Several employees of the Nelson Mandela Bay Municipality are implicated in alleged air conditioners fraud amounting to millions of rands in a damning report compiled by the Office of Internal Audit and Risk Assurance: Forensics (IA).

In the report, 26 employees from various departments - some are senior officials - are accused of gross negligence for their alleged role in irregular, fruitless and wasteful expenditure amounting to almost R4-million.

News24 previously reported the company V&A Air Conditioning allegedly received money from the municipality for services never rendered.

The municipality's deputy director of libraries, Bongiwe Chigumbu, 52, and the owner of V&A Air Conditioning, Mlungisi John, 55, appeared in the Gqeberha Specialised Commercial Crimes Court on 30 March on charges of fraud and contravening the Municipal Finance Management Act (MFMA).

Both were released on R4 000 bail each.

The matter is still under investigation by the Hawks, but more details of the alleged fraud have since surfaced in the report.

According to the document, the IA received information from a whistleblower in 2018 about alleged irregular payments for the supply and installation of air conditioners at various library sites, fire stations and other municipal buildings.

Following the first part of the IA's investigation, it was discovered that V&A Air Conditioning allegedly misrepresented itself as being appointed to supply and install air conditioners, when it was only supposed to service small air conditioners.

The allegations include that the company fraudulently claimed for air conditioners that were never supplied nor installed, while the ones installed were of a lesser value than the invoice supplied to and paid for by the municipality.

The report claims that V&A was not registered with the Department of Labour to perform these installations.

According to the report, the implicated officials are from four directorates: Safety and Security; Infrastructure and Engineering; Economic Development, Tourism and Agriculture; and Sport, Recreation, Arts and Culture.

The officials, among others, allegedly authorised the respective job cards without the technical qualifications or experience to do so. In some instances, the IA found that an intern allegedly performed the work of a senior official, which included authorising payments of almost R1-million.

Furthermore, the air conditioners installed did not comply with the specifications, and the procurement of services from V&A was not done via the project managers, leading to fruitless and wasteful expenditure by the municipality.

The report recommended:

• formal consequence management for all implicated officials and V&A Air Conditioning;
• the alleged fruitless and wasteful expenditure be recovered from the implicated officials;
• a formal circular be sent to all directorates to ensure that project managers and heads of departments are more alert with tenders and authorisation of payments;
• a letter of appointment and bill of quantities for the service provider be attached to each payment; and
• corporate services ensure a qualified official manages this tender.

The mayor of Nelson Mandela Bay, Gary van Niekerk, said this was only the first step towards rooting out all corruption in the municipality.

"This is just the beginning. We will be coming for everyone involved in fraud and corruption," he said.