‘R5.1bn of housing contracts unaccounted for’

612 07.03.2013 Former Gauteng local government and housing MEC Humphrey Mmemezi, addends the memorial of Keamogetswe Sefularo. Sefularo was murdered last Friday by her friends as they made their way home from school in Mohlakeng Randfontein. Picture: Itumeleng English

612 07.03.2013 Former Gauteng local government and housing MEC Humphrey Mmemezi, addends the memorial of Keamogetswe Sefularo. Sefularo was murdered last Friday by her friends as they made their way home from school in Mohlakeng Randfontein. Picture: Itumeleng English

Published Nov 7, 2014

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Johannesburg -

Former Gauteng MEC for local government and housing Humphrey Mmemezi’s toxic legacy continues to haunt the provincial department more than two years after he left the office in disgrace.

On Thursday, the Department of Human Settlements - formerly housing - was chided by members of the standing committee on public accounts (Scopa) for its failure to account for more than R5.1 billion of housing contracts allocated over the past three years.

Scopa demanded answers on why the provincial department also illegally spent more than R7 million to install a security system at the departmental headquarters in Sauer Street, Joburg, including a private entrance for Mmemezi while he was in office.

The auditor-general (AG) found that during Mmemezi’s tenure, a private company was paid more than R6.6m to prepare the department’s annual financial statements, while another was paid R1.2m in 2011/2012 for the same job.

All the shocking revelations emerged when the department failed to provide the AG with necessary documents to enable its officials to conduct proper financial audits within the Housing Department.

The documents sought were for contracts issued since 2010 when Mmemezi was in office until he resigned in July 2012.

The remaining other dubious contracts were issued between July 2012 and March last year after Ntombi Mekgwe (now Speaker of the Gauteng Provincial Legislature) took over from Mmemezi.

The AG gave the Housing Department a qualified audit report for its failure to provide sufficient audit evidence relating to the R5.1bn commitments.

The AG also urged the department to conduct an investigation on the whereabouts of the contracts, including developing a strategy to address document, contract, project management and financial accountability.

During proceedings on Thursday, MEC for Human Settlement Jacob Mamabolo, who appeared before Scopa with his delegation, told the committee that most of the ills were committed before he took office.

Mamabolo, however, said his office would on Friday announce the name of the company that has been appointed to conduct a centralised project management office for his department.

He said the tender was provided to an outside company because none of his departmental officials possessed the necessary skills.

According to Mamabolo, the new service provider would scrutinise legal contracts between the department and service providers.

The Housing Department also announced that it would in due course appoint another service provider to do record-management storage for them in their bid to assist the AG to retrieve all the necessary documents needed for auditing.

The newly appointed head of the department, Daphney Ngoasheng, told Scopa that preliminary moves were under way to scan some of the contract documents and store them electronically.

While Mamabolo, Ngoasheng and their team tried to answer most of the questions, Scopa members, particularly DA spokeswoman on public accounts Glenda Steyn, expressed reservations about the irregular expenditure of more than R152m.

Scopa ordered Mamabolo and his team to provide detailed explanations of who was responsible for the irregular installation of the security system in the Housing Department and its five regions.

It also ordered him to explain measures undertaken to recover the funds.

The Star first exposed this irregular expenditure in June 2012 and revealed that the contract was given to Vuledzani Mbedzi – the sole owner of Tshwane Firearms Training. Mbedzi confirmed that he was given the contract although it never went out on tender.

At the time, Mbedzi said: “I was given the job before Treasury came with the idea that the government must invite more than three tenders before awarding the project to the winning bidder.”

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- The Star

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