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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.