No red faces at Blue IQ

The results of the “work done by the Blue IQ board will shine through in the agency's next audit report”, says Blue IQ chairperson Noedine Isaacs-Mpulo.

This is despite the controversy surrounding the embattled agency's overpayments to its board members, as well as Isaacs-Mpulo's former tenure as CEO of Lefatshe Technologies.

Lefatshe plays heavily in the Gauteng government space.

Speaking to ITWeb this morning, Isaacs-Mpulo defended herself against all allegations of wrongdoing, saying she had always acted above board. “I have always conducted myself with integrity.”

However, she would not be drawn on any of the details of being paid R25 000 per meeting, saying only that Gauteng economic development MEC Firoz Cachalia has already clarified this issue.

“It would be inappropriate for me to comment at this stage, since the MEC has already made it clear.” The MEC has also discussed the possible conflict of interest with her having been CEO of Lefatshe Technologies and chairperson of Blue IQ at the same time.

Isaacs-Mpulo sold her 28% stake in Lefatshe Technologies and stepped down as CEO of the company earlier this month. She joined Lefatshe as CEO after she left the State IT Agency (SITA) in 2007, where she was COO. SITA is also one of Lefatshe's customers.

Democratic Alliance corruption spokesman Jack Bloom says Isaacs-Mpulo was paid a whopping R901 000 last year as chairperson of Blue IQ and five other agencies of the department, all while also serving as CEO of Lefatshe Technologies.

Bloom is also concerned that Isaacs-Mpulo had a conflict of interest, as Lefatshe is a technology service provider to several Gauteng government agencies, including the Gauteng Shared Services Centre (GSSC). The conflict arose after a R12 billion broadband project, called Blue Umbrella, was transferred from Blue IQ to the GSSC.

Cachalia revealed the Blue IQ board members are being paid excessively high fees for simply attending meetings, with the chairperson receiving R25 000 per meeting, and ordinary board members R20 000 a meeting. In addition, board members also get paid R7 500 for special meetings, and R937.50 an hour for “consultation” meetings.

During the 2008/9 financial year to March, Isaacs-Mpulo attended all 11 meetings and was paid R119 000 for her trouble, according to the Blue IQ annual report. She was appointed to the agency's board in September 2007.

Isaacs-Mpulo told ITWeb that despite Bloom's concerns that she was CEO of a government technology provider and chairman of an agency that was responsible for key ICT projects, she has never been guilty of misconduct.

She says she is now focused on Blue IQ and its projects. “We have decided, as Blue IQ, just to put our heads down and get on with the job, and the results of our work will shine in the next audit report,” she added.

Steven Watson, Blue IQ's group executive for marketing and communications, says board fees at the agency will be reviewed once a new “super agency” has been created by merging Blue IQ, the Gauteng Enterprise Development Agency and the Gauteng Economic Propeller.

However, says Watson, Blue IQ has made strides in resolving issues raised by the auditor-general in its most recent annual report.

In the agency's latest annual report for the 2008/9 year, Cachalia wrote that the “most concerning questions are obviously the ones that arise from the auditor-general's audit opinion”.

The AG indicated insufficient evidence was provided for audit purposes; there was unauthorised, irregular and fruitless expenditure; and the agency did not comply with legislative, regulatory and internal controls.

“These findings suggest systemic weaknesses in financial management, inadequate oversight by the board, and governance failures relating, in particular, to the lack of accountability in Blue IQ subsidiaries,” wrote Cachalia.

Watson says “Blue IQ has turned the corner in correcting a lot of the audit issues,” and significant progress has been made in the past year. He expects the next annual report, due to be published in September, to reflect this progress.