SARS needs strong leadership to return to IT glory
The South African Revenue Service's (SARS's) difficulties are not insurmountable, but require decisive and experienced leadership, which at present SARS does not have.
This is the conclusion made by the Nugent commission in its final report to president Cyril Ramaphosa.
It recommends that the new SARS commissioner recruit one or more suitably qualified people to take charge of the organisation's IT development and implementation strategy.
Chaired by retired judge Robert Nugent, the commission of inquiry was first mentioned by Ramaphosa during his State of the Nation Address in February and appointed in May. Its broad mandate was to investigate issues of corporate governance, whether tenders were awarded correctly and allegations of misconduct under the leadership of axed commissioner, Tom Moyane.
During the investigations, the commission heard testimony about the tax collector's aging IT infrastructure, budgetary constraints to upgrade systems, and current capacity and functionality of systems. It questioned Moyane's motive to stop SARS' modernisation programme that had cost billions.
The inquiry also probed the awarding of a R200 million IT contract to research firm Gartner and the value SARS received from this agreement.
SARS had world-class IT
In its final report, the Nugent commission says that based on heard evidence it can conclude that there has been "a massive failure of integrity and governance at SARS, and all else follows from that. What SARS was, and what it has become, is sufficient proof in itself that integrity and governance failed on a massive scale."
SARS is an information technology driven business. Information technology plays not merely a supporting role, as it might do in other government bodies, but enables its core business.The Nugent commission report
The report states: "SARS is an information technology driven business. Information technology plays not merely a supporting role, as it might do in other government bodies, but enables its core business. Secondly, SARS needs to be linked to the digital economy if it is to fulfil its mandate effectively. It cannot be permitted to fall behind, and should ideally be ahead of developments in the digital economy. Information technology skills in support functions, while they have their role, are not sufficient to maintain and develop SARS core systems.
"At the commencement of the period under inquiry SARS had an effective and world-class IT division. Technology was central to the modernisation programme and the driving force behind many of the achievements up to that time. SARS IT worked closely with the Modernisation Programme Office, and with a generous budget, and dedicated people, had the capacity and capability to quickly and efficiently initiate and complete projects within the Modernisation Programme. The division was led by a 'core team' headed by Mr [Barry] Hore [former SARS COO].
"Technology was at the heart of the modernisation programme, and its successes are well-documented. Mr Artwell Kunene, executive for business relations in DIST [Digital Information Services and Technology], said that at that point 'IT was a lifeline to SARS. SARS lived and thought IT. IT was central to everything."
Lack of direction
The report states that there is no meaningful policy, programme or strategy for the role of technology at the revenue collection agency. The lack of direction, it highlights, has been exacerbated by the division being without a chief officer for almost a year after the re-structure.
Mmamathe Makhekhe-Mokhuane, chief Officer for DIST at SARS, has been seemingly unable to provide direction, the commission says in its report. Makhekhe-Mokhuane, who was appointed to the position in early 2017, received backlash following her interview with the SABC, during which she was unable to explain the current state of the IT infrastructure or provide a clear assessment of the way forward.
"According to her own evidence DIST currently operates only to 'keep the lights on' and without any new or focussed innovation. While she spoke in her evidence of many matters that needed 'talking about', we were not able to discern any strategy, or any real prospect that DIST will come to terms with, and reverse, the heritage of four years of neglect, within the foreseeable future, while information technology remains under her management.
"SARS is hamstrung by the difficulty of recruiting and retaining skilled IT professionals capable of dealing with the level of technology that exists at SARS, and to effectively procure the hardware and software needed to fulfil its mandate. It appears that these difficulties are not insurmountable, but require decisive and experienced leadership, which at present SARS does not have."
To read the commission of inquiry's full report, click here.