DID ANNUAL REPORT 2023_24

Annual Report 2023-2024

Material irregularities identified during audit

Construction of new Khutsong South clinic not completed

37. Resources of the department were not utilised economically, as required by section 38(1) (b) of the PFMA. The department did not take appropriate steps to ensure that a replacement contractor is appointed to complete the construction of the new Khutsong South clinic since termination of the contractor’s contract November 2019 due to abandonment of site. 38. The department was given an instruction to proceed with the project in July 2022 by the Gauteng Department of Health. The incomplete infrastructure is likely to be vandalised and deteriorate due to elements of weather. 39. The non-compliance is likely to result in material financial loss for the Gauteng Department of Health, if a replacement contractor is not appointed on time to complete construction of the clinic. 40. Gauteng Department of Infrastructure Development implements infrastructure projects on behalf of the Gauteng Department of Health. 41. The accounting officer was notified of the material irregularity on 23 August 2023 and invited to make a written submission on the actions taken and to be taken to address the matter. • Appointed a contractor in April 2024 to complete construction of the clinic. Gauteng Department of Health confirmed budget availability in July 2024 and the contracting process is expected to be finalised before end of August 2024. Construction work will commence upon finalisation of the contracting process • A root cause analysis finalised in June 2024 concluded that established contract management processes were not followed and a process to implement recommendations from the report is expected to be finalised before end of October 2024. • Established a panel of construction contractors with construction industry development board grading between level 6 and 9. This will enhance turnaround times on the appointments of contractors, in particular appointing replacement contractors where the contractor has failed to perform. 43. To prevent a re-occurrence of the material irregularity, the accounting officer holds bilateral meetings with senior management on a biweekly basis to enhance oversight and support. This ensures speedy turnaround times on projects. 42. The accounting officer has taken the following actions to address the material irregularity:

44. I will follow up on the implementation of the planned actions during my next audit. Construction of Mayibuye Primary School not completed

45. Resources of the department were not utilised economically, as required by section 38(1) (b) of the PFMA. The department did not address concerns raised by the Gauteng Department of Education to ensure that a replacement contractor is appointed to complete the construction of Mayibuye Primary School between July 2020 and July 2023. 46. The incomplete infrastructure is likely to be vandalised and deteriorate due to elements of weather. The non compliance is likely to result in material financial loss for the Gauteng department of Education, if a replacement contractor is not appointed on time to complete construction of the school.

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DEPARTMENT OF INFRASTRUCTURE DEVELOPMENT