Several months ago, in the course of continued investigation and analysis of Gauteng’s monthly Covid-19 Expenditure Disclosure Reports, and in particular while looking into the wasteful expenditure on “fumigation services” (What the Fog?) Maverick Citizen spotted what we believed to be a rudimentary mathematical error, but one with multimillion-rand implications.

What The Fog? Gauteng govt blows R117m on unnecessary and potentially dangerous Covid-19 fumigation

We noticed that each month the Treasury was treating the cumulative expenditure figure of what it was paying the six wannabe cleaning companies to “fumigate” Gauteng’s public buildings as new expenditure and then adding it to the next month’s totals (see letter below). As a result, what was actually an expenditure of R117-million by the end of January 2021 (itself an amount that ought to bring the SIU running in) was reported as expenditure of R377-million.

These numbers were ratified by the department and fed through to the National Treasury, which claims to be the overseers of public expenditure.

However, even in the era of fruitless and irregular expenditure, the numbers didn’t seem to add up. We didn’t want to exaggerate an already tender-inflated amount so we chose the low road and asked questions.

Nevertheless, in the interests of solutions-oriented journalism, on 12 March Maverick Citizen raised concerns with the National Treasury in an email that stated:

“Please tell the responsible persons that after investigation I can tell you that some of the figures on the [National Treasury] website are badly wrong and based on a miscalculation where cumulative amounts reported each month are being recorded as new monthly payments. For example, you report payments to KEO Group of R108-million on the first page of the dashboard (and on page 3). They are actually R37-million.”

There was no response. 

However, although the Treasury had on 12 March told us that “we are not in a position to share incomplete information that must still undergo a verification process” in reply to an email we forwarded on 16 March that carefully set out our calculations. The National Treasury passed the buck and responded: 

“Organs of state provide National Treasury with the information and it is published on the NT dashboard as received. It is the responsibility of the accounting officer/authority or delegated official to ensure the accuracy of information before it is sent to the NT. Any queries will always be directed to the relevant organ of state for clarity or possible correction.” 

And that was the end of that. To date, the National Treasury still has grossly wrong figures on its Covid-19 Report summary website.

Gauteng treasury investigates

Fortunately, Gauteng treasury was more cooperative and willing to undertake an investigation. 

On Tuesday, after several delays, it provided Maverick Citizen with findings after “comparing figures reported by DID (as populated in the National Treasury Covid-19 disclosure report template), and Daily Maverick figures for the six listed suppliers as well as the payments report”. 

These were:

“That, indeed DID reported cumulative payments, and in other instances, some figures were repeatedly reported in different months. This resulted in incorrect total expenditure being reflected in the monthly reports of the department. The matter has been brought to the attention of the DID and an erratum will be published in the next report.”

In the provincial treasury’s response, it stresses that it: “take[s] the matter of discrepancies identified in the DID reports very seriously. As such, GPT is currently conducting a review of all information submitted by departments for their previous Covid-19 expenditure reports. If any discrepancies are found, we will publish an erratum in future reports in line with our commitment to transparency and accountability in public procurement.

“As one of the key mitigation measures for future reports, we will work closely with departments to strengthen the verification process of all information submitted for these expenditure reports to ensure high levels of accuracy and integrity.”

Who is monitoring public expenditure as it happens?

Phew. All’s well that ends well, we might assume. 

However, we must ask what are the implications when a journalist with no training in accounting or mathematics can pick up mistakes overlooked by several departments with a small army of accountants; why are these figures not being interrogated by anyone from the Office of the Gauteng Premier which claims that it has forensic investigations under way into all corruption allegations in the province?

As we have written previously, such rudimentary errors raise very serious questions about government systems for oversight of public finances, a matter that was also raised by the Auditor-General in her most recent report.

What a waste: Gauteng’s oversight of public spending is failing

If R259-million can be added to the books and published in a report that is intended to advance accountability and transparency, with no one noticing, and if no one had noticed, how difficult would it be for a corrupt official to later cash in on the differences between the recorded amounts and the actual amounts — and how do we know that this is not happening?

We believe the problems are not limited to GDID’s accounts, so we await with interest the findings of the full review of “all information submitted by departments for their previous Covid-19 expenditure reports”. The next Expenditure Disclosure report is due next week. 

So, once again, Covid-19 has found government systems wanting even when it’s pretending transparency — the question is when is anyone in high office really going to do something about it? DM/MC

For the public record: The letter sent by Maverick Citizen to Gauteng treasury on 15 March

Dear John,

Thank you for talking to me last week.

As promised I am writing to explain why I think there are a series of serious errors in the Gauteng Expenditure Disclosure reports that are significantly inflating the real numbers and thus are very misleading. 

I would be grateful if the Gauteng treasury could urgently investigate this.

I came to this conclusion after investigating Gauteng’s spending on ‘sanitising buildings’ in general (all departments) and then specifically the expenditure of the GDID on sanitising buildings through six contracts.

See article here: https://www.dailymaverick.co.za/article/2021-03-13-what-the-fog-gauteng-govt-blows-r117m-on-unnecessary-and-potentially-dangerous-covid-19-fumigation/

The error I think is that the Expenditure report is adding up the cumulative figures per company each month (which is given in the spreadsheet), rather than the new payments/expenditure to these companies. 

If you do this with the six companies contracted by the DID for fumigation services then you reach a total expenditure of R423,353,571 March-Jan 2021 as opposed to actual of R117,478,629.

I suggest you look at the January 2021 report to illustrate this point:

1. Total provincial expenditure: 53,348,792.67
2. Total GDID: 44,418,833.18
3. Total sanitising buildings: 38,509,866.84 (includes from other departments)
4. Total KEO Group cumulative (listed in table 3 and annexure): 37,900,084
5. Total other GDID costs: 6,518,748
6. Total KEO real new expenditure (from Dec report): approx 2m

Note that 4 + 5 = the total GDID expenditure (2) which proves that the cumulative figure (not the new payments for January (6)) is what is being used.

If you do a similar analysis on previous months I fear you will find exactly the same problem.

I don’t know if this miscalculation is limited to costs associated with the six companies paid monthly for fumigation services. However, even if the error is limited to these companies, it means that reported figures for total expenditure are out by hundreds of millions of rands.

What is also worrying is that these figures are being reported to National Treasury. I have further reason to suspect this because the National Treasury on its dashboard reports that KEO Group has received payments of R108.42 m (whereas in fact the payments have totalled 37.9 million).

Does this make sense? I would be grateful for your response as soon as possible as this is a matter of serious public concern.

Yours sincerely,

Mark