Kimi Makwetu. Picture: GCIS
Kimi Makwetu. Picture: GCIS

The Presidency has again been found to have violated the Public Finance Management Act, Treasury guidelines and preferential procurement regulations.

The Presidency’s 2016-17 annual report showed that it incurred irregular expenditure of about R17m because prescribed supply chain prescripts were not being followed.

The Presidency got an unqualified audit opinion, but Auditor-General Kimi Makwetu identified various issues of concern, including the Presidency’s failure to meet contractual obligations and to settle payments within 30 days, as required by the act and regulations.

This raises questions about its commitment to the state’s local procurement and supplier development programme. The late payment of suppliers is a major issue afflicting small and medium enterprises.

In his report, Makwetu said leadership was not effective in ensuring that established policy procedures were updated and communicated to enable and support the understanding and execution of internal control objectives, processes and responsibilities pertaining to supply chain management.

"The review and monitoring of compliance with applicable laws and regulations were ineffective in certain instances."

Effective steps were not taken to prevent irregular expenditure, as required by the act and Treasury regulations.

Furthermore, goods and services with a transaction value below R500,000 were procured without obtaining the required price quotations.

Quotations were awarded to suppliers whose tax matters had not been declared by the South African Revenue Service to be in order, as required by Treasury rules and the preferential procurement regulations.

Makwetu also raised concern about the numerous legal battles involving the Presidency.

"There are a number of cases that might give rise to possible obligations for the Presidency but the cases are yet not finalised. If the state is not successful, the Presidency could become responsible for paying the legal costs of the applicants.

"The amounts in question are determined by the taxing master and cannot be reliably estimated at this point in time," he said.

In a statement, the Presidency said progress had been made in various areas outlined in the annual performance plan.

"While the Presidency welcomes the unqualified audit … a lot of work must be done to deal with the matters of emphasis that the [auditor-general] has raised, especially relating to irregular expenditure" the Presidency said.

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