Johannesburg - The company that billed R76 million for the funerals of three Struggle stalwarts this week maintained that the Department of Public Works and Infrastructure knew the prices it was paying before the funerals.
Joburg-based Crocia Events has come under fire for overcharging for the state funerals of Struggle icon Winnie Madikizela-Mandela, ex-cabinet minister Zola Skweyiya and former chief of state protocol Billy Modise in 2018.
Public Works and Infrastructure Minister Patricia de Lille revealed that she has asked the Special Investigating Unit (SIU) to investigate and recover all or alternatively some of the funds paid to Crocia Events.
Criminal complaints, in terms of the Prevention of Organised Crime Act, will be referred to the Hawks or such other competent authority, according to De Lille.
“It was suspected that funeral costs paid to Crocia were exorbitant and not in accordance with the contract entered into with the department. It was further alleged that the department did not receive value for money in respect of payments made,” says a report presented by De Lille this week.
However, Crocia Events’ Sammy Mashita told Independent Media on Friday that the company set the prices before the funerals and the department was aware of them before it was billed.
He said the company has written to both De Lille and PriceWaterhouseCoopers (PwC), which investigated the matter.
According to Mashita, they co-operated with the PwC probe but were not given a right of reply before the investigation was finalised.
He said there were no criminal charges against the company and the police had not charged or arrested anyone.
“We don’t know what the charges are,” said Mashita, who did not respond to further questions he asked to be emailed.
Crocia Events billed R35.7m for Madikizela-Mandela’s funeral and R29m for Skweyiya’s, while the burial of Modise cost more than R11.4m.
The investigation found that the May 2018 payments for Skweyiya’s funeral were a day after the payment for Madikizela-Mandela’s.
De Lille’s report states that the procurement process that led to the appointment of Crocia Events was flawed, as bids were evaluated based on the total amount without considering individual line items.
It states that had individual line items been considered, it would have been found that Crocia Events’ bid was at a higher price and that no service level agreement (SLA) had been concluded between the department and Crocia Events at the time the company started rendering services, despite terms of reference for the supply and delivery of movable infrastructure for official funerals stipulated that the successful bidder enters into a SLA.
“The reason for this is that there was disagreement between the department and the service provider as to whether the latter was entitled to management and retainer fees.
“In this regard, the department obtained a legal opinion from counsel, in terms of which the department was advised that it would not be legally permissible for the department to include management and retainer fees in the SLA as these did not form part of the tender,” states the report.
The department awarded Crocia Events a 24-months contract for the rendering of services in the form of movable infrastructure for state and/or official funerals in all nine provinces.
Last month, De Lille revealed that the government had paid almost R106m on 15 state and official funerals between February 2018 and February this year, including the three handled by Crocia Events.
The department said it was developing a costs norms and standard document to determine the amounts it will be specifically responsible for each type and category of funeral and the cost limits.
It has also proposed alternative financial assistance when a family opts to implement its own infrastructure according to its wishes and now uses brick and mortar structures instead of marquees, which are only used when necessary.
According to the department, it has limited infrastructure provided at the bereaved home to two days instead of seven or more as was the case before and also refrains from setting up infrastructure for memorial services.