R500m wasted on Gauteng Health ICT system but still no accountability

16 September 2019

No criminal charges have yet been laid against three former Gauteng Health Department officials identified in a year-old forensic report that found wasteful and irregular expenditure in a R500 million three-year contract signed with Telkom in 2014 for data storage.

This is revealed in documents tabled at a meeting of the Gauteng Legislature’s Health Committee last week on Friday.

According to a legal opinion and forensic investigation done for the Department, this contract “failed to follow proper and lawful procedures.” The following officials are identified “for the improprieties and the irregularities that are associated with the procurement of the Vblocks server system from Telkom”:

- Former Chief Information Officer (CIO) Mojalefa Lekoto who was instrumental in concluding the contract, but has since left the Department.

- Former Head of Department Dr Barney Selebano, who was responsible for authorizing and signing various documents.

- Former Chief Financial Officer (CFO) George Mahlangu who also signed off key documents with Selebano.

Damning findings against Mr Lekoto include the following:

1. He abused his powers and allowed Telkom to proceed without a proper contract.

2. He failed to determine the total cost of ownership of the Vblocks system.

3. He failed to prevent irregular, fruitless and wasteful expenditure in relation to the Vblocks project.

All three officials (Lekota, Selebano and Mahlangu) contravened various legislative prescripts including the Public Finance Management Act (PFMA) and Treasury regulations.

The Department has so far paid Telkom R456 413 413 for the cancelled contract, but still owes R94 million and R33 million interest for late payment. According to legal opinion, the Department is still bound to pay even though it was an invalid contract. It is recommended that a settlement is negotiated with Telkom even though Telkom did not act in good faith as it failed to disclose that it had already engaged SITA to conclude a similar procurement agreement that would have made the purchase of the Vblocks system unnnecesary.

The forensic report was completed in September 2018, but the Department only wrote to the State Attorney on 18 July this year to pursue criminal and civil action against Selebano, Mahlangu and Lekoto, and to recover any monies owed to the Department.

It is of great concern that Mr George Mahlangu was recently appointed as head of the IEC’s political party funding unit.

The whereabouts of Mr Mojalefa Lekoto are not known but I hope he hasn’t got another government post elsewhere. He previously resigned from the Limpopo Department of Education in 2010 after being suspended for approving tenders worth R83 million without following proper procedures.

The R500 million Vblock scandal happened under former Health MEC Qedani Mahlangu who resigned in disgrace after the Life Esidimeni tragedy.

R500 million could have built 12 clinics or hired a thousand nurses for a year, or used for new machinery and the repair of dilapidated hospitals.

It is deplorable that officials go from job to job without accountability for negligence and probable corruption.

I will push for effective action to be taken against these officials whose actions caused a colossal loss to the state. They need to be charged in court and also pay from their own pockets.

Issued by Jack Bloom, DA Gauteng Shadow Health MEC, 16 September 2019