A legal firm pocketed more than R2,688,799.47 from the National Arts Council (NAC) in just one year, despite the entity having budgeted a mere R500,000 for legal services.
Evidence seen by Sunday World shows that the NAC’s legal bills exceeded the budget by more than R2.1-million.
The firm, which cannot be named for legal reasons, had been appointed in the 2020/2021 financial year to handle only (Presidential Employment Stimulus Programme) PESP-related legal matters. But interim CEO Julie Diphofa allegedly authorised additional work outside the firm’s initial mandate.
Sunday World can further reveal that Diphofa and interim CFO Reshma Bhoola were cautioned about the irregular expenditure but allegedly ignored the warnings.
“This legal firm was appointed from a legal panel of 60 to attend solely to PESP legal matters. By the end of August 2022, the firm had been paid R2,688,799.47. And the procurement office was still receiving more invoices,” said an insider.
Irregularities flagged during audit
The irregularities were also flagged during an audit.
“Auditors found that we were not utilising and rotating work among the panel of 60 legal firms. They also found that this legal firm had been used beyond its mandate, outside of PESP matters. As a result, the exorbitant payment had to receive Treasury approval to continue with PESP cases. The recommendation was that we obtain three quotations from service providers on the panel,” said another source.
Some of the payments:
- August 2021: The law firm pocketed R378,982.50 for just three cases. This included a notice letter to an overpaid beneficiary that cost R2,875.
- October 15 2021: They were paid R121,017.50 for nine cases. This included a letter of apology billed at R5,750.
- October 29 2021: They received R533,936.72 for 11 cases.
- December 9 2021: They pocketed R291,080.76, which included R23,718.75. This was for an opinion on implementing recommendations in a legal report.
- March 30 – June 30 2022: The firm received R678,453.28, which included R14,662.50. This was for drafting an opinion on the appointment of a council member to an administrative position. R12,075.00 for drafting a letter to DSAC, R15,525.00 for drafting a joint statement. R15,525.00 for drafting an MOU for a concert in Durban, and R8,625.00 for drafting a letter to a media house.
Implicated officials still in office
“We have reported this to the Public Protector, the NAC CEO Lebogang Mogoera, and NAC Chairperson Eugene Botha. But they do not seem to be interested. We are concerned about the protection of witnesses, as they might be intimidated or unduly influenced. The entire investigation is already compromised because the implicated individuals still have full access to evidence. The evidence includes procurement records, legal contracts, and internal communications.
“We feel that the independence and fairness of the investigation is compromised. [Because] the implicated officials still occupy positions of authority within the NAC,” said the source.
Botha and Mogoera were approached for comment, but at the time of publishing, they had not responded.
Public Protector Spokesperson Salvation Mokgatlhe confirmed awareness of the matter. “We shall provide a full response during the week,” said Mokgatlhe.
