IRREGULAR APPOINTMENT
Open Water’s mandate was to investigate the department’s school uniform programme, according to a leaked application document. The document states that the firm was chosen from a National Treasury panel of forensic auditing firms. The Treasury appoints panels of companies that have tendered to provide certain goods or services, from which government entities can request quotations.
Open Water was the only firm on the panel to be asked for a quotation, according to the application document. Standard supply chain protocol for this size of transaction requires that at least three quotations be compared.
Gadebe, the MEC’s spokesperson, confirmed to GroundUp that the appointment was “not in line with Treasury regulations”.
The document approving the R8.5-million contract was signed only by Gasela and the director of Supply Chain Management, not by the Chief Financial Officer Johann Strauss, who had been placed on “special leave”. Strauss has since returned to work.
Gasela did not respond to questions sent to her via WhatsApp.
The budget for the investigation is for five months of work and a total of 1,880 hours. It includes salaries for a project director (R600,000), a legal specialist (R720,000), two senior investigators (R540,000 each), two senior managers (R480,000 each), a manager (R680,000), a finance and risk specialist (R640,000), and several investigators earning between R240,000 and R400,000.
The department’s school uniform programme, through which free uniforms are provided to children in need, was worth about R190-million, a source told GroundUp. But the programme has been riddled with problems. In May, sewing co-operatives held a sit-in at the department’s headquarters, saying they had not been paid for thousands of uniforms they had been instructed to make and had delivered to school children.
The department’s response was that rogue officials had instructed the co-operatives to make the uniforms while another contractor had already been appointed. GroundUp understands that Open Water’s mandate included identifying who these officials were.
In his reply to GroundUp, department spokesperson Gadebe said Open Water’s selection was also questionable because there were lower bidders. But the application document, signed by Gasela, says that Open Water was the only bidder.
“R8.5-million is high for only one project to be investigated,” a source in the department told GroundUp.
Another source told GroundUp that the project could have been investigated internally rather than paying millions to outside investigators.
“It would be a simple matter for GDSD to ask the co-ops who gave them the instruction to proceed with manufacturing the uniforms, rather than issue a multimillion-rand contract,” the source said.
The budget for the Open Water investigation includes a budget category for “Irregular Expenditure” in addition to the school uniform project, but neither the department’s approval memo nor Open Water’s project proposal explains what “irregular expenditure” is being investigated.
Gadebe told GroundUp that the “high costs” of the investigation is part of the reason the MEC has instructed the Department to restart the appointment process.
EWN
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