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13 December 2012 at 17:22 - Posted by Midrand

Tender fraud puts SA in a bad light


The recent corruption perception index, which placed South Africa among the world’s most corrupt countries, highlighted gross inadequacies of punishments meted out to tender fraudsters and corrupt government officials.

A senior researcher at law firm Edward Nathan Sonnenbergs (ENS) said on Wednesday that failure to take stringent measures against public servants found guilty of dabbling in corrupt activities such as influencing tender processes had harmed the country’s corruption status.

“The absence of notable convictions under the Public Finance Management Act and the Municipal Finance Management Act has raised concerns that incidences of corruption, bribery of public officials, kickbacks in public procurement and the embezzlement of public funds have skyrocketed and that efforts to stem the growth have been ineffective,” said Peter Allwright.

He said this in light of the high number of public officials listed on the Treasury’s database of restricted suppliers. Of the 346 convictions listed on the database, 43 percent of companies or people listed are public officials who performed external remunerative work for the government without permission. Most of these were in the Limpopo Health Department.

While some action would be taken against transgressors, they simply resigned from one public institution to join another so they could continue with their illicit activities.

“The transgressions show the high number of public officials involved with illicit work often conducted at the expense of their public sector roles.

“Strong action needs to be taken soon to stop the widespread growth of fraud and corruption. The act says that if there has been a transgression, you’ve got to take action. They should not be allowed to resign, or you continue taking action against them even if they resign to send a strong message that you can’t get away with it,” said Allwright.

He said a recent forensic investigation that ENS conducted into the construction of 23 000 pit latrines in the Eastern Cape had uncovered widespread corruption, bribery, kickbacks and the embezzlement of public funds.

“The investigation found that the public institution was in complete disarray, with endemic maladministration and ineptitude. Sixty-seven percent of contracts, totalling R132 million, were incorrectly awarded to service providers,” he said.

Allwright said the investigation had uncovered deviation from the supply chain management policy and inconsistencies in the assessment of proposals. major construction contracts were irregularly awarded to companies that did not meet standards.

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