Sassa grants mega-tender during Hawks probe – Mail and Guardian


The South African Social Security Agency (Sassa) has granted a R400-million tender to a company under investigation by the Hawks for alleged payment irregularities involving an earlier R2-million Sassa contract.
It was Sassa that reported Azande Consulting to the Hawks about the first contract in 2013. But last year the company still bagged the R400-million contract to conduct a national door-to-door survey to gauge the social services needs of poor South Africans in 1 540 wards.
The new contract is part of the agency’s integrated communities registration outreach project that includes an event management service.
Not a single member of Sassa’s eight-member bid adjudication committee or the acting chief executive officer who signed off on the deal at the time appear to have been aware of the Hawks investigation when they unanimously awarded the new contract.
The Mail & Guardian has established that Azande Consulting was among several companies that were reported to Sassa’s internal financial misconduct board after officials at the agency’s Eastern Cape regional office raised concerns about the procurement process and payments arising from the company’s 2013 contract.
Sassa is the complainant in the criminal case that was opened.
Two senior Sassa officials said the agency’s fraud management and compliance unit had lodged the case with the Hawks, but they could not give more details.
The M&G was also told that a Hawks investigator had written to Sassa chief executive Thokozani Magwaza early this month asking for co-operation.
“He [the investigator] requested that supply chain management, fraud and compliance and finance department staff be availed to assist with the investigations over the 2013 payments,” one of the insiders said.
Hawks spokesperson Hangwani Mulaudzi said: “We don’t discuss our cases in the media … pending investigations. All cases remain confidential and as to who and why we cannot reveal. Such is not negotiable.”
The company’s sole director, Doreen Makhaye, referred queries to Sassa. Subsequent attempts to contact her through her office and by cellphone and email were unsuccessful.
Azande Consulting also appears to have scored from a second contract with another company, Vee-el Promotions. Documents seen by the M&G show that Vee-el Promotions and Azande are the only companies accredited to provide event management services to Sassa “as and when needed”.
But the two appear to be connected. The sole director of Vee-el Promotions is Lamie Nkosi, who was listed on Azande Consulting’s website as an “administrator responsible for logistics” before the site was taken down this week.
Nkosi, in a brief interview with the M&G, confirmed he was an Azande Consulting employee but refused to take further questions.
Paseka Letsatsi, Sassa spokesperson, said the companies had both submitteda “certificate of independent bid determination” which is part of requirements for the submission of bid proposals. Azande Consulting in its business profile stated that Nkosi was an employee.
Letsatsi said Sassa would be “reviewing the allegations and circumstances under which this relationship took place”.
“The outcome of the review will determine way forward,” he said.
Azande Consulting had, since July last year, already been paid R170-million for the project.
Sassa, in a written response to questions about the new contract, maintains that everything was above board and that all payments to Azande for this contract were valid.
But the M&G has established that the R400-million contract was flagged by Zane Dangor, the former director general of the department of social development, before his resignation in March. One of his concerns related to the value of the contract, according to one official.
“He was also questioning why the project was being outsourced when it was done internally all along,” the official said.
Dangor said he was unable to comment because he was no longer employed by the department.
The officials who spoke to the M&G said they shared Dangor’s concerns about why the door-to-door survey had been outsourced – something that had been handled internally since 2008 – particularly because it was so expensive.
They also claimed that some invoices seemed inflated or excessive. The company was expected to provide marquees, transport costs, chairs, catering, mobile toilets and other services for once-off events in each of the different wards to enable people to have a one-stop facility for government services, including social grants. Azande billed Sassa R223 000 for each event but its own invoices show that, in some cases, it only provided catering.
Sassa said by the end of January the company had surveyed people in only 67 wards in eight provinces. In the 2016-2017 financial year, more than 500 were supposed to be surveyed.
Documents, including invoices and payment schedules, suggest that Sassa has paid Azande Consulting R155-million since November, substantially more than what could have been expected to be paid at that stage. The value of the three-year contract is R392-million.
The officials who spoke to M&G said the agency’s chief financial officer, Tsakeriwa Chauke, had raised a series of issues regarding a November invoice paid for in December.
“He wanted an explanation as to how it was possible to spend R29-million on the project in one month. To him, that suggested that the project was going to cost R348-million in one year, whereas the overall value over three years was meant to come in at R392-million. Chauke wanted to know if this was going to be the trend for the three years of the contract,” one of the insiders said.
The company’s invoicing system also appeared to have raised alarm among some Sassa officials because, in some cases, there were claims for chairs, water or meals, with no breakdown of the costs for each.

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