Overall, R218,54 billion (44%) of the R500 billion fiscal relief package had been used by 31 March 2021*, as detailed in the table below. We obtained the information on the initiatives that we audited from the accounting records of the auditees included in the covid-19 audit, and the remainder from external sources.
* The amount used for the initiative on credit guarantee schemes is as at 18 May 2021.
Spending of R500 billion relief package
Recap on audit approach and findings from special reports
This audit was unique in its approach. We audited payments, procurement and delivery as they occurred, and reported any audit findings and observations to the accounting officer or authority so that they could deal with any shortcomings in real time and tighten controls to prevent the findings from reoccurring. A key component of the audit was the focus on preventative controls, which are, by their nature, a deterrent to abuse. We engaged up front with accounting officers and authorities on the importance of preventative controls to counteract the increased risks and to direct significant changes in their operations. We also assessed the preventative controls implemented by the auditees and recommended additional controls to strengthen the processes and prevent any accountability failures.
The audit was performed by multidisciplinary teams made up of fraud, information technology and sector-specific experts, who supported the financial auditors to dig deeper and provide relevant insights on auditees’ risks and operations.
The reporting approach was also unique because we used special reports to report on our findings and recommendations throughout the audit and not only at the end of an audit, as is our normal approach. The response to this approach was very positive, as portfolio and standing committees in Parliament and the legislatures could also play a more proactive oversight role, supported by the reports and our briefings to them.
Unsurprisingly, the findings from these real-time audits bore a striking resemblance to what we have reported on in the past.
In these special reports, we again highlighted the significant deficiencies in the procurement and contract management processes, and reported on the inadequate controls meant to ensure that payments are only made for goods and services that are delivered at the right time, price and quality. During a pandemic, the consequences of a supplier not delivering items such as personal protective equipment (PPE) are severe. We expressed concern about unfairness in the awarding of government business and that sufficient care was not taken to protect against overpricing, financial loss, fraud and abuse of the system.
The bulk of the government’s PPE procurement took place in the health and education sectors, where the pre-existing weaknesses in the control environments were further compounded by the covid-19 interventions.
In addition, we reported that the information technology systems, processes and controls used in government were not agile enough to respond to the changes required. We identified that the lack of validation, integration and sharing of data across government platforms resulted in people (including government officials) receiving benefits and grants to which they were not entitled.
Some of the initiatives, such as planned facilities that were earmarked for use as quarantine sites and the provision of temporary residential units, did not achieve the desired results, and some were even abandoned because of failed coordination, monitoring and relationships across the three spheres of government. Where implementing agents were involved, we found weaknesses in coordination and monitoring that compromised delivery, transparency and accountability. Even though command centres and other oversight structures were put in place, we often found that the information provided to them and to executive authorities on the performance of the initiatives was flawed.
We further highlighted irregularities, poor controls and indicators of potential fraud, which was noted in the context of the already compromised control environment. In previous years, we have reported on poor control environments where the basics of financial management and record keeping are not in place. We have highlighted the impact of instability in leadership, a lack of consequences for transgressions and non-compliance with legislation, and opportunities for abuse in the supply chain management processes.
The reports also included our recommendations to accounting officers and authorities for addressing our findings, as well as the responses we received to these recommendations.
We called on oversight structures to use the special reports to direct their oversight actions – to call accounting officers and authorities and executive authorities to account for how they implemented the covid-19 initiatives and managed the funds entrusted to them.
We also urged all role-players to shift their thinking towards prevention, which is a far better approach than having to deal with lengthy and costly investigations that result in loss of resources and diminished public confidence. Shortly after we tabled these reports, we launched a preventative control guide to help oversight and accounting officers in this regard.
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