Investigation into how a company was paid R30m after winning R6m tender

08:45 (GMT+2) Thu, 20 Jun 2019

The National Skills Authority (NSA) is continuing its investigation into how a company initially awarded a R6 million tender was eventually paid almost R30 million for the same work.

Star Sign and Print won a R6 million tender to develop and produce branding and marketing materials for the Services sector education and training authority (Seta) in 2018.

However, a preliminary report by the NSA in September 2018 flagged some supply chain irregularities in the tender.

In April, then higher education and training minister Naledi Pandor ordered a new investigation after the Seta board failed to explain why the initial tender had ballooned to R28 963 429.60, which was paid to Star Sign and Print.

The NSA, an advisory body of the ministry, had been investigating allegations of maladministration in the Seta.

In a letter seen by City Press, addressed to the Seta board chairperson Marinkie Madlope and dated April 1, Pandor said she was not satisfied with the board’s initial responses to the NSA report allegations relating to supply chain irregularities.

According to the preliminary NSA report, Star Sign and Print’s initial proposal was to handle the Seta’s marketing, branding and stationery supply for R6 619 592.72.

By the time the project was completed, R28 963 429.60 had been paid to Star Sign and Print, the NSA probe found.

The report said the company, apart from the branding and marketing, had also supplied 20 000 exam pads at R214 each, 30 000 lanyards at R166 each and 30 000 flash drives at R167 each, among other things. The report flagged these as supply chain irregularities.

Pandor also sought answers from the Seta board about a “questionable” transaction – R250 million funding for the building of skills centres and the acquisition of provincial offices which the board approved in 2015 within “a mere six days before the financial year end”.

The NSA report said this amount later increased to R320 million in 2017 when the Seta board approved an additional R70 million for the same project.

Pandor wanted the board to explain all the irregularities, included the Star Sign and Print tender, building of skills centres and acquisition of provincial offices.

“As a result, I direct the accounting authority [board] to commission an independent investigation to ascertain the veracity of this allegation. This must form part of the activities in your action plan or turnaround strategy,” Pandor wrote.

Attempts to get a comment from Star Sign and Print proved futile as phone calls went unanswered and emails were not responded to.

Other issues flagged by the NSA report included:

. Variations in contracts for Motheo, Kokstad, Cala and Prieska skills centres;

. That no explanation was provided for why these amounts could not have been committed to projects earlier in the financial year;

. That there “does appear to be a trend by the Seta increasing the procurement amounts after the tender process is already completed, which suggests possible manipulation of supply chain processes and warrants further investigation.

. The NSA report said the provincial skills centres were acquired at “almost double the market value”; and

. That further investigation was required to establish why the Seta had not conducted independent valuations by a sworn appraiser and to verify whether processes were followed in appointing the service provider, who identified potential properties.

These offices are located in Nelspruit, Port Elizabeth, Cape Town, Midrand, Kimberley and Bloemfontein.

Nompilo Sidondi, the Seta’s legal services acting executive manager, declined to comment on what was their initial response to Pandor that led her to instruct the board to institute an independent investigation.

She said these matters were the subject of an investigation commissioned by the board on April 17 and expected to be concluded before the end of next month.

Sidondi said providing City Press with initial responses sent to Pandor was “likely to jeopardise the investigation currently under way” and, if publicised, would “compromise” the probe.

The report would be submitted to Pandor’s successor, Blade Nzimande.

Sidondi said work performed at Motheo, Kokstad, Cala and Prieska skills centres included construction that would serve as institutional platforms and tangible infrastructure for skills development.

She said the turnaround plan was submitted and accepted by Pandor.

Msindisi Fengu2019-06-20 00:30

City Press. 


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