Tenders –?the state’s ?‘family business’

2014-08-03 15:01

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Talk about keeping it in the family: municipal employees, councillors, their close relatives and civil servants in other government departments raked in more than R540 million in municipal tenders during the 2012/13 financial year.

KwaZulu-Natal led the way in contract nepotism, awarding tenders worth R90.5 million to relatives.

The other big family spenders were:

»The Free State (R37 million);

»North West (R19 million); and

»Limpopo (R11.1 million).

But the figures could be even higher. Auditor-General Kimi Makwetu’s team only “tested” a sample of the tenders in each municipality to determine whether any laws had been broken.

Makwetu said in his audit findings, released on Wednesday, that in many instances these companies and the officials involved had not declared their interests before the tenders were awarded.

By law, any conflict of interest must be declared.

This, according to Makwetu’s audit report, meant many municipal tenders were “susceptible to fraud”.

The audit reveals that:

»178 municipalities awarded 1 617 tenders to companies belonging to other public servants – to the tune of R445 million;

»54 municipalities awarded 301 tenders to companies owned by council employees or councillors, to the value of R95 million; and

»45 municipalities awarded 292 tenders to close family members of councillors and council officials, to the tune of R115 million.

Makwetu was scathing in his assessment of municipalities’ attempts to tackle the ongoing problem: “But limited action was taken in response to similar findings in the previous year. Municipalities have thus not taken the opportunity to send a clear message that they would not tolerate such irregular actions by their officials or suppliers and that any such action would have consequences.

“We are concerned [that] the awards to employees and councillors as such could have been prevented or detected by implementing basic controls – such as employees, councillors and suppliers submitting declarations of interest.”

The law doesn’t ban the awarding of tenders to public servants or their close relatives, but stipulates that municipalities declare this information if the tender is worth more than R2?000.

Trade union federation Cosatu this week called for the passing of the Public Administration and Management Bill to be expedited. The bill prohibits state employees from doing business with the state or being a director of a public or private company conducting business with the state.

“It becomes particularly toxic when public figures are themselves, or their close family members, owners or partners in private companies that do business with public bodies,” said Cosatu spokesperson Patrick Craven.

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