Date: 18/12/2003
Source: Mpumalanga Provincial Government
Title: Mahlangu: Findings of task team investigating corruption charges against MEC Mabona


MPUMALANGA PREMIER RELEASES FINDINGS OF THE TASK TEAM

1. It would be remembered that on Wednesday 19 November 2003, I Ndaweni Mahlangu the Premier of Mpumalanga Province, in consultation with the Mpumalanga Executive Council appointed a task team consisting of
* Gcabashe Mohammedi Mzizi (a firm of Accountants an Auditors)
* Advocate Solly Sithole SC of the Pretoria Bar, and
* Advocate Peter Mothle of the Pretoria Bar

2. That is the task team that was appointed as a result of the negative reports in the media concerning certain transactions in the Department of public works, Road and Transport. Certain serious allegations were also levelled against MEC Steve Jabulani Mabona.

3. Briefly, the terms of reference of the task team were to investigate the following:

3.1 All contracts (if any) which have been awarded by the Mpumalanga Department of Public Works, Road and Transport to Mr Walter Senoko's Company PCUIC or any company and /close corporation in which he (Mr.Senoko) had an interest:
3.2 Whether in awarding such contracts the tender and internal rules and procedures of the Mpumalanga Provincial Government were complied with;
3.3 Whether all payments (if any) made to the said company and/close corporations were for services rendered by such company and/ or close corporations
3.4 Whether the MEC for Public Works, Road and Transport, Mr Steve Jabulani Mabona, was unduly involved in or did influence the awarding of such contracts;
3.5 Whether any person in the employ of the Provincial Government benefited from the awarding of such contract; and
3.6 Any other aspects or matter incidental to the above

4. I am happy to announce today (18 December 2003) that the task team has completed its task and handed the report to me yesterday (17 December 2003) at 15:00.

The findings of the task team are as follows:

4.1 That Mr Walter Senoko has interest in the PCUIC and he is linked to the following companies:
* Mofenyi Traders (Pty) Ltd;
* Mofenyi Tourism (Pty) Ltd; and
* Bushi Investments

That Mr. Walter Senoko was awarded contracts through the following companies/close corporations;
* PCUIC trading as Bushi Investement;
* Mofenyi Traders (Pty) Ltd;
* Mofenyi Tourism (Pty) Ltd; and
* Bushi Investments

That Mr Walter Senoko was awarded the following contracts through the companies/close corporations which he has no direct interest:
* Hluxukani Construction cc

That the purported contract on the strength of the R6.6 million, which was paid to Mr. Senoko was an invalid contract

That there were services that were rendered for payments by this companies/close corporation to the department.

This services rendered for payments constitute contracts (agreements) for which no written proof was provided to the task team except for PCUIC Trading as Bushi Investments

4.2 The task team finds that had the attempt to secure the 9 million rands contract in favour of PCUIC succeeded the internal rules and procedures on the Mpumalanga Provincial Government would have been serious compromised.

In regard to the procurement of vacuum cleaners by the Department, the conduct of departmental officials amounts to a frustration of internal rules and procedures, which under certain circumstances is worthy of sanction.

4.3 The task team makes the findings that there were services rendered to the Department by the company and/or close corporation for the payment referred to above
4.4 After exhaustive consultations with the departmental officials and the MEC of the Department, and after a thorough examination of the documents provided to the task team, no shred of evidence of any influence or involvement by the MEC; Mr Steve Jabulane Mabona, in the awarding of such contracts could be found
4.5 No proof exists that any of the departmental officials received any benefits from the awarding of the said contracts;

There is no proof the MEC; Mr Steve Jabulane Mabona, received any benefits from the awarding of any contract from his department.

4.6 The Task Team finds the following in respect of the R6.6 million payment:

That the officials in the Department accepted the guarantee document without proper verification. The officials should have submitted the alleged guarantee to the Legal section of the Department for verification;
That the officials failed to adhere to the General Conditions of Contract (GCC) 52(6)(c) which stipulates that:
"If as stated in the Appendix, a Retention Money Guarantee is permitted and the Contractor elects to furnish it, the guarantee shall, at the cost of the Contractor, be executed by a Bank in a form approved by the Employer and shall be accepted in lieu of retention money until the aggregate of the retention monies which would, but for the guarantee to be executed by a Bank in a form approved by the Employer is equal to the aggregate liability for the Bank under the guarantee, whereafter the remaining portion of the retention money shall be retained by the Employer as provided in this clause".

That payments were made outside the allocated budget for the project;

That on Monday the 2nd of June 2003 the processes to make the paymentb were commenced with. Another letter was received from Dave Zietsman Civils CC wishing that the payment be made to the PCUIC. As PCUIC had no contract with the Department and this would be a request for payments to be ceded to PCUIC and therefore the tender Board would have been required to approve this cession but no attempt to make such an application was made;
That officials erred in accepting the request that the payment be made to PCUIC who were not registered as a supplier;

That the authorisation from Treasury was not sought for the payment of the amount exceeding R5 million; and

That junior officials of the Department claimed that they were subjected to pressure to process the payment as soon as possible. The Department parted with R6.6 million for no services rendered, within a period of seven (7) days.

That the MEC was accompanied by at least four businessmen including Mr Senoko, who were not part of the government delegation;

That the amount of R 289 660.00 paid by the Provincial Government for cost of the trip did not include the travel, accommodation and other related costs of businessmen, and

The trip was arranged by Mofenyi Tourism (Pty) Ltd, to which Mr Senoko is linked, and there is no evidence presented to the Task Team that quotation were called for and received for the contract.

The Task Team makes the finding that the tension existing between the two Departments contributes greatly to a breakdown of communication between public officials concerned as well as to adverse publicity in the print media.

The Task Team finds that instances such as this, if anything, reveal lack of financial controls in the Department.

RECOMMENDATIONS

The Task Team makes the following recommendations:
* In respect of the first term of reference, no recommendation is made;
* In respect of the second term of reference, it is recommended that control measures be tightened up when the Departmental officials call for quotations. This responsibility resides with the Departmental Tender Committee;
* In respect of the third term of reference, it is recommended that in future Departmental officials must comply with the GCC rules, PFMA and Treasury Regulations and ensure that they pay only for services rendered;
* In respect of the fourth term of reference, no recommendation is made;
* In respect of the fifth term of reference, no recommendation is made; and
* In respect of the miscellaneous issues dealt with under this term of reference, the recommendations referred to in sub-paragraphs 1.2 and 1.3 above are equally applicable. In addition, the task team is of the view that an intervention is necessary to rescue the tension that is evident between Treasury and officials of the Department. Such intervention could be initiated by the Office of the Director General of the Province.

5. I hereby accept the findings and recommendations of the Task Team.

6. I also have confirmation from the Prosecuting Authority of this country that the institution is not investigating MEC Steve Jabulane Mabona. I hereby hand over a letter given to my possession from the relevant authority.

7. The Provincial Government is also taking the following steps in remedying the anomalies in the Department of Public Works, Roads and Transport:

* Mr William Mthombothi who has been acting as head of the Department during the problems as set out in the report, will cease to be the acting head of the Department of Public Work, Roads and Transport with effect from 19 December 2003 and a letter in this regard is on its way to Mr Mthombothi
* Ms Priscilla Nomsa Nkwinika (currently) the Director of Legal Services in the Department of Public Works, Roads and Transport will be the acting head of the department with effect from 19 December 2003
* I have also directed MEC Mabona to fast track the process of appointing a permanent Head of the Department because the adverts were closed and all that remains is the appointment of the selection panel, which will interview and make recommendations to both the Executing Authority and the Mpumalanga Executive Council
* MEC Mabona has already put on tender the requirement for services of an information technology company to put in place the risk management services in the whole department
* Ms Florence Netshifhefhe has been appointed as Director to deal with monitoring of the risk management system which is currently on tender
* The Director-General of the Mpumalanga Province, Adv Stanley Soko has already been directed this morning to deal with tensions between officials from the department of Public Works, Roads and Transport and those of the Provincial Treasury. In this task Adv Soko will enlist the assistance of National Treasury's senior officials
* The report of the Task Team together with its record of proceedings will be referred to the Mpumalanga State Law Advisors and the Labour Relations Unit in my office to deal with disciplinary proceedings for contravention of internal procedures, treasury regulations, PFMA and other matters referred to in this Task Team Report.

I thank you.

Issued by the Mpumalanga Provincial Government, 18 December 2003