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SCOPA zeroes in on Gauteng’s controversial IT security tender

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Gauteng MEC of finance and e-government Nomantu Nkomo-Ralehoko.
Gauteng MEC of finance and e-government Nomantu Nkomo-Ralehoko.

As the debate surrounding the controversial multimillion-rand IT security contract continues, Gauteng legislature has entered the fray, saying it had allowed the Department of e-Government to “fast-track’ the finalisation of the contract last year.

Sochayile Khanyile, chairperson of the Standing Committee on Public Accounts (SCOPA) at the Gauteng provincial legislature, has welcomed the announcement by premier David Makhura that an investigation into the alleged irregularities of the contract would be instituted.

According to Khanyile, the legislature had resolved in December 2019 for the Gauteng Department of e-Government to “fast-track the finalisation of the contract on the Security Operation Centre (SOC) and provide the legislature with a progress report every quarter and continuing up until finalisation thereof”.

He adds: “The legislature’s resolution was informed by SCOPA’s concerns about the month-to-month contract on the Security Operation Centre which continued to incur irregular expenditure.”

ITWeb reported on the irregular expenditure incurred by the e-government department during the 2016/17 financial year.

However, upon further enquiry, ITWeb established the department incurred additional irregular expenditure of R200 million between 2009 and 2011 on the same contract.

For the two years, the department paid R199 708 523 to supplier G-SOC Security Services, which was declared irregular, according to documents seen by ITWeb.

The Star newspaper reported on Monday that the company, which previously traded as Lefatshe Technologies, has been mired in controversies regarding its operations with Gauteng municipalities and Bitou municipality in the Western Cape.

In 2010, the company, whose directors at the time included political heavyweights and businessmen Cheslyn Mostert and Bocks Augustian Zo Marius, had another contract with the same department cancelled due to fraud and corruption allegations.

Khanyile says SCOPA was expecting the progress report from the department by the end of March 2020 prior to the declaration by president Cyril Ramaphosa of the 21-day national lockdown.

Khanyile previously raised SCOPA’s concerns with MEC of finance Nomantu Nkomo-Ralehoko, and this week requested clarity following recent media reports on the alleged irregularities in the processing and approval of quotations for the 12-month contract.

The SCOPA chairperson says he will request a report from Makhura on the progress of the forensic investigation.

“Furthermore, based on the outcomes of the investigation, SCOPA will request the department to account on the findings – with the purpose of providing recommendations to ensure compliance with the Public Finance Management Act,” reads a SCOPA statement.

Adding drama to the contract issues are allegations the company that held the contract for 16 years was paid without being tax complaint as per National Treasury requirements.

Nkomo-Ralehoko confirmed this week that the company was not compliant and, even after the attorney-general’s findings, the department continued with the irregular expenditure on a month-to-month basis until the contract was terminated.

“It was also established through the Basic Accounting System, which is linked online to the Centralised Supplier Database, that the service provider is not tax compliant,” she said.

According to documents seen by ITWeb, G-SOC, registered as supplier MAA0163677 in the department’s supplier database, is “non-compliant” on tax.

The National Treasury rules say: “It is necessary for persons conducting business with the state are tax compliant at the date of submission and award of a bid as well as for the full duration of their respective contracts.”

Department officials say because of tax non-compliance, this means the accounting officer can terminate procurement contracts if it is found there are irregularities and they were concluded in contravention of the applicable legislation.

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