Sassa grants mega-ten­der as Hawks probe

Mail & Guardian - - News - Sihle Manda

The South African So­cial Se­cu­rity Agency (Sassa) has granted a R400-mil­lion ten­der to a com­pany un­der in­ves­ti­ga­tion by the Hawks for alleged pay­ment ir­reg­u­lar­i­ties in­volv­ing an ear­lier R2-mil­lion Sassa con­tract.

It was Sassa that re­ported Azande Con­sult­ing to the Hawks about the first con­tract in 2013. But last year the com­pany still bagged the R400-mil­lion con­tract to con­duct a na­tional door-to-door sur­vey to gauge the so­cial ser­vices needs of poor South Africans in 1 540 wards.

The new con­tract is part of the agency’s in­te­grated com­mu­ni­ties reg­is­tra­tion out­reach project that in­cludes an event man­age­ment ser­vice.

Not a sin­gle mem­ber of Sassa’s eight-mem­ber bid ad­ju­di­ca­tion com­mit­tee or the act­ing chief ex­ec­u­tive of­fi­cer who signed off on the deal at the time ap­pear to have been aware of the Hawks in­ves­ti­ga­tion when they unan­i­mously awarded the new con­tract.

The Mail & Guardian has es­tab­lished that Azande Con­sult­ing was among sev­eral com­pa­nies that were re­ported to Sassa’s in­ter­nal fi­nan­cial mis­con­duct board af­ter of­fi­cials at the agency’s Eastern Cape re­gional of­fice raised con­cerns about the pro­cure­ment process and pay­ments aris­ing from the com­pany’s 2013 con­tract.

Sassa is the com­plainant in the crim­i­nal case that was opened.

Two se­nior Sassa of­fi­cials said the agency’s fraud man­age­ment and com­pli­ance unit had lodged the case with the Hawks, but they could not give more de­tails.

The M&G was also told that a Hawks in­ves­ti­ga­tor had writ­ten to Sassa chief ex­ec­u­tive Thokozani Mag­waza early this month ask­ing for co-op­er­a­tion.

“He [the in­ves­ti­ga­tor] re­quested that sup­ply chain man­age­ment, fraud and com­pli­ance and fi­nance depart­ment staff be availed to as­sist with the in­ves­ti­ga­tions over the 2013 pay­ments,” one of the in­sid­ers said.

Hawks spokesper­son Hang­wani Mu­laudzi said: “We don’t dis­cuss our cases in the me­dia … pend­ing in­ves­ti­ga­tions. All cases re­main con­fi­den­tial and as to who and why we can­not re­veal. Such is not ne­go­tiable.”

The com­pany’s sole di­rec­tor, Doreen Makhaye, re­ferred queries to Sassa. Sub­se­quent at­tempts to contact her through her of­fice and by cell­phone and email were un­suc­cess­ful.

Azande Con­sult­ing also ap­pears to have scored from a sec­ond con­tract with an­other com­pany, Vee-el Pro­mo­tions. Doc­u­ments seen by the M&G show that Vee-el Pro­mo­tions and Azande are the only com­pa­nies ac­cred­ited to provide event man­age­ment ser­vices to Sassa “as and when needed”.

But the two ap­pear to be con­nected. The sole di­rec­tor of Vee-el Pro­mo­tions is Lamie Nkosi, who was listed on Azande Con­sult­ing’s web­site as an “ad­min­is­tra­tor re­spon­si­ble for lo­gis­tics” be­fore the site was taken down this week.

Nkosi, in a brief in­ter­view with the M&G, con­firmed he was an Azande Con­sult­ing em­ployee but re­fused to take fur­ther ques­tions.

Paseka Let­satsi, Sassa spokesper­son, said the com­pa­nies had both sub­mit­ted a “cer­tifi­cate of in­de­pen­dent bid de­ter­mi­na­tion” which is part of re­quire­ments for the sub­mis­sion of bid pro­pos­als. Azande Con­sult­ing in its busi­ness pro­file stated that Nkosi was an em­ployee.

Let­satsi said Sassa would be “re­view­ing the al­le­ga­tions and cir­cum­stances un­der which this re­la­tion­ship took place”.

“The outcome of the re­view will de­ter­mine way for­ward,” he said.

Azande Con­sult­ing had, since July last year, al­ready been paid R170mil­lion for the project.

Sassa, in a writ­ten re­sponse to ques­tions about the new con­tract, main­tains that ev­ery­thing was above board and that all pay­ments to Azande for this con­tract were valid.

But the M&G has es­tab­lished that the R400-mil­lion con­tract was flagged by Zane Dan­gor, the for­mer di­rec­tor gen­eral of the depart­ment of so­cial de­vel­op­ment, be­fore his res­ig­na­tion in March. One of his con­cerns re­lated to the value of the con­tract, ac­cord­ing to one of­fi­cial.

“He was also ques­tion­ing why the project was be­ing out­sourced when it was done in­ter­nally all along,” the of­fi­cial said.

Dan­gor said he was un­able to com­ment be­cause he was no longer em­ployed by the depart­ment.

The of­fi­cials who spoke to the M&G said they shared Dan­gor’s con­cerns about why the door-to-door sur­vey had been out­sourced — some­thing that had been han­dled in­ter­nally since 2008 — par­tic­u­larly be­cause it was so ex­pen­sive.

They also claimed that some in­voices seemed in­flated or ex­ces­sive. The com­pany was ex­pected to provide mar­quees, trans­port costs, chairs, ca­ter­ing, mo­bile toi­lets and other ser­vices for once-off events in each of the dif­fer­ent wards to en­able peo­ple to have a one-stop fa­cil­ity for gov­ern­ment ser­vices, in­clud­ing so­cial grants. Azande billed Sassa R223 000 for each event but its own in­voices show that, in some cases, it only pro­vided ca­ter­ing.

Sassa said by the end of Jan­uary the com­pany had sur­veyed peo­ple in only 67 wards in eight prov­inces. In the 2016-2017 fi­nan­cial year, more than 500 were sup­posed to be sur­veyed.

Doc­u­ments, in­clud­ing in­voices and pay­ment sched­ules, sug­gest that Sassa has paid Azande Con­sult­ing R155-mil­lion since Novem­ber, sub­stan­tially more than what could have been ex­pected to be paid at that stage. The value of the three-year con­tract is R392-mil­lion.

The of­fi­cials who spoke to M&G said the agency’s chief fi­nan­cial of­fi­cer, Tsak­eriwa Chauke, had raised a se­ries of is­sues re­gard­ing a Novem­ber in­voice paid for in De­cem­ber.

“He wanted an ex­pla­na­tion as to how it was pos­si­ble to spend R29mil­lion on the project in one month. To him, that sug­gested that the project was go­ing to cost R348-mil­lion in one year, whereas the over­all value over three years was meant to come in at R392-mil­lion. Chauke wanted to know if this was go­ing to be the trend for the three years of the con­tract,” one of the in­sid­ers said.

The com­pany’s in­voic­ing sys­tem also ap­peared to have raised alarm among some Sassa of­fi­cials be­cause, in some cases, there were claims for chairs, wa­ter or meals, with no break­down of the costs for each.

Sus­pi­cious: Ques­tions have been raised about how Azande Con­sult­ing was given a R400-mil­lion ten­der to con­duct a na­tional door-to-door while the con­trac­tor was un­der in­ves­ti­ga­tion

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