Covid-19 funds: AG uncovers spending on dead people, bogus employees, spoilt medicine

The Auditor-General has been hard at work since her appointment took effect on 1 December this year. Nine days into her official tenure Tsakani Maluleke has exposed more weaknesses in government spending and procurement practices. The Auditor-General’s second report on Government’s spending and management of Covid-19 relief funds contains a list of inefficiencies and fraudulent transactions involving government officials. delves into the report. – Melani Nathan

Serious problems with South Africa’s Covid-19 spending uncovered

Jamie McKane

The Auditor-General’s office has published its second report on the government’s spending during the Covid-19 pandemic.

Auditor General Tsakani Maluleke, who succeeded the late Kimi Makwetu, found “significant deficiencies in the procurement and contract management processes of the relief package government redirected in response to Covid-19”.

Maluleke applauded the government’s ongoing efforts in fighting the pandemic, saying it has done well to ensure the provision of sufficient health services.

At the request of President Ramaphosa, the Auditor-General’s office undertook an audit of government’s Covid-19 spending following a R500bn package being made available to contain the spread of the virus and relieve its social and economic distress.

This is the second in a series of audit reports on Covid-19 spending, and Maluleke said that like the first one, it finds evidence irregularities, poor controls and systems, and indicators of potential fraud.

“The audit office again reports that the information technology systems, processes and controls used in government were not agile enough to respond to the changes required,” the report said.

Read also: Hawks bust company director for R3.2m Covid-19 social relief funds fraud

“The lack of validation, integration and sharing of data across government platforms resulted in people (including government officials) receiving benefits and grants to which they were not entitled.”

“Some of the initiatives did not achieve the desired results and were even abandoned because of failed coordination, monitoring and relationships across the three spheres of government,” it said.

South Africa’s Covid-19 spending problems

We have highlighted some of the more interesting findings from the Auditor-General’s report below:

TERS relief payments were abused and were paid to people who were below the legal age of employment, deceased, receiving other benefits, or working in government. R3.4bn of funds that may have been disbursed incorrectly have been recovered.

1,513 company directors who were awarded government tenders applied for and received social grants from SASSA.

Inadequate planning, record keeping and guidelines resulted in inconsistencies in the delivery of food parcels, including people receiving food parcels multiple times, grant recipients also receiving food parcels and approved beneficiaries not receiving food parcels.

The audit identified various instances of contracts being awarded to businesses that do not have a history of providing PPE – often working in a different industry or even being formed or registered just before a contract was awarded.

Read also: Real reason R500bn Covid-19 relief isn’t getting to business

The Department of Defence procured an unregistered medical drug from Cuba, which was exposed to temperature variations that may have compromised its integrity and wasted the money spent on the drug.

The report stated that it has found government ministers and departments to be receptive of this criticism and eager to work with other bodies to improve the outcome of this spending.

“The public sector requires longer-term, more effective solutions to deal with the underlying causes of people, systems and processes not delivering optimally,” the report said.

“From our side as the audit office, we will continue to audit the Covid-19 funding and follow up on the progress made in addressing the audit findings and observations from this report as part of our normal annual audit.”

The third audit report on Covid-19 spending is expected to be published in mid-2021 and will focus on local government.

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