Parliament, Tuesday, 28 July 2020 – The Standing Committee on Public Accounts (Scopa) has criticised the South African Broadcasting Corporation (SABC) for lack of planning in relation to supply chain management and contract management.

1. MEDIA STATEMENT
SABC ABUSES EXPANSIONS AND DEVIATIONS TO REPLACE PLANNING –
SCOPA
Parliament, Tuesday, 28 July 2020 – The Standing Committee on Public Accounts
(Scopa) has criticised the South African Broadcasting Corporation (SABC) for lack of
planning in relation to supply chain management and contract management. This
lack of planning has led to endless extensions and deviations of contracts which are
supposed to be an exception than the norm, in some instances without proper
contracts in place. The SABC is using expansions and deviations to replace proper
planning when it comes to contract management.
Scopa is concerned about the abuse of deviations and expansions as well as
monopolies in certain suppliers such as Inala Broadcast. This has created evergreen
contracts which span more than 10 years. The committee has resolved to request
the Auditor-General to perform a special audit on expansions and deviations on all
contracts with a life span of 10 years or more at the SABC. The second leg of this
process will involve referring these matters to the Special Investigating Unit (SIU) for
criminal investigation.
The committee has noted that there are three deviations and one expansion that
involve Inala Broadcast, which is a local supplier for an international company that
the SABC claims is a sole provider of several IT systems in South Africa. However,
the National Treasury found that the SABC did not test the market to ascertain that
there are no other companies which provide the same service, and it is not clear if
the price that the SABC is paying is market-related.
Scopa has noted that one of the contracts the SABC has with Inala Broadcast is
ENPS Newsroom. This contract was for five years from September 2011 to 30
September 2016 for the amount of R65.3 million, and has been deviated until to
date. Inala Broadcast was appointed on 30 September 2011 for five years until
September 2016 and renewed for three months until December 2016 at an amount
of R1.9 million at a variance of 3%. The SABC reduced licence users due to
overutilisation that attracted higher penalties and the contract was extended for
another three years until 31 December 2019 for an amount of R19.6 million at a
cumulative variance of 96%.
Scopa understands that the request was recommended by the Group CEO on 6
November 2019. The National Treasury did not support the extension on 2
December 2019 on the basis that it was not justifiable. This contract was declared
irregular by the Auditor-General.
Equally of concern to the committee, the SABC was unable to answer questions on
information provided by them, which speaks to the extent of the shortcomings of the
SABC. They failed to respond to questions posed by Scopa on the Inala Broadcast
contract and on several contracts involving Telkom, JASCO, debt collectors and
SAP.