Hawks investigate alleged criminal conduct in Department of Water and Sanitation

Public Protector Busi Mkhwebane has set the Hawks on the Department of Water and Sanitation (DWS) over allegations there may have been criminal conduct in the purchasing of SAP licences worth R950 million.

Mkhwebane has ordered the Hawks to establish if acts of impropriety she identified are acts of criminal conduct in terms of the Prevention and Combating of Corrupt Activities Act and if so pursue investigations against the perpetrators.

In her investigation of the complaint lodged by former EFF secretary-general Godrich Gardee, Mkhwebane also found that the Special Investigative Unit (SIU) had been instructed to investigate the payment of R35 million in kickbacks in relation to the purchase of the SAP (System Applications and Products) licences.

The SIU informed Mkhwebane it had found evidence that the contract was nearly R950 million, which included R450 million for the licences and maintenance over a five-year period for the department and water boards. She found there was no needs analysis conducted and no budget for the purchase of the SAP licences while a total of R285 million had been paid to SAP by the time of completion of her probe.

The State Information Technology Agency (Sita) had not been consulted as required for such purchases, according to the report. “In fact, Sita advised the department of water and sanitation against proceeding with this contract,” she found. Mkhwebane also found that two of the department’s former acting directors-general, Sifiso Mkhize and Zandile Mathe, failed to ensure that the procurement of SAP licences followed a process that is transparent, equitable and fair and that their conduct amounted to maladministration and was improper.

According to Mkhwebane’s report, Mkhize and Mathe failed to comply with the Public Finance Management Act, which provided for their respective responsibilities. Mkhwebane also ordered water and sanitation director-general Mbulelo Tshangana to ensure that going forward any information and communication technology procurement is aligned with the requirements of the Constitution, the Sita Act, relevant National Treasury regulations and departmental policies.

She said Tshangana should take appropriate disciplinary action against Mathe for the irregular and wasteful expenditure incurred in the procurement of the SAP licences and to continue supporting the SIU in civil litigation and any other process currently underway. The Public Protector found that the payment of R285 million to SAP SA amounted to irregular, fruitless and wasteful expenditure as the department had not received any services from the company at the time it was made.

Mathe, in her capacity as deputy director-general responsible for the national water resources infrastructure, was found to have fervently pursued the approval of the project despite concerns raised by the department’s IT and legal services. Neither Mkhize nor Mathe could be reached for comment yesterday. However, Mathe told Mkhwebane that SAP was the sole provider of the service and the deal complied with the department’s supply chain management policies.

She said she was too old to prepare submissions and that she instructed the director in her office to work with SAP. Mkhize, who approved the project and entered into the contract with SAP, said his office did not have the capacity to verify each and every submission and he signed based on the strength of the recommendation and evidence from Mathe and the bid adjudication committee.

He said he resigned from the department in July 2018 and was not aware of what transpired with the implementation of the project after the software licences were secured. SAP wanted Mkhwebane to redact the name of the consultant who worked on the project from her report as the person always acted in the scope of employment. The public protector agreed.