State fu­neral ‘rip-off’

Min­is­ter or­ders crim­i­nal charges af­ter tax­pay­ers’ mil­lions spent on VIP buri­als

Sunday Times - - Front Page - By GRAEME HOSKEN

● The fu­ner­als of Win­nie Madik­izela-Man­dela and two other ANC strug­gle stal­warts cost tax­pay­ers R76m in what the depart­ment of pub­lic works has branded a gi­ant rip-off.

Pub­lic works & infrastruc­ture min­is­ter Pa­tri­cia de Lille has in­structed her of­fi­cials to lay fraud charges against the com­pany that staged the fu­ner­als of Madik­izela-Man­dela, Zola Sk­weyiya and Billy Modise, who all died in 2018, for al­legedly in­flat­ing their in­voices.

She is also mov­ing to cap the amount state and of­fi­cial fu­ner­als can cost the tax­payer.

For the fu­ner­als of Madik­izela-Man­dela and Sk­weyiya, the depart­ment spent R7m to hire padded chairs, leather couches and scat­ter cush­ions; R2.47m for drap­ing; R470,000 for servi­ettes; R695,000 for orches­tra equip­ment and R30,000 to dig three graves.

But that’s not all. The huge bill, ac­cord­ing to in­voices the Sun­day Times has seen, ex­cluded venue hire such as that of Soweto’s Or­lando Sta­dium, where 37,000 peo­ple at­tended Madik­izela-Man­dela’s fu­neral ser­vice.

How­ever, Sammy Mashita, project man­ager of Cro­cia Events, which won a two-year ten­der in 2017 to pro­vide infrastruc­ture for all state fu­ner­als, in­sists that he saved the state money.

He said the depart­ment would have paid “R274m for ser­vices ren­dered” had his com­pany not pointed out in­ef­fi­cien­cies in the ten­der.

“This was be­cause of the stu­pid­ity of those who com­piled the ten­der spec­i­fi­ca­tions. They were more than will­ing to pay that amount even af­ter we warned them of their glar­ing stu­pid­ity,” he told the Sun­day Times this week.

“We ac­tu­ally saved the state huge sums of money be­cause of our busi­ness con­science. We told them if they paid us the full amount it would be rob­bery. For what they were pre­pared to pay, and what they ac­tu­ally paid us, they could have bought ev­ery­thing that they would ever need for all fu­ture fu­ner­als.”

Cro­cia is owned by Phe­ladi Mphahlele, who in De­cem­ber 2018 mar­ried Mashita in a three­day so­ci­ety wed­ding at which US R&B star An­thony Hamil­ton per­formed.

De Lille said “red flags” around ex­ces­sive fu­neral spend­ing war­ranted high-level in­ves­ti­ga­tions by her depart­ment’s anti-cor­rup­tion unit. She told the Sun­day Times that she had asked the unit to in­ves­ti­gate whether proper pro­cesses were fol­lowed in ap­point­ing Cro­cia, and to re­port back to her by next month.

“We have given the in­struc­tion to the rel­e­vant of­fi­cials to lay crim­i­nal charges against the ser­vice provider,” she said.

“I have also sup­ported rec­om­men­da­tions to in­ves­ti­gate pos­si­ble ir­reg­u­lar­i­ties that may have been per­pe­trated in other fu­ner­als sup­ported by this ser­vice provider.”

Some of the in­voices Cro­cia gave the Sun­day Times show that:

● For Madik­izela-Man­dela’s 10-day, R37m me­mo­rial and fu­neral, tax­pay­ers paid R624,000 to hire 12 “air cool­ers”; R185,990 for pot plants, green­ery and flow­ers; R18,000 for 300m of red cer­e­mo­nial rope; R420,000 for 3,500 servi­ettes (hir­ing them at R60 per nap­kin per day); R170,000 for 1km of tem­po­rary fenc­ing; R638,950 for car­pets and drap­ing, and R696,000 for or­ches­tral equip­ment.

● For Sk­weyiya’s R28.9m fu­neral at the Pre­to­ria East Chris­tian Re­vival Church, the state paid R3.1m to hire drap­ing, car­pets and Astro­Turf; R50,000 for 500 servi­ettes; and R96,792 for plants, flow­ers and green­ery.

● The fu­neral of Modise, who was buried in Jo­han­nes­burg’s West Park Ceme­tery, cost the state R10m.

The R76m fig­ure also in­cludes 15% in “man­age­ment fees” loaded onto agreed quotes for

We have given the in­struc­tion to the rel­e­vant of­fi­cials to lay crim­i­nal charges against the ser­vice provider

Pa­tri­cia de Lille

the Madik­izela-Man­dela and Sk­weyiya fu­ner­als, which De Lille said were “con­cealed”.

“The depart­ment in­tends to in­sti­tute civil and crim­i­nal ac­tion to re­cover R7.7m from the ser­vice provider in this re­gard,” she said.

De Lille is now rec­om­mend­ing to min­is­ter in the pres­i­dency Jack­son Mthembu that state fu­neral costs be capped.

She de­clined to pro­vide copies of the in­voices, say­ing they would be used as ev­i­dence in dis­ci­plinary pro­cesses now un­der way against two chief di­rec­tors in the depart­ment’s Pres­tige Unit, and two ad­min­is­tra­tive events clerks.

The depart­ment’s probe also found that its own di­rec­tor-gen­eral, Sam Vukela — who ini­ti­ated the in­ves­ti­ga­tion — ap­proved the mas­sive costs of Madik­izela-Man­dela and Sk­weyiya’s fu­ner­als.

“As the del­e­gated author­ity, Vukela gave the fi­nal ap­proval for the pay­ment of two of the three fu­ner­als, which each ex­ceeded R20m,” said De Lille’s spokesper­son, Zara Ni­chol­son. “The ad­verse find­ings of the in­ves­ti­ga­tion on the con­duct of the of­fi­cials ap­ply to him equally.”

In August, the Sun­day Times re­ported that Vukela was im­pli­cated in a Pub­lic Ser­vice Com­mis­sion re­port into a mas­sive hir­ing spree of 714 of­fi­cials in his depart­ment. He was also named in for­mer pub­lic pro­tec­tor Thuli Madon­sela’s re­port on mas­sive over­spend­ing at for­mer pres­i­dent Ja­cob Zuma’s

Nkandla homestead, to which he al­legedly di­verted mil­lions of rands.

Vukela failed to re­spond to What­sApped ques­tions. Pres­i­dent Cyril Ramaphosa, who is re­spon­si­ble for ap­point­ing di­rec­tors-gen­eral, has yet to dis­ci­pline Vukela.

In a sep­a­rate au­dit, fi­nalised in June last year, of the depart­ment’s goods and ser­vices con­tracts, the au­di­tor-gen­eral un­cov­ered more than R30m in ir­reg­u­lar ex­pen­di­ture around the fu­ner­als of Madik­izela-Man­dela, Sk­weyiya and Modise.

A source close to both in­ves­ti­ga­tions, how­ever, said R76m was the tip of the ice­berg. “Just three fu­ner­als cost R76m. Other fu­ner­als, which were far big­ger, saw hun­dreds of mil­lions of rands ap­par­ently stolen through in­flated in­voices,” the source said.

“The billings and pay­ments went unchecked for years. That’s why these in­ves­ti­ga­tions are so im­por­tant. It’s vi­tal that fi­nan­cial lim­its are set to stop the loot­ing.”

About Mashita’s claim that the depart­ment was pre­pared to pay him R274m for the fu­ner­als, the source said: “The depart­ment would never spend a quar­ter of a bil­lion rand on the lo­gis­tics sup­plies for three fu­ner­als. It’s an il­lu­sion. There are no facts be­hind this.”

De Lille has now or­dered a re­view of all of­fi­cial fu­ner­als Cro­cia con­ducted.

Ni­chol­son said: “A stag­ger­ing level of in­ep­ti­tude and neg­li­gence is ap­par­ent in the man­ner in which of­fi­cials failed to pro­tect the in­ter­ests of the state … Cro­cia sub­mit­ted in­flated in­voices which dif­fered in some cases from its ten­der ar­range­ments, with no

Trea­sury ap­provals ob­tained.

“The quo­ta­tion of the ser­vice provider ex­ceeded fi­nal de­part­men­tal spec­i­fi­ca­tions in two of the fu­ner­als.”

Ni­chol­son said ir­reg­u­lar and ques­tion­able pay­ments to Cro­cia in­cluded R27.5m for items whose prices dif­fered from the prices con­tracted for; R33.9m on items not con­tracted for; and R12.4m for goods de­liv­ered which were never req­ui­si­tioned.

The au­di­tor-gen­eral’s spokesper­son, Africa Boso, con­firmed that the con­tracts were au­dited as part of nor­mal an­nual fi­nan­cial-year au­dits.

When the au­dits were con­cluded, the au­di­tor-gen­eral rec­om­mended that the depart­ment per­form a full in­ves­ti­ga­tion of all sim­i­lar con­tracts.

Cro­cia’s Mashita — who was chief of staff of both for­mer pub­lic works min­is­ter Ge­off Doidge and for­mer in­ter­na­tional re­la­tions min­is­ter Maite Nkoana-Masha­bane — de­nied De Lille’s al­le­ga­tions and said the depart­ment had brought the prob­lems on it­self.

He said he could have worked out a deal with the depart­ment to lower costs through ser­vice-level agree­ments “but they were not in­ter­ested even though they all knew the state could be pay­ing less and that they were rip­ping them­selves off”.

He dared De Lille to take him to court, say­ing he would prove that her of­fi­cials orig­i­nally agreed to pay Cro­cia R274m.

“They must not blame us for their stu­pid­ity and not putting out a proper ten­der. We got lucky and rode this luck. There was noth­ing sin­is­ter about how we got this ten­der and all in­voices and signed con­tracts are legally bind­ing,” he said, adding that his com­pany was still con­duct­ing of­fi­cial fu­ner­als and other events for the state.

“The R76m is not ir­reg­u­lar. It would have been ir­reg­u­lar if no due process was fol­lowed or over­pay­ments were made. We bid and won the ten­der fairly.

“They must take us to court. We will fight them all the way and de­mand the R274m, which is what they would have orig­i­nally paid us.”

Mashita said the prices were high be­cause the depart­ment re­quested daily hir­ing rates in­stead of a hire-per-event op­tion.

“Ob­vi­ously daily rates are more ex­pen­sive in event­ing, which they didn’t com­pre­hend. We warned them of this in e-mails to se­nior [pub­lic works] of­fi­cials in­clud­ing Vukela, who I worked with pre­vi­ously when he was DDG in the depart­ment’s cor­po­rate af­fairs,” he said.

“If we went with [the depart­ment’s] ap­proved costs, Sk­weyiya’s fu­neral would have cost R211m and Madik­izela-Man­dela’s fu­neral R63m. We saved tax­pay­ers R182m on Sk­weyiya’s fu­neral and R27m on Madik­ize­laMan­dela’s fu­neral.

“We fol­lowed the depart­ment’s specs and gave them our pric­ing costs, which they un­der­stood and ap­proved. Ques­tions must be asked of the [depart­ment] of­fi­cials who said it was cor­rect to bill per day and those who signed off on or­ders and the pay­ments.”

Mashita said Cro­cia was be­ing used as a scape­goat for the depart­ment’s mis­man­age­ment. The com­pany was un­aware of the au­di­tor-gen­eral’s in­ves­ti­ga­tion, “which we wel­come”.

“We did co-op­er­ate with a foren­sic in­ves­ti­ga­tion by Price­wa­ter­house­C­oop­ers, which was done for the depart­ment,” he said.

Asked about his 15% man­age­ment fee, which he in­sisted was “not hid­den”, Mashita said this was for over­all event man­age­ment and cov­ered costs not in his quotes, such as se­cu­rity, as well as food, trans­port, ac­com­mo­da­tion and over­time pay for his staff, among oth­ers.

Cro­cia Events owner Phe­ladi Mphahlele and her hus­band, Cro­cia project man­ager Sammy Mashita.

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