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HomeNEWSZondo Commission investigators face investigations over expenditure

Zondo Commission investigators face investigations over expenditure

  • Chief Justice Raymond Zondo handed over the final State Capture Inquiry report to President Cyril Ramaphosa in June, after an over three-year investigation that cost more than R1 billion.
  • The justice department has now confirmed an audit will be conducted into the inquiry, particularly with respect to the cost of investigators.
  • News24 has established this investigation had its genesis in anonymous complaints made to former finance minister Tito Mboweni.

Anonymous complaints to then-finance minister Tito Mboweni about the allegedly exorbitant costs of State Capture Inquiry investigators has now triggered an audit into the commission’s finances – two years after they were made.

The justice department’s Steve Mahlangu confirmed the investigation to News24, but was at pains to stress it was “not a forensic audit, but a review to determine if the costs incurred, particularly with respect to the investigators were indeed economical and derived value for money”.

Documents seen by News24 suggested the investigation might actually be far more extensive, with a 9 July 2021 letter from the department’s then-acting chief financial officer, Nhlanhla Mthembu, to a private audit firm in Kwazulu-Natal revealing it was mooting an investigation into, among other things:

  • The commissions criteria for appointing the various service providers/consultants.
  • Whether these service providers/consultants had the necessary knowledge, skills, qualifications and experience required for the post?
  • Whether they were appointed for the intended purpose?
  • Whether the rate paid to the service provider/consultant in line with their competencies and experience?
  • Whether the work performed by the service providers/consultants correspond with their invoices? Did the Commission receive value for money?
  • If [SA Institute for Chartered Accountants] rates were applied, were the appointments at specific rates in line with the minimum requirements [qualification and experience] for that rate?
  • And, to what extent were the reports provided by different law enforcement agencies on investigations already concluded, utilised by the commission?

Mthembu said it was “imperative that this investigation is kept confidential during its duration to ensure the work of the Commission is not affected”, adding it needed to be completed before the inquiry’s term was due to end, which at the time was meant to happen in September 2021.

He revealed, for the duration of the commission, National Treasury’s Office of the Accountant-General (OAG) managed the payment of inquiry investigators, whose details have been kept confidential because of the security concerns attached to their work.

The OAG was responsible, among other things, for appointing and on-boarding investigators as both staff and consultants. This was done under the terms of a July 2018 memorandum of understanding (MOU) signed between Treasury and the department.

Deviating from the MOU

According to Mthembu, however, the commission “chose to deviate from the MOU when appointing investigators and conducted their own appointments and would only submit the invoices for payment to the OAG” – an issue the department now wants investigated.

“The escalating costs of the commission are mainly driven by legal and investigative services. However, some investigators’ services were terminated due to financial constraints,” Mthembu wrote to the private firm in KZN.

These budget cuts would result in some investigators not being paid for up to nine months – a development that had a damaging impact on the preparation of state capture prosecutions they were working on.

“The commission finds itself with serious budgetary constraints that may threaten the quality of the work that needs to be done by its investigators and its legal team,” inquiry secretary Itumeleng Mosala wrote to then-Investigating Directorate (ID) head Hermione Cronje in January 2021.

ID agrees to help the commission

“If the commission does not have funds to pay its investigators and its legal team to do a proper and thorough job, the work that the NPA [National Prosecuting Authority] will take over from the commission’s investigation and legal teams after the commission has completed its work may well not be of an acceptable standard.

“If this happened, it would be because, owing to lack of funds, the commission’s investigation and legal teams could not devote as much time and attention to certain matters as they would have wished to.                                                   

“This situation would lead to unacceptable delays in the prosecution of matters by the NPA as the NPA will have to undertake extensive investigations before it may decide whether or not to prosecute,” he stated.

While the ID had agreed it was willing to assist the commission financially, that offer was not accepted by Treasury because of budgetary prescripts not allowing this. This led to exactly what Mosala predicted: months of delays in investigators being paid and adverse consequences for the preparation of certain state capture prosecutions.

Chief Justice Raymond Zondo has released the final part of his State Capture Inquiry report to President Cyril Ramaphosa on Wednesday. With this the four-and-a-half-year State Capture Inquiry finally came to an end.

But Mthembu’s letter to the KZN auditing firm, which duly responded with a 33-page proposal on how it could investigate and possibly litigate and assist in criminal prosecutions in relation to the probe into the commission’s investigative budget, does not appear to reflect any of this background.

According to Mahlangu, the department had yet to appoint a firm to conduct the investigation.    

The procurement process to appoint the service provider started in August 2021, he added.

Two years later

It remains unclear why the department’s audit, which it claims to still be finalising with the now-finalised commission and Treasury, is only being conducted now, almost two years after Mboweni raised his concerns.

In February 2021, he strongly suggested Treasury was reluctant to continue funding the commission and stated, after his budget vote speech, “[t]his perpetual extension of the inquiry into state capture is not really conducive. They must finish their work”.

“It must end at some stage unless their DG [director-general] has anything to say. I don’t think I’m going to sign up on another tranche of cash to the state capture commission. They must finish their work,” he added.

But Mboweni’s complaints about the cost of the inquiry had started long before his public comments.

He wrote to Justice Minister Ronald Lamola on 28 September 2020 and “raised concerns … regarding the escalating costs of the Commission of Inquiry into the Allegations of State Capture”.

“The minister of finance also raised that he had anonymously been alerted about allegations of expenditure irregularities at the commission and exorbitant claims by the investigators, which he found disconcerting,” the acting director-general of the justice department, Kalay Pillay, wrote to then-Auditor-General Kimi Makwetu in October 2020.

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