Taxpayers in South Africa have been paying for buildings leased to government but not being used for public office functions. The Department of Public Works (DPW) has been forking out rent to the tune of R5-million a month for over 100 buildings that are not occupied by public officials, and for the lack of oversight resulting in waste of public funds, they are our zero for this week.
In his department’s budget vote, delivered in Parliament this week, Minister Thulas Nxesi revealed that a lease review done by the DPW and Treasury as part of a seven-year plan to rebuild public works showed up some inconsistencies in the dealings with private sector lessors.
“The size of the actual accommodation of certain leased accommodation occupied by user departments differed from the occupancy as agreed in the lease agreement and paid for by the DPW,” Nxesi told Parliament.
He added that “the escalation rates of certain leased accommodation differed to the market escalation rates. There were 578 leases where no lease agreements could be located, leading to potential irregular expenditure.”
To help remedy the situation, the department has stopped payments to the leases of building that stand vacant. To probe how the problem of dodgy leases got to this state, Nxesi said a probe had been started by the Special Investigating Unit.
The department is only in the second year of its seven-year rehabilitation programme. Poor performance by the department in its functions, said Nxesi, made it necessary to develop the programme. For eight years, the department failed to receive a clean audit from the auditor-general.
It is not all bad news for DPW, however, which has taken on measures to ensure more stability in the financial management of the department and better record keeping functions of government assets.
“A review of the supply chain management function led to the development of specialised streams dealing with procurement of goods and services; immovable assets acquisition and disposal, leases and infrastructure development,” said Nxesi.
He also said that the National Treasury Government Technical Advisory Centre was assisting the department in correcting its supply chain management as well as in capital projects to ensure compliance and alignment.