Godongwana appoints acting CEO for embattled GPAA amid forensic investigation

Finance Minister Enoch Godongwana has appointed Job Stadi Mngomezulu as acting CEO of the Government Pensions Administration Agency (GPAA) after seconding him from the National Treasury.

This decision comes in the wake of Godongwana placing Kedibone Madiehe on precautionary suspension with full pay, effective immediately, as her tenure has recently come under sharp scrutiny over allegations of procurement irregularities. 

Moreover, Godongwana announced that the Office of the Accountant General (OAG) unit has commenced a detailed forensic investigation into all allegations of financial misconduct at the agency.

The GPAA is a government component which reports to the Minister of Finance and administers the pension affairs of approximately 1.7 million government employees and pensioners, as well as the affairs of their spouses and dependants.

The agency has been rocked by allegations of serious financial mismanagement of pension funds amounting to more than R500 million after an audit being prepared for the financial year-end flagged administration issues. 

The GPAA is also accused of paying R270m 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.

Other allegations against the agency include squandering at least R148m for the leasing of 11 mobile office buses and paying more than R100m for duplicated ICT projects.

Mngomezulu joined the Treasury more than 20 years ago as a director for financial management before being promoted to chief financial officer. 

He later served as a chief risk officer before taking up the role of deputy director-general for corporate services. 

Godongwana said he was confident in Mngomezulu's ability to lead the organisation during the transitional period. 

“Under Mr Mngomezulu's leadership, GPAA will continue to deliver on its mandate while we work to resolve these matters expeditiously,” he said.

Godongwana assured pensioners and the public that all pension services will continue without interruption, saying the investigation will be conducted promptly and thoroughly.

He said there will be minimal disruption to GPAA's critical operations and that the highest standards of governance will be maintained.

To achieve this, the Treasury - through the OAG unit - has commenced a detailed forensic investigation into all allegations against implicated individuals as well as contracts that have been awarded. 

Godongwana said the preliminary focus of the investigation will focus on the GPAA head office lease contract, the African Mobility bus lease, the Jicho Consulting contracts, and the LCS Biometric System lease contract.

Mindful of the need to act quickly while ensuring that the matters under investigation are addressed through proper legal channels and the rights of all parties are respected, Godongwana said he was confident the investigation and related disciplinary measures can be completed within the next 60 days.

“We deeply appreciate the importance of maintaining the trust and confidence of pension holders and broader society in GPAA's operations,” Godongwana said. 

“The National Treasury remains committed to transparent governance and will provide updates as appropriate while respecting the integrity of the ongoing processes.” 

Meanwhile, 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 - welcomed the suspension of Madiehe.

The PSCU said this was an important first step but said unless the real mastermind of the fraud was removed and investigated, the rot at the GPAA will continue unchecked.

“The suspension of CEO Madiehe is proof that PSCU’s campaign works – but the battle is not won. The true architect of GPAA’s fraudulent contracts and unlawful payments, [acting chief financial officer] Kgaile Molebatsi, remains in charge of finances. He authorised over R100m in irregular POs, inflated contracts from R67m to R500m through backdated addendums, and continues to wield financial authority despite overwhelming evidence of misconduct,” said the union.

“The PSCU will continue to expose this criminal network and defend every whistleblower targeted for their integrity. The GPAA must be cleansed, its corrupt officials removed, and its captured systems restored to serve workers, not syndicates.”

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