On 23 July 2012, South African Finance Minister Pravin Gordhan announced that the treasury would create an oversight unit on public procurement. The establishment of this oversight unit would be aimed at actively enforcing supply chain management processes and would include the appointment of a chief procurement officer.
Gordhan stated that transactions of a particular size or type may be subject to scrutiny. He further announced that the treasury would develop IT systems which would enable the active monitoring of compliance with financial management requirements. These systems would enable the treasury to access information regarding instances of public procurement.
The move comes after the publication of a recent report by the South African Auditor-General Terence Nombembe on the results of local government audits. The report found that only 5% of municipal entities had achieved clean audits for the 2010/2011 financial year. The report further identified the lack of competencies and skills, as well as the lack of consequences for poor performance as the root causes of the troubling audit results.
Gordhan emphasised the need for government to demonstrate that poor performance and non-adherence to legal requirements in public procurement would be met with more severe consequences.