7.1 The contract signed between the Department and Committed Artists on 10 August 1995 makes provision for the following:

•  Phase 1: A script will be developed for a nation-wide HIV/AIDS theatre production. This should be completed by end of August 1995,
• Phase 2: The cast for the production will be selected. This should also be completed by end of August 1995;
• Phase 3: The production will be rehearsed and reviewed. This should have been done during September to November 1995;
• Phase 4: The production will be launched. This would take place during December 1995;
• Phase 5: The production will go on a nation-wide tour from January to December 1996;
• The company undertakes to assign staff to fulfil its obligations under the contract;
• The company is responsible for the procurement and insurance of the equipment necessary for the project;
• The company undertakes to buy from the Department equipment the Department will not need after the completion of the Project - the contract refers by way of example to the bus, truck, dry cleaning machines, lighting equipment and sound equipment budgeted for [From this one gathers that the ownership remains with the Department, though the contract never states so explicitly.];
•  The company undertakes to comply with the time schedule and programme given for the different phases summarised above [One would have expected the Department to bind the company to a much more detailed time schedule and programme - the contract is silent on the number of performances and the places and dates to be performed at];
• The cost of the Project is determined to be as tendered, namely R14 247 600, and part of the tender documents, including the detailed budget tendered, are made part of the contract;
• The company is not to exceed the said cost, and it undertakes to maintain proper control over the use of funds to ensure proper completion of the Project;
• The company undertakes to submit a preliminary report by end December 1995, an interim report by end June 1996 and a final report by end February 1997;
• The company undertakes to approach the Project on a participative basis and to invite staff of the Department to contribute in the discussions relating to the planning of the Project, and the Department has the right to contribute to the theme and script design and development of the Project,
• The Department undertakes to pay the company the tendered amount as follows:
• - R3 million as advance payment on conclusion of the agreement
• - R6 million at the end of December 1995
• - The remaining amount of R5 247 600 at the end of June 1996;
•  Advance payments are to be considered by the Department on request and have to be justifiable;
• The ownership of the copyright or any other intellectual property arising from the Project vests in the Department, and financial benefits resulting from this accrues to the Department.

7.2.1 The contract is not well-drafted. It is also not clear in some respects. Major areas for concern are:

•  The fact that the contract does not unequivocally place final control over the play content and quality with the Department. One would have expected the contract (or indeed the tender) to call for a detailed script to be presented to the Department for proper evaluation. The final say on whether the script is acceptable, should have been with the Department. Only after approval of such script by the Department, would one have expected the contract to allow for the production of the play to go ahead. What in effect happened, was that the detailed script was not even in existence at the time the play opened on 1 December 1995 and the play was made up as it progressed. This was not due to laxity on the part of Committed Artists. It was quite impossible to produce a script in the time allowed by the tender. A loophole was also created where the tender specifications called for a "script/framework" and did not insist on a completed script.
•  The contract should have been much clearer and detailed regarding expenditure by putting control of expenditure with the Department and spelling out the ways in which the company would account for expenditure.
• The contract should have been explicit on what would happen with entrance fees or anther income generated from sales and merchandise and in what way it should be accounted for. Alternatively, one would have expected the contract to stipulate that no entrance fee be charged. The fact that the charging of entrance fees for this specific play is in itself controversial, makes dealing with it in the contract all the more important. The failure of the contract to do so, was explained by the drafter when he says that he was expected to draft the contract at a time when the parties :had not yet agreed on what should happen to the proceeds of the play.

7.2.3 Of importance, is the fact that both the Department and the company interprets the contract on the basis that the company should stay within the limits of the budget tendered, and apparently that funds not utilised would be returned to the Department. Of importance also is the fact that Mr Ngema is quite willing to co-operate with the Department.

7.2.4 The reasons for the shortcomings in the contract can easily be identified as:

• lack of experience on the part of the drafter;
• insufficient time allowed for drafting of the contract; and
• failure to submit the draft to the State-Attorney.

7.2.6 It was pointed out to the Director-General that the drafter was out of his depth in having to take the responsibility of drafting a R14,2 million contract with virtually no experience. Her immediate reaction was to say that the post would be upgraded to draw seasoned drafters. It is suggested that the Department should restructure the Legal Section, taking into account the experience of the incumbents and the responsibilities that the Legal Section has to shoulder from time to time. The drafter's rank was that of Senior Legal Administrative Officer, which is the equivalent of a Deputy Director, and therefore on middle-management level. It seems unlikely that the Department would be unable to find appropriate candidates at that level.

7.2.7 A contributing factor was the insufficient time allowed for drafting the contract. The Chief Director: Support Services, instructed the drafter in the morning; and wanted the contract that same afternoon. The drafter bought himself some time by saying that it was impossible, and he was allowed to hand in his draft the following afternoon. This still did not allow him enough time to apply his mind thoroughly to each provision.

7.2.8 The Treasury Instructions provide for contracts to be screened by the State-Attorney. The contract was not submitted to the State Attorney by either Mr Ramasala or Mr Badenhorst as is prescribed in Treasury Instruction X12.2 which reads as follows:

"No agreement (excluding inter-state and inter-governmental agreements) with financial implications or implied financial implications may be executed on betray of the State or statutory boards and other bodies whose operations and activities are normally financed wholly or mainly out of funds derived from subsidies, grants-in-aid or other moneys paid out of the Exchequer Account, without the written consent of the State Attorney. For this purpose the draft agreement shall be submitted to the State Attorney under cover of a minute in which all relevant information is provided and on which the name, telephone and extension numbers of an officer of at least the rank of assistant director (or equal rank) to which enquires may be directed, also appear."

7.2.9 Screening by the State Attorney was even more essential in this case, in view of the amount involved. Although he knew of the Treasury Instruction, the drafter did not insist on the contract being given to the State Attorney, because, he says, the Legal Section is regarded as being obstructive if they insist on urgent contracts being given to the State Attorney to screen, since this takes time. It transpired that this Treasury Instruction was also being ignored in other cases. There seems to be a failure on the part of many officials in the Department to distinguish between performing duties with a sense of urgency, but with adherence to the rules, and a reckless abandonment of rules in the name of urgency. The former should be strived for, the latter is totally unacceptable. It is clear that the importance of adherence to Treasury Instructions and State Tender Board Regulations should be brought to the attention of the officials in the Department.

7.3 Cost of the play

7.3.1 The contract was signed for R14,2 million. The question is whether it was necessary for the Department to spend R14,2 million to attain their goal of bringing across an AIDS/HIV message, or whether it could have been attained at a lower price.

7.3.2 One could question, criticise and cut back on much of the tendered budget. The point is that Committed Artists tendered that budget, they were awarded the tender, and are entitled to be paid, provided they perform in terms of the contract. The awarding of the tender was due to negligence within the Department, by not following proper tender procedures, by not doing proper preplanning, and by not evaluating the tender properly. The directors fee tendered has been questioned in the press. The difficulty is that the fee was part of the tender that was awarded in circumstances where the market was not properly tested.

7.3.3 It became clear from expert evidence presented to me that budgeting for a play is mostly dictated by available funds. If one has R14,2 million available, that is what one will spend. But if one has much less, one makes do with what is available. One would use fewer actors, less expensive lighting equipment, for example, but still produce a professional play which conveys an adequate message.

7 3.4 What did become clear, was that the Department could probably have had a high quality production for much less than R14,2 million if proper tender procedures were followed. When the expert witnesses were tested on what their tenders would have been it become clear that the highest offer would have been R8 million. It should also be noted that it was confirmed to me by the tenderer who submitted the lowest tender of R600 000, that it was indeed a serious tender, and that the company could do it for that amount. It was qualified, however, by saying that if they were to have tendered now, after having time to evaluate the tender better, their tender would probably have been in the region of R1 to R2 million.

7.4 Content of play

7.4.1 The play has some excellent music and dance routines, and is calcite entertaining,. However, the issue is whether the R14,2 million is well spent in bringing across the correct message on AIDS/HIV.

7.4.2 The only message that came across clearly, when we attended the play, is that one must use a condom when indulging in sexual activity, otherwise one is bound to contract AIDS and die. This impression was borne out by what certain witnesses had to say on their impressions in this regard. It became clear from evidence presented to me that the issue is much more complicated than that. It was aptly put by one witness that what one has, is a commercial play with AIDS as the theme. For the Department to justify spending R14,2 million, one would have expected much more. One would have expected the play at least to address the myths and fallacies surrounding HIV/AIDS, and to teach the youth (the target group) about choices on the sexual terrain, as well as to convey where to go and what to do to get more information or assistance. Once again, these deficiencies can be attributed to an inadequate pre-planning process by the Department. Committed Artists tendered to produce a musical "around the theme of HIV/AIDS awareness and prevention in South Africa," as the tender specifications require, and this they have done. During the hearings officials of the Department conveyed to me that there can never be total agreement among experts on what messages should be conveyed. This could be so, but I have little doubt that the present product can be improved on regarding the messages it conveys. In fairness to the Department I should add that there has been an ongoing effort by themselves to improve the message conveyed by the play. The Department remains concerned and is quite willing to take the views of other experts in the field into consideration.

7.4.3 I have been addressed by a representative of AIDS Consortium, which is an affiliation of over 100 South African organisations that are active in the field of HIV and AIDS. Affiliates cut across all disciplines working in this area, for example education, condom provision, social welfare. The Consortium itself focuses on the human rights and ethical issues that are raised with regard to HIV and AIDS. In the representative's opinion the play gives a negative message, and educational messages are either weak or seriously deficient. Their view is that it entrenches the present stigmas and prejudices surrounding HIV and AIDS. One of the main areas the play should have dealt with (considering it was to target the rural areas) was to teach women about choices in a sexual relationship but this was in their view trivialised in the play.

7 4.4 I have dealt with the future of the play below in Chapter 9. If the play were to continue, it is clear that a major effort will have to be made in co-operation with Committed Artists to re-evaluate the message of the play. In this effort experts in various disciplines should be involved to ensure that the correct message is conveyed in the best possible way.

7.5 Reaction within the Department to the contract

Director: HIV/AIDS and STD Programme (Mrs Abdool Karim)

7.5.1 She received a copy of the signed contract on 18 August 1995. She said she was perturbed and surprised when she noted that the contractual amount was R14,27 million. She wrote to the Minister and voiced her concern about the fact that the cost of the play was to be R14,27 million. According to her the ceiling for the play was R5 million. She was subsequently informed that a meeting had been scheduled for 20 September 1995 between the Director-General, Mr Badenhorst, and Mr Ngema, and took that to be the follow-up of the concerns she has raised. She then accepted that Departmental Support Services, would deal with the issue further and that her task would be to concentrate on improving the content of the play.

7.5.2 The Director-General did follow the matter up and Mr Badenhorst was tasked to assist. Neither Mrs Abdool Karim, nor Dr Mtshali for that matter, could have been expected to take further steps at this stage as the matters being followed up were now of a contractual nature.

Director-General: Health

7.5.3 Dr Shisana was informed for the first time of the signing of the contract by Mr Badenhorst by way of a memorandum dated 11 August 1995 Her written remarks dated 16 August 1995 in the margin of this memorandum read as follows:

"To: Badenhorst

I though for such a'' amongst you would halve let me participate in the discussion. Badenhorst please let's discuss. The play was to cost R5 million or less; This was Minister Zuma's instruction. Now the play is to cost us R14.2 million. Please let's urgently discuss the matter. "

7 5.5 It is clear, also from other evidence given before me, that the original intention was to set aside R5 million to be spent on the play, and that Mr Badenhorst acted without involving her when signing the contract.

September 1995 meeting

7.5.6 Dr Shisana said she felt it necessary to analyse the contract in the presence of Mr Ngema to see whether the contract amount could not be reduced. A meeting subsequently took place on 20 September 1995 with a view to having the contract revised.

7.5.7 According to the minutes of the meeting, the following people attended: Dr Shisana, Mr Ngema, Mr Badenhorst and Mr Ramasala The following main issues were discussed:

1. a. The fact that the Department was to fund Mr Ngema's infrastructure;
2. b. The inclusion of costs for accommodation and meals for the artists in the contract;
3. c. The distribution of proceeds of the play.

7.5.9 According to the minutes, Mr Ngema accepted that the Department could not fund the setting up of his office.. He mentioned that income, which would be substantial, would be generated as from December 1995. He was also to try to raise a bank loan.

7.5.10 Dr Shisana also queried the reasonableness of rentals charged for office space, water and electricity, and photocopy machines. Mr Ngema explained the amounts involved. Dr Shisana requested him to submit receipts on expenditure, to get quotes before acquiring anything, and to submit "indications" to the Department on whether the rental was market related for that area.

7.5.11 Regarding (b), Mr Ngema explained that the Unions insist that artists are provided with accommodation and receive subsistence and travel benefits when away from home. This was subsequently confirmed to me by Dr Kani of the Market Theatre who testified in this regard. Mr Ngema's explanations were accepted by Dr Shisana, and he was requested to keep copies of hotel and meal bills, and to forward it to the Department on a monthly basis for record purposes.

7.5.12 Regarding (c), Dr Shisana suggested that the question of distribution of the proceeds of the play would have to be investigated. She enquired what percentage should accrue to Mr Ngema. He submitted that in his experience the initial percentage accruing to the Department would be high for the Department to recoup on their investment. Once the Department has raised enough funds, the percentage of Committed Artists should be raised to 50%. Earnings from CD's, T-shirts, etcetera, would form part of the proceeds. Royalties would always accrue to the Department.

7.5.13 To sum up, decisions seem to have been taken:

•  to obtain the money for office structure from elsewhere so that the Department would be released from financial responsibility in this regard;
•  that income generated by the project would be followed up on;
•  that Committed Artists would submit details of expenditure to the Department;
•  that Committed Artists would submit a complete business plan to the Department.

Draft amendment to the contract

7.5.15 Mr Ramasala, the head of the Department's Legal Section, said he was instructed by Mr Badenhorst in December 1995 to draft an amended contract to reflect the subsequent discussions on the infrastructure and the sharing of the proceeds of the play. This he did and his draft was sent through to Mr Badenhorst on 21 December 1995. In his covering memorandum he requested Mr Badenhorst to indicate whether the drab the discussions Deviously held. There was no reaction to his memorandum until February 1996 when he was told to prepare another draft. At this stage his instructions were to be more specific about defective performance. This he did, but also this draft was never signed. On the draft sent through on 21 December 1995, Mr Badenhorst said that it was never signed because clarity was never obtained on the issue of income for the play. Mr Badenhorst also ascribed the subsequent failure to put amendments to the contract in writing, to a lack of time.

7.5.16 It is disconcerting that the Department did not follow up on important oral agreements between the Department and Mr Ngema They were never formalised by way of written amendments. This should have been a priority. To this day this has not been done. Dr Shisana explained that other mechanisms for saving money were being looked at, and suggested that that was the reason why she did not push for written amendments to the contract. It seems as if Dr Shisana did not appreciate the importance of concretising oral agreements reached into contractual form. It is true that this never became an issue because of Mr Ngema's co-operation with the Department. Experience shows that relations can easily sour, and when one is dealing with millions of rends, every aspect must be properly contractually regulated. The result of the Department's laxity in not observing these formalities was that the agreement of 20 September 1995 that they were not to pay for the infrastructure was never followed up and they ended up paying for the infrastructure.

7.5.17 In my view the Director-General can be criticised for not seeing to it that the necessary formal amendments to the contract were made in the circumstances set out above. At the very least one would have expected a firm instruction for such amendments to be executed without delay. This was never done.

7.6 Press releases by the Department

7.6.1 Allegations have been made that the Department has possibly misled the public about certain aspects surrounding Sarafina II. Two press releases which the Department issued, came to my attention.

7.6.2 The first one was dated 30 January 1996. It was in response to the Sunday Times Newspaper reporting concerns that the Department has wasted money by funding the play. The only statement in the press release that needs to be dealt with is where it says that many townships in Kwazulu/Natal, where 14% of pregnant women are HIV positive, do not have theatres. It proceeds: "As a result a huge infrastructure is required in order for the artists to perform. The Department of Health is doing everything in its power to get the message across to people living in townships in order to prevent the devastating effects of AIDS. For this reason, we are prepared to pay substantial amounts of money to prevent this scourge".

7.6.3 It is ironic that the Department at this stage used the infrastructure necessary for touring the play as justification for the amount spent, whereas the tender specifications specified that tenderers must have the capacity and infrastructure to tour the production. Also at this stage the Department seems to have forgotten that the original idea was not to spend more than R5 million on the play. It: is clear  that the Department took a defensive stand, no doubt because there was a valid contract in place, binding the Department for R14,2 million.

7.6.4 The second press release was dated 12 February 1996. This was in response to several articles having appeared in the press, and the purpose was, as it is put, to present "clarification of the truth" It dealt with various aspects two of which I wish to deal with:

•  the tender procedures utilised,
•  the cost and financial control of the play.

7.6.6 The press release then proceeds to set out what was done, and the only statement of consequence is the one that reads that the two tenders submitted "were considered by the Departmental Tender Committee." As discussed above the tender did serve before the Departmental Tender Committee, but it was never evaluated. The statement quoted implies that the Departmental Tender Committee approved of the tender accepted, and that is not true. This press release was drafted by Mr Badenhorst and Mrs Abdool Karim. It was presented to the Director-General before issuing. She said that she did not have time to go through it properly, but gave the go-ahead for it to be released. She obviously relied for its correctness on her senior officials who drafted it, as she is entitled to do. When Mr Badenhorst was questioned on the misleading nature of this statement, and that one would have expected the Department to indicate that the Departmental Tender Committee never finalised evaluating the tenders, he said that the statement was made in response to a specific allegation in the press, namely that the Minister had influenced the Departmental Tender Committee, and he suggested that in that context the statement is correct. In my view this explanation does not hold any water and it does not impress me.

7.6.7 Regarding the cost and financial control of the play, the press release reads as follows:

"The budget submitted [by the tenderer] ulnas assessed by the Finance Section of the Department of Health and the motivation for each line item in the budget was scrutinised before being approved. "

7.6.8 Still on the same topic, the press release reads that: "Currently the play is entirely being funded by the European Union funds allocated for AIDS programmes." This is also not true. Mr Badenhorst's reaction to this was that there was some argument at that stage about the issue on whether or not the European Union would fund the play. When he was asked whether this should not have been mentioned, he said Mrs Abdool Karim drafted that portion of the press release.

7.6.9 Also as part of this topic, it is stated that agreements have been reached on improving the financial systems of Committed Artists to the satisfaction of both parties. It continue by saying: "Expenditure will be reflected on the basis of those directly related with {he play which will be funded from the funds provided by the Department arid those incurred as running costs cf the Company which moms to ~ R1,I million such as leasing of certain vehicles, of Lice furniture, studio equipment, computers etc. which is for the account of Committed Artists. " The impression created by this statement is that the Rl,l million would come out of the pocket of Committed Artists, and this is not true. The budget tendered includes for example computers and office furniture for the support service office, and is included in the R14,2 million. The validity of this statement is therefore questionable.

7.7 Portfolio Committee meeting

7.7.1 On 28 February 1996 the Portfolio Committee for Health met with the Minister of Health and some of her departmental officials. It was a meeting open to the public and I therefore feel myself at liberty to comment on what was said there and on the answers to questions which the Department prepared for that meeting. I perused a transcript of the Portfolio Committee meeting. The quality of the transcript was rather poor.

7.7.2 The following aspects are of importance here:

•  The statement by Mr Badenhorst that it was agreed upon that the Rl,4 million included in the budget for infrastructure would not be part of the funding from the European Union.

[Mr Badenhorst explained that he was referring to the agreement reached on 20 September 1995 at the meeting between the Department and Mr Ngema. When asked whether he should not have informed the Portfolio Committee that this agreement had still not been formalised by means of an addendum to the contract, he said that he took it that after the agreement at the meeting of 20 September 1995, the position would be as agreed upon.]

• The statement by Mr Badenhorst that the Department are doing regular audits where they send out people to Committed Artists' offices and also to the plays, and that a system is in place for controlling ticket sales, and it is audited on a regular basis by the Department.

[Mr Badenhorst explained to me that the offices had been audited at the time of the meeting already . The idea was further to pay surprise visits to the play to see whether the ticket system works according to what was planned. This had never been done before the Portfolio Committee meeting. When asked whether this is not a bit misleading, he said that what he meant was that they would do audits of the ticket sales in future also.]

7 7.4 The questions and answers are:

"Question I
How many tenders did the Department receive?

Reply
Two companies responded to the call for tenders despite repeated efforts to encourage other theatre companies to forward proposals

Question 2
Where were the notices published?

Reply
Because of the highly specialised skills, the urgency of the situation and the fact that donor funds (KU) were being used to fund the play, relaxed tender procedures were utilised The tender specifications were forwarded to a few theatre companies who in our opinion had the credibility and capacity to undertake this task and would deliver a high quality production on time

Question 3
What was the criteria for selection?

Reply
The following were used in the selection process:

Previous track record and experience
Credibility in the target commities
Capacity to undertake task timeously
Conceptualisation and vision of the task at hand

Question 4
How is the Department planning to address the three issues as raised by the reporter?

Reply

4 1 As an art-form, the play is criticised as ' pelvic thrusts ":

It is the director 's responsibility to entertain and to ensure that the production is professional Any art form has critics and admirers In order to avoid one-sided biased journalism, the opinions of the target audience should be sought and portrayed. We do not doubt that some people will dislike the play jot as we do not doubt that many will be entertained and through this medium and take home an Important AIDS message.

4.2 The content of the play is criticised as factually incorrect:

The play was reviewed by several AIDS experts and several changes were made to the script before its official opening. Changes are ongoing to ensure that the information is correct and to condense the message in order to keep the play short. We plead that any existing factual problems with the play should be brought to our notice immediately so that they can be addressed immediately.

4. 3 The cost of the play has been criticised as being too expensive:

The budget submitted was assessed by the Finance Section of the Department of Health cmd the motivation for each line item in the budget was scrutinised before being approved. Currently the play is being funded by funds allocated to the AIDS programme by the European Union. is with all f financial transactions we are at pains to ensure that money is being used in accordance lo State expenditure regulations and have instituted very strict control measures to ensure that the money is spent as specified. It is important to note that the budget includes a six month rehearsal period as well as the costs of taking the play on a one year national tour to the most remote parts of the country. The budget is inclusive of salaries capital and operating expenses. It would be interesting to know how many of the theatre managers consulted by the reporter before estimating what it should have cost had seen the play before estimating what is should have cost.

Question 5
What was the nature of prior consultation with provincial health workers and other stakeholders

Reply
The HIV/AIDS and STD Directorate functions in terms of business plans that have been widely distributed and consulted within and outside government. The mass communication strategy includes innovative use of media to publicise AIDS and to right discrimination against AIDS. Raising awareness of the general public is a major component of our work as you will note from the budget allocation and the extensiveness of the media strategy that includes billboards posters radio and TV spots taxi adverts seven cities mural project the red ribbon campaign and a national AIDS play. There were no objections raised by anyone. The directorate also convenes a National Media Forum to discuss details of the media strategy. Provincial representatives form part of this Forum. Discussion on the play have been included in two quarterly meetings held to date.

The Minister of Health discussed the matter with the MEC' s for health in Pretoria during the concept phase.

Question 6
What plan does the Department have to evaluate the effectiveness of this strategy?

Reply
As with any health promotion effort that utilises multiple media strategies it will be quite difficult to ascertain which component has been most effective. This is teeing further confounded by the adverse publicity this issue is receiving. Nevertheless, a call for proposals have been made for exit interviews to be conducted during the 12 month tour of the play. An overall evaluation of the HIV/AIMS and STD Programme will also be conducted this year to assess the overall inexact of the programme."

7.7.5 Regarding the reply to question 1, it is true that two companies responded to the call for tenders, but the rider that there had been repeated efforts to encourage other theatre companies to forward proposals, is an exaggeration. Only three tenders were invited in the first place.

7.7.6 In the reply to question 2 it is stated as a fact that donor funds (KU) were being used to fund the play. This is repeated in the reply to question 4.3. From evidence presented before me, whilst the Department still believed that they were to utilise EU funds, this was in fact not the case because they had failed to take the necessary steps to have access those funds.

7.7.7 Again, as in the press release, one finds in the reply to question 4.3, the statement that the budget submitted was assessed by the Finance Section and that the motivation for each line item in the budget was scrutinised before being approved. As discussed above, this is not true. Mr Badenhorst originally said that he could not remember who was responsible for this portion of the answer. On the probabilities it is unlikely that it would have been Mrs Abdool Karim, since her involvement with the evaluation of the tenders was to draft a recommendation which does not deal with the budget at all. Also, the Finance Section resorts under Mr Badenhorst. Mr Badenhorst later conceded that he "must have" drafted a portion of the reply. Mr Badenhorst stated that he believed that the Finance Section scrutinised the budget. He said, however, that those of the Finance Section who were questioned about this, were the people who would have done the scrutinising. Since they all said they never did so, Mr Badenhorst conceded that his belief in this regard could be wrong. He said he was under the impression that it had been done, because they had the documentation, when their representative attended the Departmental Tender Committee meeting, and the representative would not have been in a position to query the line items if they had not scrutinised it. This makes sense, except for the fact that the Departmental Tender Committee never got around evaluating the tender. Mr Badenhorst had, however, not instructed the Finance Section to scrutinise the budget. He also did not ask them for their comments before signing the contract, because he took it for granted, he said, that they would tell him if there is a major problem.

7.7.8 The reply to question 5 is couched in vague generalisations on the work of the HIV/AIDS and STD Directorate. It is not a clear answer to the question, as one would have wanted. It further states that the Minister of Health discussed the matter with the MEC's for Health in Pretoria during the concept phase. This part was borne out by two letters that came into my possession. The first is a letter dated 11 March 1996 and written by Mr A N Masondo, MEC for Health: Gauteng. In it he states that he wishes to confirm that he was consulted "on the need to engage a professional theatre company to perform an AIDS play". Attached to the lettter is the transcript of his answer to a question put in the Provincial Legislature, which led to a newspaper report stating that he had denied that the national Department of Health had consulted him on the expenditure for the Play. From this it appears that he was asked whether the Gauteng Health Department was consulted about the expenditure and in what manner. For some or other reason he did not give a direct answer, but answered that "we as the Gauteng Department of Health have not been involved in any way in any planning of any details regarding the play itself. And secondly, to state therefore that we haven't also had any form of specific developments of details on how the play should be utilised in this province. But I must state that we support the principle of a play as a short-term strategy." This is compatible with his statement in the letter, but one can understand why the reporter misread his answer.

7.7.9 The second is a letter dated 12 March 1996, written by Mr E Rasool, MEC for Health and Social Services in the Western Cape. In it he confirms that the play was discussed between Minister Zuma and the MEC's. He adds that "the principle of a dramatic intervention in AIDS was fully accepted, even though issues regarding finances were not discussed as meetings at this level do not enter that level of detail."

7.7.10 It seems as if the Minister and the Director-General relied on their Director and Chief Director for the information that went out to the public. This they are entitled to do, and is everyday practice. It would be impossible for the Minister and Director-General to have first hand knowledge of all that goes on in the Department. The problem is that it is often difficult to pinpoint the source of misleading statements in these circumstances.

7.7.11 There is one aspect, however, which merits further attention. It was clear to me that the Minister, the Director-General, Dr Mtshali and Mrs Abdool Karim were under the impression that the Departmental Tender Committee had approved of Committed Artists' tender being accepted, until such time as they were told that this was not the position when I interviewed them.

7.7.12 In this regard, the role of Mr Badenhorst, needs further scrutiny. According to Dr Shisana, she accepted that Mr Badenhorst would not have signed the contract without the Departmental Tender Committee having recommended that the tender must be accepted. In March 1996 she was going through the documents pertaining to Sarafina II, and said to Mr Badenhorst that she wanted to see a copy of the minutes of the Departmental Tender Committee where they deal with the tender. She received minutes, and noticed that according to those minutes the matter was held in abeyance. She then requested Mr Badenhorst to give her the minutes containing the approval of the Departmental Tender Committee of the tender. Mr Badenhorst then presented her with the following note:

"EXPLANATORY NOTE ON ACCEPTANCE OF THE TENDER OF COMMITTED ARTISTS

On 8 August 1995 after the meeting of the Departmental Tender Committee I had phoned the Chairperson(Mr J Angelo) to enquire as to the decision on the Committed Artists tender. He informed me that the Committee had problems with certain of the items included such as the busses, trucks, lighting equipment arid other infra structural items. I had mentioned to him' that most of these items had already been queried and explained and proposed that consideration be given that the tender be recommended with a proviso. The problem may then be addressed He informed me that he agreed with the proposal. On the strength of this the tender was accepted.

A H BADENHORST 1996. 03. 08
CHIEF DIRECTOR: DEPARTMENTAL SUPPORT SERVICES

I concur/do not concur with the contents of the explanatory note.

J ANGELO 1996. 03.08
CHAIRPERSON: DEPARTMENTAL TENDER COMMITTEE "

7.7.14 Mr Badenhorst could not have presented his Director-General with the minutes where the tender was recommended because this never happened and there are no such minutes. This must have been known to Mr Badenhorst, but he chose to present his Director-General with a note creating the impression that the Departmental Tender Committee accepted the tender. It is also disconcerting that the Minister said she had asked Mr Badenhorst several times after the furore started over the Play, whether procedures were followed, and he said that procedures were followed.

7.7.15 Mr Angelo, Acting Chairperson of the Departmental Tender Committee, allowed himself to be misused in this regard by signing the note. He must have known that the contents were misleading, and that the tender was never accepted by the Departmental Tender Committee. Although both Mr Badenhorst and Mr Angelo signed the note, their culpability is not the same, since the allegation is that the one instigated and the other allowed himself to be misused. It seems to me that there is an element of dishonesty present in both cases, hence my recommendation below. Obviously the respective roles played would be taken into account by the enquiry recommended.

7.7.16 Neither Mr Badenhorst's, nor the Chairperson, Mr Angelo's explanations on this note impressed me. I do not propose to deal with their explanations here because this may form the subject of another enquiry in terms of my recommendation contained in the next paragraph.

7.7.17 I have reasonable grounds to suspect that Mr Badenhorst and Mr Angelo are guilty of misconduct in terms of section 20(b), alternatively section 20(i) of the Public Service Act 1994 by signing and presenting this note to the Director-General. In terms of section 21(1)(b) of that Act, I refer the matter to the Director-General for an investigation of a charge of misconduct against Mr Badenhorst and Mr Angelo. I recommend that she appoints an- investigation officer from outside the Department of Health.

8. FURTHER DEVELOPMENTS AROUND THE CONTRACT

8.1 The Director: HIV/AIDS and STD Programme, Mrs Abdool Karim, had several meetings with Mr Ngema while the play was being developed. Mr Ngema could however not submit a script that could be evaluated by the AIDS Directorate. He said that he was writing the script as the play developed. Mrs Abdool Karim and other members of her team attended a rehearsal during the middle of November 1995. They were of the view that the AIDS message in the play was inadequate and out of line with the suggestions that were made during their meetings. Certain suggestions were made to correct this. It was left to Mr Ngema to implement these suggestions.

8.2 The play was then further developed, but the script was only presented during the middle of February 1 996.

8.3 During October 1995 Mr Badenhorst had a meeting with Mr Ngema. Also present was Mr Mahaye from Ernst & Young, who was acting as Mr Ngema's adviser. Mr Badenhorst raised several] issues on the financial matters which concerned the Department. These matters concerned management at the Durban offices of Committed Artists which had been set up to deal with Sarafina II. Since the matters raised were not subsequently attended to the Department decided to send down its own internal auditors to carry out an internal audit.

8.4 The Department was not satisfied with the financial controls of Committed Artists and the following was done to try and rectify the situation: The Division: Internal Audit of the Directorate: Financial Management Services conducted two financial inspections at the offices of Committed Artists Theatre Company. One was performed on 8 February 1996 and the other from 19 to 23 February 1996. The findings were as follows:

• First Audit:
• There were various shortcomings in the financial controls;
• A salary and wage register was not available;
• A great number of staff loans and advances were granted without the necessary approval or contracts;
• The first deposit in the income account for the gate earnings was only made on 9 January 1996 whilst the play started on 1 December 1996;
• Whilst no funds were supposed to be withdrawn from this account a cheque book was issued;
• The income from the play could not be confirmed because. the relevant documentation was not available;
• The accounting was also not up to date.
• Second Audit:
• In the case of 274 transactions amounting to R952011-44 the expenses could not be confirmed due to the absence of vouchers;
• Transactions were posted to the wrong accounts in the ledger;
• Cheques were issued in connection with an Opel Astra which was not budgeted for;
• Audit fees to the amount of R85 958-28 was paid to Ernst & Young, but no proof could be found of work done (This is dealt with in detail in paragraph 8.1.7/8.1.12 below.)
• Cheques were made out for Mr Ngema's personal expenses and then posted to directors fees in the ledger;
• There was no control over the petty cash and vouchers were not presented for all expenses incurred.
• Not all the salary expenses could be confirmed;
• PAYE that was deducted from personnel was not paid over to the Receiver of Revenue.

8.5 From 20 February 1996 the Department of Health seconded an official of the Department as an administrator to Committed Artists Theatre Company, to ensure that money was only spent on budgeted items after it had been properly approved, and expenditure properly accounted for.

8.6 Committed Artists Theatre Company gave an official response to the internal audit reports on 29 March 1996 through Manase & Associates, Chartered Accountants, a firm which was appointed by the company. According to the report, unauthorised expenditure to the tune of R27 3:35 was incurred by Committed Artists Theatre Company which was included in the amount of R952 011-44 which was queried by the internal auditors. Invoices amounting to R197 999-87 were still missing. There were also some petty cash vouchers outstanding. Mr Ngema agreed to pay back moneys that were not due to him. An application was made for tax amnesty from the Receiver of Revenue and it is expected that the outstanding amounts will be paid over. It was also indicated that the ledger would be updated and reposted correctly.

8.7 In the second audit report mention is made of fees which was paid to Ernst & Young Management Services Ltd. on 28 October 1995. This is queried in the report. The report reads:

"According to the vouchers the amount was paid for the following:
1. Setting up the office;
2. Recruitment of staff;
3. Initial working documentation;
4. Project proposals;
5. Advising Mr Ngema.
The justness (sic) of above mentioned actions by the Audit firm is hereby queried as no proof of any nature could be found or seen at the office during inspection".

8.9 Manase & Associates, the accountants subsequently employed by Committed Artists, followed the query of the internal accountants up by requesting details on their fee note from Ernst & Young. The details indicated that the fee is basically for 300 hours of work done. Mr Ngema indicated to me that it is quite possible that that was the actual time spent by Ernst & Young.

8.10 The Ernst & Young explained to me that the services rendered included:

• advice and assistance with project proposals;
• advice and assistance with the recruitment of appropriate staff and the development of job
• descriptions,
• advising Mr Ngema and staff on tax and salary matters;
• advising on the set-up of the project of rice including
• advising on the acquisition of office computer hardware and software;
• obtaining insurance quotations,
• designing a filing system;
• advising on the need to establish proper financial controls;
• attending numerous meetings at the request of Mr Ngema;
• registering Committed Artists with the Department of Inland Revenue; and
• reviewing and providing comments on various commercial contracts.

8.12 It seems therefore that Ernst & Young can hardly be blamed for the lack of financial controls in the accounting system of Committed Artists.

8. 13 On 17 January 1996 Manase & Associates (Chartered Accountants) drew up a cash flow projection for the play. They were tasked to examine the financial systems and make the necessary recommendations on how to streamline them. They were also to write a financial manual for the company and help with the answering of the audit queries. The cash flow report by Manase & Associates shows that it' expenditure for the play carries on at the present rate, the amount required for the project period, that is until December 1996, will not be R14,27 million but R18 555 838-04.

9. FUTURE OF THE CONTRACT

9.1 From the above it becomes clear that the play Sarafina II was conceptualised by the Department and brought into fruition through a process which was flawed and defective. The advice that donor funds had to be treated differently with regard to tendering procedures was incorrect. The signing of the contract without the approval of the Tender Committee was grossly negligent. The signing of a contract for an amount in excess of R14 million without reference to the departmental Accounting Officer (the Director-General) was also negligent. Despite the fact that the contract was drafted by the Legal section of the Department there were insufficient or inadequate provisions for the control of spending of the moneys at the implementation stage of the contract.

9.2 In considering what recommendations to make to the Department concerning the whole issue, I had to take cognisance of the fact that there was a valid and legally binding contract in existence between Committed Artists and the Department. The overriding factor however, which I also had to bear in mind, was that this was a contract which should never have been entered into for a number of reasons. The understanding among senior departmental officials who included the Director-General, Dr Shisana, and the Director: HIV/AIDS and STD Programme, Mrs Abdool Karim, was that the amount available for the play was the sum of R5 million. No amount was ever formally budgeted for the production of the play. Despite this, a contract for R14 million was signed. The tender was never finalised or approved by the Departmental Tender Committee. In the light thereof there should never have been any question of a contract being signed or entered into. The Accounting Officer for the Department, Dr Shisana, was never consulted before the contract was signed even though it was quite clear that the Department was about to be committed to spending millions of rends. These were however internal departmental problems which cannot be used. to avoid a validly binding contract. I accordingly had to be careful about not trying to solve a problem by creating another, such as creating the possibility of the department being sued for breach of contract for acting precipitately.

9.3 Three options were considered by myself namely:

• Whether to continue with the original agreement.
• Whether to negotiate a new or amended agreement.
• Whether to terminate the agreement.

9.4 Continuation of the original agreement

9.4.1 Continuing with the original agreement is not advisable because of the serious flaws already referred to above. In addition, whilst it is understood that with the contract as it stands, the initial four months would have been more costly as the production was being prepared and rehearsed, it appears from various financial reports that it is not showing a profit. It appears instead that advances have already been made on the next payment (R379 381 and R113 821-30) which is only due at the end of June 1996. The cashflow projection of the Chartered Accountants, Manase and Associates, dated 11 March 1996 gives a total estimate of R18 555 838 04. It would be a breach of clause 4.S of the contract to exceed the tender amount. Clause 4.5 provides that the company undertakes not to exceed the cost of the project and to maintain proper control over the use of funds to ensure proper completion of the project.

9.4.2 Furthermore, in view of the fact that the European Union has already dissociated itself from the funding of Sarafina II, this means that the EU funds for the moment at least, are not available for Sarafina II. This means that departmental (governmental) funds have to be utilised for this purpose. Accordingly I find that this option is not a viable one .

9.5 Negotiating an amended agreement

9.5.1 For the reasons stated in option 1 above it would seem that an amended agreement would result in an even higher contractual amount. This conclusion is based on current financial reports including the report of Accountants Manase and Associates. If however this was not the case and if Mr Ngema could prove that he could carry the contract to December 1996, the Department would have to negotiate an amendment to the contract to ensure that it had proper control over the spending of the final payment of R5 247 600. This would be the route to go if the contract cannot be terminated.

9.6 Termination of the contract

9.6.1 This option can only be considered with reference to the terms of the contract between Committed Artist Theatre Company and the Department of Health.

9.6.2 Clause 15 of the contract reads of follows:

"15.1 Either party shall have the right, in the extent of a breach of contract or defective performance by the other party, to require such party to remedy such defective performance or breach within a period of thirty (30) days after the receipt of a written notice by the party claiming defective performance or breach of contract to the party in breach, giving details of the alleged defective performance or breach of contract".

In terms of this clause therefore, termination can take place if it can be shown that the Theatre Company has breached the contract or that its performance is defective.

9.7 The evidence before us shows the following:

• The amount of R431000 which seems to have been irregularly spent on the private studio belonging to Mr Ngema is still outstanding. This is despite a demand from the Accounting Officer Dr Shisana for it to be refunded.
• The department requested Committed Artists to furnish it with invoices every month. Committed Artist have failed to do so.
• An amount of R197 000 still has to be justified as having been spent on the project. Committed Artists were required to furnish the necessary proof. They have failed to do so.
• At a meeting held on 20 September 1995 Committed Artists were requested to submit receipts for all expenditures. They were also requested obtain quotes upon acquiring any goods and to furnish copies thereof to the Department. Committed Artists failed to do this.
• Committed Artists have failed to maintain proper control over the use of funds. Numerous items of such failure were listed in the financial inspection report of March 1996 by the internal Audit Unit of the Department. Committed Artists were furnished with a copy of that report and they were requested to respond thereto by 10 March 1996. No satisfactory response was received from them in that. To date some items therein remain unaccounted for.

10. SUMMARY OF FINDINGS

I have made the following findings of fact:

10.1 Sarafina II was conceptualised by the Minister for the Department of Health together with the Director of the HIV/AIDS and STD Programme Directorate during or about June 1995. After bouncing the idea on Mr Ngema they gave instructions to departmental officials for implementation thereof by applying the relevant tender procedures.

10.2 The source for which the play was to be funded was never formally decided on but from the evidence it is clear that it would come from one of two sources, namely the EU fund or Departmental budget. The line managers, that is the Chief Director: National Programmes, Dr Mtshali, and Director HIV/AIDS and STD Programme, Mrs Abdool Karim, ought to have made a formal decision concerning the source of funding. This was never done.

10.3 The Chief Director: Departmental Support Services of the Health Department, Mr Badenhorst, was the official who was tasked with the implementation of the HIV/AIDS play in terms of departmental procedures. The HIV/AIDS Directorate issued what has been called a limited invitation for tenders which resulted in two offers being received from Committed Artists Theatre Company and from Opera Africa.

10.4 A recommendation by the Chief Director (Dr Mtshali) and the Director (Mrs Abdool Karim) of the HIV/AIDS programme to the effect that the tender be awarded to Committed Artists Theatre Company was submitted to the Tender Committee. No objection was made by these officials to the amount of R14,27 million rends which was mentioned in that tender although they state that they did raise their objections verbally to the Chief Director: Departmental Support Services Mr Badenhorst.

10.4.1 I am of the firm view that the two officials did not apply their minds properly when they made their recommendation to accept a tender for R14,27 million rends. They ought not to have recommended the tender in the light of the ceiling of R5 million. In addition, the failure to notify the EU as required in terms of the agreement about material deviations from the agreement constitutes a serious omission.

10.4.2 I therefore find, that they were negligent in the performance of their duties. This is a matter of great concern. It must be addressed by the Director-General. I have however refrained from recommending disciplinary action against them because I could not find any bad faith in their actions.

10.5 The Departmental Tender Committee sat to consider the tenders on 8 August 1995 and on the very same day Mr Badenhorst, Chief Director: Departmental Support Services was already requisitioning a cheque for R3 million to be paid to Mr Ngema. The signing of the contract was done by Mr Badenhorst without any reference to the Chief Accounting Officer the Director General, Dr Shisana, and before the Departmental Tender Committee selected a successful tenderer.

10.6 The Departmental Tender Committee never selected a successful tenderer to date.

10.7 The contract signed between Mr Badenhorst and Committed Artists was not well draped, is no. clear in some respects and there are some areas of major concern. This is due to a combination of reasons, namely: a lack of experience on the part of the drafter, insufficient time allowed for the drafting of the contract and failure to submit the draft to the State Attorney.

10.8 The Department failed to formalise oral agreements, beneficial to the Department, agreed to by the Department and Mr Ngema. Written amendments to the contract were never signed. The Drector-General involved herself in this regard and ought to have seen to it that they were signed. In my view the Director-General can be criticised for not seeing to it that the necessary formal amendments to the contract were made. It was precisely because of this omission that, whereas in the meeting of 20 September 1995 it had been agreed that the Department would not pay for Mr Ngema's infrastructure they ended up doing precisely that.

10.9 Even though it is not clear when the budget or ceiling for the Sarafina II play was set it can be safely accepted that in the minds of some senior officials, including the Director-General, the Chief Director: National Programmes and Director: HIV/AIDS and STD Programme, the ceiling for the play was set at R5 million. This is confirmed by hand written notes written to the Chief Director: Departmental Support Services by the Director-General, Dr Shisana, on or about 18 August 1995. This is further confirmed by a letter of the same date written by the Director: HIV/AIDS and STD Programmes, Mrs Abdool Karim to the Minister.

10. 10 The Department of Health did mention the play Sarafina II in their reports of August and October 1995 to the European Union (KU) but they did not make a formal request to access EU funds in that report as was required by Annexure IV of their Agreement.

10.11 Though the Minister was correct in saying that they informed the EU about Sarafina II and thereby referring to the reports of August and October 1995, those reports did not mention that Sarafina II would be funded from EU funds and they did not give details of the relevant budget as is required by the Agreement with KU. The reports were in any case only issued after the contract for the play was already signed.

10.12 The reaction of the Department in press releases and in the answers to questions supplied to the Portfolio Committee on Health, contain certain inaccuracies, the most important being the following:

10.12.1 It is not true that the budget annexed to the tender of Committed Artists was assessed by the Finance Section of the Department of Health. It is accordingly incorrect to say that each line item in the said budget was scrutinised and approved by that Section.

10.12.2 It is not true that the Departmental Tender Committee considered fully, and as is implied, recommended the tender of Committed Artists.

10.13 The awarding of SarafinaII contract to Committed Artist Theatre Company was not in accordance with State tender procedures. It was not in accordance even with the agreement with the European Union. It was never budgeted for. I accordingly find that it was an unauthorised expenditure. This means that the Department spent money it did not have, or that it did not have the authority to spend. The matter can now only be resolved ex post facto by the Public Accounts Committee of Parliament, or the Cabinet.

10.14 If the Department went out on open tender, chances are that the Department would have had a high quality production at much less than the present cost.

10.15 The HIV/AIDS message the play conveys is inadequate, and questionable in certain respects and should be revised and improved if the play is continued with.

10.16 The Department never submitted a proper business plan for the HIV/AIDS PROGRAMME to the RDP Office as required. Therefore the RDP office will not make any funds available to the Department of Health for this programme until the said requirements are complied with.

10.17 With reference to paragraph 6.4.12 I find the threat of Mr Vorster to junior officials unacceptable. I voice my disquiet and displeasure in this regard. Such behaviour is detrimental to good relations within the department and is unbecoming of a senior officials.. The Director-General should formally bring this finding to the attention of the official concerned.

10.18 Mr Badenhorst, Chief Director: Departmental Support Services, chose to present his Director-General with a note creating the impression that the Departmental Tender Committee had accepted the tender of Committed Artists when he was requested to produce the minutes of the relevant meeting. This was over and above other reprehensible acts he had already committed such as signing a contract without a recommendation of the Tender Committee and without sanction of the Accounting Officer. I find that he misrepresented the true facts simply because it was impossible for him to produce the minutes since the Departmental Tender Committee never recommended the tender. Mr Angelo, the Acting Chairperson of the Departmental Tender Committee, colluded with Mr Badenhorst by signing the note indicating that he concurred with it. Mr Angelo clearly endorsed a fraudulent note well knowing it to be false. The Director-General was thus misled into believing that the Departmental Tender Committee had indeed recommended the acceptance of Committed Artists tender.

10.19 The scourge of AIDS constitutes a threat of immeasurable proportions to the country both from the social and economic points of view. From this view the conceptualisation of the play itself was a commendable act on the part of the Minister and the Department of Health but the mismanagement that followed in the implementation thereof cannot be justified even on the basis of that threat. Adherence to proper management principles is the quintessence of good governance.

11. RECOMMENDATIONS

11.I During my interviews with the Minister and the Director-General, many of my concerns a.. maladministration within the Department were mentioned to them, and in certain cases I have made clear what recommendations I would make. The Director-General has kept me up to date with further developments in this regard. I am pleased to note that action has already been taken, notably with regard to my recommendations on tender procedures.

It is recommended that the Department of Health should embark on an intensive education and training programme which should involve the State Tender Board, the RDP office and the International Development Co-operation Committee (IDCC) to inform and apprise all the relevant departmental officials of the funding procedures, tender procedures, regulations and all relevant information with a view to increasing efficiency in financial management specifically and management generally. Line managers must be targeted on a more specific basis to ensure that they are able to carry out their supervisory duties more efficiently and to prevent unquestioning and undue reliance on junior officials.

11.3 It is recommended that before contracts are signed, after being drafted by the Legal Section of the Department of Health, they should be referred to the State Attorney for vetting in line with State Treasury Instructions.

11.4 It is recommended that the Departmental Tender Committee of the Department of Health be reconstituted and retrained to ensure that the officials constituting it have the necessary authority and expertise to see to it that all the procedures are adhered to and implemented.

11.5 It is recommended that the Director-General revisits the delegations in the Department with a. view to ensuring that the officials who are given delegated authority will have the necessary experience and knowledge and that she should ensure that such officials function under strict and direct supervision of herself in her capacity as the Accounting Officer for the Department of Health.

11.6 It is recommended that the Department acting in co-operation with the State Attorney should consider terminating the contract between the Department of Health and Committed Artist Theatre Company in terms of clause 15.1 of the contract. The Department should then see to it that all the equipment is repossessed by it with the view realising those assets in attempting to recoup their losses suffered by the Department.

11.7 It is recommended that the Department and indeed government officials generally should be circumspect in issuing statements which could have a detrimental effect on South Africa's international relations and more particularly that could have an adverse impact on the economy of the country. This is said with specific reference to donor funding.

11.8 I have reasonable grounds to suspect that Mr A H Badenhorst, Chief Director: Departmental Support Services, and Mr J G Angelo, Acting Chairperson of the Departmental Tender Committee. are guilty of misconduct in terms of Section 20(b), alternatively Section 20(i) of the Public Service Act 1994. Particulars in this regard are discussed in paragraph 7.7.12 to 7.7.17 above. In terms of Section 21(1) (b) of that Act, I refer the matter to the Director-General for an investigation of a charge of misconduct against Mr Badenhorst and Mr Angelo. I recommend that she appoints an investigation officer from outside the Department of Health.

11.9 It is recommended that the Department should restructure the Legal Section, taking into account the experience of the incumbents and the responsibilities that the Legal Section has to shoulder from time to time.

11.10 This has been an investigation of a specific government department and all the findings and recommendations refer to that Department. I however, deem it appropriate to make a few recommendations which are broadly more encompassing. These emanate from the testimony of RDP officials who in their normal duties deal with all government departments:

11.10.1 It is recommended that government departments should ensure strict adherence to terms and conditions of agreements entered into with foreign governments. This is very important for international credibility and trust. Failure to adhere strictly to the terms of agreements is a serious matter which can negatively impact on the RDP Programme.

11.10.2 Since international assistance is a new phenomenon for the government of South Africa, there is a relative lack of capacity within the Civil Service to manage this assistance. This does not mean a lack of ability on their part. There are insufficient operational tools to enable them to work more effectively. More particularly, the government has no generic legal agreement (concerning issues such as procurement, tendering, status of technical assistants, etcetera) and as such responds to different legal agreements presented by different countries and agencies. This can create confusion and it needs to be rectified as a matter of urgency. If this is done it would not only promote efficiency whilst at the same time creating legal certainty but also ensure a streamlined and speedy delivery process at all levels and in all departments.

Annexure A