Government stopped some payments to stop abuse of public funds: Prof Ncube
Nevanji Munyaradzi Chiondegwa.
By paying for goods priced on forward speculative exchange rates Government purchases were in fact fuelling inflation, and so the responsible thing to do was to stop everyone and restore normalcy a Government Minister has revealed.
Minister of Finance and Economic Development, Professor Mthuli Ncube said, “Whenever there is an observation of exorbitant pricing/ fraudulent activities it is only proper to stop.” The signing of contracts does not allow for the rampant abuse of public funds and where such abuse is noticed to ensure value for money and protecting public funds from abuse the contracts can be terminated.
Responding to some questions raised by various stakeholders on the cancellation of tenders awarded by Government to various suppliers and a freeze on some payments pending price rationalisation,
Below are excepts from the question and answers provided by the Minister in a Press Statement yesterday.
1. Why did it take long for Government to realise this and take action?
Overpricing might have been happening in the beginning it was not rampant and analysis only showed a massive change starting June and we had to stop this immediately after realising the pricing of goods and services was one of the major contributors to the instability. By paying for goods priced on forward speculative exchange rates Government purchases were inn fact fuelling inflation, so the responsible thing to do is to stop everyone and restore normalcy
2. How is government looking at litigation costs? Is this exercise not against laws. Contracts were already signed and goods and services consumed. Why look back and not go forward?
Whenever there is an observation of exorbitant pricing/ fraudulent activities it is only proper to stop. Payments have not been stopped so there should not be any litigation if fair pricing is followed. Contracts might have been signed but when there is realisation that this is not in the interest of ensuring value for money and protecting public funds from abuse indeed payments can be suspended pending further investigations or audit.
3. What framework is in place to punish officials involved as well as suppliers?
You might have noted the recent blacklisting of some companies and more will be and will not be allowed to participate in government tenders. Furthermore, from results of the audit, there shall be measures to punish civil servants found to be complicit to these frauds.
4. For future contracts is use of audit department not preaudit? Laws do not permit that. How are you dealing with that? What is role of PRAZ in all this? How does it relate to the Value for Money Unit announced? Is the VMU not a duplication of non-functional existing structures? Who is playing this role as we are a month after announcement?
Audit units have a role to play and will help set the pace for future contracts. Remember suspension was done on submitted payments which some showed issues hence the necessity of including the audit units. PRAZ is a regulator and in this even SPOC did not pick this issue hence need for an independent unit to look at such issues. The issues are currently being handled by the Expenditure Management Department and The Central Internal Audit Unit within the Ministry of Finance and Economic Development.
5. When is government going to start making payments.
Payments have never stopped except where there are clear issues. So even as we speak there are MDAs who have submitted their due diligence reports and payments are being made. Also, there are items which do not require due diligence and such we have continued to pay. We note resistance by some MDAs and the Accounting Officers will be held to account.
6. Is there any plans to review current legislation on government procurement?
Indeed there is need to strengthen the existing laws especially on value for money procedures and putting additional safeguards and checks and balances
7. Why is government not using framework agreements for pooled procurement and direct procurement from primary manufacturers?
Government already started implementing this with initial targets being the Police, Prisons, Defence, Education and Health ministries.
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