FREE STATE ED­U­CA­TION PART­NER­SHIP WAS IR­REG­U­LAR

CityPress - - News - SETUMO STONE setumo.stone@city­press.co.za

The Kag­iso Shan­duka Trust was awarded an ir­reg­u­lar ten­der in the Free State for a ru­ral ed­u­ca­tion de­vel­op­ment and re­lated in­fra­struc­ture project that should have gone out for com­pet­i­tive bid­ding, leav­ing the pro­vin­cial ed­u­ca­tion depart­ment R500 mil­lion in the red.

The co-fi­nanc­ing con­tract be­tween the Kag­iso Shan­duka Trust and the Free State ed­u­ca­tion depart­ment was in­tended to pi­lot an in­no­va­tive model to ad­dress in­fra­struc­ture de­vel­op­ment, cur­ricu­lum sup­port, so­cial wel­fare and grow­ing lead­er­ship in ru­ral and town­ship schools in the prov­ince. The trust is also as­so­ci­ated with Pres­i­dent Cyril Ramaphosa.

There was, how­ever, no in­no­va­tive el­e­ment in the un­so­licited bid by the part­ner­ship be­tween the Kag­iso Shan­duka Trust and the Kag­iso Shan­duka Foun­da­tion that war­ranted a de­vi­a­tion from the pro­cure­ment process, and other ser­vice providers could have eas­ily pro­vided the same work, found an in­ves­tiga­tive re­port by PwC in Oc­to­ber last year.

The agree­ment was a matched fund­ing part­ner­ship, in which the Kag­iso Shan­duka Trust con­tributed R200 mil­lion and the Free State ed­u­ca­tion depart­ment con­tributed the same amount.

The in­ves­ti­ga­tors found that the state ex­pen­di­ture of R508 299 556 on the project – in­clud­ing the prepart­ner­ship deal in 2010, in­volv­ing only the Kag­iso Shan­duka Trust – was ir­reg­u­lar and rec­om­mended that fur­ther in­ves­ti­ga­tion be con­ducted to es­tab­lish whether tax­pay­ers had money in the deal be­fore a re­quest for con­do­na­tion was sub­mit­ted to the pro­vin­cial trea­sury.

In a sam­ple of 19 out of a to­tal of 301 projects in which the in­ves­ti­ga­tors sought phys­i­cal ver­i­fi­ca­tion of the in­fra­struc­ture built in the schools, some medi­umto high-risk is­sues were iden­ti­fied, in­clud­ing sig­nif­i­cant cracks in walls, wa­ter leaks and sub­stan­dard elec­tric­ity con­nec­tions, as well as amounts claimed for work that had ap­par­ently not been done.

With the pro­vi­sion that fur­ther in­ves­ti­ga­tion needed to be done, the in­ves­ti­ga­tors found that no per­son had com­mit­ted wrong­do­ing. How­ever, they also rec­om­mended that more projects val­ued at

R431 099 252 be scru­ti­nised for other medium- to high-risk is­sues.

Ac­cord­ing to the re­port, “there was no in­for­ma­tion avail­able to sup­port the cost of re­pair or cost to cor­rect de­fects … There was also no doc­u­men­ta­tion sup­port­ing a de­ci­sion by the depart­ment to en­force any re­course they may have un­der the 2010 or 2013 ser­vice level agree­ments to cor­rect any of the iden­ti­fied re­pairs.”

Once the cal­cu­lated loss has been es­tab­lished, the depart­ment is ad­vised to ap­proach the pro­vin­cial trea­sury for con­do­na­tion of the ir­reg­u­lar ex­pen­di­ture. The re­quest should in­clude in­ves­ti­ga­tion into fraud, cor­rup­tion or crim­i­nal acts; any crim­i­nal charges laid; any dis­ci­plinary ac­tion; and re­me­dial ac­tion taken by the accounting au­thor­ity.

The Kag­iso Shan­duka Trust said on Fri­day that, while it had not yet seen the PwC re­port and could not com­ment on its con­tents, Ramaphosa had not been in­volved in the in­fra­struc­ture de­vel­op­ment op­er­a­tions.

“His in­volve­ment was lim­ited to the Kag­iso Shan­duka Trust’s in­ter­nal and ex­ter­nal ad­vi­sory boards, whose man­date was to of­fer strate­gic guid­ance on de­liv­er­ing the pro­gramme.

“The ad­vi­sory board mem­bers hold no fi­nan­cial and op­er­a­tional re­spon­si­bil­i­ties, and only re­ceive re­ports on the strate­gic ob­jec­tives of the pro­gramme and progress thereof from the board of trus­tees,” said Kaya Ny­ati, the trust’s man­ager of stake­holder re­la­tions and com­mu­ni­ca­tions.

Asked how the con­tract had been con­cluded when the prod­uct or ser­vice did not com­ply with Na­tional Trea­sury’s re­quire­ments for un­so­licited bids (in­clud­ing that the prod­uct or ser­vice in­volves an in­no­va­tive de­sign, an in­no­va­tive ap­proach to project de­vel­op­ment and man­age­ment, and a new and cost-ef­fec­tive method of ser­vice delivery), Ny­ati said: “We en­gaged ex­ten­sively with the le­gal rep­re­sen­ta­tives of the par­ties in­volved to en­sure that the part­ner­ship agree­ments met the nec­es­sary le­gal and ad­min­is­tra­tive re­quire­ments.

“The Free State govern­ment also pro­vided le­gal in­puts and over­sight on the con­tract prior to the con­tract be­ing signed. As part of the ex­ten­sive le­gal con­sul­ta­tions be­tween the par­ties to the agree­ment, we were as­sured that, as an in­no­va­tive project with govern­ment, the agree­ment could be en­tered into.”

Im­por­tantly, she added: “Dur­ing the im­ple­men­ta­tion of the part­ner­ship agree­ment, the Kag­iso Shan­duka Trust – as a non­profit or­gan­i­sa­tion – was in­de­pen­dently au­dited an­nu­ally and has re­ceived clean au­dits since 2014.”

Re­gard­ing the iden­ti­fied struc­tural de­fects, Ny­ati would only say that the Kag­iso Shan­duka Trust had es­tab­lished man­age­ment struc­tures to en­sure joint de­ci­sion-mak­ing for pro­gramme im­ple­men­ta­tion, in­clud­ing in­fra­struc­ture delivery.

“The com­mit­tee is con­sti­tuted by of­fi­cials from both the [ed­u­ca­tion depart­ment] and the Kag­iso Shan­duka Trust. Their role is to pro­vide qual­ity as­sur­ance and en­sure that any in­fra­struc­ture de­fects are at­tended to. As prac­tice, when we be­come aware of any chal­lenges re­lat­ing to in­fra­struc­ture delivery, we en­sure that these are reme­died and that qual­ity as­sur­ance is im­proved dur­ing the build­ing process,” said Ny­ati.

In the 2013 to 2015 an­nual re­port of the Kag­iso Shan­duka Trust, Ramaphosa stated that the Free State pro­gramme was well aligned with govern­ment’s poli­cies and fo­cus ar­eas.

“If col­lab­o­ra­tions like the Kag­iso Shan­duka Trust – which bring to­gether the pri­vate sec­tor, govern­ment, NGOs and school com­mu­ni­ties – are able to flour­ish, we will see true progress in our col­lec­tive mis­sion to se­cure a suc­cess­ful fu­ture for the young peo­ple of this coun­try,” he said.

The Free State ed­u­ca­tion depart­ment said it was ex­pe­ri­enc­ing un­fore­seen tech­ni­cal dif­fi­cul­ties in re­spond­ing to the me­dia query, while the pres­i­dency said it was only on Fri­day evening that they had be­come aware of the ques­tions sent to them by City Press on Thurs­day morn­ing.

Free State trea­sury spokesper­son Tshidiso Mokokoane said it had taken cog­ni­sance of the PwC re­port on the re­view of ir­reg­u­lar ex­pen­di­ture.

“It should also be noted that the trea­sury pro­vides mon­i­tor­ing and sup­port to de­part­ments in en­sur­ing that sound sup­ply chain man­age­ment prac­tices are ob­served through key con­trol ma­trix and key per­for­mance in­di­ca­tors,” he said.

Mokokoane said the pro­vin­cial trea­sury had not yet been ap­proached by the pro­vin­cial ed­u­ca­tion depart­ment for con­do­na­tion of the Kag­iso Shan­duka Trust’s ir­reg­u­lar ex­pen­di­ture.

“As per the re­sults of the re­port, it was im­pos­si­ble

[Ramaphosa’s] in­volve­ment was lim­ited to Kag­iso Shan­duka Trust’s in­ter­nal and ex­ter­nal ad­vi­sory boards, whose man­date was to of­fer strate­gic guid­ance on de­liv­er­ing the pro­gramme. The ad­vi­sory board mem­bers hold no fi­nan­cial and op­er­a­tional re­spon­si­bil­i­ties and only re­ceive re­ports on the strate­gic ob­jec­tives of the pro­gramme and progress thereof from the board

to con­clude whether a loss was in­curred or not, and the depart­ment was ad­vised to re­visit the to­tal pop­u­la­tion of projects be­fore cal­cu­lat­ing such loss,” he said.

“Only once the depart­ment has fi­nalised the fur­ther in­ves­ti­ga­tion and it has been con­firmed that no loss was in­curred in the con­tra­ven­tion of leg­is­la­tion, and that value for money was achieved, can the accounting of­fi­cer of the ed­u­ca­tion au­thor­ity re­fer the mat­ter re­lated to ir­reg­u­lar ex­pen­di­ture to the pro­vin­cial trea­sury to con­sider con­do­na­tion of the men­tioned ir­reg­u­lar ex­pen­di­ture,” he ex­plained.

Ny­ati said that, at the time of en­ter­ing into the con­tract in 2013, the Kag­iso Shan­duka Trust had en­gaged ex­ten­sively with the le­gal rep­re­sen­ta­tives of the par­ties in­volved to en­sure that the part­ner­ship agree­ment met the nec­es­sary le­gal and ad­min­is­tra­tive re­quire­ments. The trust had duly been as­sured that the agree­ment was en­tirely le­git­i­mate and could pro­ceed.

The ben­e­fits of the pro­gramme, she said, had been pos­i­tively re­alised over the years and could be ob­served in the im­proved pass rate and qual­ity of ma­tric re­sults in the Free State.

“The sus­tain­abil­ity of the pro­gramme’s in­ter­ven­tions is ev­i­dent in the re­sults of Fezile Dabi as the high­est-per­form­ing district in the coun­try,” Ny­ati added.

“From 2013 to April last year, the Kag­iso Shan­duka Trust’s District Whole School De­vel­op­ment Pro­gramme made a pos­i­tive im­pact on the Fezile Dabi and Motheo dis­tricts in the Free State, in­clud­ing 240 project schools, the at­ten­dance of 251 schools at em­pow­er­ment and trans­for­ma­tion work­shops and the in­di­rect pos­i­tive im­pact of these work­shops on 399 673 pupils.

“In ad­di­tion, 137 981 pupils un­der­went vi­sion screen­ing, 5 662 pairs of spec­ta­cles were do­nated to them, 334 new school fa­cil­i­ties were built and an­other 284 were ren­o­vated, 1 575 tem­po­rary jobs were cre­ated and 261 small, mi­cro and medium-sized en­ter­prises were sup­ported,” said Ny­ati.

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