Special Investigating Unit uncovers multimillion-rand Covid-related corruption in Northern Cape

Action is being taken against Northern Cape officials implicated in wrongdoing related to the Covid-19 pandemic. This is according to the Special Investigating Unit’s (SIU’s) seventh progress report on its investigations into allegations of corruption related to Covid-19 and the National State of Disaster.

The report is a supplement and update to the “final” report that the SIU made public in January.

The report was handed to President Cyril Ramaphosa in July and was released this week.

Read more in Daily Maverick: “Latest SIU report reveals billions more rands of unlawful and dodgy Covid-19 spending exposed”

The SIU’s initial investigations stemmed from a request by the premier of the Northern Cape, Dr Zamani Saul, that all personal protective equipment (PPE) contracts in all departments, including his own Office of the Premier, be investigated in relation to allegations of corruption. The provincial Treasury then undertook a report into the allegations, which was in turn handed over to the SIU. The SIU then initiated its own investigations based on the Treasury report.

Macronym 37 (Pty) Ltd

This case was identified by the premier’s office based on matters highlighted by the provincial Treasury. In June 2020, the Northern Cape Department of Health (DoH) made an award to the value of R26,960,025 (including VAT) for:

• Coveralls — R12,443,500 (excluding VAT);


•  Disposable surgical masks — R3,000,000 (excluding VAT); and


• N95 masks — R8,000,000 (excluding VAT).

According to the SIU, “the contract concerned was preceded by an unlawful procurement process” which resulted in a flawed general approved deviation submission. Alternatively, no specific deviation submission or application was made to an accounting officer for the procurement being awarded.

“On this premise, the Accounting Officer has not approved any procurement to be made on the basis of deviating from the normal prescribed procurement prescripts in respect of conducting a competitive bidding process for the procurement of the goods and/or services,” read the SIU report.

This was an unauthorised departure from the required procurement systems, said the SIU. A report furnished to the SIU by Supply Chain Management “explicitly indicated that Macronym was initially disqualified due to non-compliance”.

MKV Investments (Pty) Ltd

This investigation was based on a request by the Office of the Premier, as well as the Northern Cape Provincial Treasury report. According to the SIU, on 18 August, the provincial health department procured the following from MWV at a value of R16,906,678 (including VAT):

• Three-ply surgical masks — R5,171,550;


• Protective disposable coveralls — R8,451,925; and


• Body bags — R3,283,193.

The SIU report revealed the contract was “preceded by an unlawful process”, under similar circumstances to the Macronym award.

“There are no quotations from other service providers on the relevant payment batch, which is indicative of the fact that the process of awarding a contract to MKV was not a competitive process,” read the report. In addition, there was no evidence that the pricing of MKV was ever evaluated or its items were submitted for quality assurance.

“The CSD [Central Supplier Database] report attached on MKV’s payment batch, shows that the bank verification of the company had failed,” read the SIU report. “The requisition form attached on MKV’s payment batch indicates that M Gaborone, the CFO, without any reasonable explanation, increased the quantities of body bags to 5,000.”

DNS Suppliers (Pty) Ltd

DNS is another contract stemming from the provincial Treasury report. “The NCP DoH awarded two emergency contracts on or about 06 April 2020 to DNS in the amount of R432,170 and R96,025 (incl VAT) for the purchase of 1,000 500ml bottles of alcohol sanitisers and 4,000 large and medium examination gloves,” read the report.

The SIU said this contract was preceded by unlawful processes, similar to those of MKV and Macronym.

“On this premise, the Accounting Officer has not approved any procurement to be made on the basis of deviating from the normal prescribed procurement prescripts in respect of conducting a competitive bidding process for the procurement of the goods and/or services.”

The SIU found DNS’s quotation, invoice and delivery note number were all dated 6 April 2020.

“In addition, a purchase order… dated 14 April 2020 has been generated after delivery and after the supplier invoiced for the goods,” read the report.

In addition, the SIU found, “The DNS payment batch for the transaction valued at R432,170 for the purchase of large and medium surgeon gloves has three quotations, which is in contravention of the NCDoH SCM Policy, [which] provides for, ‘a total of five price quotations shall be sourced for a transaction value of R200,000 up to R500,000’.”

Asijiki Soundbytes (Pty) Ltd

Another provincial Treasury report focused on how the provincial Department of Health awarded an emergency contract to the value of R13,918,100 on or about 4 June 2020 to the service provider for:

• Large double-sided lead aprons — R133,200;


• Large disposable gowns — R6,375,000;


• Extra large disposable theatre gowns — R6,375,000;


• Thermometers — R517,500; and


• Safety laser goggles — R517,400.

Like the other cases, this contract was preceded by unlawful processes, which resulted in a flawed general approval deviation submission or alternatively, no specific deviation submission/application made to the accounting officer for the procurement award.

According to the SIU, a system controller confirmed that “a Level 7 official performed the final authorisation of the Asijiki transaction with Purchase Order Number HP-00937 and SR Number-012165, a function that is normally performed from a Level 8 to Level 11-graded official”.

Revolt Headboy (Pty) Ltd

Revolt Headboy is another matter requested by the Office of the Premier and highlighted in the provincial Treasury report. The investigation focused on how the provincial Department of Health awarded an emergency contract to the value of R2,947,200 on or about 4 June 2020 to the service provider for 240,000 three-ply surgical face masks — another contract that was preceded by an unlawful procurement process.

C-MED Suppliers CC

On 8 April 2020, the provincial Department of Health made an award to the value of R8,112,034 to C-Med to supply:

• 200,000 surgical masks;


• 30,000 KN95 respiratory masks;


• 5,000 x 500ml hand sanitiser;


• 5,000 medium disposable gowns;


• 1,000 goggles;


• 1,000 facial shield masks;


• 2,000 protective bodysuits; and


• 100 handgun thermometers.

This contract too was preceded by an “unlawful procurement process”.

Consequences 

In all the above cases, the SIU said disciplinary proceedings against the former acting head of the department, Dr Deon Garvey Theys, were still in progress. In addition, the final decision to institute the SIU’s disciplinary recommendation is under consideration by the Office of the Premier in respect of the CFO, Mosimanegape Daniel Gaborone, which was referred in October 2021.

“The SIU’s disciplinary recommendations in respect of any other department officials are still under consideration,” read the report.

Macronym, MKV Investments and Asijiki Soundbytes, were referred to the South African Health Products Regulatory Authority (Sahpra). “Sahpra has confirmed that no licence was issued to the service provider to distribute medical devices to a third party at the time of award,” read the report.

This was a criminal offence, said the SIU.

“A file with all the evidence has been handed over to the appointed Counsel. The SIU now awaits the first consultation with Counsel. The SIU investigation revealed that the procurement processes were flouted and the tender awarded irregularly.”

Tshela Bophelo Wellness Solutions — N Cape Department of Education

Within the provincial education department, Tshela Bophelo Wellness Solutions was one of the matters highlighted in the Treasury report. According to the SIU report, the provincial education department made an award in June 2020 to the value of R6,564,315 to a service provider known as Tshela Bophelo for:

• Covid-19 training and supply of materials;


• The provision and distribution of training manuals;


• The provision and distribution of training DVDs; and


• The provision of training to school management teams, provincial Covid coordinating teams, district coordinating teams and food handlers.

The SIU said the contract was “preceded by an unlawful procurement process. No approval was sought from the Accounting Officer to request written price quotations from an approved list of service providers”. The SIU report called it “a flawed deviation procurement process, as on the facts it appears that the service provider was appointed on a sole provider basis, which they were clearly not.

“The SIU investigation revealed that the procurement processes were flouted and the tender awarded irregularly.”

Some investigations did not have outcomes.

Northern Cape Department of Social Development 

Within the provincial Department of Social Development, the provincial Treasury report identified 99 investigations in respect of procurement processes and supplier appointments. According to the SIU, interviews and evidence were collected from people within the department, including senior managers.

“The investigation did not reveal evidence that sustained either the allegation concerned or any irregularities… as a result, these investigations were closed without any outcomes.”

Department of Roads and Public Works (DRPW)

In 2020/2021, the DRPW conducted ad hoc assignments on behalf of the provincial health and education departments. The provincial Department of Education (DoE) requested the DRPW on 26 April 2020 to “sanitise schools” for the reopening on 5 May. The DRPW attempted to split the sanitation into smaller projects to ensure equitable work allocations to different suppliers, and to ensure the project could be done within the limitations of the Level 4 and 5 lockdown regulations, read the report.

Five matters “were concluded and closed without any irregularities” read the SIU report. In other provinces such as Gauteng, sanitation contracts came under scrutiny, including in reports by Daily Maverick’s Mark Heywood about such activities. DM