Fresh allegations rock Compensation Fund over procurement, governance and consultant spending

Officials and whistle-blowers have reported fresh concerns about procurement practices, governance and consultant spending at the Compensation Fund, according to reporting by The Citizen. The state entity, which administers compensation for workplace injuries and has large reserve funds, has denied wrongdoing while investigations and oversight processes continue.

What is being alleged

According to The Citizen, allegations include procurement manipulation, governance failures and questionable appointments. Sources and officials have raised concerns about how tenders were managed, changes to bid committees and the exclusion of experienced supply chain and finance staff from evaluation processes.

Claims about senior appointments

The Citizen reports that several officials allege chief financial officer Monaheng Mokoena was appointed in November 2022 through a head‑hunting process rather than an open recruitment process, and that necessary pre‑employment or security clearance steps and Special Investigating Unit (SIU) findings were not adequately considered. One senior official alleged that “the appointment proceeded despite Mokoena previously facing scrutiny during his tenure at the Free State Provincial Treasury, where he was removed, following controversy surrounding personal protective equipment (PPE) procurement before he later resigned.”

Procurement and contract concerns

The Citizen says sources allege the fund appointed a Bloemfontein‑based accounting firm on a three‑month contract worth R1.5 million to prepare annual financial statements after the official responsible for those statements was suspended. The sources claim the firm reported directly to Mokoena and produced financial statements “containing significant errors and misstatements.”

Officials also told The Citizen that a 2023 tender for financial and accounting services was initially estimated at R60 million over three years but that the value increased to R100 million before adjudication. They allege bid specifications were amended during the procurement process to favour a particular service provider who had previously worked with Mokoena.

The sources further allege that bid committee members who questioned aspects of the procurement process were removed and replaced with officials subordinate to Mokoena, that experienced supply chain and finance officials were excluded from evaluations, and that a junior assistant director was tasked with approving work an arrangement the sources say allowed invoices to be approved on billable hours rather than measurable deliverables. The sources also allege Mokoena removed the chairs of both the bid adjudication committee and the sub‑adjudication committee before assuming both roles himself.

Spending on consultants and other oversight flags

The reporting includes claims from a whistle‑blower that the Compensation Fund spent over R142 million on consultants with little to show for it, and that a private company, FTMG, reportedly received about R46.6 million between January 2022 and January 2024 through procurement processes. The Auditor‑General was also reported to have flagged issues including fraudulent accounts, missing records and a linked loss of R71 million.

Impact on claimants and responses

Sources told The Citizen that the fund has bullied claimants and delayed payments to injured workers, which they say has worsened protests and complaints. The Compensation Fund has denied wrongdoing and said it is restructuring systems. The fund’s spokesperson, Hlonitshwa Mpaka, told The Citizen that Mokoena “was appointed through an open and competitive recruitment process, not through head‑hunting,” and that “pre‑employment screening was conducted before his appointment and that no criminal record was identified.”

Mpaka also said the fund’s supply chain management policy provides for bid specification and bid evaluation committees to be appointed on a project‑by‑project basis, and that the commissioner plays no role in bid committee processes. She said procurement followed the fund’s standard recruitment procedures and applicable laws.

Investigations and oversight

The Citizen reports that investigations and oversight by bodies such as the Auditor‑General and parliamentary committees are ongoing. The Compensation Fund has denied the specific allegations of improper reconstitution of procurement committees and maintains that its procurement processes comply with relevant legislation and internal policies.

What happens next: The reporting indicates oversight and investigative processes remain active as the fund responds to the allegations and works on system changes.