The Special Investigating Unit (SIU) again reported back to Parliament on its work, this time on 23 October to the Standing Committee on Public Accounts (Scopa). The focus was on investigations it conducted into the OR Tambo district municipality (Eastern Cape), the eThekwini metro (KwaZulu-Natal [KZN]), and the Ngaka Modiri Molema municipality (North West).
With local government elections coming up in 2026, poor performance is likely to cost municipalities dearly – and as far as the SIU is concerned, in some cases there is more to be lost than many people realise.
The SIU’s COO Leonard Lekgetho presented the report-back, starting with Proclamation R80 of 2022 under which the SIU was authorised to investigate OR Tambo District Municipality for procurement irregularities.
One investigation involved a tender which was initially budgeted at R20-million but was eventually awarded at R70.2-million to a company that was not the cheapest out of 10 bids received. The SIU also found a contract of employment between the municipality and the winning bidder, who consequently had one employee permanently placed in the office of the municipal manager. The winning company was also found to have used its service level agreement (SLA) to pay various entities not related to the tender, such as R2-million for a boxing tournament, whose organisers were instructed to submit the invoice to the company, causing the money to be processed under the SLA.
Numerous instances of corruption and fraud were found. “One municipal official received R120 000 from a service provider, and the SIU is finalising an investigation into allegations that the service provider bought a motor vehicle that is being used by a municipal official.”
In terms of this tender, the SIU did not receive the tender closing register, nor did it receive the appointment letters of some members of the bid adjudication committee, so their very presence on the committee was irregular.
There are several related matters before the court, said Lekgetho, and disciplinary, administrative, and criminal referrals have been made.
As a general observation, he concluded, “the municipal officials used the SLA as a vehicle to enrich themselves, their friends, and their family and relatives. A number of payments or contracts were done via third party subcontracting where municipal processes were not followed”.
The SIU is also preparing an investigation under Proclamation R172 of 2024, focusing on alleged maladministration in various matters related to water services at the same municipality. However, since that was only issued in August this year, completion is anticipated in August 2025.
Elsewhere in the country
The situation is no better in the North West or KZN. Under Proclamation R9 of 2021, the SIU investigated eThekwini Municipality for maladministration in a R28.1-million contract awarded under its housing programme, including allegations that developers appointed by the municipality transferred or sold vacant properties for their own enrichment. A whistle-blower provided the SIU with details of 29 sites in the Phoenix area which, they alleged, were part of the irregularities.
An SIU site visit revealed that the housing programme was not implemented, and the sites were being used for other purposes. One property sold to the developer at R34 200 was in turn sold for R1.1-million, and another which the developer bought for R21 000 was sold for an outrageous R9.5-million. Financial analysis of officials’ bank statements also revealed that some developers were paying gratification to officials.
“We found that there was a contravention of the municipal prescript in the allocation of sites and immovable assets by the municipality,” said Lekgetho, “and there were also irregularities in the appointment of the service providers as well as in the allocation of sites to service providers.”
Disciplinary and criminal referrals have been made, and the SIU also recommended the blacklisting of four companies/service providers and their directors.
Committee members questioned the municipality’s role in allowing the situation to develop, angry that it had not been doing the required monitoring and oversight.
Irregularities abound
In the North West, at Ngaka Modiri Molema Municipality, an investigation into PPE fraud during the Covid-19 pandemic found serious irregularities at various stages.
But until the SIU investigated and intervened, no action was taken against any of the implicated officials, who include the CFO and the municipal manager, who has since been reappointed.
The SIU has referred four individuals to the NPA for contravention of the Municipal Financial Management Act – they are the afore-mentioned municipal manager and CFO, the supply chain manager, and a service provider. In terms of disciplinary referrals, nine were made.
“We made a civil recovery to the value of R25.8-million on 27 March 2024 and in terms of that process, court papers have been issued to review and set aside the contract,” Lekgetho explained. “We also observed the misuse of SCM Regulation 36.1 which was exploited to deviate from the normal procurement process under certain circumstances.”
The service provider offered a settlement of R750 000 which the SIU rightly refused, and the unit is proceeding with civil litigation in the matter.
Supporting the SIU
Committee members were appalled, lamenting the fact that there was no accountability from municipalities or consequences for the guilty, that recommendations are not implemented, and that the SIU is not empowered to arrest and prosecute offenders. “You are barking but you can’t bite,” said one member. “[These people] will siphon the state like there’s no tomorrow.”
Another member said Scopa needs to think about why it exists. “The SIU will be here every day … and that’ll be it. That cannot be our function for the next five years … otherwise it will just be a talk show.”
There was a suggestion of establishing a register for offenders, “some sort of national blacklist against these people because as so often happens people leave a municipality then go on to another one and carry out their dirty deeds somewhere else. We need to stop this … so whenever anyone’s employed in a municipality their name’s going to be checked against this roster to see if there are actions outstanding against them”.
Chairperson Songezo Zibi asked Lekgetho, in terms of the SIU’s funding model, if any of these municipalities had paid what was owing for SIU services. “Most of them have not paid a single cent to the SIU,” replied Lekgetho, “but we are still negotiating for the outstanding balance.”
