Tembisa Hospital R2bn corruption: How the CEOs ‘failed to do their jobs’

THE Special Investigating Unit (SIU) interim report into allegations of maladministration, which resulted in Tembisa Hospital being looted for over R2 billion, has exposed several ethical failures and a lack of tender due diligence by the CEOs, which led to widespread corruption.

- MANYANE MANYANE [e-mail]

Under the Public Finance Management Act 1 of 1999 (PFMA), the Chief Executive Officer (CEO) of a public hospital, as the Accounting Officer or as a delegate of the relevant Accounting Authority, bears a statutory and fiduciary duty to ensure that all financial and operational decisions are taken with due diligence, transparency, and accountability.

Section 38(1)(a)(i) of the PFMA expressly requires the Accounting Officer to ensure that the institution maintains effective, efficient, and transparent systems of financial and risk management and internal control. In the context of due diligence for potential partnerships or transactions, this translates to the CEO providing strategic leadership in evaluating the financial viability, compliance, and alignment of the prospective engagement with the hospital's statutory mandate and strategic objectives.

Furthermore, in terms of Section 51(1)(b)(ii), the CEO must take effective steps to prevent irregular, fruitless, and wasteful expenditure, and to safeguard the hospital's assets and interests. This duty inherently includes assessing legal, operational, and reputational risks that may arise from entering into partnerships or agreements. Therefore, the CEO's role in due diligence is both leadership-oriented and compliance-driven - ensuring that the decision-making process adheres to the principles of good governance, public accountability, and ethical financial management as envisaged by the PFMA and associated Treasury Regulations.

In summary, the hospital CEO must ensure that every potential partnership or transaction undergoes comprehensive due diligence, guided by sound financial management principles and consistent with the hospital's mission and the broader objectives of the public sector integrity and value for money.