Dept admits irregular deals

2010-07-21 00:00

THE KwaZulu-Natal Department of Co-operative Governance and Traditional Affairs has acknowledged allegations of irregular procurement procedures leading to payments of more than R5 million for the supply of earth boxes (a container gardening system) by a Johannesburg company and communication services rendered by a Durban-based company.

According to documents submitted to the The Witness, in both instances there was no bidding process because the companies were appointed as single sources.

The department’s spokesperson, Lennox Mabaso, confirmed in a statement that there was a measure of irregularity in the appointments of both companies.

“Both instances were reported to provincial and national treasury, as well as the office of the Auditor-General. Disciplinary processes have been initiated against officials who did not follow the correct procurement procedures in initiating these appointments.

“Corrective measures have been taken and it was possible to regularise both transactions in terms of the supply-chain management …” said Mabaso

Supporting documents state that the R3 933 000 for the acquisition of earth boxes for the Ondlunkulu Project was not authorised because officials in the chain of command did not sign the invoice.

A reliable source said that although the former head of the department, Gabi Gumbi-Masilela, had authority, she was never informed about the order before it was finalised.

At the time of going to print, The Witness could not verify the name of the company because, according to sources, there was no signed contract between the company and the department.

When asked if Operation Lionheart, a Johannesburg-based earth-box company, had any relations with the department, a representative said in an e-mail: “Operation Lionheart has no direct relationship with the [department]. Operation Lionheart has a distributor’s agreement with an intermediary, to whom we supply earth boxes.

“There is a confidentiality agreement in place with this intermediary. We cannot make comment and [we] have no knowledge about any irregularity with the said department.”

According to inside sources, the Ondlunkulu Project was structured by the department when it celebrated Women’s Day in Durban last year.

The Witness has learnt that the earth boxes were given to the wives of KwaZulu-Natal amakhosi who attended the event.

In the other case allegedly involving irregular expenditure, a six-month contract signed on October 31, 2009, between the department and the Durban communication company Drumbeat stated that the company would be paid R70 000 a month.

Sources said that this was signed without acknowledgement by the department’s senior authority.

Drumbeat was appointed as a single source to conduct public relations services for the new image and role of the department, after MEC Nomusa Dube took over from Willies Mchunu.

Drumbeat’s director confirmed that R1 778 205,60 has been paid into the company’s account.

When asked for comment, the director said in an e-mail: “I have no comment to make.”

The irregularities were identified through internal control processes and were immediately dealt with in terms of the appropriate Treasury Regulations and practice notes by the department.

“It must be stressed that in both instances, the service providers had to be appointed as a matter of urgency to provide services to the department that were required within extremely tight timelines,” said Mabaso.

However, the person who revealed the irregular payement to The Witness said: “A contract concluded outside the bidding process is illegal and is a nullity and should not be enforced no matter what the hardship there is to the service provider … It is very odd that the department was advised to take disciplinary action against culprits, but so far nothing has been done …”

In May, Finance MEC Ina Cronjé launched a new supply-chain management system that is intended to eliminate tender corruption.

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