Johannesburg - The South African National Roads Agency Limited (Sanral) has defended its management of the agency’s finances despite the auditor-general highlighting R3.3 billion in irregular expenditure in its latest financial statements.
This irregular expenditure resulted from Sanral deviating from legislated supply chain management processes in the Preferential Procurement Policy Framework Act (PPPFA) and Treasury regulations.
Despite highlighting certain non-compliance issues, the auditor-general declared Sanral’s financial statements for the year to March as fairly presented in all material respects and gave it an unqualified report.
Inge Mulder, Sanral’s chief financial officer, said yesterday that the auditor-general had found that tenders of R2.4bn, which was included in the sum of R3.3bn, had been awarded using a benchmarking instrument to determine the “most realistic lowest acceptable price”.
Mulder said the auditor-general’s report stated that although the intention was within the objectives of the PPPFA, it was not compliant with the letter of the law.
Ian Ollis, the DA’s transport spokesman, said Sanral had repeatedly demonstrated that it viewed itself above the public by forcing e-tolling on Gauteng despite widespread opposition, and it had now demonstrated that it also believed it did not have to adhere to financial management policies and legislation. “Sanral is not above the law and should be held accountable,” he said.
Mulder said the non-compliance was related to certain aspects of the PPPFA and how Sanral had carried out the procurement of a management contractor in support of the development of small, medium and micro enterprises.
She said the deviation from the PPPFA had not been approved by the finance minister, but an application for exemption had been submitted for the minister’s consideration.
Mulder stressed that the auditor-general had not found the form of procurement used to be “corrupt in any way whatsoever”, and a proper examination of the system would show that it also discouraged collusive practices.
She added that the system of procurement had been used by Sanral for the past 11 years and only this year had the auditor-general found fault with it.
Mulder also stressed that the figures contained in Sanral’s financial statements would not have differed from those reported had the non-compliance factor been absent.
“This is implicit in the auditor-general’s favourable report, which in addition pointed out that the delay in the implementation of the high-profile Gauteng Freeway Improvement Project had not impacted negatively on Sanral’s going concern status,” she said.
However, Ollis said the DA would request that portfolio committee chairwoman Ruth Bhengu summon Sanral’s chairwoman Tembakazi Mnyaka and chief executive Nazir Alli, as well as Transport Minister Dipuo Peters, to Parliament to explain the lack of financial and legal compliance.
“Any wrongdoing must be punished. Good governance requires every step in awarding every contract to follow the letter of the law. Sanral should be no exception,” he said.
Vusi Mona, a Sanral spokesman, said no action was warranted against any official or employee at Sanral because no corruption or fraudulent activity had occurred.
“Furthermore, Sanral can account for the money. All Sanral has to do is to take careful note of the auditor-general’s non-compliance observations and ensure that in future this does not recur,” he said. - Business Report