Every supplier is meant to have a fair shot at winning a contract for government’s R4-billion-a-year Community Work Programme (CWP).<\/p>\n
Like this story? Be an amaB Supporter<\/a> <\/span>to help us do more. Sign up for our newsletter<\/a><\/span> to get more.<\/em><\/p>\n But an amaBhungane investigation shows that Ziphozethu \u201cGabsie” Mathenjwa, the woman tasked with awarding a portion of the contracts, gave more than 300 of them, valued at R32-million, to a newly registered non-profit set up by her brother; all without a competitive bidding process.<\/p>\n Mathenjwa \u2013 an experienced director who sits on the governance and ethics committees of Umgeni Water \u2013 claims she was not aware of any duty to declare a conflict of interest with regard to her brother.<\/p>\n She says the department of co-operative governance and traditional affairs (Cogta), which runs the CWP, knew about other aspects of the arrangement and raised no objection.<\/p>\n That is surprising because, as we discovered, she has done something similar before and Cogta objected vigorously \u2013 read our accompanying story, Broken Trust at the Mvula Trust<\/em><\/a>.<\/p>\n The CWP is one of government\u2019s signature job creation schemes, providing part-time work to 280 000 people across the country.<\/p>\n Yet the programme is not run by government, but by \u201cimplementing agents\u201d, non-profit agencies that run sites and award contracts to procure things like tools, materials, protective clothing and training.<\/p>\n But because this is government money, the implementing agents are required to award contracts in a way that is \u201ctransparent, cost effective, fair [and] equitable \u2026 in line with section 217 of the constitution\u201d, according to Cogta.<\/p>\n In April 2018, Mathenjwa\u2019s Insika Foundation was one of 11 implementing agents appointed by Cogta. Although Insika is based in Johannesburg, it was put in charge of sites in the Western Cape and Kwazulu-Natal.<\/p>\n Last year, amaBhungane used the Promotion of Access to Information Act to access data from Cogta. We wanted to see who was benefitting from the thousands of contracts implementing agents were awarding for tools, training and the like.<\/p>\n Explore the CWP service provider database here<\/a>.<\/p><\/blockquote>\n We also wanted to establish if rumours were true that the CWP had become a feeding scheme for friends and family of those connected to Cogta and its implementing agents.<\/p>\n Also read: Cogta \u201casked SSA\u201d to investigate journalist<\/a> and Who\u2019s eating the Community Work Programme? Explore the data<\/a><\/p><\/blockquote>\n As we analysed the data, one name jumped out at us: Umnotho we Afrika.<\/p>\n With 311 contracts, Umnotho we Afrika far outstripped the next biggest CWP supplier countrywide, which received just 38 contracts. In addition to this, Umnotho\u2019s contracts all came from the same implementing agent: Insika Foundation.<\/p>\n The R32-million Umnotho received accounted for almost 60% of the contracts Insika issued and included ten for protective clothing (R3.8-million), 37 for tools and materials (R7.9-million) and 264 for training (R20.7-million).<\/p>\n Remember, Insika was running the programme on government\u2019s behalf and was supposed to preside over a \u201ccost effective, fair [and] equitable\u201d procurement process.<\/p>\n \u201cWe have to satisfy ourselves that your processes are fair,\u201d George Seitisho, the then-acting deputy director general in charge of the CWP, had warned implementing agents in a secretly-recorded meeting in 2017, before the current tender for the appointment of implementing agents was awarded.<\/p>\n \u201cYou know that section 217 of the Constitution? You are not going to be like one consultant I knew who was a civil engineering consultant and all the contractors were his buddies. So, you will be watched like a hawk.\u201d<\/p>\n Yet a simple company search would have shown Seitisho and Cogta that Insika and Umnotho are related companies. While the former is run by Mathenjwa, the latter is run by her older brother, Phiwisipho.<\/p>\n In fact, Phiwisipho Mathenjwa was previously a director of Insika. He resigned in September 2016 and in November 2017 registered Umnotho \u2013 just before Cogta issued its new tender.<\/p>\n For a short time Insika and Umnotho even shared an office in Midrand.<\/p>\n When we met Gabsie Mathenjwa last month she was defiant about Insika\u2019s decision to award over 300 contracts to her brother\u2019s company, describing it as her \u201ccompetitive advantage\u201d.<\/p>\n Here is how she explained it:<\/p>\n Cogta\u2019s tender for implementing agents awarded extra points for bidders that agreed to partner with an \u201cemerging\u201d non-profit organisation and her brother had \u201call the qualifications and experience necessary\u201d for Insika to deliver an impressive bid.<\/p>\n \u201cIt was going to be easy [for Insika] to form a partnership [with Umnotho] because one of its directors, Phiwisipho, had a history with Insika,\u201d she told us, before rattling off a list of his qualifications.<\/p>\n Seemingly Cogta\u2019s intention was to give a leg-up to small, local non-profits. But as a newly-registered non-profit based in Gauteng, could Umnotho really be considered \u201cemerging\u201d?<\/p>\n \u201cThey were both: they were brand new and emerging,\u201d Mathenjwa insisted.<\/p>\n When we spoke to Mathenjwa a week later, she added: \u201cI like hardworking people. My decision was not based on blood relations. I am a workaholic. And I want people who meet that criteria.\u201d<\/p>\n Documents show that Insika told Cogta it planned to form a joint venture with Umnotho and to subcontract \u201c30% of the contract\u201d to Umnotho, with \u201cdecision-making authority\u201d split \u201c70 (Insika): 30 (Umnotho)\u201d \u2013 in other words to share some of the management duties and fees Insika as implementing agent would be entitled to from Cogta.<\/p>\n But in fact Mathenjwa had devised a scheme to use the procurement budget from the CWP to pay her brother\u2019s company instead.<\/p>\n The CWP in the Western Cape and Kwazulu-Natal has an annual budget of R905-million.<\/p>\n Roughly 70% of this goes to pay the programme\u2019s workers, while another 30% is paid to several implement agents, including Insika, to cover their fees and so they can procure tools, materials, protective clothing and training.<\/p>\n These are the contracts Insika was supposed to award in a fair and equitable way.<\/p>\n But a one-page extract from Insika\u2019s bid that Mathenjwa showed us, stated: \u201c[T]he emerging partner is allocated a minimum of 30% of the contract value. As such a minimum of 30% is allocated in the procurement budget as a set aside \u2026 to Umnotho we Afrika Foundation with a view of deliberately facilitating transformation and development.\u201d<\/p>\n Put simply, this means Insika planned to hand 30% of the procurement budget \u2013 contracts for tools, training and protective clothing \u2013 directly to her brother\u2019s company, without any competitive bidding process.<\/p>\n \u201cWhen we get a budget \u2026 automatically they have 30% of the work that is being done,\u201d she confirmed.<\/p>\n Although Cogta\u2019s tender document does not specify that implementing agents had to use a competitive bidding process, at very least the other criteria of section 217 of the Constitution \u2013 \u201ctransparent, cost effective, fair [and] equitable\u201d \u2013 still had to apply.<\/p>\n Mathenjwa said that in the absence of a competitive bidding process, Insika used its own \u201cmarket study\u201d to determine what a fair price for Umnotho\u2019s goods and services would be.<\/p>\n Phiwisipho Mathenjwa initially told us that Umnotho used a three-quote system when sourcing goods that it could not provide itself. But when we asked a series of follow up question, he refused to clarify.<\/p>\n \u201cThe follow up questions raised are now intrusive into our operational model (our competitive advantage) and as such could [be] quite detrimental to the long term survival of our organization,\u201d he said via WhatsApp.<\/p>\n Gabsie Mathenjwa insisted the highly unusual arrangement with Umnotho (though not the family relationship) was disclosed to Cogta during the bidding process but that no eyebrows were raised. \u201cMaybe we were too ambitious, but no one said anything.\u201d<\/p>\n Mathenjwa spent much of our hour-long meeting discussing how her brother\u2019s company would be capacitated by the experience of working on the CWP.<\/p>\n \u201cWe told [Cogta], if you want to build [a non-profit] they have to participate in the core of CWP, in everything,\u201d she said.<\/p>\n She also insisted that awarding contracts to her brother\u2019s company made the programme more efficient because Umnotho would double as both trainer and implementing agent when on site.<\/p>\n Which is precisely the point: instead of splitting its own project management fee with Umnotho, Mathenjwa simply awarded supply and service contracts to her brother\u2019s company with governments money.<\/p>\n Also read: A multi-billion-rand programme yet no protective clothing<\/a><\/p><\/blockquote>\n Pushed on whether Cogta explicitly accepted this arrangement, Mathenjwa told us: \u201cThey accepted because we are here today.\u201d<\/p>\n We requested additional information and documents from Mathenjwa in a bid to test that claim.<\/p>\n For example, we asked to see the agreement Insika signed with Cogta \u2013 or at least the clauses governing procurement \u2013 but she turned us down.<\/p>\n Instead she repeatedly pointed to what appear to be an outdated tender document.<\/p>\n Eventually we pointed out that the Cogta tender on which she actually bid required implementing agents to run a procurement process that was \u201ctransparent, cost effective, fair, equitable and an effective procurement and provisioning system that will ensure value for money while implementing CWP (In line with section 217 of the Constitution of the Republic of South Africa, 1996)\u201d.<\/p>\n Section 217 also requires procurement to be competitive.<\/p>\n We put it directly to her that on our reading she was not entitled to procure goods and services on any other basis, and as such was not entitled to create a set-aside in the procurement budget for Umnotho.<\/p>\n We also put it to her that the fact that Insika recorded the payments to Umnotho as RFQs RFQs supported this interpretation. An RFQ, or request for quotation, is usually part of a competitive bidding process.<\/p>\n Instead of answering, she shut down the discussion.<\/p>\n \u201cIt is now over a month that you have been trying to publish negative information regarding my organization\u2026 It is now clear that you have decided to move away from the facts but have decided that your conclusions supersede what I have told you,\u201d she said in an almost identical WhatsApp to one that we received minutes later from her brother.<\/p>\n You can read full written responses from Gabsie (here<\/a>) and Phiwisipho (here<\/a>) Mathenjwa.<\/p><\/blockquote>\n Both Gabsie and Phiwisipho Mathenjwa warned us that they had read the Press Code and reserved their rights to sue us.<\/p>\n Both brother and sister said they were not \u201cexplicitly\u201d asked in the bid application form to disclose their relationship, and so neither did.<\/p>\n Cogta spokesperson Mlungisi Mtshali confirmed that Cogta had not required implementing agents to disclose whether their service providers were related companies on its CWP contract \u2013 a flaw Cogta said it would address in the next cycle.<\/p>\n According to Phiwisipho Mathenjwa, it was public knowledge that he and Gabsie were related.<\/p>\n We queried this with the office of the auditor-general, the entity which audits the CWP and which recently flagged over R2-billion in irregular expenditure at Cogta, mostly stemming from the programme.<\/p>\n Spokesperson Africa Boso told amaBhungane that the auditor-general had no knowledge of the Mathenjwas\u2019 relationship.<\/p>\n As a seasoned director with Umgeni Water and formerly Denel, it is hard to believe that Mathenjwa had no idea she was required to disclose that her brother\u2019s company would benefit from the government contracts she would dish out.<\/p>\n [sidebarContentQuote align=left]Like this story? Be an amaB Supporter<\/a> <\/span>to help us do more. Sign up for our newsletter<\/a><\/span> to get more.[\/sidebarContentQuote] <\/em><\/p>\n But Mathenjwa\u2019s claims of ignorance became even less believable when we discovered that she had been bust for a similar scheme several years before.<\/p>\nThe agent<\/h5>\n
The data<\/h5>\n
\u201cI like hard-working people\u201d<\/h5>\n
The devil in the detail<\/h5>\n
Capacitating within the family<\/h5>\n
The threat<\/h5>\n
The conflict of interest<\/h5>\n