Treasury under fire over failed R1bn IT project

Finance Minister Malusi Gigaba has promised to crack down on those responsible for wasting R1 billion in the National Treasury on the Integrated Financial Management System (IFMS), which was never implemented. Gigaba told the standing committee on public accounts (Scopa) on Tuesday they had launched a forensic investigation into the IT contract, on which R1bn was spent. The National Treasury initiated the IFMS project in 2005 and spent R1bn on the first phase. Another R1.2bn was spent during the second phase of the project. National Treasury director-general Dondo Mogajane earlier told Scopa a total of R4.3bn was budgeted for the IFMS. Out of the R4.3bn, a total of R2.2bn was used over the last few years.

MPs complained that in 10 years, the National Treasury did not get value for money despite large sums being spent on the IT system. Gigaba said he acknowledged the failure of internal controls to pick up problems in the project. He said the problems were picked up by the Treasury’s internal audit committee. “I am certainly giving my attention to the report and issues raised,” said Gigaba. He said payments on the IFMS project had been suspended. The IFMS was supposed to modernise the government’s IT system across departments. Gigaba said they would now appoint a person who would be directly in charge of the IFMS project in the Treasury. “We will ensure the forensic investigation is instituted to get to the bottom of the report. It is our intention to get to the bottom of this matter. There is no doubt about it. There was clearly a failure of internal controls with regard to this,” said Gigaba.

He added that despite problems associated with the project, the public must never lose trust in the Treasury. This was one lapse out of the many good things the Treasury had been doing, he said. Earlier, ANC MP Nyami Booi questioned why the Treasury had lost R1bn on a project intended to modernise the government’s IT system. He said even on the second phase of the project, there were no results. He questioned how the Treasury arrived at R1bn, because there was no value for money and the project had collapsed. “Do you know how many houses could be built with R1bn?” he asked Treasury officials. Mogajane said there was an investigation being conducted into the matter. Scopa chairperson Themba Godi described the implementation of the IFMS project as “shambolic” and “shocking”.

He said the Treasury, whose job was to oversee proper expenditure in government, was in the dock for wasting money. Godi said even the internal audit had found that the project cost was done informally. He said the internal audit report also found that consultants were made to monitor themselves. He called on Gigaba to take action against those responsible.