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Swaziland finance minister announces procurement reform


Supply Management

29 February 2012 | Angeline Albert

This year, the Swaziland government plans to introduce a public procurement agency to oversee the purchasing carried out by public bodies.

In this national budget speech, finance minister Majozi Sithole said that the Swaziland Public Procurement Regulatory Agency will be created in the 2012/13 financial year.

As well as overseeing public purchasing, the agency will provide an independent forum to assess suppliers’ complaints. In addition, a code of conduct for public sector procurement officials will also be adopted.

The changes come as a result of the country’s Procurement Act of 2010, which gained assent from His Majesty King Mswati III last year. The act also disqualifies public sector workers and politicians from supplying government with goods and services.

In his budget speech, Sithole said: “Government understands that improving public procurement can generate savings without compromising services to the public. It is also an area prone to corruption. That is why we have a new procurement act. In 2012, the government will apply the changes required.”

The minister emphasized the need for stronger fiscal discipline in government by investing in cost-saving policies, improving procurement and public finance management and fighting corruption.

AfDB and EBRD to Launch Assessment of Tunisia’s Public Procurement System


AllAfrica

April 23, 2013

The African Development Bank (AfDB) and the European Bank for Reconstruction and Development (EBRD) are jointly organizing the North Africa and Southern Eastern Mediterranean (SEMED) Regional Public procurement Conference on Morocco on April 22-23 in Marrakesh, Morocco to launch a report on the assessment of the public procurement system of Tunisia.

The conference, which will provide Tunisia an action plan to improve its public procurement system will include discussions on public procurement initiatives, reforms and assessments in Egypt, Jordan, Mauritania and Morocco.

Key Speakers at the conference will include experts and representatives from the AfDB, EBRD, Organisation for Economic Cooperation and Development (OECD), United Nations Commission on International Trade Law (UNCITRAL), World Trade Organisation (WTO) and the European Union Delegation to Ukraine.

The AfDB collaborated with the World Bank, the European Union and the Tunisian Government to complete the assessment of Tunisia’s public procurement system in 2012, as part of the Bank’s efforts to promote sound and efficient business practices in Africa.

Margaret Thatcher, public procurement pioneer and advocate?


Spend Matters

By Peter Smith

April 8, 2013

Margaret Thatcher, who died today, was the United Kingdom’s most important politician of the last 50 years. She will be remembered for both her domestic leadership, as she turned round what seemed like a country in inexorable decline through the 1970s, and her role in foreign policy, from the Falklands to supporting Reagan in the “defeat” of the USSR.

But she can also take some credit as one of the key founding fathers (mothers?) of professional public sector procurement. Under her period of office as Prime Minister, 1979 – 90, we saw major advances in procurement throughout the public sector.  As David Smith, Commercial Director at the Department of Work and Pensions, CIPS President last year and someone who was one of the pioneers of public procurement himself, said to us today:

“She was really the first Prime Minister in the UK to take seriously the whole concept that government spending needed to be efficient and effective. She instigated the first government procurement review in 1984, which really led to the Treasury Central Unit on Procurement being formed, more senior procurement staff in departments, and eventually OGC, ERG and all the focus we’ve seen since on public sector procurement”.

She also led the drive to involve the private sector more in the delivery of government services. Now, just like the more divisive side of her achievements on the economic front (miners’ strike et al), you might look either positively or negatively at “compulsory competitive tendering” and “market testing” as the beginning of the whole outsourcing boom and greater private sector involvement in public services.

But if you remember the days of the local authority works’ departments, and their total lack of any customer or VFM focus (and often a dollop of corruption to go alongside that), then it’s hard to argue against her view that competition and procurement had to be taken more seriously if the taxpayer was to receive value for money for an ever-increasing investment.

And as well as being arguably the inventor of public sector outsourcing, it was under her leadership that the first serious Procurement Directors started appearing in government departments. I did my stint as a government CPO not long after she’d moved on, but her influence was still clear in the approach of Ministers like  Peter Lilley and Michael Heseltine, with their support for further innovative procurement initiatives around outsourcing and PFI for instance.

As David Smith said today,

“Whatever you think of her politics, she was a friend of the profession, and a genuine pioneer in understanding the importance of the role in the public sector. Many of the things we take for granted now in public procurement started because of her”.

RIP Baroness Thatcher.

Algerians outraged over latest corruption accusations against state oil and gas behemoth


Fox News

March 3, 2013 / Associated Press

ALGIERS, Algeria –  Corrupt and gorging itself at the trough of Algeria’s vast oil wealth — that’s how most Algerians privately view the elites running the country. Yet few have been willing to say so publicly, until now.

New corruption scandals are shining a new spotlight on state oil company Sonatrach, which jointly with BP and Norway’s Statoil runs the desert gas plant that was the scene of a bloody hostage standoff in January.

A recent anguished public plea by a former Sonatrach official shocked Algerians and raised hopes that the leadership will try to clean up the oil and gas sector in Africa’s largest country.

There’s plenty at stake: Algeria is also one of the continent’s richest countries, as the No. 3 supplier of natural gas to Europe, with $190 billion in reserves, up $8 billion in the last year alone.

The Feb. 18 letter by former Sonatrach vice president Hocine Malti in the French-language Algerian daily El Watan broke the silence around the company. Addressing the shadowy leader of Algeria’s intelligence service, it asks if he is really serious about investigating new bribery scandals involving Sonatrach and Italian and Canadian companies.

When Italian prosecutors in January announced an investigation into oil company ENI and subsidiary SAIPEM for allegedly paying €197 million ($256.1 million) in bribes to secure an €11 billion contract with Sonatrach, it provoked a firestorm in the Algerian media, until the North African country’s justice system finally announced its own inquiry Feb. 10.

Malti, author of the “Secret History of Algerian Oil,” scoffed that Algerian authorities were only following the lead of international investigators and wondered if Mohammed “Tewfik” Mediene, the feared head of the Department of Research and Security, would allow the real sources of corruption to be tried in court.

“Is it too much to dream that some of your fellow generals, certain ministers or corrupt businessmen — members of the pyramid that you are on top of — members of this fraternity, might also end up in front of justice?” he asked in the letter. “Or will it be like always, just the small fry are targeted by this new investigation?”

“Will we have to continue to listen for news from the Milan prosecutor to know the sad reality of our country, to discover how certain people, whom you know quite well, people you have come across in your long professional career, have gorged themselves on millions of dollars and euros of the country’s oil revenues?” he added.

The response to the letter was swift. Energy Minister Youcef Yousfi promised that once an investigation was complete “we will take all necessary measures” against those harming the interests of the nation.

President Abdelaziz Bouteflika, who rarely appears in public, said in a written statement, “these revelations provoke our disgust and condemnation, but I trust the justice system of our country to bring clarity to the web of accusations and discover who is responsible.”

Malti told The Associated Press by telephone from his home in France that he wrote the letter partly out of anger that Algeria had to rely on foreign prosecutors to reveal the extent of its own corruption and addressed it to the head of intelligence to shock people.

“It made a lot of noise because with this letter, I broke a taboo,” he said. “The head of the DRS is an unapproachable figure in Algeria, at times we can’t even pronounce (say) his name.”

It is not the first time the state-owned hydrocarbon company, which provides Algeria with 97 percent of its hard currency earnings, has been enmeshed in scandal.

In 2010, its head, three of its vice presidents and the minister of energy were all fired in a corruption investigation run by Mediene’s intelligence agency.

However, rather than restore faith in the country’s corruption-fighting mechanism, the 2010 purge was widely seen as a chance to settle scores between the DRS and Bouteflika, since most of those fired were his close associates.

Algeria ranks 105 out of 176 in Transparency International‘s 2012 corruption index, and the occasional corruption investigation often just seems to be how the elites settle their scores, such as a string of revelations about prominent politicians in November, which observers said were linked to next year’s presidential elections.

“I realize that people might be shocked by what is happening at Sonatrach — these scandals are terrible and we condemn them as individual acts,” Sonatrach head Abdelhamid Zerguine said on the radio Sunday, the anniversary of Algeria’s 1971 nationalization of its oil industry from the French. He promised to fight further corruption “with utmost vigor,” even while denying it was systemic.

The scale of the scandals is staggering. Nearly €200 million ($260 million) was paid out by the Italians, according to the Milan prosecutor. ENI has pledged full cooperation with prosecutors in their investigations.

Meanwhile, according to a joint investigation by Canada’s Globe and Mail newspaper and an Italian business paper published Feb. 22, Canadian company SNC-Lavalin paid a series of bribes of its own to secure a $1 billion engineering contract. Company spokeswoman Lilly Nguyen responded to queries about the case saying “to the best of our knowledge, SNC-Lavalin is not specifically under investigation in the Sonatrach matter.”

With commissions on deals like this going to the highest levels of power, the Algerian press rarely reports about it — until the subject is broached by the foreign media.

Malti, who was there at the founding of Sonatrach in 1963, estimated that the country was losing between $3 and 6 billion annually to corruption in the oil sector alone.

“If a judge says that an inquiry has opened or even a minister promises to take measures against ‘people working against Algeria’s interests,’ I don’t believe them,” Mohammed Saidj, a professor of international relations at Algiers University, told the AP. “It’s just words to appease a public opinion shocked when it hears about the corruption and billions of dollars stolen by high-level political and military officials, including those close to the president.”

The chances of this situation changing are dim, considering how much the country relies on a single company.

In a chapter on Sonatrach in the 2012 book “Oil and Governance,” John Entelis, an Algeria expert at New York’s Fordham University, described the importance of a company established just a year after Algeria won its independence from France, and wrote, “Algeria’s governing elite rely upon Sonatrach for revenue from which they gain power, patronage, and privileges.”

Entelis told AP that the letter in El Watan shows that Algerians are increasingly able to complain about this system, even if that won’t necessarily change things.

“This is the heart of the Algerian political system — Sonatrach, the DRS, civil society in the form of … willingness to make these things public. Some say this is what enables it to maintain itself instead of collapse,” he said.

___

Paul Schemm reported from Rabat, Morocco. Associated Press writer Karim Kebir contributed to this report from Algiers, Algeria.

Analysis: New law fails to ease oil concerns in Uganda


IRIN NEWS

KAMPALA/NAIROBI, 13 December 2012 (IRIN) – Uganda’s parliament recently passed a law to govern the exploration, development and production of the country’s estimated three billion barrels of oil, a resource whose extraction will directly affect the livelihoods of tens of thousands of people.

While the law streamlines the burgeoning industry, analysts have raised concerns over transparency and over who controls the sector.

“The new law helps set clear guidelines under which the oil sector is to be run and managed, and makes clear who is in charge of what roles,” said Tony Otoa, director of Great Lakes Public Affairs (GLPA), a Uganda-based think tank focusing on oil and governance. “However, there are some concerns about transparency and too much power within the oil industry in the hands of the president.”

The bill was passed on 7 December after weeks of wrangling over its controversial Clause 9, which gives the energy minister wide-ranging powers, including authority over the granting and revoking of oil licenses, negotiating and endorsing petroleum agreements, and promoting and sustaining transparency in the petroleum sector. Many members of parliament (MPs) felt these powers should be held by an independent national oil authority.

“Essentially, the standoff, which has ended, was about the withdrawal of trust from a government that is battered by corruption scandals. Also the way the cabinet operates is that, in the past, the feeling has been that some key ministries, like finance, are effectively run by the presidency after being stuffed by yes-men or -women. The pushback against Clause 9 also comes as the Central Bank opened its vaults to a large withdrawal in 2010 [US$740 million to buy six fighter jets] only for approvals to be sought retrospectively,” said Angelo Izama, a Ugandan journalist and oil sector analyst.

“Loss of trust”

“This loss of trust is behind the resistance to greater control by the executive,” he added. “The executive has not been a bad shepherd of the process so far. Uganda’s negotiating position has been tougher with the oil companies, ironically, without the oversight of parliament. However, public scandals elsewhere have negatively affected the ability of the president to convince lawmakers – especially of his party – that he means well.”

A number of donors – including the UK and Ireland – recently suspended aid to Uganda following allegations of deep-rooted corruption in the Office of the Prime Minister. The prime minister, the former energy minister and the foreign affairs minister were all accused of taking kick-backs from oil companies in 2011, charges that remain unproven but that nevertheless damage the reputation of the government.

“The country lacks trust in the state… Institutions and officials have lost legitimacy, and for such an important bill to vest too much power into a political appointee is a recipe for disaster,” said Stephen Oola, a transitional justice and governance analyst at Uganda’s Makerere University Refugee Law Project.

“Granting and revoking licenses and negotiations are technical in nature. We need an independent commission or authority made up of people of good competence, technical ability and experience, and good morals to guard our oil,” said Frank Gashumba, a local businessman and social activist.

Proponents of Clause 9 say licensing powers are safer in the hands of the cabinet than under an oil authority. “The authority is open, easy to bribe and manipulate. Cabinet is bigger than the authority – members of the executive are answerable to Ugandans because they are elected leaders,” said Kenneth Omona, a ruling party MP.

Those opposed to it say they will challenge the law, which was passed with 149 votes in favour and 39 against; some 198 MPs did not turn up to vote.

“The fight is not complete; the passing of the bill is liable to be challenged in courts of law,” said Theodore Ssekikubo, ruling party MP and chair of the parliamentary forum on oil and gas. “If we fail to go to court, we shall subject the matter to a referendum for all Ugandans to pronounce themselves on this strategic resource. We want to ensure transparency and accountability in the oil sector.”

Transparency

There are also concerns about the law’s confidentiality clause, which limits the amount of information accessible by the public.

“The law is lacking transparency – it imposes confidentiality on officials working within the sector, even after they leave office, so there is no opportunity for whistle-blowing or for the public to have access to information on, say, production-sharing agreements,” GLPA’s Otoa said.

He noted that Uganda still hasn’t joined the Extractive Industries Transparency Initiative (EITI), an international scheme that attempts to set a global standard for transparency in oil, gas and mining, further compounding the sector’s lack of transparency. As a member of the EITI, Uganda and oil companies involved in the country would be required to publish all payments and revenues from the industry.

While Total and the China National Offshore Oil Corporation (CNOOC), two of Uganda’s major oil partners, are listed on Wall Street and are therefore subject to the Dodd-Frank Wall Street Reform and Consumer Protection Act – which requires disclosure of payments relating to the acquisition of licenses for exploration and production of oil, gas and minerals – the Irish firm Tullow Oil, another of Uganda’s main oil partners, is not under any similar obligations.

“I am worried we [legislators] and the public can’t access and scrutinize these agreements. You can imagine the recently negotiated and signed oil agreements have not been accessed by the public, not even by members of parliament,” Beatrice Anywar, former shadow energy minister, told IRIN.

The impact of the oil sector has so far been most acutely felt by communities around Lake Albert, thousands of whom have had to move – some willingly and some forcefully – to make room for an oil refinery, which is expected to take up 29sqkm and displace some 8,000 people.

Land issues

“The government is prosecuting the refinery resettlement by the book. However, managing public expectations and the process of multiple decision makers in Uganda’s complex land legal system [Uganda has multiple land systems, including customary, leasehold and freehold] has contributed some volatility to the process… What is adequate compensation? And who determines that? Is it the market or should this be done by the government?” said journalist Izama.

“As a partner to the oil companies, it’s questionable too if the government can make the best decisions for the affected people as it would look to keep project costs fairly low,” he continued. “It is still a dilemma which is jurisprudential as well as political.”

He noted that much of the oil is in game reserves and a sensitive basin with lakes, rivers and a rare biodiversity, and borders the Democratic Republic of Congo, which could also pose challenges for peaceful production; there has already been some tension between the two countries over their boundaries within Lake Albert.

“The process of consensus-building is still weak, and regardless of how it’s arrived at, displacements will create uncomfortable realities, including land and job pressure.”

According to Otoa, Uganda’s lack of a comprehensive land policy makes compensation issues more complex. “We need clear land policies to ensure people are properly compensated – there is a Resettlement Action Plan in place, but it has not been implemented, and a draft land policy has not been actualized, leaving these communities vulnerable,” he said.

He noted that the lack of education among the local population, both in the oil-rich areas and the rest of the country, had contributed to the continued problems in the sector.

“We have focused too much on educating MPs on the implications and importance of good oil governance. We need to move to people-centred approaches and encourage dialogue in the public sphere, which will lead to people demanding accountability from their MPs and the government,” he added.

Ultimately, Izama said, responsible actions by the government will be the difference between Uganda’s oil making a significant impact on the country’s economy or causing conflict and greater poverty.

“Pressure on public institutions prior to commercial oil production is an effective way of counteracting the resource curse. If this public engagement falters, if the transition [from President Museveni to his successor] is volatile, some of the scenarios of the so-called oil curse are possible,” he said. “Overall the tensions are high, but responsible actions by public and political institutions like the past debate show progress is possible.”

Uganda participates in East African procurement forum


The Independent

By Julius Businge

December 5, 2012

The Public Procurement and Disposal of Public Assets (PPDA) Executive Director, Cornelia Sabiiti is leading a team of 19 professionals to a regional procurement forum in Bujumbura, Burundi that runs from Dec. 5 to 7, the procurement body said in a press statement released on Dec. 5.

Over 200 delegates from public, private and civil organisations in the region are attending the 5th East African Procurement Forum being held in Bujumbura.

During the three day conference delegates from Burundi, Kenya, Rwanda, Tanzania, Uganda and South Sudan will deliberate on issues affecting public procurement in the region. The objective of the forum is to serve as a framework that helps participants learn and benchmark with each other on their respective public procurement systems including policies and enforcement measures.

The Ugandan team includes delegates from Civil Aviation Authority (CAA), Uganda Revenue Authority (URA), Uganda National Roads Authority (UNRA), Ministry of Education & Sports, Uganda Management Institute (UMI), Ministry of Health, Kampala Capital City Authority (KCCA), Ministry of Local Government, National Environment Management Authority (NEMA), Uganda Coffee Development Authority (UCDA), Institute of Procurement Professionals of Uganda (IPPU), AH Consulting and the Ministry of Defense.

Uganda will be presenting six papers including a paper on ethics and transparency in the management of public procurement; the contribution of civil society and the public sectors on ethics and transparency in public procurement. Another paper will look at the challenges of an independent regulatory authority.

The Burundi forum comes on the heels of the successful public procurement symposium PPDA held in September 2012 bringing together public and private sector professionals in Uganda.

Supply Chain Management – turning professional?


The Guardian

The trend for professionalising supply chain management in the private sector is slowly reaching the public sector in Africa but still rarely appears anywhere near the top of development agendas.

The trend for professionalising supply chain management in the private sector is slowly reaching the public sector in Africa but still rarely appears anywhere near the top of development agendas. This despite the fact that, in many developing countries, public procurement accounts for over 50% of GDP, or considerably more where the private sector is small.

Historically, procurement and supply chain management have been undervalued and viewed as a process rather than a professional function. With the realisation that effective supply chain management plays a critical role in ensuring funds are well used, value for money in the delivery of basic services is achieved, and transparency and accountability is assured, the value of professional supply chain management needs to be recognised. How will this happen in countries where procurement is viewed as an “add-on” to other careers?

The wave of legal and institutional reforms to public procurement across Africa over the past few years has certainly focused attention more firmly on the question of capacity building. Many universities are subsequently providing pre-service training in supply chain management which is beginning to instil an early appreciation of the value of the function.

In the health sector, where the issues are more acute, major programmes to combat diseases such as HIV/AIDS and tuberculosis have highlighted the importance of strong procurement and supply chain due to the critical need for regular access to medical supplies. The World Health Organization identifies equitable access to medical products, vaccines and other technologies as one of the six building blocks to a well-functioning health system. The traditional approach to provide expensive in-service supply chain management training to doctors and pharmacists so that they can add this on to their day job is slowly changing but more needs to be done to raise the profile of supply chain management in health institutions.

This trend towards institutional reform in the public procurement sector is not focused solely on health. Procurement training is increasingly available at all levels, from basic introductions to new procurement procedures to academic courses run by universities. Crown Agents has worked with the governments of several African countries to ensure that their procurement capacity building strategies are delivered. Our long expertise in supply chain management and procurement reform and our ability to understand the local environment enable us to work with procurement authorities across Africa. In Ghana for example we helped to develop a whole programme of professional development that covered short, medium and long-term requirements. We partnered with the Institute of Management and Public Administration to implement the short-term plan which was based on training an estimated 25,000 people including procurement staff, tender committees, the private sector and oversight institutions addressing the cross-cutting nature of procurement. We also teamed up with tertiary education institutions to develop the medium and long term training which included a bachelors level degree course in procurement.

Professionalisation is not just about training; it is about transforming the view of the profession itself to ensure a local supply of qualified new recruits in the future. Securing professional accreditation validates and upholds the importance of the supply chain management role. In Botswana for example the Public Procurement and Asset Disposal Board is seeking accreditation of its training materials both nationally and internationally after Crown Agents helped it to develop a series of procurement training modules and completed a training-the-trainers course prior to building capacity in its procuring entities.
Many countries are even establishing their own national professional bodies as membership of international professional institutions such as UK Chartered Institute of Purchasing and Supply and Chartered Institute of Logistics and Transport expands significantly in Africa.
In the health sector there are also a number of initiatives that support the strategic role of supply chain managers. Crown Agents has provided technical support and is an active stakeholder in ‘The People That Deliver’ initiative which promotes workforce excellence in supply chain management.
Building supply chain competence and promoting and valuing supply chain management as a professional career can make a positive impact on a country’s economic development and its people’s lives.

Content on this page is produced and controlled by Crown Agents.

Nigeria Validates Manitoba’s Power-Mangement Contract


Bloomberg

By Elisha Bala-Gbogbo

Nov 21, 2012

Nigeria validated a power-management contract signed by Canada’s Manitoba Hydro Electric Board in July to run the state-owned power utility Transmission Co. of Nigeria after regulatory approval, the Bureau of Public Enterprises, the privatization agency, said.

“We have received ratification from the Bureau of Public Procurement and the contract has been certified,” Chukwuma Nwokoh, a spokesman for the Abuja-based privatization agency said by phone today. Under Nigerian laws, all contracts entered into by the government needs to be certified by the Bureau of Public Procurement.

Reuben Abati, a spokesman for President Goodluck Jonathan, on Nov. 14 announced the cancellation of the contract saying the correct procedure wasn’t followed. Manitoba “did not follow the law strictly” and initial report of the termination was a “misunderstanding,” Jonathan said on Nov. 18 in an interview broadcast on state-rub television NTA

Nigeria, Africa’s top oil producer, is selling majority stakes in power plants and letting private investors buy as much as 60 percent of 11 distribution companies spun out of the former state-owned utility as it seeks private investment to curb power shortages. Blackouts are a daily occurrence in Nigeria, Africa’s most populous country with more than 160 million people. Demand for electricity in Nigeria is almost double the supply of about 4,000 megawatts and the government plans to boost output to 14,019 megawatts by 2013.

Bids worth more than $2 billion by companies including Siemens AG (SIE) and Korea Electric Power Corp. (KEP) were approved by the government for the sale of the companies on Oct. 30.

To contact the reporter on this story: Elisha Bala-Gbogbo in Abuja atebalagbogbo@bloomberg.net

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net

 

South Africa: Gordhan’s war on incompetence and impunity


Mail & Guardian

By Faranaaz Parker

July 24, 2012

Finance Minister Pravin Gordhan has revealed plans for the national treasury to take a much tighter grip on local governments‘ finances. See the full report here.

Following the release of a damning report on the scale of mismanagement at municipal levels, Finance Minister Pravin Gordhan on Monday revealed that the national treasury would take a tighter grip on procurement processes across the country.

Gordhan announced that treasury would create a procurement oversight unit to actively enforce supply chain management at a national level and would shortly appoint a chief procurement officer. The position would be advertised in two weeks and would be established within the next two months.

“Where there are transactions for a particular size or type within the national domain there must be the ability to assess whether they meet market criteria in terms of prices [and] whether proper processes havebeen followed,” he said.

The announcement was an indictment of local government’s failure to spend and account for public money effectively.

The minister was speaking at the release of auditor general Terence Nombembe’s report on local government audit results, which showed that only 5% of all municipal entities – a total of 13 – had achieved clean audits for the year 2010/2011.

Gordhan said IT systems would be developed to allow the treasury to actively monitor compliance with financial management requirements so that it may demand information regarding procurements, such as how decisions were made and by whom.

Spending fiascos

The move may help prevent public spending fiascos such as the multibillion-rand leasing scandal that saw former police chief Bheki Cele and former public works minister Gwen Mahlangu-Nkabinde sacked last year.

Gordhan said the government should be able to demonstrate that there were consequences for nonperformance and for working outside the law.

“At the moment, those consequences are not there. When consequences are not there continuously then a level of impunity develops,” he said.

He said the new oversight mechanism would require the help of law enforcement agencies, who would bear the responsibility of preparing cases against and prosecuting those guilty of corruption.

With reference to the auditor general’s report, Gordhan said he was particularly disappointed that some large metros, which had better skills and capacity than small municipalities, did not received clean audits.

“If they can’t meet simple criteria in financial management, then it’s a matter the treasury has to take a closer look at,” he said.

Nombembe’s damning report
Nombembe’s report showed there were three root causes behind the slow progress towards clean audits in local government.

The biggest problem, he said, was a general lack of consequence for poor performance. Modified audit results were simply considered the norm, he said.

In addition, over 70% of those audited did not have the minimum competencies and skills required to perform their jobs.

Worryingly, over half of the municipalities audited were slow in responding to the auditor general’s suggestions and were not taking ownership of key financial controls.

Nombembe said if these issues were not addressed, they would continue to weaken governance.

He also complained that most municipalities employed consultants in areas where they already had people to do the work, and even then the results were not as good as they should be.

Cedric Frolick, National Assembly house chairperson, agreed, saying: “What are the employees doing when 70% of the work is being done by people who must be paid for it on top of their salaries?”

“Why are people who are not doing their job, being allowed to keep on [not] doing it?”

Meeting the criteria
But Minister in the Presidency responsible for performance, monitoring and evaluation Collins Chabane said because of the way the three spheres of government were structured, it was difficult to make interventions in local government unless specific criteria had been met.

“It creates a complication where no other authority can intervene, by law, until that municipality makes a decision,” he said.

Chabane said in future, the performance of departments and institutions may be linked to the performance of the heads of those institutions.

“That will begin to bring accountability,” he said.

Meanwhile Subesh Pillay, chairperson of the South African Local Government Association, said it was important to remember that clean audits were a means to an end.

“That end is to ensure that local government become efficient and effective organs of service delivery,” he said.

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