Thursday, April 15, 2021

Multi million Pula CEDA project bombs ÔÇô secret report

A huge bill, a contaminated data base, a hemorrhaging bank account and a raging legal battle are all the Citizen Entrepreneurial Development Agency have to show for their ambitious core business, the IT project, that was started three years ago ÔÇô a secret report compiled for the Minister of Finance has revealed.

The IT programme, which was expected to help speed up the processing of loans, improve customer service and improve the management of CEDA funds, bombed out and snowballed into a huge legal battled with KPMG, the company that was contracted for the IT project.

CEDA is accusing KPMG of failing to honour and deliver key aspects of the huge Information Technology contract and is, as a result, withholding the paycheck due to the international management consulting firm.

According to information contained in the confidential report by Auditor General and leaked to The Sunday Standard, KPMG failed to deliver management technology solutions to CEDA as contracted.

The Auditor General prepared the report for the eyes of Minister of Finance, Baledzi Gaolathe, after the minister said he was worried about some events at CEDA.

The failed technology, which has since led to the contamination of the CEDA information database, is now a subject of an arbitration which is expected to further bleed more money from CEDA, said the Auditor General.

The KPMG technology was expected to improve the efficiencies of CEDA core business, improve back office operations, like human Resource department and improve customer service.
But, says the Auditor General, the quality of CEDA data is doubtful.

Other than that, some modules were not delivered; the system was also incorrectly used.
“A series of problems pertaining to the system (such as bugs) were experienced during implementation which was caused by human errors when implementing the system,” said the Auditor General in a confidential report.

The arbitration process between the two feuding litigants is now expected to cost them P1million.
The Auditor General said, faced with non delivery by KPMG, CEDA decided to contract new consultants and, as a result, the project cost overruns now stand at P8 million.

According to the report by Auditor General, a copy of which The Sunday Standard has obtained, the dispute has been sent to former High Court judge Peter Collins for arbitration.

At the insistence of the Minister of Finance, the investigation by the Auditor General has found out that KPMG did not deliver some of the most critical components of the system.

As a result, says the Auditor General in his report, CEDA has not been able to realize the project benefits of efficiency in using the KPMG system to manage their core business and improving the customer service.

Some of the key components that KPMG did not deliver as contracted are the Loans Origination and Entrepreneurial Development Department modules.
As a result, CEDA was forced to engage yet another IT solutions company, IZAZI Solutions, at the cost of an extra P6 million to implement the missing modules.

Minister of Finance Baledzi Gaolathe, authorized an investigation into CEDA operations as one of the conditions for him to reappoint CEO Thapelo Matsheka whose contract expired in February.
Because of a number of management issues at CEDA with which the Minister and the CEDA board were not happy about, Matsheka had to go for close to ten months under a temporary basis as the minister insisted on certain issues being sorted out first.

The Auditor General further alerted the minister that, as a result of the complications between CEDA and KPMG, the quality of CEDA data is not up to scratch.

The situation has not been helped by the fact that end users at CEDA were never properly trained. They ended up using the system incorrectly.
The Auditor General says the three months period that KPMG dedicated towards training CEDA staff on the new technology was not “inadequate.”
Contacted for comment, the Chief Executive of KPMG Botswana, Ken Molosi, said the issue was very sensitive as it was now at an arbitration stage.

He said there were certain aspects of the contract that CEDA failed to deliver on their side of the deal.
“I don’t want to talk about this; suffice to point out that it has been a long running battle. What you have to realize is that we are the plaintiff and CEDA are the defendant. It is us suing CEDA not the other way round,” said Molosi.

He went on to point out that from his dealings with CEDA, it was apparent that the state owned citizen economic agency did not understand their key business processes.

“It was a high risk area through and through,” said Molosi.

He insisted that CEDA owes his company money, and that the only money so far paid him is for the services rendered.


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