Red flags raised over SABC’s end-of-year splurge

In an earlier version of this story it was reported that auditing firm SekelaXabiso benefited from the broadcaster’s free-wheeling contract signing. 

SekelaXabiso has pointed out to that this was not the case.

Times Live reported that SekelaXabiso started billing the SABC before its nine-month contract worth R9.8 month was signed on December 23. SekelaXabiso pointed out that these were pro-forma invoices as opposed to tax invoices, which were submitted on 18 January.

We apologise for carrying the error. The reference to the auditing firm in this article has now been redacted.

Top executives at the SABC have reportedly violated both National Treasury and the public broadcaster’s own procurement rules after they allegedly made an upfront payment to a company the broadcaster was not allowed to do business with just days before Christmas last year.

The Times reports that the executives were in a festive season rush to pay R5.1 million to a company called Infonomix to redesign seven SABC websites as part of a five-year contract.

The deal is apparently one of dozens of questionable contracts SABC executives are believed to have rushed last year, with most of them signed by former COO Hlaudi Motsoeneng and acting CEO James Aguma.

According to copies of some of these contracts and other internal documents obtained by the newspaper, the deal with Infonomix was authorised by the SABC’s acting chief financial officer, Audrey Raphela, and its group executive for commercial enterprises, Tshifhiwa Mulaudzi, despite the company failing a bank verification test and not having a tax clearance certificate.

This violates National Treasury and SABC procurement rules and policies.

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Infonomix reportedly charged the SABC R637 000 VAT charge on the bill without being registered for VAT, and the SABC paid the company in full after Raphela authorised a special payment request for the upfront payment, which she released on December 12.

A working document released on January 27 by a special parliamentary committee that was tasked with establishing the suitability of the SABC board to hold office raised concerns about the financial cost of flouting governance and procurement rules at the public broadcaster.

The report warned of a “looming financial crisis” that had left the SABC “at risk of becoming technically insolvent”.