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Daily Maverick
6 hours ago
- Business
- Daily Maverick
Weaponising the Public Finance Management Act: A new legal trend threatening public sector discipline
A concerning trend is emerging in public sector employment. Employees facing disciplinary action are increasingly wielding the Public Finance Management Act 1 of 1999 (PFMA) not as the accountability tool it was designed to be, but as a shield against workplace consequences. This strategic pivot transforms financial governance legislation into an employment litigation weapon with potentially far-reaching implications for public administration. The PFMA was enacted in 1999 with the primary purpose of establishing a robust framework for financial governance in South Africa's public sector. At its core, the act aims to secure transparency, accountability, and sound management of revenue, expenditure, assets and liabilities across national and provincial government institutions. Among its core objectives, it provides mechanisms to prevent irregular, unauthorised, as well as fruitless and wasteful expenditure, thereby safeguarding public resources against misuse. The recent Labour Court case of Vico v The Department of Forestry, Fisheries and Environment offers a compelling illustration of this new phenomenon. Thembalethu Vico, a director within the department who faced dismissal following disciplinary proceedings related to the removal of confiscated abalone valued at approximately R7.5-million, sought to challenge his dismissal through an unusual legal avenue: by attacking the procedural aspects of his disciplinary hearing through the lens of the PFMA. At the heart of Vico's application was an attempt to secure declaratory relief related to what he characterised as incomplete disciplinary proceedings. His arguments centred on several PFMA-related assertions: that the employer had 'unjustly and unfairly terminated' the briefing contract of the disciplinary hearing chairperson; that this termination caused 'unreasonable delay' in his disciplinary hearing; that respondents 'contravened the applicant's right to fair labour practice'; and rather notably, that expenditure on recusal applications against the chairperson constituted 'fruitless and wasteful expenditure' under the PFMA. The Labour Court's response was unequivocal. In his judgment, Judge Robert Lagrange not only dismissed the application, but characterised it as 'vexatious in nature', ordering the applicant to pay the respondents' costs. 'An attempt to circumvent the proper forums for labour disputes' The court found that Vico was 'no stranger to legal principles and reasoning' and determined that his PFMA-based arguments represented an attempt to circumvent the proper forums for labour disputes — namely the General Public Service Sectoral Bargaining Council where he had already lodged an unfair dismissal claim. This case highlights a broader issue deserving closer scrutiny: the strategic repurposing of financial management legislation to serve employment law objectives. The PFMA, enacted in 1999, was designed to promote transparent and effective management of government finances — not as a mechanism for employees to challenge disciplinary outcomes. Yet increasingly, we witness creative legal arguments that stretch the PFMA beyond its intended boundaries. Several notable examples demonstrate this concerning pattern in other contextual scenarios: Unsuccessful tender bidders increasingly invoke the PFMA not to address genuine financial irregularities, but to contest legitimate procurement decisions they simply disagree with. By alleging technical PFMA violations, these bidders attempt to overturn procurement outcomes through financial management legislation rather than following appropriate procurement appeal processes. Some employees facing disciplinary action for performance or conduct issues have strategically repositioned themselves as 'whistleblowers' under section 51 of the PFMA. By claiming they were disciplined for reporting financial misconduct, rather than for their own workplace infractions, they attempt to transform standard employment disputes into protected disclosure matters. Some senior employees facing poor performance reviews have contested their evaluations by claiming they were instructed to take actions that would violate the PFMA. This transforms performance management into a complex legal dispute about financial legislation interpretation. Public entities facing pressure to implement organisational changes have cited PFMA compliance concerns as reasons to delay implementation, effectively using financial legislation as a strategic tool to resist operational reforms. Perhaps most troublingly, the PFMA has become weaponised in political contexts, with allegations of technical PFMA violations used to undermine political opponents in positions of financial accountability, regardless of whether actual financial mismanagement occurred. In the misconduct context, the implications of this trend are significant. Public sector managers face the daunting prospect of defending not only the substantive merits of disciplinary decisions, but also navigating complex arguments about whether their internal processes satisfy the technical requirements of financial legislation. This creates a chilling effect on departmental decision-making, potentially undermining efforts to address misconduct effectively. More worryingly, this legal strategy diverts valuable court resources. Judge Lagrange noted that the application was largely an attempt to revisit a matter that had already been decided, writing that 'it beggars belief that the applicant could have seriously believed that he could simply avoid the unequivocal effect of the judgment by approaching this court under the guise of an application for declaratory relief'. When courts must attend to such applications, genuine cases requiring judicial attention face delays. The Department of Forestry, Fisheries and the Environment's approach in the Vico case provides a template for addressing such claims. Rather than becoming entangled in debates about the PFMA's application to employment matters, they successfully redirected the court's attention to the jurisdictional question: Whether the Labour Court was the appropriate forum for what was essentially an attempt to relitigate disciplinary proceedings through a different legal framework. Distinct forums and remedies PFMA matters and employment disputes are meant to follow different procedural paths, with distinct forums and remedies designed to preserve the integrity of both systems. When properly invoked, PFMA concerns should follow established channels that begin with internal departmental controls, escalate to Treasury oversight, proceed through audit mechanisms via the Auditor-General's examination, involve executive accountability and operate through specific financial misconduct procedures established in the PFMA — all pathways that exist distinctly from labour dispute mechanisms. Notably absent from the PFMA is any provision making the Labour Court a forum for adjudicating PFMA violations, which is why the Department of Forestry, Fisheries and the Environment correctly focused on the jurisdictional question, highlighting that the applicant was attempting to bypass proper forums for both employment disputes (the General Public Service Sectoral Bargaining Council) and financial governance concerns (internal controls, Treasury oversight and potentially criminal proceedings). As this trend continues to evolve, public sector employers would be wise to develop proactive strategies. This includes ensuring that disciplinary procedures are documented with meticulous attention to detail, that financial decisions related to such proceedings are properly authorised, and that legal teams are prepared to address PFMA-based arguments directly. The PFMA represents a crucial pillar of democratic governance and institutional transformation. The act has become instrumental in the country's ongoing struggle against corruption and State Capture — challenges that have threatened South Africa's democratic foundations and economic stability. However, the judiciary's response in the Vico case sends a clear message: the PFMA cannot be weaponised to circumvent established labour relations processes. This judgment establishes an important precedent that may discourage frivolous applications of this nature. Ultimately, public administration requires both financial accountability and efficient personnel management. When these systems are placed in artificial opposition through creative litigation strategies, neither objective is well served. The Labour Court's firm stance in the Vico case represents a welcome correction — one that reinforces the proper boundaries between financial governance and employment law in South Africa's public sector. DM
The Citizen
4 days ago
- The Citizen
SIU blocks R3.3 million pension payout of former Gauteng HOD
The SIU secured a court order stopping Gasela's pension payout as criminal investigations continue into corruption and fraud allegations. The Special Investigating Unit (SIU) has secured a court order stopping the pension payout of a former Gauteng head of department (HOD) as criminal investigations continue into corruption and fraud allegations. The unit obtained an interim order from the special tribunal to stop the Government Employees Pension Fund (GEPF) from processing about R3.3 million in pension benefits for Matilda Matozi Gasela, the former HOD at the Gauteng department of agriculture, rural development and land reform. Additionally, until the legal proceedings are concluded, Gasela is prohibited from accessing or claiming these funds under the order which was given on May 15, 2025. Gasela allegedly played key role in mismanaging trash-collecting vehicles contract Gasela began her tenure as HOD in 2018 and allegedly played a key role in mismanaging a contract with Enviro Mobi (Pty) Ltd (later known as Groen Mintirho). SIU spokesperson Kaizer Kganyago said that Gasela authorised additional payments and approved a R6 499 712.64 settlement for 'storage costs' — an item not included in the original contract — even though the company failed to deliver the vehicles. ALSO READ: SIU to investigate Defence department's surgical mask tender from 2021 Senior counsel explicitly advised against this payment, which was later declared fruitless and wasteful expenditure. 'Her actions allegedly contravened the Public Finance Management Act (PFMA) and contributed to the depletion of public funds, as the SIU contends, in what it describes as a fraudulent scheme,' Kganyago said. After discovering evidence of criminal activity, the SIU referred the case to the National Prosecuting Authority (NPA). The SIU sent this evidence to the NPA to consider pursuing criminal charges against Gasela, including fraud, corruption and maladministration. October 2024 arrest In October 2024, authorities arrested Gasela and her six co-accused. Her co-accused include: Loyiso Mkwana, chief director: sustainable use of environment, who also served as the bid evaluation committee chair. Thandeka Mbassa, former HOD. She left in August 2018. Abdullah Mohamed Ismail, former chief financial officer and chair of the bid adjudication committee. Matlhekelo Elsie Mabe, director of Mvest Trading (Pty) Ltd. Tinyiko Mahuntsi, director of Enviro Mobi. Puleng Peter Mabe, former director of Enviro Mobi and a former member of parliament Infographic: Supplied ALSO READ: NPA lacking in lottery probe The accused appeared before the Palm Ridge Specialised Commercial Crimes Court inJohannesburg. They were linked to financial mismanagement and illegal procurement in connection with the R33 million contracts that the Ekurhuleni metropolitan municipality (EMM) and the department gave to Enviro Mobi. Kganyago confirmed that the SIU filed papers in the special tribunal to review and cancel the contract and recover R33 731 463.64 in financial losses suffered by the state. R33m financial losses 'Furthermore, as part of consequence management, the SIU has made disciplinary referrals to the department against implicated officials. An administrative referral was made against Enviro Mobi for blacklisting,' he said. According to Presidential Proclamation No. R.15 of 2021, the SIU was tasked with investigating claims of maladministration in the department and Ekurhuleni specifically concerning the contracting or purchase of 200 portable three-wheel motorised trash-collecting vehicles. ALSO READ: Thrrr…Phaaa: Musician Selaelo Selota's Mercedes frozen as SIU probes misuse of lottery funds During the 2023/24 financial year, the SIU finished its investigation into this issue and delivered the report to the president.
TimesLIVE
4 days ago
- Business
- TimesLIVE
Special Tribunal stops pension to former Gauteng agriculture head Matilda Gasela
The Special Investigating Unit (SIU) has obtained an interim order preventing the processing of a R3.3m pension payout to Matilda Matozi Gasela, former Gauteng agriculture, rural development and land reform department head. The order, granted by the Special Tribunal on May 15, also restrained Gasela from accessing or claiming these funds pending finalisation of legal proceedings against her. Gasela assumed office as head of department in December 2018 and is alleged to have played a pivotal role in the mismanagement of a contract involving Enviro Mobi (later known as Groen Mintirho). 'Despite the company's failure to deliver the required vehicles, she authorised further payments and approved a settlement of R6.5m for purported 'storage costs' — an expense not stipulated in the original contract. 'Senior counsel had explicitly advised against this payment, which was later declared to be fruitless and wasteful expenditure,' the SIU said on Friday. Her actions allegedly contravened the Public Finance Management Act (PFMA) and contributed to the depletion of public funds in what the SIU described as a fraudulent scheme.
The Citizen
5 days ago
- Health
- The Citizen
‘Monument of corruption': More suspects in court for Kimberley mental hospital scandal
The accused appeared in court following their arrest in connection with the long-standing Northern Cape mental hospital corruption case. . The accused appear in the Kimberley Magistrate's Court on Wednesday in connection with the Kimberley mental hospital corruption case. Picture: Supplied/ NPA The six additional accused, including senior government officials and private consultants, appeared briefly in the Kimberley Magistrate's Court on Wednesday, 28 May, in connection with the high-profile Kimberley Mental Health Hospital corruption case in the Northern Cape. Following their arrest and first court appearance, Lourencia Crause, Louis Adriaan van Niekerk, Monyahi Winston Modisa, Edward Charles Pullen Petzer, Motlalepula Elias Selemela and Ruth Palm face charges ranging from fraud, corruption, money laundering, and contraventions of the Public Finance Management Act (PFMA). Kimberley Mental Health Hospital The matter concerns the construction of the Kimberley Mental Health Hospital, which commenced in 2005 and saw its original R297 million budget escalate to more than R1 billion due to delays, poor workmanship, and frequent changes in contractors. The hospital was built to relieve the pressure on West End Hospital and to offer mental health services in the Northern Cape The services include child and adolescent mental health care, forensic mental health care and general adult psychiatric services. 'Monument of corruption' When Northern Cape Premier Dr Zamani Saul opened the multimillion-rand hospital back in 2019, he referred to it as a 'monument of corruption' due to its construction marred by irregularities. Spotlight reported at the time that Saul said the hospital, which has a capacity of 287 beds, will be operationalised in phases. Construction contract: Massive cost overruns In August 2005, the then head of department (HOD) for the Department of Roads, Transport and Public Works, Motlalepula Elias Selemela, awarded the construction contract to Vista Park/Joh Arch Investments. Construction of the Kimberley Mental Health Hospital ran a decade behind schedule. Picture: Supplied Irregularities were identified in the project, which allegedly contributed to massive cost overruns. Additional accused face multiple charges Selemela and Palm, also a former HOD in the department, are facing multiple charges for contraventions of the PFMA: • Selemela faces 26 counts involving unlawful payments totalling over R15.2 million. • Palm faces 24 counts, involving irregular payments amounting to R39.4 million. • Both are also charged for allegedly failing to recover penalties of approximately R11.3 million from service providers who breached contract terms. The four co-accused — Crause, Van Niekerk, Modisa, and Petzer — were directors of Strabismis Trading (Pty) Ltd and Babereki Consulting Engineers. They are charged in both their personal and fiduciary capacities for their role in facilitating payments of more than R51 million to entities that had no valid contracts with the department. Broader investigation These payments, the State alleges, were made with full knowledge that the funds were not lawfully due. The charges stem from the appointment of Babereki Consulting Engineers on 8 October 2003 to provide civil and structural engineering services for the proposed multimillion-rand psychiatric hospital. These developments form part of a broader investigation into public corruption and mismanagement. ALSO READ: The Babita Deokaran effect: New tender laws, 'hospital syndicates', whistleblower incentives List of Kimberley Mental Health Hospital corruption accused The newly charged individuals form part of the previously charged accused, including former HOD Patience Mokhali, former MEC John Block, company Babereki Consulting Engineers, and company director Tshegolekae Motaung, who are currently out on bail following their appearance in 2023. Former ANC Northern Cape chair John Block. Picture: Gallo Images/Beeld/Emile Hendriks Bail was granted to the six accused as follows: Crause was granted bail of R2 000; Van Niekerk, Modisa, and Palm were each granted bail of R10 000; and Selemela was granted bail of R5 000. The case has been postponed to Monday, 2 June 2025, when the accused are expected to join their co-accused in the Kimberley District Court. READ NOW: Sassa R4m fraud case latest: Court dismisses bail bid of accused
IOL News
5 days ago
- Business
- IOL News
KwaZulu-Natal 2025 budget re-tabled with no changes despite VAT increase withdrawal: Here's why
KwaZulu-Natal's 2025/26 Provincial Budget was officially re-tabled on Thursday by MEC for Finance Francois Rodgers following a national fiscal disruption caused by the withdrawal of the proposed VAT increase. Despite this unexpected development at the national level, Rodgers confirmed that the province's fiscal framework remains entirely unchanged. In his address to the Provincial Legislature, Rodgers reaffirmed the sequence of events that led to the re-tabling. The budget had initially been tabled on March 25, 2025, within the stipulated two-week window following the national budget announcement on March 12, as per Section 27.2 of the Public Finance Management Act (PFMA). However, with the subsequent withdrawal of the Division of Revenue Bill and the Appropriation Bill on April 24, due to the removal of the VAT increase and a revised fiscal framework, Rodgers was compelled to withdraw the provincial budget and formally communicated this to the Legislature on May 7. Rodgers said, 'Fortunately, as confirmed in a formal allocation letter to the Province by National Treasury, the withdrawal of the proposed VAT increase has had no impact on the Provincial Budget.' He further highlighted that, 'There has been absolutely no change to the fiscal framework in the Province of KwaZulu-Natal because of the withdrawal of VAT. Our budget remains a total of R158.4 billion.'
