AG warns against procurement fraud

25 Oct, 2019 - 00:10 0 Views
AG warns against procurement fraud Mrs Mildred Chiri

The Chronicle

Prosper Ndlovu and Pride Mahlangu, Business Reporters

THE Auditor General, Mrs Mildred Chiri, has called for increased transparency and accountability in public procurement processes, warning that any trace of corruption in that sector will greatly retard economic growth. 

Speaking at the Chartered Institute of Procurement and Supplies (CIPS) 2019 annual congress in Bulawayo yesterday, Mrs Chiri said procurement was the cornerstone of economic development and yet the most vulnerable to corruption. Given the substantial amounts of taxpayers’ money involved in public procurement, she said, higher standards of conduct were needed to deliver quality service as well as safeguard public interest.

“The direct costs of corruption manifest in… loss of public funds through misallocations or higher expenses as well as lower quality of goods, services and works. Suppliers pay bribes in order to secure contracts but recover these through inflated prices, billing for work which was not performed,” Mrs Chiri said. 

“They deliver work which is substandard by reducing quality of work or using inferior materials. As a result, the costs are exaggerated and quality of work is compromised. Such haemorrhage retards economic growth and development.”

Due to corruption in public procurement, the Auditor General said key infrastructure projects such as roads, bridges and other public works were lagging behind or have failed altogether. This further strengthens the need for prudence in public procurement because of its impact on the economy.

Mrs Chiri commended the New Dispensation for reforming the procurement and public finance management legislation. Informed by the country’s Constitutional values, the Public Finance Management Act demands strict adherence to principles of corporate governance. These have been buttressed by the Procurement and Disposal of Public Assets Act, which overhauled the structure of the previous State Procurement Board (SPB) and transformed it into a regulatory authority, which no longer participates in tenders. The new Act now requires procurement officers in the public sector to have professional qualifications in the discipline.

“This is very commendable. Professionalising this discipline will go a long way in redressing some of the governance issues, that is, controls and monitoring that have been lacking in the procurement systems,” Mrs Chiri said.

She challenged the Procurement Regulatory Authority of Zimbabwe (Praz) to discharge its monitoring mandate effectively and keep procurement officers on their toes to enforce due diligence. 

Prior to the latest reforms, the SPB virtually had monopoly over all procurement processes and this opened the system to wider loopholes evidenced by inordinate delays in turnaround time among other inefficiencies that attracted widespread public complaints. 

In some cases, Mrs Chiri said, some contractors who malperformed were awarded new tenders as there was no performance tracking system in place. As a result, she said, several audit findings exposed the massive rot in procurement systems, which warranted a complete reform of the sector.

Mrs Chiri said the procurement reforms instituted by the New Dispensation were in line with global best practices as they mirror key principles of a modern procurement system. 

Among these is transparency, integrity, efficiency, accountability, risk management, e-procurement, balance and evaluation. The Auditor General said Zimbabwe cannot afford to lag behind other states in embracing these tenets and weeding out any traces of corruption.

She said although implementation of some of the new measures was still at its infancy, procurement officers should swiftly adjust and deliver the best service for the economy. 

“My office has not yet audited the application of the new guiding principles of the Act. It will embark on this during the 2019 financial year audit,” Mrs Chiri said.

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