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Wednesday, July 28, 2021

SIU freezes accounts of decontamination companies contracted by GDE

South Africa’s Special Investigating Unit (SIU) said it found the Covid-19 schools decontamination procurement contracted by the Gauteng Department of Education (GDE) to be “unlawful, haphazard and unfair”.

SIU said it has been granted a preservation order to the value of R40.7 million by the Special Tribunal to freeze bank accounts and assets belonging to 14 service providers that were contracted by Gauteng Education to decontaminate schools to the tune of R431 million.

SIU Spokesperson Kaizer Kganyago said the investigation by SIU revealed that the Gauteng Education Department did not follow due process in the procurement of services to decontaminate schools during the Covid-19 pandemic.

“The SIU approached the Special Tribunal for preservation order to freeze accounts with the sum of R6 million and assets with an estimated value of over R4.7 million belonging to seven companies, five individuals and two family trusts.

“Some of the names of companies who were appointed to decontaminate schools were supplied to the provincial education department via WhatsApp by the department’s own officials,” said Kganyago.

Adding that the majority of the companies whose assets have now been frozen were not only unaccredited but were not even based in the province.

Kganyago said the order includes assets such as two Mercedes Benz V Class, Landrover, Range Rover Sport, Haval H6 and Toyota Avanza.

He added that the collaboration with the Financial Intelligence Centre (FIC) was very effective.

“The FIC assisted – and based on the information presented by the investigating team, issued intervention directions to place a hold on R30 million of the funds received from the Education Department,” said Kganyago.

He added that the action was pursued after seven service providers started withdrawing the funds received from the department.

“A portion of the funds were transferred to multiple beneficiaries who have, in turn, disposed of them,” he said.

Between June and August 2020, the Gauteng Department of Education spent more than R431-million on sanitising schools.

The money was paid to hundreds of companies, many of which appeared to have no expertise or prior involvement in the cleaning industry.

At the time, departmental spokesperson Steve Mabona said the large expense could be justified in that it was necessary to allay fears of teachers, unions, SGBs and parents.

Kganyago said the procurement process followed by GDE was “haphazard, unfair and littered with procurement irregularities”.

He said the department obtained a deviation under Treasury regulations to conduct the procurement process without inviting competitive bids.

“The department did so on the basis that emergency procurement was warranted, given the urgent and pressing need to appoint service providers to decontaminate schools exposed to Covid-19,” said Kganyago.

Adding that the Treasury expressly stated that the request for the deviation appoint accredited service providers from the Central Supplier Database.

However, this was not done. The SIU investigation revealed that the department failed to comply with the express requirement of the deviation.

Kganyago said the vast majority of service providers that were appointed,173 out of 280, were not accredited and were not on the CSD.

“On this basis alone, the SIU will argue before the Special Tribunal that the procurement process was unlawful and falls to be reviewed and set aside,” he said.

Adding that the investigation also revealed that the procurement process was not cost-effective.

“The service providers were not paid per square meter of the area cleaned. Rather, a senior official in the department appears to have arbitrarily decided to offer a fee of R250 000 to R270 000 for the decontamination of primary schools; R250 000 to R290 000 for secondary schools; and R250 000 to R300 000 for district offices.

“The fees bear no relation to the work done by service providers or the cost of material used. The selection and appointment of suppliers was done in a haphazard, unfair and inequitable manner,” said Kganyago.

The order prohibits Fikile Mpofana Pty Ltd, Insimu Projects Pty Ltd, Insimu Consulting Pty Ltd, Insimu Medical Group, Mangaliso Pty Ltd, Lisondalo Pty Ltd, Zenaldo Consulting Pty Ltd, Sigwile Bright Mhlongo, Fikile Eugenia Mpofana, Lindokuhle Bridget Mkhize, Njabulo Mabaso, Richard Mweli, Shuphula Family Trust, and Madangu Family Trust from dealing with the funds held in the bank accounts and assets.

Kganyago said the SIU would in the next month launch review proceedings in the Special Tribunal, and also seek an order against the service providers to pay back all profits as consequence of their appointment.

He added that evidence pointing to criminal conduct will be referred to the National Prosecuting Authority, as well as the Hawks in the South African Police Service for further action.

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