by Philippa Van Rooyen

Fraud corruption in Eastern Cape Department of Health

R1.4 billion fraud revealed within the DOH

Eastern Cape Department of Health

Damning reports of nepotism, corruption and fraud amounting to R1.4 billion in the Eastern Cape’s health department have prompted calls by the opposition for drastic intervention.

Details of the health department rot were initially revealed as part of a forensic investigation commissioned by Eastern Cape Premier Noxolo Kiviet and health MEC Sicelo Gqobana. 

The probe was carried out by the Special Investigating Unit (SIU), the SA Revenue Service, Asset Forfeiture Unit and the Provincial Health Department. Some 544 department workers were suspected of being ghost employees after it emerged they had invalid identity numbers, the department said in a statement on Sunday 3 February 2013.

A total of 8 034 employees were directors of active companies and 929 were listed as suppliers for the health department. Of the 8 034 staff members, 235 had received payments of R42.8 million from the department.

These payments included R7.3 million for providing medical support personnel, R4 million and R3.5 million for engineering support staff, and R3.8 million for an emergency services member.

The department also revealed there were 35 spouses of employees doing business with it, and these were linked to 35 companies which received payments of R11 million.

"This preliminary report by the SIU and partners shows that the department is committed to clean governance and will root out corruption as it stifles service delivery," the department said.

Meanwhile The Times reported yesterday that according to a leaked document in its possession, as many as “23 221 of the health department's 56 000 employees were selling services and goods back to their employer”.

“The health department has denied these allegations, saying about 9 000 employees are listed on their supplier database, a fifth of all employees,” the publication added. The health department's former superintendent-general Siva Pillay helped recoup some of the losses by chasing down offending staff.

According to the leaked document, tracking down fraudulent staff helped the department recover R600 million of the stolen R1.4 billion. In addition, Pillay’s efforts saw more than 1000 staff being fired or 'encouraged to resign' between 2010 and 2012. The superintendent-general’s contract expired in December and he has declined to renew it.

“The health department, while admitting yesterday that millions had been stolen by staff, called the figure of R1.4 billion a ‘gross exaggeration’,” The Times reported. However, Gqobana's office said it had "handed over several people to the police".

With the help of auditors PricewaterhouseCoopers, Pillay followed paper trails and scrutinised relationships between employees and service provider after he was appointed in 2010, in his drive to stamp out corruption in the department, according to The Times.

At a special anti-corruption meeting of about 150 top government officials in Bhisho in December 2012, Pillay was heard telling the audience: "We complain about a shortage of skills but when it comes to corruption there is no skills shortage: people are ingenious."

According to a PricewaterhouseCoopers document presented at the meeting in December, health department accountant Nommiselo Mxinwa was so brazen, “she would record allegedly illegal payments in her desk diary,” The Times reported.

“Each month, she allegedly paid just under R30 000 – the maximum allowed without inviting tenders – to members of her family and her friends.

“Auditors had discovered that Mxinwa awarded contracts to 13 companies owned variously by her sisters, a sister-in-law, a niece and her husband, to the tune of R4 million.

“PricewaterhouseCoopers alleged that, between 2008 and 2009, Mxinwa worked in cahoots with at least five other health department managers, including one who would approve purchases, another who would sign invoices and another who would make payments,” the publication added.

Meanwhile, this morning, departmental spokesperson Sizwe Kupelo said in a statement that “claims that the Eastern Cape health department has lost R1.4 billion to fraud are an attempt to tarnish the name of health MEC Sicelo Gqobana”.

The department was aware only of the R42.8 million involved in a fraud and corruption investigation being conducted by SIU, according to the statement.

The DA responded to the matter on Monday by calling for the full SIU report to be made public and for guilty individuals to be brought to book. “The DA today submitted a Promotion of Access to Information Act (Paia) application for forensic audit details of corruption and nepotism in the Eastern Cape health department,” said DA provincial shadow health MEC John Cupido in a statement.

“The report by the SIU, which has revealed major corruption and nepotism worth billions, must be made public,” he said.  Cupido added that the application included a request to release the names of companies, officials and units within the health department involved in corruption.

“At the very least, the audit report, commissioned by Premier Noxolo Kiviet and Health MEC Sicelo Gqobana, must be formally presented to the Provincial Legislature's Portfolio Committee on Health.

The DA also requested that extensive feedback be given to the committee on steps being taken against health department employees and their families implicated in the SIU report. “Service delivery in the Eastern Cape, across all departments, is at an all-time low. One of the reasons for this is the ongoing practice of civil servants who are doing business with the province, instead of getting on with the jobs that they are being paid to do. The DA will continue to lobby for insider trading to come to an end.”


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