What the auditor-general says on Mpumalanga RDP tenders

2011-11-21 07:18

It is important to clarify first that the department did not receive a clean audit but an unqualified audit with findings on non-compliance.

The department was not qualified on the matter in question as they complied with the guide for accounting officers/ authorities issued by National Treasury.

It is also important to point that the procurement followed was according to our findings not closed bidding process but rather a two-stage bidding allowed in terms of the National Treasury supply chain management (SCM) guidance to accounting officers.

Secondly the National Treasury SCM guide for accounting officers/authorities was used in evaluating the SCM processes followed by the department:

An effective system of supply chain management requires an accounting officer or authority to ensure that the resources required to support the strategic and operational commitments of an institution are properly budgeted for and procured at the correct time.

Planning for the procurement of such resources must take into account the period required for competitive bidding processes. In reviewing the process followed by the department, we have concluded that the department has used the two stage bidding allowed in terms of the SCM guidance to accounting officers, in constructing the houses.

The first stage is where potential suppliers are invited to register in the list of prospective suppliers. At this stage all potential suppliers are given the opportunity to bid through annual public invitation and the quarterly updating of the database.

Evaluation criteria for listing were stated in the invitation for registration as a supplier (reference number: DHS/DB/10) and included:
» Tax clearance certificate; and

» NHBRC registration, etc.The auditors verified the following:

» The department advertised annually for suppliers to apply for registrations on the database and the database is updated quarterly.

» The listing criteria as stated in the invitation were correctly applied and: - No suppliers who do not meet the criteria were added on the list,- No suppliers were unfairly disqualified from listing.

The second stage is the awarding of projects to contractors.

This is the stage that may have raised concerns, namely that the selection of contractors from the database is based on a preferred choice of the project manager or his delegate (par. 6 of the policy).

However, after thorough investigation by the auditors, it was confirmed that the process followed conformed to the five principles of fair, competitive, cost-effective, transparent and equitable.

Criteria on which projects were awarded were pre-determined and potential suppliers were evaluated against these criteria.It is important to note that the evaluation was conducted by the evaluation committee and adjudicated by the adjudication committee with the final award being approved by a properly delegated official or committee.

Functionality Paragraph 6.4 of the policy lists the functionality against which suppliers will be evaluated, being:
» Capacity of the contractor

» Experience of the contractor

» Access to finance by the contractor

» Ability to provide the goods, services or works

» Quality work of the contractor

» Reasonableness of completing the work given The auditors verified that a proper evaluation was done before contracts were awarded. (fair).

Potential suppliers were informed on the criteria used and the maximum points to be awarded. (fair, transparent)

Conclusion Due processes were followed in evaluating suppliers against set criteria for functionality and HDI and specific goals when allocating projects.

Thus, the contract was not awarded in contravention of SCM legislation and consequently no irregular expenditure was incurred.

– Ms Jeanny Morulane is head of communications in the office of the auditor-general

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