The Public Protector has found no substance in the allegations that Northern Cape Premier Dr Zamani Saul and MEC for Health Maruping Lekwene facilitated the awarding of a personal protective equipment (PPE) tender to Macronym 37 CC.
THE PUBLIC Protector has found no substance in the allegations that Northern Cape Premier Dr Zamani Saul and MEC for Health Maruping Lekwene facilitated the awarding of a personal protective equipment (PPE) tender to Macronym 37 CC.
The director of Macronym 37 CC, Somandla Sibisi, was reported to be connected to the premier as well as the ANC.
Macronym 37 CC was awarded a R26.9 million contract to procure Covid-19 PPE, including coveralls, surgical masks and N95/FFP2 masks, in June 2020.
The wife of Saul’s adviser Norman Shushu had also received a R13 million tender to supply the South African Police Service (SAPS) with one million masks.
The investigation report that was released on September 30 probed allegations of improper conduct and maladministration relating to the procurement of goods and the awarding of a contract to Macronym 37 CC by the Northern Cape Department of Health.
Acting Public Protector Kholeka Gcaleka, however, stated that the awarding of the contract to Macronym was not in accordance with the procurement policies of goods and services, where the conduct of the department was “improper and constituted maladministration”.
It was indicated that Macronym 37 CC was awarded a tender despite being de-registered by the Companies and Intellectual Property Commission (CIPC) for non-compliance due to its failure to submit tax returns since 2017.
Gcaleka added that internal procedures and internal control measures were not in place for the approval and processing of payments.
“These controls did not provide reasonable assurance that all expenditure is necessary, appropriate, paid promptly and adequately recorded and reported on.”
Gcaleka indicated that irregular expenditure was incurred as Macronymn’s documents were not duly signed as required, where the department paid them without verifying the validity of the tax clearance certificate.
“Macronym did not submit their broad-based black empowerment employment equity (B-BBEE) certificate as required, while their certificate had expired.
“The submission of the implementation plan and remedial action shall, in the absence of a court order, be complied with within the period prescribed in this report to avoid being in contempt of the Public Protector.”
The report stated that the wife of the special adviser to the premier, in a telephone interview, denied the allegation that a company called Kamo Training, of which she was the sole director, had received the SAPS mask contract.
“The SAPS placed the first order, worth R6.5 million, on March 29, 2020, four days after the country went into lockdown. Brigadier Mahlangu verbally approved purchase orders for four companies. The Hawks are currently investigating allegations relating to the SAPS officials who abused emergency procurement procedures and fraudulently handed multimillion-rand contracts for the supply of masks and sanitisers to Tsa Bophelo Medical Supplies and Logistics, Tombo Investments, Basadzi Pele Management Consulting and the Before Sunset Group.”
Gcaleka also advised the MEC for Health to take appropriate action within the next 60 days against the former HOD, Dr Dion Theys, for failure to comply with the Public Finance Management Act (PFMA) and with procurement policies of goods and services.
She stated that the acting HOD should also take appropriate steps against any official who had contravened the PFMA and ensure that officials involved in supply chain management were properly trained in the provisions of the PFMA, Treasury regulations, policies and national Treasury supply chain management prescripts.
She ordered the HOD to report the non-compliance with the prescribed laws and prescripts and the expenditure incurred in the procurement of the PPE to the Northern Cape provincial Treasury and take steps to ensure that the audit committee reported regularly to him on audit outcomes.
The Public Protector said Saul denied the allegations that he was involved in the supply chain management processes of the department.
“According to the declaration of interest form dated June 9, 2020, obtained during the investigation, Sibisi stated that he did not have any relationship with a person employed by the state and who was involved with the evaluation and or adjudication of the bid in question.”
Gcaleka noted that cellphone records that were obtained from Vodacom and MTN during the investigation did not show any evidence that there was any contact or regular contact between Saul and Sibisi before and after the tender was awarded to Macronym 37 CC.
She indicated that the department deviated from normal supply chain management processes when it commenced procuring PPE for the Covid-19 pandemic in March 2020
“In April 2020, the department requested quotations from service providers to procure Covid-19 PPE, while a R26.9 million contract was awarded to Macronym 37 CC – a contract to procure Covid-19 PPE ie coveralls, surgical masks and N95/FFP2 masks. The records of the municipality indicate that the goods ordered from Macronym were delivered and confirmed by delivery notes.”
The Public Protector indicated that the chief financial officer, Daniel Gaborone, in a meeting held on February 17, 2021, conceded that the department’s supply chain management (SCM) unit “did not deal adequately with the procurement process in relation to the Covid-19 PPE”.
“Gaborone further stated in the meeting during the investigation that due diligence was not exercised in ensuring that the company that was awarded the contract was indeed tax compliant because the supply chain management (SCM) unit of the department relied mostly on the central supply database information for March 2020 and did not verify Macronym’s tax compliance status with the South Africa Revenue Service (Sars), as required.”
The report indicated that only Central Medical, ARC Technology and Logan Medical could be approached to provide the goods although all three companies could not deliver the products required by the department.
“The MEC for Health, Maruping Lekwene, stated that the department had already instituted disciplinary action against Dr Theys and Gaborone and implicated officials in supply chain management.
The report indicated that the investigation was ‘quite complicated’ and was delayed due to the investigation initiated by the Special Investigating Unit (SIU).
“A charge sheet was drafted. The process was still ongoing and the matter is being discussed with the director-general and would continue in due course. The disciplinary case against Gaborone was still pending but had to be postponed due to ill-health and the seizing of the laptop and cellphone by the Hawks for further investigation. This has stalled the continuation of the disciplinary process.”
The Public Protector indicated that a new manager had been appointed to oversee the SCM Unit and to strengthen compliance.”
Gcaleka noted that the HOD had failed to send a copy of the letter to prove that the expenditure incurred in the procurement of PPE was reported to Treasury.
“In a subsequent letter dated May 19, 2022, Dr Theys, through his attorneys Mjila and Partners Incorporated, stated that supply chain management was responsible for the procurement of goods and services.”
Gcaleka remarked that it was the duty of the HOD to check the tax compliance and B-BBEE status of suppliers and ensure that transgressions or non-compliance with existing SCM were dealt with in line with the Labour Relations Act.
”It is required of the HOD to investigate the transgressions of the SCM system and initiate disciplinary processes against the affected officers if it is found that they committed misconduct.”
She pointed out that the PPE tender had been under investigation by multiple government agencies and they appeared to be searching for the same answers.
“According to Malibongwe Faas, the manager for fleet and asset management, the SCM unit and CFO on two different occasions had approached Macronym to acquire PPE.”
Gcaleka noted that Macronym was disqualified in the first transaction that was processed by the SCM unit, while in the second transaction the CFO received the proposal directly from Macronym in June 2020.
“The items and quantity were different from those that the SCM unit had listed in the quotation form to service providers.
“In June 2020, the CFO appointed Macronymn for reasons best known to him.”
The Public Protector indicated that several attempts were made in vain during the investigation to interview Sibisi – the director of Macronymn 37 CC.
Gcaleka stated that the HOD, as the accounting officer, as well as the CFO, did not take any steps to prevent unauthorised, irregular, fruitless and wasteful expenditure.
“The department should give preference to local service providers who are registered on the central supply database and ensure that they are tax compliant. The HOD failed to ensure that tax compliance checks were done before the contract was awarded.
“The department failed to ensure that the contract for service awarded to Macronym 37 CC was cost-effective and incurred irregular expenditure.
“The HOD was obligated by law to use the resources of the department in an effective, efficient and economical manner. The CFO at the time (Gaborone) conceded that the department’s supply chain management unit did not deal adequately with the procurement process in relation to the Covid-19 PPE.
“During the investigation, no evidence was found that the HOD took disciplinary steps against any official of the department who committed financial misconduct relating to the awarding of the Covid-19 PPE contracts.”
Gcaleka noted that while Macronym’s overall tax status reflected as compliant according to the central supplier database, the department had not verified if it was in fact tax compliant.
“The quotation that was submitted by Macronym was also not on the letterhead of the entity and not signed to make it an official document that could be considered.
The provincial director of public prosecutions, advocate Livingston Mzukisi Sakata, indicated yesterday that prosecutions into PPE spending in the Province would follow.
