An investigation into the bungled advertising campaign for the 2011 census has cast a harsh light on plans by the government's communication services' plans to take control of all state advertising.
The story is a complex one, and in the greater scheme of government spending borders on the inconsequential, with a little under R28-million at stake. But it has come to threaten multiple companies and officials at the Government Communication and Information System (GCIS) and Statistics South Africa with civil and criminal action, amid accusations of theft of documents, criminal negligence, and veiled hints at corrupt motives.
The investigation may also help to explain why, for the past two years, several government departments have flouted instructions from Cabinet on how they should direct a combined R2-billion in government spending on communications.
The continuing refusal to do so has hobbled a government policy officially designed to reshape the entire media landscape – and unofficially feared to be creating a stick with which to beat media outlets perceived as "unpatriotic".
In late 2010 the Mail & Guardian reported on a plan hatched by then GCIS boss Jimmy Manyi, to centralise all government advertising spending (expected to top R2-billion this year), amid accusations that the intent was to channel money towards "patriotic" media outlets such as the New Age newspaper and SABC, and away from the "unfriendly" likes of the Sowetan and the Sunday Times.
At the time, the government denied the allegations, saying the centralisation was aimed at saving money and supporting diversity by channelling funds to often struggling community media organisations.
The centralisation strategy was officially endorsed by Cabinet in mid-2011, but implementation has been patchy at best. Although officials in noncomplying departments steadfastly refuse to speak about the matter on the record, the M&G understands they have used everything from subterfuge to simple bull-headedness to retain control of their own advertising budgets. And instances such as the now documented case of the debacle around the 2011 census, which in theory could have derailed the R3.4-billion project, is doing little to change their minds.
What emerges in that case, through a combination of interviews and documents, is a startling failure by the GCIS to handle even a fraction of the money it is intended to spend on behalf of all of government.
In late 2010 and early 2011, StatsSA gave the GCIS R24.7-million for initial advertising around the census that took place in October 2011. The money had a very clear purpose.
"Publicity is one of the fundamental phases in census undertaking," Stats SA said in a subsequent evaluation of the mammoth project.
"Census branding played a crucial role in sensitising communities and, eventually, their participation."
What happened to the money once in the hands of GCIS may still be the subject of criminal investigations, but before the dust had settled nearly 40% of the money had gone missing or was paid to companies that had delivered nothing. Stats SA was forced to hurriedly appoint its own agency to handle the work the GCIS was supposed to do.
Along the way, according to a forensic investigation concluded in November 2012 and seen in draft form by the M&G, the GCIS flouted its own rules, broke regulations and tender policies, subverted systems, destroyed documents and possibly committed fraud.
An official told investigators under oath that the GCIS did not have policies and procedures for bulk media buying, even though it is supposed to spend billions of rands of taxpayer money in such procurements.
In another instance Light Views Productions, a then newly formed company contracted to provide outdoor billboards for census advertising, submitted an invoice just shy of R7-million, while admitting the billboards had not actually been erected.
"We told them there were still delays, but at the end of the day there was a contract they had to honour," said Light Views director Jacob Mocuminyane.
Various GCIS officials, investigators found, despite knowing differently, certified that the work had been done and ordered the payment of the invoice. They went as far as to break payments down into amounts of less than R1-million to circumvent an automated system intended to prevent large, irregular payments. Such splitting of invoices, one official told investigators, "was a common practice at GCIS".
Although investigators recommended that such peculiarities be criminally investigated to determine whether they arose from corruption, the findings imply that simple incompetence was to blame.
For Stats SA, the consequences of using the GCIS on the project is an ongoing headache. It is now expected to claw back R9.6-million of unspent or misspent funds from the GCIS. Some of its officials face disciplinary action or worse, primarily for entrusting the GCIS with money in the first place.
On top of that, Light Views – which was paid the R7-million despite delivering no service and claiming it was owed much more – attempted to stop the census from going ahead until it was paid. A court did not agree to grant a last-minute interdict against an undertaking worth several billion rands over a squabble involving R10-million to R20-million, but a Stats SA insider said the threat, however remote, had been chilling.
Light Views is still pursuing action to recover money it says it is legitimately owed, with Mocuminyane pleading poverty. Another company contracted to provide outdoor space, Likhwane, was similarly paid R778000 despite never running ads, and also believes it is owed money.
Investigators found that neither Light Views nor Likhwane were screened by the GCIS to determine whether they were capable of delivering the services and they were appointed without tender.
But beyond the financial irregularities, it is the failures of the GCIS in handling the relatively simple business of actual media buying and its administration that suggests why various departments would rather not use its services.
In buying billboards, airtime and print space for ads, the GCIS failed to stick to the split between various types of media as requested by Stats SA. In cases where ads were apparently flighted, the GCIS had to rely on invoices as proof, and even then not all invoices could conclusively be linked to the campaign the money had been allocated to. The GCIS also failed to co-ordinate the delivery of creative material to the companies intended to use it.
Those functions, industry experts said, are at the heart of media buying, and such failures border on the unbelievable.
"There is no reason, under any circumstance, to make a payment for a billboard before that board is up, ever," said an advertising executive with some knowledge of the case.
"These are not the type of things that happen because somebody forgets to do something. There are decisions there that just should never be made."
One of the stated reasons for centralising media buying: support for struggling community media outlets has also been brought into question.
In two phases of census ads, the GCIS procured no media from community radio stations. In another phase it made payments of up to R20 200 to community outlets, but only about 2.2% of the money it spent did not go to large, established, commercial publications and stations.
Also not evident from invoices was issue of centralised media buying. Although the New Age was a recipient, its nearly R150000 share of the total spend amounted to less than 0.7% and was dwarfed by payments to titles owned by Independent Newspapers and Naspers.
Various GCIS officials this week referred requests for comment to one another, but did not respond in time.