The auditor-general (AG) has slammed the State IT Agency (SITA) in its annual report.
The AG says SITA does not have adequate policies, procedures and systems in place to ensure compliance with laws and regulations and effective internal control.
SITA's annual report was tabled before Parliament yesterday, one of the first state-owned enterprises to do so at the beginning of the yearly reporting season.
According to the report, SITA incurred R215 million worth of irregular expenditure last year, on top of R19 million in the 2008/09 financial year.
The agency has been plagued by allegations of mismanagement for some time, yet it sits as a central pillar of government's IT procurement arm. A turnaround strategy is supposed to have been implemented and driven by public service and administration minister Richard Baloyi.
There are four cases of fraud that are currently being investigated by the Special Investigation Unit.
The auditor-general's report states that, in some instances, service level agreements with government departments and other government entities were not signed or concluded as required by the SITA Act.
The public finance watchdog also cites other issues of non-compliance that have been committed in terms of the agency's governing law and the Public Finance Management Act.
These include a lack of standards relating to the interoperability of information systems between departments and no standards for information security environments, and not reporting to the minister of finance on supplier performance criteria of all contracts for IT services and goods.
In some cases, the initiation of the tender process occurred without an approved business case, and in other instances the business cases did not include the required budget for goods and services.
The AG also slammed SITA's leadership and management for several internal control deficiencies.
These included the fact there is no adequate system for managing contracts; that the prior year audit findings had not been substantially addressed; and there was a lack of consensus management against employees who are found to be continuously in breach of policies and procedures.
The AG found SITA did not have reliable information systems for recording financial information and extensive manual intervention was required to prepare the annual financial statements for the year.
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