DA proposes special Inspector-General to prevent Covid-19 relief funding corruption

25 May 2020

Note to Editors: The following statement was delivered during a virtual press conference by the DA Shadow Minister of Finance, Geordin Hill-Lewis MP, DA Member on the Appropriations Committee, Ashor Sarupen MP and DA Member on the Standing Committee on the Auditor-General, Jan De Villiers MP.

Please find attached the DA’s proposal for a Special Inspector General.

The Democratic Alliance (DA) has today tabled a proposal to the Minister of Finance, Tito Mboweni, for the creation of a Special Inspector-General to prevent corruption relating to Covid-19 pandemic relief, recovery and stimulus funding. This Inspector-General will have broad, sweeping powers to investigate and take pre-emptive, real-time action to prevent corruption at all levels of government for any taxpayer monies allocated to Covid relief and stimulus.

This is necessitated by the fact that previous localised disasters, as well as regular expenditure, has been lost through illegitimate procurement practices, undue cost escalation and direct theft.

The DA specifically proposes that the Special Inspector-General will have the following powers:

Summoning information or assistance from any government department, agency, or other entity at National, Provincial or Local government level. Failure to disclose information within seven days will be regarded as a criminal offence;

Direct departments to take immediate action to address deficiencies identified by a report or investigation of the Special Inspector General;

Prevent the payment of any monies to, or recall moneys from any individual or entity where the Special Inspector-General finds deficiencies, non-adherence to processes, or potential abuse of power or corruption;

Nullify the awarding of tenders and contracts where the Special Inspector-General finds deficiencies, non-adherence to processes, or potential abuse of power or corruption;

Have powers to investigate the legitimacy of any eligible businesses receiving any state-backed Covid funding;

Require an explanation of the reasons the State determined it to be appropriate to procure any goods or services for Covid relief, including a justification of the price paid for, and other financial terms associated with, the applicable transaction; and

Preventing and/or Terminating procurement where exorbitant pricing is detected.

The direct expenditure planned in the forthcoming Special Appropriations Bill will amount to nearly 10% of the annual budget, in addition to existing expenditure that has been re-prioritised and freed up under emergency provisions. As such funding is being dispersed under disaster relief and emergency provisions of law, regular processes are suspended in the interests of efficiency. However, as demonstrated by the Public Works department has demonstrated, this can result in massive wasteful expenditure with no results.

This Inspector-General would differ from the Auditor-General (AG) in that the AG only considers spending after it has happened at the end of a financial year, and cannot take any preemptive action to prevent corruption. Legal provision for this Special Inspector General can be made in the forthcoming Special Appropriations Bill to be tabled to Parliament in June to give effect to the R500 billion stimulus package announced by the President and Finance Minister.

In the interests of co-operation, the DA will today table this proposal to the Finance Minister, however, should no mechanism to prevent corruption be included in the Special Appropriations Bill, the DA will table this as an amendment to the bill when it is presented to Parliament in July.

Issued by Ashor Sarupen, DA Member on the Appropriations Committee, 25 May 2020