The expenditure forms part of over R2 billion in irregular transactions recorded in the GPAA’s audited financial statements.
Parliament’s Portfolio Committee on Public Service and Administration has expressed serious concern following reports that the Government Pensions Administration Agency (GPAA) allegedly incurred irregular and wasteful expenditure totalling R145 million.
The expenditure forms part of over R2 billion in irregular transactions recorded in the GPAA’s audited financial statements for the year ended March 2025, which were submitted to Parliament late in December.
Transgressions
It includes irregular expenditure on a fraudulent office block for the agency’s head office.
The Auditor-General of South Africa (AGSA) said the agency had failed to investigate the transgressions and had not implemented any disciplinary processes against those responsible.
The Auditor-General recorded that after year-end, the GPAA recovered at least R35.9 million from Shula Developers, which had received the funds as an upfront payment and deposit in a R239 million refurbishment deal for an office block it had fraudulently let to the GPAA in 2024.
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Concerns
Parliament’s committee said it is concerned that some payments were made for services not rendered and that procurement procedures were not followed, including costs associated with leasing an office block intended as the agency’s head office.
“The committee views these findings as extremely serious,” said the chairperson of the committee, Jan de Villiers.
“They confirm long-standing concerns raised by the committee in Parliament on issues regarding governance failures, procurement irregularities and a culture of weak accountability.”
He said these are not isolated irregularities but part of an alarming pattern within an institution entrusted with the administration of public servants’ pensions.”
Public confidence
According to reports, the AG found that the pensions agency failed to investigate the identified transgressions and did not take any disciplinary action.
De Villiers said this failure to act weakens public confidence.
“Accountability cannot be optional,” he said, “particularly where billions of rand and pensioners’ livelihoods are at stake.”
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Millions
De Villiers also noted the partial recovery of R35.9 million from a service provider involved in the irregular lease of the office block and warned that recovering funds after the fact does not absolve those who authorised the irregular expenditure.
“Recovery is necessary, but not enough. There must be consequences for maladministration, including disciplinary and, where appropriate, criminal action.”
The AG has reportedly estimated the interest payable by the service provider at about R1 million by March last year.
Stronger leadership
In recent months, the committee has repeatedly called for stronger leadership and improved governance at the GPAA.
Suspension
The GPAA’s CEO, Kedibone Madiehe, has since been suspended by Finance Minister Enoch Godongwana, and an investigation into the irregularities is underway.
“The committee will scrutinise the audited financial statements once they are tabled in Parliament and will work with the Standing Committee on Finance and other structures to ensure that those implicated are held accountable, said de Villiers.
“We need real remedial actions without delay.”
De Villiers reaffirmed the committee’s commitment to overseeing the pensions agency and the Government Employees Pension Fund with its 1.7 million members.
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