1(a) The Department ensures 100% compliance to Supply Chain Management (SCM) processes and all financial management policies and procedures as well as instructions from National Treasury are adhered to. This has led to a material decrease in irregular expenditure in 2021/22 compared to 2020/21.
- DBE disclosed the irregular expenditure as part of a drive to clean up the accounting of infrastructure projects.
- ASIDI started in 2012 and SAFE started in 2018.
- DBE assessed all procurement processes on ASIDI and SAFE. This revealed the following deficiencies in the procurement documents:
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- Tenders not advertised for 21 days;
- Local content – no SBD6.2 included;
- Non-compliance to Preferential Procurement Regulations;
- Non-compliance to CIDB regulations;
- Non-compliance to mandatory subcontracting; and
- Non-compliance to Implementing Agent own SCM policies.
- The bulk of these projects have been completed and schools are already benefiting from the use of the facilities provided.
- Some implementing agents have applied for condonation from National Treasury. This process has not been concluded
Response to question 1.(b)
- Allocation of projects to be implemented to Implementing Agents are done in Batches that can range from anything from 15 large schools to over 200 sanitation projects. A single process issue (such as not including a SBD6.2) in a bulk tender process, can thus have a large monetary impact as all the expenditure in a batch will have to be declared Irregular Expenditure.
- Expenditure may be multi-year or across financial years and process issues in previous years influences the Irregular Expenditure declared in the current financial year.
Response to question 2.
- The DBE implemented a standard operating procedure to check all procurement processes to avoid a repeat of this historical default. A checklist has been introduced in the SCM directorate to ensure that all procurement complies to SCM processes