A “secret” report by suspended Inspector-General of Intelligence (IGI) Imtiaz Fazel has revealed how national police commissioner Gen Fannie Masemola and SAPS Crime Intelligence boss Lt-Gen Dumisani Khumalo may have committed “gross” financial misconduct in the procurement of buildings amounting to more than R120-million.
The duo is accused of bypassing due process in the acquisition of five buildings across the country, which were to be used as SAPS-CI operational centres and safe houses.
Three of the properties are in Gauteng and were bought for R85-million, with a property in KwaZulu-Natal as well as one in Free State.
The IGI was investigating allegations of procurement irregularities and circumvention of processes as well as the abuse of the Secret Services Account, colloquially known as the slush fund.
Khumalo is accused of misleading Masemola into signing a deviation from ordinary procurement laws to the detriment of the taxpayer to the tune of more than R120-million.
This while Masemola is thrown under the bus for negligently signing off on the deviation without due diligence as the accounting officer of the SAPS.
“[Masemola] should be charged with financial misconduct in terms of section 38 of the PFMA (Public Finance Management Act), in that he negligently prejudiced the administration, discipline, or efficiency of the department, in that he approved two generic and defective ‘global deviations’ during the 2023-24 and 2024-25 financial years, which were not in line with the relevant procurement prescripts, and in particular, regulation 3.3.4 of SCM Instruction 2 of 2021-22,” reads the report.
“These ‘global deviations’ were used by management of SAPS-CI to procure five buildings, including the Veroz Boutique Hotel, thereby causing the Secret Services Account (slush fund) to incur irregular, fruitless, and wasteful expenditure in excess of R120-million.”
The investigation concluded that Masemola failed to fulfill the general responsibilities imposed on him in terms of the section 38 of the PFMA.
The report is emphatic that Masemola was found wanting in terms of ensuring that the slush fund maintains effective, efficient, and transparent systems of financial and risk management and internal control.
On Khumalo, the report is extremely damning, laying the blame squarely at his door as the chief induna of the CI division, for whose use the properties were procured, with him as the mastermind behind the whole scheme. “[Khumalo] should be charged with gross financial misconduct in terms of section 45 of the PFMA for administering a flawed procurement process … for failing to comply and/or ensure compliance with provisions of the PFMA…” the IGI recommended.
“He misled the national commissioner and caused him to approve generic and defective global deviations, which were not in line with the relevant procurement prescripts… and thereby causing the Secret Services Account to incur irregular, fruitless, and wasteful expenditure in excess of R120-million.
“He failed to report to the National Treasury and AGSA within 10 days of the approvals of ‘global deviations’ from normal SCM processes as required by the Treasury Regulations [and] approved the payment of R28 769 924 for the purchase of the Veroz Boutique Hotel, which was not planned or budgeted for, and allowed SAPS uniform branches, not funded through the Secret Services Account, to take occupation of the Veroz Boutique Hotel.”
The report blames Khumalo for a total of eight procurement and supply chain-related transgressions and negligence in the acquisition and use, or lack thereof, of the five buildings.
The IGI found that Masemola blundered by issuing a blanket deviation for all five properties, arguing that each building should have had its own separate deviation.
As for Khumalo, the investigation report states that he should have reported the deviations to the National Treasury within 10 days of such approval, but he failed to do so.
