In a startling revelation that could have severe implications for the administration of public service pensions, the Public Service and Commercial Union of South Africa (PSCU) has flagged allegations of gross financial mismanagement at the Government Pensions Administration Agency (GPAA). The union’s concerns stem from the Internal Audit Report for the 2024/25 financial year, which outlines potential misconduct and governance failures that could jeopardise the financial security of approximately 1.7 million government employees and pensioners reliant on the funds managed by the GPAA.
In a formal letter addressed to GPAA CEO Kedibone Madiehe over the weekend, the PSCU sought urgent clarification and strategic remedial measures in response to the audit findings. As a key arm of the government reporting directly to the Minister of Finance, the GPAA administers the Government Employees Pension Fund (GEPF)—the largest pension fund in Africa—alongside other schemes that cater to the needs of public servants, their spouses, and dependants.
The troubling audit report, compiled by Abacwaningi Business Solution (ABS) Audit & Advisory Services, unearthed a variety of governance concerns that have raised alarm bells. “The report reveals severe financial mismanagement, governance failures, and potential criminal conduct that demand urgent intervention,” stated PSCU Secretary General Tahir Maepa in the letter. This declaration underscores the gravity of the situation and the pressing need for immediate accountability.
A significant point of contention raised by the union is the discrepancy between reported irregular expenditure figures. The GPAA has acknowledged R15.3 million in irregular spending, while the internal audit uncovered R30.8 million listed in the agency’s internal register. The PSCU is demanding a full disclosure of the irregular expenditure report to illuminate these conflicting figures.
Further complicating the matter is a questionable purchase order of R67 million, which has inexplicably escalated into a whopping R495 million lease liability. Questions abound regarding the motivations behind this contract, which was signed in an apparent rush just after the audit concluded (May 23, 2025) and carried a backdated commencement date of July 31, 2024. This deal, struck between LCS and the GPAA, raises alarm with regard to its cost-effectiveness and alignment with the objectives of the GEPF and GPAA.
The audit sceptically questioned, “How does a purchase contract of R67,135,442 translate into an additional R428,255,112.72, resulting in a total project cost of R495,390,554—almost half a billion rands?”
The PSCU is insisting on evidence regarding compliance with supply chain management practices and proper approval from the National Treasury. Additionally, the union has flagged significant concerns surrounding R11.9 million in prepayments, R6.8 million allocated for undelivered uniforms, and a R12 million NPS system lacking deployment evidence, marking these as potential areas for the agency to recoup substantial losses.
Alarmingly, PSCU has also highlighted potential breaches of the Protection of Personal Information Act (POPIA), alleging that member data may have been unlawfully shared with service providers. The risks posed by ICT projects executed without proper oversight further threaten both the integrity and functionality of vital systems within the GPAA.
The PSCU has taken a firm stance on the issue, demanding a written response to their concerns within seven working days. Should the GPAA fail to provide a satisfactory reply, the union warns it will escalate the matter to various governmental oversight bodies, including the Minister of Finance, the Standing Committee on Public Accounts (Scopa), and the Public Protector, as well as the Hawks—South Africa’s Directorate for Priority Crime Investigation.
Despite the gravity of the allegations, GPAA officials, including Madiehe, were unavailable for comment over the weekend. The report compiled by ABS Audit & Advisory Services echoes the concerns raised by the PSCU, recommending that any contracts issued without budget approval should be strictly regulated with oversight from the GEPF and vetted by the GPAA’s legal chief director.
“By addressing the weaknesses that have been identified, this will ensure that the controls implemented within the Government Pensions Administration Agency and its related processes are improved,” concluded the auditors, highlighting the importance of compliance and governance in restoring trust in the agency’s operations.