An audit on South Africa corruption in public procurement in response to the Covid-19 pandemic shows that 62% of contracts analyzed so far have irregularities.
The Special Investigating Unit audits what South Africa spent in its fight against Covid-19 and has shared an updated report of corruption, fraud or forgery cases that siphoned off public money.
In total, the SIU scrutinizes 5,467 government contracts granted to 3,066 service providers for a value of 14.3 billion rand (US$937 million).
The probe has been finalized for only 4,549 contracts and the report doesn’t refer to ongoing cases. But already 62% of the contracts have irregularities, meaning that at least 51% of all the contracts signed by public officials will not be deemed correct.
The SIU shared its actions on December 10, 2021 and South Africa’s president Cyril Ramaphosa authorized to make it public. The report was released on January 25.
The SIU noted that because of the declaration of a national state of disaster in March 2020, persons in positions of authority within provincial governments believed that they didn’t need to comply with public sector procurement regulations. As a consequence and for the sake of emergency, they didn’t mind much about tender processes involving pubic funds.
First allegations of fraud or corruption came up to the SIU about the procurement of personal protection equipment, quarantine sites, catering services, or disinfecting material.
Suppliers would allegedly be paid without a proof of delivery, payments would be made twice, service providers would not be tax compliant, products would be sold at exorbitant prices or contracts would be granted to friends or family members of public officials.
Health Minister of South Africa resigned for a corruption scandal in the middle of the Covid-19 pandemic
The SIU therefore applied to the president for a proclamation to investigate maladministration and corruption regarding procurement by all public institutions in response to the Covid-19 pandemic.
The president of South Africa authorized the investigation on July 2020 to find out if public money was siphoned off.
By making the report public, Ramaphosa wants to show he is fighting against corruption as he was a longstanding vice president when his predecessor Jacob Zuma resigned from the presidency over corruption scandals in 2018.
To date, the investigations has led to 386 offenses such as fraud, corruption or forgery sent to the National Prosecuting Authority, 224 referrals for disciplinary actions against public officials, 330 requests for administrative actions including blacklisting of companies.
Forty-five cases, accounting for R2.1 billion ($138m) of public spending, have been brought to the Tribunal on Corruption, Fraud and Illicit Money Flows.
The investigation has potentially avoided losing R114 million in corruption according to the report. South Africa should expect recovering R551.5 million ($36m) because of misuse of Covid-19 funds, although only 6% have actually be recovered so far.
Last August, Health Minister Zweli Mkhize resigned as a result of the Digital Vibes corruption scandal. The company managed by two former associates of the minister won a tender worth R150 million in 2019 to provide communications services to the ministry. The contract was later irregularly extended to include the management of a Covid-19 awareness campaign. The company reportedly gave cash, paid for maintenance works or bought a car for Mkhize and his family.
The final report on all corruption cases should be submitted to the president by June 2022.