SIU: Ekurhuleni investigation

2011-12-03 12:34

Three wide-ranging investigations are under way in the Ekurhuleni municipality involving contracts worth more than R600 million. The biggest relates to 10 tenders, valued at R500 million, awarded by the municipality’s waste-management department.

In one case, investigations revealed payments of more than R37 million to a service provider despite the fact that no delivery notes were available and no one at the municipality could verify if the goods were in fact delivered.

In addition, the service provider was paid boosted prices on invoices already submitted to the value of R10 million.

A criminal case has been registered against the service provider and the official involved. The same executive manager verbally appointed 13 community-based contractors for a period of six months – with a budget of R12 million – without complying with the municipality’s procurement policy.

Another executive manager failed to disclose his interests in two service providers appointed for waste and rubble removal, and authorised payments without verifying if services had been delivered.

One of the service providers was registered on Cipro only after it was awarded the contract.Disciplinary action has since been instituted against two executive managers, a manager and two operations staff members in the waste-management department.

One official tendered his resignation upon receipt of the charge sheet, and disciplinary hearings against the other four are under way.

Several tenders awarded by the municipality’s IT department are also under investigation. In one case, the executive director of IT awarded a R32-million contract to a company in which he had an interest, and had authorised 70% of the company’s ­invoices by the time it was discovered.

The executive director was subsequently fired.SIU investigations also revealed an undisclosed business relationship between the municipality’s chief IT architect and a service provider.

Arrests were made in August this year and the accused have already appeared in court.In another case, a municipal official signed off invoices for more than R12 million to an IT service provider on services which had not been delivered. The total value of the contract was R94 million.

The official has been suspended pending disciplinary and other action against him.

The municipality’s relationship with security service providers is also being investigated after allegations of irregular appointment, fraud and corruption.

The initial budget for security contracts was R10 million, but the SIU has established that payments made to service providers amount to more than R26 million.The SIU is now working to establish any possible conflicts of interest by municipal employees.

It has found 2 683 employees with business entities registered in their names, of whom 12 have already
received payment from the municipality.

A range of other investigations are also under way, including an electricity tender which was awarded to a service provider who does not have the ­capacity or the resources to do the job.

The SIU is working with the municipality to resolve this.Allegations have also been received that 20 service providers were appointed to “green” soccer fields in the run-up to the 2010 Fifa World Cup.

A total of R20 million was paid to the service providers,but inspections have revealed that none of the services were rendered.

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