South Africa’s auditor general uncovers mass graft

South Africa’s multi-billion-dollar coronavirus budget is marred with “frightening” levels of corruption, fraud, and inflated prices, Auditor-General Kimi Makwetu said Wednesday.

As part of a campaign to clean up government President Cyril Ramaphosa had instructed Makwetu to scrutinise the disbursement of funds earmarked for pandemic relief in June.

This came after public outrage over revelations that politically connected companies were given contracts to supply personal protective equipment (PPE).

The fund totalling 147.4 billion rands ($8.7 billion) was meant to be used by state departments to provide food aid, PPE, and social grants to the unemployed among other relief measures.

Makwetu and his team have identified a string of procurement payments for a referral to law enforcement for further investigation, including instances of overpayment to individuals and entities, with some prices of PPE inflated by as much as 200 percent.

“Based on what was audited to date, there are clear signs of overpricing, unfair processes, potential fraud and supply chain management legislation being sidestepped,” the comptroller said as he delivered the first of a series of reports on South Africa’s Covid-19 response.

“Our analyses of orders placed by health departments identified that some items were priced at more than double and even five times the prescribed price,” he said during a televised hearing.

He added that the education sector experienced similar patterns of price inflation.

The auditor general, whose term in office ends in November, warned that investigations had revealed “a number of frightening findings that require to be followed up very quickly”.

Makwetu also unearthed numerous gaps, risks, inadequate controls, and serious violations including illegal payments and overpayment of unemployment funds by state agencies.

In response to the report, Labour Minister Thulas Nxesi said Wednesday that 38 criminal cases had been opened.

He said the Unemployment Insurance Fund (UIF) commissioner, Teboho Maruping, has been placed on precautionary suspension after he was flagged in the auditor general’s probe.

Nxesi said Maruping’s poor leadership had resulted in illegal payments to recipients of other state grants, including ineligible public servants and even inmates, deceased persons, and minors.