24 January 2013

South Africa: North West Standing Committee On Provincial Public Accounts (scopa) to Institute an Investigation for Over R13 Million Spent On Legal Fees

press release

On Thursday, 24 January 2013, the North West Provincial Legislature's Standing Committee on Provincial Public Accounts (SCOPA) resolved to institute an investigation after former MEC for Finance, Loiusa Mabe, the current MEC, Paul Sebegoe, and the Acting Head of the Department of Finance, Geo Paul, failed to give the committee a clear account of procurement processes followed in appointing Morake Attorneys, a company that has been paid over R13 million for a disciplinary hearing of the Department of Finance head.

The two MECs, were previously called to account to the committee regarding media reports that the Department of Finance spent R13 million on legal fees of a disciplinary hearing of its suspended Head of Department (HOD), Johannes Mohlala, but failed to do so. SCOPA then resolved to ask Premier Thandi Modise to expel them.

According to the media reports, the Acting HOD, Geo Paul, had written to the former MEC, who was MEC Mabe then, to advise that if MEC Mabe wanted to deviate from the normal process to appoint the law firm, the value of the contract should not exceed R500 000, but invoices that the media has seen shows that department paid nearly R2 million for a single invoice.

Chairperson of the Committee, Hon. Hlomane Chauke, said that he had listened to interviews in the media that the two MEC had had, where they said that the committee is on a witch hunt, wanting to chop their heads after coming from the National Elective Conference of the ANC in Mangaung in December 2012.

"I want to put on record that this committee has always had a good relationship with the Members of the Executive council including the two MECs.

"The fact is, the Department of Finance has a budget of over R10 Billion and they have to account for it as it is public funds. People of the North West, in fact all South Africans must know that there is accountability in this province," said Hon Chauke.

In a report that MEC Sebegoe, presented to the committee, Morake Attorneys, have been paid R15.4 million to date for the case of HOD, Mr Mohlala, the Chief Financial Officer, Mrs Kasirivu and the Chief Director, Mr Mogoane. The cases of the latter two have been finalised but both are appealing. Morake Attorneys have been paid R13 332 449. 95, for the disciplinary hearings of the three people. He was also paid for other legal matters in the department R2 126 930.33, by the same department.

The Acting HOD, Geo Paul, could not give the committee satisfactory responses when questions were raised as to how Morake Attorneys were appointed.

Premier Thandi Modise said she was very concerned when she read newspaper reports with altercation between the Legislature and the two MECs.

"It is demeaning for the province and I have to apologise for that. I was given wrong information when the two MECs said the committee did not give them enough notice time to come and appear before it.

"I was only told that a letter came inviting them to a meeting on the 6th of December and the meeting was on the same day. It is news to me that they were given a chance to appear on the 11th of December," said the Premier Modise.

According to information that members of the committee had, which Geo Paul also did not dispute, Morake Attorneys, were almost five times higher in price than other companies that they were competing with, and that they had less experience to all of them.

The Premier has welcomed the committee's decision to open an investigation stating clearly that all Members of the Executive Council were taken to a training so that they can understand all procurement policies.

"In those trainings, HODs were also part of them. No one will come to SCOPA and say I was coerced to do this, they know what to do when that happens.

"The training was meant to make sure that we do not get embarrassed like we are today," said the Premier.

Hon. Chauke said the Committee will meet sometime next week with the Premier, the office of the Public Protector, the Hawks and the Office of the Public Service Commissioner to discuss how the investigation should unfold.

Issued by: North West Provincial Legislature

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