The South African National Roads Agency Limited (Sanral) has defended its management of the agency’s finances despite the auditor-general highlighting R3.3 billion in irregular expenditure in its latest financial statements. This irregular expenditure resulted from Sanral deviating from legislated supply chain management processes in the Preferential Procurement Policy Framework Act (PPPFA) and Treasury regulations.
Despite highlighting certain non-compliance issues, the auditor-general declared Sanral’s financial statements for the year to March as fairly presented in all material respects and gave it an unqualified report.
Inge Mulder, Sanral’s chief financial officer, says that the auditor-general had found that tenders of R2.4billion, which was included in the sum of R3.3billion, had been awarded using a benchmarking instrument to determine the “most realistic lowest acceptable price”.
Mulder said the auditor-general’s report stated that although the intention was within the objectives of the PPPFA, it was not compliant with the letter of the law.
Mulder says the non-compliance was related to certain aspects of the PPPFA and how Sanral had carried out the procurement of a management contractor in support of the development of small, medium and micro enterprises. She says the deviation from the PPPFA had not been approved by the finance minister, but an application for exemption had been submitted for the minister’s consideration.
Mulder stresses that the auditor-general had not found the form of procurement used to be “corrupt in any way whatsoever”, and a proper examination of the system would show that it also discouraged collusive practices.
She added that the system of procurement had been used by Sanral for the past 11 years and only this year had the auditor-general found fault with it.
Mulder also stressed that the figures contained in Sanral’s financial statements would not have differed from those reported had the non-compliance factor been absent.