Top police forensic officers named in dodgy R52 million tender deal

CAPE TOWN — Just when you thought the political manipulation of law enforcers for Machiavellian Zuptoid purposes had terminally tarnished the reputation of our police services, along comes a forensic report detailing up to R52 million of potentially fraudulent financial transactions involving 20 very senior police forensic officers. Taking the kindest interpretation of the report – we don’t yet know where the all money ended up – the named officers deliberately and/or negligently flouted well-established financial protocols and/or misrepresented fund allocations involving a contract with Keith Keating’s Forensic Data Analysts for the provision of “forensic light sources”. The genie is now well and truly out of the bottle and the entire police forensic services leadership is squinting in the harsh, sudden glare. There’ll be a scramble to contain, cover up and silence – or perhaps turn State witness. As usual, the narrative includes lone police officers trying to raise the flag on suspicious-looking paper-work. Yet in this Gotham-like scenario, they’re the only sane voices in a crazy wilderness – the more they speak up the more vulnerable they become. That’s how State Capture and corruption work. In a climate of fearful compliance, the line between upholding the law and breaking it becomes invisible. The article was published with permission form the Daily Maverick. – Chris Bateman

By Marianne Thamm

An in-depth forensic investigation by Grant Thornton and SizweNtsalubaGobodo Advisory Services into the awarding of a SAPS/SITA contract to Keith Keating’s Forensic Data Analysts amounting to R61 million for the provision of forensic light sources, has uncovered massive potential fraud and/or collusion between at least 20 senior SAPS officials and FDA employees. No wonder SAPS wanted a closed SCOPA session on Tuesday.

Those implicated include former acting commissioner Khomotso Phahlane who was head of SAPS forensic services at the time. Daily Maverick reported extensively on the SAPS/SITA FDA capture after it was brought to light by DA SCOPA member Tim Brauteseth in November 2017.

Former Police Minister Nkosinathi Nhleko and Former Acting National Commissioner Khomotso Phahlane.

Also implicated in the forensic report are at least 20 top cops including Brigadier Sydney Masuku, Section Head of the SAPS Specialised Crime Investigation Systems within Technology Management Services, Lieutenant General Avhashoni Ramikosi, SAPS Chief Financial Officer (also implicated in the VBS heist), Colonel Johannes Potgieter, Section Commander: Network Infrastructure Management within the TMS division, Lieutenant General Stefanus Schutte, Deputy National Commissioner: Management Intervention, Lieutenant Gen Lungiswa Shezi – Divisional Commissioner: TMS, Colonel Thembitshe Magubane – Head Financial Services: Forensic Services, Lieutenant Colonel Andy Patrick, former employee of SAPS who was working in TMS division, Brigadier Nissa Pillay, Section Head: Crime Administration Systems within TMS and former Section Head: Programme Management Office, Major General Edith Mavundla, Component Head: System Infrastructure within the TMS division, Brigadier Johannes Ramathoka, Head: Support Services within the TMS division, Lieutenant Colonel Christiaan Goosen, Officer responsible for the maintenance and development of SCM, Lieutenant-Colonel Monica Grundling, Officer responsible for certification of invoices for network services reports within TMS, Captain Ida van Huyssteen, Officer working in the wide area networks and national network upgrade within TMS.

Read also: How SA was stolen: NPA, police in bed with Zupta crooks – O’Sullivan team

The report, which was presented to SCOPA on Tuesday, has recommended “the Accounting Officer of SAPS” (Commissioner Khehla Sitole) should consider obtaining legal counsel on the appropriate steps to take against a list of individuals “for their involvement in potential fraud and/or collusion leading to the irregular transaction that took place on 31 March 2016.”

Those who are implicated in the irregular reservation of R35 million from the Forensic Services Criminal Justice System Budget without seeking and obtaining approval from National Treasury are, according to the report;

Phahlane for his involvement in “the preparation of an application referring to a certificate indicating that funds required for the procurement he requested SCM to initiate would be reserved on the FS CJS budget, while well aware that such funds were not budgeted for and no approval was obtained from National Treasury to reserve/utilise the FS CJS budget for the intended procurement”

Col Magubane “for his involvement in certifying that R35 million was to be reserved on the CJS budget while the procurement of light sources was not included in the FS CJS plan for 2015/16 (the year in which the contract was awarded and purchases of equipment commenced).”

Those who the report says allegedly misrepresented the reprioritisation of the R46 million previously earmarked for panoramic cameras to treasury are:

Lt Col Patrick “for compiling the change control request dated 27 November 2015 which captured information contrary to (and thus misrepresenting the facts to National Treasury) the initial change control request dated 30 October 2015 compiled from the Component: Technology Infrastructure Management;

Brig Pillay “for the potential negligence on her part in stating that she may have recommended the change control request based on an assumption. This potential negligence may have resulted in the misrepresentation made to National Treasury”.

Lt Gen Shezi “for recommending the change control request dated 27 November 2015 which captured information contrary to (and thus misrepresenting the facts to National Treasury) the change control request dated 30 October 2015 which she approved on 21 December 2015”.

Maj Gen Mavundla “for recommending the change control request dated 27 November 2015, seemingly on an incorrect basis which contributed in the misrepresentation made to National Treasury”.

Phahlane “for effectively approving the change control request submitted to National Treasury. More so, given that the misleading justification provided in respect of the R46 million emanates from his request made to TMS on 25 August 2015.

The report recommended that Colonel Potgieter be probed for a “potentially irregular and/or unlawful request… to issue SCM and Finance system rights to NNUP (National Network Upgrade Programme) staff” as well as his preparation for the application “while well aware of the concerns raised by Col Coetzer”.

Brig Ramathoka “for recommending the application while well aware of the concerns raised by Col Coetzer regarding the system rights of the NNUP staff and the capacity and preparations of the SCM and Finance sections in respect of the year-end workload. Brig Ramathoka also failed to provide clear guidance/instructions in respect of the system rights issued to the NNUP staff when requested to do so by Col Goosen and Brig Gouws:.

Lt Gen Shezi “for approving the application while well aware of the concerns raised by Col Coetzer regarding the system rights of the NNUP staff and the capacity and preparations of the SCM and Finance sections in respect of the year-end workload.”

She will also face charges for her irregular processing of the payment of R52.9 million made to FDA on 31 March 2016 and her alleged involvement in the approval of the increased FA (financial authorisation) for the amount R52,942,653.66.

Lt Col Goosen “for his involvement in processing the order/invoice for 169 light sources, this without duly approved overtime to be working in the NNUP environment on the day. Lt Col Goosen is a PAS system administrator who was performing operational functions on the system on the day. This poses risks of conflict of interest and lack of segregation of duties”

Lt Col Grundling and Cpt van Huyssteen “for their involvement in the processing of the order/invoice for 169 light sources outside of the authorised environment as per the overtime application approved by Lt Gen Shezi on 24 March 2016”.

Col Potgieter “for his involvement by signing the invoice on behalf of the end user, outside of the authority granted for the overtime application he had submitted, and thereby making a misrepresentation that goods were duly delivered”.

Brig Masuku “for the misrepresentation he made when signing the delivery note at FDA’s premises purporting that delivery had taken place.”

The authors of the report said although efforts to locate Brigadier de Wit had not been successful, “we recommend that SAPS should attempt to locate her in order for her to be interviewed to account for her role in certifying that R35 million was to be reserved on the CJS budget while the procurement of light sources was not included in the FS CJS plan for 2015/16. The Accounting Officer of SAPS should consider obtaining legal counsel on appropriate steps to take against Brig de Wit should there be impropriety on her part.”

Over and above this the report stated that the Accounting Officer of SAPS – at present Commissioner Khehla Sitole – “should consider obtaining legal counsel on the appropriate steps to take against Lt Gen Schutte, Lt Gen Ramikosi, Maj Gen Nelson, Lt Gen Shezi and Lt Gen Phahlane in respect of their processing of the transfer of R28 million from FS to TMS without obtaining authorisation/approval from National Treasury.”

Also Sitole, said the report, “should also consider obtaining legal counsel on the appropriate steps to take against FDA for the misrepresentation made by Mr Smit and Mr Keating regarding the delivery of goods on 31 March 2018 in breach of the conditions of the contract entered into between SAPS and FDA.”

Reviewing the budgetary process the report found that information reviewed indicated that light sources were not included on the Criminal Justice System budget for FY 2015/16, the year in which the contract for light sources had been awarded to FDA.

“Only an amount of R6 million was included in the FS Procurement Plan for FY 2015/16. However, R35 million was reserved from the CJS funds allocated to FS by National Treasury for FY 2015/16. This was done without any approval by National Treasury. Thus, rendering the reservations of the R35 million from the CJS budget irregular,” noted the report.

The forensic report found that over and above the irregular R35 million reserved on the CJS budget, “another irregular transfer of R28 million from FS to TMS was conducted on 31 March 2018.”

“Similarly, this transfer was not approved by National Treasury as required. The transfer was actively facilitated and approved by Lt Gen Phahlane. Our findings indicate that the R28 million seems to have been transferred in order cover the amount of R6,942,653.66 (as at 31 March 2016) in excess of the R46 million reprioritised within the TMS CJS budget for the purchase of light sources.”

The investigation found that events relating to the tendering processes undertaken in 2013 and 2014 and the related budgeting processes as per the FS Procurement Plans and the CJS Budgets, the needs/demand analysis seemed to be flawed.

“This is in view of the fact that the budget of R10.5 million made available in 2013 for the procurement of 378 light sources seems to have been set without taking into account the actual unit price of the light sources.”

Prior to 2013, SAPS had purchased light sources through the PCEM contract. As such, said the report, the budgeted amount of R10.5 million ought to have been compared with previous purchases of light sources to verify whether the budgeted amount would have been adequate to cover the needs of 378 light sources.

“In 2014, only an estimated budget of R35 million was indicated by Lt Gen Phahlane without specifying the actual number of light sources required in FS. This further indicates that a proper needs analysis may not have been done. More so, given that only R6 million was included in the FS procurement plan for FY 2015/16 while no budget was included in the CJS budget by FS. Thus, the R35 million indicated by Lt Gen Phahlane and the basis thereof are questionable.”

More proof of a “flawed needs assessment” was noted when the first application for light sources under contract 19/1/9/1/235 TD (14) had been made. The application had been made for 150 light sources costing R51 million whereas only a budgeted amount of R35 million had been available.

“Following the initial application, there were applications for 133 and 146 light sources submitted post the reprioritisation of R46 million from TMS. Ultimately, 169 light sources were purchased via TMS. This was after Maj Gen Manamela had declined a request for 80 light sources initiated with FS. All these various requests for light sources point to flawed and questionable needs assessment for the light sources.”

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Maj Gen Manamela, said the report, had indicated that critical information had not been provided when the needs assessments had been done and that the low utilisation rate of the light sources had it been considered.

Investigating the approval processes for the purchase of the 169 light sources the report found it was irregular based on the fact that the purchase amount was in excess of the estimated contract value of R35 million, no BAC (Bid Adjudication Committee) approval had been granted for the purchase above the contract value.

The transaction had been processed from the TMS CJS budget following the reprioritisation of the R46 million for the panoramic cameras. This reprioritisation had been based on “a misrepresentation made to National Treasury that WBS included the handheld light sources which was not the case”

“However, the ultimate amount paid to FDA was R61,195,526.99 (R52,942,653.66 + R8,252,873.33), albeit the R8,252,873.33 of the ROE (Rate of Exchange) variation was paid in FY 2016/17. Thus, the total amount paid was in excess of R46 million by R15,195,526.99. As at 31 March 2016, the excess amount paid was R6,942,653.66 (R52,942,653.66 – R46,000,000).”

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The report found no evidence of a Bid Adjudication Committee nor National Treasury approval of the R6,942,653.66 in excess of R46 million.

“In this regard, the purpose (or part thereof) of the R28 million irregularly transferred on 31 March 2016 seems to have been to cover the shortfall within TMS”.

This payment had been processed, the investigation found, based on a misrepresentation made by Brig Masuku and FDA that delivery had taken place whereas no delivery had actually taken place. This also constitutes a breach of the conditions of the contract which stipulated SAPS premises as the delivery address”.

The invoice had been signed by Col Potgieter “who was not the end user of the equipment, thus also misrepresenting that delivery of the goods had taken place and had been processed “by staff who ought not to have had system rights to process the invoice, in potential breach of the processes stipulated in the National Instruction. Thus, pointing to potential bypass of set internal controls and processes.”

Further, the report noted, “these employees were specifically granted system rights and overtime only to process invoices for the NNUP environment. Thus the employees processed the invoice outside of the authority provided.”

“The myriad of irregularities relating to the manner in which the transaction of the 169 light sources was approved and processed points to potential fraud and/or collusion amongst various SAPS employees as well as FDA employees.” DM