OPINION: The establishment of the Special Tribunal has helped in the turn-around time for the recovery of the monies lost to the State.
By Selby Makgotho
In one of the recent landmark rulings before the Special Tribunal, an observation is being made that the State and the taxpayers end up being losers – the biggest losers. The finding by the Special Tribunal in the matter of the Special Investigating Unit (SIU) and Another v Caledon River Properties t/a Magwa Construction and ProfTeam CC makes an interesting read to those charged with the responsibility of the public funds.
“Regrettably, the biggest loser is the State and the public. They have been deprived of the variety of public, social and economic benefits that flow from a solid border track at the Beit Bridge border and are saddled with a deficient border fence. Further corrective measures lie in holding the officials who designed, approved and implemented the Beit Bridge Border Fence Projects and its related procurement processes and those who failed to take the appropriate steps to enhance the integrity of the fence,” the Special Tribunal judgment notes.
The matters for adjudication involved the two amounts of R21, 8m and R1, 8m were paid in advance, four days after the conclusion of the R3,7m contract. The SIU – authorised by Proclamation 23 of 2020 – probed the irregularities and approached the Special Tribunal for an order to repay the amounts. Caledon and ProfTeam filed a counter-claim arguing they were entitled to the monies derived from the contract. The situation calls into account the role played by the officials who can easily transfer such huge amounts without being detected. The department’s narrative is that it picked up the financial irregularities and alerted the SIU.
But the question remains: how did we get here? The situation is worsened by the fact that the same officials could not appear before the Special Tribunal as witnesses on the basis that they feared for their lives. Caledon and ProfTeam pointed out that the payments were made at the behest of the departmental officials, who went further and imposed a deadline of three weeks to complete the 21-kilometre border fence.
In an unrelated matter, the SIU and the Department of Water and Sanitation entered into a settlement agreement with the Systems Applications Products (SAP) (Pty) Ltd where the latter undertook to pay an amount of R413, 1m. The amount arose out of the two software licence and support agreements entered into in 2015 and 2016, in which it was contested, were marred by irregularities in the conclusion of the contracts. The service provider alleged that there were amounts paid to third party software companies in the execution of the impugned contract. The factual basis for the contest by SAP is that the monies paid to the third party software companies ought to be deducted from the amount due to paid to the department. The factual finding in respect of the argument is still to be made after the Special Tribunal ordered the parties to file affidavits detailing their financial expenses during the lifetime of the contracts upon which a determination could be made.
These two, and many other cases before the Special Tribunal in its three-year lifespan, have seen amounts totalling R8, 6bn being recovered on behalf of the State, which had lost them to officials who fail to follow the rules and regulations of contracts, performance and several related irregularities. These were monies that were spent unlawfully, irregularly, and in complete disregard of the constitutional, legislative and statutory provisions governing procurement in public institutions. It is high time that the provisions of the Public Finance Management Act (PFMA), which guides on how public funds ought to be utilised is put in full operation, practice, and, at best, known by all public officials. As per the initial pronouncements, the Special Tribunal is expected to recover an estimated R14, 9bn lost to the State and the public. The current matters before the Special Tribunal ready for adjudication are estimated at about R6bn. These are matters currently undergoing case management processes to ensure they are ripe for hearing.
The ensuing amendment process of the SIU and the Special Tribunals Act 74 of 1996 will further strengthen the recovery efforts. In this regard, deliberations are at an advanced stage among stakeholders. The amendment process is in the final stages and will soon be implemented. Consistently, in the past few hearings, the jurisdiction of the Special Tribunal to preside on matters of constitutional invalidity came under attack. The litigants, in most cases the respondents, questioned the legitimacy of the Special Tribunal in adjudicating upon civil disputes and ordering for the forfeiture of funds to the State as well as a number of preservation orders.
The establishment of the Special Tribunal has helped in the turn-around time for the recovery of the monies lost to the State. As with the Covid-19 pandemic procurement irregularities, most of the recoveries have been (and continues to be) made. In the absence of the Special Tribunal, the SIU would be struggling to get earlier court dates in the normal court processes. While this is happening, the monies are dissipating and when the matter is ripe for hearing, very little, if any, would be recovered.
*Adv. Selby Makgotho, a PhD Candidate in Public International Law with Unisa, is the Spokesperson of the Special Tribunal.
** The views expressed here may not necessarily be that of IOL.