Weak controls, expired contracts and irregular expenditure have yet again been linked to the Department of Health and its entities, according to the Auditor-General of South Africa (Agsa).
In a briefing to Parliament’s Portfolio Committee on Health last week, Agsa officials said more than R9.7bn in contracts at the National Health Laboratory Service (NHLS) had escaped full audit scrutiny.
Nelisiwe Mhlongo, deputy business unit leader at Agsa, told MPs the Department of Health had disclosed more than R5.3m in irregular expenditure that was still under assessment, reports TimesLIVE.
She said the department had paid invoices before receipt of goods and services, which is not in accordance with the service level agreement.
“Procurement from prior years was not done through Sita (the State Information Technology Agency), while the NHLS continued using expired contracts and a catalogue system instead of going out to competitive bidding.”
Procurement failures, audit gaps
The NHLS was the biggest contributor to procurement findings in the sector.
“Sufficient appropriate audit evidence could not be obtained to confirm that management complied with supply chain management prescripts,” she said, adding that the NHLS incurred irregular expenditure and possibly uneconomical procurement.
The AG’s findings included:
• quotations were accepted from suppliers who failed to submit mandatory declarations;
• competitive bids were not advertised for the required minimum period;
• goods and services were procured without obtaining three quotations, in breach of Treasury regulations; and
• the NHLS failed to monitor adherence to contract terms or commitments effectively.
Mhlongo said the R9.7bn in contracts at the NHLS could not be fully audited because of incomplete or unreliable documentation.
Patients pay the price
Corruption Watch warned that procurement failures in the sector ultimately harm patients.
Attorney at Corruption Watch Nkululeko Conco said irregular procurement or non-delivery by suppliers often translated into a lack of essential equipment and compromised patient care.
“Facilities are unable to provide appropriate care when suppliers fail to deliver. Staff end up performing functions outside their scope of work, and this affects the quality of health care delivered to patients.”
Poor procurement practices also affected medical equipment maintenance and infrastructure.
“We’ve seen cases where medical equipment was procured without maintenance being included in the tender,” he said, calling for greater transparency in public health procurement,” Conco added.
“The public should have access to information about what is being procured, from whom, for how much and how performance will be monitored.”
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