KZN Provincial Treasury

Transcription

1 KZN Provincial Treasury Provincial Supply Chain Management Unit IMFO Workshop: SCM Pertinent Issues 2015

2 Programme 1. Contract Management, the MFMA and Compliance 2. Regulation 36 Deviations 3. SCM Irregular Expenditure 4. Provincial Treasury and National Treasury Initiatives 2

3 3 SECTION 116 CONTRACT MANAGEMENT

4 KZN Provincial Treasury Provincial SCM Unit Section 116 of the MFMA: Contract Management Section 116 Key Challenges; Absence of Contract Agreement vs Reliance on General Conditions of Contract and MBD Documents to manage contractual relations; Inadequate Record Keeping Mechanisms (Failure to establish central repository where contracts are kept missing key documents during audit); Incomplete Contract Files (Files missing critical contract data such as variation orders, signed agreements, key addendum etc.) Inadequate Staffing; and Lack of General Contract Management System 4

5 KZN Provincial Treasury Provincial SCM Unit Section 116 of the MFMA: Contract Management Section 116 Key Requirements; Contracts must be in writing and stipulate terms of the agreement, termination and dispute resolution clauses; A periodic contract review mechanism; A contract performance management system; and A contract management reporting framework 5

6 KZN Provincial Treasury Provincial SCM Unit Section 116 of the MFMA: Contract Management Section 116 Short to Medium Term Proposed Solutions; Establishment of Contract Database (Register) for all Contracts; Design and implement a Central Filing System and Repository for Contracts; Where budget allows, create or increase capacity of Contract Management Units through clear and Council Approved SOP s; Develop a reporting framework flowing from the Contract Register (timelines for Regular Council reports; and Create Standard Contracts for frequently procured G,S&W 6

7 7 REGULATION 36 DEVIATIONS

8 KZN Provincial Treasury Provincial SCM Unit Regulation 36 Deviations Regulation 36 Deviation Regulation 36 is an MFMA process that allows the accounting officer to dispense with the ordinary approved process for the procurement of goods, services and works in the event that; It is an urgent situation or an emergency; G,S&W are only provided by a supplier/contractor who is certified to be the sole supplier; For the acquisition of special works of art or zoos, animals or historic objects where it s impossible or impractical to go to tender; and To ratify minor breaches to procurement process 8

9 KZN Provincial Treasury Provincial SCM Unit Regulation 36 Deviations Urgent cases Early delivery is of critical importance The invitation of competitive bids is impossible or impractical. Urgent cases include any unforeseen needs that timeous resolution Example: Burst water pipe require Deviation SHALL NOT be used to cover poor planning 9

10 KZN Provincial Treasury Provincial SCM Unit Regulation 36 Deviations Emergency cases Immediate action is necessary to avoid a dangerous or risky situation or misery. Cases considered life threatening, example: Situations arising from natural disasters, e.g. fire 10

11 Urgent and emergency cases process KZN Provincial Treasury Provincial SCM Unit Regulation 36 Deviations Requisition approved i.t.o financial delegation 3 quotations, where practical Written confirmations of orders ASAP. Reasons certified at least at Manager level or by delegations Fair market related price where one quote is received 11

12 Exemptions KZN Provincial Treasury Provincial SCM Unit Regulation 36 Deviations Sole Suppliers Bids may be accepted, provided it complies with the specification and that the prices are proved to be and are certified as fair and reasonable. Reasonableness must be determined in the following sequence:- Comparison with prices, after discounts, to other clients and the relative discount that the Province enjoys Where this is not possible, profit before tax, based on a full statement of relevant costs 12

13 13 SCM IRREGULAR EXPENDITURE

14 KZN Provincial Treasury Provincial SCM Unit Irregular Expenditure Irregular Expenditure is expenditure, other than unauthorized expenditure incurred in contravention of or that is not in accordance with a requirement of any applicable legislation or prescript. Sources include; Regulation 32 and 36 deviations; Failure to Comply with minimum prescribed requirements in advertising and awarding bids/tenders; Awards to persons in the service of the state, no TCC; and Natural non-compliance 14

15 Irregular Expenditure Solutions

16 16 PROVINCIAL AND NATIONAL INITIATIVES

17 Provincial and National Treasury Initiatives and Key Changes to Legislation National and Provincial Initiatives 1. Centralized Suppliers Database (Travel to PMB,1 September; 1 April; 1 July) (SARS, PERSAL, CIPC) 2. B-BBEE Sworn Affidavits (Slides) 3. e-procurement Tool (Rotation of Suppliers, LED) 4. e-tender Publication Portal (Free Documents) 5. MBAT/BAT

18 Contact Details Provincial SCM Unit Advocate Siza Mthethwa (033)

19 KwaZulu-Natal Provincial Treasury SCM Support Unit Thank You! 19