Suspended SARS commissioner Tom Moyane. Picture: TREVOR SAMSON
Suspended SARS commissioner Tom Moyane. Picture: TREVOR SAMSON
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The SA Revenue Service (Sars) commission of inquiry has revealed the cynical role that yet another consultancy played in weakening the tax agency.

International advisory firm Gartner's role emerged in testimony last week, as arguably even more questionable than that of Boston-based consultancy Bain & Company, which has since withdrawn its participation in the inquiry after damning allegations surfaced about the conduct of its managing partner, Vittorio Massone.

This means many questions around Bain's role in the destruction of Sars would remain unanswered, and that a large amount of evidence of the damage it had done at Sars and over the irregular contract it received would stand uncontested.

In 2013, then deputy auditor-general Kimi Makwetu urged the government to employ stricter controls over the use of consultants when he presented a report on a performance audit of eight national government departments.

The Sars commission of inquiry has shown that not only was the work of Bain, one of the world's big three consulting firms, and Gartner damaging for the institution, but there were also serious irregularities in the manner in which the contracts were secured.

The report tabled in parliament showed how these departments had over a period of three years spent R24.6bn on consultants. This marked a staggering 74% of their national spending of R33.5bn during that period. This was apart from the spending by provincial governments — the total spend was more than R100bn at the time.

There are few tools to measure whether the government receives value for its money  from consultants.

The Sars commission of inquiry has shown that not only was the work of Bain, one of the world's big three consulting firms, and Gartner damaging for the institution, but there were also serious irregularities in the manner in which the contracts were secured.

The inquiry heard how a senior Gartner official — who is expected to testify this week — along with a close friend of suspended commissioner Tom Moyane, Patrick Monyeki, had actually written the specifications or terms of reference for the Sars information technology tender; the same tender which Gartner was then awarded.

The contract was awarded in a so-called transversal contract with the State Information Technology Agency. Gartner had an existing deal with this state institution, where Moyane had previously been employed, and Sars then piggy-backed off that deal. 

This was found to be irregular, because Gartner’s initial contract with Sita too was not awarded according to procedure. It is a veritable mess.

The modus operandi for both the Bain and Gartner contracts entered into by Moyane’s Sars was similar. Both firms had been working closely with the commissioner himself even before the need for the work arose. In Bain’s case, it was Massone’s recommendation before he even examined the Sars environment that a total “refresh” was required. 

The second phase of the Gartner contract, like the second part of the Bain one, was also awarded irregularly and a “deviation” was sought from the National Treasury. When the work started, only 33 Sars employees were interviewed from a list provided by Moyane.

The work Sars paid collectively to both consultancies amounted to some R400m.

It is well-known now how damaging Bain’s overhaul of the Sars operating model was, how it neutralised key units and displaced 200 experienced and skilled employees.

If there was any doubt, commission chairman retired judge Robert Nugent articulated it clearly in his interim report to President Cyril Ramaphosa, in which he said the restructuring had effectively benefited tax dodgers or “delinquent taxpayers” and the new structure allowed criminal networks, mainly the illicit tobacco networks, to function with impunity.

In the report, Nugent also recommended that Moyane be axed as commissioner and a permanent head of the tax agency be appointed without delay to stabilise the institution.

The conduct and work by two supposedly prestigious consulting firms at the Sars inquiry provides a microscope for all of government to see the negative impact the work of these firms can have.

The government should not only heed the call from Makwetu — now the auditor-general — from back in 2013 and make better use of consultants, but consider banning the use of those such as Bain and Gartner, whose work have proven to be destructive and potentially debilitating for key institutions.

 

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