Gauteng school decontamination scandal: SIU to freeze R40.7m worth of assets of 14 firms

27 May 2021

The Special Investigating Unit has been granted an order to freeze R40.7m worth of assets belonging to 14 companies, after its investigation into allegations of ‘unlawful procurement of services’ by the Gauteng Department of Education to decontaminate schools.

Following Maverick Citizen’s exposé on the Gauteng Department of Education’s spending on decontaminating schools, the Special Investigating Unit (SIU) has frozen the bank accounts and assets worth R40.7-million of 14 companies that were paid millions of rands for the unnecessary work.

On Thursday SIU head advocate Andy Mothibi told the media through the South African National Editors’ Forum that the investigation was still under way, “but for now we have uncovered evidence of irregularities that enabled the SIU to approach the Special Tribunal, and we have been granted the order to freeze the accounts of those service providers”.

The SIU 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. The service providers were contracted by GP Education to decontaminate schools to the tune of R431 million. pic.twitter.com/RyYcm1nTlu

— Special Investigating Unit (SIU) (@RSASIU) May 27, 2021

In January Maverick Citizen reported that the Gauteng Department of Education (GDE) had spent more than R431-million on sanitising schools against Covid-19.

The information, contained in an expenditure report sent to Maverick Citizen, indicated that the unnecessary “deep cleaning” of schools in Gauteng between June and September last year was done by a number of GDE contracted companies – many of which had no expertise or prior involvement in cleaning.

https://www.dailymaverick.co.za/article/2021-01-26-gauteng-department-of-education-spent-r431-million-in-three-months-on-unnecessary-deep-cleaning-and-decontamination-of-schools/

Soon after the exposé was published the SIU announced it would investigate the GDE’s procurement of services to decontaminate, disinfect and sanitise schools.

On 30 April the SIU submitted its Covid-19 investigation report to President Cyril Ramaphosa, which included outcomes of its investigation into the decontamination of schools in Gauteng.

Following its investigation, the SIU said on Thursday that it had approached the Special Tribunal for a 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.

“The assets included two Mercedes-Benz V Class, Land Rover Range Rover Sport, Haval H6 and Toyota Avanza,” it said.

Mothibi said the SIU could not have done the investigation alone, and the SIU’s collaboration with the Financial Intelligence Centre (FIC) had proved to be “effective and valuable”.

The SIU said the FIC had assisted the investigating team by placing a hold on R30-million of the funds received by the GDE “after seven service providers began dissipating the funds received from the department, upon receipt. A portion of the funds were transferred to multiple beneficiaries who have, in turn, disposed of them.”

The preservation order granted by the Special Tribunal prohibits companies and individuals including, “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,” the SIU said.

‘Unlawful’ and expensive procurement

The SIU’s investigation revealed that the procurement process conducted by the Gauteng Education Department was “manifestly unlawful”.

The GDE had paid out more than R431-million to service providers in accordance with a process that was “haphazard, unfair and littered with procurement irregularities”, the SIU said.

The GDE had “obtained a deviation under Treasury regulations to conduct the procurement process without inviting competitive bids”, on the basis that emergency procurement was justified considering the urgent need to hire service providers to decontaminate schools exposed to Covid-19.

The GDE’s request for deviation clearly stated that the department would “‘appoint accredited service providers from the Central Supplier Database (CSD)”.

“The SIU investigation revealed that the department failed to comply with the express requirement of the deviation. The vast majority of service providers that were appointed were not accredited and were not on the CSD.”

The Maverick Citizen investigation found that the numerous small service providers contracted by the GDE were not experienced in sanitising or deep cleaning services and that the costs paid out by the department were excessive.

It is on this basis that the SIU said it “will argue before the Special Tribunal that the procurement process was unlawful and falls to be reviewed and set aside”.

In addition to the GDE’s unlawful procurement process, the SIU investigation found that the process was neither cost-effective nor did the fees bear any relation to the work conducted by the service providers or to the cost of the material used.

The SIU said: “The service providers were not paid per square metre 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 “selection and appointment” of suppliers was conducted in a “haphazard, unfair and inequitable manner”, the SIU found.

Usually, the Supply Chain Management (SCM) division of the GDE would select and appoint suppliers, but the SIU investigation has revealed that the SCM division was not involved in the selection and appointment of service providers.

The SIU investigation revealed that the service providers were appointed without confirming whether they were accredited or appeared on the CSD, and some of the names of service providers were received via WhatsApp from officials in the Gauteng Department of Education.

The SIU said it would launch “review proceedings in the Special Tribunal within the next 30 days and also seek an order against the service providers to pay back all profits as consequences of their appointment”.

The Gauteng Department of Education is yet to comment. DM

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