Matlosana municipality graft probe: Millions in unexplained overpayments

Several officials at the Matlosana local municipality in Klerksdorp in North West, including the chief financial officer (CFO), are being investigated for possible corruption and fraud after contractors were given millions of rands in unexplained overpayments.

An independent forensic audit that investigated possible irregularities in the R292 million paid to the municipality’s top 30 suppliers, found that several firms needed further probing.

Annual financial statement reveals payment irregularities

The municipality’s CFO, Mercy Phetla, allegedly neglected to guard against financial mismanagement by allowing officials to make irregular and duplicate payments to service providers without approval from senior management.

The issue could also implicate municipal manager Lesego Seametso because, although he initiated the probe by taking the matter to council, the buck stops with him as accounting officer.

The opposition DA accused Seametso of sleeping on the job and called for him and the CFO to account for dereliction of duty.

City of Matlosana executive mayor Fikile Mahlophe said the payment irregularities were identified during auditing and compiling of the annual financial statement.

Mahlophe and Seametso brought the issue before the council which, on 24 October, resolved to institute an independent forensic investigation.

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Financial report uncovers inflated payments to suppliers

The report by Maine Management and Chartered Accountants Inc, submitted at a special council meeting on 12 February, revealed that, in several instances, suppliers received double, or triple payments.

One construction firm was paid the same amount of R672 031.25 three times on 1 February last year, on three invoices.

The same firm was allegedly paid four inflated amounts totalling R982 884.57 instead of R600 132.10.

In some cases, suppliers were paid without invoices or goods received documents, meaning the work or delivery might not have been done.

The report revealed that a contractor who supplied illuminating paraffin to destitute rural communities was paid R6.2 million twice, using the same order number.

The auditor-general’s report identified the irregularities involving this firm, prompting the Matlosana investigation.

Some payments were made to companies without a contract with the municipality.

In one instance, the municipality paid a tax consultant whose contract expired 18 months ago.

The contract was allegedly extended after the payment as a cover-up.

Construction companies that owed the municipality money for water and electricity bills were awarded contracts and paid… an indication that no supply chain procedures were followed.

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DA to report municipality financial mismanagement to Cogta and SIU

DA councillor Johannes le Grange said the party would take the issue to the Minister of Cooperative Governance and Traditional Affairs, Velenkosini Hlabisa.

Le Grange said the ANC in the council tried unsuccessfully to get the forensic report rejected as a cover-up.

“The DA will not allow this corruption to continue; it will ensure that those responsible are held accountable. The people of Matlosana deserve a municipality that works for them, not for the corrupt,” Le Grange said.

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