• Ten provincial and local government employees have been caught by the Eastern Cape Treasury allegedly doing business with the state.
• The Treasury has instructed managers of those particular employees to take immediate action against them.
• It is a serious offence for public servants to do business with the state and can result in criminal prosecution and dismissal.

Ten government employees in the Eastern Cape have been red flagged by the provincial Treasury for doing business with the state.

Eastern Cape Finance MEC Mlungisi Mvoko raised concern after the public servants, from provincial and local government, were found to have engaged in Covid-19-related business dealings with the provincial government.

The officials are now in hot water after Provincial Treasury head Daluhlanga Majeke served them with injunction letters and instructed their bosses to launch immediate action.

Majeke also warned the officials that their alleged actions had exposed them to criminal prosecution.

This comes as the provincial Treasury took a decision to publish all names of businesses providing services for the government in relation to the Covid-19 pandemic.

Government tender deals came under intense scrutiny after Presidency spokesperson Khusela Diko's husband, Thandisizwe Diko, scored a R125-million deal to provide PPE to the Gauteng health department.

In a press statement on Sunday, Mvoko said that government officials who engaged in business with the state were committing serious offences.

Eastern Cape MEC for Finance, Mlungisi Mvoko, said:

'Clear regulations'

Mvoko said, in the injunction letters, Treasury had stipulated that the alleged conduct by the officials constituted a conflict of interest, and therefore exposed them to criminal prosecution in terms of the Public Administration Management Act (PAMA), which came into effect on 1 April 2019.

Mvoko said a directive issued by the Office of the Premier, dated 19 August 2019, stated that the head of department should note that he/she would be held accountable for failing to act against any official who was found to have contravened the above statutory laws.

"As such, the affected departments have to respond in writing to Provincial Treasury by Wednesday 19 August 2020, and indicate application of consequence management. All those who are in the value chain of our supply chain processes must be made to account. Furthermore, the department should also mention what measures it has implemented to prevent such occurrences from happening in the future," said Mvoko.

"It is concerning that such conduct continues to take place, despite clear regulations that need to be followed when conducting procurement. In terms of National Treasury Instruction Note 4A of 2016/17, when sourcing for price quotations from prospective suppliers, departments must verify key information on the CSD in line with the PFMA and regulatory requirements."

He said the regulations compelled procuring officials to verify key information, such as business registration – including details of directorship and membership, bank account holder information, in-the-service-of-the-state status, tax compliance status, identity number, B-BBEE status level, tender defaulting and restriction status, and any additional and supplementary verification information communicated by Treasury.

Provincial Treasury would continue to monitor potential cases of conflict of interest, including in the Covid-19 procurement, Mvoko promised.

The rules

Majeke reminded the officials of Section 8 of Public Administration Management Act which states that:

(1) In this section and in Section 9, "employee" includes persons contemplated in Section 12A of the Public Service Act and a person performing similar functions in a municipality.

(2) An employee may not -

(a) conduct business with the State; or

(b) be a director of a public or private company conducting business with the State.

(3) A contravention of subsection (2) -

(a) is an offence, and any person found guilty of the offence is liable to a fine or imprisonment for a period not exceeding five years or both such fine and imprisonment; and

(b) constitutes serious misconduct which may result in the termination of employment by the employer.

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