Unqualified audit despite ‘closed’ tenders

2011-11-19 18:18

The Mpumalanga Department of Human Settlements received an unqualified audit opinion from ­auditor-general (AG) Terence Nombembe despite violating supply chain management policies in the awarding of housing contracts worth R331.2?million.

The tenders were awarded without being advertised to allow for competitive bidding. Nombembe’s officials in Mpumalanga picked up the matter in a final management report.

The AG found that the department had flouted sections of the Constitution of South Africa, the Public Finance Management Act and a Treasury practice note which stipulated that tenders above R500?000 should be advertised in the government bulletin or media.

The AG said: “This practice (of closed bidding) discourages fairness and is not equitable. It does not give everyone an equal chance of being selected from the database and gives the project manager unfettered powers to select favourite service providers.”

After this report, departmental head David Dube met with AG officials. The meeting directed that Dube and the AG’s Sibongile Lubambo find “common ground” on the closed bidding policy.

“In a meeting, Lubambo indicated that she did not have a problem with the policy and advised that the department should interact with the provincial treasury. If treasury had no problem, the AG’s office wouldn’t have one because (it) ­audits matters in line with the instructions, regulations and policies of treasury,” Dube wrote.

Dube claimed that he had sent the policy to treasury, which did not “indicate anything contrary to the policy.” However, former Mpumalanga treasury head Mandla Mazibuko told the department in writing that any project more that R500?000 must be open to competitive bidding.

Jonas Letshela, provincial treasury spokesperson, agreed with Mazibuko this week: “We did advise human settlements on this matter, which is that projects above R500?000 should go out to open bidding process.”

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