The Office of the Auditor-General (AGSA) recently expressed concern to Parliament’s Standing Committee on Public Accounts (Scopa) that there have been no consequence for public officials doing business with the state, despite recommendations made years ago on how best to address the issue. Government has paid out millions over the past decade or so to its own employees for work that was outsourced, with cases of clear conflict of interest occurring across all three spheres of government.

Eugene Zungu, AGSA national leader for audit services, said one of the findings of his office was a cost to government of about R32-million to public servants who had not sought the necessary approval to bid for government contracts. The figure may have grown exponentially since 2008, when the AGSA audit report on the matter was first compiled. The report, which covered transactions pertaining to the 2015/6 financial year, formed the basis for a briefing to Scopa.

The amount in question related to cases of just 30 employees supplying the very departments within which they work. AGSA’s recommendation in those cases was that departments take disciplinary action against employees who perform such remunerative work without approval. “Additionally, departments should implement and monitor controls for managing employees’ other remunerative work,” Zungu said. He cited the departments of correctional services; justice and constitutional development; and police as repeat offenders in this regard.

Ntobovuyo Mente of the EFF said corruption cannot be ruled out when so much money is distributed among such a small number of people, with no consequence.  “It is a huge sum and it needs to be accounted for.” She asked that AGSA provide a breakdown of the names and the list of departments involved.

When AGSA conducted the performance audit, explained Zungu, they looked at instances where employees of departments were doing business directly with their own departments, as well as those who had not declared that they were doing business with their own departments. They also looked at employees’ spouses doing business with departments where the husband/wife is employed and they identified conflicts which were not declared in these instances. The third area was employees of departments doing business with other national departments.

AGSA’s recommendation in those cases was that departments should implement and monitor controls for managing employees’ other remunerative work. They recommended that designated employees should be informed of the requirement that they have to request approval to perform other remunerative work.

Zungu added that for stricter control of the process, the Public Service Commission (PSC) established a directorate to evaluate financial disclosure forms that employees had to complete for purposes of compliance. The PSC, said Zungu, had further committed to establishing rules for the scrutiny of financial disclosure forms and for the management of conflicts of interest.

In the interest of ensuring compliance, AGSA asked for specific commitments by role-players within departments, on the recommendations that it made. In terms of the Public Administration Management Act, which bars public servants from doing business with the state, consequences for breach of the regulation should be made clear to employees. The law took effect in August last year, and according to Zungu, implementation of this – alongside disclosures from state employees about close relatives doing business with government – will be monitored and the information released.

David Ross of the DA expressed his concern over the fact that the departments within which conflict of interest matters arose were meant to implement consequence management themselves, when the transgressions were coming from within those departments. And to get the responsibility from the companies they deal with is another matter.

Zungu noted that his team had flagged in the report false declaration by the suppliers or the employees as a fraud risk indicator. “It could be a precursor to corrupt behaviour happening in that specific department.”