National Treasury has announced an investigation into allegations that a former employee improperly influenced the awarding of transversal contracts, following testimony at the Madlanga Commission.
The probe will be conducted by external forensic investigators and findings will be made public.
“It has been alleged at the Madlanga Commission that a former employee improperly influenced the awarding of various transversal contracts during his time at the National Treasury,” the department said in a statement on Wednesday.
“In light of the seriousness of the allegations presented, the National Treasury has initiated an investigation into the awarding of transversal contracts concluded during this period.”
The investigation will test the veracity of the allegations and determine what measures are needed to strengthen procurement and award processes within the transversal contracting system.
Background to the commission
The Madlanga Commission, officially the Judicial Commission of Inquiry into Criminality, Political Interference and Corruption in the Criminal Justice System, was established by President Cyril Ramaphosa in July last year.
Since its establishment, the commission has heard evidence regarding corruption and kickbacks in multiple government contracts. Testimony at the inquiry has previously implicated individuals in a R280 million National Treasury contract and a R50 million spare parts tender.
What are transversal contracts?
Transversal contracts are centralised procurement arrangements facilitated by National Treasury for goods and services required by multiple public sector entities. These contracts are designed to streamline procurement, reduce costs and promote standardisation across government.
At National Treasury, transversal contracts are managed by the Office of the Chief Procurement Officer, who is responsible for sourcing strategy, bid processes and contract awards.
All transversal contracts involve line departments who participate in the procurement process. For example, if a transversal contract is for the South African Police Service, officials from SAPS would participate in the bid specification, bid evaluation and bid adjudication committees.
Public sector entities may choose to utilise transversal contracts, but procurement transactions are conducted directly between the participating institution and appointed suppliers. This model combines centralised contracting with decentralised purchasing.
Support for the inquiry
National Treasury said it has already started processing the commission’s documentation requests and will continue to support the inquiry’s work.
“The National Treasury remains committed to transparency, accountability and integrity in public procurement and will take all necessary steps to ensure that any allegations of misconduct are thoroughly investigated and consequence management is applied,” the department said.
The department said it recognises public interest in the matter but will not provide media interviews while the investigation is underway to protect its integrity.
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Timeline and funding concerns
The Madlanga Commission is scheduled to conclude public hearings on 31 July, with the final report originally due by 31 August. However, the commission is in discussions with the Presidency regarding a possible extension due to an overwhelming workload.
By November last year, National Treasury had confirmed that R147 million had been spent on the commission. The Department of Justice has expressed concern about insufficient funds to cover the costs of any extension, but the minister of finance has indicated that funding for the commission’s continuation will be addressed through the 2026 adjustments budget.
Evidence presented to the commission has already led to the dismissal of SAPS organised crime head Maj-Gen Richard Shibiri and the suspension of other senior police officers. The commission has referred multiple matters for urgent criminal investigation and prosecutorial decisions.
