Lesufi ‘sat on’ dignity pack fraud report

Only 24% of 248 Gauteng schools received their share of the R106  million dignity packs project, which an investigation has found to have been riddled with alleged fraud, corruption and other criminal acts. 

The programme, which ran during the 2016-17 and 2017-18 financial years, was meant to provide sanitary towels and other products to “indigent girls and women who have reached puberty, commenced menstruation and who attend [no-fee-paying] schools, [and] state-owned colleges and universities”. 

It was also supposed to have provided children and young adults living with albinism with care packages that included sunscreen and hats.

This is the latest discovery in the Mail & Guardian’s series of the allegedly concealed forensic reports that Gauteng Premier Panyaza Lesufi insists have been made publicly available, although no record exists on any provincial website. 

The dignity packs report — which is dated September 2020 and which the M&G has seen — details how officials in the provincial social development department “devised a scheme to circumvent … procurement processes to unlawfully and wilfully enrich [themselves and] certain suppliers to the detriment of … the public”. 

The investigation was conducted by law firm Bowman Gilfillan and signed by its executive for investigations, Joe da Silva. 

Three sources in the Gauteng government with intimate knowledge of the investigation said the premier was aware of the report, which was handed to his predecessor, David Makhura, but neither of them had acted on it. 

“This was an important project because too many girls struggle to buy sanitary towels and miss out on school when their cycle comes because of a lack of funds,” said one insider, who asked to remain anonymous. “We can’t say we are for the upliftment of black children but look away when progressive projects that will make their lives easier are looted.” 

According to a report by the Spar International retail group, about 30% of the country’s schoolgirls miss lessons “because they can’t afford menstrual hygiene products”, equating to seven million “girls affected by period poverty, hindering their education and future”.

Another source concurred that it was important for Lesufi to release these reports and act on the recommendations. 

“These reports will not stay hidden forever. The premier is aware of them and must decide if he wants his legacy to be tainted by protecting corrupt officials,” they said.

Shoki Tshabalala — the former head of the social development department, who is now the deputy director general for the department in the presidency for women, youth and persons with disabilities — was implicated in the dignity pack report as being at the forefront of the alleged fraud for having “committed financial misconduct”. Criminal charges were recommended against her. 

This was the second recommended criminal case against Tshabalala. The M&G reported on 18  October about another recommendation that Tshabalala be charged for her role in a “corrupt” contract worth more than R273  million to disburse about 850  000 school uniforms, shoes, underwear and vests to Gauteng’s vulnerable learners. 

But Tshabalala remains employed by the state, as noted in the investigative report, which added that it had not spoken to her during the inquiry because she had “not responded to an email request for an interview”. 

“However, this does not change our findings, based on the documentary evidence made available to us,” the report stated.

This week, the M&G sent questions to Lesufi’s office, the provincial social development department, as well as the department of women, youth and persons with disabilities. 

The premier’s spokesperson Sizwe Pamla said Lesufi was an education executive council member at the time of the report, adding that social development received the reports and were working to implement the recommendations. 

“The premier was briefed by the Gauteng Provincial Forensic Audit Unit on the report and informed that it was submitted to the Directorate for Priority Crime Investigation (Hawks) to implement some of the recommendations,” he said, without giving timelines and progress details. 

Motsamai Motlhaolwa, the social development department spokesperson, said the department would defer comments to Lesufi. 

Cassius Selala, spokesperson for the presidency, had not responded at the time of going print, despite repeated requests. 

A “sham” of an evaluation process to appoint the six nonprofit organisations (NPOs) — Godisang Development, Kumaka Early Development, Morithi wa Sechaba, Siyabonga Africa Development, Tshepo-Themba Development and Fountains of Life — was unearthed by investigators. 

The minutes attached to the report showed how “factually incorrect” information — such as claiming that Fountains of Life had serviced the department before, and the other NPOs submitting their documents after they were awarded service level agreements — was used to achieve “a predetermined outcome”. 

“The process was obviously designed to benefit certain persons and organisations to the detriment of the [department] and the public at large,” investigators asserted, adding that the government officials’ actions “could constitute fraud and/or corruption”. 

Worryingly, the report stated that all the NPOs, except for Kumaka and Godisang, “rendered no services with regard to the dignity packs programme, and were mere ‘conduits’ or ‘paying sites’”. This means that the four organisations were used to filter money to designated service providers that would provide the products without undergoing an open tender process, which is part of supply-chain management circumvention and flouts the Public Finance Management Act. 

Conduit payments, the M&G reported in June, were how listed company Life Healthcare allegedly milked R112  million from the provincial government in supplying drug rehabilitation centres after being appointed in a process also found to have been corrupt by an independent forensic investigation. 

That inquiry into Life Healthcare stated it was “irregular for a government subsidy meant for the NPOs to be channelled to a private company”, as was the case in this project.

In the case of this project, the dignity packs project, the end result was that only about 60, or 24.04%, of the 248 schools received their packs across the 2016-17 and 2017-18 financial years, with the remaining money allegedly kept by the appointed NPOs, some of which funded the lavish lifestyles of departmental officials and their families. 

For example, Kumaka received more than R52.7   million from the social development department in both reporting periods, but “only 19% of this amount related to the dignity packs programme”. 

“We attempted to do a reconciliation of the bank statement of Kumaka to determine how the monies were utilised. This exercise was impossible as Kumaka did not keep the funds, received for various projects, separated, as requested,” investigators wrote. “All funds were paid into one bank account.” 

Despite not responding to the M&G’s questions this week, Lesufi has publicly stated the importance of non-governmental organisations (NGOs) to the province. 

In July, the premier apologised to NGOs for freezing payments while Gauteng investigated alleged corruption in the allocation of R1.9  billion from the social development department’s R5.5  billion budget for the 2024-25 financial year. 

“Unfortunately, there were serious missteps, and we need to rectify this. Our NGOs are doing invaluable work on behalf of [the] government, and they must be treated with the utmost respect,” Lesufi said at the time.

But in August, the province reinstated 13 officials named in forensic reports, including social development deputy director general Onkemetse Kabasia and Mbali Ndlovu, the deputy director of sustainable livelihoods, who were both named in the dignity packs investigation. 

Criminal charges were recommended against Ndlovu for contravening the Prevention and Combating of Corrupt Activities Act and for “money laundering amounting to R106  000  003.80 … for being [an accomplice] to the fraudulent scheme to circumvent the [department’s] procurement processes”. 

No one was charged or disciplined for the alleged crimes.