Treasury lashed over R1bn IT fiasco

R1.2bn lost to South Africans

THE standing committee on public accounts (Scopa) lambasted the National Treasury for wasting R1 billion in an IT programme that never got off the ground.

Scopa yesterday called on Finance Minister Malusi Gigaba to take decisive action against officials responsible for the collapse of the Integrated Financial Management System (IFMS), after spending R1bn on the first phase.

Themba Godi, Scopa’s chairperson, described the failed implementation of the IFMS project as “shocking and shambolic”.

The Treasury, headed by Gigaba, faced a grilling from Scopa over the project.

“This situation must never be repeated and action must be taken against those responsible,” Godi said.

“Here is a national programme, but the way it is implemented is shambolic. R1bn later… you realise it is not working. That is shocking,” Godi fumed.

This was after Dondo Mogajane, Treasury’s directorgeneral, admitted that the first phase of the IFMS project was never implemented after they had spent R1bn on it.

Godi said the issue was about the Treasury making the right decisions.

There were a lot of problems with this project, which was confirmed by the Treasury’s internal audit committee, he noted.

Unchecked

Godi said the service providers had a free hand in the project, and were not monitored when they were supposed to deliver the services required.

ANC MP Nyami Booi said the R1bn lost could have been used to build houses.

He accused the Treasury of throwing money into the IFMS project, without checking if it was getting value for its money.

In the end Treasury did not get a return on its R1bn investment in the IT project, he pointed out.

Tim Brauteseth of the DA questioned the use of consultants had cost the Treasury a lot of money.

Mogajane announced that a forensic investigation was launched.

And Gigaba said they would soon be appointing a team to conduct the probe. He added that they would report back to Scopa on the findings.

Gigaba said they wanted to get to the bottom of how things had gone awry.

“I take responsibility for what has happened in order to ensure the problems here are properly addressed. I hope we won’t have to come back to Scopa to face the grilling we faced today,” Gigaba said.

He also pledged to provide Scopa with more information on the original cost of the project when it was first submitted to the cabinet in 2002. It was to have been implemented in 2005.

DIRECTOR-GENERAL of Finance Dondo Mogajane yesterday said he halted all payments in relation to the Internal Finance Management System earlier this month, in response to dozens of adverse internal audit findings on the process.

Mogajane also told Parliament’s watchdog Standing Committee on Public Accounts (Scopa) that he had ordered the project management office to be restructured after learning that it had a staff complement of only five people, one of whom worked part time.

It was “very worrying” that a critical project was so understaffed, he said.

MPs were questioning top Treasury officials about the department’s failure to put the IMFS into operation after 15 years and R1.2 billion spent.

The project aims to integrate all human resource and financial management systems across government. The first model, IMFS1, was abandoned after National Treasury was advised not to use bespoke software as planned, but to opt for off-the-shelf commercial models.

The department was called before Parliament’s appropriations committee in June after an internal audit report conducted in 2015/16 was leaked to ANN7. It reflected very poor financial and operating controls for the project, with 49 of the 54 findings carrying a “catastrophic” risk rating and the rest a very high risk.

At that meeting, Mogajane conceded that the findings risked bringing National Treasury into disrepute.

Yesterday, ANC MP Mnyami Booi led the charge, saying the Treasury could not “be the institution that spends such an amount of money without accountability”.

He added: “The reality of what happened is that South Africans lost R1.2bn.”

Mogajane countered that he had only been in his position for three months, and has had to contend with other crises, including the economy entering a recession.

He said it should be said in National Treasury’s defence that it alerted the cabinet in 2013 that there were challenges with the project, and responded to complaints from MPs about seeking help from the World Bank by saying it had expertise at such systems, and had offered advice free of charge.

Mogajane also rejected suggestions that there was no political will to complete and implement the system.

“The day-to-day implementation is a technical issue, I would not want to say there was no political will.”

The chairman of Scopa, Themba Godi, said regardless of the problems, the net result was that R1.2bn was spent only to start from scratch.

Mogajane said the issue was of great concern, including to Finance Minister Malusi Gigaba, who had demanded answers from him, but the reverse side was that it showed that National Treasury’s internal audit system was robust.

Mogajane said on his instruction all payments towards the IMFS stopped on August 7. – African News Agency