Millions intended to be spent on the health needs of Eastern Cape residents have gone missing from departmental coffers, with employees failing to disclose company interests in 19 tenders worth more than R10.5-million.
In a further bombshell, the provincial health department’s superintendent-general Dr Thobile Mbengashe told a watchdog committee in Bhisho yesterday that “other cases” relating to irregular expenditure of R376.8-million in “medico-legal” cases had been referred to the state attorney “to determine criminal liability of officials within the department”.
Mbengashe was on the carpet before the Bhisho legislature’s public finance watchdog, the Standing Committee on Public Accounts (Scopa) chaired by UDM MPL Max Mhlathi.
Mbengashe was grilled over the reckless spending of state funds in the year under review.
Scopa heard that an amount of R212-million, which includes the R10.5-million, had been spent irregularly in the 2015-16 financial year.
Of this R212-million, R30-million had been fruitless and wasteful expenditure incurred in 219 cases of interest having to be paid on overdue invoices, some for unpaid medical legal claims.
Mhlathi said there was a very thin line between these expenditures and corruption.
The 19 tenders were awarded to companies with close ties to some of the department’s employees, but these employees had failed to declare their business interests.
Mbengashe said the prevalence of irregular expenditure in his department was a concern that they were working day and night to sort out.
He told the multi-party committee the irregular expenditure was as a result of 244 cases where employees had:
lFailed to adhere to procurement policies;
lFailed to declare their business interests; and
lFailed to complete bidding documentation in the department’s construction projects.
Also contributing to the irregular expenditure, were two cases where R25.5-million was awarded to Intersite Property Co, without any competitive bidding processes being followed.
Mbengashe told the committee that the matter “has been referred to the state attorney for legal advice” on what action could be taken against those responsible for flouting tender processes.
He said in six cases, R30-million had been paid for construction projects while bidding documentation had not been completed.
“The department has started to engage the department of roads and public works to supply documentation for the six cases amounting to R30.1-million in respect of bidding documentation that is incomplete for construction projects.
“The rest of these matters will be dealt with in accordance with the project plan to deal with irregular expenditure which has been approved,” said Mbengashe.
Mbengashe told the committee that action was being taken by his department against those found responsible for such expenditure.
“Nine letters were issued to officials to respond to allegations of financial misconduct.
“Seven responses were received and handed over for further investigation.”
Asked by Mhlathi about the underlying causes for irregular expenditure in his department, Mbengashe blamed non-compliance with procurement policies and non-submission of information required by the auditor-general.
He admitted that attempts to identify employees doing business with the department who hid their business interests had been limited.
The department had turned to “workshops” to fight irregular expenditure where policies were discussed on how to prevent irregular, fruitless and wasteful expenditure.
On a positive note, he said he was pleased that the R212-million represented a drastic decrease compared to the R1.1-billion irregular expenditure incurred in the 2011-12 financial year.
The department had also improved its dismal audit outcomes in the past 13 years, to achieve an unqualified audit, albeit with findings in 2015-16 that R34.7-million had been blown on fruitless and wasteful expenditure.
Mbengashe said this money included interest charged on overdue payments to suppliers, interest on medical claims instituted against the department and for damage caused to state vehicles by negligent employees which amounted to R1.9-million.
“These expenditures are basically forming part of corruption because people are not doing things according to prescripts. That needs to change,” said Mhlathi. — asandan@dispatch.co.za
Millions lost in wasteful spending
In a further bombshell, the provincial health department’s superintendent-general Dr Thobile Mbengashe told a watchdog committee in Bhisho yesterday that “other cases” relating to irregular expenditure of R376.8-million in “medico-legal” cases had been referred to the state attorney “to determine criminal liability of officials within the department”.
Mbengashe was on the carpet before the Bhisho legislature’s public finance watchdog, the Standing Committee on Public Accounts (Scopa) chaired by UDM MPL Max Mhlathi.
Mbengashe was grilled over the reckless spending of state funds in the year under review.
Scopa heard that an amount of R212-million, which includes the R10.5-million, had been spent irregularly in the 2015-16 financial year.
Of this R212-million, R30-million had been fruitless and wasteful expenditure incurred in 219 cases of interest having to be paid on overdue invoices, some for unpaid medical legal claims.
Mhlathi said there was a very thin line between these expenditures and corruption.
The 19 tenders were awarded to companies with close ties to some of the department’s employees, but these employees had failed to declare their business interests.
Mbengashe said the prevalence of irregular expenditure in his department was a concern that they were working day and night to sort out.
He told the multi-party committee the irregular expenditure was as a result of 244 cases where employees had:
lFailed to adhere to procurement policies;
lFailed to declare their business interests; and
lFailed to complete bidding documentation in the department’s construction projects.
Also contributing to the irregular expenditure, were two cases where R25.5-million was awarded to Intersite Property Co, without any competitive bidding processes being followed.
Mbengashe told the committee that the matter “has been referred to the state attorney for legal advice” on what action could be taken against those responsible for flouting tender processes.
He said in six cases, R30-million had been paid for construction projects while bidding documentation had not been completed.
“The department has started to engage the department of roads and public works to supply documentation for the six cases amounting to R30.1-million in respect of bidding documentation that is incomplete for construction projects.
“The rest of these matters will be dealt with in accordance with the project plan to deal with irregular expenditure which has been approved,” said Mbengashe.
Mbengashe told the committee that action was being taken by his department against those found responsible for such expenditure.
“Nine letters were issued to officials to respond to allegations of financial misconduct.
“Seven responses were received and handed over for further investigation.”
Asked by Mhlathi about the underlying causes for irregular expenditure in his department, Mbengashe blamed non-compliance with procurement policies and non-submission of information required by the auditor-general.
He admitted that attempts to identify employees doing business with the department who hid their business interests had been limited.
The department had turned to “workshops” to fight irregular expenditure where policies were discussed on how to prevent irregular, fruitless and wasteful expenditure.
On a positive note, he said he was pleased that the R212-million represented a drastic decrease compared to the R1.1-billion irregular expenditure incurred in the 2011-12 financial year.
The department had also improved its dismal audit outcomes in the past 13 years, to achieve an unqualified audit, albeit with findings in 2015-16 that R34.7-million had been blown on fruitless and wasteful expenditure.
Mbengashe said this money included interest charged on overdue payments to suppliers, interest on medical claims instituted against the department and for damage caused to state vehicles by negligent employees which amounted to R1.9-million.
“These expenditures are basically forming part of corruption because people are not doing things according to prescripts. That needs to change,” said Mhlathi. — asandan@dispatch.co.za
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