Interrogation of Auditor General’s Reports on Procurement at Departments of Justice & Trade & Industry; Interrogation of Auditor

Public Accounts (SCOPA)

22 August 2007
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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report


22 August 2007
Mr T Godi (PAC)

Documents handed out
Report of the Auditor General on an investigation into Procurement at the Department of Justice and Constitutional Affairs March 2007

Audio recording of meeting

The Auditor General had submitted a report on procurement policies and practices at the Department of Justice and Constitutional Affairs, as well as at the Department of Trade and Industry. Both Departments were interrogated on issues raised in the reports.


Auditor General’s Report on Procurement Policies and Practices: Department of Justice (DOJ)

The Chairperson stressed that the ultimate aim of the SCOPA hearings was to ensure full accountability and to save needless expenditure.

Ms N Hlangwana (ANC) noted that the report by the Auditor General stated that there had not been timeous performance in the Department and she wished to know firstly what had been the cause of such delays and secondly what steps had been taken to assure that this would not prevail again in the future.

Adv Menzi Simelane, Director General, DOJ, stated that there were areas of work of the Department which had not been satisfactory, and that the Department had embarked on a process to rectify such a situation. There were areas of Departmental practice which were not satisfactory. However, of necessity there were numerous service providers and their sheer number gave rise to some of the problems that had both been encountered and reported on in this Auditor General (AG) report.

The Chairperson stated that his understanding of the questions was that he should be speaking to the weaknesses of the staff in not doing what they were supposed to have done, and further what mechanisms had the Department implemented to ensure that such errors and omissions did not recur.

Adv Simelane stated that in his view there were no staff weaknesses. Problems had arisen because of the changeover from a Tender process to a Supply Chain Management system, and the implementation of an effective system of planning. He added that the process of Supply Chain Management, as opposed to a Tender process, had not been fully mapped out. The contracts for supply to High and Magistrate’s Courts of a recording system had expired, and further contributed to the problem. The new recording system was a combined recording and transcription service.

The Chairperson interposed that there seemed to be a lack of planning.

Adv Simelane replied that the combined recording / transcription service reflected technological advances and was what was on the market.

The Chairperson reiterated that it seemed that the Department’s problems had been occasioned by a lack of planning, since it appeared that the Department had been taken by surprise at the ending of the contract. He wished to know what measures had been taken to ensure that there was no repetition of this when the current contract expired.

Adv Simelane assured the Chairperson that all processes were being reviewed and that contracts were being monitored to establish when they expired and when they needed review or replacement. The Department was confident that the system had improved and there would not be problems in the future.

Ms Hlangwana then wished to know what disciplinary processes, if any, had been taken against employees, arising from the problems identified in the report.

Adv Simelane stated that disciplinary processes against employee officials had been implemented, but not concluded.

The Chairperson wished to have further details of the disciplinary processes.

Adv Simelane then replied that the change from the Tender process to a Supply Chain Management process required a review of job descriptions and a performance review was also being undertaken.

The Chairperson wished to know whether detailed information was available.

Ms Sandra Gomm, Chief Financial Officer, DOJ, replied that the original appointments had been made in terms of traditional procurement, but the new system of Supply Chain Procurement Management required new skills. The problem was that the system taken over had been corrupt, and the new system being implemented required reorganised structures, and filling of new posts. Management was in the process of getting the posts filled.

Ms Hlangwana stated that she felt that this was no justification and that systems must be created and put in place.

The Chairperson intervened, and stated that he was now apparently faced with conflicting versions. Firstly, he had heard explanations that the predicament arose as a result of the new systems required, yet there was also mention of disciplinary processes against employed officials.

Adv Simelane explained that this appeared to be conflicting, but it could be explained by the fact that although there was a new system and new challenges, the officials had nonetheless made some elementary mistakes and basic errors, which he felt should not have required intervention at management level.

Ms Hlangwana expressed concern about the transcription system.

Adv Simelane explained that the former transcription service had only met part of the Courts’ requirements, and additionally there were unforeseen demands in certain provincial areas from transcripts relating to certain cases. There was continuous monitoring of the newly implemented systems.

Ms Hlangwana noted that it had been found that five service providers had been contracted to do work, but that there had been no documentation as required by regulation. She asked what processes were in place, or being put in place, to ensure compliance.

Adv Simelane replied that the aspirant contractors did not comply with all requirements for the completing of bid documents and it had been found that documents to support the contracts were lacking. As part of the new Supply Chain Management system now implemented there was a point by point checking system, and if one point could not be satisfactorily completed then the process could not proceed to the next point. He was of the opinion that this step by step process should greatly assist the Department, the officials and the contractors. It was a question of document management and abiding by the process.

Ms Hlangwana then asked whether this would be the last time there were such questions raised.

Adv Simelane replied that although he wished to provide a definite affirmative, his experience proved that there was always likely to be a problem when human beings and money were intertwined, and so he could not provide a straightforward unqualified affirmation.

The Chairperson asked whether the implementation and enforcement of the systems would not pick up problems before they needed the attention of management.

Adv Simelane confirmed that they should do so. If not, then he would deal with the issue. He was of the opinion that there should be a significant improvement as a result of the systems having been put in place.

Ms Hlangwana asked whether there was consideration and verification of the information supplied by bidders in the Supply Management Chain system.

Adv Simelane conceded that this had not been part of the system previously but that it was now implemented. Additionally there were now procedures in place for the security vetting of employees.

Ms Hlangwana drew attention to the fact that four members had not attended the Supply Management Chain training. She asked the reasons, and the consequence of such non attendance.

Adv Simelane replied that this was now part of the due process implemented and that in fact all the members had attended such courses.

Mr E Trent (DA) asked for an assurance that all the negligent officials had been disciplined. He noted that negligence was not confined to any one area. He asked, in the case of officials not attending courses, how many, and the reasons for non attendance.

Adv Simelane conceded that of the six relevant officials, four had not attended the courses in Supply Chain Management systems.

Mr Trent drew attention to the fact that the Public Finance Management Act (PFMA) was implemented in 1999, eight years ago. In terms of this Act the Accounting Officer was required to implement a system that was appropriate to the intention of the Act. Even now, eight years later, the Department was still encountering problems in implementation. He felt the time for excuses had long past. If two thirds of the required officials had not attended courses he felt that this was a severe dereliction of duty by them. He also believed that SCOPA must make an example of them, for unless this was done officials would still continue to ignore their duties and responsibilities.

Mr Trent then referred to the fact that the audit report highlighted that there had been 38 % over-payment of suppliers, which he regarded as wasteful expenditure of the taxpayer’s money. He asked for comments why action should not be taken against officials from the Department.

Adv Simelane responded that officials went on training courses regularly and on an ongoing basis. He could not say why these four had not gone on their required training, but he could say that disciplinary action would be taken against them. It was not correct to say that the Department had not attended to, nor undertaken training in compliance with the PFMA.

The Chairperson pointed out that although the Supply Chain Management was a new process and that there was continuous training, it still remained a fact that the PFMA was not a new development.

Adv Simelane replied that whilst this was correct, Supply Chain Management as a conceptual system had only been introduced from 2004 and thus was a relatively new concept requiring adjustment and adaptation. Supply Chain Management required a differing approach from the Tender Process System, and it was in respect of these changes that the officials had to be brought on board with training.

The Chairperson wished to know whether there could be reference to specific cases, and asked if there had been deliberate non compliance.

Mr Trent highlighted that this sector was not exempted from complying with the regulations. The required system was not in place, and he did not accept the excuses.

Mr Trent noted that the Department had paid higher prices twice. He queried whether this should be considered a wasteful expenditure of State monies. He also asked if these monies had been recovered or whether any attempts to recover had been taken.

The Chairperson stressed that this Committee was particularly concerned about wasteful expenditure of state money.

Adv Simelane replied that no attempts had been made to recover this additional expenditure, for it was regarded as properly incurred, since certain courts had required extraordinary urgent transcripts of cases. The Legal Advisers were of the opinion that there was nothing untoward about these extraordinary payments.

Mr Trent noted that out of 46 payment batches, only two had goods received notes completed. He asked of the Auditor General whether this was general practice.

Adv Simelane replied that samples had been taken and that these showed that they related to urgent transcription cases.

Mr Trent then stated that he had requested the Auditor General to reply to his question.

An official from the Office of the Auditor General, stated that the service provider had not provided any basis upon which it was charging. It was a principle to only make payments in terms of the relevant contract conditions and terms. In the opinion of the Auditor General the Department must put in place and implement a system to identify the basis of payment.

The Chairperson said that he felt this was a fair comment.

Adv Simelane acknowledged it was a fair comment and added that legal opinion had been sought regarding the necessity of the extra work charged for. He had been satisfied that this was in fact required.

Mr Trent noted that there did not appear to be any supporting documentation to prove that the services had been rendered satisfactorily. He was of the opinion that this was a grave oversight, and opened the door to possible corruption. The Department must ensure that the work had not only been done, but done satisfactorily.

Adv Simelane conceded that this was so.

Mr Trent then queried why there was no action to recover monies paid improperly or in excess of the contracted amounts.

Adv Simelane undertook to check this matter, and assured the Members that there would be efforts to recover monies.

The Chairperson asked for the assurance that monthly reports would be provided in this and other gray areas.

Mr Trent then referred to page 5 of the AG’s report, where he had highlighted discrepancies in mileage. He asked what the Department was doing about these instances, and further what it was doing to ensure it did not happen again.

Adv Simelane stated that this aspect was referred to the relevant authority for action. He added that consideration was being given also to possible aspects of fraud, in addition to the possibility of Competition matters.

Mr Trent then wanted to know the amount of the monies in question.

Adv Simelane said that the full amount might well be in the region of R40 million.

The Chairperson referred to page 8 of the Auditor General’s report in which he had highlighted concerns raised by the Accounting Officer. He enquired of the progress in settling or satisfying such concerns.

Adv Simelane replied that other than the matter of a permanent appointment, which depended upon finalisation of a job description and its formal evaluation, every other concern had received attention.

The Chairperson asked whether this had overcome the lack of trained staff.

Adv Simelane replied that people had been trained, but had not yet been appointed to permanent  positions as their job evaluations were still to be completed.

The Chairperson asked whether this included the re-constitution of the data base centre committees and was assured that it did.

The Chairperson asked about document management

The Director General stated that document management in the Department was now completely under control and that the filing system was also receiving attention.

The Chairperson sought clarification and confirmation that this included suppliers.

Adv Simelane assured him that it did.

Mr Trent then referred to verification of the documents submitted in support of consideration for Preferred Provider status, and asked whether these were being properly vetted and verified. The AG had referred to the fact that the Department had not known or abided by the rules and that there had not been proper validation of supporting documents. Mr Trent was concerned to see that the Department would abide by the rules, and take the necessary steps against officials who did not apply the rules properly.

The Chairperson said that the Department was taking steps, but queried whether any steps were being taken against officials. He suggested that the Committee await a report from the Department on that point.

Mr Trent wished to know what steps were taken to ensure compliance with the regulations regarding preferential purchases.

The Chairperson pointed out that in his report the AG had requested the introduction of an eight- point process, and that the Committee should await a report on the implementation of this process.

Mr Trent and the Chairperson held differing views, but the Chairperson stressed that the issue was whether the system did work, and that was the question the Committee would like to have answered.

Mr P Gerber (ANC) asked how the contracts were advertised. He asked how and why replies were expected in four days.

Ms Gomm noted that contracts were required to be concluded urgently. After more intense scrutiny they were found to be faulty; and cancelled.

Mr Gerber wished to know whether these cancellations and requests were done in the printed media or by telephone.

Adv Simelane said they had been done in accordance with standard procedures.

The official from the Auditor General stated that normally a Department must show quotations, but if the amount of the contract was below R200 000 then a different procedure applied from those above R200 000. If all possible suppliers had been contacted by telephone, then this would be regarded as acceptable if all other procedures and regulations were in place.

Mr R Mofokeng (ANC) asked whether the same procedures were being followed, two years later, or whether the Department had changed the procedures in this time as a result of lessons learned. If so, he asked whether these lessons were learned only for this Department.

Adv Simelane stated that it was clear that great attention had to be paid to the verification process. The Department was particularly vigilant about the procedure for some processes were conducted in bad faith.

Mr Mofokeng said it seemed to him that the service providers obtained significant business from Government. The DOJ was not the only department involved. He wondered if it was not possible to introduce a widespread system to cover all departments and suppliers to government.

Mr Trent wished to revert to the payments to suppliers of transcription services. He asked why there was a difference between the provinces’ payments, despite the fact that there did not seem to be significant differences either in the size of the province or the work.

Adv Simelane admitted that there were different payments. However, the differences were based on the volume of the work in each province. Gauteng was geographically the smallest province, but had the largest volume of work in the department.

The Chairperson thanked the Department for its explanations. He hoped the next report would give evidence of improved training, discipline and a strengthened management function, so that the Department gave good service.

Procurement Policies and Practices in Department of Trade and Industry (dti): Interrogation of AG report

Mr D Gumede (ANC) stated that the Committee appreciated all the hard work that was being done by the Department of Trade and Industry (dti) but it had certain specific areas of concern. He asked whether there was now full and proper implementation by the Accounting Officer of the Procurement Policies for Supply Chain Management in accordance with procedures and regulations. 

Mr Tshediso Matona, Director General, dti, assured the Committee that he personally had been aware of the shortcomings, and had personally investigated the issues around Supply Chain Management (SCM). He had then undertaken measures to improve the performance by the Department, and these measures were initiated even before the report by the AG had highlighted the shortcomings. He was certain that by the time of the next audit these issues would have been satisfactorily attended to by dti. As far as he was concerned, the gap occasioned by the changeover from the Tendering Process to Supply Chain Management had been picked up and understood. Supply Chain Management policies and procedures were being implemented fully, and were also updated in all areas. SCM was now under the control of the Accounting Officer for Procurement Policies. In addition a system of risk management had also been implemented. The department was now fully compliant.

Mr Gumede then asked whether there had been any teething problems.

Mr Matona replied that if there were, he would ask for assistance, but thus far there were none.

Mr K Naidoo, Chief Financial Officer, dti, interposed that initially the officials had not fully understood SCM as opposed to the Tendering Process, but with monthly meetings devoted to SCM there were now no issues of concern emerging.

Mr Gumede posed a question relating to the comments of the Accounting Officer on page 7 of the AG report. He asked what progress there had been regarding the appointment of consultants, and what had been done on the transfer of their skills.

Mr Matona replied that there was no guideline for the appointment of consultants, and that they would be appointed as required. Their appointment was regarded as being within the SCM discipline. There had been a request that any appointment of consultants must be properly motivated and their appointment was to follow the proper procedures and be in accordance with regulations.

The Chairperson wanted a report in respect of remuneration.

Mr Matona responded that the drawing up of a guideline for the remuneration of Consultants was work in progress.

Mr Gumede wished to know if, when considering use of consultants, dti would give thought to the most economic options.

Mr Matona assured Members that the cost of consultants was at the forefront of considerations. The appointment was the special task of the Quality Officer in the SCM procedure. A rigorous analysis was implemented, and consultants were only appointed when absolutely necessary.

The Chairperson pointed out that he saw some contradictions. He was of the opinion that the necessity for consultants could be avoided by the appointment of properly trained staff, and asked for comment.

Mr Matona replied that an audit of the staffing of the Department had been performed, based on a number of criteria. However, this had not included certain criteria relating to the Tender Committee. Subsequent developments revealed these criteria to be essential, and they had been included to try to eliminate the weaknesses. 

Mr Naidoo added that requirements had been placed before the Tender Committee, but that these had now been changed to comply with the guidelines imposed upon the dti and all other government departments. He considered that there was compliance. 

Mr Gumede then asked whether the changes introduced in the SCM, especially for consultants, meant in effect that the decision making was at a higher level of authority than before.

Mr Matona responded that when there was a request for the appointment of a consultant, the Director General must be fully informed of the reasons and the standards or criteria upon which the decision was made. Only after approval by Mr Matona himself would the matter proceed further. 

Mr Gumede then asked for an explanation on the current staffing levels and the vacancies, if any.

Mr Matona replied that as at March 2007 two-thirds of the vacancies had been filled, so in theory there was a 60% reduction in the vacancies listed in the report. However, because of staff turnover and internal promotions the percentages had not really changed to that extent. He pointed out further that when an internal promotion had been made the staff complement had not been changed, but the new vacancy then arose at a lower level.

The Chairperson commented that internal promotions did not seem to assist in reducing the vacancy rate, but merely placed the vacancies at another level.

Mr Matona conceded that this was so. He added that this is a challenging issue, but it was being addressed by the Department. Recruitment personnel had been engaged to secure the necessary skills, but the pool from which qualified individuals were sought was highly competitive. Recently the Department, having gone through an intricate process to select a certain candidate, was told that he decided to accept an appointment elsewhere. Dti was targeting Masters students at the universities, but it was acknowledged that this was a complex problem.

Mr Gumede remarked that staffing was a major problem, and internal promotions did not resolve the low level vacancies. The matter was compounded by salary levels.

Mr Gumede wished to know whether any possible conflicts of interest among staff and procurement members were considered before tenders were awarded.

Mr Matona responded that other than the incident referred to in the previous audit report there were, to his knowledge, no conflicts. However, dti was very conscious of the possibility of conflict and this was constantly in the forefront of its mind.

Mr Gumede asked whether the unfavourable comments by the AG about the lack of consistent application of the Preferred Procurement Policy were being addressed.

Mr Matona replied that the dti had corrected the weaknesses highlighted, was implementing an improved scoring system for Black Economic Empowerment (BEE) and was applying it, and therefore was confident that dti was complying with legislation.
The Chairperson remarked that in the report there was reference to the CFO being a consultant and not holding a permanent position.

Mr Matona pointed out that Mr Naidoo had been appointed, and that dti was no longer using consultants in the field of financial management.

The Chairperson wished to know whether dti was working on skills transfer.

Mr Matona assured him that this was happening.

A member sought clarity on the definition of consultant, as he wondered whether dti was applying this term consistently with the definition in the PFMA.

Mr M Stephens (DA) referred to page 8 of the report, and the problems surrounding non-signature of a contract with a consultancy consortium.

Mr Matona stated that the contract had now been signed.

Mr Stephens asked how many consultants had been engaged without signed contracts, and whether there were still any consultants without signed contracts.

Mr Matona replied that there had only been this particular instance. Since then all consultants had signed contracts and no consultants were engaged without signed contracts.

Mr Naidoo elaborated that in this instance dti had engaged the consultant and allowed it to start work. Dti then wished to expand the requirements, but the consultant objected to extension of the terms and conditions and had refused to sign until the parties had reached concurrence on the question of the expanded duties and agreed extra remuneration. It had signed the contract once these points were clarified. This had been an exception to the general rule.

Mr Stephens noted paragraph 5.2.2 of the report, stating that the contracts were signed, and a project manager was overseeing the work, for which payment was made on completion. He asked what mechanism was in place for validating the quality of the work, and for assessing whether the work done served the purposes. It seemed to him that too much latitude was allowed to the project manager and the consultant, who could both be too easily satisfied.

Mr Matona replied that it was left to both the consultant and the project manager to satisfy themselves as to the standard and necessity of work performed. The project manager was also required to evaluate the standard of the work and to sign off the work before the payment was made. Random checks were made throughout the continuation of the work, as well as internal audits, to satisfy dti that there was proper validation or verification.

Mr Stephens asked at what stage the standard of the work required of the consultants was established.

Mr Matona replied that when a need for consultants was established, the terms of reference would be clarified, and there was approval and monitoring of the work performed by the project manager concerned

Mr Stephens commented that the standards of reference need to be established and agreed in advance, and compliance with those terms of reference must be monitored, otherwise dti could face litigation. He felt the requisite standard of work should be set out clearly in the contract documents.

Mr Matona emphasised that he was describing the current practice. This was set up as a result of the disputed contract, which was now regarded as a learning step from which current practices and procedures emerged. The dti endeavoured at all times to spell out, upfront, the required needs and standards. He accepted the points made.

Mr Stephens appealed to the dti to rectify all areas where the AG had stated that there was no, or insufficient, compliance with regulations and protocols.

Mr Matona stated that this had been done.

Mr H Bekker (IFP) was concerned that there was insufficient monitoring and evaluation of the work done by the consultants. He would regard the lack of signature of the consultant’s contract as negligence and he wondered who had paid for the job, and whether the person neglecting to ensure that there was a signature had been identified
Mr Matona noted that this was a matter for an internal audit.

Mr Naidoo clarified that after the essentials of the contract had been agreed upon, dti had wanted to extend frame of reference. The consultant declined to sign until these aspects were properly sorted out. As certain of the work was required urgently, the consultant had started this work, but had not attended to any of the work relating to the extra requirements. The contract had been signed once all terms had been agreed upon. All parties were aware of the situation at all times.

Mr Bekker addressed the question of the Preferential Procurement Policy. It seemed that one contractor had, seemingly arbitrarily, benefited by the departmental addition of between 3 and 20 points to its bid. He wished to know who had been responsible for this addition and whether it possibly amounted to corruption.

Mr Matona replied that it was obviously a matter for concern, but that he was not in a position to say that it had been corruption. He did not know off hand, who had been the contractor. He said that there was sometimes an attempt to assist a contractor who seemingly was qualified for the contract but had not fully completed all tender forms because of lack of understanding. The Department tried to cover all areas and was upfront with its requirements that contractors qualify in terms of broad based black economic empowerment (BBBEE), but notwithstanding these attempts aspirant contractors often did not complete the draft contract forms clearly. In this instance there had been R2 million wasted expenditure.

Mr Bekker wished to know whether the contractor concerned had taken legal action against the Department.

Mr Matona replied that there had been no consequences arising from this incident, which had taken place a long time ago.

Mr Bekker expressed the view that the Department had been extremely fortunate.

Mr V Smith (ANC) had concerns about the criteria upon which the consultants were selected or appointed, and further asked if they were they appointed with the transfer of skills by consultants in mind.

Mr Matona replied that the skills and transfer of and expertise of the consultants was an issue that had attracted different interpretations, but there was always reference back to the guidelines of Treasury and Government, and dti would follow new policies as they were updated. These guidelines around SCM had been issued in 2004, and dti had changed its policies and documentation after that.

Mr V Smith said that the cost of R2 million could in fact have been a cost to the Department and this situation was untenable. He would like the persons responsible to be identified.

Mr Matona agreed that the irregularity itself was not acceptable. However, an identification would involve another costly forensic audit, and he believed this would amount to throwing good money after bad. He firmly he believed similar instances would not arise again as firm controls were now in place.

Mr Smith agreed with the policy of not throwing good money after bad. However, he wished to stress that this mistake had been inexcusable. He urged all departments and sections within the dti to take cognisance and be aware of the dangers.

Mr P Gerber (ANC) asked what would be done to overcome potential conflicts of interest.

Mr Matona replied that every action regarding SCM tenders was taken in terms of guidelines and procedures.

Mr Naidoo added that if there was a declaration of a conflict of interest by a member of the procurement committee this member was asked to recuse himself and take no further part in the process. There was stricter vetting of persons appointed to any function where there might be a conflict of interest.

Interrogation of qualified audit reports of Companies and Intellectual Property Registration Office (CIPRO)
Mr Keith Sendwe, Chief Executive Officer, CIPRO gave the background to the qualified audit report and adverse comments made by the AG. He said that these events had occurred before his own appointment in August 2006. Since his appointment he had been endeavouring to turn the situation around and had the benefit of the assistance of Mr Renier du Toit, who was appointed as Chief Financial Officer of CIPRO from January 2007.

Initial investigations revealed that the problems had been occasioned by three serving officials, against whom disciplinary proceedings were being taken, Another six officials had left the employ of CIPRO, but investigations against them were proceeding in conjunction with the National Prosecuting Authority (NPA).

He stated that a SCM (Supply Chain Management) process had been installed and after intensive training it was working well. Further, there had been an intensive evaluation of the revenue generated by CIPRO. All items received were now recorded in the general ledger. There were extensive checks to ensure compliance with regulations and procedures. There were quarterly internal audits, an asset register had been established and was updated monthly, and performance agreements were drawn up for every member of CIPRO management. It was expected that the budgetary requirements would be achieved by March 2008. In addition there were to be audits of the Information System and where necessary IT equipment was being replaced. Above all quarterly reports were being submitted to SCOPA.

Mr Trent was concerned by the fact that the CEO had stated that everything was working “quite” well.

Mr Sendwe asked to be excused a degree of modesty by use of the adverb “quite”. He assured SCOPA that everything was being attended to in terms of Treasury regulations, and he hoped that there would be no problems or questions in the future.

Mr Bekker stated that before coming to the meeting he had consulted the Website operated by CIPRO. He was disturbed both by the outdated and sparse information available on this site. He had searched for details about close corporations with which he was familiar, and had received some information about the members, but when he had cross referenced by the names of such members he had encountered a blank.

The CEO conceded that there were still operational difficulties with the website, which had been updated from 1 January 2007. He said that there were delays of a week for updated information on close corporations and three weeks for information on companies. He stated that CIPRO was working towards making website information about close corporations available within 24 hours, and information on companies available within 48 hours.

Mr Smith congratulated the CEO on the turnaround but wished to have assurance that those persons involved in the disciplinary hearings would, if appropriate, be provided with written warnings, and that any appropriate results would be referred to the NPA for the necessary action. Moreover he sought an assurance that very severe action would be taken against anyone involved in similar actions in the future, whether high or low level officials. He finally asked under what guidelines the SCM principles were being applied.

Mr Sendwe assured Members that even the highest level officials would be included in the investigations and that, where necessary, applicable reports would be put in writing and forwarded to the NPA. With regard to SCM everyone including management had attended training. All persons concerned with procurement had been verified and validated in regard to the outside interests, and copies of the information were affixed to the records of every meeting concerning procurement. Every procurement decision followed this procedure, was submitted to the CFO for approval, and finally came to him as CEO for ultimate approval.

Mr Trent (DA) accepted that there had been some progress in reforming CIPRO. He emphasised that CIPRO played a very important role in the wheel of South Africa. He asked if CIPRO’s management were satisfied with their registration times, and asked if they were investigating whether the product could be improved.

Mr Gerber said that he too had gone into the website and still did not find the information or the operations satisfactory. He requested that this be looked into.

The Chairperson stated that other matters could be dealt with in the Annual Report and was of the opinion that much still required to be done. There was still a problem with the computer programmes and hardware. CIPRO should concentrate on improving skills, and to attempt to match, if not better, similar institutions elsewhere in the world.

The meeting was adjourned..


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