MEC Dube-Ncube calls for evidence into ‘looting of public funds’ at Harry Gwala

2015-04-24 00:00

THE Department of Co-operative Governance and Traditional Affairs says it is yet to be given evidence of ­alleged rampant irregular expenditure and “looting of public funds” at the Harry Gwala District Municipality.

Yesterday MEC Nomusa Dube-Ncube’s office insisted that if the details of a security tender awarded by the municipality — that was inflated by nearly 160% — is brought to their attention, they would not hesitate to call a wide-scale investigation. “Any allegation of fraud or corruption within municipal structures will be viewed in a serious light and obviously this will be a cause for concern because the reputation of a municipality and its leaders is on the line,” said spokesperson Lennox Mabaso.

“She [Dube-Ncube] needs the ­document and she will be glad to accept them and then she will act. We need to have the evidence.”

Mabaso appealed to anyone with ­information on corruption at the ­municipality to come forward. Later, he acknowledged the department had ­received a letter penned by former Harry Gwala council speaker Mandla Ngcobo’s attorney, with an affidavit highlighting his concerns about the municipality’s tenders, in July last year.

However, there was no proof accompanying the document, said Mabaso.

However, he denied that no action had followed. “The letter was handed to our internal investigators, who are working with auditors. It is a matter we are following up, but the ­whistleblower is not coming forth with information.

“Nevertheless, we will look at the Auditor General’s findings on the municipality to determine if there is anything tangible in the allegations being made before appointing a forensic investigation, which can be a costly exercise,” he said.

Mabaso added that Ngcobo’s letter had been to several other government agencies, which his department was ­liaising with to determine what ­investigations had been conducted. He would be able to comment on the progress today. “We take this matter very seriously. It is not as if we received the letter and have not done anything. People can speed up the process by bringing us information.”

Ngcobo has lifted the lid on a raft of transactions entered into by the ­municipality that he had doubts over, only to be disciplined by the ANC and brow-beaten into resigning. He is now an ordinary councillor.

Last week, he wrote to President ­Jacob Zuma, begging him to set the graft-busting Special Investigations Unit on the municipality to prevent “the looting of public funds”.

He focuses on a security contract awarded after going out to tender. Ngcobo says the cost was inflated by R12 million, taking the total cost to R22 million. He also asks for a R2,5 million training contract to be probed.

Ngcobo, who declined to speak to News24, says in the letter that he raised his concerns before the council and tried to get a court order preventing further payment of the tender to provide security at municipal offices, which almost doubled without reason.

“In the 2011/2012 financial year, a tender was awarded to a non-responsive service provider. The bid adjudication committee disregarded essential requirements in the bid document [and awarded the tender to a company which did not fulfil all the required criteria].

“There have been overpayments and fluctuation of monthly costs [to the ­security company] and an excess payment of over R12 million,” Ngcobo said.

A decision circular from the municipality’s chief financial officer, dated July 2011, says that the Bid Adjudication Committee recommended the ­appointment of a certain company to provide security services for office buildings for three years at a total cost of R8 706 922,80 [R241 858,97 per month].

The tender was awarded despite the company not having public liability insurance and proof of a provident fund, which were key requirements.

A report by the National Treasury, of which News24 has obtained a copy, reveals that the scope of the tender was dramatically increased a month after the contract was awarded, apparently to guard 12 waterworks sites.

In the space of 30 days, the company went from providing 41 security guards to 95 on the same contract. Using ­invoices submitted by the company, the Treasury also found that the price per guard increased by nearly 25% within a year, pushing the monthly rate to nearly R900 000 when the contract was finally halted in August 2014. The company was asked by the Treasury to submit details of the personnel ­employed to guard municipal sites, but their records reflected less than the number they had invoiced for, which went unexplained.

The Treasury concluded that the contract was gravely inflated without authorisation.

The company’s managing director deferred all questions to the municipal manager.

Harry Gwala District officials, including the municipal manager, did not respond to questions sent repeatedly.

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