GPAA suspends more executives amid allegations of financial misconduct

Dominoes are continuing to fall at the Government Pensions Administration Agency (GPAA) over a series of allegations of maladministration and financial misconduct.

This comes as the newly appointed acting CEO of the GPAA, Job Stadi Mngomezulu, on Monday suspended two senior executives, the acting chief financial officer (CFO) and the acting chief director of client relations management, who are implicated in the allegations. 

In an announcement sent to the GPAA staff on Monday night, which Business Report has seen, the suspension of acting CFO Kgaile Molebatsi and Eric Morudu, acting chief director for client relations management, was announced. 

"This decision follows the widely publicised allegations of maladministration of several projects at the GPAA. The Minister of Finance has since instituted an investigation into these matters. Following his appointment as the Acting Chief Executive Officer (ACEO), Mr Stadi Mngomezulu has been assessing the events that led to the allegations with the intention to stabilise the organisation and restore public trust," read the announcement. 

"This included briefings by various governance structures as well as engagements with the executive committee of the GPAA. It is against this background that the ACEO decided to place the executives on precautionary suspension while the investigation is underway." 

However, the announcement specifically stated that the precautionary suspensions were not a confirmation of guilt on the part of the executives.

"It is a well-considered decision whose aim is to ensure that the investigation is expeditious and free of any potential interference." 

The suspension of these executives follows that of the CEO, Kedibone Madiehe, who was on precautionary suspension with full pay last month.

The GPAA, which manages the pension affairs of about 1.7 million government employees, pensioners, and their dependants, has been rocked by allegations of large-scale financial mismanagement.

An internal audit prepared by Abacwaningi Business Solutions flagged governance failures and irregular spending estimated at more than R500 million, including questionable contracts worth hundreds of millions of rand.

In June, Business Report published details from the audit, exposing allegations that the GPAA had paid R270m to contractors for refurbishments on a building it had no legal access to under a lease deal valued at R1 billion.

The agency also allegedly squandered R148m leasing mobile office buses and more than R100m on duplicate ICT projects.

The Portfolio Committee on Public Service and Administration has called for a joint meeting with the Standing Committee on Finance to probe serious allegations of misconduct and financial irregularities at the GPAA.

Mngomezulu has quickly made his mark since taking over the reins at the GPAA as he halted a contentious forensic investigation aimed at uncovering the source of leaked internal audit documents, which was seen as a “witch hunt against whistleblowers.”

The GPAA had sought approval from its procurement committee to appoint Nexus Forensics for R260 000 to investigate how confidential documents found their way into the hands of the PSCU and the media.

The Public Service and Commercial Union (PSCU), which was the first to blow the whistle at GPAA and has been relentlessly exposing a number of questionable contracts, wrote to Mngomezulu on Friday demanding the immediate precautionary suspension of executives implicated in serious corruption and procurement irregularities.

The union’s secretary-general, Tahir Maepa, said allowing these executives to remain in office would have exposed the GPAA to further financial and reputational damage, and give them access to systems, staff, and evidence that should be safeguarded while also creating an environment of fear that deters employees from cooperating with investigators.

"The suspension of these individuals is not a punitive measure it is a basic safeguard to protect the integrity of the investigation, whistleblowers, and pensioners’ money," Maepa said.

"We urge you to act decisively and align yourself with the fight against corruption, not with those who have brought the GPAA into disrepute. Your efforts are noted with appreciation." 

BUSINESS REPORT