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I have carefully studied the report of the Independent Review Panel that we had appointed to appraise the awarding of the department's Hospital Information System (HIS) tender.

I am satisfied with the findings and recommendations contained in the report given the limited scope of time and powers that the team had, and would accordingly wish to seize this opportunity to convey our words of gratitude and appreciation to the appraisal team for the diligent and professional manner in which they conducted their assignment. We are thankful that the report will definitely go a long way towards assisting government as a whole in matters of procurement and management of complex projects in the province.

Based on their findings, the team had recommended the following:

* That, given the circumstances that prevail around the project, the MEC should consider putting the entire project on hold, stop payment and consider a possible recovery of amounts paid. This should be done after the MEC has obtained legal advice from the Provincial legal services and the State Attorney.

* That the MEC should consider engaging institutions like SITA to obtain advise on how to re-implement Medicom or a system that is compatible with Medicom or with NHIS/SA standards.

* That the MEC should engage institutions empowered to investigate any possible mismanagement of public funds to pursue any clue that may appear in the report and that should include forensic auditing to cover both tenders. (Sec 62 of PFMA).

* That a strategic committee should be tasked to revamp administrative structures, which will restore clear line functions and responsibilities with regard to IT projects.

* That in all projects it is vital for the department to appoint knowledgeable project managers to manage projects of this magnitude, and that the department should insists that project managers nominated by a contractor should have an accreditation of the Project Management Institute.

* That in any IT project the department must involve the Provincial IT Bureau, the National Health Information Systems of South Africa Committee and the Provincial IT Committee in order to ensure compatibility with national and provincial standards. The Patient Administration System and Billing System (PAAB) could be used instead of the NHC/MIS for billing and patient Administration System at no additional cost.

* Special attention should be given to developing and maintaining an appropriate filing system in accordance with what is prescribed by the national archives, especially the security of documents.

* Strategies must be put in place by the DHW describing how Local Business Partnerships (LBPs) should be involved and managed in projects of this magnitude.

* That the MEC should engage institutions empowered to investigate the current LBPs involved in tender NTP 7479.

* That the MEC further investigates on the whereabouts of the original and signed tender response documents from Ethniks Systems.

* That the MEC should demand a copy of the contract, service level agreement between the DHW and Ethniks Systems and a report on the procurement process followed in allocating Ethniks Systems to provide computers, running the e-mail and office automation to the DHW during the transition period from the IBM contract to the Ethniks Systems contract.

* That the MEC invoke the provisions of the PFMA to address the unauthorised expenditure created by the SG and the officials that he may have delegated when they exceeded the Provincial Tender Board delegation of R350 000,00 to engage Ethniks Systems to maintain the WHITOC. The PFMA should be invoked in respect of other findings, which the panel identified as fruitless or unauthorised expenditure.

* That the MEC is advised to invoke the provisions of the Public Service Act and Public Service Regulations and consider possible disciplinary actions against the officials who appear to have been negligent in their duty or are guilty of any offence arising out of dereliction of duty.

It is clear from the report that a lot of irregularities, impropriety, omissions and commissions might have taken place both in the processes leading to the awarding of the tender as well as in the general management of the contract. The report is clear about individuals implicated, as well as policies, structures and systems that need to be reviewed for the purpose of addressing the identified problems.

Accordingly, we will be instructing the legal and labour relations unit in the department to facilitate the formulation and preference of appropriate charges against officials who might have been negligent or abused their positions in the course of the management of this tender. We will endeavour to seek recourse from the Public Service Act, Public Service Regulations, Public Finance Management and any such legal instrument that will assist us to deal with the problem.

It is also appropriate that the report be passed over to other competent state agencies to further advise, investigate, pursue and/or prosecute on matters that border on mismanagement of public funds and possible criminality.

In the meantime, we will also be seeking legal and IT expert advises on the status of the project and matters relevant to IT projects in the department. Equally, we will be continuing to appraise ourselves fully on all other recommendations of the team so that we address this problem in the most efficient and comprehensive way.

We again thank the convenor of the team and all his colleagues, and wish to assure the general public that government and its institutions are determined to deal decisively with all those who might have acted improperly or unlawfully in the management of this or any other tender that is brought to our attention. The lessons learnt from the management of this tender form a very strong foundation on how we should deal with complex multi million and multi year contracts, and we have thus developed a policy that tenders of this magnitude should be subjected to periodic intense appraisal in order to timeously detect possible deviations. Government is committed to rooting out impropriety in all our institutions and within the broader society.

Contact: Charley Nkadimeng at 082 803 1687

Issued by Health and Welfare, Northern Province

20 December 2001