The Department of Correctional Services (DCS) is losing millions every year as poorly managed IT systems are leading to rigged and manipulated tender processes, says the Special Investigating Unit (SIU).
The SIU is probing a range of contracts involving the DCS and these include IT contracts said to be worth several hundred million rand.
In February 2008, the department acknowledged to Parliament that its procurement systems and processes were plagued by corruption and maladministration. The SIU also reported it had helped the department recover a total of R3.4 billion since 2006, which has since increased to almost R5 billion.
The unit, in its investigation, found that several databases in the DCS were not integrated; screening processes for services providers were absent; there was low compliance with procurement policy; the DCS had poor data and document management systems; and systems were not secured and failed to restrict lower level employees' access to information.
The report also revealed fictitious vendors, duplicated payments, fixed bidding processes, and discrepancies between purchase quantities and contract quantities. Repeat refunds, invoices which were paid twice, inflated prices and employee data which was similar to supplier data was also found.
“It is a growing challenge to protect the integrity of systems and processes. There were occurrences of opportunistic and organised exploitation of gaps in systems. Organised fraud is on the increase, in the absence of proper systems to monitor the movement of money and goods in government departments. Poor administration posed as big a threat as fraud,” says the SIU.
IT irregularities
In its analysis of the DCS payments database, the SIU scrutinised 750 000 transactions to investigate excessive expenditure in petrol card use. A total of 145 DCS officials were recommended for disciplinary action, while two were charged criminally.
The SIU is also investigating Sondolo IT's R88 million security contracts for alleged irregularities. In a forensic audit held in May 2008, the SIU cited the Sondolo IT contract for possible tender rigging and collusion with DCS officials.
While the SIU says Sondolo IT's contract does not fall under the scope of its current investigation, it confirms the contract is being investigated. Corrections minister Nosiviwe Mapisa-Nqakula previously welcomed the SIU's probe and said the department would implement all recommendations made by the unit.
Sondolo IT is a subsidiary of the nationwide security agency Bosasa Security, which is a part of the Bosasa group of companies. It was registered as a private company in February 2005 and awarded the contract to run the surveillance at the prisons less than a year later.
”All contracts are subject to the widespread investigation the DCS initiated. Risk areas had been identified and these will be probed,” says the SIU.
False information
The unit says it has identified non-compliance with policy and procedures, lack of internal controls for procurement, lack of effective monitoring and evaluation systems and inadequate corruption prevention systems within some of the IT-related tenders.
In one case, the project budget was overspent by R150 million and was later increased again by another R100 million. Computer software was also restricted to use on several hardware packages, which were advertised in previous tenders. The SIU found that the stated integration of these solutions was unnecessary and had inflated prices.
The unit found a centralised, integrated approach to data management had become increasingly necessary.
“These were all anomalies which were picked up as technology systems were poorly administered,” says the SIU.
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