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Treasury must explain multibillion-rand payment system to Scopa

Aug 28 2017 14:17
Liesl Peyper

Cape Town – Parliament’s watchdog the standing committee on public accounts (Scopa) will on Tuesday demand answers from National Treasury about a multibillion-rand financial payment system.

The auditor general wants to give National Treasury its first ever qualified audit opinion for to the way in which the contract for the integrated financial management system was awarded. The payment system is meant to bring together all government payments into one system.

The first phase of the project was completed at a cost of R1.2bn, but then Cabinet in 2013 approved that the architecture of the project be changed due to specific technological changes.

A new “off the shelf” payment system would cost R4.3bn, including the R1.2bn originally spent on the first phase.

National Treasury’s audit committee found that the payments done through the integrated system lacked internal controls to mitigate risks, and requested that then director general Lungisa Fuzile order a forensic investigation into the matter. Deloitte was awarded the tender and started the investigation in October 2016.

In June this year, Dondo Mogajane, who replaced Fuzile in June this year, and a team from Treasury appeared before Parliament’s appropriations committee after former Gupta-owned media units ANN7 and The New Age had reported on the internal audit report on the implementation of the integrated management system.

The internal report revealed inadequate payment procedures and non-existence of budget information, as well as a lack of independent quality assurance. In addition, service provider Bitz Technologies was overpaid and invoices were paid before official sign-off or approvals, among other matters.

BusinessLive reported in August that the integrated financial management system matter had caused tension among Treasury officials with one grouping alleging investigations into the system are being suppressed, while others claim the probe serves to tarnish former finance minister Pravin Gordhan’s legacy.

There are allegations that Fuzile did not act on the audit committee’s report on irregularities with the payment system, while other sources in Treasury dispute the claims, alleging in turn that the internal audit committee is sitting on an investigative report by Deloitte that found no wrongdoing. 

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national treasury  |  scopa  |  lungisa fuzile
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