Special Investigating Unit acting head Leonard Lekgetho provided the Standing Committee on Public Accounts with a summary of the outcomes of the institution's investigations into municipalities over the period 2012 to date.
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The Special Investigating Unit (SIU) has referred contracts valued at R1,1 billion to municipalities for civil proceedings, highlighting ongoing issues in public procurement since 2012.
This happened as contracts valued at R545 million were deemed invalid and set aside during the same period.
SIU acting head Leonard Lekgetho revealed this when he was briefing the Standing Committee on Public Accounts (Scopa) about their investigations conducted in municipalities across the country.
Lekgetho said the SIU had recovered only R1,1m, while R58,9m of potential cash or assets were to be recovered to date.
He further said there was a total of 362 referrals to the National Prosecuting Authority for criminal investigation, 222 for disciplinary action against officials, and 629 referrals for administrative action during the same period.
Lekgetho earlier said there were four active investigations in municipalities and 15 that were completed in the Free State, North West, Gauteng, and KwaZulu-Natal.
In the Free State, there are two active proclamations at Masilonyana Municipality and one completed at Maluti-A-Phofung Municipality.
The SIU has submitted a motivation to the Justice and Constitutional Development Department for a proclamation to investigate the Mangaung and Mafube local municipalities.
Lekgetho also said an investigation was underway at Mahikeng Municipality, while two were completed at JB Marks, and one each at the City of Matlosana and Ditsobotla Municipality.
Whereas one proclamation was active in the Tshwane Metro, two others were already completed there, along with two in the City of Johannesburg and one in the Ekurhuleni Metro.
There were six investigations in KwaZulu-Natal, with one already underway at eThekwini Metro and four others completed at the same municipality, and one at Msunduzi Municipality.
Lekgetho said the pattern from the proclamations showed that there was irregular appointment of service providers, corruption, missing tender documents, irregular expenditure, contractors failing to perform, supply chain processes not being followed, and misconduct by officials.
“At the centre, there is Municipal Finance Management Act contraventions.”
Regarding the investigation at Tshwane Metro, Lekgetho said the SIU is probing Phase one upgrades and urgent refurbishment at the Rooivaal Wastewater Treatment Works.
The procurement irregularities and misrepresentations resulted in the irregular appointment of the contractor.
There was also fraudulent misrepresentation in the contractor’s bid, fraudulent certification of records, contravention of Construction Industry Development Board (CIBD) regulations, and R147m in irregular expenditure.
Lekgetho said that while the investigation is ongoing, the SIU has made 13 referrals for disciplinary action against officials, 31 referrals to the Hawks for criminal investigation, two administrative action referrals to SARS, 17 referrals to the CIBD, 10 referrals for blacklisting of contractors by the National Treasury, and 10 referrals to the CIPC for delinquency declaration of directors of companies.
He added that 27 City of Tshwane officials have been red-flagged for lifestyle audit, 65 role players for high-level profiling, and seven external parties for financial analysis of suspicious transactions.
Regarding the eThekwini Metro proclamation, the SIU found maladministration in the ongoing investigation into the provision of water and sanitation services to Human Settlements and schools.
“There are seven contracts under the project involving procurement irregularities and non-performance,” Lekgetho said.
He added that 18 officials are implicated in procurement irregularities and have since been referred for disciplinary action.
“The 18 disciplinary committee referrals are under review by the municipality’s financial misconduct board.”
Lekgetho also told the MPs that the SIU has found irregular appointment of a service provider for the refurbishment of the Brandfort Water Treatment Works and raw water pumps stations in Masilonyana Municipality in the Free State.
The same finding was made on the upgrading of the Brandfort Sport Centre Phase One.
The SIU has made three referrals for criminal investigations and three others for disciplinary action.
According to Lekgetho, the SIU also found that the Mahikeng Municipality flouted the Municipal Management Act when it piggy-bagged on two contracts entered by the Mbhashe Municipality for the procurement of construction machinery.
The contracts were awarded without council approval of being advertised despite the recommendation by the bid evaluation committee.
The bid evaluation committee never held a meeting in one of the awarded contracts.