EPWP funding to eThekwini halted over ‘jobs for sex’ and ghost beneficiaries scandal

Public Works and Infrastructure Minister Dean Macpherson has announced that his department will withhold Expanded Public Works Programme (EPWP) funding to eThekwini Metropolitan municipality following an alleged jobs for sex, relatives, political affiliates and cash scandal that has led to payments being made to individuals who did not qualify as beneficiaries.

Macpherson’s decision, announced at a briefing in Durban on Tuesday, follows material irregularities flagged by the Auditor-General of South Africa (AGSA) in the municipality’s administration of the programme in 2021/2022.

KwaZulu-Natal MEC for Public Works and Infrastructure Martin Meyer and deputy director-general for the EPWP, Carmen-Joy Abrahams, were present at the briefing. 

The AG report, which was republished in the eThekwini’s draft annual report released for public comment in January, detailed payments made on the EPWP to individuals who did not qualify as beneficiaries, including fictitious “ghost” beneficiaries, deceased beneficiaries and beneficiaries employed in other state institutions. 

It also noted payments made without sufficient supporting documents or proof that tasks were performed, in non-compliance with the Municipal Finance Management Act (MFMA).

The non-compliance resulted in a material financial loss of R3.28 million by 31 October 2022, with a likely further loss of R2.34 million for payments to ineligible beneficiaries employed elsewhere in the state.

According to the report, the accounting officer was notified of the material irregularity on 13 December 2022 and provided responses, including progress reports, but the auditor-general assessed that adequate progress had not been made in implementing recommendations by an extended deadline. 

These included a full investigation into root causes and possible financial misconduct under the MFMA, recovery of losses, implementation of effective expenditure controls, disciplinary action against officials and reporting to the police where criminal acts are suspected.

Macpherson said his decision to cut EPWP grant funding to the metro for 2026/7 until it investigates the matter and takes corrective action, was not taken lightly. 

He said the decision was prompted after he received correspondence from the AGSA regarding the material irregularity identified in the municipality’s administration of the grant dating back to 2021/2022.

“The irregularity relates to payments made for services not rendered in contravention of Section 65 of the Municipal Finance Management Act. 

“This means that the municipality was unable to provide verifiable records, including attendance registers and supporting documentation to demonstrate that work was actually performed by the individuals who were paid,” he said.

“The AG’s findings indicate that the municipality’s database included both beneficiaries, deceased beneficiaries, beneficiaries employed elsewhere in government and beneficiaries with no valid identity numbers.”

The matter was serious because funds intended to support poor and unemployed people through work opportunities had been diverted elsewhere. “For many people, EPWP is the difference between food and no food. It is the difference between a household making it through the month or not,” he said.

“When EPWP is abused, it is not only taxpayers who are being robbed. It is the poorest South Africans who are being robbed. It is the unemployed person who should have received an opportunity, but did not,” said Macpherson.

The minister has directed that eThekwini must, within 30 days, pass a council resolution endorsing a full investigation, a detailed remedial action plan with timeframes and support for disciplinary and, where appropriate, criminal proceedings. The municipality must also quantify the loss, identify improper beneficiaries, recover funds and institute consequence management.

“We do not have the luxury of looking away … That is why I have directed to withhold EPWP fund transfers to eThekwini metropolitan municipality in the new 2026/27 financial year until the necessary corrective action has been taken,” he said.

The metro bears responsibility for its expenditure controls, payroll, beneficiary management and record-keeping, while the national department acts to prevent further exposure of funds, the minister said.

According to Meyer, so far 18 whistle-blowers had come forward with “credible and actionable” complaints about corruption involved in the allocation of EPWP jobs in the city.

“These sentiments are similar in nature to the numerous complaints that KZN Public Works and Infrastructure has been getting on its recently launched EPWP anti-fraud and whistleblower portal … where complaints primarily relate to concerns about a lack of transparency in recruitment processes, alleged political interference in recruitment and operational challenges within certain municipalities,” he said.

Meyer said the matter had also emerged as the number one complaint across communities in the province. He said some applicants had complained that they had been asked to pay for jobs, while others were asked for sex or to prove their political affiliation in exchange for work.

Abrahams said her department would support the metro to implement processes and controls to manage the EPWP system.

“It is important when things go wrong that we deal with consequence management,” she said. “We recognise that the AG has engaged us as a partner in relation to this and we will be engaging with regard to the incentive grant because that is the tool we have available as the branch. 

“We will, if need be, engage national treasury in regard to the allocation that gets given to the metro,” said Abrahams.

“We want eThekwini to address the audit challenges. We want them to improve on their coordination. We want all the sectors to be revived within the metro… that work opportunities are created and that they take the technical support offered by us and the province,” she said.

However, Meyer noted that whistleblowers had been reluctant to open criminal cases. “The most desperate and the poor are being exploited. They have got these jobs and are very scared of losing the income they have or being victimised by the people in their community.

“So while we know for a fact sex for jobs exists and people do report it, it’s very difficult for us to take any actions,” he said. “But let me be clear, sex for jobs is a form of sexual abuse and a form of rape and it needs criminal charges to be laid for people like that to end up in orange uniforms and be a guest of the government in Westville prison or others.”

Macpherson and his team said that despite the challenges, they aim to depoliticise the programme as it remains a vital tool to provide meaningful work opportunities, valuable skills and support to struggling communities.

“The EPWP is too important to be captured by corruption. It is too important to be weakened by poor controls. And it is too important to fail the people who depend on it,” he said.

Macpherson warned that the metro was not being singled out but that similar action would follow if abuse is identified in other municipalities.

Whistleblowers can report suspected corruption via a QR code on the KZN department’swebsite here.