PFMA 2019-20 Report

on national and provincial audit outcomes 43 MATERIAL IRREGULARITY ACTION TAKEN BY AUDIT REPORT DATE Department of Health (KZN) – 2018-19 Contracts for radiology equipment awarded in September 2017 to bidders that did not score highest points in evaluation process, resulting in higher prices being paid. Financial loss: To be quantified by accounting officer Notification: 25 June 2019 Based on preliminary investigation by department’s special investigation unit concluded in July 2019, acting accounting officer requested provincial treasury’s forensic investigation unit in August 2019 to comprehensively investigate matter. Investigation completed in June 2020 concluded that there was no non-compliance based on different interpretation of requirements of Preferential Procurement Policy Framework Act. National Treasury was requested to resolve disagreement and provided their view in November 2020, which investigation unit (which now falls under premier’s office) is currently reviewing. Accounting officer plans to take necessary action based on revised outcome and recommendation of investigation. Recommendations in audit report and referrals to public body for investigation MATERIAL IRREGULARITY RECOMMENDATION/REFERRAL AS REPORTED IN AUDIT REPORT Department of Defence – 2019-20 Contract for inventory and asset verification awarded in February 2017 to two bidders on 50/50 basis and not to one bidder that scored highest points in evaluation process, resulting in increased project cost. Financial loss: R250,6 million Notified: 18 July 2019 Accounting officer did not take any action in response to being notified of material irregularity. Recommendations to be implemented by 30 November 2020: • Accounting officer should investigate irregular expenditure and quantify amount of financial loss incurred, in accordance with National Treasury instruction notes dealing with irregular expenditure. • Department should take effective and appropriate disciplinary steps against any official found to be responsible through investigation in terms of section 38(1)(h) of Public Finance Management Act and treasury regulation 9.1.3. • Department should take appropriate action to determine whether responsible official is liable by law for losses suffered by department for purpose of recovery, as required by treasury regulations 9.1.4 and 12.7.1.