THE National Social Security Authority (NSSA) has spent US$10,4 million on a new information communication technology system that worked for just two years and now lies idle, and could be forced to spend another US$10 million if potential arbitration goes against the authority.
The system was supplied by Twenty Third Century Systems (TTCS), which is owned by South African EOH Holdings, a company listed on the Johannesburg Stock Exchange.
The new system was used only from August 2015 to December 31 2017 when the agreement was terminated as new bills and invoices continued to flood. The system is now lying idle at the NSSA headquarters in Harare.
Although the ICT system is not functional, NSSA is sitting on additional bills of up to US$10 million from TTCS, and the board is reluctant to pay, citing the unclear circumstances under which they have been filed.
While the tender for the ICT system is said to have been subjected to the normal NSSA procurement processes, reliable sources said TTCS was selected although it did not meet one of the criteria, that of having supplied a similar system to at least three other companies or organisations.
This is a common requirement in Zimbabwe where most buyers prefer systems that have had the bugs removed. After the ICT system was supplied, invoices and claims kept arriving.
The new NSSA board led by Dr Cuthbert Chidoori is in the process of cleaning up NSSA after a forensic audit uncovered irregularities, mistakes and sometimes plain fraud. Dr Chidoori told The Herald that TTCS "was paid US$10,4 million as the capital project cost".
"TTCS further billed NSSA US$5,02 million as license fees for 396 additional users and 140 000 additional business partners," he said.
"NSSA disputed this bill as the project had not been signed off and the system was not working. "NSSA served TTCS with a notice to terminate the agreement effective end of December 2017." However, after the termination of the agreement, TTCS slapped NSSA with further bills for 2,8 million Euros (just over US$3 million) for 2016, 2017 and 2018.
Another bill of US$831 000 was raised by TTCS for the annual maintenance fees and licence renewal. But Dr Chidoori says NSSA was not keen to settle the bills as there was a dispute.
"NSSA's position is that it is not liable for the payment of the claimed fees as there was a dispute with regards the system itself and how the system worked. The matter is now in a tentative process for formal arbitration," he said.
If the arbitration orders NSSA to pay, the investment into the SAP system would rise to almost US$20 million for a system that is not working. Dr Chidoori's board is in the process of cleaning up NSSA after a forensic audit uncovered irregularities, mistakes and sometimes plain fraud.
In the most recent move, the board sent 24 NSSA executives and managers on leave so it could investigate claims that they awarded themselves between US$100 000 and US$460 000 each in housing, vehicle and personal loans without following procedures.