The Government Employees Medical Scheme (Gems) has admitted to blowing hundreds of thousands of its members’ contributions to pay for an empty building for a year.
Gems has been forking out more than R60,000 a month to Mowana Properties for its North West regional office on the Borekelong House ground floor in Mahikeng since September last year without occupying it.
The rental expenditure has resulted in Public Service and Administration Minister Ayanda Dlodlo calling for an investigation into the matter.
Instead of occupying the office space, GEMS opted to rent the Kobo Segole Guest House conference room for R31,000 a month. Insiders said that this has been categorised as “wasteful expenditure”, but no one has been held responsible.
Mowana Properties on Friday confirmed collecting monthly rentals from GEMS coffers as per the “legally-binding” lease agreement between the two parties. Company spokesperson Ignatius Sathekge said Mowana was not responsible for GEMS’s failure to occupy the office space.
“The lease agreement was duly signed by both entities last year, for the lease commencement date of 1 September 2017. As per this agreement, the building was handed over to the tenant. We are not sure why GEMS have not taken occupation of the building as of yet,” he said.
Dlodlo’s spokesperson Mava Scott said: “Our position is that no government department or entity can afford any form of wasteful expenditure, whether they are in a healthy or unhealthy financial position.
“This is why if the alleged wasteful expenditure is proven against GEMS, the minister will instruct the board to institute disciplinary measures once an investigation finds this allegation to be true and those found guilty should be made to pay for this waste,” said Scott.
We will update this report as information becomes available.