FORMER National Health Laboratory Service (NHLS) chief executive Joyce Mogale and late ex-chief financial officer Sikhumbuzo Zulu’s estate must pay back almost R22.5 million for overpaying for several lucrative contracts.
Mogale and Zulu faced several charges before being dismissed in May 2019 after the NHLS became aware of irregularities in February 2017, which included exceeding delegations of authority by signing a service level agreement with Blue Future Internet and Surveillance.
Nearly R84m was agreed to for the supply, maintenance and service of end-user computer hardware, which had been approved for about R26m, in contravention of the Public Finance Management Act.
Other charges were for causing the NHLS to incur fruitless and wasteful expenditure in excess of R58m, as well as irregular and/or unauthorised payments made to Blue Future of about R93.2m between April 2016 and September 2016.
They were also accused of hiring a company, Afrirent, for R80m and for the leasing of motor vehicles for the NHLS. The amount was in excess of Mogale’s delegation of authority, which was limited to R20m.
Mogale also exceeded her delegation of authority by entering into and/or concluded an addendum to the service level agreement with DV8 Consulting to amend the contract value to an additional amount of R63.5m for the provision, maintenance and support of end-user MPLS VPN (multiprotocol label switching virtual private networks).
They approached the Commission for Conciliation, Mediation and Arbitration (CCMA) arguing that their dismissals were procedurally and substantively fair.
The CCMA referred the dispute to the Labour Court, which slapped the two with an order dismissing their claim for unfair dismissal.
Instead, Labour Court Judge Connie Prinsloo found Mogale and Zulu’s estate jointly liable to pay to the NHLS R342 545 in relation to the DV8 Consulting contract, which is the difference between the price paid to CISCO and the one that could have been secured from Hewlett-Packard.
Additionally, Mogale was found liable and has to pay the NHLS more than R22.1m.
”The difference between what the bid adjudication committee approved and which Mogale was recommended to sign and what she did sign, which was R7.6m.
“The penalties that were levied due to Mogale’s signing of the addendum to the contract containing the penalty clause, which amounts to R14.6m,” reads the judgment handed down last Friday in relation to the Afrirent irregularities.
Judge Prinsloo continued: “It has been demonstrated that during their conduct relating to each of the three contractors, as discussed in detail supra (above), Zulu and Mogale failed to perform their duties effectively, efficiently and professionally, and instead displayed severe negligence and incompetence, resulting in damage to the NHLS.”
NHLS board chairperson Professor Eric Buch said at the time of Mogale and Zulu’s suspension that the entity’s debt to its suppliers was in excess of R800m, which outstripped its paltry cash balance.
”Since then, a diligent effort has steadily turned the NHLS around. The NHLS now has substantial reserves and its staff have received reasonable annual increases, while annual tariff increases have remained below 5%,” he said.
The NHLS said Mogale and former head of supply chain management Graham Motsepe, manager of contracts and tender compliance Mthunzi Mthimkulu, legal manager Sibusiso Mthenjane and Blue Future owner Pierre Petersen were on trial in the Palm Ridge Magistrate’s Court after charges were laid against them in 2017.
Buch expressed his optimism that those responsible would also be charged on the Afrirent and DV8 Consulting matters.
Pretorius had been found guilty of fraud in his tender submission to the NHLS and was awaiting sentencing, the entity confirmed this week.
Mogale and Zulu’s legal representative did not respond to questions from the Sunday Independent.
loyiso.sidimba@inl.co.za