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EXCLUSIVE: Forensic probe recommends Tourism KwaZulu-Natal officials cough up money lost in doomed, unauthorised media campaign

Tourism KZN’s banner on X (formerly Twitter). Picture: X

Tourism KZN’s banner on X (formerly Twitter). Picture: X

Published Oct 26, 2023

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An investigation report compiled for Tourism KwaZulu-Natal by an independent forensic company has recommended that officials of the tourism entity cough up money lost during a doomed media campaign that was worth almost R1 million.

The report was compiled by Durban-based Bonakude Consulting and it was signed off as binding in May this year.

IOL has a copy of the damning report.

The investigation was initiated to determine the status of a R718,941.66 contract Tourism KwaZulu-Natal had with Assegai and Javelin, a Durban-based advertising agency which has since gone out of business.

The report found that the contract was irregular as the PFMA (Public Finance Management Act) was brazenly ignored - and so were other guidelines that should be followed when using public money.

According to the final report, in June 2020, at the peak of Covid-19 when travelling was largely limited, Tourism KwaZulu-Natal engaged in a media marketing campaign dubbed “KZN Has It All" to woo travellers to visit the province, at a time when tourism prospects were at their worst.

However, the entity needed to apply for a deviation from the KwaZulu-Natal Treasury in order to issue the tender, but its application was declined.

Despite that, senior officials within the entity allegedly devised another strategy to get the tender awarded to Assegai and Javelin Advertising CC for a media buying and marketing campaign instead. Assegai and Javelin, with a nod from TKZN, dropped in Media 24 and TravelStart.

The report recorded that upon request for supporting documentation for the service provider, it was noted that the contract was extended through an addendum.

“No evidence was provided to confirm that the SCM (supply chain management) process for the extension of the contract was followed.

“Based on inspection of emails from Treasury, it was confirmed that the addendum was done after there was Treasury communication which was not allowing the extension.

"Based on the information provided, the addendum that was performed, it was not in line with the SCM processes for the entity and there were no signed addendum provided to us."

The report recorded that the CFO (chief financial officer, Lindani Sidaki) explained that after the deviation was not approved by Treasury, the CEO suggested that TKZN use a clause which already existed to fulfil what was not approved by KZN Provincial Treasury.

"He concluded by confirming that the decision was taken to utilise a clause from the SLA (service level agreement), therefore, an addendum was added to the existing contract between TKZN and Assegai and Javelin Advertising (PTY) Ltd to accommodate the clause of (Management of Media Buying /Placement).

“Upon further discussions with the CFO, it was noted that an instruction was given to procure via an agency, even after the Treasury refusal was obtained. No supporting evidence, motivational documentation or prescripts were made (in) reference to the initiation of the deviation.

“It was noted, however, that there is no evidence on file to support the above claim by the CFO,” the report noted.

As part of the recommendation, since it was found that Tourism KwaZulu-Natal incurred a loss of R80,333.32, the money should be recovered from Assegai and Javelin's director.

“The Accounting Officer should initiate the process for recovery from Assegai and Javelin Director of R80,333.32.

“The Accounting Officer assess the costs associated with the recovery, versus the amount to be recovered. If this assessment indicates that the cost of recovery is greater than the amount to be recovered, legal advice should be sought on the way forward."

Furthermore, it said if it could not be recovered from the director of Assegai and Javelin, it should be recovered from Phindile Makwakwa, the former acting CEO.

“If the recovery of the amounts from the service provider are unsuccessful, the recovery of the amount raised, should be initiated against the former Acting CEO and the former General Manager – Marketing (Thulisile Galelekile), due to the following: Former General Manager – Marketing: Approval the Invoices and Purchase Orders prior to payment. Former Acting CEO – approval of payments to the supplier."

It also recommended disciplinary hearings against the former acting chief executive officer, Makwakwa, former General Manager and a former Senior Manager – supply chain management, whose name is not mentioned in the report.

“Disciplinary measures be put in place to include the following officials: Former Acting CEO (i.e. still under the employ of Government) Former General Manager – Marketing (i.e. still under the employ of Government) Former Senior Manager – SCM (i.e. still under the employ of Government),” the report recommended.

Regarding the campaign itself, the report found that it performed poorly in some regions.

"We also noted that the distribution of awareness across devices was also minimal although impressions were high, we noted that the number of clicks and engagements were significantly lower, there is also no reference made in Progress Reports submitted and Close-Out.

"Reports regarding the services that the agency provided with regards to this campaign.? Based on the above – we noted that a service was provided and paid for, however the added value could not be determined. This can be further compounded by the fact that there is no available evidence that the agent (Assegai and Javelin) had initiated and concluded on successful negotiations with Media24 and TravelStart, prior to the appointment of the 3rd Parties."

The chairperson of the board of Tourism KwaZulu-Natal, Sithembiso Madlala said they are looking into the matters raised in the report.

“‘The report that was compiled by Bonakude on behalf of TKZN contains information that is still subjected to internal processes and is not ready for public consumption, as the relevant governance bodies and committees are still engaging it,” Madlala told IOL.

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* This story has been edited. Assegai and Javelin has since shut down.