How R134m ‘erroneously’ transferred into a municipality’s bank account disappeared on the same day

Bojanala District Municipality logo. Picture: Sourced
Bojanala District Municipality logo. Picture: Sourced

It took just one day for cash-strapped and struggling municipality to disburse money to  catering and dumping site companies

The trail of how R134 million “erroneously” transferred into the Bojanala District Municipality’s bank account disappeared on the same day and was used to pay off service providers could be contained in the municipal’s ledger account.

The ledger ostensibly shows how millions were used to pay for catering and the clearing of illegal dumping sites when the municipality was too broke to even pay its workers.

Despite being broke, the municipality appears to have spared no expense – paying millions of rands on what was recorded in its ledger as bills for catering for events as well as for the clearing of illegal dumping sites.

Payments for these services, which raised eyebrows because of the challenges the municipality was facing at the time, with some areas in the area experiencing acute water shortage – went on until May last year, according to ledger entries.

All this happened a month before news broke that the municipality’s finances were in shambles and it was struggling to even pay salaries in July last year.

R134 million payment appeared to have vanished the same day it reflected on the municipal account

The municipality later admitted that it had used some of the R134 million deposited by error into its coffers on March 4 2019.

The money was meant for the Rustenburg Local Municipality.

The municipal ledger, which City Press has seen, purportedly shows that one company received two payments totalling R5.5 million on March 22 2019 for desludging septic tanks and R5.8 million for clearing illegal dumping sites.

A catering and events management company was paid R6 million in 13 payments, all in May last year, for catering, décor and transport.

The municipal ledger reflecting all these dodgy payments has now landed in the hands of the standing committee on public accounts (Scopa) in the North West legislature which has since shared the information with the Hawks.

City Press asked Bojanala municipality spokesperson, Archie Babeile, why the payments were made to the two specific companies.

He did not contest the authenticity of the ledger or the information contained in it when asked about the “erroneous” R134 million payment and how some of it was spent.

According to the ledger, the R134 million payment appeared to have vanished the same day it reflected on the municipal account.

Babeile said the municipality was “in no position to respond directly to this question, pending the outcomes of the investigations”.

Babeile was referring to a forensic investigation by the provincial Treasury which is probing the “erroneous” transfer of the R134 million, which was meant for the construction of low-cost houses in Rustenburg, into the Bojanala municipality coffers.

It was, however, not clear if the payments made to the service providers followed the “erroneous” transfer.

We’re now going to look into allegations of fraud and corruption
Hawks’ spokesperson Brigadier Hangwani Mulaudzi

Scopa chairperson Job Dliso, said their understanding was that the ledger document was leaked by a whistle-blower.

Scopa was briefed by the Hawks last week on its investigation into the R134 million and the elite police unit informed the committee that there was going to be no further investigation as the Bojanala municipality had already repaid the full amount.

The money was returned in three instalments – R50 million paid on July 25; R25 million on August 2 and R59 million on August 23 last year.

This could mean that at some point last year the municipality found itself under pressure to repay the whole amount while battling to find money to pay salaries.

The struggle to pay salaries, which at times saw municipal workers taking to the streets in protests, continued until late last year.

Dliso and other members of Scopa said that although the money had been returned, they were eager to know what exactly had happened.

Sources within the municipality and the provincial legislature said they were suspicious that large amounts of money were paid to service providers for services not done or on inflated invoices.

A Scopa member said the ledger was a good starting point for the Hawks to “connect the dots and help the public understand how the municipality could have ended up broke even after it received R134 million”.

In a response to City Press on a story related to the cash crunch the municipality experienced in August last year, Babeile then said: “Money was spent on the municipality’s operational costs.”

He would not respond to the same question recently “pending the outcome of the investigation” into the same matter.

Meanwhile, Hawks’ spokesperson Brigadier Hangwani Mulaudzi told City Press that although there was no complainant they had noted concerns and allegations raised on the trail of the money.

“We’re now going to look into allegations of fraud and corruption,” Mulaudzi said.

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