Finance Minister Enoch Godongwana has appointed Stadi Mngomezulu as the acting CEO of the Government Pensions Administration Agency (GPAA), following the suspension of chief executive Kedibone Madiehe over allegations of a massive R1.2 billion procurement fraud.
The move, announced on Friday, comes amid explosive claims from the Public Servants Association (PSA) that its members within the agency were threatened with suspension and disciplinary action when they attempted to question the allegedly irregular transactions.
Minister Godongwana has ordered a full probe into the alleged fraud. The incoming acting CEO, who is the Deputy Director-General at the National Treasury, is expected to take decisive action against top executives believed to have played a critical role in the scandal.
In a revealing interview, PSA General Manager Claude Naicker detailed a culture of intimidation and fear that allowed the alleged corruption to fester. According to Naicker, the first red flags were raised by concerned GPAA employees and an internal audit report that identified transactions “that were not kosher.”
The situation escalated when a senior official and PSA member, upon discovering dubious payment instructions, respectfully sought clarity from senior management and the CEO.
“Upon inquiring about these transactions, he was then charged for insubordination,” Naicker stated. After the PSA assisted him in making representations, the official was instead placed on “precautionary suspension.”
This action had a chilling effect. Naicker revealed that multiple other staff members then approached the union, afraid to carry out instructions they believed were unlawful. They were reportedly met with threats.
“Senior management and the CEO [were] threatening staff, yet fully aware that an internal report had flagged this transaction as irregular,” Naicker said. “They yet went ahead and instructed staff to actually pay these transactions… they were threatened with insubordination and threatened with disciplinary action.”
The PSA alleges that this pattern of bullying prevented the irregular payments from being processed, potentially saving the public purse millions.
While welcoming the Minister’s intervention, Naicker pointed out that the warning signs were not new. “It’s not something new that the minister of finance just heard about. These reports surfaced in the media a long time ago,” he said, expressing hope that the new leadership would allow officials to do their jobs without fear of prejudice.
He also highlighted a common problem across government departments where junior staff are often made “scapegoats” for following unlawful instructions from superiors, only to be charged themselves when the irregularities are discovered.
Naicker held up the actions of the suspended official as a “brave” and “exemplary” example for the public service. “If all public servants can do that… I think we can root out corruption and maladministration in the public sector.”
The matter is also expected to be scrutinized by Parliament’s Portfolio Committee on Public Service and Administration when it returns from recess.