/ 28 March 2024

Treasury in dodgy R800m contract

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Special Investigating Unit head Andy Mothibi. File photo by Paul Botes

The Special Investigating Unit (SIU) has found irregularities and conflict of interest issues in the R800 million treasury integrated financial management system (IFMS) contract awarded to Oracle SA, which is to be blacklisted.

On Wednesday, the head of the SIU, Andy Mothibi, appeared before parliament’s standing committee on public accounts (Scopa) and said the objective of the investigation was to review compliance with the legislation, identify irregular conduct on the part of officials and recover public money.

Launched in 2015, the IFMS project aims to secure an integrated system for the government, incorporating supply-chain, financial and human resource management, as well as payroll, inventory and business intelligence.

In 2016, the treasury concluded the contracts to purchase software licences for the programme with Oracle. 

In 2020, President Cyril Ramaphosa instructed the SIU to look into the contract to investigate failures since its implementation.

At the SIU’s previous appearance before Scopa in September, lead investigator Naomi Jose said from May 2016 to June 2021 the treasury had paid Oracle a total of R822 300 505.60 for licence fees and support and maintenance and pre-implementation services.

A whistleblower gave the SUI a report which found that Oracle was in contact with senior treasury and State Information Technology Agency officials, alleging that there had been corruption and irregularities in the procurement process.

On Wednesday, the SIU’s national investigator, Leonard Lekgetho, said the company had not provided any services to the treasury and that procurement processes were not followed when the tender was awarded.

Mothiba said the National Prosecuting Authority would look at the five criminal matters that have been uncovered by the SIU, adding that because of the conflict of interest in the bidding for the tender, Oracle would be blacklisted and also be dropped by the State Information Technology Agency.

He added that the SIU had concluded its investigation but had not submitted the report to Ramaphosa, pending completion of civil action against those involved.

“The execution of the outcomes does not wait for the president’s report — we will proceed and compile the report as it indicates, among others, the findings, the outcomes and how we are executing the findings,” Mothibi said.

Scopa chairperson Mkhuleko Hlengwa said the IFMS system did not work, telling fellow legislators that no further funds would be wasted on the programme.

“Although so much money has already been wasted, taxpayers must be satisfied that this system will be [repealed],” he said.