The Special Investigating Unit has uncovered widespread looting and corruption in several municipalities in KwaZulu-Natal, Eastern Cape and the North West.
Appearing before the Standing Committee on Public Accounts on Wednesday, the SIU detailed how municipal officials had looted state funds for personal gain, enriching themselves, their friends, and their families.
The SIU report to parliament focused on investigations into the OR Tambo District Municipality in the Eastern Cape, the eThekwini Metro in KwaZulu-Natal, and the Ngaka Modiri Molema Municipality in the North West.
Leonard Lekgetho, the SIU’s Chief Operating Officer, presented the report before SCOPA, beginning with Proclamation R80 of 2022, which authorised the investigation into the OR Tambo District Municipality for procurement irregularities.
One investigation involved a tender originally budgeted at R20 million, but which was eventually awarded at R70.2 million to a company that was not the lowest bidder among the 10 submissions.
In another incident, one municipal official allegedly received R120,000 from a service provider, and further investigations are underway regarding claims that the same service provider purchased a motor vehicle being used by a municipal official.
Lekgetho further told SCOPA that several related cases are currently before the courts, with disciplinary, administrative, and criminal referrals made.
“The municipal officials used the SLA as a vehicle to enrich themselves, their friends, family, and relatives. Numerous payments or contracts were facilitated via third-party subcontracting where municipal processes were not followed,” said Lekgetho.
Furthermore, the SIU is preparing for an investigation under Proclamation R172 of 2024, which focuses on alleged maladministration related to water services in the same municipality.
Since this proclamation was only issued in August 2024, completion of the investigation is expected by August 2025.
The situation is similarly troubling in the North West and KwaZulu-Natal.
Under Proclamation R9 of 2021, the SIU investigated eThekwini Municipality for maladministration involving a R28.1-million contract related to its housing programme.
Allegations surfaced that developers appointed by the municipality sold or transferred vacant properties for personal enrichment.
A whistle-blower provided the SIU with details of 29 sites in the Phoenix area, which were allegedly part of these irregularities.
An SIU site visit confirmed that the housing programme was not implemented, and the sites were being used for other purposes.
One property, sold to the developer for R34,200, was later sold for R1.1 million, while another purchased for R21,000 was resold for an exorbitant R9.5 million.
Financial analysis of officials’ bank statements revealed that some developers were paying bribes to officials.
“We found that there was a contravention of the municipal prescript in the allocation of sites and immovable assets by the municipality,” said Lekgetho.
“There were also irregularities in the appointment of the service providers as well as in the allocation of sites to service providers.”
In the North West, at Ngaka Modiri Molema Municipality, an investigation into Personal Protective Equipment fraud during the Covid-19 pandemic found serious irregularities at various stages.
The SIU has referred four individuals to the National Prosecuting Authority for contravention of the Municipal Financial Management Act.
They include the municipal manager and the Chief Financial Officer, the supply chain manager, and a service provider.
“We made a civil recovery to the value of R25.8-million on 27 March 2024 and in terms of that process, court papers have been issued to review and set aside the contract,” Lekgethoexplained.
“We also observed the misuse of SCM Regulation 36.1 which was exploited to deviate from the normal procurement process under certain circumstances.”
The service provider offered a settlement of R750 000 which the SIU rightly refused, and the unit is proceeding with civil litigation in the matter.
SCOPA chairperson Songezo Zibi asked Lekgetho, in terms of the SIU’s funding model, if any of these municipalities had paid what was owing for SIU services.
“Most of them have not paid a single cent to the SIU,” replied Lekgetho.
“We are still negotiating for the outstanding balance.”
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