Author Topic: Forensic audit uncovers tender problems at Ceta  (Read 1285 times)

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Forensic audit uncovers tender problems at Ceta
« on: May 27, 2016, 09:30:08 AM »
FRESH procurement irregularities have surfaced at a sector education and training authority (Seta), already cited for anomalies on contracts worth R200m and for enrolling ghost students.

MPs heard on Wednesday that the Construction Education and Training Authority (Ceta), which trains and provides bursaries for students intending to enter the construction industry, has been involved in the irregular procurement of training providers.

This could be an indication that Setas, previously criticised for poor financial management and corruption, are yet to turn a corner.

Officials from the Department of Higher Education and Training briefed MPs on a forensic audit report of procurement at the Ceta.

The Ceta was placed under administration in 2013 following allegations of contract and enrolment irregularities.

In 2015 the department enlisted Gildenhuys Malatji Attorneys to conduct a forensic investigation of the Ceta.

The probe looked into procurement procedures in relation to contracts with JSK Consulting and Africawide Consulting along with funded projects in which former employees were involved.

Claims were that Canton Trading 273, the company of former employee George Peta, had contracts with the Ceta. A 2011 forensic investigation into the Ceta’s finances found that Peta and two others submitted reports for a project that was never implemented.

The report said Peta, who left the authority in 2012, signed a service-level agreement and approved invoices when he did not have the authority to do so.

Other allegations were that entities had been awarded projects when they did not have the capacity to deliver and that some of them were previous employees of the Ceta or other Setas.

Other claims were that the contracts with the companies were superfluous as the Ceta had staff to fulfil the functions they had been hired to perform.

Presenting the findings of the audit by Malatji Attorneys to MPs on the portfolio committee on higher education and training, Maliviwe Lumka, the chief director for Seta co-ordination at the department, said the appointment of JSK Consulting was irregular as its bid did not score the most points.

"There is no merit, however, in the suggestion that the Ceta had capacity to perform the functions which JSK had been appointed for," said Lumka.

He said Africawide Consulting was appointed in violation of procurement prescripts, in that it did not achieve what it was appointed to do. The probe found that the manner in which Africawide Consulting rendered services to the Ceta amounted to an abdication of the board’s responsibilities to adjudicate applications. The forensic report recommends that a new procurement process be considered.

In the report, the investigators said in relation to Peta and Canton, the Ceta should have refrained from doing business with the former employee.

Lumka said the forensic probe recommended that the Ceta board should consider developing a policy that prescribes the conduct of business with former Seta employees.

"This should ensure that those who have exited the (Seta) environment as a result of wrongdoing are disqualified from taking part in grant applications or as training providers," said Lumka.

Furthermore, Lumka said the Ceta’s procurement of training providers needed to be audited more closely. Either the auditor-general or an internal audit function needed to be requested to review the eight bids at the centre of the report and make recommendations on how to tighten procurement processes.

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