Education

15.     (1)     Yes, I am aware of the forensic report which was commissioned by the State Information Technology Agency (SITA) following a SITA procurement process for local area network services at schools of the Western Cape Education Department (WCED).

SITA provided a copy of a forensic report by Cliffe Dekker Hofmeyr attorneys (CDH) to the WCED in November 2023, and in which report four findings of irregularities in the SITA process were made.  A summary of the four findings made in the CDH report is attached as annexure A. 

There were no findings against any official in the Western Cape Government.

SITA advised that it accepted the findings in the report and withdrew its recommendation made to the WCED in March 2023.  The WCED then requested SITA to provide it with all relevant documentation and information which the investigators relied on, to verify the findings made.  Such documentation was finally received from SITA in February 2024, after several letters and engagements with SITA.

The WCED proceeded to appoint senior counsel via the offices of the State Attorney to consider the findings made in the forensic report.  In a legal opinion obtained by the WCED, counsel concluded that none of the findings of irregularity that were made by the forensic investigators, were merited and hence did not warrant the WCED to have its decision to award the contract reviewed and set aside by a court.

In June 2024, the Auditor-General of South Africa (AGSA) issued COMAF 65 of 2023/24 to SITA (COMAF) in which several findings of irregular expenditure were made in respect of the SITA procurement process. 

Although some of the AGSA’s findings overlap with the findings made in the CDH forensic report, several new findings were made.  In response, and although SITA management did not agree with the findings made by the AGSA and noted such in its response to the COMAF, the WCED raised a formal dispute (in August 2024) on the findings made by the AGSA, in terms of the relevant processes, via the Western Cape Provincial Treasury.

The Provincial Treasury transferred the dispute to the National Treasury, as the evaluation of the bids, performed in terms of a SITA procurement process, falls within the ambit of a national entity and therefore National Treasury was the applicable entity to further deal with the WCED’s dispute.  The matter is still in the process of being considered by National Treasury.

In addition to the above dispute raised by the WCED in respect of the AGSA’s findings, the WCED expanded its instructions to senior counsel to consider and advise on the findings made in the COMAF.  Currently the opinion from senior counsel is awaited.

As such, and since currently there is no legal basis to terminate the contract, the WCED shall continue to honour its contract with the service provider, and will continue to do so unless and until valid and substantiated reasons have been identified for the WCED to take steps to have its decision to award the contract set aside and the decision has been set aside by a court accordingly.  

The WCED remains committed to its legal duty to take legal action, if required and legally substantiated, should any reason exist why the contract with the service provider should not continue. 

(2)     Following a procurement process conducted by SITA, in terms of the relevant legislation, SITA made a recommendation to the WCED to award the contract, for local area network services at WCED schools, to the service provider.  The recommendation, made in March 2023, was made by SITA after following all its further internal processes, which included board approval, scrutiny by its internal auditors and a firm of appointed external auditors, and engaging services of both its internal as well as external legal advisors.

Following receipt of this recommendation the WCED proceeded to award the contract to the service provider on 19 May 2023.  After the award of the contract, and during August 2023, SITA informed the WCED that there were allegations of irregularities which occurred during the SITA procurement process and that a forensic investigation would be conducted to determine whether such irregularities occurred, and requested the WCED to make its officials available to be interviewed by the forensic investigators. 

At the time of making the award, the WCED was not aware of any alleged irregularities which occurred during the SITA procurement process, and  SITA did divulge any information to the WCED of the alleged irregularities.  The WCED agreed to make its officials available whilst the forensic investigation took place.

(3)     Court proceedings were launched by SITA in respect of the WCED’s award to the service provider, and SITA’s attorneys served the application papers on various respondents but not on the WCED. To my knowledge, the application was formally withdrawn by SITA on 10 April 2024.

(4)     Refer to the response under (3) above.

ANNEXURE A

SUMMARY OF FINDINGS MADE IN THE CDH REPORT, DATED 16 OCTOBER 2023

1. In summary, the CDH report identifies four aspects of the SITA evaluation and adjudication processes which, in CDH’s view, constitutes material irregularities.  CDH recommended that the SITA board, due to the nature of such irregularities, re-evaluate its decision to recommend the award of the bid to the service provider.

2.       The four aspects identified in the CDH Report are summarised as follows:

2.1.    CDH expressed the view that the two price options of the bid submitted by service provider, and the consideration and evaluation thereof by the Bid Evaluation Committee (BEC), and the SITA board’s recommendation to award option A of the service provider’s bid, resulted in an unfair procurement process, therefore resulting in a material irregularity in the bid process;

2.2.    CDH concluded that the manner in which the BEC evaluated the Local Content requirements of the bids were inconsistent and not in accordance with the specifications of the RFB

2.3.    CDH disputed the BEC’s exclusion of the bid from another service provider – they were excluded for not complying with the Microsoft certification requirement – advising that the BEC was incorrect in excluding the other provider’s bid, and this resulted in a further material irregularity in the bid process; and

2.4.    finally, CDH was of the view that the decision made by the SITA Board, following a round robin voting process, after which the Board recommended the award of the bid to the service provider, was invalid in that it did not comply with the minimum voting requirements for such a process, and the round robin results did not meet the minimum threshold of 70%, as prescribed by the SITA Memorandum of Incorporation (MoI). Furthermore, CDH was of the view that the ratification of the round robin decision, which was made by the Board at a meeting on 30 May 2023, took place after the award was made by the WCED to the service provider on 19 May 2023, and consequently could not cure the fact that the Board was not properly constituted at the time that the recommendation was made.

There were no findings against any official in the Western Cape Government.