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May 2021

Here’s how the Digital Vibes contract violated SA’s public financial management law

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Through Zintle Mahlati May 26, 2021

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Johannesburg – An internal investigation found that the Health Ministry’s payment of Rand 150 million to Digital Vibes was irregular and contrary to the Public Financial Management Act (PFMA).

Health Minister Dr Zweli Mkhize briefed media on Wednesday morning following his calls to withdraw from a Rand 150 million contract awarded to his associates.

The Daily Maverick had reported that associates including Tahera Mather, Mkhize’s former assistant, and her former spokesperson, Naadhira Mitha, were involved in a company called Digital Vibes.

Digital Vibes won a Rand 150 million contract for communications work. The deal initially focused on the NHI, but was extended last year to include Covid-19 communications work for the Department of Health.

Digital Vibes is accused of inflating prices and doing work the department could do in-house.

Mkhize said he was not surprised by the outrage that followed media reports on the deal. He said the ministry was concerned about the contract and opened an internal investigation in January. The investigation, carried out by an external tax firm, has been concluded.

A summary of its findings stated that “the invitation to tender and the tendering process it followed was a violation of the PFM law.”

He also found that Digital Vibes’ nomination process was flawed due to inconsistencies within the nominating committee and lack of disclosure of conflicts of interest.

“Investigators have found that approximately R37 million paid to Digital Vibes is an unnecessary and unnecessary expense,” Mkhize said.

Regarding the work of Covid-19, investigators found that Digital Vibes received work instructions from the department before the contract was extended to include Covid-19 communication.

Investigators also found that any money paid to Digital Vibes for work done before the contract was extended to include Covid-19 was an unnecessary expense and against Treasury regulations.

“The appointment of Digital Vibes was irregular and the total of Rand 150 million paid to Digital Vibes during the period of January 2020 and January 2021 was an irregular expenditure,” Mkhize said.

He said the “consequence management” process was underway as well as disciplinary action against anyone involved in awarding the contract.

Mkhize said legal proceedings are underway to recover the funds that have been illegally paid. He said it was yet to be determined whether there had been any corruption in the payment of funds, as an investigation into the flow of money was underway.

The Special Investigations Unit is also reviewing the same contract.

Mkhize confirmed that he submitted the report to President Cyril Ramaphosa on Tuesday.

He said that since he is cooperating with the SIU and there has been no interference, he sees no need to step aside.

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Kuwait committee warns of serious imbalances in public finances

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KUWAIT CITY – The Economic Affairs Committee of the Council of Ministers has warned of serious structural imbalances in public finances and a worsening of the liquidity crisis with the depletion of the General Reserve Fund, reports the Al-Rai daily citing sources.

Sources said the committee estimated the budget deficit over the next five years to be between KD45 and KD 55 billion. Sources revealed that the relevant team was finalizing the national economic and financial sustainability program, in cooperation with the Ministry of Finance, for submission to the committee.

Public sector employment policy is unsustainable and there are significant imbalances in the labor market, considering that more than four in five Kuwaitis work in government offices.

The program aims to control spending and increase non-oil revenues; and in the medium and long term, support economic diversification, improve the business environment, stimulate private sector growth and develop the labor market.

The program is being developed and revised based on changing data, emphasizing the development of the labor market by attracting foreign investment and supporting entrepreneurs and the industrial sector.

© 2021 Arab Times Kuwait English Daily. All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

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