Kimberley - The South African Social Services Agency (Sassa) in the Northern Cape has come under fire over a R1.8 million deviation that it continues to pay for office rentals, for buildings owned by Trifecta directors.
The buildings, which previously belonged to Trifecta, were transferred to Delta Property Fund in 2016 - a national company based in Johannesburg, where Sassa has confirmed that the two companies share the same directors.
Sassa said that it has not been able to source alternative office accommodation since its leases with Trifecta expired.
Former ANC provincial chairperson John Block and the CEO of Trifecta Holdings (Pty) Ltd, Christo Scholtz, were both sentenced to 15 years imprisonment for corruption and money laundering in relation to the leases in 2016.
Scholtz has been unable to overturn an asset forfeiture order of R60 million for his assets and companies.
The Supreme Court of Appeal has yet to deliver judgment on the convictions and sentences.
During a recent hearing convened by the Standing Committee on Public Accounts (Scopa) on Sassa’s irregular, fruitless and wasteful expenditure for the 2016/17 financial year, questions were raised over whether the leases were inflated.
Scopa chairperson Nelson Themba Godi emphasised that Sassa had landed itself in a moral dilemma where it continued to do business with the Trifecta group of companies after the court had declared that the state had entered into corrupt leases.
“Sassa went ahead to extend a contract with the same people.”
He instructed the regional manager of Sassa in the Northern Cape to enlighten the committee over R9 million that was paid to the Independent Development Trust (IDT) for the construction of local offices and not a regional office.
Godi also raised concern over conflicting information provided in the presentation regarding the construction of two offices although three offices were mentioned when questions were directed at officials.
He was flabbergasted as to how Sassa officials were unaware of a R1.8 million deviation that was “one of the largest in the Northern Cape”.
Scopa committee member Thapelo Chiloane asked Sassa to inform them whether the R1.8 million deviation on the Trifecta contract, where Delta Property Fund was appointed for the leasing of accommodation, was “charged accordingly”.
He also sought clarity on the exact nature of work that Delta Property Fund was doing for Trifecta and questioned if Trifecta was the parent company.
Sassa chief financial officer (CFO) Tsakeriwa Chauke explained that properties previously run by Trifecta were currently being run by Delta Property Fund.
“Numerous deviations had been made on leasing office accommodation by Sassa, which had been struggling to synchronise their processes with those of the Department of Public Works. This was after a directive was issued by the former minister for Sassa to stop procuring office accommodation, but instead use the services of the Department of Public Works. Sassa at the time had leases it had already entered into, which the Department of Public Works had refused to accept and recommended that Sassa wait for the leases to end.”
She explained that Trifecta and the Delta Property Fund were two separate legal entities, “even though the directors were the same”.
The acting regional manager of Sassa in the Northern Cape, Tsebeletso Makhetha, told the committee that since 2016 Sassa had been able to reduce the number of square metres occupied in two buildings under Trifecta.
“The regional office was still facing challenges with the Department of Public Works in finding alternative accommodation that could accommodate Sassa staff.”
Makhetha was unable to elaborate on the R9 million that was paid for the construction of new local offices and apologised for “not having the document” referred to.
The executive manager of corporate services at Sassa assured that government was currently being charged correctly for the leases.
“The contract with Trifecta had come to an end, after which the Department of Public Works was not able to provide an alternative building. The department therefore had no option but to enter into a new contract with Trifecta, where a deviation was requested by Sassa from National Treasury.”
The executive manager pointed out that there was “unfortunately no other alternative” office accommodation for Sassa.
“Sassa decided to build three offices in different parts of the Northern Cape because it would have cost more to rehabilitate old premises than construct new offices.”
Susan Shabangu, Minister of Social Development, assured the committee of her decisiveness and commitment to deal with all concerns raised.
She indicated that challenges relating to leases and contracts were being addressed in conjunction with the Department of Public Works.
“A comprehensive plan on time frames is being worked on to ensure that accommodation is made available within the next two years.”