Rochelle de Kock
IN a bid to strengthen internal controls in the department overseeing tenders and eliminate fraud, the Nelson Mandela Bay Municipality has implemented new electronic systems to keep track of all contracts awarded to ensure they are not tampered with.
The shakeup in the supply chain management (SCM) unit follows a scathing attack by the auditor-general on the record-keeping system of the department, which the AG said failed to provide important documents about bid committee meetings.
Councillors debated the audit report for the 2012-13 financial year at a municipal public accounts committee (MPAC) meeting yesterday.
The audit report, which has a qualified opinion, is the second consecutive qualified audit on the metro.
A qualified audit means there is a lack of proper internal controls and that the AG could not verify some financial information.
The AG said management “did not adequately monitor the actions and outputs of officials throughout the year under review to ensure compliance with key legislation”.
“Awareness of SCM requirements among officials across all functional areas was not at the required level, as evidenced by the amount of irregular expenditure identified during the audit.”
At the MPAC meeting, SCM official Ndimphiwe Mantyontya said the department had installed a new contract management program to keep track of the tenders from the time they were advertised until they were awarded.
“Since October 2013, we have implemented a new online system to eliminate any tampering with the tenders. No one has access to the bids until the closing dates, and then it is only assistant director Roger Ferreira who would have access.
“Any chance of fraud has been eliminated. In the past splitting of bids would be done, but now this is not allowed and there are processes in place to ensure that does not take place,” Mantyontya said.
“Supply chain was not centralised in the past. Now, documents are stamped and kept in their original state and no one is allowed to remove anything.”
The municipality was rapped over the knuckles for not being able to produce information on tenders dating back to 2008.
Because the metro was not able to provide all the information before the latest audit was conducted, it meant the city carried over R710-million in irregular expenditure from the 2011-12 financial year.
The city’s acting chief financial officer, Barbara de Scande, said her department developed a template in July last year that made it mandatory to capture information about every tender electronically.
“I’m 100% comfortable that we are dealing with the problem. We are working with internal audit and we have asked them to check our files randomly to see if we are complying,” De Scande said.
Some of the areas of concern in the SCM unit raised by the AG included:
- The municipality not having adequate systems in place to identify and disclose all irregular expenditure;
- Twenty investigations being conducted relating to fraud, corruption and failure to comply with SCM requirements;
- Insufficient evidence to show tenders were awarded to those recommended by the tender committees or those scoring the highest points; and
- Tenders being awarded to companies owned by municipal workers or workers who were shareholders in the businesses.