Treasury urges tighter regulations, more consequences for irregular spend | Fin24
In partnership with

Treasury urges tighter regulations, more consequences for irregular spend

May 23 2018 20:33
Khulekani Magubane

Cape Town – Treasury on Wednesday reiterated the need to "revisit" procurement regulations, saying some government officials were abusing processes for deviations and expansions.

These officials not only abuse process but also believe they are entitled to do so, Parliament's Standing Committee on Public Accounts (Scopa) heard on Wednesday.

This was according to a submission from National Treasury's director general Dondo Mogajane, who said certain regulations relating to procurement must be "revisit[ed]".

Persistent gaps remained and there was a lack of consequences for errant officials, Scopa heard. 

Treasury was streamlining processes, Mogajane said, to ensure entities and departments understood the need to respect systems that allowed for deviations and expansions.

"We will look at Treasury regulations and, one way or another, change this. The AG (auditor general) can only process and audit what we have instructed, so that if the AG decides to relook at deviations and ask questions, we can get a sense of what was approved and why," said Mogajane.  

Deviations and expansions - the systems in place to allow for exceptional circumstances in procurement - have come under the spotlight as procurement processes are examined. 

Mogajane also said budget councils and technical financial support committees in local and provincial spheres of government must legitimise processes, playing an active role in plugging persistent leaks.

"We need to revisit [these] regulations. This will be done with the [finance] minister [Nhlanhla Nene] to ensure that a new approval process looks at addressing deviations. For the system to work properly, we need to properly define the role of provincial treasuries," he said.

Treasury's Chief Procurement Officer Willie Mathebula lamented the lack of consequences for employees and accounting officers who either enable or participate in irregular expenditure.

"Deviations below competitive bids are not reported, as there is no obligation to report by institutions. Abuse is picked by the Auditor General during audits," Mathebula said.

Chief Director of Supply Chain Management Solly Tshitangano added that some accounting officers and authorities believed they were entitled to procure goods and services through deviations.

"Some accounting officers and authorities deviate and participate in contracts arranged by other situations. There is no obligation to report these deviations," Tshitangano said.

Some officials appeared to believe Treasury's role in the procurement process was simply to rubber-stamp deviations from procurement guidelines or expansions of procurement scope, the Committee also heard. The submission concluded that these accounting officers and authorities appeared to think National Treasury should approve deviations and expansions, regardless of their validity or purpose.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER



Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Trump’s administration has threatened to choke Huawei, hitting some of its biggest component makers. What are you most concerned about??

Previous results · Suggest a vote