Pretoria - The Limpopo Department of Public Works, Roads and Infrastructure has lost nearly R500 000 that was paid into the bank account of a service provider that did not have any contractual obligations with the government.
An amount of R489 066 was wrongfully paid into a Standard Bank account of Capstan Trading 293 Cable Tec in 2015, instead of Capstan Trading 270 Phetlako Construction, which was contracted to upgrade Gonono Road in Mopani District outside Polokwane.
An investigation report leaked to the Pretoria News and conducted by the department’s corporate governance and risk management, signed by deputy director AK Ratshitali, revealed that the four officials who authorised and approved the expenditure failed to comply with the instruction on the payment advice.
This was despite the fact that the supplier entity registration form used to upload information of the service provider on the system had the correct banking details.
Despite the incident having taken place in 2015 and the investigation recommending that a disciplinary inquiry be instituted against the four officials, two of them left the department before the matter was finalised six years later, leaving the other pair to face disciplinary proceedings. They were acquitted.
The Pretoria News can also reveal that the department was never refunded the money, despite the investigation having recommended action against Capstan Trading 293 Cable Tec.
For three years the department claimed to be looking for the address of the company without any luck.
The report said in part: “The department’s legal adviser should institute a civil action against the owner of the company which was wrongfully paid.
“The Chief Financial Officer should consider introducing a checklist to be used to verify the details of the service provider, order number, invoice number and contract amount to prevent making payments to the wrong service provider.”
An insider in the department, who cannot be named in case of reprisals, said the mistake must have been done deliberately because the invoice number and the company wrongfully sent the funds would not match on the system.
“This has to be another case of corruption and cover ups. It’s impossible in these systems to pay funds into a wrong account. This went through four officials and not one saw the mistake? It is just too systematic. Another investigation should be conducted on this matter,” said the source.
Department spokesperson Witness Tiva confirmed that a disciplinary process had taken place and they were never able to recover the money.
“As part of consequence management, an internal investigation was instituted and subsequently disciplinary hearings ensued against two of the four officials, and the matter was finalised in 2021, because the other two officials had already left the department,” Tiva said.
The pair faced allegations of misconduct after they allegedly failed to do due diligence before processing the erroneous payment. The chairperson of the disciplinary hearing did not find the pair guilty.
It has since been established that the cause of the incorrect payment being made was, among others, the use of different systems.
“In our quest to recover the amount in question from the service provider, the department went to the extent of engaging the services of the Office of the State Attorney.
“The state attorney made several attempts to serve the company with summons to recoup the money, but it did not succeed as the service provider in question kept changing his address and the company addresses were eventually found, and unfortunately the matter was prescribed as the matter took a period of more than three years to be resolved.
The debt became irrecoverable, as it had been extinguished by prescription,” Tiva said.
Pretoria News