Mchunu called for the urgent implementation of the Public Administration Management Act that prevents public servants from doing business with the government.
The government has for years been trying to rein in officials involved in business deals with their own departments and entities.
Mchunu said the government must intensify its fight against corruption.
He said they were left disappointed with the recent report by Auditor-General Kimi Makwetu on the municipalities with clean audits. The number declined to only 18 out of 257 municipalities.