Case designed based on the following sources:

$1.$ Ambe, I.M$.$ and Badenhorst$-$Weiss, J$.$A$.2012.$ Procurement challenges in the South African public sector. Journal of Transport and Supply Chain Management $242-261.$ Link: Procurement challenges in the South African public sector

$2.$

$3.$ Selomo, M$.$R$.$ and Govender, K$.$K$.2016.$ Procurement and Supply Chain Management in Government Institutions: A Case Study of Select Departments in the Limpopo Province, South Africa, Dutch Journal of Finance and Management, $1\mathrm{.}1(37)$:$1-10,$ Link: Procurement and Supply Chain Management in Government Institutions

Introduction

The current state of the South African $($SA$)$ government$$s Supply Chain Management $($SCM$)$ is fraught with malpractices which include lack of good governance, fair, equitable, transparent, competitive and cost$-$effective procurement process. Generally, SCM performance in government departments is effective, although it became evident that the departments experience obstacles during the implementation of SCM processes and procedures. Furthermore, procurement planning is inadequate and needs improvement when the departments procure goods, services or works. Procurement execution was also found wanting, especially with regards to procurement governance.

The South Africa context

Procurement reforms in the South African $($SA$)$ government started in $1995$ and were directed at two broad focus areas, namely, the promotion of the principles of good governance and the introduction of a preference system to address certain socio$-$economic objectives. The procurement reform processes were supported by the introduction of a number of legislative measures, including the adoption of the Public Financial Management Act $($PFMA$)$ and the Preferential Procurement Policy Framework Act $($PPPFA$)($National Treasury, $2003).$ The PPPFA was endorsed as a result of Section $217$ of the Constitution of the Republic of South Africa which $($Republic of South Africa $1996)$ stipulated the need to implement a procurement policy that will provide preference in the allocation of contracts, and prevent unfair discrimination. PPPFA requires that when government assesses contracts, it must take into consideration the preference point system which prescribes functionality, price, and the Reconstruction Development Programme $($RDP$)$ goals. The PPPFA was amended by the Department of Trade and Industry $($DTI$)$ and the National Treasury, after the approved B$-$BBEE Codes of Good Practice in $2006,$ to advance the objectives of the Broad$-$Based Black Economic Empowerment Act $($B$-$BBEE Act$)$ and its strategy, as these two legislations were not aligned. The alignment led to the amendment of the Preferential Procurement Regulations $($PPR$)$ which was effected in $2011($National Treasury $2011).$

The Constitution of the Republic of South African $(108$ of $1996$ Section $217)$ states that when an organ of state of the national, provincial and local spheres of government procures goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost$-$effective. However, the practice prior to $2004$ was far from the ideal in a sense that procurement and provisioning activities were rule driven, and value for money was almost always equated to the lowest price tendered; procurement and provisioning activities were not linked to budgetary planning; the bid documentation was not uniform, causing uncertainty to bidders and practitioners; and the Preferential Procurement Policy Framework Act, No $5$ of $2000$ and its associated regulations were complex and difficult to implement $($National Treasury, $2004$: $2).$ The afore$-$mentioned led to the approved adoption of a policy strategy to guide uniformity in the Procurement Reform Process in the government by the South African National Cabinet in September $2003.$ This was done to replace the outdated procurement and provisioning practices across government institutions with Supply Chain Management $($SCM$)$ functions that integrate financial management in procurement processes and conform to international best practices $($National Treasury, $2004$;$5$;$6$;$11).$ The SCM which was implemented in $2004,$ is a tool that government initiated to manage the procurement process to ensure best practices. In order to achieve effective procurement practices, compliance audit is one of the control measures used to establish and prove adherence to legislation, regulations and policies. Cosserat $(2004$: $21)$ states that $$a compliance audit involves obtaining and evaluating evidence to determine whether certain operational activities of an entity conform to specified conditions, rules and regulations.$$ According to the Monitoring and Evaluation $($M&E$)$ framework, organizations are required to establish policies and procedures that provide reasonable assurance that their quality controls are relevant, adequate and comply with best practice. The process includes both ongoing consideration and evaluation of the elements of the quality control system