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Procurement During COVID-19 Under the Spotlight

September 8, 2020

National Treasury

National treasury and the Auditor-General will publish Preventative Control Guides on 9 September 2020.

Treasury announced this in a briefing to parliament on procurement during the COVID-19 pandemic.

According to treasury, preventative controls assist management to identify the risks of misappropriation, fraud and corruption before a transaction takes place.

It also “provides accounting officers with a toolkit of possible solutions to make preventative controls a reality”.

Treasury also referred to the Draft Public Procurement Bill that aims to regulate public procurement.

The draft bill was published for comment in Government Gazette 43030 in February 2020.

At the end of March, the period for comment was extended until the end of June 2020.

The draft bill also seeks to prescribe the framework for the procurement policy as envisaged in section 217 of the Constitution.

According to the draft bill’s memorandum, Section 217 of the Constitution stipulates that “procurement by organs of state and identified institutions must occur in accordance with a system which is fair, equitable, transparent, competitive and cost-effective”.

The public procurement regime in South Africa is described as currently fragmented with a number of laws regulating procurement across the public sector resulting in confusion as different procurement rules apply.

Therefore, legislation is needed which creates a single framework regulating procurement.

The Draft Public Procurement Bill aims to:

• regulate public procurement;
• prescribe a framework for procurement policy envisaged in section 217(3) of the Constitution; and
• provide for matters connected therewith.

During the briefing, treasury revealed that comment on the draft bill is currently being considered for incorporation.

Other measures on public procurement include the review of the PFMA and MFMA regarding emergency procurement procedures and strengthening the accountability by accounting officers/authorities; process to consider the modernising of public procurement including automating public procurement system with enhanced due diligence and increased efficiency in processing requests to get underway and continuous information exchange between prevention, investigation and prosecution so that future preventative measures are informed by investigation lessons learnt and prosecution outcomes in order to close gaps.

Meanwhile, treasury briefed the national council of provinces last week on the Disaster Management Tax Relief Bill and the Disaster Management Tax Relief Administration Bill.

The bills were tabled in June 2020 as part of the 2020 Supplementary Budget.

The standing committee on finance amended the Disaster Management Tax Relief Bill by extending by two months, the relief provided for in Clauses 7,8 and 9 of the bill.

As regards the Disaster Management Tax Relief Administration Bill, the committee amended clause 2 on COVID tax relief measures so that repayments would now only begin in October 2020 and run through until March 2021.

In a separate matter, the South African Revenue Service published, in Gazette 43683, an amendment to Schedule 1 of the Customs and Excise Act.

Part 1 of Schedule 1 is amended by the substitution of tariff subheadings 1001.91 and 1001.99 as well as 1101.00.10, 1101.00.20, 1101.00.30 and 1101.00.90, to increase the rate of customs duty on wheat and wheaten flour from 51.66c/kg and 77.49c/kg to 83,21c/kg and 124,81c/kg respectively, in terms of the existing variable tariff formula.

The amendment applied from 4 September 2020.