'Department fraud tops R1bn'

20 April 2010, 10:50


Former Gauteng Health MEC Brian Hlongwa's plan to introduce a credit card like health data system is under investigation following claims of multi-million rand fraud.

The health department is also investigated for the loss of nearly R1-billion in irregularly paid consultants during Hlongwa's tenure.

Health Minister Aaron Motsoaledi made the shocking revelations when he replied to Dr Dion George - Democratic Alliance (DA) finance spokesman - about the national government's decision to appoint Gobodo Forensic and Investigative Accounting, to probe the Gauteng Health Department in August last year.

The DA asked Motsoaledi to provide answers about possible disciplinary actions against those implicated in the fraudulent acts.

In his reply, Motsoaledi said the Gauteng department had reported a poor financial performance for the 2008/09 financial year, particularly on its goods and services budget.

"The department reported at the time that it had over-spent its overall budget for the financial year by R722-million, and had an additional R573-million in unpaid invoices for suppliers.

"Unlike other provincial health departments that had overspent in 2008/09, Gauteng was negatively affected by what appeared to be an inability to manage its goods and services budget. Others had reported staff costs as a key driver in overall overspending," he said.

The SIU investigation comes almost three years after Hlongwa had promised Gauteng residents smart cards, which would contain their medical history when visiting local clinics and hospitals.

At the time, Hlongwa said patients' medical records would be immediately available on those cards allowing medical personnel to access patients' medical history via a computer network linking all facilities.

Yesterday, it emerged a company was irregularly appointed and paid a substantial amount of money to do the job but failed to do so resulting in the provincial government losing R200 million.

The Gauteng health department also spent nearly R1 billion on outside consultants for various services such as project management, Information and Communication Technology (ICT) and other agencies.

Many contracts allowed payments to consultants before services were actually delivered.

In some cases, contracts were awarded and payments made without any subsequent completion of the projects.

The SIU is also investigating health department officials for paying over R200-million for a Health Information System and a "Smart-Card" system that never materialised.

Motsoaledi told the DA that an investigation was launched after the health department failed to provide information showing that correct procedures were followed in the allocation of tenders.

The probe was also conducted after the health department failed to account for assets worth R61,6-million.

Motsoaledi said the national government, has, due to the Gobodo initial investigation, prima facie evidence that the health department did not follow proper procurement processes for several significant contracts. That was why the matter was referred to the ISIU.

"The Gobodo report recommends disciplinary action against officials implicated in wrongful actions. The report was referred to the SIU with instructions to prosecute individuals implicated and pursue the recovery of assets."

Bloom in his reaction, said: "There also needs to be political accountability in this matter. The role played by Hlongwa needs to be thoroughly probed. How could officials get away with so much that damaged the department's ability to serve the health needs of the people in Gauteng?"



This article was originally published on page 1 of The Pretoria News on April 20, 2010

The Star

Commentys by Sonny

If one departments fraud is R1bn, then what is the ANC's fraud?

It cannot be counted!

Where is the promised "SERVICE DELIVERY?"