Gauteng lost R6.8 million in botched payment to Microsoft Ireland

The_Ogre

Honorary Master
Joined
Apr 30, 2010
Messages
25,533
Well after all those approvals it still takes one guy to do the actual transaction.
...who usually has a finance background, not IT.

You and I would immediately go WTAF?!
 

krycor

Honorary Master
Joined
Aug 4, 2005
Messages
18,454
Curious on how they reversed it.. ie this seems like a funds transfer? So they transferred back hence fees as payment reversal would incur much less? Not too sure with cross border payments +/- dynamic currency conversion systems etc.

Also why was this picked up so late? I don’t know about the rest of you, but the usual process involves invoicing etc prior to it being settled so I suspect there is more of a story here than a simple error.

I mean this wasn’t the 1st time they processed a ms payment so why was it different?
 

Shake&Bake

Party Liaison
Joined
Jan 19, 2007
Messages
21,821
There the DA goes slamming off again. But when their counsellor in the TableView area or whatever embezzled a stash of cash: They allow her to be represented by CoCT Rates Payers, because of a "power" given to the speaker.

Fsck all these politicians. Just line them up and get the execution squad in please.
 

markings

Expert Member
Joined
Jan 24, 2010
Messages
1,875
The government doesn't have dollar denominated accounts with banks into which the dollars could have been deposited for later payments in dollars?
 

system32

Expert Member
Joined
Dec 29, 2009
Messages
4,672
The real problem is that they should be using LibreOffice and save $$$
 

Lucas Buck

Executive Member
Joined
Jun 20, 2005
Messages
5,169
I wouldn't be suprised if the person in finance responsible for processing the payment thought that they were paying in Rands. This looks like a simple but costly error that somehow wasn't picked up.
 

Pineapple Smurf

Pineapple Beer Connoisseur
Joined
Aug 2, 2016
Messages
38,418
Here in the Western Cape we have the DA running our stuff
Why do you Okes in Gauteng keep voting ANC?
 

rietrot

Honorary Master
Joined
Aug 26, 2016
Messages
26,260
How is it just lost?

Phone then up. Say you accidentally paid to much and ask for a credit?

It's not rocket science.
 

JohnStarr

Executive Member
Joined
May 21, 2018
Messages
7,689
How can you lose R6.8 million when they processed $20 million instead of R20 million. That's far, FAR more than R6.8 million!
 

The_Ogre

Honorary Master
Joined
Apr 30, 2010
Messages
25,533
How is it just lost?

Phone then up. Say you accidentally paid to much and ask for a credit?

It's not rocket science.


How can you lose R6.8 million when they processed $20 million instead of R20 million. That's far, FAR more than R6.8 million!

You have to understand how foreign exchange works.

I pay you $10 000 in error. The current exchange rate is R15 to the $ so in ZAR I EFT R150 000.

By the time realise I have made a mistake and ask you to refund me., the ZAR strengthened and the rate is now already R13 to the $ so when you refund me the $10 000, I only receive R130 000.

That, in essence, is what happened here.

So yes, R20 000 is lost and I cannot hold you accountable for that loss.
 

Johnvgb

Well-Known Member
Joined
Dec 30, 2010
Messages
107
Curious on how they reversed it.. ie this seems like a funds transfer? So they transferred back hence fees as payment reversal would incur much less? Not too sure with cross border payments +/- dynamic currency conversion systems etc.

Also why was this picked up so late? I don’t know about the rest of you, but the usual process involves invoicing etc prior to it being settled so I suspect there is more of a story here than a simple error.

I mean this wasn’t the 1st time they processed a ms payment so why was it different?
Perhaps the R6mill was someone's commission (wink, wink)
 

JohnStarr

Executive Member
Joined
May 21, 2018
Messages
7,689
You have to understand how foreign exchange works.

I pay you $10 000 in error. The current exchange rate is R15 to the $ so in ZAR I EFT R150 000.

By the time realise I have made a mistake and ask you to refund me., the ZAR strengthened and the rate is now already R13 to the $ so when you refund me the $10 000, I only receive R130 000.

That, in essence, is what happened here.

So yes, R20 000 is lost and I cannot hold you accountable for that loss.
Sorry man, it has been a long day and week in fact. I saw that it was based on a foreign exchange change. My bad, and apologies.
 

Swa

Honorary Master
Joined
May 4, 2012
Messages
29,709
I wouldn't be suprised if the person in finance responsible for processing the payment thought that they were paying in Rands. This looks like a simple but costly error that somehow wasn't picked up.
The part I don't understand is how they accepted the ZAR quote.
 

Lucas Buck

Executive Member
Joined
Jun 20, 2005
Messages
5,169
The part I don't understand is how they accepted the ZAR quote.
The quote would have had to be in US dollars. At least has been my experience in the past when dealing directly with overseas vendors.
 

Swa

Honorary Master
Joined
May 4, 2012
Messages
29,709
The quote would have had to be in US dollars. At least has been my experience in the past when dealing directly with overseas vendors.
When you pay in Dollars your bank gives you a ZAR quote unless you pay by credit card.

Wait, the quote was in Rand. They chose to pay in Dollars and got another Rand quote. That makes it even worse.
 
Top