Despite a history of cancelling major IT contracts, the South African Revenue Services (SARS) has fought back against corruption allegations.
This follows a statement by Democratic Alliance (DA) shadow minister of finance, Dion George, alleging there was a “growing culture of mismanagement, leading to wasteful and fruitless expenditure at an institution at the centre of government finances”.
George further states that an IT contract was cancelled in the middle of programme development and the project was awarded to a lesser known firm of consultants. He adds that performance management systems were abandoned after they were developed and consultants had been paid to implement the systems.
The DA also says there was a lack of transparency and the restriction of the executive committee to procurement procedures for IT resulted in the acquisition and abandonment of several systems, and the ballooning of costs. In one instance, project costs grew from R100 million to R500 million, as a result of poorly constructed contracts, claims George.
While SARS has rejected the claims, saying they are untested and emanate from questionable sources, the organisation has a history of withdrawing tenders.
In 2003, SARS cancelled a R100 million tender after it discovered unfair tampering with one of its tender processes by an external agency. The tender entailed the supply of IT hardware to the organisation.
data and voice networks within SARS, was cancelled. Along with the R750 million customs scanner tender, the bids caused a stir as they were cancelled and later awarded in 2007.
Early warning
Corruption allegations were provided by a former senior employee, who revealed SARS has “increasingly experienced the creeping scourge of fraud and corruption”, says the DA.
SARS, however, says its track record “speaks for itself” and any allegations should have been highlighted by audits from the auditor-general.
Former SARS commissioner Pravin Gordhan spent more than R650 million in 2008 to beef up IT systems and the contact centre. The organisation says such improvements should be noted along with instances where it acted against corrupt practices when they occurred. It adds that appropriate action, including the dismissal of senior staff, has often been a result of its anti-corruption efforts.
“SARS believes the auditor-general is the appropriate and designated authority to issue an opinion on how SARS conducts its affairs - including its operations, finances and governance,” says SARS.
George says that, as problems at SARS affect government coffers and the country's fiscal security, SA cannot afford for SARS to become a failed state institution.
“The information received sets out very concerning failures and serves as an early warning that political will and dedicated management can stop the creeping rot,” says George.
The DA says it will pursue these matters through questions in Parliament and address the issues in the Portfolio Committee on Finance.
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