GPAA refutes allegations of mismanagement amid scrutiny over office lease agreements

The Government Pensions Administration Agency (GPAA) has refuted all allegations of mismanagement of funds, irregular procurement, and subvertion of governance processes.

This comes after weekend reports that the GPAA paid R270 million to contractors for refurbishing a building it allegedly has no legal access to, linked to a 10-year office lease agreement estimated at R1 billion.

The GPAA is a government agency that administers funds for the Government Employees Pension Fund, serving 1.7 million employees and pensioners.

GPAA spokesperson, Mack Lewele, on Tuesday said the allegations were the subject of an ongoing audit process. 

Lekwele told Business Report that due to this process, the GPAA was not in a position to make pre-emptive statements as they may jeopardise the audit outcome.

“As stated previously, we reiterate that our process to procure the services mentioned was fair, transparent and competitive. Reports claiming that the GPAA committed R1bn to a fictitious building lease are wrong,” he said.

“While the GPAA is still committed to the investigation process and will rather not pre-empt its outcomes, we wish to strongly refute the falsehood about R1bn. This is not true even by any calculations of what would have been an annual cost of the rental over the intended number of years.”

The Portfolio Committee on Public Service and Administration said on Tuesday that it will summon the GPAA to appear before it and provide details about the circumstances surrounding the alleged “ghost contract”. 

However, Lekwele said it was not true that there was no signed offer to purchase agreement between the bidder and the owner of the building.

Lekwele said the GPAA awarded the bidder based on their satisfying the requirement to either own a building or be in possession of a signed offer to purchase agreement.

“This practice is standard in the property industry. The allegation of R270m paid for refurbishment is also factually incorrect and misleading,” he said.

“Thus, words like “ghost”, “fictitious”, etc. are simply intended to damage the individuals’ and entity’s reputation, and we request refraining from publishing such wrong information. We still appeal to all stakeholders to allow the process to complete, and as stated before, we will follow appropriate actions if the results point to any maladministration.” 

Meanwhile, the Public Servants Association (PSA) said it was alarmed by the alleged level of recklessness, criminality, disregard of the Public Finance Management Act (PFMA), and lack of proper governance at the GPAA in respect of payments for services not yet rendered.

The PSA said it was aware of instructions being issued for prepayment of R11.9m out of R21m for the procurement of services whilst the GPAA has no current legal obligation to make such payment. 

The workers’ union said the payment will further raise the risk of duplicate payments, especially given the absence of contract vetting, with the need to implement the GPAA’s internal audit recommendation for proper contract review and project oversight. 

“Proceeding with payment may thus result in the payment of potentially irregular or unlawful transactions. Section 57 of the PFMA obligates officials to prevent unauthorised, irregular, fruitless or wasteful expenditure. The Public Service Regulations further prohibit the execution of unlawful, unethical, or improper instruction,” said the PSA.

“The PSA is appalled by the highly irregular conduct of the relevant GPAA official demanding that these payments be made whilst being aware that these contrary to prevailing statutes and financial regulations. This conduct raises questions about who stands to benefit from such transactions. An internal audit recommendation is being ignored in a demonstration of an abuse of power and a lack of integrity.” 

The Public Service and Commercial Union of South Africa (PSCU), which was the first to raise alarms about alleged mismanagement at GPAA, welcomed the PSA’s entrance into the frey but questioned where the union was when its own members were being hunted down for stopping these alleged corrupt deals.

The PSCU said that for years, GPAA whistleblowers—many of them PSA members—have endured targeted suspensions, device seizures and intimidation raids disguised as “investigations”, and forced replacement by compromised cadres linked to the very corruption they exposed.

“The PSA’s late entry into the fight against GPAA corruption is better than nothing—but workers need a union that stands up for them before they are destroyed for telling the truth,” said the PSCU.

“This fight is not only about stolen pensions—it is about dismantling a criminal syndicate inside a public institution and calling out a union leadership that abandoned its own members in their hour of need.”

BUSINESS REPORT