Over-billing huge risk to state fiscus: Protector

By Drum Digital
10 April 2013

An investigation into false billing by service providers needs to be done urgently, Public Protector Thuli Madonsela said on Wednesday.

Addressing the Institute of Municipal Finance Officers (IMFO) in Somerset West, Madonsela said over-billing and false billing would eventually cripple the state.

She warned that the extent of the problem was huge, but said a thorough investigation could quantify exactly how much the state was losing by overpaying service providers.

The Public Protector was able to look into only specific complaints lodged at her office, and did not have the resources to do a state-wide probe.

"If we look at the RDP [housing] programme, yes we would say billions [of rand] have been lost," she said.

"We're not in a position, though, to talk to how much has been lost overall."

The majority of false billing cases the Public Protector had picked up had to do with RDP housing, accommodation for state officials, the leasing of state buildings and also state travel.

The over-billing would involve collusion by government officials.

Madonsela cited instances where municipal officials stayed overnight in a hotel, but travel agents claimed for a five-night stay.

The official would then ask the agents to have the extra money transferred into their bank account.

Other instances included municipalities putting in a R2 million order for services, only to receive a R6 million invoice later.

"The amounts are getting scarier and scarier," she said.

Madonsela suggested that National Treasury conduct the probe.

"You need a fully-fledged national project on this... picking a few case studies and examining them.... It's something that needs to be done urgently."

-by Sapa

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