The provincial finance department has tried to tighten its controls after millions disappeared from its coffers
Evidence wa ka Ngobeni
Eastern Cape police have uncovered alleged theft of R63-million from the province’s service delivery kitty and 11 top officials have appeared in court on charges of corruption.
The officials, some of them senior government accountants, had access to and handled disbursements from the Provincial Treasury the central reservoir of funds for the Eastern Cape government.
Senior government officials allege lax controls within the Eastern Cape Department of Finance enabled the officials to siphon cash, which they allegedly paid to a string of suppliers for almost two years before the alleged scam was uncovered.
The scam has been described by the police as the “worst corruption scandal” to hit the impoverished province in the past seven years. Police are investigating 18 other government officials and have arrested one of the more than 40 suppliers implicated in the scam.
The supplier and two government officials appeared in the Zwelitsha Magistrate’s Court on Tuesday. The officials were refused bail, while the supplier who allegedly had R195 000 transferred into her private bank account for services she did not render was granted bail of R20 000. The other nine appeared in court recently.
The police investigation is not completed and they are attempting to trace millions of rands believed to have been used to buy properties in some of the province’s plush suburbs by the officials.
The police say they have recovered about R3-million allegedly stolen by the syndicate.
The Eastern Cape province is riddled with financial problems, which has led to the near collapse of basic services in the Department of Health.
Senior government officials say the more than R60-million lost by the government could have been used to provide much-needed electricity in schools and to renovate dilapidated hospitals and buy new equipment.
Eastern Cape Department of Finance spokesperson Zama Mpondwana said the department has attempted to tighten its financial control systems to ensure that scams like this one do not happen again.
The officials allegedly created more than 40 fictitious creditors on the finance department’s computer, paid out large sums of money from the department’s coffers and printed fake invoices.
Police claim they also set up front companies with the help of friends, who are alleged to have shared the proceeds. Fictitious payments were allegedly made to companies that often legally render services to the government.
Police say such transactions require approval by top government officials. They said they are investigating senior government officials but could not name them due to the sensitivity of the case.
The arrested officials include two senior government accountants in the departments of education and finance and clerks in the departments of local government and public works.
Captain Lionel Hughes of the East London police investigating unit says his team traced some of the suppliers and found that some were “poorly furnished tuckshops selling tomatoes”.
A senior government official says the alleged scam shows that the provincial finance department has failed to manage the financial activities of the provincial government.
“The provincial finance department is supposed to ensure order and to exercise proper control over the provincial revenue and expenditure, but this scam demonstrates that we need to relook at the efficiency of the provincial financial administration services,” he said.
“With proper financial controls such scams can be detected and avoided as they cripple service delivery. Now the province has lost more than R60-million while people in the rural areas continue to live in poverty.”
l Eastern Cape police on Tuesday arrested two senior government officials allegedly involved in a “ghost pensioners” scam to defraud the provincial Department of Welfare.
The department said the accused officials allegedly defrauded the department by using pension vouchers for dead people, allowing them to claim the pensions.
The arrest of the two, who are appeared briefly in court this week, brings the number of people arrested in connection with the R28,5-million pension scam to 10.
About 50 government officials and three community members are being investigated in connection with the scam.