EXPENDITU NDITURE RE 1 2 3 4 CASE STUDY MR B WAS A SUPPORT - - PowerPoint PPT Presentation

FRAUD FRAUD AND AND CORR CORRUPT UPTION ION ON ON UIF UIFW: UNA NAUTHO UTHORIS RISED, ED, IRREGU IRREGULAR, AR, FRUIT FRUITLE LESS SS & WA WAST STEF EFUL UL EXPENDITU NDITURE RE

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CASE STUDY

➢ MR B WAS A SUPPORT MANAGER RESPONSBILE FOR MAINTENANCE OF 12 FACILTITIES OVER 12 REGIONS. ➢ EACH FACILITY WITH ITS OWN VOTE NUMBER. ➢ MR B WAS ASSISTED BY THE MAINTENANCE DIVISION IN APPOINTING CONTRACTORS TO PROVIDE MAINTENANCE WORK AT THE FACILITIES. ➢ SUMMARY OF FINDINGS: ➢ APPOINTED WIFE’S COMPANY ➢ APPOINTED A RELATIVE/ASSOCIATE ➢ COVER QUOTATIONS ➢ RANDOM USE OF VOTES ➢ SERVICES NOT PROVIDED ➢ MIRRORED TRANSACTIONS

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DEFINITIONS

IRREGULAR EXPENDITURE:

➢ THE MFMA NOT FOLLOWED ➢ THE SCM NOT FOLLOWED ➢ CONTRAVENTION OF THE PUBLIC OFFICE-BEARERS ACT

UNAUTHORISED EXPENDITURE:

➢ OVERSPENDING ➢ SPENDING FROM A WRONG VOTE ➢ SPENDING FUNDS FOR A WRONG PURPOSE ➢ SPENDING FROM AN UNRELATED DEPARTMENT OR FUNCTIONAL AREA

FRUITLESS AND WASTEFUL EXPENDITURE:

➢ MONEY WASTED WITH NO VALUE GAINED, UNNECESSARY EXPENDITURE

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REQUIREMENTS OF THE MFMA

• IDENTIFY THE OFFICIAL(S) WHO CAUSED AND/OR AUTHORISED THE

EXPENDITURE

• WAS THIS A NEGLIGENT ACT OR DELIBERATE NON-COMPLIANCE

➢ THE SCM REQUIREMENT/PROCESS WAS KNOWN

➢ DID THE OFFICIAL STAND TO GAIN ➢ WAS THE CONTRACT ALLOWED TO CONTINUE OFFERING THE SERVICES ➢ PROJECT MANAGEMENT CHALLENGES

• BASIS FOR RECOVERY

➢ FROM THE PERSON DEEMED LIABLE FOR THE EXPENDITURE ➢ NO VALUE FOR MONEY ➢ NO SERVICES RENDERED ➢ FRAUD AND/OR CORRUPTION COMMITTED

• ACTION TAKEN AGAINST THE SERVICE PROVIDERS
• REGISTER CRIMINAL CASE FOR FURTHER INVESTIGATION

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IRREGULAR EXPENDITURE , CAUSES

• EXPIRED CONTRACTS WHICH ARE STILL ACTIVE
• DEVIATION APPLICATIONS
• “SINGLE SOURCE” SUPPLIERS
• ADMINISTRATION AT THE SCM UNIT
• NON-COMPLIANCE
• NEGLIGENCE
• CORRUPTION
• FRAUD
• PRESSURE
• DELIVERY CHALLENGES
• KPI TARGETS

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UNAUTHORISED EXPENDITURE, CAUSES

• PIGGY-BACKING BY DEPARTMENTS
• UNMONITORED OR UNCAPPED EXPENDITURE
• FAILURE TO CONDUCT RECONCILIATIONS
• FRAUD
• CORRUPTION
• KPI TARGETS

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FRUITLESS AND WASTEFUL EXPENDITURE, CAUSES

• NEGLIGENCE
• NON-COMPLIANCE
• COLLUSION (CORRUPTION)
• CONFLICT OF INTEREST (CORRUPTION)
• FRAUD

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THANK YOU

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