SIU details overspending on state funerals, renovations at Union Buildings

The SIU briefed Parliament’s Standing Committee on Public Accounts on Wednesday.

The unit’s National Chief Investigation Officer Leonard Lekgetho said the state funerals of struggle stalwart Winnie Mandela, former minister Zola Skweyiya and former ambassador Billy Modise each saw overcharging of R10 million.

"The first investigation we did was when the Department of Public Works requested the SIU to investigate possible fruitless and wasteful expenditure relating to services provided during the state funerals,” Lekgetho said.

"In the findings we found out that the service provider was appointed by the department to manage the three funerals. The funerals were of the Ms Winnie Mandela, Mr Zola Skweyiya and Mr Billy Modise and we found that there was excessive pricing that was made by the service provider on these funerals' services.

"In terms of the outcome, on 18 April 2023, Crocia Events was ordered by the Special Tribunal to pay back to the department an overpayment of R10.7 million and an interest of the same amount calculated at 7% from January 2019. In terms of the recovery, the department is in the process of implementing the court order."

Lekgetho told MPs the irregularities were partly due to the department allowing unqualified officials to prepare the procurement process and payments, which were above the tender amounts.

"In the observation of their funerals, we found that there is no market analysis and consideration of Section 217 of the Constitution prior to the state funeral services provider being appointed, and procurement functions were executed by junior officials who were not always sure what procurement processes they need to follow.

"The service provider awarded the tender, that is Crocia Events, has changed its directors about three times, of which the department didn't really pick it up and able to take cognisance of that," said Lekgetho.

In a separate probe, the SIU found a service provider had invoiced 12.5% more than the company should have for renovations at the Union Buildings during the tenure of former president Jacob Zuma.

"Allegations were received concerning irregularities in respect of the procurement processes followed during the appointment of Motseng, one of the service providers that was appointed in order to do the renovations at the Union Buildings.

"It was alleged that there was no budget that was approved prior to the commencement of the tender of the union building and estate contract that was awarded to Motseng.

"Motseng had inflated the invoice cost of goods and services delivered to the prestige portfolio, and invoices were being inflated based on the batch payment authorised by finance. Motseng had added 12.5% profit margin for which no contract evidence existed into the invoice submitted to DPW."

SIU head Andy Mothibi told MPs that the unit is engaging with state institutions to assist with monitoring and evaluation.

"We do, from time to time, submit systemic recommendations to address the observations we have made and improve the administration of the department and related practices.

"We also indicate that the department, as part of its restructuring, needs to develop an improvement plan to address the findings and to mitigate the recurrence of the incidents of maladministration and malpractices. We are also going to refer actions to the department for monitoring and evaluation to the Presidency for inclusion in the monitoring and evaluation plan."

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