The Special Investigating Unit’s (SIU) third final report on its wide-ranging investigation into Covid-19 procurement irregularities under Proclamation R23 of 2020 is now publicly available – find part 1 and part 2 here.
R23 authorised the SIU to investigate procurement conducted under the Covid-19 national state of disaster, which was declared in March 2020. It was to unearth procurement processes that were not fair, competitive, or transparent, as well as those which contravened legislation, guidelines, or regulations. The SIU was also to investigate any improper or unlawful conduct by officials or employees at state institutions.
The third final report spans the period of investigation between 1 July 2022 and 31 October 2022, and was delivered to the president on 15 December 2022. The first and second final reports covered 23 July 2020 to 30 November 2021, and 1 December 2021 to 30 June 2022, respectively.
In total the SIU set its sights on 5 515 contracts awarded to 3 025 service providers, with a total value of R17.8-billion. By the end of the period which this third final report covers, says the SIU, 90.2% of investigations had been finalised while 9.2% were ongoing.
In terms of the 90.2% of finalised matters, the SIU found that the value of irregularities in contracts far outweighed that of contracts which were conducted correctly. No irregularities were found in 2 010 contracts valued at R6.7-billion – but irregularities were identified in 2 965 contracts, with a jaw-dropping value of R8.9-billion. In addition, 85 contracts with a total value of R174 951 were found to be out of scope – meaning that they do not fall within the established parameters or scope of the procurement projects.
As a result of this monumental piece of work, 59 matters had been enrolled in the Special Tribunal as of 31 October 2022, while 476 referrals were made to prosecuting authorities, 458 officials were referred for disciplinary action, and three matters were referred for executive action.
However, it is concerning that the matters enrolled with the Special Tribunal only cover a small proportion – R2.5-billion – of the R8.9-billion worth of irregularities uncovered.
Should all these enrolled cases and referrals be successfully handled, the state stands to recoup R566-million in cash or assets, with R119-million in losses prevented, and R729-milllion worth of contracts set aside. The value of the actual cash or assets recovered to date stands at a paltry R36-million.
In this report the SIU shares the progress of various civil litigation cases undertaken in High Courts around the country and in the Special Tribunal, details of the referrals made for disciplinary, administrative, or executive action, and a breakdown of the value of actual and potential recoveries along with details of potential losses averted and contracts set aside.
It also goes into detail regarding matters finalised and those still under way.