Help us get paid, Special Investigating Unit pleads with Ramaphosa

The Special Investigating Unit (SIU) has turned to President Cyril Ramaphosa over payment for its probe into the Covid-19 PPE corruption scandal.

The SIU says it is engaging with the National Treasury to come to an understanding on how it is going to be remunerated for an outstanding amount of R216m spent on the Covid-19 investigation.

“The SIU has not been successful in these engagements and, while the SIU is still engaging with the Treasury, the SIU deemed it prudent to include it in this final report to make the president aware that the SIU is at risk of not getting paid for the bulk of the current estimated R216m,” the SIU says.

Ramaphosa ordered the probe into the irregular procurement of personal protective equipment that occurred during the national state of disaster on March 15 2020.

According to the SIU, which released a report on the outcome of its probe into procurement associated with the coronavirus pandemic across all spheres of government on Tuesday, “businesses, individuals, state officials and politicians cynically exploited a public health crisis for personal gain”.

The report revealed that: “To a large extent the state institutions involved simply turned a blind eye to the rule of law and, by doing so, allowed the public purse to be looted.

“The sad result is that contracts to the value of R1.39bn have been identified as having been irregularly procured by the state and are now the subject of pending legal proceedings in the special tribunal where the SIU is seeking to have these contract awards reviewed and set aside.”

The report has detailed just how much it cost to conduct the probe and the challenge the SIU now faces with regards to remuneration.

“The SIU says it requires an intervention in this regard with a view of the National Treasury making central funding available for this outstanding amount.

“The total estimated costs is therefore R310m, which is about R41m down from the previous estimate of R351m. This is mainly due to a reduced amount estimated for short-term contractors for use on the investigation.

“The costs, however, may further escalate due to ongoing civil litigation and the SIU investigators testifying in disciplinary processes and criminal cases.

“In the light of the total budget cuts of about R150m to the government grant budget of the SIU for the past financial years as well as for the next three years, it is with respect that the SIU requests some intervention with regards to the net R216m outstanding costs on the proclamation.”

SIU spokesperson Kaizer Kganyago explained to Sunday Times Daily that “in normal circumstances, when a proclamation is made, that proclamation is usually directed at one institution”.

“But in this case, for the first time, this proclamation was directed at all the state institutions from national, provincial, local and state owned entities,” he said.

SA has a total of 700 state institutions across the three government spheres.

“Initially when this investigation was proclaimed, we knew that it was going to be a challenge because we were going to have to invoice each and every institution that we investigated.

“We then started engagements with the Treasury to ask if they could centralise this and put money aside for all these invoices [so] we deal with the Treasury and not individuals. That did not and has not worked up to now, but we are still engaging with them for a solution,” said Kganyago.

He added the SIU spent money to conduct the investigation, including litigation, and “that money has to be brought back at some point”.

“Inasmuch as the engagements are going, we just wanted the president to be aware of the challenges we are facing,” he said.

According to the report: “Currently the fees recovered in this way make up around 45% of the SIU’s total annual operational and capital expenditure budget while the other 55% is funded by way of a government grant.”

In normal circumstances when conducting an investigation after a proclamation, the SIU writes a formal “letter of engagement” to the particular government institution.  

“The estimated fees are based on the number of project hours to be spent at a rate that is relevant to the specific SIU resource that will be working on the investigation. This is similar to how the auditor-general recovers its fees,” reads the report.

However, for this investigation: “The SIU’s opinion was that it would be impractical and ineffective to sign LOEs with all the state institutions that the SIU would be investigating under the Covid-19 proclamation and to attempt to recover the fees for the investigations from them, especially in the current circumstances where state institutions' budgets are under severe pressure.”

The SIU said it had proposed an overall “umbrella” LOE with the Treasury for this proclamation in order for invoicing to be done centrally in terms of the investigations and that the Treasury pays the SIU directly for these costs.

“After many engagements with National Treasury, the SIU was unfortunately not successful in this regard. As a result a decision was taken by the SIU to pursue individual LOEs to formalise the governance and invoicing processes.

“It has proven not be ideal as the SIU had to pursue about 99 individual LOEs which was and still is very cumbersome and administratively intensive. In practice the SIU has been able to only get 44 LOEs signed by state institutions, and has invoiced only R84.4m as a result and has received only R5.6m to date,” reads the report.