Deputy Speaker, the Auditor-General issued a report to Parliament in August 2008, which indicated that senior managers failed to declare their interests and that the majority of government employees did not have approval to perform remunerative work outside their employment in government.
The report of the Auditor-General highlighted, amongst other things, six key findings. The first is a lack of approval to perform remunerative work. Of the 2 319 government officials that had an interest in companies that did business with government departments, only 75 had permission. The business conducted with government by these employee-related entities for the 2005-06 and 2006-07 financial years amounted to R615 million.
The second finding highlighted excessive business with employee-related entities. In certain instances, employees of the departments had approval to perform other remunerative work, but did excessive business with government which could have had an impact on their ability to effectively perform their respective duties. The Auditor-General further found that 19 employees did business with national and provincial departments to the tune of R68 million.
With regard to the third finding, there was also the issue of collusive tendering processes. The Auditor-General also identified a total of 11 employees involved in collusive tendering and their activities amounted to R1,6 million.
Regarding the fourth finding, the report also dealt with conflicts of interest. Employees were involved in procurement processes in the departments and the entities in which they had an interest. These employees were appointed to deliver goods and services for government and their conflict-of-interest transactions amounted to R14,2 million.
In respect of the fifth finding, there was also a lack of declaration as well as misrepresentation in the standard bidding documents. Fifty-nine government employees with transactions amounting to R172 million were found to have misrepresented the disclosure in the tender documents by not declaring that they were related to companies and close corporations doing business with government.
The sixth finding was regarding deviation from the supply-chain management processes in the awarding of tenders and quotations.
When read in line with the findings of the Public Service Commission's Report on financial disclosures by members of the senior management service for the 2007-08 financial year, the findings of the Auditor-General are an indication of a profound challenge of a conflict of interest in the Public Service.
The Public Service Commission, PSC, found that 210 senior management members did not disclose their interests in some companies or close corporations. Furthermore, the PSC reported that only 48% of the disclosure forms were submitted by senior management members to the PSC before the prescribed dates.
Whilst there are clear guidelines in terms of the Public Service regulations, Treasury regulations, the Public Finance Management Act and other applicable legislation regarding the prevention and the management of conflicts of interest, the following challenges remain significant in resolving this matter.
One, there is lack of compliance with legislation relating to financial disclosures; two, there is no proper monitoring of the legislation relating to financial disclosures, procurement, collusion among public servants and other practices that have led to the findings outlined by the Auditor- General; three, there are attitudinal reasons that mostly lead to a lack of compliance by senior management.
In line with the aforementioned provisions, we recommend that: One, national and provincial departments ensure that they develop effective monitoring and evaluation policies that will respond to any breaches in policy and deal with such cases immediately; two, in an event that some employees are found guilty, the respective national and provincial accounting officers must ensure that they recover the money acquired through these fraudulent means; three, the accounting officers of the relevant departments must take disciplinary action against designated employees who do not declare their interests in companies or CCs that did business with national departments; and, four, national departments that had employees performing remunerative work without approval investigate these instances and that the relevant accounting officers take immediate and appropriate disciplinary action against those that are found guilty of performing remunerative work without approval. I thank you.