A forensic investigation into Limpopo's Modimolle-Mookgophong Municipality has revealed a litany of corrupt activities in which millions of rand were paid to companies where there were no service level agreements with the entities nor invoices.
It was found that 539 suspicious transactions labelled only as "electronic fund transfer" in the municipality's bank statements were made to the companies.
In some instances, the municipality did not know who was paid via these transactions.
The investigation was initiated by the DA after the party took control of the municipality from the ANC in the 2016 municipal elections.
The DA, after realising the municipality was bankrupt, requested National Treasury to conduct an investigation into numerous allegations of irregularities in relation to 28 service providers.
The municipality is currently under administration.
The report found among the companies that benefitted irregularly was law firm Legodi Attorneys whose partners includes Tumi Mokwena who was EFF leader Julius Malema's former lawyer.
The law firm was instructed to handle the municipality's legal matters - but it was never on the council's database.
The forensic report revealed that although Legodi Attorneys was not on the panel of service providers, it was irregularly paid more than R9.3m for "legal matters" between June 2017 and May 2018.
The report stated: "The municipality had a panel of attorneys that existed at the time of the establishment of Lim368 [the merger of Modimolle and Mookgophong municipalities].
"Legodi Attorneys was not on the panel of attorneys but was appointed for various legal matters. There is no proof that Legodi Attorneys was appointed through a council resolution.
"Legodi Attorneys' appointment was irregular in that no procurement process was followed by the municipality."
The report highlighted the fact that the firm had submitted suspicious invoices to the municipality.
"During the period June 2017 to May 2018, Legodi Attorneys was paid a total of R9 358 714.50 in respect of matters they were appointed for even though they were not on a panel of service providers," the report stated.
It recommended that a criminal case be laid against the firm for possible fraud for allegedly submitting suspicious invoices, saying it had failed to explain when given an opportunity to do so.
However, Legodi Attorneys' Floyd Legodi denied this when contacted by News24.
"We were on the panel [of service providers]. I have copies to prove that my firm was on the panel. Everyone knows the procedure and why would they give us instructions?
"I was never consulted when the [forensic] investigation was conducted and I doubt if the report [of the investigation] exists," Legodi said.
The report compiled by Fundudzi Forensic Services, which News24 has seen, recommends that municipal manager Oupa Sebola be criminally charged for contravening Section 3 of the Prevention and Combating of Corrupt Activities Act.
The recommendation followed the finding that Sebola had abused his position by irregularly appointing several companies onto the panel of service providers, and later paid them without following proper procedures.
It was found that he had also irregularly registered six companies to the water and sanitation panel, although they were not recommended by the bid adjudication committee.
Sebola told News24: "I cannot respond properly to your questions because I haven't seen the report. Nobody even consulted me during the investigation."
Poor record keeping
The report notes that the investigating team experienced massive delays in obtaining critical documentation required for the probe, indicating a lack of record keeping in the municipality.
"The investigation concludes that Mr Sebola failed to manage the financial administration of the municipality in contravention of Section 62 of the MFAMA in that he failed to take all reasonable [measures] to ensure that full and proper records of the financial affairs of the municipality are kept," the report stated.
The forensic report was tabled at the council meeting on Thursday.
'Clearly highlighted the maladministration'
DA provincial leader Jacques Smalle told News24 the report had highlighted what the party had always said was the state of affairs under the ANC.
"Our statements have now been verified by the report, which clearly highlighted the maladministration that has been taking place [at the municipality]. That's why we requested National Treasury to investigate," Smalle said.
The Auditor General (AG), in the 2017-18 report, expressed concern that municipalities in Limpopo continued to ignore compliance with legislation. No municipality had obtained a clean audit, the AG report had shown.
The AG report also showed that only three of the 27 municipalities in the province had delivered financial statements that were useful and reliable. However, only one of them did not require adjustments.
ANC spokesperson Donald Selamolela told News24 the party would respond to the report as soon as it came to its attention.
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