Treasury top dogs in trouble over R1bn system ‘not working’

National Treasury top brass were yesterday hauled over the coals by the standing committee on public accounts (Scopa) over the controversial R1 billion integrated financial management systems (IFMS), awarded to software giant Oracle.

Special Investigating Unit (SIU) head advocate Andy Mothibi, who found irregularities in the contract, said he would soon finalise his report and present it to President Cyril Ramaphosa.

With Treasury paying R68 million a year for the maintenance of the system, which has not been implemented, Mothibi told Scopa he would launch an application in the Special Tribunal to cancel the contract – a move opposed by the department.

Government officials linked to the irregular awarding of the tender have been referred for disciplinary processes, with five cases submitted to the National Prosecuting Authority, which will collaborate with the Hawks in investigations and prosecutions.

With the SIU having concluded its investigation, Mothibi said the execution of the outcomes would not wait for Ramaphosa’s report. “Legal findings are there. “We have made findings that are supported by evidence. Based on those findings, we are able to execute,” he said.

The report prepared for the president would indicate “findings, outcomes and this is where we are, in executing the findings”.

“It was not a draft presidential report that we presented here a few months ago, but a status report of the investigation.

“We will now proceed and finalise the report to the president, because the investigation is complete. We do have the evidence that supports the findings,” Mothibi told Scopa.

The Cabinet-mandated IFMS is a modernisation programme, aimed at replacing ageing and fragmented financial, human resource and payroll.

Taking flak from MPs for years of failing to address the IFMS impasse, National Treasury director-general Dr Duncan Pieterse and accountant-general Shabeen Khan said they found it difficult to cancel the Oracle contract “due to legal implications”. They denied assertions by the SIU, auditor-general and independent auditing firms, pointing to irregularities in the tender process.

“Part of the reason that all of us are not satisfied with the current situation is because we have a legally binding contract with the IFMS service provider,” said Pieterse.

“We have certain obligations in terms of that contract.

Unhappy about National Treasury’s handling of the IFMS contract, Scopa chair Mkhuleko

Hlengwa said it seemed that “this is the hill you [National Treasury] are prepared to die on”.

Tracing years of mishandling the contract, Hlengwa said: “In July 2015, National Treasury’s audit committee requested its internal audit unit to perform a review of the IFMS payments for 2014-15 financial year.

“The investigation revealed a total of 54 findings, of which 49 had catastrophic risk findings and five had high risk ratings.

“The investigation indicated weaknesses in the internal controls to mitigate the risks and weak monitoring systems.

“The internal audit investigation indicated that internal controls could not be relied on.”