Panyaza Lesufi, Gauteng premier and co-convenor of the ANC in the province. Photo: X
Criminal charges relating to alleged corruption involving school uniform procurement were among the recommendations of a forensic report that the Gauteng government appears to have buried.
The investigation detailed a raft of fraud and corruption allegations, widespread conflicts of interest and flouting government procurement regulations.
More than R15.4 million is unaccounted for after the province contracted 11 companies to disburse about 850 000 school uniforms, shoes, underwear and vests to Gauteng’s vulnerable learners. The total contract was worth R273.7 million in the 2016-17 and 2017-18 financial years.
It also emerged that not all uniforms and other clothing were delivered to the learners or schools.
The report, dated December 2019, is among a host of findings that Gauteng Premier Panyaza Lesufi this week said he had released.
The companies selected by the department received their money through “conduit payments”, meaning that registered nonprofit organisations (NPO) were used to filter funds through their bank accounts to the uniform distributors — a process the investigation said lacked “financial or risk management principles”.
“Making conduit payments into the accounts of parties with whom the department has no contractual relationship for those specific payments will amount to [findings of] irregular expenditures to be made,” read the report.
“Those officials who made, permitted or caused the irregular expenditure (whether by omission or commission) may have committed financial misconduct as defined in the Public Finance Management Act.”
The Mail & Guardian has established that no criminal or disciplinary action has been taken by the provincial government which, in August, reinstated 13 implicated senior social development departmental directors without subjecting them to a hearing.
Among them were deputy director general Onkemetse Kabasia, Solly Ndweni, the chief director of NPO partnership and development research, Themba Msimanga, the director of partnerships and funding, and Mbali Ndlovu, the deputy director of sustainable livelihoods.
These NPO revelations follow the M&G’s reports in June and July of how the Life Healthcare Group allegedly stole R112 million from social development in “corrupt” contracts to supply drug rehabilitation centres for the province.
The same officials were named in forensic investigations into the listed health company.
Lesufi — who came under fire this week from the Democratic Alliance, which during a media briefing on Tuesday called on the premier to make the NPO investigations public — responded on social media on Tuesday, saying he had released “all reports” on 12 December 2022, “two months after I took office”.
“We [the Gauteng government] wish to know which reports exactly are we hiding, name and title of those reports,” the premier said on X.
The December 2019 report was titled: Third Report on an Investigation into Processes Followed by Department of Social Development Employees in respect of the School Uniform Project.
Several whistleblowers and well-placed sources in the provincial government told the M&G that Lesufi was aware of the uniforms report and the reinstatement of named officials.
The premier’s spokesperson, Sizwe Pamla, directed questions to the social development department.
“On reliable sources and whistleblowers, they must go to the nearest police station or any law enforcement agency of their choice with the information they have and open a case,” he added.
Shoki Tshabalala — the deputy director general in the presidency for the women, youth and persons with disabilities department, who also served as its chief accounting officer in 2021 — was implicated for alleged crimes during her time as the head of Gauteng’s social development department.
The investigation, which the provincial treasury commissioned, recommended that then premier David Makhura should open criminal charges against Tshabalala for contravening the Public Finance Management Act for the “irregular expenditure” of items for the uniform project.
It added that Tshabalala was “currently employed in the ministry in the presidency responsible for women, youth and persons with disabilities. Ms Tshabalala is therefore still in the employ of the state and disciplinary action can be taken against her for the identified contraventions.”
Presidency spokesperson Vincent Magwenya said Tshabalala’s appointment was “not a matter that [President Cyril Ramaphosa] would have been involved in”.
He referred further comment requests to Cassius Selala, the women, youth, and persons with disabilities ministerial spokesperson, who did not respond to questions about Tshabalala’s implication in a forensic report, including the attendant criminal charge recommendations.
Selala said the ministry was not aware of any findings against its senior official.
“Ms Shoki Tshabalala has received a top security clearance certificate from the [State Security Agency], which was valid until 31 August 2021, with a clearance number for a period of five years from 2016 to 2021,” Selala said.
An example of conflicts of interest that Tshabalala allegedly facilitated was how the nonprofit Kagisano — appointed to implement the uniforms project — was invoiced by Quarphix, a for-profit company, for work done on the social development department’s Bana Pele system, which was used to administer the programme.
Kagisano and Quarphix had the same directors sitting on the respective boards of the companies, the report stated.
“Considering the duplicated board members between the two entities, in essence, Quarphix invoiced itself and approved its own invoices. This duplication of key persons across both entities amounts to a conflict of interest,” it said.
Figures from the investigation showed that Kagisano received nearly R27.5 million over two financial years to run the project, including a more than R12.6 million advance payment from social development “without a contractual obligation to do so”.
Further, the investigation found that Kagisano “was the only NPO considered for the project management role” in an “unduly expedited process in order to accommodate the award to Kagisano”.
A background check by the M&G showed that Pule Molapo, the managing director of Kagisano, was not only on the Quarphix board, but sat on that of the Godisang Development Centre, which also received R25 million to supply 81 750 uniform packs, jerseys and school shoes.
The investigators found that, from a sample of 90 randomly selected schools from about 900, “there was an 8.7% non-delivery of school uniform packs during the 2016-17 financial year and a 27.5% non-delivery of school uniform packs during the 2017-18 financial year”.
On Tuesday, social development spokesperson Motsamai Motlhaolwa said the department would “not comment on internal investigations”.