An investigation into the Department of Water Affairs by the Auditor-General has uncovered financial irregularities amounting to more than a billion rand. The probe has uncovered tender manipulation and the unlawful awarding and extension of contracts.
Pam Yako, the department’s director general, has been on suspension with full pay since July 2009, pending the outcome of the investigation, the Cape Times reported.
Terence Nombembe’s report, tabled in Parliament on Tuesday, details how a contract for information technology services was illegally extended over a period of 49 months, increasing the original R180-million contract value by 587 percent to a total of R1056-million. He has recommended this sum be declared irregular expenditure.
The Auditor-General also found that Yako in 2008 hired a business partner of hers to run a R2.5-million change management project in her department. This went against rules that senior managers may not allow themselves to be improperly influenced by personal relationships.
Yako didn’t recuse herself and she had failed to disclose a conflict of interest, Nombembe said.
As the contract breached regulations, payments of the R1.87-million to Yako’s business associate should also be regarded as irregular expenditure, the newspaper reported Nombembe as saying.
Hand-picked group approve tender
Yako also allowed an irregular payment of R289 902 to her associate for services rendered before a contract, to facilitate a strategic planning session for the finance branch, had been concluded — this amount was not disclosed in the department’s annual report.
Yako was also found to have ordered the re-evaluation of a tender for travel services by a different committee whose members were apparently hand-picked by her.
This was after a recommendation that the bid go to a company that scored highest.
After the re-evaluation, three companies were awarded the contract (at a cost of R124-million over two years). Nombembe found that they were also approached by the department to reduce their prices, an opportunity not afforded the highest-scoring bidder.
As a result of supply chain management rules being breached the Auditor-General recommended that payments of R85.6-million to the companies also be deemed irregular expenditure.
None with relevant qualification
Nombembe highlighted the fact that the department bid adjudication committee was not compliant, as none of its members was a supply chain management practitioner.
Two other contracts were also found to be irregular.
Nombembe was at pains to point out that his report “merely stated the facts as they have come to our attention” and was not a judgment of guilt or innocence. He said that the report could only be used as a reference document in disciplinary hearings as well as civil or criminal litigation.
The report shows the flagrant abuse of policies and procedures and a failure of senior management to ensure the rules were followed.
Minister told to treat cause
Water Affairs Minister Buyelwa Sonjica called Nombembe to submit a report, which he did in May. He recommended she “decisively” address the findings therein.
Action limited to the specific findings would “mostly likely address the symptoms, but not the underlying causes”. It was very important to deal with the lapse in governance, controls and monitoring, he said.
“Leadership oversight is also about preventing an organisational culture of impunity and acting decisively to correct deficiencies.”
The Cape Times was unable to get comment from ministry spokesperson Sputnik Ratau, nor was he able to say when the disciplinary hearing would start.