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Public procurement loopholes enable looting of Covid-19 goods

by Staff reporter
19 Sep 2022 at 20:02hrs | Views
THE absence of statutes aimed at managing the procurement of goods and services and their issuance in times of emergency in Zimbabwe led to the country not getting value for the funds it invested towards the sprucing up and reconstruction of its fragile and collapsed healthcare system at the height of the Covid-19 pandemic, investigations by The NewsHawks have revealed.

In March 2020, Covid-19 was declared a national disaster. The  Zimbabwean government took measures to protect citizens from the raging effects of the disease through redirecting resources to curtailing challenges and the vulnerabilities that emerged with the pandemic.

To that effect, the procurement of products and services aimed at mitigating the scourge of the pandemic was delegated to various government departments.

In April, the then Health minister, Obadiah Moyo (pictured), found himself in the eye of a storm after he illegally awarded a multi-million-dollar contract for Covid-19 test kits, drugs and personal protective equipment to a shadowy company called Drax International without going to public tender.

The scandal came to full public attention at the end of May after it emerged the company involved, Drax International, had invoiced the government US$28 per disposable mask whose wholesale price was just under US$4 from reputable local suppliers.

The inflated invoice triggered sustained public outrage, forcing the government, which had initially denied payments had been made, to take action. A parallel Interpol investigation, triggered after US$2 million was paid to Drax International's newly opened account in Hungary, put to rest government claims that no payment had been made.

An investigation by The NewsHawks scrutinisingthe utilisation of Covid-19 funds revealed that the clandestine

manner in which goods and services aimed at curtailing the pandemic were procured did not end with former minister Moyo and the Drax International scandal.

Investigations show that the cancer spread to other government departments in various provinces.

In Manicaland, investigations showed that the provincial Social Welfare office tasked with the responsibility of procuring groceries for eight quarantine centres in the province did not have a procurement plan, and ministry officials procured goods haphazardly.

This action was in contravention of the Public Procurement and Disposal of Public Assets Act [Chapter 22:23] which stipulates that ministries, departments and agencies should plan their public procurement activities with a view to achieving maximum value for public funds spent.

Office bearers from various Manicaland quarantine centres took advantage of the disorganised procurement system to order various consumables without documented requisitions that showed the number of inmates in their care. Investigations further revealed that some of the consumables ended up being sold to the public illegally.

In interviews with The NewsHawks, residents of Sakubva suburb who spoke on condition of anonymity for fear of reprisals confirmed to this publication that it was easier to buy bread that was being sold from the Mutare Teachers' College quarantine centre, compared to queueing in local supermarkets that were operating under restricted hours.

"When Covid-19 hit Zimbabwe, I was fortunate to be acquainted with one of the people who were working at the Mutare Teachers' College quarantine centre. Getting access to basics like bread only required a WhatsApp message and a US$2 for the two loaves that my family of six needed daily,'' the first resident said.

"Being able to buy bread from my neighbour's contact at Mutare Teachers' College made my life easier as I had just given birth to a daughter and could not afford to wake up early in the morning to join queues, especially to buy bread,'' another resident said.

Two former Covid-19 patients, who were quarantined at Magamba and Rowa Training centres in Manicaland province, also divulged how they managed to purchase bread and meat from officials who were in charge of their care, upon their release from the institution to go home.

"Although my stay at Magamba Training Centre was a bad experience because of the unavailability of water for two weeks, I'm happy that I did not go home to my family empty handed. One of the officers I had gotten close to while admitted at the isolation centre sold me five loaves of bread and two crates of eggs for US$12," a former Covid-19 inmate said.

"Those officers were complaining about not being given Covid-19 allowances, that's why they ended up selling groceries which were within their reach to us, especially when we were leaving the isolation centre. If I was in their shoes, I would have done the same, it was a dog-eat-dog situation," another former inmate added.

Ministry of Public Service, Labour and Social Welfare permanent secretary Simon Masanga dismissed the allegations, saying: "What stuff was being sold? I think we are focusing on trivia, forgetting the bigger picture. Mutare Teachers' College and Magamba are government institutions with stores systems."

Investigations further revealed that the setting up of two out of the four isolation and treatment centres in Manicaland, which were supposed to provide isolation services and treatment facilities to Covid-19 patients, was not completed within the contractually stipulated timeframe.

This, according to the Auditor-General, was caused by inadequate capacity assessment by the provincial Public Works office before it awarded Wynand Investment (Private) Limited two tenders for the supply, fixing and installation of medical gas equipment at Nyanga Hospital and Chipinge District Hospital isolation centres.

Contractually, Wynand Investment (Pvt) Ltd, was supposed to complete the medical gas installation exercise it had been given in September 2020 in three weeks (21 days), but the company took more than three months without having completed the job.

A verification visit to Nyanga District Hospital by The NewsHawks revealed that the ZW$4 288 864 invested in the fixing and installation of medical gas equipment at the isolation and treatment centre went to waste as work was only completed during the last week of December 2020,  only for the isolation centre to be closed again for other renovations that were completed long after the height of the Covid-19 pandemic.

Sources at the hospital revealed that the delay in the completion of the isolation block resulted in patients who needed isolation and treatment services for Covid-19 being admitted in a makeshift isolation room in the children's ward.

The NewsHawks also discovered that Mutare City Council and the Manicaland Provincial Public Works Office Procurement Management Units after procuring Covid-19 goods and services worth ZW$20.8 million without following procurement procedures, failed to submit records in time for all the Covid-19 requirements they procured, to cover the pandemic emergency phase for verification by the Procurement Authority of Zimbabwe (Praz).

The procurement documents should have covered a schedule of all requirements purchased for Covid-19 management, invitation to tender, requests for proposals or quotations, framework agreements and/or bid documents through which suppliers were solicited, copies of full sets of all supplier bids responding to each invitation to tender, request for proposal or quotations, record of bid evaluation, tender awards and related communications to all bidders and copies of each procurement contract signed, among other submissions.

"I was not furnished with copies of documentation which was submitted in compliance to Praz's requirement by Mutare City Council and Manicaland Provincial Public Works Office for the tenders awarded. Manicaland Provincial Public Works Office awarded tenders worth ZW$20 800 000. There was no evidence of timely response to the Praz requirements by the Provincial Project Management Unit," the Auditor-General said.

A report by Transparency International Zimbabwe (TIZ) on Corruption Risks in Public Procurement process during Emergencies in Zimbabwe confirmed and corroborated The NewsHawks's findings, indicating that several corrupt practices undermined the integrity of processes, mechanisms and institutions meant to conduct procurement of goods and services during  the Cyclone Idai and Covid-19 pandemic.

"This study identified several corruption risks and vulnerabilities in the existing public procurement process during emergencies in Zimbabwe. Whilst most risks arise in the various stages of the actual procurement cycle, they are engendered by the external political and economic context. These risks and vulnerabilities undermine not only the lawful, compliant and ethical conduct of public procurement processes, but also damage the integrity of the process whilst eroding public confidence and trust in procurement institutions," the TIZ report reads.

Public finance management specialist Nelson Maseko also corroborated The NewsHawks investigation findings, saying on numerous occasions procurement procedures were flouted.

"Because there were no systems in place for procuring entities, no guidelines were provided for receiving donated goods, procurement and distribution of food, money and other goods which were made available, a lot of resources were open to plunder," he said.  

Efforts to get a comment from Praz were fruitless, with officials insisting that the people who are able to comment on the procurement system in Zimbabwe during the Covid-19 pandemic, as well as ascertain whether all procuring entities submitted records for all the material they procured, were said to be out of office on three different occasions when contacted for comment.

There was also no response to questions sent via email earlier in the month.

We however reached out to Mike Mugabe from the ministry of Labour, Public Service and Social Welfare procurement department, who said: "I'm not aware if the required documents were sent from our ministry to Praz. The director who was in charge of procurement then is no longer with us".

The permanent secretary in the ministry of Labour, Public Service and Social Welfare, Simon Masanga, acknowledged that it was difficult to follow procedures and attributed the problem to the skeletal staff his ministry had  due to cuts on staff.

"During the period under review, we were short staffed; we had to hire students to assist in these facilities."

Masanga added: "Covid-19 was not something that anyone anticipated. In some instances, decisions were made to cater for citizens who would have been delivered to quarantine and isolation centres later without proper required amenities."

Asked what correctional measures his ministry took to curb the clandestine manner in which his accounting officers procured Covid-19 consumables as well as the course of action they had taken in disciplining officers who were found guilty of underhand dealings, Masanga said: "The ministry has followed recommendations from the Auditor-General, and every issue pertaining our staff has been resolved".

Director of communications in the Local Government ministry, Gabriel Masvora, said the delay in completing the supply, fixing and installation of medical gas equipment at Nyanga and Chipinge district hospitals isolation centres by Wynand Investments (Private) Limited, was caused by delays in delivery since some of the material used was imported.

"Some parts of the projects, for example manifolds, were imported from South Africa. Due to Covid-19 restrictions on movement, there were delays in delivery of these imported materials, which had an effect of the completion of the projects within stipulated timeframes and contractors did write about these delays," Masvora said.

The chairperson of the Public Accounts Committee responsible for examining the financial affairs of government departments and state-owned enterprises, Brian Dube, confirmed that

his committee had noted with concern the clandestine manner in which various entities had procured Covid-19 goods and services and they were pushing for recourse.

"The PAC committee noted with concern the manner in which procurement of Covid-19 consumables and services was done. In a report we presented in Parliament, which was adopted by the House, we recommended that resources the country lost must be recovered and, going forward, all companies that violated their contractual obligations like not finishing work or finishing work late must be blacklisted and not be allowed to tender again for any government or parastatal contract.

"In addition, accounting officers who failed to do due diligence, which is a critical part of procurement procedures and prejudiced the country's finances, must be charged with neglect of duty. Disciplinary action must be taken,'' Dube said.

Anomalies in how Covid-19 goods and services were procured are confirmed in the special audit report on the utilisation of Covid-19 funds by the Auditor-General, Mildred Chiri.

"In Manicaland Province, no approved documented requisitions from the eight (8) Quarantine Centres were availed, for the ZW$2 998 078 worth of goods procured, detailing the food requirements against the number of inmates. The office bearers made use of verbal and social media platforms such as WhatsApp when raising orders during the Covid-19 period. This was in contravention of Section 67 (8) of the Public Finance Management (Treasury Instructions), 2019 which requires that all procurement requests be justified as to the need, so as to avoid fruitless and wasteful expenditure; surplus and redundancy. I therefore could not confirm whether the goods that were procured were in line with the needs at the Quarantine Centres."

The Auditor-General's Office also unearthed that contracts worth ZW$4 288 864 and ZW$3 770 427 were awarded to one contractor who failed to fix and install medical gas equipment at Nyanga and Chipinge District Hospital isolation centres, within the contract period of three weeks.

Manicaland is not the only province from which procurement of Covid-19 services were haphazardly done, the remaining nine provinces also faced the same problem and through such actions, government failed to reap any meaningful results from its investments.

Source - thenewshawks