An internal audit report commissioned to investigate the alleged irregular awarding of the R360m SAPS health contract to Vusimuzi “Cat” Matlala’s company, Medicare24 Tshwane District, has found numerous red flags that should have led to the bid’s disqualification.
This was revealed by SAPS divisional commissioner for supply chain management Lt-Gen Molefe Fani while testifying before parliament’s ad hoc committee investigating allegations of corruption within the criminal justice system.
Fani, who chaired the bid adjudication committee (BAC) that oversaw the tender process, told parliament that after concerns about the contract were raised in December, suspended police minister Senzo Mchunu instructed that an audit be conducted.
The tender was awarded to a company belonging to Matlala, who was reportedly associated with procurement irregularities concerning Tembisa Hospital.
The auditors’ report revealed that Matlala’s company was operating under a franchise agreement with another entity but failed to disclose this crucial information in the bidding document.
Fani said this was a mandatory requirement.
“If you are not operating at your own premises, you must provide the water and lights account or an agreement you have with the person who owns the building. In this instance, it’s not just about the rental; it’s about the operating and utilisation of facilities in that space.
“It appears the bidder did not own the facility but had a franchise agreement. That was picked up by the auditors,” Fani explained.
The auditors also pointed out that the franchise agreement was not signed by the franchisee — a requirement Fani stressed was mandatory.
“What it indicates is that the franchisee didn’t sign, which makes the document incomplete. A mandatory requirement was not complied with.”
Furthermore, Matlala’s company submitted the company profile of Medicare24 instead of the required third-party supplier declaration.
“Medicare24 did not bid, and their company profile is irrelevant for this bid. By submitting the company profile of Medicare24 together with the bidding documents, the bidder asserted the bid would be executed by Medicare24 without making a third-party declaration. The finding is correct.”
The audit report also established that the pricing schedule submitted by the bidder differed from the one issued with the original bid document, suggesting it had been altered.
Fani added that the documents were submitted for forensic analysis to determine if they were signed by the same person.
“The forensic analysis established that the signature of the bidder did not correspond with the signature on the submitted pricing schedule. Therefore, the pricing schedule submitted by the bidder couldn’t be relied upon as it lacked integrity.”
He stressed that a key tender requirement is that the submitted schedule must not be changed or altered in any form. “If they have been altered, this should have been a disqualification,” Fani said.
However, he indicated that there would not have been a reasonable way for the committee to detect the mismatched signatures at the time.
The report further disclosed that alleged procurement irregularities involving Matlala, the director of Medicare24, in relation to Tembisa Hospital, were raised in the media prior to the evaluation of the SAPS bid.
Fani indicated that the bid evaluation committee “should have taken into consideration the allegations raised in the media about the director to inform their due diligence methodology”.
He maintained that the evaluation committee should have recommended the company’s disqualification.
“When you evaluate the tenders, you evaluate them as received. In your report, you highlight the issues that should be considered by the BAC.
“If those concerns highlighted to the BAC are outside the tender process, the BAC would not award the tender — even if the supplier becomes the winning bid. They would have to refer that matter to legal services to give direction as to what needs to happen.”
He added that the BAC lacked crucial information. “I had no knowledge of Matlala. I may have heard it in the news. It didn’t appear to us at the time that this person is wanted. Had we known Matlala was suspicious, we would have flagged it.”
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