The Special Investigation Unit probe saved State Information Technology Agency R111 million and recovered R24.6 m in procurement irregularities.
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THE Special Investigations Unit (SIU) saved the State Information Technology Agency (SITA) R111 million and recovered R24.6m through its investigations into procurement processes at the entity.
This was revealed by SIU head Andy Mothibi when he and his team briefed the Standing Committee on Public Accounts (Scopa) Wednesday on the investigation they conducted at SITA and the SABC.
“The focus of the investigation has been on procurement irregularities that occurred at SABC and SITA,” Mothibi said.
His unit referred four criminal cases to the National Prosecution Authority, 22 disciplinary cases to SITA and one administrative action and a contract valued at R265m was set aside.
There was one case of litigation that was pursued following the investigations.
Mothibi said the SIU was authorised in 2014 and 2015 to investigate the appointment of IBM SA to supply works, goods and/or services in terms of an Integrated Supply Agreement as well as irregular, unauthorised and fruitless expenditure incurred in the awarding of a contract to service provider iFirm Consulting.
He said the SIU found that the contracts were concluded irregularly.
SIU chief operating officer, Leonard Lekgetho, told Scopa that IBM was appointed at a cost of R888m as a single source service provider without prior permission of the National Treasury to deviate from a competitive procurement process.
"Whereas the SITA board approved the Integrated Supply Agreement for R888 399 393.35 (VAT inclusive), terms of the agreement itself stated that the contract price to amount to R854 365 829.50 (excluding VAT).
“However, if 14% VAT is added to this amount, the total exceeds the amount approved by the board by R85 577 652.28,” Lekgetho said.
He also said R774 676 244 in payments was incurred as irregular expenditure.
Lekgetho said it was found that iFirm was appointed without a competitive bidding process being followed.
Lekgetho said with the support of SIU, SITA lodged an application in the Gauteng High Court to have the contract reviewed and set aside.
The court found that the agreement concluded was unconstitutional and invalid and iFirm was ordered to pay the costs of the application.
Lekgetho added that the investigation referred 22 matters for disciplinary action and SIU demanded R24m outstanding monies.
He said the SIU saved R111.3m when the contract was terminated and referred four criminal referrals and one to the Asset Forfeiture Unit and one for blacklisting.
Responding to questions, Mothibi said the contract with IBM was supposed to be an add-on to services IBM was providing to SITA and “there was clear dependency”.
“It looks like IBM really entrenched themselves. The concept of evergreen had crept in,” he said.
He also said disciplinary action could not be taken against the CEO, who was at the forefront, as he had left SITA employment.
Mothibi said: “It is our view that SITA should really consider to ensure it meets the procurement requirements.”
Scopa chairperson Songezo said SITA has for several years failed to achieve satisfactory audit outcomes or to adequately support various government departments, agencies and other public institutions.
“We are going to invite the Minister of Communication and Digital Technologies to appear before the committee to explain the steps he is taking to ensure the SITA recovers to fulfil its constitutional mandate,” Zibi said.
Cape Times