Limpopo ‘wasteful expenditure’: Companies make millions

2014-08-31 06:00

A Limpopo law firm has made R576 000 in four hours “perusing” 32 tender files as part of a R1.4 million deal to conduct a forensic investigation of the troubled Greater Tubatse Municipality.

This is believed to form part of a wider investigation into alleged corruption and maladministration by the Special Investigating Unit (SIU) ordered by President Jacob Zuma last month.

In addition, Tubatse paid R1.2 million to a second company to prepare its financial statements for the 2012/13 financial year – which earned the municipality an adverse audit outcome.

Tubatse has spent almost R3 million on attempts to get its books in order while, according to communities, service delivery has suffered.

When allegations emerged, the Hawks stepped in and on July 15 searched the Tubatse offices and seized documents. The raid was successfully challenged and reversed by the municipality, questioning its legality, a move criticised by opposition parties as a bid by municipal bosses to hide bad deeds.

Zuma signed a proclamation on July 21 ordering the SIU to investigate the Greater Tubatse and Vhembe district municipalities in Limpopo as well as the South African Post Office, State Information Technology Agency and national departments of labour, public works and transport.

SIU spokesperson Boy Ndala said the investigation in all cases is “only in its early stages”. He said they were mainly focusing on a number of allegations as stated in the president’s proclamation.

Although no details were offered on allegations to be investigated in Tubatse, communities, opposition parties and workers’ unions, including Samwu, believe they centre on issues that led the municipality to transgress from qualified opinions in the past two financial years to adverse opinions from the auditor general in the latest, 2012/13 financial year.

At the centre of these allegations is the conduct of the acting municipal manager, Adelaide Monyepao, under whose watch most of the alleged maladministration happened.

City Press has seen invoices and confirmation of payment of R1 462 500 to Mapotene Mangena Incorporated Attorneys for forensic investigations.

The appointment was questioned as the law firm’s letterhead on the invoices only states that they are labour and corporate law practitioners. There was no indication that they had acquired external specialised services elsewhere.

Issues were raised on two invoices written on August 7 2013.

The first one included travel claims at R5 per kilometre times 180 times six, which totals R5 400 – although it came in at R54 000 on the invoice.

In the second invoice, for R1 462 500 – or R500 more than the first – travel claims were changed to R7.50 per kilometre times 180 times 40, suggesting that 40 trips of 180km were made. The law firm is based in Polokwane which is just over 150km from the municipal offices in Burgersfort.

Among other charges on invoices are R 9 000 for a two-hour consultation during which instructions were given, R45 000 for “perusing municipal regulations and by-laws” and R139 000 for research.

This is the firm that has also made R576 000 in four hours for perusing 32 files of tender documents.

PAC Limpopo chairperson and a councillor at Tubatse, Aubrey Ngwathe, said the municipality paid AMA Consulting R1.2 million to compile its financial statements – the documents that pushed Tubatse’s audit opinion from “qualified” to “adverse”.

In his February 2014 report to the Limpopo legislature, the auditor-general raised concerns about those financial statements, saying that Tubatse failed to produce supporting documents and tender files for contracts amounting to almost R67 million.

The report further stated that in contravening supply chain management regulations, the municipality incurred irregular expenditure of R71 million while inadequate budgetary controls led to unauthorised expenditure of R78 million.

“Another company has once again been appointed at a value of R1.4 million to compile annual financial statements without a council resolution while the reputable KPMG has quoted less than R400 000. This is wasteful expenditure and we may fail to get a clean audit once again,” said Ngwathe.

Tubatse Residents Association chairperson Morewane Sekhukhune said together with other community members they have already given statements to the Hawks on the allegations above.

“Water remains a thorny issue. More than 30 villages are still without electricity and service delivery in general continues to suffer due to this rampant corruption. It is our wish that the SIU uncovers the truth and those responsible for stealing from the public accounts,” he said.

City Press understands that Vhembe municipality is being investigated for a number of tenders awarded before and after 2010 to, among others, friends of Julius Malema.

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