Officials defied Bay bosses on payments
PwC report claims they tried to shunt through invoices for R1.8m
DESPITE their attempts to secure a R1.9-million payment to Milongani Eco-Consulting being squashed by a city finance boss, senior Nelson Mandela Bay public health staff defied orders and tried to push through invoices for a further R1.8-million.
The R1.9-million invoice for “waste management services” was rejected by the municipality’s finance department.
But in complete defiance of an instruction from their boss, Tsietsi Mokonenyane, to stop the project, the public health officials tried to push through two more invoices, for R1.3-million and R498 000 respectively.
These are among the bombshell allegations in the PricewaterhouseCoopers forensic report into the city’s contract with Milongani.
The municipality dished out a total R25.6-million to Milongani between August 2015 and March last year.
The Herald reported yesterday on explosive allegations of tender rigging, fraud and collusion in the PwC report on the metro’s contract with Milongani for environmental health services.
The PwC report is with the Hawks for further investigation.
The findings are also contained in the confidential section of the last council agenda.
They were not discussed as the council meeting, on Thursday, collapsed when opposition councillors walked out, leaving the coalition without a quorum.
Fingered in what investigators painted as dodgy dealings in the Waste Services project are three public health managers – former executive director Andile Tolom, project manager Thabo Williams and acting waste management director Nkosinathi Dolo.
All three have been on suspension since April last year.
According to the PwC report, Tolom signed an agreement with Milongani for waste management services even though another company, Tedcor, had been awarded the R54-million contract.
Milongani’s contract with the municipality was for environmental services thus waste management services did not fall within its scope of work.
The report states that Tolom told investigators he had appointed Milongani due to political pressure placed on him to commence with the project. He did not say who was pressuring him. “Mr Tolom advised that he agreed to appoint Milongani due to the issues experienced with SMMEs in relation to the appointment of Tedcor, [which was] based in Johannesburg, and the political pressure placed on him to commence with the project.”
An invoice amounting to R1.958-million was pushed through the metro’s system for payment, but it was stopped by then acting chief financial officer Barbara de Scande.
The report states: “We were provided [with] a memorandum that Ms Barbara de Scande wrote to the executive director: public health to advise that, as Milongani’s contract does not relate to waste management services, the invoice received from Milongani for an amount of R1 958 330 in respect of the implementation of complimentary waste management services within NMBM would not be processed for payment.”
The money was for cooperative fees (R833 333), health and safety (R202 600) and project implementation (R681 900).
After De Scande raised her concerns, the invoice was not paid and the project was stopped.
A second invoice for R1.3-million was, nevertheless, submitted and allegedly processed by Williams. The invoice was later deleted from the metro’s system on March 6 last year, using Dolo’s username. The third invoice for R498 180 seven days later was, according to the report, processed by Williams and approved by Dolo.
It was, however, stopped by Mokonenyane.
The report states that Dolo denies deleting the second invoice, saying it was done by someone using his username.
Dolo told investigators his assistant had access to his passwords – which contravenes the municipality’s computer policy. Dolo’s assistant, however, points fingers at Williams, alleging he came to her office and told her he needed to look for something on her computer. The assistant believes Williams deleted the R1.3-million invoice.
PwC states in the report: “Attempts were made by Mr Williams and Mr Dolo to process three separate payments to Milongani in respect of this project.
“The second and third payment attempts were made by these officials knowing full well that the first payment had been rejected. This was also after a letter had been issued to discontinue the project.”
Dolo denied any involvement with Milongani.
“I have never done any work with or for them, never met [them] or been in any of their meetings. In fact, I do not know who they are,” he told The Herald.
Tolom declined to comment “despite the fact that I deny any wrongdoing”.
Attempts to reach Williams for comment were unsuccessful.
PwC suggested in its report that there was prima facie evidence of fraud with regards to the Milongani contract. – Additional reporting by Nomazima Nkosi
[They knew] full well that the first payment had been rejected
UNDER pressure to open the Groot Kloof Education Centre, allegedly at the behest of the political bosses at the time, almost R600 000 was shelled out on sprucing up the Hillside facility. Using the Milongani Eco-Consulting contract – meant for environmental services – office and electronic equipment as well as cutlery, all to the tune of R591 801, was purchased over three months.
But a few items did not make it to the centre, including a new iPad Air, three data sim cards and a 3G keyboard.
These are among the findings contained in the PricewaterhouseCoopers forensic report, which probed the payments to Milongani.
This all transpired in the months leading up to the official opening of the education centre in September 2015.
The R21-million centre serves as a base in the northern areas for education on preserving the environment.
According to the report, a municipal administrator told investigators that environmental services director Joram Mkosana took the iPad, keyboard and a data sim card for himself, and the other data cards were used by staff in the office.
Mkosana denied this to the PwC investigators. The allegations in the report put the blame squarely on Mkosana for purchasing these items through the Milongani contract, even though it fell outside the scope of what Milongani was hired to do.
The report stated that Mkosana claimed he was under political pressure from the member of the mayoral committee for public health at the time – who was Joy Seale – to complete the centre.
He allegedly admitted they had decided to use the Milongani contract to bypass the supply chain management procedures to expedite the process. Although Mkosana was not the project manager for the completion of the centre, he allegedly instructed staff to obtain quotes and buy all necessary items to ensure the centre’s opening went ahead.
Attempts to reach Mkosana for comment were unsuccessful. He was not at the home address listed in the PwC report.
On allegations that Mkosana received political pressure from the then MMC for public health to open Groot Kloof, Seale said the project was budgeted for and completed and there was no reason why it had remained shut. Seale said she was doing her duty as the MMC at the time.
“The building was complete and had it remained shut, it would have been vandalised,” she said.
“I don’t know why I’m being dragged into a political pressure situation because everything else is an administrative issue,” Seale said.
Meanwhile, senior environmental education officer Pumla Koltana told PwC investigators the iPad, keyboard and data sim cards were not delivered to the centre.
Speaking to The Herald yesterday, Koltana said she never saw those items at the centre. “I don’t recall those items. We’ve got computers here and there aren’t any iPads,” Koltana said.
In addition to the missing items, the three invoices issued by Milongani to the municipality had three different signatures, all allegedly that of Milongani owner Mpho Nangammbi, and three different invoice letterheads.
Officials failed to notice the glaring differences when processing the payments.
Among items Milongani purchased without any supporting documents pertaining to the centre were:
Various electronic equipment – R53 078.40, R76 191.90 and R75 395.04;
Office furniture – R36 246.77, R56 915.64 and R44 327.20;
Office furniture and appliances R105 671.64;
Appliances and cutlery R8 843;
Various items and services R39 121.38 and R34 487.28;
Office furniture, appliances and cutlery R105
Various types of banners R54 770.16;
Various items R82 080 and R39 740;
Estimated launch costs R27 968.48.