Whistle‑blower alleges R142m consultant overspend at Compensation Fund

A whistle‑blower has told The Citizen that the Compensation Fund may have spent R142 million on overlapping consultant work, with little to show for the money and ongoing audit failures.

Alleged duplicate contracts and rising losses

According to The Citizen, the Compensation Fund allegedly blew over R96 million on consultants brought in to perform work that had already been largely completed by a previous contractor at a cost of approximately R46 million, producing a combined figure the whistle‑blower described as roughly R142 million.

Original engagement of FTMG and scope

The Citizen reports that the entity engaged FTMG Africa Advisory Services in 2022 to address long‑standing audit failures and governance weaknesses. The intervention was authorised by then employment and labour minister Thulas Nxesi under Section 15 of the Public Service Act and involved the deployment of 20 consultants tasked with improving audit outcomes, strengthening financial controls and transferring critical skills to fund officials.

The Citizen says FTMG was reportedly paid about R46.6 million between January 2022 and January 2024.

Legal and procurement questions

While Section 15 allows for secondment of public servants, The Citizen states it is alleged that FTMG a private company was effectively contracted through procurement processes. Under the Public Finance Management Act, The Citizen notes, service contracts above R1 million must go through competitive bidding, which has led to allegations that the arrangement may have been unlawful.

New tender for similar work

The Citizen reports that the Compensation Fund later issued Tender TCF 03:2024-25 for what is alleged to have been substantially the same scope of work assigned to FTMG. According to The Citizen, FTMG had completed between 75% and 85% of the project when EMS Solutions was awarded the new contract.

“The logical step would have been to conduct a gap analysis and procure only the outstanding work. Instead, the entire scope was retendered at more than double the cost,” said a senior official with direct knowledge of the procurement process, as reported by The Citizen.

Conflicts of interest and internal disputes

The Citizen cites documents alleging that chief financial officer Monét Mokena acted as project manager while also serving on the bid committee that selected the successful bidder, raising conflict‑of‑interest concerns under Treasury procurement regulations.

The Citizen also reports that deputy director of financial reporting Martina Munonde was suspended before the tender was finalised after raising concerns about the process; her suspension was later overturned and, according to The Citizen, her constructive dismissal case was with the Commission for Conciliation, Mediation and Arbitration at the time of reporting.

Audit failures persist despite consultant spending

The Citizen has revealed that the Compensation Fund’s financial losses rose to R71 million over the past two financial years, up from R10 million in 2022‑23, which The Citizen attributes to alleged fraudulent activities. The Citizen further reports that despite spending millions on consultants over the past three years, the fund has continued to receive adverse audit findings for almost 15 years with no sustained improvement in sight.

Responses and next steps

The Citizen reported that the labour department, FTMG Africa Advisory and EMS Solutions had not responded to questions by the time of publishing. The whistle‑blower’s allegations and the procurement and audit concerns outlined by The Citizen raise questions about oversight of public funds at the Compensation Fund.