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The Department of Public Works is our zero today for admitting to improper spending of almost R4-billion in public funds.

Speaking at a joint meeting of Scopa and the public works portfolio committee on Wednesday, deputy minister Jeremy Cronin shared information on improper spending by his department. Cronin confirmed that between 2009 and March 2013, the department was responsible for “R3.6-billion [that] appeared to be irregular expenditure, problematic expenditures.”

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The department indulged in irregular expenditure of more than R1.5-billion in the 2012-2013 financial year alone – part of this involved the controversial lease of the Middestad office block by the Department of Public Works on behalf of the South African Police Service.

The department also incurred needless costs of R4.9-million by repaying VAT to non-VAT vendors.

Corruption won’t be tolerated

Cronin has given assurances that the matter is being addressed, and that corruption will not be tolerated.

"We are not just lamenting, we are actually undertaking a whole range of actions, including criminal cases, some of which have already gone to court."

One of these cases, he said, involved the Middestad incident. After an investigation, the public protector Thuli Madonsela found that the lease was unlawful and that then police commissioner Bheki Cele had not adhered to procurement procedure. Cele was dismissed in mid-2012.

Besides irregular lease contracts and improper procurement procedures, Cronin gave details of wasteful spending – for example, corrupt officials in the department have colluded with suppliers to charge R200 for each drinking glass hired for functions at the presidential guesthouse. This means that up to R60 000 was spent just on glasses for 300 guests, for one night!

“It's a smallish indication of, at the very least, a lack of diligence, when departments tender for services,” Cronin admitted. “There could be more behind it … but it's unforgivable."

Public Works chief financial officer Cox Mokgoro said that the matter was already under investigation by the Special Investigating Unit. “We will see when the conclusions come out and what recommendations are put forward."

Cronin said the department had unearthed the mind-boggling amount after spending a long time going through almost a million transactions.

"It’s an enormous set of problems which we are not proud of," he told the media.

For its irregular spending of R3.6-billion in public funds, the Department of Public Works is our zero for the week. But while he acknowledged the situation, deputy minister Jeremy Cronin also stated that efforts were under way to address the problem and root out corruption.