Whooping R1.6 billion stolen from the Eastern Cape’s social development fund

The disappearance of R1.6b has raised serious questions.

The South African National Treasury has compiled a series of reports detailing gross expenditure irregularities within the Eastern Cape. These reports have been obtained by City Press, and the information now made public.

The Treasury reports rely on information gathered from special audit services conducted between 2011 and 2017. The audits scrutinised expenses related to mobile classrooms, roads and housing in the province.

A string of individuals, companies and national government agencies are mentioned in the reports as being involved in the syphoning of government funds.

The Independent Development Trust (IDT), SA National Roads Agency Limited (Sanral) and the Coega Development Corporation (CDC) are accused of smuggling money out from under the Eastern Cape’s government funding.

The Social Housing Regulatory Authority (SHRA), a subsidiary of the national department of human settlements, is especially singled out in the reports. The Treasury found that the SHRA was allocated R341m intended for housing projects in rural and underprivileged communities.

The IDT and Sanral were both paid in excess of R170 million, funds allocated for work on roads and transport projects. Work that was often cancelled, terminated or mismanaged.

The IDT could not account for R21.7m. The CDC spent an “excessive” R101m on stones for 23km of road.

According to the Treasury reports; R4.8m of the R61m meant for social housing developments in East London was illegally transferred to 11 personal bank accounts.

Duplicate payments to IDT, Sanral and their respective subcontractors exceed R320m – payment for contracts already provided to the CDC.

Money syphoned to personal accounts has been spent on a Chevrolet Trailblazer and other luxury cars.

Other wastages include purchases of bespoke suits from House of Monatic, a Cape Town boutique. Social development money also found its way into fine dining restaurants, namely the Grazia restaurant in East London.

The original account has been frozen, and the Eastern Cape human settlements department have yet to respond to the Treasury reports.

Mbulelo Peterson, Sanral’s southern regional manager says:

Ayanda Vilakazi, the spokesperson for the CDC, says the department contracted them to build roads for three years in six provincial districts.

The SHRA has not responded to the Treasury reports.

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