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Cape Town - The embattled State Information Technology Agency (Sita) is owed R800m in outstanding debt by government departments and has warned it will start cutting off services to recoup outstanding monies.
In spite of the Public Finance Management Act's requirement for all government departments to pay accounts within 30 days, Sita's acting CEO Nontobeko Ntsinde told Fin24.com the effect of outstanding debts - all incurred in the 2009//10 financial year - was "huge", representing about a fifth of the self-funded organisation's R4bn annual revenue.
Explaining how such a situation developed, Ntsinde said Sita had supplied some government departments with services without a signed and binding contract, and continues to do so.
"Because some of the services we provide are critical, we can't just cut them off," she said. "But then, because there is no binding contract with us, when other priorities arise in government departments they often spend the money on other things."
She admitted that although government departments were tardy about signing Sita's service level contracts, there were also shortcomings on Sita's side which needed to be addressed.
"We can't be in a situation where only 50% of all service level agreements are signed. If they have not signed, they can redirect funds and use them elsewhere, and if there is no contract Sita can't pursue the matter in court," she told parliament's public service and administration portfolio committee.
Ntsinde said if negotiation and persuasion did not recover the money, she had the "mandate" from Public Service and Administration Minister Richard Baloyi to start cutting services off.
Plagued with corruption
Perhaps the message would get through if officials arrived at work to find they had no internet connection, she quipped.
While Ntsinde would not disclose the main non-paying culprits, she said Sita's "Achilles' heel" was its supply chain management and tender processes.
This goes to the heart of corruption issues that have plagued the department.
In October 2009, Baloyi promised MPs he would turn the agency around. His attempts backfired when three executives he put in charge to drive this process were implicated by a risk assessment of Sita's procurement processes.
Baloyi received this report in April. In July, Ntsinde was appointed as acting CEO and in early August the three executives who were implicated by the risk assessment were suspended, along with three senior managers.
Ntsinde says that aside from internal disciplinary processes, investigations may require that the suspended officials be held criminally liable.
"We do not underestimate the challenge of turning around a ship that has been sailing into the abyss," she said.
- Fin24.com
