The National Health Laboratory Service is fighting fraud, with tip-offs proving vital to the effort

The National Health Laboratory Service (NHLS) has often been in the headlines in recent years for lengthy delays and a massive backlog in releasing forensic test results, but another story – one of tackling corruption, fraud and tender irregularities – has quietly been unfolding behind the scenes. 

As part of a written answer to a question in Parliament, Health Minister Aaron Motsoaledi has published data and information showing that the NHLS has been tackling crime and corruption – and acting on public tip-offs. His answer has offered a rare glimpse of what accountability looks like in the public health sector. 

The NHLS is the primary provider of diagnostic pathology services to the public health sector in South Africa, which means it handles the laboratory analysis of patient bodily samples. In addition, its forensic chemistry laboratories handle the tests for blood alcohol analysis as well as toxicology tests to determine causes of death.  

In 2019, after a corruption scandal relating to information technology (IT) contracts worth about R200-million at the service, it introduced the Vuvuzela tip-off hotline to receive information on where things are going wrong.

Read more: Labour Court orders former NHLS chief to pay R22m in damages 

The Vuvuzela platform is independently managed by the Audit and Risk Department of the NHLS, ensuring the impartial handling of reported concerns.

Since 2019, it has received 175 tip-offs on the hotline. Motsoaledi said 75 of them were not related to fraud or any crime, and were sent to the NHLS management for res­­olution as they mostly dealt with customer debt en­­quiries, complaints regarding noncompliance with Covid restrictions and re­­quests submitted un­­der the Promotion of Access to Information Act.

Of the remaining complaints, 24 were substantiated and actions were taken against those re­­spon­­sible. Another 14 investigations are still continuing. 

Cleaning up

Since her appointment as CEO of the NHLS in 2024, Professor Koleka Mlisana has had to battle an extensive cyberattack that took out the service’s systems, as well as R9.2-billion in bad debt racked up by provinces not paying for their medical tests.

Read more: Information Regulator demands details on cyberattack from NHLS

Speaking in Parliament recently, Mlisana underscored the importance of a functioning NHLS in the public sector, emphasising that more than 90% of clinical decisions taken in state hospitals around the country are based on the results it produces. 

In the early days of the hotline, until 2021, the substantiated tip-offs related mostly to scammers fraudulently using doctors’ practice numbers, as well as irregular procurement processes. In the latter instance, several employees were subsequently dismissed from the service or resigned.

Mlisana said the NHLS has “always had a challenge in supply chain management and within the procurement department”, but added that work was being done to “clean this up”. Part of this strategy is the Vuvuzela hotline. In terms of threats from outside the organisation, the hotline received two tip-offs in 2020 that a ­scammer was impersonating the NHLS and had issued a fake request for quotations. The claims were substantiated, and followed by a fraud awareness campaign. 

In 2021, a case was opened with the police after information was received on the hotline that someone had changed NHLS laboratory test results for their own benefit.

Internally, there have been tip-offs on instances of theft and abuse of NHLS assets as well as nepotism. They have also been followed up and resulted in disciplinary action and dismissals.

In the past year, a tip-off resulted in an investigation into an employee who was selling fake NHLS test results. There have been instances in the past when this was done to obtain a disability grant from the SA Social Security Agency. This employee, however, died while the investigation was taking place.

Two sets of tip-offs were received about procurement processes, Motsoaledi said, and both were being investigated. In another case generated from a tip-off to the Vuvuzela hotline, an employee was found to have faked their qualifications. This case, too, was substantiated, but the employee resigned before steps could be taken, Motsoaledi said. 

The most recent tip-offs included a service provider’s attempt to bribe an employee for a tender award. It was reported to management, who informed the police. 

Past mistakes

In September 2024, former NHLS chief executive Joyce Mogale and the late former chief financial officer, Sikhumbuzo Zulu, lost their case in the Labour Court against their dismissal for fraud and corruption in 2019. Zulu died before the court proceedings were concluded.

Mogale was ordered to pay the public entity about R22-million for losses related to one of three questionable contracts. The board of the NHLS described the ruling as a “victory for governance”. 

The NHLS became aware of irregularities in three contracts worth about R200-million in February 2017. Mogale and Zulu were suspended and subsequently dismissed after a disciplinary hearing. The Vu­­vuzela hotline was introduced shortly after that.

During their disciplinary hearing, advocate Nazeer Cassim SC said Mogale and Zulu had displayed conduct “symptomatic of the grand-scale looting and thievery in our country”. He added: “People of their ilk … are on the lookout to enrich themselves. They plunged their employer into serious financial prejudice.” 

Mogale appeared in the Palm Ridge specialised commercial crimes court in September 2024, where she was charged with  fraud and contravention of the Public Finance Management Act over an IT contract with a company called Blue Future. She was released on R20,000 bail. 

Her co-accused are the former head of NHLS supply chain management, Graham Motsepe, former manager of contracts and ­tender compliance Mthunzi Mthi­mkulu, former legal manager Sibusiso Mthenjane and the owner of Blue Future, Pierre Petersen. 

Provincial health departments owe lab service R9.7-billion

One of the biggest risks to the financial stability of the NHLS, the state’s forensic and pathology laboratory service, is failure by provincial health departments to pay their bills.

Read more: Provinces owe NHLS R8.9bn amid labs urgently needing upgrades and staff

According to information provided to Parliament by the NHLS, provincial health departments owe the service R9.7-billion. 

The two biggest debtors are the Gauteng department of health, owing R1.9-billion, and the Eastern Cape department of health, owing R1.3-billion. The Free State’s debt has escalated to R523-million, the Northern Cape owes R475-million and North West owes R402-million.

Answering questions from members of Parliament, NHLS chief financial officer Pumeza Mayekiso said KwaZulu-Natal had no current debt, but it did have a historic debt of R2.5-billion that it was paying off. She said discussions had begun with the Eastern Cape and Gauteng. 

Mayekiso added that there was a payment plan in place for Gauteng, but the province had been having trouble making payments since the Covid-19 pandemic. 

Limpopo and the Western Cape’s debts to the NHLS were up to date. Mpumalanga had no historic debt, but its current debt stood at R59-million. Mayekiso added that she hoped to open discussions with the Free State department of health soon.

Documentation before Parliament ex­­plains that the provinces make up 95% of the NHLS’s billing, but they claim that their own dire financial position makes it difficult for them to pay the service on time. DM

This story first appeared in our weekly DM168 newspaper, available countrywide for R35.