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'Some items more than double, even five times the price': auditor-general on PPE scandal

02 September 2020 - 12:39 By Sipho Masondo
Auditor-general Kimi Makwetu was asked by President Cyril Ramaphosa to audit the procurement processes for Covid-19 related PPE, services and infrastructure.
Auditor-general Kimi Makwetu was asked by President Cyril Ramaphosa to audit the procurement processes for Covid-19 related PPE, services and infrastructure.

The national and provincial departments of health and education have paid up to five times more than they should have for personal protective equipment (PPE) to fight the spread of the coronavirus, says auditor-general Kimi Makwetu.

Makwetu said in Pretoria on Wednesday that when buying PPE, the departments did not stick to prices prescribed by the National Treasury and in many cases paid more than five times the Treasury’s recommended prices.

After the outbreak commenced in March, the Treasury issued guidelines on maximum prices that government departments and companies should pay for goods such as masks, gloves, hand sanitisers, thermometers, medical waste bags, disposable plastic aprons and coveralls.

President Cyril Ramaphosa asked Makwetu and his office in April to audit the procurement processes followed by government departments and companies when buying goods, services and infrastructure to contain the pandemic.

This was in the wake of a public outcry about officials who dished out tenders for the supply of PPE to politically connected companies and the procurement of goods and services being tainted by corruption, fraud and inflated prices.

Makwetu on Wednesday released the first in a series of reports expected from his office  in the coming weeks and months.

“The National Treasury determined the specifications and market-related prices for PPE items. Through instruction notes, the Treasury made it a requirement for public sector institutions to purchase the specified PPE at these prices or less and provided for approval processes if there is no choice but to procure at a higher price,” Makwetu said in a statement.

“Contrary to these instructions, our analyses of orders placed by health departments identified that some items were priced at more than double and even five times the prescribed price. Similar instances were identified in the procurement of PPE in the education sector where the national and provincial departments are not procuring PPE at market-related prices.”

Makwetu’s preliminary findings reveal that in many cases officials dispensed of all procurement rules. “Teams are still busy auditing the procurement processes, but are identifying matters such as suppliers not having valid tax clearance certificates, quotation and competitive bidding processes not being correctly applied, inadequate or inaccurate specifications and evaluation criteria and the incorrect application thereof, conflicts of interest, and the awarding of a contract in the health sector to a supplier with no previous history of supplying or delivering PPE.”

In other cases auditors found the quality of supplied PPE to be poor. “The problem with the quality of PPE purchased is most evident in a few schools that were visited where the masks provided were not to specifications and were often one-size-fits-all [whether for a child or an adult]. Instances were also found where specified PPE items ordered by a health department were substituted by the supplier with items of a lower specification, which the department accepted and even paid for at the higher price of the originally ordered item,” Makwetu said.

Auditors have also identified clear cases of fraud, but more information will be provided in subsequent reports.

The report also shows that the delivery of water tanks by the department of water & sanitation was behind schedule and riddled with irregularities. The department appointed Rand Water as its implementing agent to roll out the delivery of water tanks to needy communities across the country.

“The department of water affairs and sanitation could not provide a reliable listing of all water tanks delivered and their location, which makes it difficult for us to audit whether the water tanks paid for have been received. It also calls into question the effectiveness of the controls implemented by the department and the reliability of the reporting on the implementation of the initiative. In some instances, Rand Water did not comply with the required procurement processes to appoint suppliers for water tanks and tankering services.”