PWC in plagiarism inquiry

One of South Africa’s big four audit firms, PricewaterhouseCoopers (PWC), is at the centre of damning claims of plagiarism levelled against it by a senior Gauteng government official.

Sibusiso Buthelezi, the suspended head of the provincial department of transport, roads and works, accuses PWC of plagiarising a 2007 consultancy report.

Buthelezi further claims PWC had an improper relationship with his former political head, Ignatius Jacobs, and that the firm was paid millions of rands for work that was “grossly unsuccessful”.

Buthelezi was suspended last week by Premier Nomvula Mokonyane after she received a damning report about allegations levelled against him by Jacobs, the former transport, roads and works MEC who now heads Mokonyane’s planning commission.

The report, compiled by attorneys Peter Harris and Michelle Moonsammy of the Resolve Group, recommends disciplinary action against Buthelezi while it clears Jacobs of wrongdoing.

The report, however, left two swords hanging over Jacobs’s head: allegations that he had “pushed PWC down the department’s throat” and claims that he improperly attempted to adjust the composition of a consortium appointed to refurbish the Kempton Park hospital.

In their report Harris and Moonsammy recommend further investigation of these claims after Jacobs failed to respond to the allegations before the first report was finalised. Jacobs’s lawyer, Shaheed Dollie, told the Mail & Guardian this week his client did subsequently respond to the allegations but wished not to disclose his responses at this stage to ensure that the integrity of the investigation is not jeopardised.

Buthelezi’s allegations about Jacobs’s allegedly improper relationship with PWC are three-pronged:

  • The most sensational of his claims is that PWC was involved in a “scandal” for committing plagiarism in 2007 by lifting work done on a new departmental structure by Ukuba Management.

    “Ukuba Management had charged the department about R500 000 and PWC had charged the department about R8-million for the said project,” Buthelezi told the Harris investigation. The department became aware of the “plagiarism” after receiving correspondence from Ukuba’s lawyer, accusing PWC of stealing its work.

    “The department resolved the matter by withholding about R500 000 of fees written by PWC and paying Ukuba Management,” Buthelezi stated. The M&G has seen a letter written by Ukuba’s lawyer, Kate Savage, to the department on December 11 2007. “We are instructed that as a result of the [department’s] decision to contract PWC, a copy of our client’s report on the departmental structure was provided to PWC. PWC subsequently prepared a report for the [department], from which it used almost all of our client’s report [parts of] which were simply cut and pasted, without amendment and for which no credit was given to our client,” Savage wrote.

  • Buthelezi further accuses Jacobs of replacing a “successful” consulting firm, Ebeneza, with PWC in 2006 to design and implement a turnaround strategy for the department.
    Buthelezi opposed the appointment of PWC to take over Ebeneza’s work. This move, he says, was followed by an investigation by PWC into whether Buthelezi could refuse to appoint PWC. “The HOD [Buthelezi] points out that this was absurd as PWC had to investigate whether they had to be appointed or not,” the Harris report reads. “The HOD asserts that this is a conflict of interest and as such PWC should never have agreed to conduct this investigation.”

    Buthelezi requested a full report on PWC’s work by the end of June 2007, which, he says, he did not receive. He subsequently appointed a task team of four (TT4) consultants to do a performance audit of PWC’s work. The Harris report found that this appointment of TT4 was irregular and that Buthelezi should have publicly invited bids for the work.

    According to Buthelezi, TT4 found that PWC’s work on phase one of the turnaround strategy was “grossly unsuccessful and proved to be an expensive mistake by the MEC that merely served to delay resolving issues in the department”.

  • Buthelezi further accuses Jacobs of using John van Rooyen, chair of the departmental acquisitions council (DAC), to “smuggle through” the DAC a contract for two PWC projects disguised as one. “In summary, the DAC was led to believe that it was authorising a R34-million project when in fact it was tricked to authorise a R70-million project,” Buthelezi told the Harris investigation.

    The contract was for the appointment of consultants to design and implement Jacobs’s “dashboard project” — management charters for which PWC subcontracted German consulting firm Dornier.

    PWC’s John White said the firm views its reputation as a “hugely important asset and always strives to operate within a strict code of ethics”. Due to confidentiality agreements, he said PWC could not comment at this stage on untested allegations. “When allegations of this nature are brought to our attention, it is standard procedure for PWC to investigate them internally,” White said. “We will also cooperate fully with any formal statutory investigation into these allegations.”

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