Gauteng finance head sacked over R50 million IT contract

The Gauteng Provincial Government has dismissed the head of the Gauteng Department of Finance Stuart Lumka for financial misconduct.

On Thursday, 30 April 2015, Gauteng Premier David Makhura informed Lumka of government’s decision to terminate his services after an independent disciplinary hearing found him guilty of gross financial misconduct and recommended his dismissal.

Lumka was placed on special leave in May 2014 following an Ernst & Young investigation of allegations of financial impropriety.

Mr Lumka’s financial misconduct relates to his authorisation of payments to Shimo IT Solutions while government had no contract with the company and therefore no financial obligations.

Mr Lumka was charged with the following:

  • He paid R48.8 million to Shimo IT Solutions when the GDF had no legal obligation to do so. He was also charged with acknowledging liability in favour of Novell Ireland Software Limited and Shimo when he was not authorised to do so and that the payments, which were not due, were irregular or fruitless and wasteful expenditure.
  • He incurred and/or caused the GDF to incur irregular expenditure of R2.1 million when he signed the Shimo Project charter. Shimo was not procured in a fair, equitable, transparent, competitive and cost-effect manner and through an open tender process.
  • He caused the GDF to incur fruitless expenditure when he paid Shimo a cancellation fee or R1 million.

Lumka was found guilty on the first two charges, which amounted to over R50 million, and acquitted on the third charge.

The chairman of the disciplinary tribunal said the only appropriate sanction was dismissal as he had abused his position of trust, the Gauteng Department said.

“The evidence shows that Mr Lumka was derelict in an egregious manner in his conduct pertaining to the charges for which I found him guilty. He ignored not only legal advise but went against a prior collective decision that there be no further payment to Novell,” the chairman said when pronouncing sanction.

The chairman rejected Lumka’s representation that he had merely exercised “poor judgment”. Lumka, he said, was unrepentant about his conduct during the course of the hearing, the government department said.

The province has also requested the State Attorney to advise regarding whether to institute criminal and/or a civil case against Lumka to recover monies misappropriated.

The province is awaiting the outcome of the opinion from the State Attorney.

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Gauteng finance head sacked over R50 million IT contract