USAASA under investigation

The Department of Communications (DOC) has ordered a forensic investigation into the Universal Service and Access Agency of SA (USAASA) for financial mismanagement worth millions.

Recent reports said the total amount of the mismanagement was R29 million. However, communications minister Roy Padayachie told ITWeb that this is incorrect.

He confirmed there was an internal audit report recommending further investigation into the project management office at USAASA.

“The concern in the report is the manner in which a R19 million project was managed. We've accepted the report and ordered a forensic investigation into the matter.”

He explained that a service provider was awarded a R19 million contract for the provision of public access facilities in under-serviced areas, but the project was not complete and yet most of the funds were disbursed to it.

In the current year, the service provider was reappointed and again funds were already being disbursed.

“We found this to be very worrying and so there is currently a forensic investigation into the matter. The investigation started last week and we have asked for the report as soon as possible,” said the minister.

There are no timelines for the completion of the investigation as yet.

Last month, ITWeb reported that USAASA paid the service provider R15 million even though it only provided one out the expected 20 access centres for the first quarter of this year.

The agency revealed this while reporting on its first quarter performance at a parliamentary portfolio committee meeting.

Thandeka Mngadi, executive manager of performance management at USAASA, said the project to provide new public access facilities in under-serviced areas is now under review. The annual target is for 44 centres to be completed in 2011/12.

The target for the first quarter was 20 centres. Only one centre was completed before the end of the first quarter. The budget for the access centres during the first quarter was R19.8 million. It was only the Ulwazi centre, in the Western Cape, that was completed.

Committee chairperson Sikhumbuzo Eric Kholwane asked how many service providers had been appointed and if provision had been made for penalties if the service provider failed to complete the contract on time. He wanted to know how much had been paid to the service provider.

Mngadi confirmed that only one service provider had been appointed. The amount paid to date was R15 million. The project was put under review after input was received from stakeholders and the committee's oversight visits.

USAASA CEO Phineas Moleele added that USAASA preferred to take remedial rather than punitive action. He said sites for the additional centres have been identified and a procurement process is in place. The contract with the current service provider has not been renewed and the completion of the remaining centres is on hold.

There were questions from committee members about whether USAASA has legal recourse against the service provider.

Moleele said the agency has recourse in common law and can take legal action to reclaim penalties from the service provider.

Democratic Alliance shadow minister of communications Natasha Michael stressed that the investigation should be carried out fully and the funds be recovered.

“This is another blow to the poor, who are already expected to bear the brunt of the cost of the digital migration. The total cost of the migration is projected to be R3.5 billion.”

USAASA is managing government subsidies for the set-top boxes that will be required for digital broadcasting.