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COSATU tender report finds lack of governance Natasha Marrian, Business Day, Johannesburg, 9 March 2015 The SizweNtsalubaGobodo report which implicates Congress of South African Trade Unions (COSATU) general secretary Zwelinzima Vavi in irregularities linked to tenders also shows governance was sorely lacking in the federation's headquarters. The report implicates Mr Vavi and personal assistant to the secretariat Nonhlanhla Hlomuka in irregularities in the awarding of contracts to a service provider, VMS Technologies. These allegations are the latest against Mr Vavi, who faced nine charges last year. The report shows that COSATU's central executive committee did not approve a refined accounts and procedure policy and its procurement was governed by its financial and control policy. The auditors were told in interviews that it was not known whether this policy had been adopted by the central executive committee. According to the policy, should services or goods valued at more than R100,000 be required, the contract should be subjected to a tender process. The committee should establish a tender panel or, if it was unable to do so, the general secretary should establish a temporary tender panel. SizweNtsalubaGobodo recommended that COSATU take corrective action against Ms Hlomuka for her role in awarding contracts to VMS Technologies for equipment such as photocopiers, telephones, the installation of networks, CCTV equipment, access control and biometrics. It also recommended that action be taken against her for the procurement of four fridges and a microwave from VMS, which cost COSATU R20,000. Mr Vavi should face sanction for the same deals, the report said. "There is no evidence of the requirement for a tender process having been complied with," it said. The auditors also conducted a detailed investigation into the termination of contracts with previous service providers for the same goods and equipment and could not reach a conclusive finding on irregularities. It found no documentary evidence that switching to VMS delivered any cost savings. COSATU's financial and control policy also failed to deal with the processes to follow in terminating contracts. The termination of the contracts for printers and telephone systems resulted in the federation having to fork out R1.9m in settlements to various service providers. "We recommend that COSATU considers updating its financial and control policy . to deal with a standard process to be followed when terminating contracts with service providers. Compliance with the said process should be strictly monitored and instances of non-compliance with this be dealt with in line with COSATU's disciplinary policies and procedures," the report said. SizweNtsalubaGobodo admitted that it had not interviewed Mr Vavi in its investigation. COSATU's central executive committee said last week that it would give him an opportunity to deliver his response to the allegations to the auditors and would hold a special leadership meeting to decide his fate. It has not yet announced the date of the meeting. Mr Vavi has denied the claims against him in a document that was widely distributed last week. In a written response, he said documents showed four service providers were approached over the services - Phambile (Xerox), Katlego (Canon), Gestetner, and VMS Technologies. He also questioned the report's recommendation that action should only be taken against him and Ms Hlomuka. He said the contracts were signed by a number of other union officials, including COSATU president Sdumo Dlamini, Mr Vavi's deputy Bheki Ntshalintshali and treasurer Freda Oostheysen. "To me this whole episode is nothing but a witch-hunt to surgically remove the general secretary," Mr Vavi said in the submission. He said nothing had come of the three instances where he had previously been under investigation and that the federation had never apologised for dragging his name through the mud. He argued that COSATU did not have a tender policy as it had never adopted a draft presented at three central executive committee meetings. Mr Vavi also said procurement was governed by COSATU's financial policy, which required only that three quotes be obtained prior to a decision. On the allegations that the procurement of refrigerators was never submitted to tender, Mr Vavi said VMS Technologies was to provide them at factory cost. From: http://www.bdlive.co.za/national/2015/03/09/COSATU-tender-report-finds-lack- of-governance -- -- You are subscribed. This footer can help you. Please POST your comments to [email protected] or reply to this message. 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