Costly deals with 173 unaccredited suppliers: SIU on Gauteng education Covid-19 spending

Assets of some service providers paid to decontaminate schools in Gauteng have been frozen after an SIU investigation. File image.
Assets of some service providers paid to decontaminate schools in Gauteng have been frozen after an SIU investigation. File image.
Image: Thapelo Morebudi

An investigation conducted by the Special Investigating Unit (SIU) has revealed that the Gauteng education department did not follow due process in the procurement of services to decontaminate schools during Covid-19.

“The department obtained a deviation under Treasury regulations to conduct the procurement process without inviting competitive bids,” SIU spokesperson Kaizer Kganyago said in a statement on Thursday.

“The department did so on the basis that emergency procurement was warranted, given the urgent and pressing need to appoint service providers to decontaminate schools exposed to Covid-19. The request for the deviation expressly stated that the department would 'appoint accredited service providers from the Central Supplier Database (CSD)'.”

However, the investigating unit said, the department had paid more than R431m to service providers “pursuant to a process that was haphazard, unfair and littered with procurement irregularities”.

“The vast majority of service providers that were appointed (173 out of 280) were not accredited and were not on the CSD. On this basis alone, the SIU will argue before the Special Tribunal that the procurement process was unlawful and falls to be reviewed and set aside,” Kganyago said.

The SIU investigation, Kganyago said, revealed that the procurement process was not cost-effective and the service providers were not paid per square metre of the area cleaned.

“Rather, a senior official in the department appears to have arbitrarily decided to offer a fee of R250,000 to R270,000 for the decontamination of primary schools; R250,000 to R290,000 for secondary schools; and R250,000 to R300,000 for district offices. The fees bear no relation to the work done by service providers or the cost of material used,” said Kganyago.

The SIU announced that it had been granted a preservation order by the Special Tribunal to freeze R6m of bank accounts and assets with an estimated value of R4.7m belonging to 14 service providers.

The freezing order prohibits Fikile Mpofana Pty Ltd; Insimu Projects Pty Ltd; Insimu Consulting Pty Ltd; Insimu Medical Group; Mangaliso Pty Ltd; Lisondalo Pty Ltd; Zenaldo Consulting Pty Ltd; Sigwile Bright Mhlongo; Fikele Eugenia Mpofana; Lindokuhle Bridget Mkhize; Njabulo Mabaso; Richard Mweli; the Shuphula Family Trust; and Madangu Family Trust from using the funds held in the bank accounts.

The assets the SIU has obtained a freezing order against include: two Mercedes-Benz V Class; a Land Rover Range Rover Sport; Haval H6; and Toyota Avanza.

With collaboration from the Financial Intelligence Centre (FIC), intervention directions have also been issued to place a hold on R30m of the funds received from the education department.

According to the SIU, a portion of the funds the service providers were paid were transferred to multiple beneficiaries who have, in turn, disposed of them.

The unit said it would within the next 30 days, also seek an order against the service providers to pay back all profits as a consequence of their appointment.

“The investigation is ongoing, but now we have uncovered evidence of irregular things that enabled the SIU to approach the Special Tribunal and we have been granted the order to freeze the accounts of those service providers,” said SIU head, advocate Andy Mothibi.

The SIU said evidence pointing to criminal conduct would be referred to the National Prosecuting Authority (NPA) and the Hawks for further action.

Additional reporting by Andisiwe Makinana

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