Ghost employees used to loot coffers
Suspended official ‘stole’ from city
IN ONE month alone last year, ethekwini Municipality allegedly paid more than R1.2 million to individuals for work they never did.
This has been revealed in a forensic investigation report compiled by the city integrity and investigations unit (CIIU).
The report focuses on “ghost employees” in the city’s Expanded Public Works Programme (EPWP) and payments of inflated daily rates to individuals.
Although criminal charges were recommended against a Safer Cities official, Andile Shangase, and disciplinary action against three of his senior managers, including former head of Safer Cities, Martin Xaba, the municipality has so far only suspended Shangase pending a disciplinary hearing.
Xaba is now a key staffer at mayor Zandile Gumede’s office. The other implicated officials are Sbu Chamane (project manager: infrastructure management and socio-economic development) and Xolani Vilane, Safer Cities administration manager.
The report provided details of how Shangase, assisted by a relative, Bongani Shangase, had allegedly recruited various individuals, presented them to the municipality as legitimate EPWP workers, facilitated the opening of bank accounts under the individuals’ names to receive EPWP payments, but kept the bank cards and pin codes and subsequently withdrew money from their accounts.
The report also provides evidence of EPWP workers, including people who never performed any work, having been paid significantly higher daily rates ranging between R511 and R2 090 as opposed to a general rate of R130 per day.
It established that 71 individuals were paid R950 per day for 43 days during May 2017, which had 22 working days. These payments amounted to just over R31 000 net pay per month, a huge amount for EPWP workers who are usually paid a pittance, it is alleged.
In total, a minimum amount of R1.2m was fraudulently paid in that month alone to individuals who never performed any duties for the EPWP programme, reads the report, which was signed off by CIIU head Mbuso Ngcobo. SUSPENDED city official Andile Shangase allegedly recruited 10 unemployed people from his hometown of Kwaswayimani, Wartburg, outside ethekwini’s jurisdiction, to serve as “ghost employees” in an Expanded
Public Works Programme.
A forensic report by ethekwini Municipality’s city integrity investigations unit, which was this week leaked to the Sunday Tribune, details how Shangase with the help of his brother, Bongani, recruited the unemployed people and had them open bank accounts at Standard Bank and ABSA using a common cell phone number.
The report states that
Shangase had arrived in Pietermaritzburg in an Audi A4 after hiring a minibus taxi for the group of “ghost employees” so they could open bank accounts in the provincial capital.
He then took the bank cards, with the pin numbers, advising the new account holders that he needed this to get them onto the municiaplity’s payroll.
During the CIIU probe Shangase denied his involvement, despite CCTV footage locating
This included six identified “EPWP ghost employees” recruited by Shangase.
“During the month of July (2017) these individuals disappeared from the EPWP payroll subsequent to the CIIU investigation. Those individuals will be dealt with in a separate report,” said Ngcobo.
He recommended that Shangase be criminally charged for “committing fraud by sourcing and adding ghost EPWP workers to the programme”.
As Shangase was not involved in the administration process of the EPWP, he could never have achieved this alone, said the report.
“Due to total disregard of good governance and non-existence of internal controls, no specific official took ownership of allocating rates to individuals working within EPWP, including the six confirmed ghost employees,” Ngcobo wrote in the report.
The CIIU said that in serving as the head of Safer Cities, Xaba had failed to implement a monitoring system to ensure that his administration section kept all contracts and contract him inside the bank.a Standard Bank agent had become suspicious of the same cell phone number being used to open the accounts, and had asked that the registered user of the cellphone number (Shangase) be brought into the bank.
After that, all transactions in the bank accounts were closely monitored by Standard Bank, leading to a trail of forensic evidence.
After taking possession of the bank cards, payments were made files, time sheets and registers.
Furthermore, Xaba failed to take action when he was notified by senior administrators of these internal control issues and irregular payments made to 77 EPWP workers, including ghost employees.
The CIIU also concluded that Chamane was aware that the Safer Cities project included “ghost EPWP workers”, and as a budget controller had failed to take any action to ensure that all EPWP workers being paid were actual workers on the programme.
Vilane, who was responsible for capturing new EPWP workers on payment spreadsheets and preparing EPWP contracts, was fingered for making payment to “ghost EPWP workers”.
The report said Vilane had been unable to provide contracts of the ghost employees and was found to have signed off on payments without inspecting attendance registers.
The CIIU found that Xaba, Vilane and Chamane had all contravened various attendance into the bank accounts. Shangase returned to Kwaswayimani and paid the people R1 000 each monthly, the CIIU report states.
However, one woman had used her own cell phone number to open her bank account and not the number provided by Shangase.when he became aware of this, he threatened to remove her from the programme.
On May 2017, the woman received an SMS notification on her cell phone number that an amount of R31 091.50 had been deposited into her newly opened Standard Bank account.
The woman suspected they were being used in a web of corruption and immediately contacted Shangase, who still had her bank card, to advise him not to use her to commit fraud.
He would later return to the area and gave her only R1 000, which was given to her through another of the ghost employees.
Although Shangase has been suspended pending a disciplinary inquiry, the city could not confirm if a criminal case had been opened, as recommended by the CIIU. sections of the Municipal Finance Management Act in that they had failed to prevent unauthorised, irregular and wasteful expenditure of at least R1.2m in one month alone.
In addition to recommending that a criminal case be opened against Shangase, and disciplinary action be taken against Xaba, Chamane and Vilane, the CIIU said the city’s legal services unit should also recover from Shangase R185 549 that was paid to the bank accounts of the “ghost EPWP workers” which were controlled by him.
Despite the damning report, ethekwini spokesperson Tozi Mthethwa said legal opinion sought by the city manager, Sipho Nzuza, found Shangase’s suspension was sufficient.
“The CIIU presented the report to the city manager for his consideration.
“Thereafter, legal opinion was sought on the matter which resulted in the suspension of one official pending a disciplinary hearing,” said Mthethwa. work.the Honouring Humphrey Big Walk was held to raise funds for the Durban and Coast SPCA. Immerman said thanks to Humphrey’s popularity the pair of them had raised almost R300 000 for charity over the past four years. He is hoping to reach the R1 million mark soon.