The Instruction Notes were there. Co-Chairperson Maswanganyi called for comments and questions. 2020/10/15 Sanral signs MoU wish SAFCEC to prioritise small contractor development. He had heard the concerns that National Treasury might not have the capacity and that it was not optimum in terms of numbers and skills because Treasury dealt with the whole of the state, including all departments and public entities. In doing so, it had become incredibly obvious that Members of the ANC in the NCOP were tone deaf and they had not heard what the public had to say. Was there a guideline in relation to localised procurement? In the main, he was talking about the PPEs. He should not make that subjective. Lots of good work had been done in relation to Covid-19, but it was clouded over by the malfeasance. 1 of 2020/2021: Amended Month-End Closure Dates For 2019/2020 and 2020/2021, Treasury Instruction No. Accounting Officers had to be held responsible for paying higher than list prices and for fraud, and law enforcement had to deal with those who had infringed laws. He was not averse to that but as things stood; he had no reason to believe that National Treasury was incapable. by Sarah Moerane, Director. Co-Chairperson Maswanganyi agreed. 3 of 2019/2020 on Fruitless & Wasteful Exp Framework, Annexure A - Fruitless and Wasteful Framework.pdf, Crosswalk to Amendments of the Irregular Expenditure Framework, Treasury Instruction No. National Treasury had not done anything and should take responsibility for not doing anything. The minutes of 30 June 2020 were adopted, with technical corrections, by the Standing Committee on Finance. As the DG had said, as Minister, he had responsibilities to ensure that there was no behaviour that was inappropriate and unfair in National Treasury and if such behaviour occurred, he had to deal with it. The DG listed the Instruction Notes issued for both the PFMA and the MFMA institutions. He presented the agenda and explained that the meeting had been convened to get information from the Minister and his officials about procurement during the Covid-19 pandemic. Mr Mogajane responded that no Accounting Officers had faced consequence management but that would happen as he and the Auditor-General unpacked what had happened in the departments. There had also been engagement between the Secretary-General of COSATU and Deputy Minister Masondo. Pre-lockdown, the economy had been in a technical recession and there had been a downgrade by rating agencies. He reminded everyone that, as much as they wanted the Auditor-General to get into full swing, the internal audit committees had a responsibility to do their work. The Auditor-General had limited staff and could not do everything and deal with year-end audit outcomes. Mr Ryder appreciated the work that had gone on behind the scenes in National Treasury and the day’s presentation but everything that National Treasury did was no more than a minor hurdle for someone to get over and to carry on with the corruption that the person had been busy with for so long. Mr Wessels noted that a few Members had raised the issue regarding public trust. Mr Hill-Lewis informed the DG that he had been quoting directly from the presentation by Mr Parks, Parliamentary Officer of COSATU, to the Committee, so the DG should get his facts straight. Given that the country was in such a crisis and there had been corruption, he asked National Treasury what active steps it would be taking when it became clear that people were making huge amounts of money from the process. Instruction Note No 8 of 2020/21. The system also provided for oversight by elected Members of Parliament and representatives at local and provincial levels and any Member of Parliament, provincial or local representative who felt that nothing was being done about an illegal activity could report anyone, if there was evidence, to law enforcement. Mr Ryder should focus on the issue, which was that, across political divide, people were angry. Many officials were very honest in their work. He agreed with the Deputy Minister that government could not spend hundreds and thousands and millions of Rand on investigations. That became the subject of the administrative system, the subject for the political Executive Authority to follow up with the Accounting Officers. It was some of the best legislation in the world but there had been contravention for years and years and no one had been held accountable. National Treasury for acquiring mobile communication services. He concluded on that note and handed over to the Minister of Finance. Dr D George (DA) stated that Members had already seen a large amount of corruption in the procurement of PPE. NATIONAL TREASURY INSTRUCTION NOTE NO. He concluded by informing the Committee that National Treasury was looking forward to the guidance and criticism of Members as the South African public relied on MPs to represent them and to ensure that National Treasury managed public finances responsibly. He stated that Members across the political lines thought that National Treasury should give consideration to COSATU’s proposals. • Instruction Notes ... National Treasury must inform organs of state via circular. Part and parcel of talking about preventative measures was the issue of who was in the institution in so far as good Accounting Officers could prevent the kind of things that had happened. Of the Supplementary Budget of R145 billion, R122.4 billion had been allocated to the various departments, local government and other entities of state. Normal procurement regulations applied. He knew of officials who worked over weekends to ensure that even funerals complied with the regulations. Minister Mboweni said he determined to put aside the political disagreements and deal with the issues before them. It was largely anecdotal evidence that was coming out but it was clearly a very big problem and he was sure that everyone wanted to eradicate that. National Treasury SCM Instruction Note 3 of 2016/17 — Preventing and Combating Abuse in the Supply Chain Management System, paragraph 8.1, states that accounting officers/accounting authorities must only deviate from inviting competitive bids in cases of emergency and sole supplier status. A medium-term strategy and a longer term strategy were needed but the economy had to be restructured, transformed and de-racialised to allow the new entrepreneurs to operate in the private sector. In an ethical society, one would have expected everyone to have followed National Treasury instructions to the letter and procurement would have been in line with the Treasury Instruction. In such a situation, a new bourgeoisie would turn to the state to make money. He informed the Minister that he had been invited to explain what had been done in relation to Covid-19 procurement, but the situation was not entirely negative. What were the objectives circumstances? Why were those systems not used to stop officials doing business with the state? He informed Committee Members that centralised procurement was not possible as National Treasury could not procure everything. Mr D Ryder (DA; Gauteng) congratulated the Minister and the Deputy Minister for appearing and the Co-Chairpersons for calling the meeting. He did not know what had been done, so he had some questions for the DG. PURPOSE The purpose of this Instruction Note is to clarify the implementation processes in respect of the Framework for Strategic Plans and Annual Performance Plans. He would leave that for another day because the matters that they were dealing with were so serious that it required everyone to work together to right the wrong but, in the process, not to taint every contract with the same negative tone because it was not the case. Mr Dondo Mogajane, Director-General, National Treasury, said requests for procurements through deviation are acceptable by law but challenges were observed when the deviations were abused by departments and entities. National Treasury alone could not be held responsible for the corruption against government as a whole and the criminal justice and law enforcement sectors had to deal with that. In addition, departments and entities had to start automating and modernising procurement management. Tighter controls were required to deal with politically exposed persons and anti-corruption methods had to be put into place. detailed Treasury Instructions was an illusion, and in fact accountability was undermined, as departments were required to obtain ‘approval’ from Treasury for example, to ‘write-off’ minor debts. 08 of 2020/2021: Provincial IYMs, Treasury Instruction No. The reality was that to jump through all the hoops of the PFMA and the MFMA had a massive cost implication and that was why a R3 pen cost R23, and that was a good deal with no corruption. The Members asked if there were procurement policies for the Solidarity Fund or whether it had been given the right to develop its own procurement policies, independent of National Treasury. Some of the COSATU proposals and his ideas could have stopped much of the corruption as it had been enormously predictable. It was not necessary for the Minister or Deputy Minister to attend those meetings. He would be having that conversation with provincial Ministers of Finance the following day. Law enforcement had to take action. It would be interesting to see how the new inter-disciplinary structures dealing with corruption would work. The subjective response was that some people were inherently corrupt. One could talk about a centralised procurement system, and the DG would speak about it. It consisted of a team of highly competent individuals who were well-equipped to perform their functions. The Auditor-General would begin to audit the Supplementary Budget immediately and not wait until the end of the financial year. 2020/08/06 The Passing of SAFCEC Past President's Con Roux and Frank Cowley. Its capacity would never be enough but the system had been designed so that accountability was delegated in some areas through provincial treasuries as per the law. That should apply to all local and provincial Executive Authorities. competitive and cost-effective. He had heard the President use harsh words about scavengers and hyenas and the Chief Whip in Parliament had spoken about the barbaric behaviour of people who did things under the current circumstances. 2. Ms N Abrahams (ANC) said that it became frustrating that Members of the various parties raised issues after National Treasury had already spoken, and she was sure that Treasury also wanted to respond. The National Treasury has issued an instruction note to government departments, municipalities and entities to help speed up the procurement of the goods and/or commodities required to reduce and control the spread of the COVID-19 virus. The above sets of Minutes were adopted by the Standing Committee on Finance without amendments. The Committee should be very action-orientated after the discussion and obtain the necessary information. Authority and accountability given in law had to be acted upon. As the country was losing jobs, what was government doing about localisation and local content, including promoting local industrialisation? Something had to be done about politically exposed persons. There was no need for a middleman. Members had concerns about the personal protective equipment donated by Ace Magashule to Cuba. He added that the Co-Chairpersons would not prescribe but as Co-Chairpersons they would suggest some broad direction. He welcomed everyone: Members of the Standing Committee of Finance and Members of the Select Committee of Finance, the Minister of Finance, Deputy Minister, DG of National Treasury and officials, as well as the media, stakeholders and members of the public. The consequences of that could be very severe. 6 - Management of Face Value Forms and Disposal of Accounting Records PT Instruction Note No. Instruction Note No 3 was issued in relation to the Imperial Medical Services and Business Unity South Africa situation. Co-Chairperson Maswanganyi agreed that Members had to be objective and not look only at the negative side. Had departments complied with the guidelines and price list and if not, why not? He would make closing remarks at the end of the conversation. Officials in supply chain management who were in the network of corrupt service providers had to be isolated and something had to be done to cleanse those networks of corrupt officials and service providers. One had to be conscious and look at the facts. Regarding COSATU, Mr Mogajane stated that he had personally sat in the online meeting with COSATU and letters had been exchanged. Co-Chairperson Maswanganyi said that, as noted by the Minister, the state was the biggest employer and had enormous buying power and it should be a platform to empower the previously disadvantaged. He noted that government officials were forbidden to supply to government. He added that as that process went forward, he had to praise that which was good. Other Members were concerned about why early warnings of corruption had not been taken seriously. One question was whether the companies were properly registered with the Companies Registration Office, with the SA Revenue Services and had departments followed a competitive process. Government had borrowed money from the IMF and other banks. 1 of 2018/2019 on Irregular Expenditure Framework (110kb) Annexure A Irregular Expenditure Framework (1,458kb) Treasury Instruction No. It was not an issue that could take a long time. Democracy was all about ensuring oversight, decentralisation and empowering poor communities. Access and opportunity had to be given to those who were able to supply the required equipment. National Treasury should build the capacity to procure all the PPEs and essentials needed to fight Covid-19. That was what had made ANC Members so defensive in the NCOP sitting the previous day. Guidance as to what can be considered impractical can be found in the National Treasury practice Note No 8 of 2007/2008 which provides that circumstances involving urgent or emergency cases or a sole supplier of particular goods or services, may be impractical and warrant a deviation. Everyone knew and could see that a lot was happening but she agreed with the Member who had called for consequences. But he wanted more from National Treasury. The departments had to demonstrate that to National Treasury. The Instruction Note had been withdrawn because there were challenges in respect of who was getting preference. He noted that the NPA had been given additional powers and the NPA had found that exciting. In an ethical society, everyone would have followed National Treasury Instruction Notes. New controls were being considered following discussions between the Auditor-General and National Treasury and they would jointly issue a “Preventative Guide” that would advise departments and entities on how to follow the Instruction Notes. He also paid homage to those service providers who had been honest and had played their part in supplying services to the state, especially in relation to Covid-19. Co-Chairperson Carrim informed Mr Ryder that 3 500 delegates at Polokwane had decided to disband the Scorpions so he could not hold one or two people responsible for that decision. 30 April 2020 Mr K Morolong (ANC) stated that to say Members were discouraged by the rampage and corruption associated by Covid-19 would be an understatement, but Members were more interested in consequence management. Government needed to seriously consider how it did business. 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