Another R500 million down the drain

Systematic corruption, serious fraud and maladministration by officials and senior managers has cost Polokwane municipality taxpayers hundreds of millions of rands over the past 16 years.

This was revealed by a forensic investigation by Bowman-Gilfillan instituted by the Polokwane municipality.

The investigations stem from serious concerns raised by the Auditor General (AG) and the internal audit committee regarding a number of irregularities that affected the municipality’s clean performance in audit outcomes.

Speaking at a media briefing on 22 October, Mayor John Mpe shed light on some of the damning findings of the investigation,

“The investigations were related to the verification of employees and contractors, ghost workers, questionable overtimes and sick leave, among many other things,” said Mpe.

According to the report, the municipality suffered a loss of approximately R500 million due to corrupt activities between 2008 and 2024.

The municipality has said that it has opened criminal cases against officials who were identified, saying that more are set to be brought to book.

Key findings:

Mpe said that the city has lost over R40 million in fraud and corruption during the construction of the Mankweng stadium.

It is alleged that the tender committee and senior managers inflated the initial amount of the construction with tens of millions of rands in extra charges.

Initiated in 2014, this project has faced numerous challenges, including bid specifications that were completed only after the advertisement was published.

Originally budgeted at around R38 million, costs have ballooned to over R126 million, with the project still far from completion and an estimated R45 million still needed.

Construction allegedly commenced without approved building plans, and relevant authorities failed to sign off on the projects, plans, and related costs.

Safety concerns have been raised regarding incomplete plumbing and electrical work, while the stadium’s deteriorating condition now demands extensive renovations. Compounding these issues, some of the land utilised for the project is not municipally owned, a fact known since May 2017.

Bowmans recommended a further investigation into the appointment of Ditlou Engineering Consultants and that steps be taken against the project managers.

Mpe said the city has started with measures to recoup the money, including civil claims.

“As a municipality we need to institute some civil claim against the money that has been paid to ensure that we withhold any retention money that we still have on the contractors who were appointed,” said Mpe.

“We have also agreed that there might have to be further investigations into other issues related to this investigation in this case they seem to have been collusion, even at the implementation” he added.

The investigation also raised more questions into allegations of contractor abuse, which saw contractors use municipal materials and then bill those materials on top of their labour charges back to the municipality.

Another key finding is that the Polokwane municipality had paid more than R128 million to municipal employees on questionable overtime over a period of 14 months – with one employee being on paid leave for over 5 years.

He says some workers were claiming overtime while on leave and others claimed overtime for work not done. 307 employees claimed that they worked more than 60 hours of overtime in a month, a violation of the Basic Conditions of Employment Act.

Mpe said that at least 44 employees, including managers, are facing disciplinary hearings.

“Here is a serious case of fraud from the outcome of the investigations, we’ve also agreed that we should as a municipality ensure that the 44 employees with questionable data from Home Affairs are verified because it was also found that there is someone in the municipality who have been on leave for five years,” said Mpe.

“The municipality would have to do proper investigations and also make sure that disciplinary action will not only be limited to a person that has been on leave,” he added.

The report also revealed that the city has at least 44 ghost workers who are used to claim salaries.

Mpe said that the municipality has opened criminal cases against employees and senior managers who allegedly used ghost workers to claim salaries and that in some instances, workers used the qualifications of deceased employees.

“With the focus on, ghost employees or suspected extended sick leave as well as the suspected multiple positions… indeed it was found that the municipality has some challenges about employees where employees have got different information on their ID versus the details on our system,” said the mayor.

Another issue that has garnered attention is that the municipality lost over R15 million for 10 buses that were bought but never delivered. Two former senior managers and a senior manager are reportedly facing charges for alleged corruption in the procurement of the city buses, Leeto la Polokwane.

Mpe said that two of the senior managers, including the CFO, have since been dismissed, and they will also institute a civil case to recoup the money lost during procurement.

“And let me emphasise that… the municipality has already opened a criminal case against those who were involved and the municipality has also instituted disciplinary action against those who are still the employees of the municipality.”

The municipality says they will refer several other cases to police against officials who were flagged by the report and embarking on a process to see how oversight can be improved.

Responses

ANC’s regional spokesperson Adolph Rapetswa commended Mpe for acting “decisively against corruption, maladministration and tender irregularities,” and backs the decision to implement recommendations of the forensic report that revealed serious fraud and maladministration.

Opposition parties in council have bemoaned the corruption, saying that this report highlights “failed internal processes and poor project management.”

“The report clearly indicates that directors and managers are not being properly monitored, and that the mismanaged human resource department has greatly contributed to the alarming state of municipal finances,” said VF Plus Polokwane councillor Susan Clarke.

DA Polokwane caucus leader Jacques Joubert said that the report “is indicative of mismanagement and entrenched corrupt practices deeply rooted within the municipality.”

“If the ANC-led administration really wants to address this overtime problem a simple shift system must be implemented; something the DA in Polokwane has been actively advocating for years, cutting overtime and creating more jobs at the same time,” he added.

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