Kimi Makwetu. Picture: PUXLEY MAKGATHO
Kimi Makwetu. Picture: PUXLEY MAKGATHO

The DA has proposed the creation of a special inspector-general office with sweeping powers in the National Treasury to oversee the expenditure of billions of rand of Covid-19 relief funds to prevent fraud and corruption in real time.

Auditor-general Kimi Makwetu has taken proactive steps for his office to monitor the spending of R230bn of the Covid relief funds by national and provincial departments. Makwetu’s  department will be checking on internal controls to see whether they are strong enough to prevent fraud and corruption.

But the DA does not believe that this is sufficient, saying that the auditor-general examines transactions only after the fact and not in real time. It does not take pre-emptive action to prevent corruption before it happens.

The proposal was made on Monday to finance minister Tito Mboweni with the request that legal provision for the special inspector-general be made in the Special Appropriations Bill that Mboweni will table in parliament in June to provide for the R500bn stimulus package aimed to limit the devastation caused by the Covid-19 lockdown on the economy, workers and the unemployed.

In terms of the DA proposal, the special inspector-general would have broad, sweeping powers to investigate and take pre-emptive, real-time action to prevent corruption at all levels of government for any monies allocated for Covid relief and stimulus.

DA finance spokesperson Geordin Hill-Lewis said in a virtual media briefing on Monday that the creation of this special office was necessary because money had been lost through “illegitimate procurement practices, undue cost escalation and direct theft” both in previous localised disasters, as well as in regular government expenditure.

“The direct expenditure planned in the forthcoming Special Appropriations Bill will amount to nearly 10% of the annual budget, in addition to existing expenditure that has been reprioritised and freed up under emergency provisions. As such, funding is being dispersed under disaster relief and emergency provisions of law [and] regular processes are suspended in the interests of efficiency. This can result in massive wasteful expenditure with no results,” Hill-Lewis said.

In terms of the DA proposal, the special inspector-general would have the power to summon information or assistance from any government department, agency or other entity at all three spheres of government. The failure to disclose information within seven days will be regarded as a criminal offence.

The special inspector-general should be able to direct departments to take immediate action to address identified deficiencies and have the power to prevent the payment of any monies to, or recall monies from any individual or entity where deficiencies, non-adherence to processes, or potential abuse of power or corruption had been found.

The opposition party also proposes that the special inspector-general should have the power to nullify the award of tenders and contracts; to investigate the legitimacy of any eligible businesses receiving any state-backed Covid funding; require an explanation of why the procurement of any goods or services for Covid relief was deemed necessary by the state, including a justification of the price paid, and other financial terms tied to the transaction; and prevent and/or terminate procurement where exorbitant pricing is detected.

The majority of staff for the office of the special inspector-general should be seconded from national and provincial treasuries and the special inspector-general should be required to submit regular reports on his work to parliament.

If no provision is made for this new position in the bill, then the DA plans to table an amendment to the bill when it is presented to parliament in July.

ensorl@businesslive.co.za