Johannesburg - The Special Investigating Unit (SIU), tasked with conducting an inquiry into the Ekurhuleni Metropolitan Council, has uncovered all manner of irregularities.
This was revealed by President Jacob Zuma in a parliamentary reply to questions by the DA. In his reply, Zuma revealed that Gauteng’s Ekurhuleni Metropolitan Council, Tshwane Metropolitan Council and Midvaal Municipality were being investigated for fraud and corruption. Ekurhuleni was judged to be the worst of the three.
Zuma said he had requested that the SIU investigate allegations of fraud and corruption committed between January 1, 2007 and November 8, 2010.
According to Zuma, Ekurhuleni Municipality’s wasteful expenditure was due to payments made for goods not supplied and for services not rendered. Municipal employees, officials, contractors, service providers and suppliers were fingered in the fraudulent activities. Zuma said the SIU was due to complete its investigations at the end of November.
“Eleven waste management contracts to the value R530 million have been reviewed. Five officials or employees of the municipality have been suspended, one official subsequently resigned and one [was] dismissed.
“The disciplinary hearings of the other three are pending. The investigation identified R1.8million of ostensibly fraudulent invoices that were submitted to and paid by the municipality in respect of the refuse bins contract,” he said.
Zuma said the investigation “identified R10m that was claimed for escalations despite the fact that no escalations have been approved”. The president also said irregular payments amounting to R8.9m was uncovered during the investigations.
The SIU is also investigating an unlawful transfer of R20m in the awarding of information and communications technology contracts that had been done without council approval.
“The investigation in respect of one contract was completed. A number of suspects were arrested and have appeared in court. An asset forfeiture order was obtained and assets to the value of R32m have been seized.
“One senior official was suspended for fraudulently signing invoices to the value of R12.5m. Criminal conduct is being investigated by the SAPS,” Zuma said. Other preliminary findings of the investigation indicate that:
- The Ekurhuleni metro exceeded its budget by R15m, and a service provider was awarded a tender based on a bid document which had not been completed by him.
- R35m was paid for the upgrading of sports fields, but no work has been done.
- Eight officials were also identified as having fraudulent matric certificates. They have been dismissed and criminal investigations have been instituted.
- Various officials have been identified as having criminal convictions, while others were found to have made fictitious claims to the municipality.
- Various entities, which belong to employees of the municipality or their spouses, were doing business with the municipality.
- The municipality also identified various “ghost” employees.
- Stock to the value of R4m was invoiced and paid for, but could not be accounted for.
“Total losses are still being quantified, but the owner of the service provider has since died. The Special Investigating Unit is negotiating possible recoveries with the trustee of the estate of the service provider,” Zuma said.
“In respect of a contract that relates to the purchasing of water meters and tokens, the investigation uncovered that according to invoices for September and November 2010, which were paid in May and July 2011, R38m was paid for 17 421 meters and tokens but only 5 804 meters and 5 796 tokens were procured.
“As a result of the investigation, an array of criminal charges were laid. [A total of] R400 million has been recommended for recovery as a result of the irregularities that were uncovered,” Zuma said.
Reacting, James Selfe, the DA spokesman on correctional services, said his was shocked at the pervasive nature and extent of corruption and maladministration in local government.
“It is good that investigations are taking place, but it seems that very few prosecutions and still fewer convictions result from these investigations,” he said.