SIU recovers R25m from Covid-19 school sanitising contracts

The Special Investigating Unit (SIU) has completed several settlement agreements with service providers and individuals linked to controversial contracts awarded by the Gauteng Department of Education (GDE) at the height of the Covid-19 pandemic.

This follows a landmark 2022 judgment by the Special Tribunal, which officially reviewed and set aside R431-million worth of highly irregular contracts awarded by the GDE. The contracts were handed out for the decontamination, disinfection, and sanitisation of schools as the department prepared to reopen.

Selby Makgotho, SIU spokesperson, said the SIU has since concluded settlement agreements with some service providers and individuals linked to the Chachulani Group Investment Holdings (Pty) Ltd respondents, who have agreed to pay the SIU R25-million in full, out of the R40-million paid by GDE.

A total of 16 service providers, trusts and individuals linked to the Chachulani Group respondents signed the settlement. This network, which includes entities such as Muta Investment Holdings, Psychin Consulting, Home Ground Trading, and members of the Negota and Motau families, authorised financial institutions to debit the preserved amounts directly from their accounts.

The Naledzi Investment Trust bears the brunt of the financial recovery, with R12,898,728.09 from two offshore unit trusts and R8,000,000.00 from its domestic account, while Netvision Energy Savers will cough up R1,708,749.00, Mpale Investments Holdings will pay R1,684,639.91, and Chachulani Group Investment Holdings will forfeit R707,892.00 to complete the R25-million clawback.

The financial institutions are required to transfer the settlement amount into the SIU’s bank account within seven days of the Tribunal granting the order.

Newsroom exposé triggered probe

This multimillion-rand clawback represents the culmination of an accountability drive set in motion by a series of Maverick Citizen exposés.

In November 2020, former Maverick Citizen editor Mark Heywood penned an article outlining how the GDE racked up a staggering R98-million bill on “sanitising buildings” in just a single month. The funds were allocated to 28 companies, many of which had no apparent cleaning or disinfection specialisation.

While the department justified the spending as essential deep-cleaning to protect returning learners, the article highlighted missing order numbers, vague transaction dates, and scientific consensus from medical experts like Professor Shabir Madhi, all pointing to an inflated and irregular procurement scheme.

In January 2021, Heywood’s Maverick Citizen investigation was the first to uncover that R431-million had been spent by the Gauteng Department of Education to sanitise public schools. Between June and August 2020, the GDE spent about R431-million on “decontamination”, “deep cleaning”, and sanitising schools, paid through hundreds of sundry payments to many companies, some with no cleaning expertise, despite national health and education guidelines that did not require fumigation or deep‑fogging and recommended only routine surface cleaning with approved disinfectants.

Investigations and reporting by Maverick Citizen found the payments were excessive and poorly justified, with little transparency about what services were actually performed and critics calling the expenditure wasteful and potentially irregular or corrupt. Because of Maverick Citizen’s exposé and continued investigations, former Gauteng MEC for Education, Panyaza Lesufi, was forced to ask the SIU to investigate.

WhatsApp deals, arbitrary pricing models

An SIU investigation found that the GDE deviated from standard procurement processes after schools were closed during the peak of the pandemic in March 2020 and subsequently reopened in June 2020 under the Covid-19 Disaster Management Regulations.

As part of preparations for the reopening of schools, the GDE implemented cleaning protocols requiring schools with reported Covid-19 cases to close temporarily for decontamination and sanitisation.

The SIU’s probe found that service providers were sourced informally from existing supplier databases, referrals, and WhatsApp messages without the involvement of the GDE’s Supply Chain Management (SCM) division, despite SCM being responsible for sourcing and vetting suppliers.

The investigation also revealed that the procurement process was not cost-effective, as service providers were not paid per square metre of the area cleaned. Rather, a senior official in the GDE appeared to have arbitrarily decided to offer a fee of R250,000 to R270,000 for the decontamination of primary schools; R250,000 to R290,000 for secondary schools; and R250,000 to R300,000 for district offices.

Fees charged were not proportionate to the work performed by the service providers or the cost of materials used.

Unfair and inequitable processes

The SIU found that the selection and appointment of the service providers were conducted in a haphazard, unfair and inequitable manner, contrary to the requirements of Section 217 of the Constitution. Senior officials involved in the procurement process also admitted that prescribed SCM procedures were not followed.

“This settlement is a critical outcome of the SIU’s relentless efforts to recover public funds lost during the Covid-19 National State of Disaster. The SIU remains committed to protecting public funds, restoring integrity in procurement and ensuring that those who unlawfully benefit from state contracts are brought to justice,” said Makgotho.

Sanitisation scandal ‘tip of an iceberg’

Heywood welcomed the SIU’s success but emphasised that recovering R25-million is merely a drop in the ocean. He added that he trusts the SIU will continue to aggressively pursue the rest of the money, using this successful order as the added impetus and legal precedent to make sure all the other contractors repay as well.

“I welcome the fact that five years after this unlawful, corrupt deep cleansing of Gauteng schools, it has been possible to recover R25-million from one of the companies. However, every single cent of that R431-million was wasted because this so-called cleaning, cleansing and fogging was entirely unnecessary and ineffective,” he said.

Heywood said that the school sanitisation scandal was merely the tip of an iceberg, pointing out that several billion rand was plundered across various state organs through identical disinfection schemes between 2020 and 2021.

“I think it is important for the public to keep an eye on this to make sure that all these monies are recovered [...] The most egregious case was what we know as the Red Roses case, which, at least, is now before the special tribunal, but that is an example where R500-million was spent,” he explained.

Looking back at his investigative work, Heywood explained that it was possible because at the time, the Gauteng government published monthly expenditure disclosure reports which provided an itemised, line-by-line ledger of public spending that detailed the exact amounts used, the specific services procured, and the precise identities of the contractors.

“The Gauteng government stopped producing those because it gave the public too much access to information in their view, but this is proof that greater transparency, perfectly reasonable transparency as this is public money, leads to reduced wastage and corruption,” he said.

When Daily Maverick reached out to the GDE for comment, spokesperson Onwabile Lubhelwana said a statement would be released during the course of the day. The article will be updated once this is available. DM