Deon de Lange
MORE than 1 300 people appeared in court from April to September last year on charges relating to social grant fraud, an interim report of the Special Investigating Unit (SIU) has revealed.
And in the nation’s capital, Pretoria, the unit has found metro police officers on the job despite having criminal records for rape and murder, dozens of government officials coining it in business with the state, and thousands of city officials fraudulently claiming social grants.
As part of its ongoing investigation into grant fraud – which began in 2005 – the SIU last year successfully prosecuted 1 178 fraudsters, prepared disciplinary cases against 823 government officials and obtained written undertakings from 2 947 people to repay a total of R34 million in illegal grants.
These are just some of the findings in the SIU’s interim progress report for the period April to September last year, tabled in Parliament last week.
According to the SIU – popularly known as the Cobras – these steps have saved the state about R6.9m, with potential further savings of R116m.
The SIU investigates corruption and maladministration in the government and specialises in complex forensic investigations, but probes only matters referred to it by presidential proclamation.
It is currently tasked with 21 proclamations involving the government at local, provincial and national levels as well as state-owned entities and enterprises.
An investigation into the Department of Arts and Culture found officials had incurred R41.7m in unauthorised expenditure as they shifted funds meant for 2010 World Cup projects to “unrelated purposes”. The same probe uncovered a further R4.5m in unauthorised payments, R5.4m in irregular expenditure and R150 000 in fruitless and wasteful expenditure relating to the department’s Investing in Culture Projects. As a result, the government has withheld payments to service providers amounting to R8.4m, recovered R351 000 and cancelled two contracts.
A probe into 41 lease agreements at the Department of Public Works – already stained by claims of widespread fraud and corruption – has uncovered “numerous irregularities including overpayment, incomplete lease agreements on file (and) lease agreements signed before bid committee approval”.
“In addition, evidence has been obtained by the SIU which indicates that Public Works officials colluded with service providers and leases were irregularly awarded to such service providers in return for significant financial compensation being paid to the officials…” the report states.
In one case, the SIU found that 27 leases worth about R325m were awarded to a single service provider. In return, two Public Works officials were paid R4m in kickbacks. The SIU has recommended that the 27 leases be cancelled and the cases be referred for criminal investigation.
Four other Public Works officials face disciplinary action for not declaring interests in companies doing business with the department.
Failure to declare business interests – and related crimes – appears to be common at all levels of government, but particularly at local government level.
The SIU is investigating 24 municipalities in North West. At the Madibeng municipality, 12 companies owned by officials were paid R4.9m, including a grass-cutting firm owned by the mayor.
At the Greater Taung municipality, 135 employees were found to have undeclared business interests, four of whom were doing a brisk trade with the municipality. In Ventersdorp, staff did not bother with supply chain management rules and appointed a service provider during a “community meeting”.
At the Moses Kotane municipality, the municipal manager’s son was appointed as a data capturer, despite scoring the lowest of all applicants during the interview process. And the supply chain manager was appointed without meeting the minimum requirements for the position.
In Rustenburg, the SIU is investigating salary and overtime payments made to a former municipal official who was in fact an awaiting-trial prisoner at the time the payments were made.
At the Tswaing municipality, the SIU uncovered 135 irregular appointments – all authorised by the former municipal manager, who is facing criminal charges together with two municipal directors.
These problems are not limited to North West.
In Stellenbosch, the former municipal manager, his brother, the chief financial officer, the former mayor, deputy mayor, a councillor and a supplier have all been implicated in financial irregularities relating to World Cup events.
Other Stellenbosch officials were fingered for financial irregularities relating to a “cultural day” hosted in Kayamandi in April 2009.
At Midvaal in Gauteng, the SIU is investigating possible fraud relating to the council’s indigent lists. According to council policy, only households with an income of less than R1 400 a month qualify for municipal discounts.
Preliminary findings showed that, out of 2 500 beneficiaries, 372 were registered as company directors, 202 were dead, 115 owned their own businesses, 14 received other government grants and 15 were permanent employees of the state.
An investigation at the SABC – requested by the public broadcaster – into 20 contracts identified as priority areas has found that all 20 deals, valued at about R798m, contravened SABC policy.
The SABC also incurred irregular or fruitless and wasteful expenditure to the tune of R150m relating to 17 other contracts. The SIU has recommended further investigations into R279m paid to 114 “consultants” between September 2007 and June 2009.
The SIU referred R34m in “potentially untaxed SABC employee benefits to Sars for investigation”.