DURBAN - An independent legal opinion sought by the Department of Health in May 2021, following concerns raised about former minister Dr Zweli Mkhize’s signature approving the controversial R150 million Digital Vibes contract, found the approval was lawful.
Mkhize is accused of allegedly approving two memoranda, on January 20, 2020 and June 16, 2020, for the implementation strategy and budget for the National Health Insurance communication strategy.
He has maintained that these were presented to him two months after Digital Vibes had been appointed in November 2019, and had already been providing services to the department.
A legal opinion prepared by senior council advocate Steven Budlender found Mkhize acted within the bounds of the law.
“We are of the opinion that the department’s practice of seeking approval from the minister for various decisions with financial implications, after they have been recommended by the director- general, is lawful.
“In some instances, the minister’s approval may not be a necessary practice, but it is not unlawful. However, in respect of high level policy decisions, such ministerial approval would even be required,” the report read.
The Budlender report is part of the annexures in the court papers Mkhize filed where he seeks to have the Special Investigating Unit (SIU) report set aside and its recommendations declared unconstitutional and unlawful.
During May 2021, the department received a draft report from Ngubane & Associates, an assurance tax and advisory firm, detailing findings made during its investigation into the department's award of the Digital Vibes contract.
Ngubane was commissioned by the department to conduct an investigation, after the auditor-general’s report found that the department may have been “overcharged for the services that could have been provided more economically by other service providers”.
On its findings, Ngubane felt that the minister’s approvals of two memoranda relating to the Digital Vibes were irregular, because Mkhize’s approval of the memoranda meant that he “assumed departmental administrative activities that are vested in the accounting officer (DG)”.
The department sought independent legal advice on whether Ngubane’s view was correct so that the department could determine how to process such memoranda in the future.
The Budlender report found that: “The minister, as the political head of the department, who is appointed and accountable to the political process, ought to be making those kinds of policy choices. The legislative regime does not preclude the minister’s involvement in approving memoranda.
“We emphasise that nothing we have said should be understood to minimise the central role of the DG in financial decisions.”
“The DG is the accounting head of the department and thus ultimately accountable for all expenditure by the department. If expenditure were to take place without his approval, that would be unlawful. The approval of the minister is not sufficient to avoid the need for the DG’s approval,” the report stated.
“Our understanding is that historical and current practice of the department is that these matters go to the DG first for approval and his recommendation before going to the minister and if not recommended by the DG, would not proceed to the minister at all.”
In his affidavit, Mkhize said: “I reiterate that the submission documents did not form part of a procurement process and that their purpose was not for the assessment or the appointment of the services provider. It was also not for me to determine the sufficiency of the budget in this regard, but only to approve that the department had considered the financial implications stated above.
“I knew that the submission gave effect to cabinet resolutions; I further knew that the appointment of a service provider entailed its own process (procurement), to be run by law, by the department’s officials, which was separate and distinct from my requirement to be satisfied that the appointments, were aligned to the department and government’s strategic objectives on the NHI communication strategy. On this basis, I signed.”
Mkhize added that he had no reason to believe or suspect that the finance unit had not complied with the requirements of the Public Finance Management Act.
“The submission documents recorded that the appointment in question was endorsed by the head of the relevant NHI cluster, the chief financial officer and ultimately the director-general.”
Mkhize said: “I did not participate and was at no point even made aware of any other details relating to the procurement process or the amounts paid to the service provider.”
He added that his only involvement and interaction with the service provider was when he was required to participate in communication initiatives such as shooting of videos, pre-recording interviews and media and public campaigns.
Mkhize is accused of allegedly putting pressure on department officials to award the R150m tender to Digital Vibes, a company owned by Tahera Mather and Naadhira Mitha, alleged to be friends of Mkhize and his family.
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