Anna Sussana Fourie, former deputy director-general in the Free State Department of the Provincial Treasury, took the stand on Monday at the state capture inquiry to testify about the Estina Dairy Project.
Fourie gave details of the events leading up the establishment of the farm.
She told the commission that, while she was attending an office party in June 2012, she was roped into the matter by the head of the provincial treasury, Humphrey Kgomongwe.
It was he who asked Fourie to carry out an assessment on a payment, amounting to R30m, that was needed by the provincial Department of Agriculture in connection with the project.
At the time, there was only R6m in the Provincial Revenue Fund.
The payment, Fourie found out, was needed by the next day - a Saturday - which Fourie said was impossible.
While Fourie was looking through the documents provided to her, she asked the CFO of the Department of Agriculture, Seipati Dlamini, to furnish her with the reasons as to why the payment needed to be made, but Dlamini refused to do so.
From these documents, Fourie said, she realised there were some irregularities.
"A sentence stated that Estina submitted a proposal on the 15 th May, 2012. From that, I then asked the CFO of the department of agriculture [Seipati Dlamini], that means there was not a tender process followed for the appointment, but the appointment was done based on the proposal that was submitted, which she confirmed," Fourie said.
Fourie added that she then indicated that the payment would result in irregular expenditure and, if the funds were not available, it would mean unauthorised expenditure.
While the feasibility study was not provided at that point (and was only provided a few months later, in October), Fourie said the agreement and obligations of Estina were not clear - including timeframes, deliverables and what was expected.
It was also indicated that Estina would contribute a "phase-in investment" of R228m, but there was no timeframe on this.
"I said to her [Dlamini] that we have provided with the reasons why we can't pay, we provided her with evidence that we do not have the R30m. So... she needs to indicate if the CEO, after he has been briefed, is prepared to pay R5m... Will they then be satisfied with it? Her response to me was, she wants R30m or nothing."
Fourie added that to pay a company R30m upfront, without any work being done or services rendered, would be "a huge amount for nothing".