SITA reality check

AS DELEGATES from the public and private sectors prepare to meet in Durban, at the beginning of next month (5 September), to hear SITA plot its course for the next year, it is fair to assume that some of the magic has faded. One can certainly no longer ignore that the familiar and comfortable safety of fairytales has been devoured by a most distasteful reality, one that would revolt even Roald Dahl.

Perhaps it is now time to admit that the glass slipper shattered and Cinderella is doomed to a life of misery, barely earning minimum wage. Perhaps Snow White choked on the apple and the prince`s valiant CPR efforts could not save her from being declared dead on arrival. And, in this reality, Goldilocks was busted for housebreaking and sentenced to five years in prison.

That SITA has been plagued by fraud and riddled with corruption for many years is an old story  one that has been told so many times even the recital of the bloody details no longer causes anyone to lose sleep.

But government`s promises about a turnaround strategy and to bring leadership stability to the agency, which have long become as clich d as "Once upon a time...", were dealt a swift deathblow by the suspension of the individuals trusted with making the state-owned entity work. Granted, no one has been found guilty of anything yet, but with investigations into tender irregularities imminent, it has become evident that government is losing its grip on SITA and the levels of corruption have grown bigger than Jack`s beanstalk. Furthermore, it is clear that the agency, in its current form and under its current leadership, has little credibility left and cannot continue to operate.

THE THREE LITTLE PIGS

In the first week of August, scandal hit the organisation again, as three of the organisation`s executive team were suspended and investigations into tender irregularities and colluding with suppliers are soon to kick off.

ITWeb Online, iWeek`s sister publication, broke the story that Ramabele Magoma Nthite, shared services executive; Moses Mthimunye, strategic services chief; and Ranti Mahlabana, GM for human resource services, have been removed from their positions, pending the outcome of the probe.

Exacerbating the situation is that Nthite and Mthimunye were two of the three-member rotating CEO team, appointed by the minister of public service and administration just over a year ago. The team was established in reaction to a risk assessment report, following an investigation into SITA`s procurement practices, which uncovered startling levels of fraud and corruption, cutting across almost all levels of the organisation.

A month before the suspension of the senior executives, the Department of Public Service and Administration (DPSA), in an understated announcement, revealed that SITA board member Nontobeko Ntsinde would take over as acting CEO for one year, or until a permanent CEO is appointed.

At the time, the official spin by the DPSA was that SITA is moving into the second phase of its turnaround strategy and that "the current situation within SITA had dictated that the appointment processes could not be awaited to run their cause".

However, the DPSA and SITA`s attempts to downplay the real state of affairs proved once again to have been an error of judgment. Industry reacted strongly to the leaked news about the suspensions, with several industry participants renewing calls for the removal of the SITA board, and some even saying the organisation had become so corrupt that it should be disbanded and re-established in a different form.

THE BOY WHO CRIED WOLF

Talk of disbanding SITA surfaced at last year`s GovTech Conference. The event proved to be a public relations nightmare for the agency, as it kicked off amid ITWeb Online exclusively reporting on the details in the leaked risk assessment report on procurement at SITA.

The 613-page report, by enterprise risk management firm Henderson Solutions, revealed an apparent total breakdown of SITA`s internal control environment, and questioned how such widespread illegal practices could have escaped SITA management and its internal audit committee.

During the investigation, the investigators received access to SITA`s human resources database, vendor/supplier database, tender database and e-mail database. Additionally, they also requested access to the payroll and payables database.

Ultimately, the findings reveal evidence of apparent large-scale corruption, conflicts of interest, duplicate payments, and invalid identities of suppliers and employees. In total, the investigation concluded that SITA could have lost as much as R355 million through duplicate payments, during the four-year period under scrutiny.

While delegates got wind of the report and the scale of irregularities at SITA, the agency`s leadership decided to continue with a business-as-usual attitude at GovTech. Eventually, Mthimunye, during an address at the conference, stated that allegations of corruption and mismanagement levelled against the agency and its employees, over the years, had to be investigated.

He then emphasised that the agency had spent R10 billion on ICT procurement since 2003, and noted: "Corruption was to be expected...

"Obviously, this is lucrative and shenanigans are bound to play themselves out here in the tussle for the piece of the cake of the R10 billion," he stated, before pushing some of the blame onto the ICT industry.

"The ICT industry has been playing victim for too long. When somebody knows there have been shenanigans around a bit, and they know who is the benefactor of the shenanigan, they simply point fingers at SITA. That is disingenuous."

Speaking at the opening of last year GovTech, public service and enterprise minister Richard Baloyi also said corruption within the agency would be harshly dealt with, but, at the same time, emphasised that the entire agency was not corrupt and mismanaged.

He added that government would not disband the agency and solutions would be found to solve its problems. "We are insistent that SITA must be supported to act out its mandate as envisaged by our government, way back in 1998," he said. However, neither Baloyi, nor Mthimunye, made any reference to the report, or any of its findings. The minister did announce that a turnaround strategy would be unveiled "soon", but - after a year - government has not publicly revealed the details of this plan.

Similarly, the damning risk assessment report will never be released publicly, and attempts to get a reaction from Baloyi on its contents have been rebuffed, with a DPSA spokesperson stating emphatically that the minister would not be commenting. Instead, he said Baloyi would soon address the media at a press conference to explain the problems faced by SITA and the remedial action being taken by government.

That was four months ago and, to date, this has not happened. Any queries along this line are met with the response that the minister`s turnaround plan is on track, doing nothing to reassure the country that this time it`s for real.

THE EMPEROR`S NEW CLOTHES

Baloyi`s appointment as public service and enterprise minister came amid the ANC`s recall of Thabo Mbeki, in September 2008. Among the Mbeki loyalists who stepped down was his predecessor, Geraldine Fraser-Moleketi, whose tenure saw some tumultuous times at SITA.

She was the agency`s main stakeholder during the 2008 GovTech Conference, which opened with ITWeb Online exclusively reporting that then CEO Llewellyn Jones had abruptly quit, practically the night before. Jones, a respected industry veteran, left the agency after a serious dispute with government CIO Michelle Williams about the awarding of a tender.

At the time, serious allegations of irregular practices started coming to the fore and Baloyi`s appointment to the portfolio shortly after the high-level blow-out at SITA seemed to carry hope of a stronger leadership style and willingness to stamp out corruption.

In an interview in January 2009, Baloyi said he was aggressively working to reposition SITA as government`s "IT agent of choice".

Baloyi spoke of having established a ministerial task team to investigate the issues within SITA and explained that this would be one of the first steps of an agency-wide overhaul.

He added there is an urgent need to reposition the agency to be fully compliant with the SITA Act, in terms of its board constitution, governance, business model and procurement practices. "We need a board that is not dominated by government officials, but is made up of independent non-executives. SITA needs a conducive environment to deliver on its mandate and a fully-functioning executive that is not in competition with the board."

He even hinted at a possible high-level purge at executive and board level, saying decisions will be made at the time of repositioning the board and management structures.

However, little seems to have changed at SITA. Ironically, Baloyi has said in the past: "We are also looking at a complete turnaround strategy for SITA. I don`t like to use the term `turnaround`, because it often means you end up where you start, but we will fix it."

Perhaps this is exactly what happened. The GovTech Conference next month promises to be interesting, as it seems unlikely that the DPSA and SITA will be able to sweep the latest scandal under the rug. Perhaps the emperor will be showing off his new clothes.