Rules bent in multimillion-rand contracts spree

25 October 2015 - 02:00 By Stephan Hofstatter and Mzilikazi wa Afrika

SABC chief operating officer Hlaudi Motsoeneng and chief financial officer James Aguma are dishing out suspect deals worth tens of millions of rands to consultants as the broadcaster lurches from one financial crisis to another under their watch. Internal documents seen by the Sunday Times reveal that:• On July 20, Aguma signed a R7-million "consultancy agreement" - without going out to tender - with engineering firm Mott MacDonald to oversee the repair of 34 lifts and five escalators at the SABC's headquarters in Auckland Park, Johannesburg.This was even though an open bidding process had already been completed to appoint a company that would replace the lifts. The original tender was cancelled on May 22 and no reasons were given;• On October 1, Motsoeneng approved Aguma's request to hire business consultancy Asante Sana for R7.5-million (without going out to tender) to help the chief financial officer to meet his financial reporting requirements; and• That day, Motsoeneng also approved Aguma's request to hire consultancy SekelaXabiso for R10.5-million - again without going out to tender - to help him fix the financial shambles at the SABC.story_article_left1Memos signed by Motsoeneng and Aguma request "deviations" from procurement procedures without stating reasons. The two are authorised to approve deviations for services worth up to R15-million.Treasury rules require contracts of more than R500,000 to go out to tender and prescribe strict requirements for deviations.The Sunday Times reported in June that the state broadcaster had made a litany of accounting errors and had to restate past performance.Audited financial statements released last month revealed that the SABC had made a loss of R395-million since March last year, compared with a R652-million profit the previous year under Motsoeneng's predecessor, Lulama Mokhobo .Motsoeneng has effectively controlled the SABC since February 2014 and Aguma has run its finances since March 2014.The auditor-general's office said this week that action must be taken against the broadcaster's executives for having presided over irregular, fruitless and wasteful expenditure totalling R432-million.The auditor-general confirmed that the SABC's financial health was "concerning" and said its financial statements were littered with errors.SABC spokesman Kaizer Kganyago said the lifts tender was cancelled because of concerns that it had been handled irregularly. The urgency of fixing the lifts justified not putting the contract out to tender.He said Aguma's decision to spend R18-million on consultants was justified because of a shortage of "chartered accountants in senior positions"...

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