South Africa’s R16bn Covid-19 free-for-all spending spree visually represented for all to see

20/01/2022 The Treasury on Covid-19 expenditure since March 2020, amounting to R16,1 billion. (Photo: who.int/Wikipedia)

By Mark Heywood

26 Jan 2022

The data presented in the visualisations seem to suggest that, for months, there was a free-for-all where many national and provincial government departments, as well as several big metros and municipalities, went on a spree buying overpriced goods and services that were often not necessary and of dubious quality (not registered with the SA Bureau of Standards or SA Health Products Regulatory Authority, for example).

Today, OpenUp and Maverick Citizen publish a series of visualisations based on scraping all the data that have been made publicly available by Treasury on Covid-19 expenditure since March 2020, amounting to R18.3-billion. This is the total amount of money spent on goods and services related to the Covid-19 emergency that the Treasury says it has records of payments for.

We invite readers to study it here.

For the first time it’s possible to see all the parts in the jigsaw of Covid-19 emergency expenditure and to start to deduce some of the patterns.

Presented in this way, the data are extremely revealing. It is something we recommend that the Fusion Centre, the Special Investigating Unit and other authorities such as the Competition Commission pay as much attention to as civil society groups and concerned citizens.

There is little evidence of verification of quality and quantity of goods procured, and where there were internal audits that found irregularities, such as in the police, they seem to have been quashed. (Photo: Gallo Images / Roger Sedres)

What you see is what OpenUp’s data analysts have extracted. Any errors are in Treasury’s raw data (and we suspect they do exist). For this reason, publishing it comes with a caveat from OpenUp. They point out that “there is not a uniformity in the way institutions have chosen to report their data, leaving it very ‘dirty’ for those outside trying to make sense of it”.

To get around this they explain how their report tries “to aggregate the data from items, departments and suppliers and identify the big outliers”. They add that this “dirtiness” makes drawing hard and fast conclusions without further confirmation and further investigation difficult. But this is in some senses the point: windows of data help us just as much in defining better questions, as they can ultimately help us in finding answers.

It should also be noted that what was reported to and recorded by Treasury by no means represents all Covid-19 emergency spending, which the Auditor-General in her 2020/21 financial report estimates is R218.54-billion (see pages 132 to 144) out of the R500-billion the President said had been allocated when he announced an emergency stimulus package in April 2020.

The billions spent on grants such as the Temporary Employer/Employee Relief Scheme (TERS) and the Social Relief of Distress Grant do not get recorded on the Treasury dashboard because they do not involve the purchase of goods and services.

But in addition, we suspect that there are items of expenditure that were justified as being necessary to respond to Covid-19 that are not being reported to the National Treasury at all, and are probably to be found in the ordinary line items of departments’ budgets.

The report also seems to suggest that there is information missing from National Treasury’s database that raises questions.

For example, what happened to the payments for the billions of rands in orders made by the Gauteng Department of Infrastructure Development for four Alternative Building Technology (ABT) field hospitals? These payments seem to have been taken off Treasury’s books since being questioned by Maverick Citizen in 2020.

In a series of articles, Maverick Citizen exposed questionable dealings between the SAPS and Red Roses Africa director Blessing Qwabe. The Mpumalanga-based company scored close to R515-million to supply hand sanitiser and disinfectants to police stations across the country. (Photo: Facebook)

Treasury has a reputation for being fiscally prudent and conservative. However, what we present today does that reputation no good. Treasury may have tried to control expenditure by issuing a series of instruction notes in emergency procurement in response to the state of disaster (found here) that set guidelines and ceilings on the prices of certain essential goods that would be needed to protect against Covid-19. However, the data presented in the visualisations seem to suggest that, for months, there was a free-for-all where many national and provincial government departments, as well as several big metros and municipalities, went on a spending spree, buying goods and services that were overpriced, often not necessary and of dubious quality (not registered with the South African Bureau of Standards or South African Health Products Regulatory Authority, for example).

It should also be noted that what was reported to and recorded by Treasury by no means represents all Covid-19 emergency spending, which the Auditor-General, Tsakani Maluleke, in her 2020/21 financial report estimates to be R218.54-billion out of the R500-billion the President said had been allocated when he announced an emergency stimulus package in April 2020. (Photo: Phill Magakoe)

Whether this was panic buying or corrupt officials cynically exploiting an opportunity to make hay while the epidemic shone can only be determined on a contract-by-contract basis.

Looking at the data visualisations it is clear that there was no consistency in emergency Covid-19 spending across government departments.

Some departments splashed out on thermometers, many engaged in “fogging”, some bought goggles, others didn’t;

Some paid substantial management fees. Most didn’t;

Most companies were one-tender wonders, scoring big and not repeating their service. Red Roses Africa, for example, which supplied R515-million in hand sanitisers to the SAPS;

Only a small number of companies were involved in contracts to multiple departments; and

Few of the companies have names that suggest the goods they supplied were part of their core business.

The reports on expenditure that Treasury received must surely have raised red flags, but it seems to have adopted a hands-off approach, leaving scrutiny of contracts to the media and the Auditor-General. But even the AG, while writing three important reports uncovering irregular expenditure, found itself unable to declare some of the most patently wasteful expenditure irregular – because the government had failed to communicate properly that “fogging” was unwarranted.

The billions spent on grants such as the Temporary Employer/Employee Relief Scheme and the Social Relief of Distress Grant do not get recorded on the Treasury dashboard because they do not involve the purchase of goods and services. (Photo: Gallo Images / Brenton Geach)

In the past, we have also picked up significant accounting errors by the Gauteng provincial and national Treasury. These have not been explained to this day.

There is little evidence of verification of quality and quantity of goods procured, and where there were internal audits that found irregularities, such as in the SAPS, they seem to have been quashed.

The data reinforce concerns raised by the Zondo Commission about the 'fundamental system failure' in public procurement, as well as the finding Deputy Chief Justice Raymond Zondo has made about the need for ongoing monitoring of public expenditure. (Photo: Gallo Images / Netwerk 24 / Deaan Vivier)

Therefore the data we publish today reinforce concerns raised by the Zondo Commission about the “fundamental system failure” in public procurement, as well as the finding Deputy Chief Justice Raymond Zondo has made about the need for ongoing monitoring (“consistent and continuous inspection”, to use his words) of public expenditure as it happens.

He says:

“Monitoring requires the detailed observation of procurement processes on the ground; it extends to all stages of the procurement cycle. It examines the decisions which are being made at all points of the procurement activity to both enable irregularities and corruption to be detected and addressed and to satisfy itself that the systems in place are functioning properly.”

The reports on expenditure that Treasury received must surely have raised red flags, but it seems to have adopted a hands-off approach. (Photo: who.int / Wikipedia)

Finally, the visualisations we publish today should reinforce public outrage about the contents of the final report that the Special Investigating Unit submitted to President Ramaphosa on Covid-19 corruption that was published on Tuesday. That report said the SIU was investigating R15,3-billion in Covid-19-related expenditure. It may well turn out to be even more. DM/MC

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