It took an Eastern Cape municipality just one hour and 45 minutes to receive four bid documents for a multimillion-rand integrated financial management IT system, register and appoint special bid evaluation committee members to peruse them, and then recommend the preferred bidder to the special bid adjudication committee.
This is according to a National Treasury investigation, which also found that, on the same day, the preferred bidder, EOH Mthombo, was then recommended to the Amathole district municipality’s (ADM) municipal manager for appointment.
The speedy decision was taken on December 19 2014, in the thick of the festive holiday season. But almost three years later, after spending more than R86m on the system, the municipality was still unable to use it, and continued to rack up losses due to late or incorrect statements being sent out by the malfunctioning system.
The treasury probe has found a host of irregular activities linked to the deal – which cost the municipality R127m – and has recommended that the municipality open a criminal case with the police.
At the centre of the controversy is former ADM municipal manager Chris Magwangqana, who signed off on the contract with EOH Mthombo.
He later left the municipality and became municipal manager at the Enoch Mgijima municipality based in Komani, where he was fired in May in for, among other things, “misleading” the council over his failure to protect municipal assets from being auctioned off.
Earlier in 2019 the public protector also found Magwangqana liable for R103m in irregular expenditure incurred by the municipality for a dodgy toilet contract.
In her report, public protector Busisiwe Mkhwebane said the contract had been handed over to the Hawks and the Asset Forfeiture Unit, and that the municipality should recover the funds from Magwangqana through civil litigation.
Magwangqana declined to comment on a list of questions sent to him by Times Select.
According to the treasury investigation, a 2012 audit by the municipality of its IT systems found it had about 27 operating systems.
It then began looking for a new system and appointed EOH Mthombo on a three-year contract costing R75m.
“As at June 2018, ADM was still unable to conduct basic day-to-day functions of finance and accounting utilising the procured system, with severe consequences.
"The municipality was also incurring potential loss of income due to late and incorrect statements being sent to customers as a result of malfunctions.
“Despite these challenges ... the service provider had already invoiced the municipality approximately R127m.” — TimesSelect
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