Two officials from the Department of Economic Development and Tourism were dismissed for facilitating an irregular R90 million tender that was awarded for the events management and promotion of the Kumba skate park in Kimberley.
TWO OFFICIALS from the Department of Economic Development and Tourism were dismissed for facilitating an irregular R90 million tender that was awarded for the events management and promotion of the Kumba skate park in Kimberley.
The vert ramp at the skate plaza currently poses a danger to skaters as it has fallen into a state of disrepair, while the skate bowl was never completed.
The contract of HRA Trading, who were appointed as the events managers for the Kumba Skate Plaza, came to an end in March 2022 when new bids were invited to present grand slam events for 2023-2026.
A source close to the project indicated that the preferred bidder provided travel agency services.
“The company only submitted a bid for the R90 million tender during the second round.”
According to an auditor-general’s report, supply chain management processes were flouted and irregular expenditure was incurred when a R90 million tender was awarded to HRA Trading for the events management and promotion of the Kumba Skate Plaza in 2019.
An investigation into irregular expenditure by the Office of the Premier in September 2021 fingered the chief financial officer (CFO), Kuberin Packrisamy, senior management accountant Altus Davel and Mr Boikanyo, who reported to Davel, as being instrumental in awarding the tender to HRA Trading.
Packirisamy was the chairperson of the adjudication committee when the tender was awarded to HRA Trading.
The departmental loss control committee, in 2021, recommended that an investigation be conducted to determine who was responsible for irregular expenditure and whether consequence management should be instituted.
Packirisamy and Davel have since been dismissed from the department.
The auditor-general’s report indicated that HRA Trading was not registered with the Construction Industry Development Board (CIDB), while the tender was not advertised on the CIDB website.
Goods and services were paid for in advance, while there were no supporting documents to verify payments.
“All payments were made to HRA Trading in the last month of the financial year and can be considered to be fiscal dumping. Goods and services over the value of R500,000 were procured without inviting competitive bids as required by treasury regulations,” the report stated.
The auditor-general pointed out that HRA Trading was contracted primarily as an events management company and did not specialise in construction or the procurement of furniture.
“No supply chain management processes were followed in the acquisition of the furniture and these purchases could not be verified.”
The auditor-general stated that CIDB grading was mandatory for all construction-related expenditure.
“Site preparatory work was not completed at year-end or as per the invoice date.
“No bill of quantities or construction costing documents were attached as supporting documents to the payment batch.”
The department paid for repair work and painting for skate parks in Springbok (R184,640.57), Upington (R227,067.50) and Kuruman (R207,966).
An amount of R480,393.50 was paid for the repair, painting and major crack repairs at the De Aar skate park.
According to the auditor-general, a CIDB-graded supplier should have been used to repair cracks in the cement works and repair the district skate parks.
“We visited all the skate parks in the Province and noted that works were not performed at all of these premises. It is strange that the individual invoices for each district have the same date.”
An invoice was issued on March 5, 2019 for R1.1 million for electrical work, power, audio and video points at the Kumba skate park in Kimberley.
The auditor-general indicated that while all improvements were marked as complete by March 31, 2019, work was still in progress during a site visit made to the skate plaza on July 3, 2019.
“Additionally, the boxes shown to the auditor were electrical points and not audio-related cables.
“The sundries and consumables, delivery and transport and installation costs as per the invoice could not be validated by supporting documents.”
The department paid R2.7 million for the construction of the modular office at the skate plaza, which was completed in March 2019.
“During the first rains, the building was leaking and it was realised that the building had to be lifted from the ground to avoid future flooding.
“Upon detailed inspection, shortcomings were detected with the sewage system at the plaza that needed to be fixed before the building could be re-erected.”
The auditor-general found that supply chain management processes were not followed for the erection of an office building and expenditure for other construction-related matters.
“We could not determine whether HRA Trading was allowed to subcontract work to other suppliers or what processes were followed to appoint subcontractors.
“We have not received the addendum to the skateboarding project contract where the department instructs HRA to upgrade the facility and build offices at the skate park.”
The auditor-general pointed out that there was no need for office accommodation at the skate park as the department did not have any officials that worked there.
“If these offices are to be occupied by HRA then the department cannot disclose it as an asset as the department will not be deriving any benefit or service potential from these offices.
“We could not confirm the appointment of any subcontractors as well as amounts charged as there were no supporting documents.
“On July 2, 2019, we could not verify the existence of any of the items that were invoiced for completed constructed items, as construction was still in progress.”
It was indicated that while the department recorded these items in its asset registers, they were not completed or received at year-end.
The department was invoiced R1.4 million for a skate park pool and transitional ramp yet the receipt of these items could not be verified by the auditor-general.
The skate pool was completed by March 31, 2019 by a subcontractor.
“On the first evening of the event, the high-mast lights supplying the bowl with lighting did not function. Upon inspection, it was discovered that the cables of the high-mast lights were damaged during the construction of the bowl. The bowl had to be broken down in order to fix the cables,” the report said.
The auditor-general stated that the bowl had to be lifted above the ground to prevent damage to the underground cabling and piping.
“The bowl was incomplete when the auditor visited the plaza on July 3, 2019.”
The department and consultant agreed to replace the main event of 2018/19 with capital improvements and repairs on the skate plaza and regional skate park, “since international partners deemed it a necessity” in order to host world-class events.
The head of communications at the Department of Economic Development and Tourism, Thandiwe Modibela, confirmed that two officials were dismissed from the department.
“Maintenance and repairs were part of the additional work done that was found to be irregular expenditure,” said Modibela.
“Consequence management was initiated as a result of the findings of the Auditor-General of South Africa. The outcome of which is that two officials have been dismissed from the department.”
She explained that the tender was re-advertised as it was deemed to not initially be competitive.
“We re-advertised in a national newspaper to reach a broader market. All previous bidders were aware.”
Modibela added that the current new three-year tender was still in progress.
“Therefore we cannot comment thereon.”
She added that Z Cader was appointed as the CFO of the department with effect from June 1 after all recruitment processes were followed.
HRA Trading did not respond to media enquiries.
