Heads will roll at the Gauteng Department of Roads and Transport (GDRT), after the auditor-general's (AG's) investigation into several contracts revealed corruption and irregularities.
Transport MEC Ismail Vadi in January requested an investigation into the awarding of 13 tenders by the Departmental Adjudication Council (DAC).
The contracts in question relate to the intelligent number plate (INP) project, at R1.3 million; the installation of a biometric verification system, at R4 million; the provision of security to departmental buildings, at R49 million; the establishment of new electronic Driver-Learner Testing Centres, at R35 million; the construction and renovation at Derek Masoek Centre, at R20 million; and the construction of roads at R900 million, over three years.
The aim of the investigation was to identify any conflicts of interest or unethical conduct by officials involved in the awarding of tenders or contracts.
The AG's report points to systemic weaknesses in the department's supply chain management (SCM) processes.
“These relate particularly to the poor quality of reporting; ineffective governance arrangements; and inadequate leadership oversight within the department,” says the GDRT.
Tackling culprits
Addressing the Standing Committee on Public Accounts and the portfolio committee on transport at the Gauteng Legislature yesterday, Vadi stressed that no contracts were actually signed between the department and respective companies.
For this reason, the AG has recommended that the letters of award in respect of the tenders be declared null and void. The AG also recommended that corrective and disciplinary action should be instituted against selected staff members.
Vadi said the department will, in due course, initiate disciplinary proceedings against employees identified in the report.
“No officials were suspended, because guilt or innocence of any individuals has not yet been determined.”
The MEC said proper disciplinary processes will be followed before action can be taken against implicated individuals. A legal team has already been tasked with looking at the labour relations issues and it will decide on action to be taken.
He added that he has instructed the executive management to overhaul the departmental SCM system.
The department will undertake to develop a clear procurement plan for all projects for the 2011/12 financial year; and establish multi-disciplinary bid specifications teams tasked with the preparation of tender documents.
DDG conflict
In respect of the INP, the AG found that the procurement process followed in the initial appointment of vendors was flawed, because of several contraventions of prescribed polices and regulations.
Extension of contracts for these vendors did not undergo the required processes, which were also bypassed in the name of fast-tracking service delivery.
The report also said several discrepancies in the memo to the DAC may be construed as a misrepresentation of facts.
The deputy DG of the project management branch at the department was involved in the drafting and dissemination of the terms of reference, soliciting the respective quotations, the compilation of the memo to the DAC, compiling the revised terms of reference in conjunction with one of the vendors, the evaluation and the selection of service providers and the splitting of work.
He also authorised payments to the same vendor and sat as a committee member on the DAC.
As a result, the report said there was limited segregation of duties. The AG has recommended that disciplinary action should be instituted against the DDG, since he disseminated information in order to favour one vendor, failed to keep proper records and is responsible for the misleading information presented to the DAC.
In terms of the biometric verification contract, improper procurement processes were followed and the vendor selected should not have been successful as it had not presented the most cost-effective option.
No spin
The Democratic Alliance (DA) has welcomed the AG's report.
“I applaud the MEC for making the report public so soon and especially for not trying to spin the findings of the report, but I think the findings show a shocking abuse of position and procedures,” says DA spokesperson for public accounts in Gauteng Glenda Steyn.
She is concerned that other contracts may also be questionable and says they should be subject to equal scrutiny.
Neil Campbell, DA Gauteng transport spokesperson, is concerned the senior management structure being used to refine the procurement procedures may include some of the managers that are implicated in the AG's findings.
Golden handshake
Vadi said the respective companies have not been named because the investigation was into the department's internal processes.
“There is no indication in the AG's report about perceptible wrong-doing on the part of the companies.”
However, the DA feels this allows corrupt companies to attempt the same situation in another province.
“It is also a pity the companies involved were not the subject of the investigation as the possibility exists that the rot may run that deep,” says Campbell.
“I think it is important that examples are made of anyone found guilty and if the circumstance warrants it they must be fired and not given the golden handshake as usually happens with government officials.”
Fresh start
The tender process for the INP and other implicated projects will be reopened as Vadi says it is in the public interest that the process starts fresh.
The INP project was meant to be rolled out in Gauteng over several deadlines that were not met.
The department previously said the INP project will be rolled out over a 24-month period once tests are done on the available technology.
Number plates will be fitted with RFID tags that contain unique identification codes programmed into a 2D barcode that traffic authorities will be able to scan.
The new system is part of a smart crime-fighting initiative aimed at putting an end to the duplication of number plates frequently used in motor vehicle theft and other illegal practices.
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