Forensic reports paints grim picture of 'wanton looting' at Metsimaholo municipality

2018-08-23 08:32
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An independent forensic report has exposed what it describes as "wanton looting" at the Metsimaholo municipality.

It has identified R250m worth of irregular appointments of service providers and extensions of the contracts at the Free state municipality. 

The report tabled at the council meeting two weeks ago has implicated at least four senior officials, including suspended municipal manager Stephen Molala. 

The damning report recommends disciplinary processes and criminal charges against some officials. 

In one incident, the report details how close to R22m was paid to a company to build the Orangeville Sports Complex, but no services were provided in over two years. 

In another, two companies were hired and paid millions for the same job of constructing the Refengkgotso Waste Water Treatment Plant. 

READ: SACP coalition government in Metsimaholo on the ropes again

The report titled "The tip of the iceberg", by forensic company Edge Forensic and Risk Consultants, was commissioned by the council that came into office eight months ago. 

"I think this must be higher up, so that the reader quickly establishes the integrity of the report. Also, who are Edge and who commissioned them? Should all go together, I think.)

The Orangeville Sports complex was evaluated and registered for close to R17m, but the municipality appointed No Limit Development Enterprise for close to R25m, with no available budget allocation. 

“I recommend that both the erstwhile Director of Technical Services and Mr Molala must be held responsible for this wanton looting of municipal funds,” the report states. 

'Municipality has been seriously overcharged'

The municipality was later forced to backtrack on the costs when the application for an increase in the project costs was turned down. 

In the report, pictures of an open field with stacks of bricks is shown where the sports complex was supposed to have been built. 

"The municipality has been seriously overcharged for this project. There is no value that the municipality received in terms of the construction of the Orangeville Sports Complex if regard is to be had to what has been done at this facility to date…. It is clear that there is no relation between what has been paid on this project and the work that has been carried out," the report reads.

This is despite the company being paid every single month since August 2017 until July 2018. 

In another multimillion-rand irregular expenditure, a company called Tecroveer was first appointed as a professional service provider for the assessment, monitoring, construction and commission of the Refengkotso Waste Water treatment plant, but then their contract was extended to include the construction of the plant, without it going to tender.

The contract with Tecroveer was revised upwards at least three times in two years, coinciding with grant allocations from Department of Water and Sanitation, at some point increasing the costs from R546 000 for professional services to close on R16m for the construction.

'It equates to fruitless and wasteful expenditure'

Molala is also accused of appointing Safcrete Consortium at a cost of R148m to do the same work, despite the municipality only being allocated a R40m grant.  

The company is now said to be suing the municipality for R8.6m, including recovery of interests on the outstanding amount after the contract was also revised downwards. 

"This is akin to charging the municipality double for the same services rendered. It equates to fruitless and wasteful expenditure, which is attributable directly to the gross negligence and irregular conduct of Mr Molala," the report says. 

The forensic investigator also blames the suspended municipal manager and other officials for National Treasury stopping a close to R9m municipal infrastructure grant for the 2017/18 financial year, and the repayment of an unspent conditional grant of R1.4m in 2016/2017. 

Molala has been fighting in the courts to keep his job. The municipality has challenged his "secondment" by the provincial Cooperative Governance and Traditional Affairs Department, after his contract expired just ahead of the by-election in the council. 

Molala is expected to face a disciplinary inquiry to respond to the allegations. 

Attempts to reach him were unsuccessful.

Acting mayor Mosioua Poho would not comment on the forensic report, telling News24 it was still confidential.

ALSO READ: Free State SACP welcomes new Metsimaholo leadership

ALSO READ: EFF slams SACP for governing Metsimaholo with ANC

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