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Free State treasury dismisses corruption allegations

Staff Reporter

The Free State treasury has come out guns blazing, dismissing as unfounded and incorrect allegations of corruption against its head of department, Godfrey Mahlatsi, published in a local newspaper last week.

A statement issued by the department Wednesday said the front-page article published by The Free State Weekly under the headline “Treasury HOD embroiled in ‘corruption’ storm” was grossly inaccurate as the alleged illicit awarding of contracts was above board and at no time did the department favour certain bidders over others.

The department said it also viewed the article as a conflict of interest because the owner of the publication, Tumi Ntsele, was appointed in 2011 as a service provider for very same events management contracts the newspaper wrote about.

“The Department of Free State Provincial Treasury noted with disquiet the contents of the article that was published by the Free State Weekly newspaper in its edition of 10-16 July 2020,” the statement says.

The article alleged that Mahlatsi was heading a department riddled with damning allegations of corruption, maladministration and favouritism.

The allegations against the department include the flaunting of procedure by appointing a company that did not have a valid tax clearance and payment of invoices for events that never took place.

The article claimed two companies, Quail Media Pty Ltd and Cubicle Trading JV, did not meet the pre-qualification requirements as they were not tax-compliant and were not listed on the provincial government’s Central Supplier Database.

It claimed that despite the irregular appointment, Quail Media JV amassed millions of rand in payments for rendering event management services to various departments.

In the Office the Premier alone, according to the article, the company made in excess of R70 million.

But according to the treasury statement, Ntsele initially raised concerns over what he called unequal distribution of work relating to the hosting of events management and all matters were clarified to him.

The department said it was surprised to find him later pursuing the matter through his publication with the intention of writing an article.

“. . . subsequent to having his concerns addressed, (he) astounded the department by sending those concerns, reduced to writing in a letter, that he forwarded to the department and further required comments for an article, which is for his newspaper . . . which disregarded the meeting he attended and answers that he received,” the department said in the statement.

“(He) is appointed as a service provider for very same events management transversal contract, hence our view that this is conflict of interest.”

The statement said Ntsele had been appointed on all the various event management contracts of the Free State provincial government consistently from 2011 as well as many other government contracts.

“(He) used to be one of only three service providers that were initially appointed in 2011 for the Free State provincial government on events and at that stage his company received the lion share in terms of profits/allocated work,” the department said.

The provincial treasury said given the seriousness of the allegations made against it, and in particular the head of department, it has elected to further ascertain the basis of the claims and thereafter determine how to deal with this matter further.

“The department . . . stresses that all the allegations that are made in the article against the department and its head are denied vehemently and the department will resort to measures that are necessary to remedy the damage that has been caused by this publication,” it said.

The department also denied allegations that it had a strained relationship with the office of the Auditor General, saying they were on good working terms.

“There is a good working relationship between Provincial Treasury and the Auditor General South Africa (AGSA) and the Provincial Treasury plays a key role in ensuring that the recommendations of the AGSA are followed,” it said.

Turning to the disputed contracts, the provincial treasury said the Auditor General audited the said transversal contracts within the Free State provincial treasury and did not find any irregularity with regard to the appointment of the two companies.

It however said, subsequent to the appointment, the AGSA team auditing the Department of the Premier picked up that work was allocated by that office and at the time one of the joint-venture companies was not tax compliant.

This, it said, often happens that an appointed company becomes non-compliant during their contract period and, in such cases, the company is expected to take corrective action.

That resulted in an audit finding against the Department of the Premier and the appointment was found to be irregular.

“The AGSA on its audit finding also clearly puts a disclaimer and states that at the time it was concluded the audit, the audit team had not received the management response. This matter is currently in the hands of AGSA and it shall be finalised before the current audit process is concluded.”

The provincial treasury has also requested the newspaper to publish its response.

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