Photo: Nick Youngson, Alpha Stock Images

Limpopo municipality spending millions in fraud recovery effort

The money has been spent on a forensic investigation and the subsequent legal fees required to recover the funds lost to fraud.


Photo: Nick Youngson, Alpha Stock Images

The Sekhukhune district municipality in Limpopo has allegedly spent upwards of R3 million in an attempt to recover R5.4 million that was lost to fraud in 2018.

The lost funds were supposed to pay service providers of the municipality, but they were paid into the wrong bank accounts in an apparent fraud.

Sekhukhune appointed a law firm to conduct a forensic investigation and commence legal proceedings against those found quilty to recover the lost money.

High cost of fraud recovery

However, a progress report from a fortnight before showed the municipality had spent around R3.4 million on the investigation and subsequent legal fees.

“The contributing factor on the costs of the legal team is due to the appointment of the counsel to apply for the recovery of the money through court process,” read the report.

Democratic Alliance councilor Isaac Makofane balked at what has been spent by the municipality in this matter and is not convinced the matter has even been fully resolved.

“It appears by the time the matter is completed, the municipality would have spent more than what was stolen. We don’t even believe that those employees were charged and we suspect senior officials are involved,” he said, according to Sowetan Live.

He revealed the party would be petitioning the Public Protector to investigate the entire situation from the initial fraud to how so much was spent on recovering the money.

Nip the problem in the bud

The Sekhukhune municipality has already defended the cost of the investigation in the same report and acknowledged that a lot had been spent, but argued that it was necessary to get to the root of the problem and cut it out altogether.

“This problem may have been happening in the municipality without anyone picking it up or investigations conducted. But this investigation has assisted the municipality to identify the source and therefore address it appropriately,” the report read.

“This will be a lesson to any other officials who may have been intending to join corrupt practices,” stated the report.

Disciplinary action

According to municipal spokesperson Willy Mosoma, the exact cost of the recovery efforts is still unknown, but the municipality has to recover R4.5 million of the missing funds.

“Five officials are facing disciplinary charges and also a [criminal] case is under investigations by the Hawks in Polokwane,” he said.

“We don’t know as yet when the investigation will be completed in order to recover the remaining R900,000, however, we respect the labour processes and the criminal case unfolding.”