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In a damning presentation in Parliament today before the portfolio committee of Public Service and Administration, the Public Service Commission (PSC) revealed that corruption frequently occurs at the quotation stages for contracts under the R200 000 threshold. The invitation for quotations, the required number of quotations obtained and the evaluation of quotations received often do not comply with procurement rules. 

The PSC undertook a study into the management of fraud and corruption risks in the supply chain management process when it became clear that the total number of cases of financial misconduct reported to the PSC has dramatically increased over the past years. In the 2005/06 financial year 771 cases of financial misconduct were reported to the PSC by national and provincial departments, while this number has increased to 1042 in the 2006/07 financial year. The national and provincial departments of public works and housing were involved.

The PSC found that no quotations were obtained before orders were placed with service providers in 29% of all transactions evaluated. For a further 45% of all transactions, the required number of quotations was not called for, while 46% of transactions the quotations were not evaluated, as required by procurement rules.
The rate of compliance to procurement rules relating to invitation of quotations in four provinces, including national departments, is below the average rate of 71%. The Gauteng province has a compliance rate of 58%, the Western Cape under the former Premiership of Ebrahim Rasool was 47%, and national departments showed only a 54% compliance.
However, these figures are most likely worse, as not all departments at both national and provincial level submitted the requested information.
The DA has proposed that the offending departments should be called to appear before the committee to account for their non compliance and explain why these reports were not presented.
The PSC has made the following recommendations and I have proposed that the offending departments be asked to account implement the following recommendations by the PSC:

Ongoing forensic or other specialized audits within the supply chain management process
Regular fraud detection reviews
Ensuring segregation of duties
Ensuring adequate supervision of the procurement process
Issuing formal requests for quotations
Recording deviations in the supply chain management process
Maintaining an updated list of service providers
Declaration of conflicts of interest
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