R150m contract awarded to Digital Vibes contravened the Public Finance Management Act: Zweli Mkhize

26 May 2021 - 11:12
Health minister Zweli Mkhize says the process of awarding a contract to Digital Vibes has been found to be irregular. File photo.
Health minister Zweli Mkhize says the process of awarding a contract to Digital Vibes has been found to be irregular. File photo.
Image: FREDDY MAVUNDA

Health minister Zweli Mkhize says an investigation into the R150m contract awarded to Digital Vibes has found the tender process followed contravened the Public Finance Management Act (PFMA).

“The process of appointing Digital Vibes was irregular. The irregularity findings range from inconsistencies in the bid committees to lack of disclosure of conflict of interest,” said Mkhize on Wednesday.

In February, Daily Maverick reported that Digital Vibes had been appointed in 2019 through a closed tender to provide communication services for the government’s National Health Insurance (NHI) rollout, with the scope of the work extended in March 2020 to include communications services for Covid-19.

Mkhize said investigators had found an amount of R37m paid to the company constituted fruitless and wasteful expenditure.

He said investigators noted the company received requests for work from the department before their contract was expanded to include Covid-19 communication.

“These requests resulted in a financial commitment of some R35m that [the national department of health] ended up paying after the expansion was approved.

“The investigators, therefore, concluded that any amount paid to Digital Vibes for any work done in relation to Covid-19 communication prior to the approval of the expansion to include Covid-19 work was irregular as the expenditure was incurred in contravention of Treasury regulations.”

Mkhize said the investigation also found the department paid the R150m to Digital Vibes between January and February 2021.

The department, Mkhize said, had reported the matter to National Treasury and he said those implicated would face consequences.

He said he was aware the “key narrative” had been that the contract was awarded to his associates, “thus inferring I may have used influence in the awarding of this contract to the said company”.

“In our first public response to this matter, I did confirm that Ms [Naadhira] Mitha had worked in my office as a PA. She then tendered her resignation citing personal reasons. The details of her resignation at the time were communicated to me by her direct supervisor, the chief of staff,” said Mkhize.

He said when Mitha resigned she did not disclose to the department that she was joining a company that had been awarded a contract by the department.

“There was never such a discussion with me as the minister or any of the ministry officials. It was only a few months after that resignation that I was alerted by my office that Ms Mitha was working with a communications company. This came about as they had reached out to my office to make an appointment to do TV and radio recordings for the Covid-19 awareness campaign.”

Mkhize said he had not found any conflict of interest in the awarding of the tender to Digital Vibes as he was not involved in the appointment process.

“I did not in any way influence the selection of employees or consultants of the company. Even at a departmental level, the minister is only informed once the whole procurement and administrative process has been concluded.”

He said if there was evidence that funds belonging to the state were not used for the intended purpose, they would be recovered.

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