SIU multi-billion rand PPE fraud disclosures amplify the need for better risk management

Gillian le Cordeur, Chief Executive: Institute of Risk Management

Alarming disclosures by the Special Investigating Unit (SIU) that over 13-billion Rand’s worth of Government Personal Protective Equipment (PPE) is subject to fraud investigation, again raises the crucial issue of heightened risk management in both the public and private sector.

While the Institute welcomes swift action by the SIU in uncovering this alleged malfeasance, risk professionals are alarmed at the depth of the problem and ask why there was failure in risk management protocols.

The tragedy of this situation is that the optimum delivery of vital PPE has been severely compromised and that in turn has the potential to impact people’s lives as the country is still dealing with the second wave of the COVID-19 pandemic and awaits a widespread vaccination rollout.

Proper risk management oversight in the entire supply chain management process – both in the public and private- sector space – could have raised red flags early on and preventative measures taken. IRMSA urges government departments involved in PPE procurement and distribution to audit and re-examine their risk management methodology with a view to tightening oversight. IRMSA acknowledges however that this type of undertaking is not done overnight, particularly given the speed and urgency with which PPE acquisition is being handled. To that end, the Institute again makes an offer to sit down with local, provincial and national government leaders and offer any assistance we can.

“IRMSA urges government departments involved in PPE procurement and distribution to audit and re-examine their risk management methodology with a view to tightening oversight.”

In May last year IRMSA wrote to the Presidency welcoming the Government’s risk adjusted strategy and offered it expertise with any assistance that was needed. In the Institute’s 2020 South Africa Risk Report, risks associated with the delivery of mega-projects and pervasive fraud and corruption were highlighted and the SIU disclosures have now confirmed that. IRMSA is confident the SIU report will be acted upon quickly and those responsible for the massive acts of fraud brought to book and punished. IRMSA’s 2021 SA Risk Report was launched at the end of February.