A REPORT by the auditor general has revealed former SABC chief executive and its legal head signed off a R1,7-billion deal without authority, write Sam Sole, Stefaans Brummer and Glynis Underhill in the Mail & Guardian.

Former SABC group chief executive Dali Mpofu and legal head Mafika Sihlali signed off the single-largest irregular contract highlighted by the auditor general in his devastating report on mismanagement at the public broadcaster.

The report was released in Parliament this week.

Mpofu and Sihlali eventually left the SABC under a cloud, although the report reveals that Mpofu — who was contesting his repeated suspension by the board — was paid R13,5-million to go away.

The auditor general reported that an environment existed at the SABC "where the 'tone at the top' is not appropriate, which in turn seems to have created a culture where management is not focused on public accountability or acting in the best interest of the SABC".

Mpofu was appointed group chief executive in August 2005. A year later, in August 2006, his friend, fellow lawyer and business partner, Sihlali, was appointed legal and business advisory services head.

Just six weeks into his new SABC job, in October 2006, Sihlali led the charge against M&G Online, which had posted a leaked copy of the SABC's internal inquiry into the so-called blacklisting scandal.

The South Gauteng High Court dismissed the SABC's urgent interdict attempt.

In July 2007 Sihlali was back in court applying to gag the Mail & Guardian, this time with temporary success.

The M&G had obtained a leaked forensic report commissioned by the SABC into Sihlali's alleged financial impropriety. The North Gauteng High Court lifted the gag after two weeks.

The leaked report included information about how Sihlali had outsourced millions of rands in legal work to law firms he was linked to and said there was prima facie evidence of R1,8-million in fraud. Sihlali denied wrongdoing.

Now it has emerged from the auditor general's report that in September 2006 Sihlali and Mpofu signed off — without authority — on the establishment of a "technology program management office" worth a staggering R326-million.

The deal included a one-off payment of R7-million, a monthly fee of R1,9-million and a massive project fee of 15% of the capital cost of the project. The fee was estimated to be worth R255-million on an estimated capital cost amounting to R1,7-billion.

The three-year contract related to the management of the SABC's "digital migration strategy", designed to convert the broadcaster's transmission technology from analogue to digital.

The contract, with a consortium led by Siemens IT Services, was concluded despite the board approving only a R10-million, one-year contract that could be renewed annually, based on performance.

According to the auditor general, the SABC's external auditors reported in July 2008 that the contract was not authorised in terms of Mpofu's delegated authority and the contract "may be such that the cost exceeds the benefit to be received".

Click here to read the full report, posted on M&G Online.