10 October 2011
How the country loses E80 million each month
FINANCE Minister Majozi Sithole has come out to justify his statement of government losing millions of Emalangeni through corruption.
He listed varying types of corruption that bled government and further warned that corrupt public officers will be removed from office when caught.
Sithole said a legal process was being followed to effect this in both government and public enterprises.
The minister said this in response to a Senate motion where he was required to prepare a report detailing how government lost public funds through corruption. He was also assigned to detail mechanisms or strategies to be used by the ministry to stop the alarming loss of public funds through corruption.
Quite a number of times, the minister publicly declared that government was losing millions of Emalangeni through corruption. It was on that basis that Senator Themba Msibi moved a motion that required clarification from the minister on that assertion.
Sithole first revealed sometime back that government was losing E40 million a month but early this year, the figure had doubled to E80 million.
Among some of the solutions to the problem, Sithole said government will eliminate benefits acquired through corrupt means. He noted that Section 34 of the Prevention of Corruption Act, 2006, provided the Anti-Corruption Commission’s Commissioner with authority to deal with public officers or former public officers who maintained standards of living which are not commensurate with their present or past official income.
Also, government has set up a stand alone internal audit department.
“Currently, the department is being strengthened and capacitated to effectively monitor and indicate weaknesses in control measures when this is realised,” Sithole said.
Artificial companies get tenders – Majozi
THERE is corruption in the government procurement system and this has led to non-existent companies getting tenders.
Finance Minister Majozi Sithole alleged that officials raised requisitions for goods or services that are not needed.
He said this was done with a view to share the spoils with suppliers and the goods are never delivered because they were not needed in the first place.
The minister also alleged that officers limited tenders by deliberately not advertising in order to restrict the number of suppliers who bid. He said in such cases, the limited quotations are obtained from the company or person who then uses different letterheads of artificial companies.
The price is inflated for all with the preferred supplier offering a lower price than all the others but still much higher than the market price.
Sithole said in some cases, government officers are known to have placed orders under this approach to benefit their own companies.
“The result is definitely high prices, non delivery or delivery of poor quality services,” he said.
Also, some suppliers have been accused of colluding with government officers to commit government without issuing the proper purchase orders.
Sithole said in such cases, it becomes unclear whether the goods were ever supplied and if they were, if the price was competitive.
He said some do not even go through the procurement system at all. In this case, the ministry is expected to pay the supplier without knowing how they got to supply government.
He said this leaves room for high prices, poor quality, no contracts and no warrants.
Senior officials steal donations
SOME senior officials are said to be stealing donations made to organisations and divert them for their own personal gains.
Finance Minister Majozi Sithole said he heard of cases where finances for charity organisations were diverted and used for personal needs.
This included paying scholarships for friends and lovers abroad yet that was not the mandate of those organisations. Sithole mentioned this as one form of corruption. He said forcing business people to finance what appeared to be a just cause, while on the other hand taking a lot from it for one’s private use is corruption.
“Forcing business people to finance what appears to be a just cause, which may be supported by elders while on the other hand taking a lot from this for your own private use. We hear of cases where finances of charitable organisations are diverted and used to pay scholarships for friends and lovers abroad yet, when this is not the mandate of the organisation. We hear of cases where donations are made publicly but collected secretly by senior people, and by the time the treasurer comes to collect, the funds are already taken but not submitted to the organisation,” Sithole said.
Types of corruption as highlighted by Sithole
1. Procurement
• Need identification: Officials raise requisitions for goods or services that are not needed
• Limiting tenders: Officers deliberately do not advertise tenders thus restricting the number of suppliers who bid.
• Supplying without purchase orders
• Suppliers not going through the procurement system
2. Abusing position to influence junior staff to do things illegally or unprocedutally using government resources illegally and unprocedutally for private benefit
• Influencing your department or parastatal to employ your relatives or secret lovers even if they do not qualify for the position
• Making people to bribe you to get jobs and/or promotions
3. Diverting government resources for other personal issues
4. Abusing government property
5. Forcing public enterprises to finance ministry or personal issues
6 Colluding with suppliers to overcharge government
7. Forcing public resources to be spent on as project or activity under the pretext it will be cheap, yet knowing that one has understated the cost with a view to reveal these once the project is ongoing.
8. Committing government financially without the proper mandate. A mandate which, if solicited would have been refused in exercise of financial prudence
9. Selling without authority government assets such as companies
10 Giving or extending rent free terms to investors without proper authority
11. Under declaring tax liabilities e.g. sales or income tax
12. Making people pay when they request assistance to meet senior public officers
Solutions
• Improve internal audit
• Improved procurement bill and procedures
• Excluding influential people and civil servants from supplying goods and services to government
• Forensic investigations
• Strengthen Anti-Corruption Commission in terms of resources
• Removing from public office those found to be corrupt
• Remove benefit acquired through corrupt means
• Strengthen legislation to facilitate lifestyle audits
• Improve financial control by promulgating Public Finance Management Bill
• Capacitate and empower internal Audit department, Auditor General’s office and the Public Accounts Committee
• Strengthen the Losses Committee
• Excluding ill-prepared projects in the national budget
‘Bomakhwapheni get jobs they don’t deserve’
SOME senior officials have been accused of giving jobs to their relatives and secret lovers.
Minister of Finance Majozi Sithole said some officers abused their positions as superiors to influence junior officers to bend procedures.
He highlighted this as one of the forms of corruption which resulted in government losing public funds. He said the officers used government resources illegally and unprocedurally for their private benefit.
He made an example where in-service scholarships are awarded to relatives and friends who are not civil servants and do not qualify to receive that benefit.
He said influencing one’s department or parastatal to hire relatives or secret lovers even if they did not qualify was another type of corruption, adding that it affected service delivery. He said it was corruption when employers abused their position to employ their friends and relatives because in the end, service delivery was affected.
Taking bribes for jobs undermined the whole recruitment system and demoralised everyone else while at the same time lowering service delivery.
Sithole said he may seem to be pointing fingers at some people, but emphasised that there were no faces put on these issues.
“We wish to indicate that some of the issues may seem like pointing fingers at some people. Rest assured there is no face or name in mind or reality associated with any of these issues. It is just a reflection of our understanding of the typologies. Kube bete lohlatjwa livesi ngobe asikavuli ngisho libhayibheli kulendzaba lena, he said.
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