WeeklySA_AdminTheft: The cases involved tender irregularities, theft, corruption and mismanagement
By WSAM Reporter
Parliament’s Portfolio Committee on Defence and Military Veterans (PCDMV) has lashed out at Minister Thandi Modise’s department saying the ongoing investigations into financial malfeasance to the tune of R170 million in the department are an indicator of “low levels of consequence management”.
The criticism follows an announcement by the Directorate for Priority Crime Investigation (DCPI), also known as the Hawks, that they were investigating four cases of fraud and corruption in the department of defence (DoD) and military veterans amounting to nearly R170 million.
Hawks boss, Lieutenant-General Godfrey Lebeya was updating the PCDMV on the DoD financial activities last week. Nearly R170 million has allegedly been mismanaged in cases involving tender irregularities, theft, corruption and mismanagement. Several suspects are still under investigation, according to Lebeya.
Reacting to what the Hawks’ boss was saying on their investigations, the PCDMV said it was of the opinion that consequence management was not a DoD priority, cautioning that the PCDMV was disappointed to see a difference in the number of cases named by the DoD and the DCPI. “The committee will follow up with the DoD on the difference in case numbers,” defenceWeb quoted the PCDMV as saying.
In a presentation to the committee, the Hawks revealed that in April this year, a case was reported at the Sunnyside police station in Pretoria relating to the procurement of machines to fix potholes. “It is alleged that Department of Defence and Military Veterans awarded a tender to a service provider. The purpose of the tender was to train nine hundred people on how to repair potholes in all the provinces as well as the procurement of the machines to fix potholes .
Proper supply chain processes were not followed during the awarding of the tender,” Lebeya was quoted by the defenceWeb as saying. According to the Hawks boss, the loss involved in this case amounts to R57 million.
Again, in 2021, the Department of Military Veterans purchased 90 rammers (a type of compactor) worth R40 million for the project – 10 for each province. “Most of them apparently disappeared mysteriously from a store in Roodepoort and cannot be traced,” defenceWeb quoted the City Press April report. Another R12.5 million was apparently paid into the personal account of the CEO of KT Squared, the company contracted to do the job.
Three suspects are currently being investigated, according to the Hawks. Another fraud and corruption case involves the procurement of personal protective equipment (PPE) for the Department of Defence.
This involves a loss of R44 million. Seventeen members of the South African National Defence Force (SANDF), four company directors and eight companies are still under investigation, Lebeya told the portfolio committee.
According to the Hawks, the fraud and corruption case in the DoD first came to light in 2020 at the beginning of the Covid-19 pandemic. This case, the Hawks said, was referred to the Hawks in 2022.
The Department of Defence charged its members but according to the Defence Act they could not charge the civilians and companies involved (the companies allegedly paid kickbacks to DoD officials). In this case, Lebeya told the committee that the investigation is ongoing.
In 2021, the Hawks began investigating a case involving fraud, theft and contravention of the Public Finance Management Act (PFMA) following a complaint about maladministration within the Department of Military Veterans offices in Pretoria.
“These allegations eventually led to the suspension of five suspects who, when accepting tenders, they disregarded the policies that are put in place by DoD governing the procurement processes and the awarding of the tenders,” the Hawks statement said.
This resulted in service providers being awarded tenders for a sowing project and a furniture making project, “but the money was deposited into the closed Corporate Account that belong to individuals’’.
No valid Service Level Agreement or contract was signed between the Department of Military Veterans irrespective of the full compliance with what was expected to be done in terms of giving training to the Military Veterans and their beneficiaries.
The Hawks also found that there were no advertisements nor invitations of the bidders to all the tenders that were awarded and the tenders were awarded to favoured friends. Five suspects and five companies are involved in the case which relates tothe loss of R37.4 million. The investigation in this case is also ongoing, according to the Hawks.
The fourth case being investigated by the Hawks involves R29 million. Three companies have been charged with fraud, corruption and theft. As stated in the Hawks’ presentation, the complainant in this case became aware of irregularities regarding the procurement on skills developments at the office of the Military Veterans Department.
It is alleged that a company provided three-day security courses at a cost of R4 million although the service provider was not registered with the Private Security Industry Regulatory Authority (PSIRA).
Another company was awarded a machinery purchase contract by National Treasury to the value of R25 million, but proper processes were not followed. A third company was appointed as a new service provider but correct processes in appointing them were not followed.
“The tenders were allegedly awarded to their favoured friends. They irregularly employed their favourites to senior positions without the necessary qualifications. Such people were never graded in terms of the Public Service Act; nevertheless, they were placed in Senior Management Service level’’, said Lebeya.
