Wesbank

GEMVAS P4 million software idle

SHARE   |   Monday, 14 March 2016   |   By Ditiro Motlhabane
Willie Willie

A Computer-based Records Management system, software and servers purchased by government for over P4 million in June 2015 lies idle at the Ministry of Finance and Development Planning (MFDP), The Patriot on Sunday has learnt. Soon after taking over the Government Employees Motor Vehicle and Residential Property Advance Guaranteed Scheme (GEMVAS) back in-house in May 2015, the ministry purchased the software from Unigem for use. But the software has never been used, exposing beneficiaries of the scheme to risk as their applications and files are processed manually. Sources at government enclave said the software is lying idle at the ministry while employees working in the scheme continue to use a risky manual system. It has also emerged that government may never use the system as connecting it to the government's mainstream computer system or servers will provide access to external operators/administrators.


Secretary, Economic and Financial Policy in the MFDP Dr Taufila Nyamadzabo said as far as he is aware the software was only acquired recently. He denied that the software was purchased last year. He said it would be irresponsible for a government department to spend millions of public funds to acquire such expensive equipment only for it to be kept in offices while service to public servants is compromised. "Although I cannot confirm if we have started using it I know the acquisition was only made recently," he said, before referring further enquiries to his deputy who deals directly with GEMVAS. Numerous efforts to reach Ellen Richard Madisa – Deputy Permanent Secretary MFDP (Financial Administration) responsible for the scheme – were futile. On the contrary Chief Executive Officer of Unigem - former administrators of GEMVAS, Julian Willie, confirmed that government paid for the system last year in June and handed it over to MFDP in July/August 2015. "Note that we also provided all the associated hardware," he said.


According to Willie, advantages of the Computerised Management System include accurate reporting and management of data thus eliminating human error and integration of processes together with scheme member management, claims management, internal controls, handling of queries and timely file tracking to enhance service delivery to the customer (public servants). Other benefits of the computerised system include online authorisation of loans to curb fraud and improve turnaround time by saving on manual processing time. The system also provides online connectivity with branches around the country to save time. eneficiaries of the scheme could misuse funds by diverting money to projects they were not approved for. In addition, due to unavailability of a dedicated marketing division for the scheme at MFDP potential beneficiaries in the public service remain unaware of the benefits in the welfare scheme.


GEMVAS operates as a loan guarantee scheme. It has approximately 20 000 active and closed files for loans. The scheme is administered at four centres around the country in Gaborone, Palapye, Francistown and Maun. It was established by government in 1973 to assist public servants access funding for the purchase of motor vehicles and residential properties. Under the scheme, government provides 80 percent guarantee for mortgage and motor vehicle loans provided by different participating banks. The scheme allows public servants to get motor vehicle and property loans at 11 per cent interest rate, with a value propositions of no deposits, no security, no processing charges, and an option to build anywhere in Botswana. By 2015 GEMVAS loan book stood at P500-600 million.


The day to day management of GEMVAS is handled by MFDP on agency basis on behalf of the Directorate of Public Service Management (DPSM), which is responsible for developing the terms and conditions for the public service. The scheme has grown tremendously over the years and more than 20,000 public servants have benefited under it.  As a result of this rapid growth and the fact that the scheme is centralised, the processing of loans became an administrative burden for government, leading to it being outsourced to Unigem in September 2010. When the scheme was still administered under the Ministry of Finance and Development Planning, officers under that unit were extremely overwhelmed in that the number of loan applications had increased over the years.

  In addition to processing loan applications, the officers had to deal with inspections and monitoring of projects, handling complaints, following defaulters and attending to policy issues concerning the scheme. "These functions stretched the limited personnel that we had, which ended up compromising service delivery.  Therefore, the outsourcing of GEMVAS to Unigem cannot be over-emphasised as it would greatly relieve government of this administrative burden," noted the then Assistant Minister of Finance and Development Planning, Charles Tibone at the handing over in 2010. The decision by government to outsource the administration and management of GEMVAS to the private sector (Unigem) was made in 2007. The outsourcing was hailed by Tibone, saying it is in line with the government’s privatisation policy where non-core government services are being outsourced to the private sector. Excited about the successful privatisation by government, Tibone said; "We are celebrating the effective economic empowerment of the entire membership of the public service trade unions as they are beneficial shareholders of Unigem".


Tibone revealed that as a result of limited capacity, MFDP was not able to adequately inspect and monitor projects where employees had received loans to build residential houses. He said some employees took advantage of this limitation and ended up abusing the scheme by diverting the funds meant for the construction of houses to other personal uses. "We have several instances where people have taken loans to purchase or build houses but on inspection no houses were found. This trend is still prevalent and remains a challenge that Unigem must face head-on," he said. The minister had also complained that there were instances where employees left the public service while still owing government a lot of money, which could not be recouped from their terminal benefits. These employees still remain defaulters and are yet to be traced and followed up in order to recover the funds. "Again our limited capacity could not allow us to adequately perform that function,” he said.


On the other hand, Willie said they had set up an in-house inspection team in all regions who conducted regular inspections and filed monthly reports. He said unlike MFDP the loan funds were disbursed in four stages before verification that the project is ongoing. At MFDP, once an application is approved, funds were credited into a trust account, which created challenges with some unscrupulous lawyers. The ministry later credited funds directly into client's accounts, which led to rampant abuse. Willie also said during their tenure they did not have defaulters because they kept contact with banks to ensure loans repayment was up-to-date, and had a legal team to follow up those leaving public service with outstanding loans. In addition, he said, Unigem had a dedicated financial education team which visited different government departments to teach them about the welfare scheme and the benefits therein. He said although government had set ‘take home’ at P1 500 for married public servants and P1 300 for singles they still had to reject many applications from civil servants who remained with zero balance in their pay-slips.