Auditor-General Terence Nombembe
Auditor-General Terence Nombembe

Lack of skills costs govt dearly

By Jabulani Sikhakhane Time of article published Oct 17, 2011

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Seven out of every ten hospitals, clinics and schools built in the nine provinces are completed late, resulting in the government having to spend billions of rands more than was originally budgeted.

These figures are based on an investigation by Auditor-General Terence Nombembe into 247 health and education projects worth R6.6 billion.

Although the number of projects was evenly split between health and education, health had the lion’s share of the value (R4.8bn) and education the remaining R1.8bn.

Delays in the completion of projects were caused by a lack of technical skills, resulting in infrastructure projects not being effectively monitored and evaluated to ensure they were completed on time and on budget – and work that was not up to standard.

Of the projects selected for detailed auditing, 70 percent were completed late or were still under construction when the audit was done. The average delay for these projects was 22 months, Nombembe said.

In some cases, Nombembe found that provinces had awarded multiple contracts to contractors without evaluating their capacity to deliver. Delays in the completion of these contracts, which often required that the original contractors be fired and replaced, resulted in provincial education departments having to spend an additional R46 million, or 71 percent more, than the original contract value.

Health departments had to spend an extra R313 million (a 58 percent increase) over the original contract values to complete projects.

Insufficient technical and professional capacity also caused project costs to increase substantially.

In the Western Cape, the auditor-general identified four projects where project costs increased by up to 260 percent between 2004 and 2008, the first and the last time respectively that they appeared on the budget. The main culprit was the transport and public works department, where vacancies in posts for architects, engineers, quantity surveyors and technicians ranged from between 25 percent and 39 percent between 2004 and 2008.

Skills shortages meant that projects were delayed by up to 63 months during the design phase. Among these were projects for accommodation at the Khayelitsha and Mitchells Plan district hospitals.

The original budgets for 13 projects in KwaZulu-Natal increased in cost because of delays during the planning stages, Nombembe said. One of the major contributing factors was that these projects were planned when it was known that funds were not available. For eight of these projects, Nombembe’s report said, the actual expenditure came in at R332m more than the original budget.

Also in KwaZulu-Natal, the auditor-general found 10 projects that had not been completed on time, but evidence could not be found that government had penalised the contractors as per their contracts. Nombembe could not find evidence that combined penalties worth R5.6m were imposed, or that they were appropriately waived on justifiable grounds, and that such waivers had been approved by the relevant authorities.

Failure to penalise contractors for late completion of projects or poor workmanship was a common occurrence, the report said.

The auditor-general has discussed his findings with the national departments of Basic Education and Health, each of which has promised remedial action. The auditor-general presented the report to the relevant committees in the national assembly on Friday last week. He will also table provincial reports before provincial legislatures.

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