A National Treasury project worth more than R1bn to integrate the financial management of national and provincial government has been found to be irregular by the Special Investigating Unit (SIU).
The National Treasury has consistently maintained there was no corruption involved in the contract with Oracle to implement the project, which has been under planning and implementation in various forms for about 20 years.
National Treasury director-general Duncan Pieterse disagreed with the SIU’s findings that the contract was irregular, supply chain management processes were not followed and there was fruitless and wasteful expenditure.
Leonard Lekgetho, SIU lead investigator into the probe of the Integrated Financial Management System (IFMS), said in a briefing to parliament’s standing committee on public accounts (Scopa) that an irregular supply chain management process was followed in the award of the contract.
“There was noncompliance with supply chain management policies and legislation,” Lekgetho said in his presentation. A conflict of interest and fruitless and wasteful expenditure were also found.
He said disciplinary referrals had been made, a blacklisting referral issued and criminal matters referred to the National Prosecuting Authority (NPA).
He said the SIU maintained the veracity of its findings even after the representations by the National Treasury, which were thoroughly reviewed and evaluated. The National Treasury was advised of where the SIU’s findings stand on March 22.
SIU head Andy Mothibi said the SIU would institute civil proceedings in the Special Tribunal for the contract to be cancelled and, if necessary, money recovered. He said senior counsel had been briefed by the SIU in February to assist the SIU in reviewing the available evidence.
Mothibi said the report to the president, who issued the proclamation for the investigation in 2020, had been completed.
Pieterse said the Treasury had also appointed senior counsel to prepare representations to the SIU in response to its draft report presented to Scopa in September. It submitted representations to the SIU in February.
These representations covered various procedural and substantive aspects raised in the SIU draft report and were shared with the SAPS, NPA and the presidency, Pieterse said.
“The completion of the SIU report will inform the way forward for IFMS,” Pieterse said. “Implementation activities are on hold to await the outcome of the SIU investigation.”
Negotiations with Oracle for the implementation of a cloud solution had also been put on hold pending finalisation of the SIU report.
“Given the challenges experienced by IFMS implementation, following the conclusion of the SIU investigation it is possible that National Treasury may pursue a new direction for IFMS implementation, building on the various lessons learnt throughout the process and global best practice,” Pieterse said.
“Engagements are under way with various international and domestic experts to harness global lessons learnt and guide implementation strategies and plans.”
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