The public sector needs to ensure effective, sustainable and strategic management of the procurement function. This is vital for economic development and effective service delivery in South Africa.
Government institutions are under increasing pressure from the community, the Minister of Finance and the Auditor General of South Africa (AGSA) to be accountable and improve service delivery.
The 2014 budget speech by the Minister of Finance, Pravin Gordhan, highlighted the need to eliminate waste and realise better value for money from public expenditure.
The AGSA’s annual reports continue to highlight the procurement and contract management challenges faced by government at all levels. 84% of municipalities had findings on supply chain for the 2012 financial year. At a
departmental level, the latest 2013 reports show this was at 60%.
Interestingly, a new international Grant Thornton report, ‘Public financial management reform in a period of global adjustment’, shows that governments globally have been focusing on improving public procurement following the recent worldwide economic crisis.
The research showed that a key trend is a focus on improving public procurement to address the need for more effective outcomes of the process and better value for the money.
Over 65 percent of respondents indicated they have introduced procurement system reforms to address the need for more efficient and effective public financial management (PFM) practices. Measures include decentralising procurement systems, introducing new procurement legislation, and introducing electronic procurement systems.
Here in South Africa, sustainable procurement is a key element of service delivery. For this reason those charged with governance should take supply chain management more seriously than simply regarding it as an administrative function.