Hundreds of employees of the Eastern Cape health department have been issued with final warnings aft.
According to the SABC, court documents lodged by the Special Investigation Unit (SIU) showed that Makhanya and the department have 20 days to dispute the claim and to defend the action.
The SIU was confident of a successful outcome. The organisation is expected hand in its report on Nkandla security upgrades next week.
According to the SABC, the claim stated that the department offered to appoint Makhanya as the principle agent of the Nkandla upgrade project, but that the appointment was unlawful as it was not preceded by an open tender process.
The claim further details Makhanya's authorisation of security measures in excess of and beyond what was advised by the South African Police Service (SAPS) and the South African National Defence Force (SANDF).
It states that by December of 2013, some R216 million had been paid by the department of public works in this regard, according to the report.
Furthermore, it states that Makhanya had varied the scope of the work at Nkandla by authorising installations that did not fall within the security measure scope.
The claim amounts to some R155 million, according to the report.
The Sunday Tribune reported that Makhanya has landed the deal to design Zulu King Goodwill Zwelithini's eighth palace.
It was not known how much Makhanya was charging for the KwaNobamba palace.
The chairman of the Royal Household Trust, Jerome Ngwenya, was quoted by the newspaper as saying that the project would be financed by private investors working with the King's son Prince Butho, who has petroleum interests in Equatorial Guinea.
In a report released in March, Public Protector Thuli Madonsela found Zuma and his family had unduly benefited from the R246 million spent on security upgrades to Zuma's private home in Nkandla, KwaZulu-Natal.
Makhanya made headlines after it was revealed in Madonsela's report that he made R16.5 million out of the R246 million Nkandla project.