Govan Mbeki Municipality probes R20m security contract irregularities

The municipal manager of Govan Mbeki Municipality, Elliot Maseko, faced tough questions during the ordinary council meeting held on May 28 regarding the ongoing appointment of security services.

The current security provider has been operating on a month-to-month contract since its agreement lapsed in August 2022.
After the contract lapsed, EFF councillors suggested insourcing security services.

The council resolved to conduct benchmarking with other municipalities that had implemented insourcing, and established an ad hoc committee for this purpose.

Maseko’s report revealed that, pending the conclusion of the benchmarking process and a final council decision, the municipality extended the expired security contract every month in line with Section 116 of the Local Government: Municipal Finance Management Act 56 of 2003.

However, this led to irregular expenditure of nearly R14m in violation of Section 32 of the same Act. This irregular spending was noted in the 2022/23 annual financial statements.

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In March 2023, the ad hoc committee presented its benchmarking findings to the council.

The key outcomes included insourcing that was costly and unsustainable; preparatory costs for insourcing were estimated at R22m and the municipality’s revenue performance (55–65%) and unfunded budget made such costs unaffordable; insourcing would inflate the organisational structure, pushing employee costs above the 35% threshold; and it would increase insurance premiums, as risk would shift back to the municipality.

The committee recommended outsourcing security services and appointing reputable service providers, in line with supply chain management (SCM) policy. A new security tender must be re-advertised to address irregular expenditure, which has now risen to nearly R20m.

Maseko reported that two tender advertisements failed to yield a suitable service provider. Some bidders submitted fraudulent documents, while others failed to meet tender requirements.

The municipality continues to pay an average of R5m per month under the month-to-month security contract. The council resolved that the municipality should advertise and appoint a suitable security service provider by the end of August 2025.

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