Tender irregularity symptoms missed

 

 

After being found to have interfered in a tender process of more than R120-million, the former chief financial officer, third in command of the beleaguered Road Accident Fund (RAF) has ended up at Medscheme, administering the medical aid of close to one million government workers for the Government Employee Medical Scheme.

This is after spending six months on special leave during the investigation and collecting R3.5-million at the end of the last financial year with a bonus of more than R700 000.

According to an internal investigation report, former CFO Rodney Gounden was found to have interfered in a tender process last year by meeting with a potential bidder before the process started and not declaring this to the RAF.

“The tender process was irregular and did not adhere to proper procurement processes. Disciplinary actions must be instituted against the CFO,” reads the report.

For years the RAF has been trying to find a new building for its Johannesburg offices, advertising the tender five times. According to the report, after Gounden’s irregularities were flagged, the contract had to be advertised again.


But Gounden denies that he interfered in the process, claiming that he was aware of the investigation but not the findings of the report.

The RAF refused to answer questions relating to former employees’ personal information.

According to the report, last year in January, only five months into his five-year contract as CFO, a position essential to the RAF’s financial management, Gounden met property consultant, Cynthia Holmes — who is the owner of Cadogan Hall Corporate Property — to discuss the ideal office spot for RAF.

According to the report, Holmes indicated that a certain building in Illovo was vacant.

“An official who was at the meeting indicated that she advised the CFO against meeting the service provider without the National Treasury. It is of grave concern that the CFO prior to the commencement of the procurement process met with the potential service provider and discussed the specifications. It is apparent that the CFO was well aware of the availability of the Illovo building prior to the commencement of the procurement processes,” reads the report.

Gounden confirms having met Holmes, saying that the RAF was desperate to ensure the process was finalised, but did not include why he did not tell the bid adjudication committee of this meeting.

“We listened to Holmes and then thanked her for the many buildings she proposed and told her that we will be in contact. No procurement processes were ever flouted,” he said.

Holmes did not respond to questions sent to her.

The report states that Gounden did not tell the bid adjudication committee about meeting Holmes, nor that he added Illovo as a preferred area.

According to the report, the company Holmes was representing did not meet the set criteria and would cost the taxpayer R128-million for five years, R43-million more than what the insolvent fund had budgeted for.

But still this property was recommended to the acting CEO, Lindelwa Jabavu as the preferred bidder.

Gounden claims that on the verge of “a possibly successful tender after six failed tenders, mischievous whistle-blowing was made as it seems to me that someone didn’t want the existing lease to be cancelled”.

Once the investigation into Gounden was completed last year in July, he remained on “special leave” until he got another high-ranking position at Medscheme administering another government entity.

Medscheme’s chief executive, Anthony Pedersen said that the company had followed the normal recruitment process, which included proper background and reference checks using highly reputable recruitment agencies.

“When the allegations were brought to our attention, we contacted RAF to check or confirm the allegations — to date we have not received any report or concluded outcome which indicates that our employee was guilty of fraud or that the allegations were proven,” he said.

Yet the RAF report states that there was proof that Gounden met a preferred bidder, failed to disclose this information, misled the bid adjudication committee and changed specifications.

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Athandiwe Saba
Athandiwe Saba

Athandiwe Saba is a multi award-winning journalist who is passionate about data, human interest issues, governance and everything that isn’t on social media. She is an author, an avid reader and trying to find the answer to the perfect balance between investigative journalism, online audiences and the decline in newspaper sales. It’s a rough world and a rewarding profession.

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