City of Cape Town spent R42m irregularly on temporary homeless campsite, SIU finds

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The camp in Strandfontein where  homeless people were temporarily accommodated by the City of Cape Town. Photo: Jaco Marais
The camp in Strandfontein where homeless people were temporarily accommodated by the City of Cape Town. Photo: Jaco Marais
Jaco Marais
  • The SIU found that the City of Cape Town spent R42 million irregularly.
  • The funds were spent on emergency temporary accommodation for homeless people during the Covid-19 lockdown.
  • The SIU is considering the possibility of legal action to recover the funds.

The Special Investigating Unit (SIU) is exploring civil action to recover more than R42 million irregularly spent on the Strandfontein homeless camp in Cape Town.

The camp was established in 2020 at the start of the Covid-19 lockdown as emergency accommodation for homeless people after the declaration of the national state of disaster.

The SIU's report into the state's spending on its response to the Covid-19 pandemic was made public on Tuesday. Investigations linked to 4 549 contracts have been finalised, with 2 803 of those agreements found to have been irregular. This amounted to 62% of the finalised investigations being deemed irregular.

According to the SIU, the City of Cape Town racked up more than R42 million in irregular spending between the Disaster Risk Management and social development departments.

READ | Scathing report released on Cape Town’s homeless policies

The irregularities were reported by GOOD secretary-general Brett Herron, according to the SIU's report. The allegations centred around services provided by Downing Marquee Hiring for tents and related items, as well as to shelters for catering and management services.

"The investigation into this aspect determined that the procurement process followed by the City in sourcing the various items and services required from Downings was irregular and as such falls to be set aside. The City failed to test the market in circumstances where it was obliged to do so, but merely accepted the quotation submitted by the service provider concerned," the SIU found.

The procurement process was found to have not been fair, transparent, equitable or cost-effective. The SIU found that the City's failure to follow the correct procurement process had resulted in irregular spending of more than R42 million.

The SIU is pursuing legal options to recover the funds, according to the report.

"The SIU is in the process of compiling instructions to the State Attorney with a view to brief counsel to advise on the viability of appropriate civil action and recovery," the SIU report read.

In response to the findings, the City said various municipal departments had cooperated with the investigation and that it had already made a full public disclosure of all Covid-19-related expenditures.

The City said in a statement:

The City has not yet received the detailed SIU report and will study this in detail once received. If there is any evidence of wrongdoing, the City will not hesitate in taking action against those responsible.

The City added that it had followed the emergency procurement process under the Supply Chain Management Policy, the National Treasury Emergency Procurement Guidelines, and the Municipal Finance Management Act.

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"The City had to construct a facility with running water, sewerage, hot water bathing facilities, accommodation, catering facilities, medical facilities and screening facilities under Covid conditions for an estimated 2 000 people at the time within a matter of days. Every rand was spent on providing services for the homeless," the City said.

Herron welcomed the findings, calling for "heads to roll" within the City of Cape Town.

"Now there should be consequences. The DA must demonstrate the accountability and good governance it claims," Herron said.

"The camp was operated for just six weeks and was widely condemned as unsuitable for human habitation," he said.

"The SIU basically concluded what any reasonable person would have realised – that R43 million for six weeks of tent hire was excessive."

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