‘Treasury has a bad habit of leaving slips at the till’
State capture witness says keeping checks and balances at the National Treasury is ‘difficult, quite difficult’
The National Treasury can’t keep track of the R800bn the state spends on goods and services annually, and can’t tell if all the money goes where it is supposed to.This was the startling revelation from acting chief procurement officer Willie Mathebula, the first person to testify at the commission of inquiry into state capture on Tuesday.
He gave evidence relating to procurement processes and rules and how they are often abused by government departments and state entities.
Asked by one of the evidence leaders, Leah Gchabashe, about the measures the Treasury had in place to keep procurement spending in check and ensure those who abused public funds were held accountable, Mathebula said: “That is a difficult question, chair, it’s quite difficult. There is a challenge because we can’t claim that all this money goes where it is directed to, hence the problem we are facing as a country.”
His office, which started to keep an eye on procurement spending in 2013, is conducting numerous investigations in a bid to “curb” the abuse of funds meant for goods and services, but it faces an uphill battle.“It’s a war that we are fighting to make sure there is no abuse of the system. There are still these elements embedded in the system for the intentional abuse of the system,” Mathebula told the inquiry headed by Deputy Chief Justice Raymond Zondo.
In the 2016/17 budget, the Treasury was requested to allow deviations from normal procurement processes to the tune of R74bn.
Mathebula said much of their investigation was focused on the procurement of goods and services by state-owned entities such as Transnet, Telkom and Denel.
These entities have been at the centre of much of the reported abuse of public funds by the politically connected Gupta family and their acolytes, with indications that most of their looting had been enabled by former president Jacob Zuma.
“There is a directorate within the office of the chief procurement officer that deals specifically with irregularities and abuse of the system. But secondly, within Treasury, specifically within the office of the accountant-general, there is a unit that deals with investigations,” Mathebula said.
The public procurement process makes provision for deviations in the tender process under certain circumstances.
Mathebula admitted Treasury itself may have loopholes in its regulatory frameworks that need to be attended to.“If you look at what has been happening in the past years, one could ascribe more than 50% of these infractions to abuse of the system.”
He said parastatals had compliance units that must ensure processes were beyond reproach and above board.
With almost 20 years’ experience at the Treasury, Mathebula said his office was battling to keep track of all transactions, as these are conducted by internal supply-chain management units of various state organs.
“Day-to-day procurement of goods and services elsewhere is conducted through [supply-chain management] units at individual organs of state. Distinct rules that govern individual procurement are formulated at an entity or department level,” he said.
Cost fluctuations are a major concern where procurement is concerned, including where a tender initially cost R4m but then ballooned to R200m because of a number of factors, among them corruption.
The commission will go on a two-day recess before the second witness, former deputy finance minister Mcebisi Jonas, takes the stand on Friday. He has accused the Guptas of offering him a R600m bribe to entice him to accept the offer of replacing Nhlanhla Nene as finance minister in 2016.