Audit report throws Kangai under the bus

Former NetOne chief executive officer Reward Kangai allegedly appointed a service provider for the OneWallet mobile money transfer without seeking the approval of the board potentially prejudicing the parastatal of millions of dollars, a forensic audit has revealed.

Source: Audit report throws Kangai under the bus – NewsDay Zimbabwe December 21, 2016

A Pricewaterhouse Coopers (PWC) report on the provision of comprehensive forensic investigation services to NetOne revealed that Kangai informed the auditors that AfroSoft was a direct appointment by the board.

However, the audit said Kangai allegedly lied to the board. It said minutes dated September 14, 2009 showed that he was the one who advised the board that NetOne had appointed AfroSoft, among other service providers, for the mobile money project.

“Kangai confirmed that the SPB (State Procurement Board) was not involved in the selection and appointment of AfroSoft. He further stated that at the time that AfroSoft was appointed, it was the only provider of the software development services required by NetOne,” the report read.

“This was in contravention of SPB regulations which stipulate that where such a direct selection and appointment is made, approval has to be sought from the SPB.”

PWC said they held discussions with various NetOne stakeholders with a view to get an understanding of the quality of service provided by AfroSoft to NetOne and noted the following:

“NetOne has a bulk messaging gateway (BMG) platform where all services are connected. NetOne utilises this BMG platform for billing bulk SMS transactions. AfroSoft accesses the SMS platform directly using the SMS platform;
this SMS platform does not have the functionality to bill transactions generated through it. NetOne, therefore, has no way of attributing a value to the content (value-added services) that is sent by AfroSoft using the SMS platform.”

The audit firm said NetOne head of billing Solomon Manda suspected AfroSoft of utilising the SMS platform to send their bulk SMS and under-declaring the number of such transactions, thereby prejudicing NetOne of revenue.

“NetOne performed an independent analysis and estimated +/-$92 000 per month worth of traffic was being generated by AfroSoft on the SMS platform,” the audit report read.

“Manda suspects that AfroSoft’s alleged abuse of the SMS platform is a major contributor to the failure of the electricity token system. Electricity tokens are distributed to the end users via SMS, and NetOne suspects that during normal business hours there is a backlog in delivering SMSs to NetOne’s customers because AfroSoft will be using that same channel to send bulk messages to their own customers.”

The report said AfroSoft chief operating officer Kundiso Matanga informed PWC that contrary to NetOne management’s belief that AfroSoft had unfettered access to the SMS platform, the company assumed that they were connected via that flash media gateway over which the mobile operator had complete access.

“He also believes that NetOne can retrieve bulk SMS data traffic/ transactions and should be able to reconcile figures presented to them by AfroSoft. He stated that AfroSoft had never misrepresented or under-declared the volume of bulk SMS transactions generated on the NetOne SMS platform,” the audit read.

But Hannes Cruywagen (Flash Media owner) informed PWC that although there was a bulk SMS processing functionality on the Flash Media gateway, this had never been operational.

“He insisted that AfroSoft was never connected to NetOne’s SMS platform and had never transacted through that Flash Media gateway. This was confirmed by Manda,” it said.