A fortnight ago, the Supreme Court of Appeal passed a judgment that will have far-reaching consequences for how government officials spend public funds.
In 2015, the defence & military veterans department issued a three-year contract to Zeal Health for health and wellness services to 16,000 military veterans. Zeal Health began providing the services. Months later it sued the government for failure to pay for it.
A Gauteng high court ruled the tender was invalid and unlawful. The matter ended up in the appeal court, which has now upheld the high court’s ruling. In essence, the appeal court found that the department’s officials had breached the Public Finance Management Act by awarding a tender for which there was insufficient budget. Crucially, the court held the government liable to pay Zeal Health.
This is an important judgment. It effectively asks officials to apply their minds before making such awards. Much of the government’s overspending is the result of officials spending money they don’t have. This is a clear case of ill-discipline, which is as bad as tender rigging and avoidable litigation.
The act provides clear guidelines on the government’s supply chain management processes.
Angie Motshekga and Bantu Holomisa — the new political leadership of the department — and the members of the standing committee on public accounts must read the judgment and demand accountability from the culprits.
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