Action against public servants in business with the government

EC Finance MEC Mlungisi Mvoko

Finance MEC Mlungisi Mvoko has noted with concern public servants who are in breach of stipulated regulations by doing business with the government. This comes after about 10 state employees, from both provincial and local government, were found to have done COVID-19 related business with the government.

“Doing business with the government while you are the employee of the same government that pays your salary constitutes a serious breach of government regulations. To address this, Head of Provincial Treasury has written injunction letters on Conflict of Interest to all affected institutions to demand immediate action,” says Mvoko.

In the letters, it is stipulated that the said conduct by the affected officials constitutes a conflict of interest, and therefore exposes them to criminal prosecution in terms of the Public Administration Management Act (PAMA), which came into effect on April 1 2019.

Section 8 of PAMA states that:

(1) In this section and in section 9, ‘‘employee’’ includes persons contemplated in section 12A of the Public Service Act and a person performing similar functions in a municipality.

(2) An employee may not—

(a) conduct business with the State; or Media Statement on Public Servants doing business with the State

(b) be a director of a public or private company conducting business with the State.

(3) A contravention of subsection (2)—

(a) is an offence, and any person found guilty of the offence is liable to a fine or imprisonment for a period not exceeding 5 years or both such fine and imprisonment; and

(b) constitutes serious misconduct which may result in the termination of employment by the employer.

Furthermore, the Directive issued by the Office of the Premier, dated August 19 2019, states that “the Head of Department should note that he/she will be held to account for failing to act against any official who is found to have contravened the above statutory provisions”.

As such, the affected departments have to respond in writing to Provincial Treasury by Wednesday 19 August 2020, and indicate the application of consequence management. All those who are in the value chain of our supply chain processes must be made to account. Furthermore, the Department should also mention what measures it has implemented to prevent such occurances from happening in the future.

“It is concerning that such conduct continues to take place despite clear regulations that need to be followed when conducting procurement. In terms of National Treasury Instruction Note 4A of 2016/17, when sourcing for price quotations from prospective suppliers, departments must verify key information on the CSD in line with the PFMA and regulatory requirements,” adds Mvoko.

Media Statement on Public Servants doing business with the State

The said regulations compel procuring officials to verify key information such as Business registration, including details of directorship and membership; bank account holder information; In the service of the state status; tax compliance status; identity number; B-BBEE status level; tender defaulting and restriction status; and any additional and supplementary verification information communicated by Treasury.

Provincial Treasury will continue to monitor potential cases of conflict of interest, including in the COVID-19 procurement.

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