Smart ID Card Project forensic audit investigation: SITA briefing

Meeting report

State Information Technology Agency (SITA) presentation
Ms Febe Potgieter-Gqubule, Acting Chairperson, SITA Board of Directors, In presenting the Smartcard ID report to the Committee, said that the Department of Home Affairs (DHA) had instructed SITA to prepare a tender for the supply, installation and maintenance of smartcards, raw materials, card personalisation and card production. The tender was initiated and advertised in May 2008. On 8 September 2008, an anonymous letter was received by the former Chairperson of the SITA Board alleging improprieties relating to the evaluation of the tender.  Further deliberations on the tender were prohibited by the Board until the report from the Auditor-General was finalised and reviewed.

Key Findings
The key findings were that there was general non-compliance with SITA tender procedures and SITA Regulations. There was failure by the DHA to submit a Business Case which was peremptory in terms of the State Information Technology Agency Act (No. 88 of 1998). In the publication of the tender together with the evaluation, the allocation of the preference points, which was one of the evaluation criteria, was submitted to SITA by the DHA after the publication of the tender. The obligation was upon the DHA to prepare and submit the evaluation criteria and upon SITA to ensure that the tender was not published without complete evaluation criteria.

The DHA did not approve the published bid and the DHA only approved the bid a week later, after publication. There was failure by SITA to open the bids in public as required by the SITA Regulations. The Bid Evaluation Committee members were appointed by the DHA after the publication of the Bid which was contrary to the prescripts of the SITA Regulations.
Not all the scoring by members of the Bid Evaluation Committee was taken into account on the basis that such members resigned, whilst there was no evidence to support their resignation and/or withdrawal. There were discrepancies in the finalisation and consolidation of the individual scorings by the Bid Evaluation Committee members.

There was failure by one SITA employee to make a complete disclosure and he failed to recuse himself from some of the deliberations. Where there was disclosure, he did not disclose the nature of the interest and failed to disclose the name of the bidder involved with the alleged job offer.

Recommendations
Ms Potgieter-Gqubule gave the following recommendations:

⚫The improvement of controls pertaining to procurement processes to ensure compliance with the SITA Act, Regulations, SITA Procurement Policies and other applicable supply chain legislation;

⚫Contravention by the DHA and SITA employees who failed to comply with the provisions of the legislations should be met by disciplinary action;

⚫The job offer made to one of the SITA employees by a bidder was irregular taking into account that it was done whilst the bid was under adjudication; and

⚫ SITA should consider blacklisting the bidder for its irregular conduct.

Discussion
The Chairperson said that the Committee had been waiting for too long for the report and it was willing to make sure that the process was concluded.

Mr G McIntosh (COPE) said that it was a poor and bad thing that had happened, but there was transparency and the presentation had shown the steps taken and the process was open to public scrutiny. He agreed with the Mr Apleni that it was proper for the project to be closed.

Mr A Gaum (ANC) said that, from the report, the problems were mainly administrative in nature with no evidence of corruption and that was a good thing. The problem was that a lot of money was clearly being wasted through negligence and lack of capacity. Besides taking disciplinary actions, there should be some evaluation of the capacity of officials to deal with such issues.

Ms H Makhuba (IFP) said that the implementation of the project was long overdue and the Committee hoped that the problems within the DHA could be solved.

The Chairperson asked about the disciplinary actions against the officials who had left. What was going to happen to such officials? It was becoming a trend that officials did wrong in one department, resigned and simply moved on to another department. Such loopholes had to be closed.

Ms Potgieter-Gqubule replied that the SITA turnaround strategy started in 2010 involved an overhaul of the procurement process and the ensuring of proper governance procedures and compliance. The plan also considered the issue of skills and capacity and SITA was looking at commodity specialists in the area of technology.

There were difficulties in handling the problem of officials who had committed offences and left. The normal procedure was to report the matter to the Public Service Commission (PSC). In the situation where the person left before the disciplinary action was commenced, it was wrong to tell the potential employer or the PSC that disciplinary measures were going to be taken against the individual.  SITA was, however, following  the procedures as spelled out in the Public Finance Management Act (Act No. 1 of 1999). 

Mr Blake Mosley Lefatola,  SITA CEO, said that the SITA had developed a checklist for the adjudication of tenders and compliance was strict. SITA was also building up its capacity in the supply chain management division and was ensuring that it advertised and attracted the best skills. The initiation of disciplinary proceedings was being hastened so that the processes could be carried out and completed on time.

Mr McIntosh said that SITA could use the mechanism of whistle-blowing to alert the PSC and other Government departments and agencies to poor performing employees who were in the habit of jumping from one department to another after committing offences. This was a big issue within the Government and was the reason for continuous poor performance. The insistence on administration seemed as though the SITA was avoiding a potentially serious case of corruption.

Ms Potgieter-Gqubule replied that the intervention was correct and the recommendations were meant to put a stop to the irregularities which had been noticed. There was no obvious evidence of corruption but the steps taken were meant to prevent the process from continuing while exposed to potential corruption. On whistle-blowing, SITA could find out that an employee wanted to leave only when he or she had already been offered employment somewhere else. Employees were usually discreet about such things and, as such, any steps to be proposed or carried out should focus on solving the situation after the employee had already left and was employed somewhere else.

Mr McIntosh asked how much the process had cost SITA.

Ms Potgieter-Gqubule replied that there had not been direct money involved but it was more or less the time of the SITA and DHA officials that was the major cost. There was no monetary cost.

Mr Mkuseli Apleni, DHA Director-General, said that the situation reported had nothing to do with the smartcard ID project which the Department of Home Affairs was now handling. A decision had been taken that the smartcard project was not going to be put out to tender and the smartcard would be printed by the Government Printing Works. A sample card had already been designed and a pilot had already commenced. The DHA was waiting on the report to confirm if there was a process which the DHA could follow as to the two employees.

The Chairperson said that it was important for the DHA to include the Committee as part of the pilot project of the smartcard.

Mr M Mnqasela (DA) said that it was important for the SITA and the DHA always to update the Committee with complete and adequate information so that it could properly give the support and oversight which it existed to do.

The Chairperson encouraged SITA to improve its governance structures so that such issues of non-compliance should not happen again.

The meeting was adjourned.