The Parliamentary Standing Committee on the Auditor-General (SCoAG) said on Friday that briefings by the Directorate for Priority Crime Investigation (DPCI), commonly known as the Hawks, and the Special Investigating Unit (SIU) have identified weak supply chain systems and poor record-keeping as reasons for the abuse of funds and municipal mismanagement, which undermine service delivery.

The committee received a briefing from the Hawks and the SIU on cases of irregularities referred by the Auditor General of South Africa (AGSA), which indicate systemic procurement weaknesses that have exposed the State to fraud, corruption and theft, resulting in the failure of service delivery.  

The DPCI is currently handling 21 cases of fraud and corruption.

SCoAG chairperson Wouter Wessels highlighted that the cases include the South African Post Office/Postbank and South African Social Security Agency (Sassa) grants matter, involving over R158-million lost owing to weak internal control systems.

The DPCI informed the committee that millions had been lost due to stolen Sassa cards, fraudulent payments and several Sassa officials were under investigation, with others appearing in court.

Other cases included municipalities implicated in financial mismanagement.

Mohokare municipality failed to pay over pension contributions to workers since 2015, and the estimated amount involved is now R116-million.

Madibeng municipality suffered fraudulent debit orders worth R19-million over years and Matjhabeng municipality made fraudulent payments for a stormwater project that was never delivered, costing nearly R16-million.

The Hawks are also investigating cases involving government departments. The Free State Department of Human Settlements is under investigation for irregular Covid-19 “standing time” payments and UIF claims, involving R10-million.

Meanwhile, the Department of Defence is accused of preferential treatment in a fuel tender worth R2.5-million.

The Northern Cape Urban Technical and Vocational Education and Training College faces fraud linked to fake quotations to the amount of R1-million and the Free State Development Corporation allegedly failed to collect R109-million in revenue owing to fraud.

Wessels explained that the AGSA had referred 19 cases of material irregularities to the SIU that involved fraud, maladministration, or abuse of power which had caused financial loss or denied citizens their rights.

“Nine of these cases have already led to Presidential Proclamations, authorising full-scale investigations. Seven cases are awaiting Proclamations from the Department of Justice, three were absorbed into existing Proclamations while four have already been finalised, with strong systemic recommendations issued,” he said.

The cases include the Free State Office of the Premier; the National Treasury IFMS Project; the Chris Hani, Amajuba, Ngaka Modiri Molema and Bushbuckridge municipalities; the Department of Defence; the State Information Technology Agency; and Umngeni Water.

Wessels noted that while the committee was encouraged by the progress made by the Hawks and the SIU, it was concerned about the duration of the investigations.

The committee said it was encouraging that the SIU, beyond investigations, was pushing for a prevention, awareness and advisory programme and driving the national corruption risk management and prevention framework to close any weaknesses.