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Phumza Portia Gambula, 48, appears in Mthatha Regional Court linked to R4.8 million Covid-19 fraud and corruption charges. (Photo: Hoseya Jubase)
The Hawks make their first Covid-19 related procurement fraud arrest in the Eastern Cape on Thursday morning during an early visit to the home of a business owner who charged the OR Tambo district municipality R4.8 million for a door. awareness campaign at home.
With her head covered by a white scarf, wearing a mask, oversized sunglasses and armed with a bottle of hand sanitizer, the owner of the Phathilizwi Training Institute made a brief appearance at the Mthatha Regional Court on Thursday morning, after she was arrested by the Hawks. in his house.
(Photo: Hosea Jubase)
Phumza Portia Gambula, 48, was provisionally charged with fraud. She was released on bail of 20,000 rand and the matter was referred to October 30.
He indicated to the court that he will plead not guilty.
Gambula is the owner of the Phathilizwi Training Institute, a company that charged the OR Tambo District Municipality R4.8 million for a door-to-door campaign related to Covid-19.
The arrest came a day after the forensic investigator, Msekeli Nqabeni, presented his findings on the matter to the OR Tambo district municipality.
(Photo: Hosea Jubase)
Hawks spokesman Col. Katlego Mogale confirmed the arrest of Gambula by the serious commercial crimes investigation team for alleged fraud worth more than R4.8 million in perceived losses for the OR Tambo district municipality .
It is alleged that the company and its sole director intentionally submitted fraudulent documents alleging that it conducted door-to-door awareness campaigns for the prevention and containment of Covid-19 in rural communities in the municipalities of Port St. Johns, King Sabatha Dalindyebo and Mhlontlo. .
“The director then billed the three municipalities for a sum of more than R4.8 million for services that were partially rendered with fraudulent supporting documents,” Mogale said.
According to Nqabeni’s report, the company already had a contract for community education workshops.
The report further stated that the company was not registered for VAT and that they were offering a price of R660 per person for the awareness campaign. They later recorded and then added VAT to this quote.
Investigators found that while some city officials were still waiting for the amended listing, as they said the price was too high, the contract with the company was signed without involving supply chain management.
Then the purchase orders were generated retrospectively.
The report further stated that during an interview with a senior municipal official, she said that the contract was extended in February 2020 or around that date until the end of June 2020.
The report says that she told investigators: “It has always been a norm in the OR Tambo district municipality that service providers with forward contracts provide services without signing a requisition document and issuing a purchase order. Purchase orders would normally be issued as a formality when the service provider issues the invoice after rendering the services; adding that it was difficult to contact the supply chain management officials to finalize the issuance of the purchase order as they were under pressure due to Covid-19. ”
The investigators, however, questioned this as they found an email from the municipality asking the director to submit a formal quote and a signed requisition document to begin the process of generating a purchase order; and that the company was hired despite an instruction from a senior municipal official that rates should be lowered as they inflated.
Phathilizwi is registered for VAT, but charges the municipality a rate of R660 before VAT instead of R660 including VAT. According to the invoice of May 21, 2020, the services were provided to 4,000 people at a rate of R660 before VAT, thus amounting to R2,640,000 before VAT. The 15% VAT amounted to R396,000 which was then added and a total invoice of 3,036,000 was issued.
A similar invoice dated March 26, 2020 added $ 37,600 in VAT for a total of $ 1.8 million.
The report concluded that the municipality was overcharged by R633,600.
Researchers appointed by the municipality found that a senior municipal official only checked the bills “at random”, as he “was careful to be infected with the virus.”
“According to her, she noticed that some of the attendance records had the same handwriting and the same signatures. He indicated that he was informed that people avoided using the same pen and swapping papers for fear of being infected by the virus, ”the report said.
“There is insufficient evidence from the attendance record attached by Phathilizwi to their invoices for Phathilizwi to show that they covered the number of people they claim to have covered on their invoice and therefore worthy of the amount they claim on their invoice,” the forensic report completed. DM / MC
