Limpopo’s Lepelle Northern Water on Tuesday responded to allegations that R9 million of public funds was flushed in a failed water project in Mashamothane village after an investigative report found that the water board paid for work that was not done.
A probe by Edge Forensic and Risk Consultants found that information that the 2017 project was 95% complete was misleading and that possibly not even half of that work was done, but money was paid out to the contractor, Esor Construction, which allegedly went under business rescue in August 2018.
The report, dated April 2020, recommended that the project manager involved, Calvin Mathivha, be disciplined for gross negligence in approving the payment without verifying whether actual work had been done.
Criminal charges had also been preferred against an official of Inhlakanipho Consultants, which was responsible for reporting progress to Lepelle and allegedly provided wrong and misleading information to Mathivha.
Lepelle spokesperson Simon Mpamonyane said the fact that the community was still not receiving water because the project had not yet been completed was cause for concern.
“We are aware of the causes of delay which have been placed on record from the project progress report and noted in the forensic report,” he said.
Mpamonyane said an independent engineer was due to be appointed as part of the investigations to assess and review the work done, and “the final account to determine actual percentage completion of the works against the financial payment due for work done”.
While insiders said Mathivha was suspended in January this year and subsequently reinstated before the process was concluded, Mpamonyane said that case was still under way.
He said it was correct that since the investigation was completed, Mathivha had returned to work.
“This was in consideration that it is not in the interest of the organisation to place employees on a long suspension as it constitutes unfairness and may attract liability for compensation.”
He said suspensions should in law be imposed for a limited duration, mainly for investigation purposes, and once they are complete employees should be allowed to return to work while disciplinary action is taken.
“The chairperson and the initiator for his disciplinary hearing are appointed and the hearing date still to be advised by the initiator after studying the forensic report and adding more charges as from the forensic report recommendation to the initial charges issued to him.”
This would be followed up for the hearing process to be fast-tracked, he said, adding that the matter could be concluded by mid-November. Four other employees were also taken through disciplinary action.
“Disciplinary action is in progress for all employees perceived to have done fraudulent activities within Lepelle. A period of two months [has been] set aside for the conclusion of the processes,” he said.
Mpamonyane said after the assessment by the independent engineer, “a process will be instituted to recover the amount that was paid to the contractor for work not done”.
Alternatively, he said, the contractor may need to return to site and complete the work that they were paid for.
According to records, he said, the 95% progress reported covered electromechanical components of the project, including pumps with fittings, manhole rings and covers, pump control valves, water type check valves, gate valves, air release valves and flanges adapters which were ordered and delivered to the on-site storage.
He said the materials were then removed for safekeeping following vandalism experienced on site.
Payment was done as per bill of quantity and the rates in the bill of quantity also included commissioning and testing, which was paid for but never done.
“There is common understanding that there was payment done for work not yet executed, since the payment was supposed to be done when commissioning and testing was completed. In this case, the full payment for materials was inclusive of commissioning and testing as per bill of quantities, while only materials on site were supposed to be paid for.”
He said the lower completion level estimated in the forensic report was from physical work as verified on site, excluding material that was supplied but not installed, hence Lepelle Northern Water had considered appointing an independent engineer to assess and review work done and the final account to determine the actual percentage completion of the work against the financial payment due for work done.
“The money paid for work not done will be recovered and those that misled the certification will be brought to book,” said Mpamonyane.
“When the substantiated overpayment amount within certificate seven is confirmed to be fraudulent and in contravention of the law, a criminal case will be opened”.
However, he said, “it is noted that materials within certificate seven were supplied, but the commissioning of those materials were not done due to rampant vandalism within the project area”.
“Therefore, it is not the whole amount [R9 million] in certificate seven that will be fraudulent, but a portion of the amount related to commissioning and testing.”
He said the final forensic report was submitted in April 2020 and had to be presented and prepared for board adoption, “hence the recovery of alleged fraudulent payment is still not activated”.
“Further to the forensic report, we are awaiting the completion of the process of verification and the final account certificate by an independent engineer and then a substantiated claim can be instituted from the contractor. This process is being accelerated,” said Mpamonyane.
He said Lepelle intended to recover the funds as per the outcome of the independent engineer’s report, whose completion the organisation was awaiting. He added that the outcome would mainly be affected after adoption of the investigation report by the board within the next three months.