I, the undersigned
Do hereby declare under oath and state as follows:
1. I am an adult male person previously employed as a CEO of Government Communication Information Systems (GCIS) and Cabinet Spokesperson, based in Pretoria. I was appointed as such with effect from 03 February 2011 and held the position until 25 August 2012.
2. My response will be in terms of Rule 3.4 of the Rules Governing Proceedings of the Judicial Commission of Inquiry. Therefore, my response is in relation to the allegations made against me in my capacity as CEO of GCIS and as an implicated person as provided for in Rule 3.3. I further confirm receipt of the Affidavit of one Ms. Miriam Phumla Williams which has been filed with the commission.
3. Ms. Phumla William’s testimony contained in Paragraph Paragraphs 14-16 deal with allegations levelled against me, of which I dispute or alternatively deny. Thereto, I dispute or deny the oral evidence of Ms. Phumla Williams delivered on 31 August 2018, Day 8, Session 1, wherein she was making further explanations to support her written testimony.
4. Notwithstanding point 3 above, and also for the sake of setting the record straight and to provide an appropriate context for my version, I deal with some of the elements of Ms. Phumla William’s testimony as contained in paragraph 12 & 13 of her statement.
My version is set out herein below: –
5. Ad Para 12
5.1. The 3rd February 2011 was my 1st day as CEO (Director General) of GCIS and as Cabinet Spokesperson. The submission by Ms. Phumla Williams stating that Mr Temba Maseko left GCIS in January 2011 is false.
5.2. On this day, 3rd February, I communicated briefly with Mr. Maseko regarding the hand-over. This short interaction happened outside the Union Buildings after his last presser as CEO of GCIS following a Cabinet meeting on the 2nd of February 2011.
5.3. He said he had to rush to DPSA and he advised that I speak to the GCIS top team. He appeared to be in a hurry and a bit unsettled, I therefore did not pursue the matter further.
5.4. Record will show that on the 3rd February 2011 Mr. Temba Maseko read his last Cabinet statement dated 03 February 2011. Exhibit RA1
5.5. I then proceeded to the office, the security guard showed me to my demarcated parking space. I got to the 5th floor, met Ms. Miriam Phumla Williams whose office was adjacent to mine, we exchanged pleasantries. I then requested her to call a meeting of the top team so that I could introduce myself to the leadership of the department.
7. Ad Para 14
7.1. I confirm the contents of this paragraph and further submit that when I arrived at the department I re-appointed Ms. Miriam Phumla Williams in the same position which she occupied as the chairperson of the Bid Committee in order to maintain smooth operations whilst I was learning the GCIS operations. This again demonstrates that I did not come in with a particular agenda to fix that which was not broken. At least that was what I thought at the time.
7.2. I further confirm that yes, I changed the Bid Adjudication Committee and hasten to add that it was not an arbitrary action nor for nefarious reasons as could be inferred in Ms William’s testimony.
7.3. The catalyst for the change was upon discovery that some members of the Bid Adjudication Committee working in concert with some employees in the procurement department had irregularly appointed a certain service provider and furthermore corrupt and fraudulent activities took place in the execution of that tender resulting in serious financial losses to Government amounting to R 6 983 640.02 for just the one service provider. This project was as an outdoor campaign on behalf of STATS SA for the Census 2011.
7.4. When this calamity was brought to my attention, I asked the Chief Internal Auditor to report this matter to all appropriate authorities.
7.5. This irregularity was reported to the Special Investigating Unit and to the Auditor General. In addition, GCIS under my leadership and STATSSA under the leadership of the Statistician General jointly requested National Treasury to conduct a thorough investigation to get to the bottom of this irregularity.
7.6. National Treasury was commissioned to investigate four key areas relating to the irregularity above.
· The procurement process followed in acquiring service providers for the Census 2011 Campaign projects.
· What services were the service providers procured for.
· Whether or not there was value for money to the State in the services supplied and
· Whether the project was conducted in accordance with the terms of reference entered into between STATS SA and GCIS as covered in the terms of the Memorandum of Understanding entered into between these two departments.
7.7. Despite the presence of members of the “Rolls Royce” Bid Adjudication Committee which Ms. Phumla Williams vouched for that it ticked all the boxes in terms of National Treasury guidelines/circular including having a CFO and five days training course on procurement, serious corruption & fraud occurred.
7.8. I therefore lost confidence in the arrangement that prevailed, and yes, I dismantled the Bid Adjudication Committee and changed some of the reporting lines to ensure that the objectives of s38 of PFMA are achieved.
7.9. Below are just some highlights of the startling findings by National Treasury Investigation. “Every conceivable rule that could be broken was broken”
7.9.1. The appointed service provider was a company registered in December 2009 with its principal business being Events Management and Production in all aspects. Various changes occurred with regards to management, with the most recent being the appointment of 3 directors on 03 January 2011, which was 3 days prior to the company’s appointment by GCIS.
7.9.2. A payment notice prepared on the 06 January 2011 was approved on the very next day, 07 January 2011.
7.9.3. Ms Phumla Williams signed the approval of this payment notice yet in terms of the Financial Delegation of GCIS she was not delegated to do so.
7.9.4. The processes adopted by GCIS in requesting the services of this particular service provider were in contravention of GCIS policies and applicable legislation. GCIS did not appoint a Bid Specifications Committee as required by Paragraph 4.1 (a) of National treasury Circular dated 27 October 2004.
7.9.5. GCIS was in contravention of s217 of the Constitution which requires procurement system that is fair, equitable, transparent, competitive and cost effective.
7.9.6. GCIS was in contravention of s38 of PFMA which stipulates that it is the general responsibility of the Accounting Officer to ensure that the department has and maintains an appropriate procurement and provisioning system which is fair, equitable, transparent, competitive and cost effective.
7.9.7. GCIS contravened Paragraph 4.9 of the National Treasury Supply Chain Management Guideline for Accounting Officers dated February 2004 which states that timely notifications of bidding opportunities are essential in competitive bidding. GCIS did not advertise.
7.9.8. GCIS contravened Treasury Regulation 16A6.2(a) in that no bid adjudication process took place as required.
7.9.9. The appointment of the service provider was not supported by an appointment letter which outlined the scope of work as well as deliverables expected from the service provider. Exhibit RA2
7.9.10. No evidence was found to indicate that the service provider was screened by GCIS prior to their appointment.
7.9.11. The service provider was appointed by GCIS despite not being registered on the supplier database of GCIS.
7.9.12. Treasury noted that the registration document was signed on 08 January 2011 and the registration captured on 14 January 2011, after the appointment of the service provider.
7.9.13. Notwithstanding that services had not yet been rendered but an invoice dated 10th February 2011 was submitted by the service provider to GCIS.
7.9.14. On the 01 March 2011 through an email to one Deputy Director General the service provider confirmed that they could not produce proof of delivery of service because the creatives were not delivered in order for them to deliver the required service.
7.9.15. Supply chain officials carried out requisitions and approvals to effect the payment of R6 983 460.02 to the service provider.
7.9.16. Supply chain officials advised the service provider to break up the invoice into amounts less than a million rands to enable faster payment.
7.9.17. The R6 983 460.02 was broken up into 7 seven different invoices of R997662.86 each to circumvent/bypass the controls implemented by the National Treasury BAS system Safety Net System. These invoices were paid between 07 March 2011 and 23 March 2011
7.9.18. The Supply chain official (whose identity is in the report) told National treasury in an interview that the splitting of invoices was a common practice at GCIS and that she had requested suppliers to split invoices on numerous occasions in order to ensure prompt payment. The practice was never rectified or brought to her attention as being irregular.
7.9.19. Through the review of the BAS payment register it was noted that the payments to the service provider were made prior to GCIS receiving funds from STATS SA which was in contravention of the MOU between GCIS and STATS SA.
8. A similar kind of irregularity was also underway at the exact same period for this same project with another service provider which was also paid R777 755.88
9. The total amount paid irregularly was R7 761 215.90
10. National Treasury recommended disciplinary action on certain identified individuals that were in the forefront of this scam and also that fraud case should be opened against identified individuals.
11. Further to point 7.9.14 above, the 3rd service provider that did not supply creatives to the other two service providers was paid R64 000 000 by Stats SA.
12. National Treasury also recommended that a detailed investigation should be initiated by STATS SA into the appointment of this 3rd service provider and whether STATS SA received the creatives and if there was value for money.
13. Conflict of Interest
In addition to the above I also observed a breach of the Check and Balances principle in that some of line mangers responsible for issuing tenders for their various requirements were also sitting in the adjudication thereof. It is common cause that various line managers have very good relationships with their various service providers. I found it very inappropriate that the same line mangers with relationships with service providers would sit and oversee tender submissions from those same people.
14. Furthermore, the Bid Adjudication Committee members were in the committee longer than what good governance in terms of rotation would allow. By way of example, see Exhibit RA 3(p 3of3)
Ms Phumla Williams 2002/01/01 till October 2012 = 10 Years
Ms. Nebo Legoabe 2002/01/01 till October 2012 = 10 Years
Ms T Carrim 2007/10/01 till October 2012 = 05 Years
Mr K Semakane 2002/04/01 till October 2012 = 10 Years
Mr DP Naidoo 2006/08/01 till October 2012 = 06 Years
Ms. AMARU 2009/07/? till September2012= 03 Years
15. Ms Phumla Williams was Chair of the BAC and DDG Corporate Services in charge of the supply chain management where all the corruption happened and she was serving with virtually all her team members in the Bid Adjudication Committee. There were no checks and balances whatsoever. The Chief Audit Executive was also part of her team.
Here’s the full affidavit Response Affidavit to Phumla+Text Affidavit (1)