Outa lays criminal complaint against Nsfas CEO Andile Nongogo for fraud and corruption

The Organisation Undoing Tax Abuse (Outa) has laid criminal complaints against Nsfas CEO Andile Nongogo, as well as one of his former colleagues and two others, for fraud and corruption.

Nongogo is also the former CEO of the Services Sector Education and Training Authority (SSETA).

Outa said it has asked for a police investigation into the conduct of Duduzile Mwelase, a senior manager at SSETA, and Anania Baloyi and Ngwenya Baloyi, both from Five Stars Communications and Projects CC (Five Star), which is a SSETA service provider.

Outa’s complaint is over the branding of a tender box, that Five Star provided for SSETA. 

The organisation said it wants all four individuals to be investigated for alleged fraud and corruption, with Nongogo and Mwelase, who is the senior manager for brand management at SSETA, being investigated for contravening the Public Finance Management Act (PFMA).

Tender

Rudie Heyneke, portfolio manager at Outa, said the criminal complaints are related to the over-inflation of a specific tender, awarded to Five Star on 22 August 2016.

“At the time, Baloyi was the sole member of Five Star, while her son, Ngwenya Baloyi, was the company’s managing director. It is alleged that Five Star over-inflated their bid for the branding of a tender box by a whopping 8 000%, or at least R292 000.”

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Heyneke said Outa uncovered this irregular Five Star tender while investigating what it called other “dubious” SSETA tenders.

“Our investigations revealed irregularities with the Five Star tender, awarded for a period of 19 months until 31 March 2018, for the design, development and supply of branded promotional items as and when required by SSETA.”

Overpaid

According to Heyneke, Five Star supplied several branded items and related services to SSETA and was paid R36.962 million for their services.

“In terms of the service level agreement between SSETA and Five Star, the responsible SSETA official for this tender was the then CEO, Andile Nongogo.

“During our investigation, we sought clarity from SSETA on several issues,” said Heyneke. “We also requested proof from SSETA that the tender box was recorded in the SSETA asset register, and at which value.”

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According to Heyneke, SSETA confirmed that the tender box was recorded in the asset register at the value of R9 690.

Inflating prices

Heyneke says it is evident that Five Star was overcharging SSETA, inflating the price by at least R298 000 or 8 000% in this specific instance.

“The SSETA CEO and employees who approved these quotes and payments were complicit in the looting of public funds,” he said.

“SSETA paid for 29 invoices submitted to them by Five Star. More criminal complaints on other transactions will follow, and Outa is also planning to hand their findings to the Special Investigating Unit (SIU) for further investigation.”

Unacceptable

Heyeke said the inflated prices charged by service providers are “unacceptable”.

“Companies who charged these exorbitant prices and public officials who approved payment of inflated tenders, should all be held to account for the abuse of taxpayers’ money,” he added.

“Outa furthermore wants all such suppliers to be listed on National Treasury’s restricted suppliers’ data base so that they will not be able to conduct business with any state entities,” he said.