Johannesburg - Auditor-General Kimi Makwetu has slammed the Free State department of health for its reckless and unmonitored spending of more than R1.2 billion on consultants.
The AG’s performance audit report on the department, released this week, has revealed how the department alone had accounted for R1.2bn of the total of R3.1bn spent by the Free State provincial government on consultants between 2008 and 2011. This amounted to 34 percent of the total expenditure on consultants by the entire provincial government in that period.
The report has revealed how the department had failed to monitor contracts it signed with suppliers, leading to them getting paid despite strong evidence that they were not performing their duties as required.
It also revealed how contracts awarded by the department were not monitored daily or monthly as required by regulations, resulting in the department paying for services that might have been substandard.
Free State Premier Ace Magashule’s spokesman, Mondli Mvambi, said he would respond after studying the report and speaking to relevant officials. At the centre of this mismanagement of taxpayers’ money were nine tenders which were initially valued at R147 million collectively, but one of them eventually cost the department about R99m.
“The department did not have a strategy and policy to govern the use of consultants. The expenditure on consultants was R344m in the 2008/2009 financial year, R456m in 2009/2010, and R423m in the 2010-11 financial year.
The nursing services tender was budgeted for R10m over a three-year period, but the department eventually spent R99.6m for the services.
The department operated throughout the period at vacancy rates averaging 49 percent.
The blame for the vacancies is laid squarely at the door of the head of department, who did not approve the filling of 29 posts classified as critical at some of the province’s hospitals, resulting in hospitals resorting to the use of consultants on a full-time basis to cover life-essential services.
It was also found that of the 93 nurses who were employed by a consultant, 26 of them were moonlighting as they were also full-time employees of the department. This was never checked by the department.
The department had also failed to follow procedures in procuring nursing services as required by the supply chain management regulations, which required that three quotations be obtained before procurement could take place.
“On five occasions, nursing services totalling R932 584 were procured without obtaining three written quotations. As a result of not obtaining three quotations, it could not be established whether the consultant was appointed at the lowest possible cost and in the best interest of the institution,” according to the report.
The AG also raised a flag about the management of a contract for debt collection services, where two firms were hired to recover R58.2m but only managed to recover R1.6m.
According to the AG, the companies contracted had failed to submit crucial reports required, but the department did not take timely action to cancel or enforce the contracts.
“The department also did not claim damages when the consultants did not furnish the required information,” said the AG.
The department’s contracts with consultants hired for waste removal services at hospitals also came under scrutiny after they were paid R29m over three years.
According to the AG’s report, despite the huge payments to the contractors, hospitals continued to experience difficulties including the lack of red plastic bags for collection of medical waste, no containers for sharp objects for the entire month and no bins for human tissue.