1. State Information Technology Agency Presentation to Portfolio Committee on Home Affairs

2. Smart Card ID for DHA Introduction Background The Role of the DHA The Role of SITA and the Auditor General Challenges and Delays Forensic Audit

3. INTRODUCTION The Smart ID Card (SIDC) is a project of DHA aimed at the introduction of a National Smart ID Card for the Republic of South Africa. DHA is responsible for the processing of identity documents to all South African citizens from the age of 16 years and older and to persons to whom permanent residence has been granted, including refugees. The tender was aimed at assisting DHA with the selection of a supplier that will provide DHA with a turnkey solution for the production of identity cards with contact-integrated circuit chip (Smart ID Card). The tender process was facilitated by SITA on behalf of DHA.

4. INTRODUCTION (cont.) In brief, the tender was for the supply and maintenance of  smart cards,  raw materials,  card personalisation and  card production facility. The implementation of the Smart ID card is aimed at replacing the current green ID Book, which is currently manually produced causing delays in the process, thereby reducing manual intervention in the processing of applications for IDs. DHA requested SITA to publish a tender for the Smart Card ID on behalf of DHA on 12 May 2008. The tender process was administered by SITA as prescribed.

5. BACKGROUND TO THE PROJECT The background to the Project is: SIDC Project was approved by Cabinet on July 2001. The DHA received an approval from Cabinet to start the procurement process for Smart Cards on March 2005. Cabinet requested the DHA to resubmit a proposal on the future of the SIDC taking into account the risk factors in May 2005. IT Projects including the SIDC Project was put on hold by the DHA pending the outcome of the DHA’s support intervention in June 2005. DHA communicated to Cabinet that a SIDC pilot project would be rolled out in April 2008.

6. BACKGROUND TO THE PROJECT SITA received a request from the DHA on 12 May 2008 to procure on its behalf. The bid closed on 27 June 2008 at 11h00. Technical evaluations commenced on 10 July 2008 and was completed on 30 July 2008 and the technical evaluation report was signed by the members on 06 August 2008. The price evaluation by BEC members commenced on 1 August 2008 and was concluded on 15 August 2008. The BEE evaluation was done and concluded on 13 August 2008 and the final report signed the same day.

7. THE ROLE OF THE DHA The DHA: Submitted a request to SITA to procure on behalf of DHA on 12 May 2008. Approved the bid document on 21 May 2008. Requested an extension of the closing date of the bid on 28 May 2008. Approved the allocation of preference points for specific participation goals on 13 June 2008. Participated in the bid evaluation process as members of the Bid Evaluation Committee (BEC).

8. THE ROLE OF SITA AND THE AUDITOR GENERAL The procurement process which SITA adopted was premised upon the prescripts of the Regulations as follows: Preparation and soliciting of bids on behalf of the Department of Home Affairs. Facilitation of the evaluation of the bids was done by SITA. Evaluation of the bids was done by the Bid Evaluation Committee. Adjudication of the bids by the SITA Recommendation Committee. Recommend award to the Accounting Officer of the Department. The Office of the Auditor General: Performed “Agreed Upon” audit procedures.

9. CHALLENGES AND DELAYS RELATING TO THE PROJECT Anonymous letter received on the 9 th September 2008 by SITA making allegations about “serious flaws with regards to the evaluation of the SITA tender RFB 643”. Pursuant to the anonymous letter, SITA, on 10 September 2008, halted the tender process with a view to finalize the Auditor General’s Report on compliance with agreed upon procedures. AG finalized the draft report on the 25 th of September 2008.

10. CHALLENGES AND DELAYS RELATING TO THE PROJECT (cont.) Between September and December 2008: SITA attended to issues raised by the AG. On 9 th December Board meeting, SITA reaffirmed its decision to halt the process until finalization of the AG’s queries and advised DHA on the decision to investigate. December 2008: SITA decided to commence a forensic investigation. Forensic audit commenced in February 2009. April 2009: Forensic audit report raised concerns on the process followed. Recommendation from SITA to DG of DHA in April 2009 to cancel the tender. DHA responded to SITA on the cancellation of the tender on the 19 th August 2009.

11. FORENSIC AUDIT December 2009 a draft forensic report was submitted to DHA for comments. The DHA committed to submit their response to the questions raised by forensic auditors by the 16 th April 2010. The Report will be finalised by the end of June 2010. The Report cannot be made available until such time that the Report has been finalised.

12. Thank you!