By Prinesha Naidoo
JOHANNESBURG – Government spent almost half of the R147.4 billion in direct funds allocated for the fight against the coronavirus pandemic by the end of July, money the Auditor-General says landed in a “weak control environment”.
The first audit report on the financial management of the government’s virus response comes as a graft scandal related to the procurement of personal protective and medical equipment engulfs the nation.
“We are concerned about the indicators of high risk of fraud and abuse we observed – not only in the areas that we were able to audit, but also where information for auditing was not forthcoming, which could be a deliberate tactic to frustrate our audit efforts,” Auditor-General Kimi Makwetu said Wednesday.
President Cyril Ramaphosa announced a R500 billion support package to offset the damage wrought by the virus and direct resources to the country’s health response in April. That included R310 billion of mostly indirect relief through tax measures, income protection and loan guarantees, and R190 billion in direct funds.
The National Treasury allocated R145 billion in a emergency budget tabled in June and will make provisions for the remaining R45 billion in next month’s medium-term spending framework.
These are some of the key findings:
- Due to a limited verification process, there is a risk the R350 social-relief grant is being paid to people who are not in distress.
- The R410 million pledged by the US government for South Africa’s health response has not yet been received and of the 1 000 ventilators pledged, only 150 had been delivered by July 5. The availability of ventilators in the market remains a problem – 1 144 were ordered for the health sector and by July 31 only 58 could be delivered.
- Record keeping is inadequate and there are concerns about how suppliers and beneficiaries who may not have been eligible for the voucher-relief scheme for small-scale farmers were selected.
- By July 15, no loans for debt relief from the R2.5 billion ring-fenced by the Industrial Development Corporation (IDC) had been approved because businesses did not meet the qualifying criteria.
- Distributing food parcels could have been significantly cheaper if the social security agency used non-profit organisations already working with the Department of Social Development instead of appointing new service providers.
- There are clear indicators of fraudulent activities in the procurement processes of personal protective equipment and these will be further investigated.
BLOOMBERG