Services Seta embroiled in tender irregularities and corruption scandal

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A damning investigation has uncovered widespread corruption and irregularities in the Services Sector Education and Training Authority (Services Seta), with nine service providers implicated in tender manipulation.

The investigation, conducted by Werkmans law firm, revealed that some companies were awarded tenders without following proper Supply Chain Management (SCM) processes, despite being already contracted.

The probe was prompted after three whistle-blowers approached the Organisation Undoing Tax Abuse (Outa) with damning evidence of tender manipulation on several different tenders.

Werkmans Attorneys investigated following Outa’s investigatigation of the allegations in 2018.

This alleged breach of protocol occurred during the tenure of former board chairperson Themba Mhambi and chief financial officers Andile Nongongo and Tsheola Matsebe between 2016 and 2023.

Rudie Heyneke, project manager at Outa, described the findings as “shocking”.

He added: “It’s even more shocking that no action has been taken against the employees or service providers implicated.”

The investigation found that tenders were advertised without due procedures, and some score sheets were missing or unsigned.

Some of the report findings, seen by The Star, were that there were “serious flaws” in SSETA procurement processes.

“In one of the tenders we investigated, we noted an apparent less than arm’s length relationship between officials of the SSETA and the officials of the service provider. We noticed highly compressed time lines in placing orders, delivery of products ordered, submission of invoices, requisition for payments and payment authorisation and processing.

“All these processes occurred in a space of approximately five days not only on one but multiple occasions… This is unheard of, considering the amounts of invoices and payments involved,” said Lloyd Abraham of Werkmans Attorneys.

The report stated that given the highly compressed time lines, it was “seriously” doubtful whether the service provider, did in fact deliver the products ordered and whether the SSETA did in fact receive and utilise the products.

“What is also worth noting is that only one official signed the delivery notes of the relevant service provider, thereby implying that she is the one who received the goods on every occasion. This is a striking coincidence,” Abraham continued.

He also said that bid submissions from most of these companies were not evaluated, and therefore, the tender was awarded irregularly.

According to Werksmans, one service provider, awarded a tender valued at R12,895,923, was allowed to increase its contract price without undergoing supply chain management processes.

Phillip Kwampe, board secretary, denied claims that Services Seta failed to implement the report’s recommendations.

“The recommendations on SCM were implemented through the review and approval of the amended SCM policy, which was approved by the board in February 2024,” Kwampe said.

However, Heyneke disputed this, saying: “The fact that no action has been taken against those implicated is a clear indication that Services Seta is not taking this seriously.”

The Parliament Portfolio Committee on Higher Education recently lambasted Services Seta for ignoring the report and failing to hold anyone accountable.

NMK Forensics, one of the implicated service providers, responded: “We suggest that you direct your query to Services Seta because they conducted the procurement process in question... NMK Forensics has always conducted its business with integrity and in compliance with the law.”

The investigation’s findings include tenders awarded without proper advertising, missing or unsigned score sheets, irregular contract price increases, unverifiable references, undated approval letters and incomplete tender documents.

The scathing report recommended a sweeping overhaul of the Services Seta supply chain management processes.

Some of the investigations recommendations included rotating supply chain management (SCM) committee members to prevent bias, strengthening accounting authority oversight and including disqualified bidders in reports.

The recommendations also included keeping minutes of SCM proceedings and signing reports by all committee members among others.

The report also calls for strict performance measures, adherence to National Treasury regulations, and disciplinary investigations against implicated employees.

The Star