A forensic investigation report into tender irregularities in Emfuleni local municipality in the Vaal has blown the lid on the extent of the rot and looting, with current and former managers fingered in massive tender irregularities.
The progress report, by forensic investigation and risk management firm Comperio, which The Citizen has seen, has fingered at least 31 senior managers in tender irregularities running into more than R1 billion in 15 red-flagged tenders.
The largest irregular expenditure noted in the report, sent to the Emfuleni chief financial officer, Andile Dyakala, more than a week ago, is the extension of a security tender without following due process, which allegedly ended up costing the battling municipality more than R108.9 million.
However, said Dyakala, the report had materially changed, and noted he had been receiving monthly progress reports from the forensic investigation firm since they were appointed to probe tender irregularities in November last year.
“I hope someone that leaked it knows that. I spoke to the MD of Comperio about the draft report which is in the public domain, while not final,” Dyakala said.
He gave no indication as to when the final report would be released, or how the reports differed, citing “confidentiality”, but not saying why. Though the extension was not approved by the bid adjudication committee, a former senior manager at the municipality informed the security company of the extension.
The “draft” forensic investigation report noted that, based on the invoice analysis, it appeared as if the security company inflated and duplicated invoices.
“Duplicate payments to the amount of R349,162.53 were identified and need to be recovered. A fixed fee of R4.6 million per month was payable to (the security company) in terms of the contract concluded with the service provider.
“The contract did not include any escalation clauses. (The security company) increased the monthly fee payable per guard after the first year of the contract, resulting in an over-claim to the amount of R57,435,404.80,” the report states.
The investigation revealed that in November 2015, six months after the conclusion of the contract, the rate payable per guard was increased for that month, resulting in an over-claim to the amount of R379,188.79.
“As per the Bill of Quantities, (the security company) would provide four vehicles at a monthly cost of R30,000.
“However, the service provider claimed R30,000 for the delivery of one vehicle. This resulted in an over-claim to the amount of R931,500,” the report claimed.
The second largest is an eviction security tender ceded to a third party not involved in the initial tender process and extended without following due process, costing the municipality more than R77.1 million in irregular expenditure. Among the bizarre contracts are a fleet tender that continued running though it had not been renewed, with the municipality allegedly paying more than R45.3 million to a car dealership.
The report claimed the dealership should not have been appointed in the first place as its tax clearance certificate appeared to be fraudulent, with the tax number and company registration number linked to two different legal entities.
The municipality allegedly paid another dealership for the services instead of the one with which the municipality had a service level agreement, with the contract apparently so badly managed that vehicles were not being returned, resulting in the irregular expenditure.
The tender was allegedly not budgeted for and Emfuleni seemingly continued paying, though 38 of the vehicles were non-operational and none were reported to the insurance company.