The Special Investigating Unit (SIU) has completed two investigations in the JB Marks Local Municipality which amounts to 10 criminal referrals made to the National Prosecuting Authority (NPA) and six disciplinary referrals made to the Municipality.

These investigations involve the construction of a flood line canal near the N12 provincial road and Ikageng Extension 11, as well as the irregular procurement and price inflation of Personal Protective Equipment (PPE) during the Covid-19 pandemic.

The SIU presented the outcomes of its investigation at a recent briefing to the Standing Committee on Public Accounts (SCOPA), where 19 municipal investigations were in the spotlight across 13 municipalities in North West, Free State, Gauteng and KwaZulu Natal.

At a national level, since 2012, nearly R 59 million has been identified for potential recovery, over R545m in contracts and administrative decisions set aside, and more than R1.14 billion in matters referred for civil litigation through the Special Tribunal. Actual recoveries about to Just R 1.14m nationally.

The SIU’s findings regarding the two cases (Proclamation R196 of 2024: Canal Construction) and (Proclamation R. 23 of 2020: COVID-19 PPE) can be outlined as follows:

Proclamation R196 of 2024: Canal Construction

According to the SIU:

• Construction started without proper budgeting and planning regarding “contingencies that are inherent in the construction project.” A sewer spillage on-site eventually made excavations impossible.
• The consulting engineer failed to undertake adequate pre-tender risk assessment. As such, the pre-existing sewer spillage problem made excavations impossible even before the tender was advertised.
• Tender specifications and scope were changed irregularly. There were also concerns regarding the composition of the Bid Adjudication Committee.
• “Evidence suggests a corrupt relationship between the Service Provider (SP) and the Accounting Officer (AO).”

Outcomes include 8 Criminal Referrals made to the National Prosecuting Authority (NPA) and 1 Disciplinary Referral made to the municipality.

Proclamation R. 23 of 2020: COVID-19 PPE

According to the SIU:

• Service provider sourced without following the process as prescribed as well as irregularities in the awarding of contracts to service providers that were not tax compliant nor registered on the Central Supplier Database.
• Suppliers of PPE were found to have inflated the prices in that the quotations were approved above the prices set out by Treasury in MFMA Circular 102.
• There was also a price variation above 10%.

Outcomes include a civil litigation matter valued at R507 277.40 that was referred to Special Tribunal.

Five disciplinary referrals to the municipality.

Two criminal referrals to the NPA.

SIU recommendations

The municipal accounting officers take personal responsibility for every signature and bid committee decision. To stop files from “vanishing,” the SIU called for centralised digital record systems and strict handover protocols to enhance accountability.

Effective internal control and implementation of the Supply Chain Management policy should ensure that procurement policies are strictly enforced to provide clear boundaries.

“Financial systems should be strengthened, and better controls implemented to ensure that the procurement processes and/or SCM prescripts are complied with, especially in respect of Regulation 32 of the Municipal SCM Regulations,” stated the SIU in the presentation to SCOPA.

The JB Marks Local Municipality was asked for comment on Monday, May 4, but have not yet replied at the time of publication.