Red flags at South African IT agency

Lifestyle audit reviews of several senior executives at the State Information Technology Agency (Sita) have raised red flags over potential corruption risks at the agency.

City Press has obtained an internal lifestyle audit of Sita employees in positions that could influence significant decisions at the agency, which is the government’s primary IT services provider.

The report — submitted to Sita management by the company’s internal auditors on 24 July 2024 — raised concerns over some executives’ conflicts of interest and large unexplained payments into their bond accounts.

Nine of the 13 executives assessed failed the review for various reasons, including for owning or having close links to companies doing business with the government.

Four employees failed to fully declare companies owned by themselves or their family members.

“One employee’s external business interest was registered on the central supply database (CSD) as a government supplier,” the report said.

“Furthermore, we noted that, in two instances, the employees had interests in IT-related companies, which is prohibited in terms of the conflict of interests policy.”

Five of the employees also had family members and friends with an interest in companies registered on the CSD.

Two senior managers and a current and retired executive allegedly received large amounts of money in their bond accounts for which they had not provided a clear explanation.

Several of them were accused of owning companies that do business with the government and Sita or having family or friends who own companies that do business with the entities.

Allegations require further investigation

The report stressed that the findings indicated something “may be amiss” but were not conclusive proof of illicit activity.

“There may be a perfectly reasonable explanation for what, on the face of it, may appear to be an extravagant lifestyle,” the report said.

“These explanations include an inheritance or a wealthy partner or family member providing financial support, which is unknown to the employer.”

“The results of this review must accordingly be approached with caution and should require, where necessary, further detailed investigation.”

In response to queries from City Press, Sita spokesperson Tlali Tlali emphasised that the lifestyle reviews were conducted on an ongoing basis and weren’t “audits”.

“This means that there’s no basis for concluding that any executive has failed the lifestyle reviews,” said Tlali.

“The report can’t be used to draw inferences on anybody’s integrity or that of Sita processes before finalisation of other outstanding legs of the review,” said Tlali.

“The report clearly states that further work must still be carried out, including interviews with affected employees and the perusal of additional evidence or information.”

“Therefore, any conclusion drawn at this stage would be unfair, unlawful and a violation of the rights of the affected parties, including Sita,” said Tlali.

Minister and Parliament come knocking

The City Press report comes in the same week that the Minister of Communications and Digital Technologies, Solly Malatsi, formally requested the Public Service Commission (PSC) investigate governance issues at Sita.

Malatsi visited Sita’s offices in Pretoria alongside the Parliamentary Committee on communications on Tuesday, 11 December 2024.

Malatsi said that the visit aimed to address “pressing issues impacting Sita’s ability to deliver on its critical mandate.”

The minister listed several specific issues that needed to be addressed, namely:

• Service delivery failures impacting numerous departments, including the Ministries of Police, Home Affairs, and Justice, resulting in requests to be exempt from using Sita services.
• Governance challenges including allegations of corruption, maladministration, and interference at the board level.
• Unstable leadership caused by high turnover at the executive and senior management levels leaving critical roles filled by individuals in an acting capacity, resulting in organisational instability and poor decision-making.
• Irregular procurement including alleged failures to adhere to proper procurement processes, resulting in irregularly awarded contracts.
• Worsening audit outcomes including Sita failing to submit its 2023/24 annual report, highlighting a worrying decline in financial and operational accountability.
• Missed performance targets with underwhelming results against predetermined objectives, reducing confidence in the agency.

Malatsi said if these issues were left unaddressed, they posed a threat to the agency’s mission and its ability to deliver value to South Africans.