The Auditor-General has told Correctional Services to check whether it is overpaying on every contract, from cleaning to coal.
It found potential overspending of about R170 million on just one food contract.
“In terms of the food contract and contracts in general, if you look at the slide where we talk about value for money, it’s actually slide 24. What we did here is we took one contract that was reviewed.
“We took all the transactions in that contract, about 13,000 transactions, and we looked at whether the department is buying at a reasonable price for specific products,” said Michelle Magerman, business unit leader at the Auditor-General of South Africa (AGSA).
“We identified, and that’s why we have the potential overspending, that about R170 million is overspent that is just on the one contract. It does give an indication that there is definitely a need for the department to go and re-look at everything, all the expenditure that they have, whether it’s cleaning, whether it’s coal, all the expenditure, and see: are we paying the right price for all the products?” Magerman said.
She was answering DA MP Nicholas Gotsell at the NCOP Select Committee on Security and Justice on Wednesday, 28 October 2026.
Gotsell had asked whether the Minister’s claimed savings on prison food were real.
“Following that R1.6 billion coal tender controversy and the irregularities in prison food procurement, has the AG assessed whether the department is obtaining genuine value for money?
“The minister has previously told us that the department was saving money by removing certain protein foods and replacing them with soy products. So I’d like to know whether the AG has in fact examined whether these savings are genuine, and whether procurement prices are reasonable and cost-cutting,” Gotsell said.
Magerman indicated that the Minister’s steps were not enough on their own.
“We do note that there are more offenders, so the offender population is growing. With that growth, there will be more spending. There will be a need for more personnel within the department. We do note that, but there is an indication that a lot can be saved if we are buying at the right market price.
“So yes, we’ve heard the interventions that the minister is implementing, but on top of that, we have also requested the department to do a full analysis of the expenditure on the products that they are buying, especially the perishables, your food, where we’ve already indicated that there is potential to save, so that this unauthorised expenditure is not as big as it is at the moment.
“Then we can focus on the key overspending, which would be employee costs if you need more employees because the inmate population is growing, and not have all this other overspending on goods that are being bought at exorbitant prices,” she said.
She said new contracts must be checked too.
“Even when you enter into new contracts, the department will need to make sure that the prices quoted by suppliers are relevant. So not only do the suppliers that are within the system now need a price review, but also new appointments. When they accept those quotations, they should do that other check to make sure that the price is reasonable, so that we do not overspend the fiscus.”
AGSA senior manager Omphemetse Setebe said the problem goes beyond head office.
“Currently we are noting that there is overspending in relation to what is available in the market. As Michelle also highlighted, we are prompting the department to look into it further. When we visited the various regions, we also noted value for money issues on other quotations or contracts at the regions,” Setebe said.
“So it’s something the department needs to expand on, to ensure that they address the full coverage and do a full assessment, whether it be zero-based budgeting or just going back to the drawing board, to determine areas where they can specifically save costs,” Setebe explained.
Setebe said the department had reviewed the food contract’s prices only once.
“We also request that they do the cyclical price review and renegotiation, as it was only done once, and there was no confirmation by the department that it was done again by year end, as at 31 March,” she said.
The potential overspending was previously reported at R170.85 million on a single nutritional products tender, Bid HO 04/2023. The department’s unauthorised spending over three years now totals R1.9 billion.
The food contract runs for five years, from 1 April 2025 to 31 March 2030.
In May, Groenewald told the Portfolio Committee on Correctional Services that the department had already saved the taxpayer R77 million.