DoD works to improve financial controls to reduce corruption and fraud

Qualified audit reports underway for Minister Nosiviwe Mapisa-Nqakula’s (DoD) Defense Ministry have seen one of Parliament’s defense oversight committees hear what is being done to change the auditor’s financial opinion General Tsakani Maluleke on the South African army.

Without going into detail regarding the sums and amounts lost due to irregular and unauthorized spending, the 16-page presentation, presented today to the Defense and Veterans Portfolio Committee by Secretary of Defense Gladys Sonto Kudjoe, provides insight into what those charged with overseeing the financial well-being of DoD think.

This includes informing the Auditor General of the process followed by the finance division of the DoD to confirm the accuracy and completeness of the identification and disclosure of irregular expenses. Monthly meetings with representatives of services and divisions (of the SA National Defense Force) confirm the cases identified in specific environments. In addition, monthly accountability meetings attended by department and division heads “confirm the recording of irregularities”.

The DoD’s internal audit division will help 73 SANDF procurement centers nationwide to “ensure full accounting and recording of irregular expenses”.

Investigations to date into irregularities uncovered by AG staff have been completed and the presentation notes that the DoD “agrees” with the government’s financial watchdog that the asset management and building rental contracts contain. “significant irregularities”. DoD financial experts found no irregularities in a jet fuel contract and disagreed with the GA over the findings of significant irregularities in the supply of fuel to maintain the Gripen and Hawk jet fighters of the SA Air Force (SAAF) in flight.

The DoD accounting officer (Secretary of Defense Gladys Kudjoe) is “in charge,” the presentation notes, of reviewing the recommendations made and advising on the “accusation” of those involved.

With regard to cases of fraud, criminality and corruption, the military police work with the anti-corruption and anti-fraud directorate (DACAF) of the inspector general of the SANDF. Once the investigation is completed, cases are referred to district courts, commercial crime court, or military court for prosecution.

Updating the Defense and Military Veterans Portfolio Committee (PCDMV) on the status of seven irregular spending and unsuccessful and unnecessary spending cases, Kudjoe said two irregular spending investigations were finalized and recommendations were being made. implemented. Three cases are under investigation by the military police and police case numbers have been released in Dequar Road (Pretoria) and Simon’s Town – the cases are currently before the commercial crimes court. There is a case of irregular spending with the SIU (Special Investigations Unit) and the service provider ordered to reimburse R41 million plus interest.

Irregular, unnecessary and unnecessary spending

In March, the PCDMV learned that the DoD was investigating seven cases of unauthorized, unsuccessful, unnecessary and improper spending amounting to Rand 1.5 billion.

One case of irregular spending concerns a PriceWaterhouse Coopers contract to manage assets worth R604 million. In June 2020, a forensic society was appointed to investigate.

The DoD Inspector General (IG) is reviewing a R 239 million lifecycle management contract for the period 2015-2019.

Investigations into asset management contracts worth 447 million rand from 2017 to 2019 are finalized, ratified by principals and due process are being followed, the DoD said in March.

Information and communications technology (ICT) contracts worth R 216.7 million for ICT services and licenses for 2018/19 were reported as the bids were not evaluated according to the criteria stipulated in the tender documentation. The service provider admitted to overcharging the DoD by R41 million and reached an agreement with the SIU to repay the R41 million with an IOU issued.

Progress was reported in March in an investigation into non-compliant spending worth R 105 million in 2018/19.

The DoD was also investigating an incorrect valuation of ship spare parts and storage in Cape Town between 2018 and 2020. The irregular spending in this case amounts to Rand 59 million.

The latest case of irregular spending concerns the underutilization of the Eco Park property, Centurion, over four years (between 2015 and 2019, amounting to Rand 108 million).

For fiscal year 2019/20, irregular spending totaling R 2.836 billion was recorded due to non-compliance with supply chain management processes and underfunding of Employee Compensation Allowance (CoE ).

Of the R 2.836 billion in irregular spending incurred for 2019/20, R 2.609 billion was for expenditure in excess of the CoE allocation. This was due to a reduction imposed by the National Treasury on actual employees serving the DoD, according to the department’s annual report.

The difference of R 230 million incurred is due to contracts awarded through unfair tendering processes in previous years.

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