Durban – Forensic auditors have been called in to investigate irregularities in tenders run by the Independent Development Trust that may have been fraudulent and potentially cost the KwaZulu-Natal provincial health department millions.
While the exact scope of the investigation or the total worth of tenders being investigated is not known, ANA African News Agency can confirm that KPMG will back date their investigation to 2010.
The IDT is, according to its own website, a “Schedule 2 state owned entity which manages the implementation and delivery of critically needed social infrastructure programmes on behalf of government”.
Up until very recently, the IDT handled the provincial health department’s procurement of infrastructure and non-health items with an estimated annual budget of R1.6 billion.
It is understood that senior officials in the health department have been unhappy with the services rendered by IDT and have long challenged many of the purchases and tenders carried out by IDT for the health department.
Apart from the department suspecting that the proper procurement processes were not followed in terms of the Public Finance Management Act, ANA has also learnt that prices appeared to have been inflated.
In one 2015 tender to supply household appliance to the nurses home at Durban’s King Edward VIII, every one of the 11 items that the winning bidder Libela Projects offered to supply was more expensive than could be obtained from general retailers.
The total cost of the invoice was R756 108.40.
ANA managed to price the exact same steam irons, television sets, kettles, urns and bar fridges from retailers at a price of R521 284.24 – 31 percent less than the price quoted by the winning bidder.
ANA did not attempt to price the items using wholesale prices.
In another 2013 tender for power tools for King Dinuzulu, where the winning bidder was Kevamy Investments CC, the health department questioned the price of a Makhita Impact Drill that according to correspondence seen was “exceeding 90 percent of market-related prices” – in other words the department was being asked to pay almost double the price.
What ANA cannot immediately confirm is whether the department actually paid these invoices or whether they were contested.
No one is claiming responsibility ordering the forensic audit and in some cases are even denying that it is happening.
The KwaZulu-Natal health department denied any knowledge of the audit and referred queries to the provincial treasury, who also denied all knowledge of the audit.
National Treasury spokeswoman Phumza Macanda declined to comment, saying that did not generally comment on investigations.
In a written reply to questions from ANA, IDT chief executive Coceko Pakade replied: “The IDT is not aware of any forensic audit that is currently being undertaken by the Department of Health on its programmes. There has never been any correspondence notifying the IDT of any forensic audit or request for information from forensic auditors.”
Asked what would be IDT’s reaction to claims of potential irreguarities in tenders, he said that IDT would take “stern action against any official or officials implicated.”
However, ANA can confirm that IDT’s KwaZulu-Natal regional chairwoman Nonhlanhla Khumalo was asked in writing by the National Treasury to cooperate with the KPMG auditors.
A copy of that correspondence, dated August 28, 2014, was also apparently sent to Dr Sibongile Zungu — the then head of the KwaZulu-Natal health department - and to the accountant general Michael Sass as well as the national Director General of Health Malebona Precious Matsoso.
Comment could not immediately be obtained from Dr Zungu.
Asked about the investigation, National health spokesman Joe Maila said: “Yes, I can confirm indeed that the National Department of Health requested an audit, however we are unable to get into details at this stage.”
Last week at a provincial health portfolio committee meeting Dhlomo said that the department had ceased to do business with IDT and that all the transactions that had previously been done through IDT would be done by the department itself.
He never gave any reasons for the decision.
ANA