Claims of IT contract mismanagement at Treasury a Gupta ploy: Gordhan

Claims of financial mismanagement of government’s Integrated Financial Management System (IFMS) is part of a well-orchestrated campaign by the “Gupta syndicate”, according to former finance minister Pravin Gordhan.

Gordhan, who is currently out of the country, said he will provide a comprehensive overview of the claims next week.

This comes after Finance Minister Malusi Gigaba told the standing committee on public accounts (Scopa) on Tuesday that Treasury had launched a forensic investigation into the IT contract, according to Business Report.

It also comes as ANN7 – which was owned by the Guptas – broadcasts continuous segments surrounding the claims. Fin24 earlier reported that the auditor general wants to give National Treasury its first ever qualified audit opinion for the way in which the contract for the IFMS was awarded. The payment system is meant to bring all government payments together into one system.

The first phase of the project was completed at a cost of R1.2 billion, but Cabinet then in 2013 approved a change to its architecture due to specific technological changes.

A new “off the shelf” payment system would cost R4.3 billion, including the R1.2 billion originally spent on the first phase.

In Gordhan’s view, the claim of mismanagement is an attempt to discredit and launch attacks “through the abuse of state institutions on those opposed to corruption and working for a renewal of the ANC so that we can once again earn the trust of citizens and ensure the ANC wins the 2019 elections”.

‘Sign of desperation’

“These malicious actions by this nefarious clique is a sign of desperation. This is also a very transparent and ridiculous attempt to shift the focus from the plentiful evidence existing in the Public Protector state capture report and the leaked emails of plain stealing of public resources, for which this clique must still account some day soon,” said Gordhan.

He indicated that a more comprehensive reply can be expected next week.

Fin24 earlier also reported that ANN7 claims an internal Treasury audit into government’s IFMS revealed that Treasury committed 54 cases of financial misconduct in just 70 months. No one has been held accountable for these alleged transactions.

Gigaba said in May this year that it is a priority for Treasury to maintain public confidence, and gave the assurance that the report of mismanagement would be investigated. Gigaba at the time affirmed his confidence in the integrity of Treasury’s past leadership.

Treasury’s director general Lungisa Fuzile departed from the department earlier in May. This followed a Cabinet reshuffle where President Jacob Zuma replaced Gordhan with Gigaba.

Fin24 reported earlier that National Treasury’s audit committee found that the payments done through the integrated system lacked internal controls to mitigate risks, and requested that then director Fuzile order a forensic investigation into the matter. Deloitte was awarded the tender and started the investigation in October 2016.

There are allegations that Fuzile did not act on the audit committee’s report on irregularities with the payment system, while other sources in Treasury dispute the claims, alleging in turn that the internal audit committee is sitting on an investigative report by Deloitte that found no wrongdoing. The Progressive Professionals Forum (PPF) has also called for the Public Protector to investigate the claims of maladministration at National Treasury.

“PPF has noted with regret and shock on the failure by National Treasury to account on the R2.2 billion spent on its IFMS project,” the forum said in a statement issued on Wednesday.

The PPF said it is “emboldened” by the commitment made by Gigaba that he will ensure that this matter is fully investigated and that all those who are found to have faulted shall be held accountable.

The forum also wants Scopa to summon “all ministers and director generals responsible” to explain why taxpayer monies were “wasted”.

It was reported earlier on Wednesday that Morena Ntsika of the Black IT Forum claims Treasury’s failed attempt to implement its IFMS is not the only instance where government has poured billions into a technology project with nothing to show for it.


Read: Treasury in hot water for failed R1 billion IT system: report

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Claims of IT contract mismanagement at Treasury a Gupta ploy: Gordhan