Cape Town - Fighting corruption and fraud in the public service remains high on the agenda of government, Finance Minister Pravin Gordhan said on Wednesday, as he warned that the state will not tolerate losing billions of Rands in maladministration.
"...Public procurement plays a significant part in the economy and is central to government service delivery. However, citizens and taxpayers do not get full value for money, because this is an area vulnerable to waste and corruption. This compromises the integrity of governance and frustrates the pace of service delivery," Gordhan said during the Budget Speech in Parliament on Wednesday.
There are currently 53 investigations involving procurement irregularities in the public service, pertaining to contracts worth R3 billion. The Department of Justice recently reported that 65 people linked to some of these investigations have been arrested and brought before the courts. More than R250 million has been seized by the state. The South African Revenue Service is also investigating another nine cases of tender fraud, with a total value of approximately R1.7 billion.
On Wednesday, Gordhan said government was at its wit's end. "We have a shared responsibility to prevent corruption and we call on all citizens to blow the whistle on corruption and to report any procurement irregularities to the relevant authorities".
He warned that government departments will be required to establish rigorous demand management procedures, including submission of advance tender programmes for the next financial year to the relevant treasury authority. Limits will be prescribed for variation orders, to restrict significant changes to procurement orders and bring our system in line with international standards.
Also, companies bidding for tenders will be required to disclose the identity of all directors, to determine whether any of the directors are government officials or tax non-compliant.
Last year, Gordhan mentioned increasing monitoring capacity and transparency in the awarding of tenders by government as among the five actions to increase efficiency of state procurement this year.
SARS has also increased its analytical capacity with the aim of ensuring that vendors winning state contracts satisfy their tax obligations fully. As at the end of January 2011, SARS had identified some 13 000 vendors who have won state contracts and who owe taxes amounting to over R1 billion.
