Question NW914 to the Minister of Communications

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21 November 2019 - NW914

Profile picture: Mackenzie, Mr C

Mackenzie, Mr C to ask the Minister of Communications

Whether the Universal Service and Access Agency of South Africa was the subject of any investigations by the Special Investigating Unit in the period 1 June 2014 to 30 June 2019; if so, what was the (a) subject and nature of each specified investigation and (b) outcome of each such investigation?

Reply:

I have been advised by USAASA as follows:

The SIU investigation into USAASA relates to maladministration and irregular expenditure. The area or subject of investigation is as per the table below:

No

Subject

Outcome

(a)

The alleged irregular appointment of Mr Zami Nkosi, as the Chief Executive Officer (CEO) of USAASA

The SIU found that the appointment of Mr Zami Nkosi as the CEO was irregular and as such USAASA incurred irregular expenditure in the sum of

R255 211.27. Mr Nkosi’s contract expired before the report could be released. Therefore, his contract could not be nullified as legislatively required.

 

Resulting from this, the SIU referred the matter on the irregular expenditure of R255 211.27 to the National Prosecuting Authority in respect of 3 former Board members of USAASA (2013/2014 and 2014/2015

financial years) on 16 November 2017.

(b)

The alleged funding by

There was no funding of irregular expenditure in

 

 

USAASA, by way of a subsidy in the amount of R500 million, to CellC for the construction and expansion of an electronic communications network for the Emalahleni Local

Municipality.

respect to the CellC investigation.

(c)

The appointment of Mthinthe Communications (Pty) Ltd in respect of phase 2 of the Rapid Development Programme

The SIU found that the appointment of Mthinthe Communications (PTY) Ltd in respect of phase 2 of the Rapid Development Programme was irregular.

 

Therefore, the SIU found that the Accounting Authority of USAASA at the time represented by the former Board (2013/14 and 2014/2015 financial years) were grossly negligent and / or willfully negligent in the execution of their fiduciary duties. The SIU further found the evidence substantiating the commission in offence of financial misconduct as envisaged in Section 86 (2) of the PFMA.

 

 

 

Resulting from the above, USAASA incurred irregular expenditure on appointment of Mthinthe Communications in the sum of R33 914 567.84. The SIU referred the matter to the National Prosecuting Authority as the evidence pointed to the commission of an offense of financial misconduct as envisages in Section 86 (2) of the PFMA on 16 November 2017.

 

 

 

USAASA contravened the following:

 

 

 

  • Section 217(1) of the Constitution which effectively requires USAASA to procure its goods and services by means of a system which is fair, equitable, transparent, competitive and cost effective.
  • Section 51 (1)(a)(ii) of the PFMA which requires USAASA to ensure that it has a procurement system which is fair, equitable, transparent, competitive and cost effective.
  • Regulations 16A3.2(a) of National Treasury Regulations which required USAASA to have and maintains a procurement system that is fair, equitable, transparent, competitive and cost effective and that is consistent with PPFA.
  • USAASA effectively contravened their own

SCM policy.

MS STELLA NDABENI-ABRAHAMS MINISTER

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