AG paints grim picture of how towns mismanaged Covid-19 cash

Eastern Cape municipality buying car for mayor among 'instances where the funding was used for something other than Covid-19', says Tsakani Maluleke

22 June 2021 - 17:01 By kgothatso madisa
Auditor-general Tsakani Maluleke has released details on how municipalities across SA have mismanaged Covid-19 funds. File photo.
Auditor-general Tsakani Maluleke has released details on how municipalities across SA have mismanaged Covid-19 funds. File photo.
Image: Freddy Mavunda

Amid a deadly pandemic which left SA reeling, an Eastern Cape municipality bought its mayor a car using Covid-19 funds that were meant for the emergency procurement of water and sanitation services.

And in some cases, other municipalities procured personal protective equipment (PPE) but stored it in such poor conditions that it could not be used.

These are just some of the examples auditor-general Tsakani Maluleke highlighted as she released details on how municipalities across SA have mismanaged Covid-19 funds, failed to follow procurement processes and mismanaged contracts once they had been awarded.

Maluleke painted an overall grim picture on the abuse of Covid-19 funds in the local government sphere. The long-standing weaknesses that were prevalent in municipalities — such as uncompetitive and unfair procurement processes — also led to failures in the managing of emergency funds.

Contracts being awarded to family members of municipal officials, awards made directly to government officials, uncompetitive pricing and unfair procurement processes were the order of the day at municipalities. In some cases the quality of services rendered was poor, while in other instances payments were made even when there was no proof that the work had been completed or the service provided.

According to Maluleke, municipalities failed to follow the correct procurement process and did not follow up with contractors to ensure that work was being done and that it was done to acceptable standards.

“We highlight these things because, in our view, they are consistent with matters we keep raising in the context of the irregularity audits, in that it is the same controls that need attention if we are to ensure that — whether there is an emergency or not — the funding that is availed to us to deliver services [is used for] its intended purpose,” she said.

She said that when it came to PPEs, there were similarities in irregularities at provincial and national level.

“In terms of PPE, we conducted these audits much in the same way we did for the provincial and national governments. You find that the findings and the observations are quite similar. From a procurement point of view ... procurement processes were not being followed, with awards to family members and to officials ... which is a contravention of the prescripts in local government.

“We found that there were red flags for fraud, and we compiled this information and we shared it with the fusion centre in the same way we did for the last report.

“We also found that PPE was brought at prices that were higher than the market rates that were determined by the National Treasury. PPE was delivered to the wrong place, not on time, the wrong quantity, and often at the wrong quality.”

At the same time, Maluleke said, millions of South Africans did not benefit from the water tank and sanitation services as municipalities failed to manage related procurement — with the money either being diverted elsewhere or contractors being paid for no work.

“Once again, we found that procurement was a problem. There were instances where the Covid-19 funding was used for something other than Covid-19. An example is of a municipality in the Eastern Cape where the funds were used to buy the mayor a car.

“We also found that the water-distribution programmes were conducted at prices that were inflated and that sometimes the water-tank services were such that we pay people to fill tanks and they don't.”