SDM loses R12 million intended for compensation fund
"It was only after payment of the last instalment, 12 months later, that the official from the compensation fund informally told our municipal official, when the two attended a workshop, that the municipality still owed the fund R16 million as a result of cumulative interests," Ramaila said.
SEKHUKHUNE – The Sekhukhune District Municipality (SDM) was recently swindled out of money amounting to R12 million, that was deposited into an alleged fraudulent bank account. The funds were meant for the Department of Labour’s compensation fund.
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SDM’s executive mayor, Stan Ramaila, confirmed the alleged fraud during a press conference in December.
This money was meant to be the municipality’s contribution, in terms of the Occupational Injuries and Diseases Act, to the compensation fund, from which workers who might get injured or contract diseases while at work could claim.
The municipality’s spokesman Willy Mosoma said they received a letter purporting to be from National Treasury and the Department of Labour marked as “final warning”, giving the municipality 21 days to settle the amount or else the fund would resort to the courts.
“Our municipality as a result made payments in 12 instalments of about R1 million a month into the bank account supplied.
“It was only after payment of the last instalment, 12 months later, that the official from the compensation fund informally told our municipal official, when the two attended a workshop, that the municipality still owed the fund R16 million as a result of cumulative interests,” Ramaila said.
The compensation fund denied ever receiving the payments the SDM had been making.
“There is prima facie evidence of negligence on the part of our officials. Had reasonable care been taken, the municipality would not have lost this money. This is a scam that possibly involves more than one person or institution. A criminal case has been opened with the SAPS.”
The SDM council has delegated Ramaila to approach the Limpopo premier, Stan Mathabatha’s office and request support in the performance of the forensic audit.
The mayor also emphasised that the decision to inform the residents and general public of this issue is in accordance with the values of Batho Pele Principles, which are information, openness and transparency.
This is not the first time the municipality lost millions in fraudulent deals. In 2018, the municipality officials allegedly paid R5,4 million into a wrong bank account. The SDM is still in the process of recovering the money.
