How Joburg paid almost R1m for an old-age home wall that never existed

The City of Joburg paid nearly R1-million for a boundary wall that did not exist, after photographs from another site and five unchecked invoices were accepted as proof of completion.

In a blatant act of fraud, a subcontractor submitted photographs of a boundary wall built elsewhere and presented them as proof of a wall constructed at Moffat View Old Age Home, south of Joburg.

Even though no such wall existed at the site, the city released nearly R1-million through five invoices submitted for work that was never done. Included in these invoices were amounts for the hiring of scaffolding for a two-metre-high wall and plastering, despite the photographs submitted showing a face-brick wall.

The fraud went undetected for months, surfacing only after a ward councillor queried the project — raising questions about how many similar contracts may have passed through the system unchecked.

Ward councillor Faeeza Chame, who represents Ward 57 in Johannesburg, said it was resident complaints and her own follow-up that ultimately exposed the fraud. Chame said residents at the old-age home had repeatedly complained about people jumping the fence, breaking into units and stealing outdoor furniture and personal belongings, prompting a request for a security wall that was formally included in the ward’s Integrated Development Plan.

Read more: Joburg’s abandoned elders — inside the city’s failing old-age home system

“Surprisingly, the request was activated quickly and, as ward councillor, I was informed that it was going ahead,” she said. “As councillors, we do not get involved in tenders or procurement. This was done by the old-age home manager.”

Chame said that about six months later, she queried the project and was told the wall had been completed and the contractor paid. “I was stunned,” she said. “I visit the facility often and have never seen a wall.”

She said she immediately challenged the claim, which led to the discovery that the photographs submitted as proof of completion were not of Moffat View at all, but of a wall at Reuven Retirement Village. “That is when the fraud was uncovered,” she said.

Chame said that although she had since been told the money had been repaid, she had repeatedly asked for proof. “To this day, I have never been given proof that the money was actually recovered,” she said.

‘Brazen act of corruption’

The seriousness of what followed is set out in a formal letter dated 22 December 2023 from the former MMC for Human Settlements, Anthea Natasha Leitch, who wrote with “grave concern” about the missing boundary wall and warned that the matter could not be dismissed as an administrative error.

“If such a brazen act of corruption could have occurred at Moffat View, what else has been going on?” Leitch wrote, calling for a full, independent forensic investigation into work carried out by Johannesburg Social Housing Company (Joshco) on behalf of her department.

Leitch detailed how five split invoices were approved for what was meant to be a single boundary-wall project — a practice she said undermined basic MFMA controls and should have triggered immediate scrutiny.

She listed multiple anomalies that she described as obvious red flags: scaffolding costs claimed for a wall only two metres high, plastering costs claimed despite photographs showing a face-brick wall, and the absence of foundation costs, which she said was inexplicable for any boundary wall.

“These issues should have been picked up,” she said, even during the most basic verification.

The failures went beyond invoice checking, Leitch added. One of her strongest criticisms was that Joscho failed to comply with an agreed process requiring the Human Settlements Quantity Surveying unit to approve quotations before any purchase orders were issued. That safeguard, she said, was bypassed entirely, removing a critical technical control designed to prevent inflated or irrational claims and directly contributing to the irregular approval of the invoices.

Leitch’s letter also records that an internal warning was raised months after payment had already been made. In September 2022, when the contractor unexpectedly arrived on site, a Human Settlements official, Zanele Malusi, emailed Themba Mathibe, who was serving as Joshco’s chief operations officer, to point out that quantity surveying approval had not been obtained and that proper purchase orders had not been issued.

Mathibe was arrested on Tuesday, 27 January, for money laundering regarding procurement irregularities at Joscho. SAPS said he was found with a “substantial” amount of money at his home.

Read more: Joburg Development Agency boss arrested with ‘substantial’ amounts of cash

Leitch said Mathibe did not respond to her warning.

“Had he responded, this entire unfortunate outcome more than a year later would have been less severe,” she said, adding that without Malusi’s intervention, the city would probably have remained unaware that it had paid for a wall that did not exist.

Leitch also highlighted what she described as a troubling contradiction: the wall had been certified as complete and paid for, yet the contractor later appeared on site to actually build it and was allegedly told not to proceed.

She further raised concerns about how the recovery of the funds was handled, saying the Joshco chief operating officer engaged directly with the contractor to arrange repayment without consulting the CEO, without legal advice, and while communicating outside normal reporting lines — all while a forensic investigation was already under way.

Those concerns were echoed at board level. In a resolution arising from a special in-committee meeting on 22 December 2023, the Joshco board recorded that it had discussed “the possibility of interference with the investigation by senior management of Joshco in trying to recover the unauthorised funds”.

The board noted the intention of the CEO to institute precautionary suspension against the COO, Mathibe, and any other officials for possible interference with the investigation, and resolved that an independent forensic investigation be instituted, with the scope to be determined by the chair of the board and the audit and risk committee chair.

Funds recovered, questions remain

The City of Johannesburg, responding through spokesperson Nthatisi Modingoane, confirmed that Eenbee Plumbing CC had been appointed through Joshco’s Repairs and Maintenance panel under tender JSH015956 to build a boundary wall at Moffat View Old Age Home, with the approved scope being a wall along five sides of the facility.

He said that on 15 June 2022, a former Human Settlements area manager signed “happy letters” confirming receipt of goods and services, which, under city processes, authorised payment once submitted to Joshco’s finance department. Payment of R986,129.09 was made on 1 July 2022.

Modingoane confirmed that the photographs submitted as proof of completion were supplied by the contractor itself and that verification relied on Human Settlements officials confirming that the work had been done. That verification, he said, was later found to be incorrect.

Following an investigation by Group Forensic and Investigation Services and the former Human Settlements executive director’s office, it was confirmed that the contractor “made a misrepresentation”. The wall shown in the photographs, he confirmed, was not at Moffat View Retirement Village, where no wall existed.

According to the city, once the misrepresentation was established, a recovery of all monies paid to the contractor, totalling R986,129.09, was initiated and the funds were repaid.

The contractor was removed from all Joshco panels, a process to blacklist the company was initiated, the matter was reported to Group Supply Chain Management, and the Human Settlements project manager responsible was charged with misconduct and dismissed. The forensic investigation was concluded on 28 March 2024.

Eenbee Plumbing CC, a Midrand-based civil engineering, general construction and plumbing contractor founded in 2009, describes itself on its website as a long-standing public-sector service provider and lists work for the City of Johannesburg, Joshco, City Parks and Zoo and other government entities among its past projects.

The city has not publicly disclosed how many contracts the company may have received across municipal or provincial entities, nor whether it continued to receive public work after the discovery of the fraud.

While the city says the money was ultimately recovered, the documentary record shows that five invoices were approved for a single project, technical impossibilities were ignored, quantity surveyors were excluded, an internal warning went unanswered and payment was authorised for a structure that did not exist.

As both the ward councillor who raised the alarm and the MMC who demanded a forensic probe have warned, the case raises a far larger and still unanswered question: if this could happen at an old-age home security project, how many other contracts passed through the same broken system without ever being detected?

Eenbee did not reply to Daily Maverick’s request for comment. DM