Rumpus over state IT report

Public Service and Administration Minister Richard Baloyi has denied sitting on a damning risk assessment of the State Information Technology Agency (Sita) that details allegations of irregularities and double-payments worth millions of rands.

The Mail & Guardian is in possession of the 613-page report compiled by Henderson Solutions and handed to Sita bosses on April 5. Shortly thereafter the report was passed on to Baloyi, who has not commented publicly on its contents.

The report:

  • Estimates that Sita might have lost R355-million through duplicate payments that were made over four years to 439 companies;
  • Claims that Sita employees frequently refer to “cliques” and “fiefdoms” within the agency;
  • Accuses board chairperson Zodwa Manase and her deputy, Michelle Williams, of bringing Sita “into further disrepute”; and
  • Details the names and ID numbers of Sita employees whose spouses or addresses are linked to Sita service providers.

These revelations come after acting Sita chief executive Moses Mtimunye acknow­ledged this week at the agency’s 2009 GovTech conference that allegations of fraud and corruption at Sita were based on fact. “If there is anything wrong, people will be locked up,” he told delegates.

According to Baloyi’s spokesperson, Sefako Nyaka, the report raises “serious issues that no responsible leader will ignore. The report was presented to the minister at a time when he was dealing with a number of issues regarding Sita. These issues related to the strengthening of the structures of Sita that are supposed to give attention to this matter.”

According to Nyaka, Baloyi has taken note of the report’s contents and “is presently at an advanced stage in trying to normalise these issues and will soon introduce strengthened capacity in both the board and Sita”.

The report has been a point of contention at Sita since it was given to Peter Pedlar, the agency’s head of procurement and regulatory affairs, in April.

An incensed Williams, who is also government’s chief information officer in the department of public service and administration, told the M&G the report was part of a bigger campaign to discredit her in the wake of the resignation of former Sita chief executive Llewellyn Jones. The campaign allegedly involves a senior Sita employee, an IT journalist and the writer of the report, Bart Henderson.

Henderson rejected Williams’s claims, stating that he was appointed by Mtimunye to conduct the risk assessment.

“Ms Williams seems obsessed with the fact that her name is mentioned in the report,” he said, adding that his appointment was discussed at length at a Sita board meeting.

It was reported last year that Jones’s resignation was caused by Williams instructing him, via SMS, to award a R1,5-million Sita tender to Praxis Consulting and not GijimaAST, which was awarded the contract by Sita’s evaluation committee.

An auditor general’s probe subsequently cleared Williams of wrong­doing. In his report Henderson criticises Williams for owning a 26% stake in Tswelopele Engineering, while this company also has a “business unit” called Tswelopele Solutions that specifically deals in the IT sector.

“There are clearly significant grounds for asserting [that] this ­relationship is in clear conflict of interest,” reads Henderson’s report.

Williams confirms her 26% equity in Tswelopele Engineering, but denies having a “direct or indirect interest” in Tswelopele Solutions. “There has been no attempt on my part to conceal this [her share of Tswelopele Engineering] or be less than transparent. The company sells electrical products — voltage regulators and surge arrestors and is not IT or ICT-related,” she says.

“This is a relationship that began before I joined the department in October 2007. I have no interests with IT companies or any government contracts, IT or non-IT.”

Manase’s 2004 conviction for the late payment of employee tax is mentioned in the Henderson report as one example of why the organisation is under pressure.

Manase, who also sits on the boards of the Reserve Bank, Total South Africa and Medi-Clinic, was charged in the Durban Magistrate’s Court and pleaded guilty to 12 counts of late payment of employee tax to the South African Revenue Service.

In an interview with ITWeb earlier this year Manase explained that her failure to pay employee tax was a result of her business — the audit firm Manase & Associates — experiencing financial difficulties because of late payments received by clients.

“In this case, I found myself not being paid by government and I got shot. I submitted returns but I was unable to pay the tax on time,” she told ITWeb.

Both Sita and the Reserve Bank asked her to stay on after her conviction.

Manase told the M&G: “The allegation that I was convicted for non-payment of employee tax is incorrect. The essence of the conviction relates to the late payment of PAYE to Sars. The explanation for, and circumstances which led to, the late payment of PAYE to Sars was accepted by Sars.

“The findings by the magistrate presiding in the matter were taken on review, and the sentence imposed on me was found to be beyond the court’s jurisdiction and was reduced substantially. With regard to my suitability to lead a company, I’m competent to be a board member, and the conviction according to the Companies Act does not disqualify me from acting as a director in any company and holding any position of trust.”

Henderson says there can be “absolutely no doubt” that Williams’s business interests and Manase’s conviction “have served and continue to serve to further undermine the Sita brand and are serving to bring Sita into further disrepute”.

Sita has been a victim of a leadership crisis, a revolving door, alleged government meddling and an inability to effect change that would stamp out corruption. The 10-year-old organisation, created to procure IT for government, set standards, drive cost savings and kill duplicate spending, has had only one chief executive who has served a full term. Of the six other CEOs who have led Sita during this time, three have done so in an acting capacity.

According to Nyaka the Henderson report “is but one of the myriads of issues that the minister had to attend to as far as Sita is concerned”.

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