Umsunduzi Municipality irregular expenditure: IDT briefing on remedial action

Public Works and Infrastructure

30 May 2017
Chairperson: Mr F Adams (ANC)
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Meeting Summary

The Independent Development Trust (IDT) appeared before the Portfolio Committee on Public Works to shed light on the irregularities uncovered on IDT projects implemented at the Umsunduzi Local Municipality (ULM), where systematic corruption had been identified following a forensic investigation and a tightening up of the whistle-blowing processes.

The IDT had entered into an agreement with the KwaZulu-Natal (KZN) provincial government, through the Department of Education, in March 2011 to assist in eradicating backlogs in the electrification of schools under the Special School Infrastructure Programme (SSIP). Most of the schools the IDT built or upgraded in the rural areas do not have proper water, sanitation or electrification, so it assists and works closely with the municipalities to provide this infrastructure. In this project, the focus was on schools’ electrification. From this experience, the IDT at the time saw the need to expand its services to other clients after a business opportunity was presented by a company, Techno Trading (TNT), that later worked in partnership with the IDT. This had been in a bid to generate more business, because the IDT charges a management/service fee for the services it renders.

ULM had appointed the IDT as an implementing agent for the electricity infrastructure programme in March 2011, and a memorandum of agreement (MOA) was concluded by both parties during 2012. The work scope included (but was not limited to) maintenance and new installations which covered services such as refurbishment of ageing infrastructure, street lighting, household electrification, solar powered street lighting and traffic lights, and beautification as part of Urban Renewal Programme (URP). The management fee for the IDT was agreed at 10% of programme expenditure. The total allocated budget for the programme was R489.4m. Of this amount, R291m was physically transferred to the IDT, with the last tranche paid in April 2013, the bulk of which was spent. Unspent funds totaling R 208 850 were refunded to ULM in January 2015.

Members sought clarification on the promise that there would be no implicated board members/officials shielded in the investigations, because the IDT was heavily involved in this corruption. The fact that it was a whistleblower that had uncovered the corruption was disheartening, if no one in the IDT had known that the contract had just been granted to TNT on a platter instead of it going out on official tender. What was happening to the schools that were supposed to have been built and the entire communities that were supposed to benefit from the projects when all the projects were less than 75% complete even years later? Members said that corruption must not be tolerated because the country was facing serious challenges of inequality, unemployment and poverty because of the people who were milking the state dry.

The Chairperson of the IDT board gave an assurance that action would be taken against individuals found to be complicit when it received the final reports. However, concrete evidence would be needed to take any action. The IDT had proved that there would be no “sacred cows,” no matter how highly placed those involved were --even board members with a potential conflict of interest.

Meeting report

The Chairperson said he was glad a high-powered delegation from the Public Works Department (PWD), including the Deputy Minister, was present. He reminded the Committee members that when they were briefed in Johannesburg by the Independent Development Trust (IDT), part of the briefing detailed their challenges in terms of management fees not paid to them by various government entities for services rendered. This Committee had then asked the IDT to submit its lists to the Committee so it could intervene on their behalf. The Committee planned to contact the Treasury and the Department of Planning, Monitoring and Evaluation (DPME) to ascertain what the problems were. The IDT was one of the delivery companies of the DPW and government in general, and if they were hampered by finance issues for jobs done for the government, then it could not properly do its jobs for the benefit of the country. This Committee was still waiting for that list from the IDT, because if the IDT could not function, then contractors, the Council for the Built Environment (CBE) and the Construction Industry Development Board (CIDB) could not function as well, and contractors could not be graded.

Alleged irregularities at Umsunduzi Local Municipality

Dr Somadoda Fikeni, Chairperson: IDT Board, said the IDT was heartened by the support given by all stakeholders. A serious matter of this nature could not make anyone happy. The IDT had indicated that there was systematic corruption taking place in Umsunduzi Local Municipality (ULM), and had followed it up by initiating a forensic investigation and tightening up the whistle-blowing processes. It had immediately realised that it did not have the money to fight the scourge when the scale of the corruption was discovered.

Treasury was then approached to fund and take over the investigation. Treasury had asked about the scope of the investigation, and the IDT had replied that the scope would be defined by any evidence of corruption found -- be it by the board, executive or anyone -- so there was no limit to the scope. The Accountant General’s representative was happy that they were approached, because they too were doing some investigations on IDT work with Correctional Services.

When the IDT conducted its investigations, one of the regions that came out prominently was KwaZulu-Natal (KZN). A whistleblower informed it of corruption going on with its projects at ULM, and the matter was immediately handed over to Treasury. While preparing for this meeting, the IDT had met with investigators who were given powers to investigate everything, including taking laptops of all the executives and pursuing criminal charges if possible. There were indications of ongoing corruption at ULM. The asset forfeiture unit and the police would be brought on board. A letter had being signed by the IDT to them as the complainant. Action would be taken against individuals found to be complicit when the reports were received by IDT. However, concrete evidence would be needed to take any action. The IDT had proved that there would be no “sacred cows,” no matter how highly placed those involved were --even board members with a potential conflict of interest.

Mr Coceko Pakade, Chief Executive Officer: IDT, gave a background on the relationship between the IDT, the ULM and the implementing agents involved in the project. He said that when the IDT had received the invitation by the Chairperson of the Committee, it had mulled over how to approach the briefing, given the fact that the investigations were still incomplete. A briefing on the findings would be presented to this Committee once investigations were completed, the board had deliberated on them, the Department had been engaged and any consequence management had been outlined. He asked the Committee to pardon the IDT if it fell short of the Committee’s expectations, because it could not speculate on a serious issue such as this. It intended to act decisively to clean up “this mess.”

He continued that the briefing was as a result of the irregularities uncovered on IDT projects with the ULM, where it was the implementing partner. The IDT was responsible for delivering social infrastructure and social development programme management services on behalf of the government. The social infrastructure programmes the IDT delivered included public schools, clinics, community centres, government offices, and these were predominantly in rural communities in the nine provinces of South Africa. The IDT also implemented government projects relating to infrastructure and not social infrastructure per se.

The IDT had entered into an agreement with KZN provincial government through the Department of Education in March 2011 to assist in eradicating backlogs in the electrification of schools under the Special School Infrastructure Programme (SSIP). Most of the schools the IDT builds or upgrades in the rural areas do not have proper water, sanitation or electrification. As a result, IDT assists and works closely with the municipalities to provide this infrastructure. In this project, the focus was to work on schools’ electrification. It was from this experience that the IDT at the time saw the need to expand its services to other clients after a business opportunity had been presented by a company, Techno Trading, which later worked in partnership with the IDT. This was in a bid to generate more business, because the IDT charges a management/service fee for the services it renders.

ULM had appointed the IDT as an implementing agent for the electricity infrastructure programme on 30 March 2011, and a memorandum of agreement (MOA) was concluded by both parties during 2012. The work scope included (but was not limited to) maintenance and new installations which covered services such as refurbishment of ageing infrastructure, street lighting, household electrification, solar powered street lighting and traffic lights, and beautification as part of the Urban Renewal Programme (URP). The management fee for the IDT was agreed at 10% of the programme expenditure. The total allocated budget for the programme was R489.4m. Of this amount, R291m was physically transferred to the IDT, with the last tranche paid in April 2013. The bulk of this was spent, and unspent funds of R 208 851 were refunded to ULM on 8 January 2015.

The IDT then acquired the services of Take Note Trading 771 (trading as TNT Projects) as a strategic partner to provide services related to business generation, programme management and professional services via single sourcing on 8 March 2012. A single sourcing request was approved by the IDT’s Tender Adjudication Committee (TAC) on 17 July 2011, and the contract’s duration was three years, running until 30 March 2015. TNT fee structure was a 3% management fee, and a programme management fee of 1% on the project value.

In March 2011, a submission was made to the TAC stating that TNT Projects had generated further business on behalf of the IDT’s energy programme between IDT and the Umsunduzi Municipality, and a service level agreement (SLA) was then signed between the two parties. The IDT was entitled to 10%, being the business generation fee in terms of the agreement. An SLA was entered into with TNT whereby it would be paid a business generation fee calculated at 3% paid to IDT by the client. TNT Projects would also be paid an amount of 1% of the programme value as a programme management fee, and this submission was approved by the TAC.

ULM had terminated the MOA, and a cession agreement was concluded between the IDT and ULM in November 2014 before project completion. The status of the work in progress (WIP) at the date of termination was included as an annexure to the presentation.

Certain irregularities relating to project were reported, and were related to:

  • The procurement process followed in acquiring the services of TNT;
  • Incorrect management fee charged;
  • Overpayment made to TNT relating to the management fee.

 

The IDT Board enlisted the services of the National Treasury’s Audit Investigation Unit to conduct a forensic investigation. National Treasury was finalising the matter and its report was expected to be presented to the Board of Trustees soon.

As soon as Board had considered report and remedial action was agreed upon, the report would be shared with the Executive Authority, with an indication of the consequence management action.

Discussion

Ms D Kohler Barnard (DA) sought clarification on the promise that there would be no board members who were implicated, shielded in the investigations because the IDT was heavily involved in this corruption. It was understood that it was a whistleblower who had uncovered the corruption, and it was very extraordinary that no-one in IDT knew that the contract was just granted to TNT on a platter, instead of it going out on official tender. On the incorrect management fee charged for the project, it was made very clear that 10% went to the IDT, and 3% of the 10% to the other project partners. What was the norm, if it was an incorrect management fee? What did the IDT charge as a project fee if an entity was hired as a management company? What was paid to them? Or was it determined that they would get 3%, but had been given something else, which made it a criminal activity? She hoped that whoever had made the payments to TNT in relation to their fees had been suspended, and did not have the ability to transfer monies anywhere as she spoke.

The conclusion in the presentation was problematic, insinuating that this Committee would, by the way, be merely informed when all other statutory bodies had made their decisions. There was no mention of bringing the Treasury reports to the Committee, and this was quite annoying. Did all the IDT’s programmes fall under TNT? If not, which were not? The scope of the project and timelines were vague -- when exactly did it start and terminate? Did TNT contract another company to do the job, and were they now sitting unpaid? Did small companies go under because of this? This was a huge concern, because small companies could fold and lives be ruined if they were not paid for a single project, so she wanted to know who was waiting for money, and from whom.

Looking at the TNT website now, she could see only two men there, and their latest project had been in 2002, which had been for the installation of fibre optic cable. It was stunning that the IDT had given a multi million rand project to them when their last project was two decades ago.

Dr Q Madlopha (ANC) said that looking the presentation, there had been no clear roles for IDT in the electrification project in the MOA signed between the IDT and TNT. The actual role of the IDT was not clearly specified. Taking into consideration the government’s requirement that contractors be paid within 30 days, there seemed to be many contractors that were not paid. How much then was being owed to these contractors, and how many were there? This matter was investigated only because a member of the Exco had raised the alarm, otherwise it would not be heard of. What was the duration from the starting of the project to its end? The Chairperson said he had appointed a forensic team to investigate the irregularities, so what had been the scope of their work and how much had been paid to them? What was their other recommendation, other than saying that a deeper investigation was needed? This was a long project -- from 2011 till 2017. What was the actual duration earmarked for this project? Her understanding was that ULM had terminated the contract because of the challenge of R100m that was sitting with the IDT and had not been paid to the contractors, and a further explanation on this was needed.

This Committee had a problem with single-sourcing arrangements. What did this actually mean? Just one company, Techno Trading, had been appointed without being the tender being advertised. What really happened? From 2011 to date, this electrification project for an informal settlement was only 5% complete – six years later. This was a concern to this Committee. Heads of all those involved must roll. Corruption could not be tolerated. The country was today facing serious challenges of inequality, unemployment and poverty because of these people who were milking the state. The Members of the Portfolio Committee, who were representatives of the state, were just looking and had no teeth to bite. They were happy for this report, but were seriously waiting for the Treasury to come up with the final report on their investigations. The communities were protesting but nothings seemed to be done.

Mr K Sithole (IFP) appreciated the presentation because it helped the Members to understand the issues facing the IDT. The first concern was that the IDT had entered into an agreement with the province of KZN in 2011, and not the municipality. Nothing had been mentioned of any role played by the KZN province in this matter. What exactly was their role in the corruption scenario? What was happening to the schools that were supposed to be built and the entire communities that were supposed to benefit from the projects? All of the IDT projects were less than 75% completed seven years later. Clarification was needed on what the IDT was supposed to have received -- it was supposed to have been 10%, but this now seemed to be 1%. What was it for, and why?

Ms E Masehela (ANC) said it was high time the IDT graduated from being a notorious entity that did not pay people, because that was what was happening on the ground. There was this perception within the IDT that because they had so many projects, they would not do the work but would hire contractors to it for them. In most cases, the people who worked for them were not even paid. She gave instances where the IDT did not pay contractors that had worked with them for over a year and more. In this case, the Committee did not know who was telling the truth -- the IDT or the contractor. It was now time for the IDT to work with honest people/contractors, and pay them for services rendered.

The presentation had indicated that the IDT was working in nine municipalities, but the Committee’s point of reference was only in one (Umsunduzi) -- what was happening in the other eight? Were things going well in the rest of the municipalities? On the 10% issue, did it mean the 3% and 1% came out the 10%, and IDT remained with 6%? What was the true situation? It was disappointing that projects that had started in 2012 had been terminated while they were ongoing by the new leadership after the 2016 elections. This meant that none of the projects was finished during the whole five years. This was a concern. The Committee hoped to be furnished with all the information once Treasury had completed its investigations.

Ms D Mathebe (ANC) wanted some clarity regarding the money spent and what had been returned. The presentation had mentioned that a R489m budget had been allocated for the programme, while the bulk of this amount was spent and unspent funds amounting to R208m had been refunded to ULM on 8 January 2015. This was so confusing -- what had happened to the money, because it was being said that the problem and challenge was money. There had been a lot of role players in this project, but no scope of work and timelines, and the Committee needed to consider all these issues. When had the project started, and what was the estimated duration? How many contractors formed part of the project? How much was owed to them, and over what period? Who was managing all the projects? This mess had to stop.

IDT’s response

Dr Fikeni started by saying that the IDT had handled projects worth R7bn. The fact that the IDT had “rotten apples” could not be excused, but this should not create the impression that everything the IDT touched turned to corruption. If one went to Limpopo, one would see their high court building, the first they had had since 1994, Mpumalanga hospitals, and many other projects across the country that were built by the IDT. The IDT encouraged the Committee Members to visit most of its projects and independently ask the opinions of people on the ground. The structures were standing there, but among this the IDT still had projects that went so wrong, like the Umsunduzi projects. There could be no excuse for this, be it 1% corruption, because it was 1% of taxpayers money.

Secondly, the board was dealing with legacy issues. None of those sitting at this meeting had been present when this agreement was signed. The arrangements in place had been inherited, and it had immediately been detected that there were some corrupt activities. A year later, an anti-corruption campaign had been launched. The staff had been addressed to say that zero tolerance for corruption was the IDT’s primary goal because as custodians of public funds, it needed to earn credibility by so doing.

The IDT had seemed to be everything to everybody previously -- from ordering washing machines to ordering oncology equipment -- and this had created scope for corruption because it was not focused on providing social infrastructure alone. It wanted to be a one stop shop for everybody, without specialising. It was in the process of streamlining, because if one was not a medical specialist it was difficult to write a specification for any project to procure machines in that space. One would then have to get a specialist in that field to provide advice, and by so doing, one lost control of the project. This was one among many other things the IDT was currently doing to refocus the organisation.

The trigger point that led to the corrupt activities going on to be uncovered had been the contract with Navigant, when a whistleblower had reported that the former CEO had a relationship with Navigant. Since the IDT was not extending the contract of the CEO beyond ten years, a farewell was being arranged for R7m. The executives had been asked to explain how the IDT could afford to spend R7m for a farewell party if it was struggling for funds. The stealing of money for a non-governmental organization (NGO) in Swaziland by a regional executive in Gauteng also surfaced. It was then realised that executives had fraudulent relationships with contractors, and it had all been hidden from the board. For instance, with Navigant, before any work had been done, R4m was already paid out. That had been the board’s induction into the IDT. It knew the situation was dire, so unlike members of other boards who would have had time to settle down, it was facing entrenched corrupt practices.

Dr Fikeni said that in his first three weeks as board chairperson, he saw something he had not seen in his previous board positions -- that as chairperson of the board, he would be fetched from home in a Range Rover, a driver would be flown to where he was going, and the same applied to the CEO. He had disagreed and told them it had to stop. When he called the CEO, he had confirmed that it had always being the tradition in the IDT. All of this was in the institution’s DNA. All that had been stopped, including the tradition of executives traveling in business class while the organisation asked for bailouts from government. In doing this, it knew it was in for a fight. That had been the environment, where everything was hidden and not transparent.

The whistleblower, for example, had said that R18m had been paid to two bed and breakfast (BNB) establishments. The board had said the IDT was not the business of dealing with BNBs, and when the executives were called and no answer was forthcoming, the board had asked for an investigation and printouts of transactions for the month of April 2014. That was how it had discovered that one BNB had been paid R9m. From there, it had ordered a forensic investigation, because it was clear that criminality was involved. To put it in context, the board was dealing with an organized crime syndicate. It was not easy to fight this battle.

The board appreciated the support it received from the Department when it briefed them of the nature of challenges it was facing -- that the IDT had great potential, but what was happening was capable of destroying the fibre of the entity. As the IDT had briefed the Committee while in Johannesburg, another strange thing that had happened was the push to acquire a new IT system. When the board asked why there was urgency, it was told it had to be done before December, almost implying that otherwise the world would collapse. This was reluctantly agreed to, due to a persuasive motivation. It was later found out that it had been a ploy to destroy evidence when they realised the new board was snooping on everything, and they could not keep it up. That had also been discovered by the forensic investigators.

The preliminary investigation into the ULM issue showed that officials from both the municipality and the IDT seem to have colluded. When the investigation was complete and the IDT had the report, it would come to the Committee and the Department to present it, because it saw them all as partners in fighting this criminality. Nothing would be hidden, and no one would be shielded from prosecution.

Ms Seipati Boulton, Chairperson: IDT Audit and Risk Committee, said that no go-ahead had been given by board for new IT systems’ implementation, because after undergoing a risk assessment, the CFO had been directed to assess what changes were envisaged, and what the impact would be. She had then told the board not to approve the system implementation, since system processes had not been performed and followed. The board had taken that decision in the end. The previous culture that had been the norm at the IDT was that management never listened to the board. Decisions taken by the board were not followed by management unless they felt it would benefit them. Despite objections from the board, the CFO had gone ahead and implemented what they had planned. The timing of the implementation was also wrong -- for any CFO to have chosen the fourth quarter to do a systems implementation, it was not good. She wanted to clarify that no go-ahead had been given to implement the IT system.

She said Gobodo had been appointed appropriately by IDT under the directive of the board to investigate the procurement processes that were followed with the IDT’s major suppliers. The IDT was looking at the general level of governance compliance around procurement processes with a specific supplier in mind, which was Navigant. A lot of tenders had been channeled through Navigant, but it was not known to what extent and what the details were. The only thing that the audit committee knew about them was that they were the sole company to organise the CEO’s farewell event. She knew the amount paid to Gobodo was not more than R500 000. The investigation lasted for about eight months. It took so long because of the resistance from management, especially the CFO who was in charge of finance and the supply chain management processes. Questions to assist the investigation were not answered, and documents requested were not handed over. The type of investigation requested on Gobodo was a preliminary investigation, and not a full blown investigation. As the chairperson indicated earlier, the IDT was dealing with a syndicated collusion. When one spoke to one official, the word went everywhere so that gaps were covered. Gobodo was asked test certain processes such as whether internal controls were followed, procurement processes, etc. The preliminary investigation had identified:

  • That Navigant had not been properly procured. It had been procured as a one stop shop for strategic implementations, employee relations, and no defined scope whereby every opportunity was given to them to grab. The contract signed with Navigant had no protection for the IDT.
  • Three health clinics from the KZN Health Department were identified as targets for investigation, based on information passed on from a whistle blower.
  • Procurement of theatre equipment showed some malpractices.
  • A non-existent library supposedly being built in KZN, for which monies had been disbursed.
  • A mobile classrooms project being implemented by IDT via a particular supplier.
  • Wrong doings by executive management that were uncovered, and these were put through a disciplinary process.
  • The frequency of payments made to a particular supplier, while it was known it took a long time for the Department to credit money to the IDT’s coffers. This had raised an alarm.

Most other issues that had come out of the IDT’s own investigations were handed over to the Treasury for a proper and thorough investigation.

Ms Kohler Barnard said she had looked through all the documents and never saw a mention of Navigant anywhere. What was Navigant related to? Was it an entity called by another name, when had it come in relation to this matter?

Ms Boulton said Navigant had been discovered when it became apparent they were the company to be paid money for the execution of the farewell party for the CEO. On closer scrutiny, it was clear that management had made the board aware that it was organising a certain function. When the contract was requested, it was apparent that this company had limitless scope to carry out any function for the IDT. This was how Navigant came in.

Dr Fikeni added that the board had also stumbled on Navigant being paid huge sums of money. Of R15m that had been obtained from the Treasury for a bailout, much of it was paid to Navigant. When asked what services had been performed by them to warrant such payments, they had been told it had been for workshops, facilitation, advice etc. When asked for the proof of the work done, the board had seen nothing till now, which was why it had taken Navigant to court on some of these issues. This was an eye opener, and the board’s induction to what was going on. This was the scope when the investigations were transferred to Treasury.

The board had come into conjunction with TNT through the partnership agreement. This had begun at the educational level, where services were provided for the Department of Education. When an opportunity arose for this businessman, who was looking for government contracts, agreements known to only a very few persons were entered into in diverse areas like electrification, cemetery construction, cleaning, upgrading, bus rapid services, Poverty Relief Project (PRP) programmes, as well as electricity renewals. As for how much was each worth, the electrification of houses in ULM was about R100m, construction of a cemetery was about R9.8m, according to his notes, although the reports were yet to be forwarded, so they could change. The integrated public transport system (IPTS) was worth about R50m, and the PRP programme about R38m. So the amount transferred to the municipality for all these projects had been R290m, while the entire IDT budget was R498m.

Ms Kohler Barnard said she had found the Navigant website, and the IDT was proudly displayed as one of their clients. They also had the Departments of Transport, Social Development, Trade and Industry, and whole pile of government business. The IDT therefore had to do something about it, because Navigant were not creaming IDT alone, but a host of other government entities. This was a company the IDT had taken to court, displaying the IDT’s name as their client.

Mr Pakade said no irregularities had been reported on the Department of Education’s programmes, and the IDT had a very good and cordial relationship with them. The IDT had said it would specialise in electrification programmes, so it had made a proposal to Umsunduzi that they needed a specialist to assist in project implementation. It was then that the municipality had procured TNT as specialists. The IDT now knew that they were not specialists according to the investigation, but partners in an arranged scam. The Department of Education in the province was not necessarily part of this Umsunduzi scam.

When the new board and CEO were appointed, it had been decided to specialise, as earlier indicated. Looking at who was found on the wrong side with regard to procurement, at the time the IDT officials believed they were doing the right thing by going for single sourcing. However, considering the nature of the transaction, the IDT was led to think that it was irregular because it should have gone to an open tender process so that the right skills would be engaged to do the work. Every official cited in the report, past and present, would have to come and account. This was in accordance with the present board’s policy of zero tolerance. The reason it was not picked up was that everything they did was done deliberately. The procurement was done through a single sourcing.

Regarding what the normal fee was, the overpayment came in two ways. The 10% that was charged was the maximum fee the IDT currently charges in terms of the Treasury instruction note issued in November 2014. The note gives a range that can be charged, depending on the size of the project. The smaller the contract, the higher the fees, while mega projects should attract a lower rate. The rate ranges from 4% to 10%. Looking at this transaction, it was a big project worth about R489m, and ordinarily the IDT should not have charged a fee of 10%. The reason it had been set at 10% was to accommodate the strategic partner. 10% of R489m would be R48.9m if the IDT were to implement the whole programme, and this should be the maximum accrued to it. The 1% of the programme management fee to TNT should not have been charged from the municipality’s account, but in terms of the agreement between TNT and the IDT, it should have been included in the 3% business generation fee. Instead, it had been charged directly to the municipality’s account, and this was how the overpayment came about. The IDT was following up on all of this and would do a reconciliation of account when the report was out.

What the board had done was to deal with the CFO at the time. The CFO had been fired in December 2015, and all the officials cited in the Navigant project had also been fired and dealt with. Anyone whose name appeared in the report being compiled would be dealt with as well, and the recovery of the money was being pursued.

Regarding the timelines on the projects, these were terminated by the municipal manager in 2014, so the projects have not continued, and if one looks at the work in progress one would notice that only a few had been completed.

In January last year, a new CFO had been appointed, and there were now qualified new employees in the finance department. Accounting firms and consultants were assisting the IDT. A comprehensive reconciliation was ongoing and all unpaid contractors were being encouraged to come forward.

The IDT’s appeal to the Committee was that the fight against corruption would not be won easily if it dealt with companies like Navigant and others, and they re-emerged in another government department over which it had no control. It was disheartening to know that reconstruction and development project (RDP) houses with poor workmanship, like cracks, were being repaired and rebuilt by the Department while the unscrupulous contractors moved on elsewhere. The consequence management, which was supposed to have a combined assurance, might be very helpful. Names of entities that were troublesome should be blacklisted. What was happening now was that they came back with another name and continued their nefarious activities, and this was often frustrating.

The Committee was of the opinion that they could do something about it by engaging with the National Treasury to establish a system to link the departments and the provinces, and advise them of all blacklisted companies, with the identity numbers of their directors, so that they could not tomorrow go around and open another company to fleece the state.

The Committee thanked the present board and management of the IDT for their courage, and reiterated that its doors were always open to them.

The meeting was adjourned.

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