Land reform department spends R1billion on consultants

The Department of Rural Development and Land Reform (DRDLR) spent R1 billion on consultants over three years from 2009 to 2011.

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This was revealed recently when the Auditor-General (AG) presented findings of a performance audit into the use of consultants by national and provincial government departments to the Portfolio Committee for Rural Development and Land Reform in parliament. George Lourens, the business executive for performance audits at the AG said it was decided to conduct a performance audit on the use of consultants by government to determine whether or not government was getting value for money.

According to minutes of the meeting published by the Parliamentary Monitoring Group, Lourens said that over the last three years, government had in total spent R102 billion on consultants – R33,5 billion by national departments and R68,5 billion by provincial departments. “It was not incorrect to use consultants where permanent appointments might be too costly, or where government cannot find the right skills in-house. However, all consultant appointments and contracts should be based on good relationships that allowed both parties to benefit from the process,” he said.

Of the R1 billion worth of contracts awarded to consultants by the DRDLR over the three-year period, the AG audited 13 projects, valued at R305,4 million. In relation to these 13 contracts the AG said it accepted that in some cases, the employment of consultants was necessary, given the skills deficiencies in the department, but emphasised that in many cases there was no proper assessment of staff capacity, whether the consultancy was the best option, and no follow-through to ensure that skills were transferred.

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Furthermore, the AG found that many contracts were varied or extended, at substantial further costs. Refering to the DRDLR’s contract for outsourcing of human resources recruitment which was entered into because of the lack of internal capacity, and the delays caused by long internal processes, Heidi van Zyl, manager of the professional audit business unit at the AG, said no cost ceiling was set.

The initial R28 million had escalated by a further R20 million, and then by another R21 million the following year. “At the end of the contract, DRDLR failed to evaluate what had been achieved, and there was no report on whether the positions were filled. The contract finally lapsed after the third year,” Van Zyl said. 

She also mentioned a contract for development of the state land leasing debtor systems. Van Zyl said that while the contract was not that large, at R3,5 million, there were problems with the implementation of the system, resulting in the department discarding the model, leaving it, again, with no state land leasing debtor system.Van Zyl pointed out that delays in implementation often resulted in the systems becoming obsolete and useless.

Responding to the AG’s report, the chairperson of the committee, Stone Sizane, asked if the AG had found fruitless and wasteful expenditure when conducting the performance audit. Lourens said that the AG would not generally look into this. However, he did indicate that in the contract for development of the state land leasing system, the services were delivered, but never used, so the expenditure was wasteful.

Mduduzi Shabane, director-general of the DRDLR, said he and the minister, Gugile Nkwinti, had been briefed about the report and outcomes. He said they were aware of the focus areas and contracts examined, as well as the gaps within the internal control environment and that they would aim to correct the most obvious weaknesses when preparing the next strategic plan.