Cape Town — MPs were shocked yesterday by the findings of a Public Service Commission (PSC) investigation that identified low levels of compliance by the housing and public works departments with supply-chain management procedures for transactions of up to R200 000.

Tenders for transactions of up to R200 000 - the threshold has since been raised by the Treasury to R500 000 - do not have to be advertised but do require a specified number of written quotations. This type of tender entails more discretion by government officials and therefore carries higher risk.

PSC officials briefed Parliament's public service and administration committee yesterday on the study, conducted on transactions undertaken by these departments at national and provincial level between 2004 and 2007. The report was tabled last year.

The two departments were chosen because of the large amounts of funds they disburse through tenders.

The commission found compliance was low regarding regulations for the invitation of tenders, for obtaining the required number of quotations, and in evaluating quotations. It recommended that forensic audits should continue.

Congress of the People MP Leonard Ramatlakane said if the findings on a limited sample were so worrying, the results of a wider study could be "quite shocking".

The PSC found that an average of 54% of transactions did not comply with the rules for evaluating quotations. This was "unacceptably low" and indicated that the requirements for awarding tenders for goods and services were not well controlled and monitored, and prone to abuse.

Departments also failed to give specific instructions relating to their orders, leaving the way open for irregularities, incorrect deliveries and the receipt of inferior goods and services.

Only 19% of the transactions examined in Gauteng departments complied with the rule requiring that a specified number of quotations be obtained.