Request for urgent independent forensic investigation and Parliamentary oversight into nearly R4 billion in contracts and expenditure involving Khumzi Investments and the Eastern Cape Department of Education
The Auditor-General of South Africa
and
The Chairperson
Portfolio Committee on Basic Education
National Assembly
Parliament of the Republic of South Africa
Dear Auditor-General and Chairperson
Request for urgent independent forensic investigation and Parliamentary oversight into nearly R4 billion in contracts and expenditure involving Khumzi Investments and the Eastern Cape Department Of Education
I write to formally request the urgent intervention of the Auditor-General of South Africa and the Portfolio Committee on Basic Education concerning the reported award and expenditure of approximately R3.95 billion in contracts involving Khumzi Investments and the Eastern Cape Department of Education over a five-year period.
Recent media reports and information arising from parliamentary processes have raised serious questions regarding the scale, concentration, administration and value for money associated with this expenditure. Of particular concern is the reported figure of approximately R3.4 billion relating to travel and accommodation. The reported value of these contracts is extraordinary when considered against the persistent and well-documented challenges facing the Eastern Cape education system.
The figures demand urgent scrutiny. Information now in the public domain indicates that approximately R336.56 million was authorised through 1,317 payments to Khumzi Investments during 2025 alone. Separate payments reflect 96 payments to the company between 19 June and 8 July 2025, with a combined value of R12,514,307.30. These transactions must be properly reconciled against the relevant contracts, purchase orders, invoices, services rendered and payments made by the Department.
The scale of the reported expenditure is particularly disturbing when viewed against the conditions under which many learners in the Eastern Cape continue to receive their education. There are children who continue to learn under trees. There are learners who must cross rivers and travel long distances simply to reach school. There are schools without adequate sanitation and infrastructure, schools that continue to face shortages of essential learning and teaching materials, and communities that continue to raise serious concerns about scholar transport and school nutrition.
Against this reality, the reported expenditure of billions of rands on travel and accommodation by an education department requires the highest possible level of scrutiny.
The public purse cannot and must not become a source of luxury expenditure while children are denied basic educational necessities. Public money allocated to education must ultimately serve education and, above all, the learner. Every rand spent must be capable of being justified in terms of necessity, efficiency, effectiveness, economy and measurable public benefit.
This is therefore not merely a question of whether a contract existed or whether officials can produce documents showing that a procurement process was followed. The more important question is whether the State actually received what it paid for and whether it received value for money.
We need to know who travelled, where they travelled, when they travelled, why they travelled, who authorised each trip, who approved the expenditure, what services were procured, what prices were paid, whether those prices were reasonable, whether the services were actually rendered and what tangible outcomes resulted from the expenditure.
We further need to know whether all travel was supported by proper travel authorities, whether officials submitted post-travel reports, whether bookings were cancelled or amended, whether there were duplicate bookings or payments, whether any expenditure was unnecessary or excessive, and whether there were effective controls over the allocation and utilisation of the relevant contracts.
The concentration of such substantial expenditure through one company is itself a matter that warrants examination. Even if Khumzi Investments was one of a number of service providers appointed by the Department, the scale of expenditure reportedly channelled through the company requires an independent assessment of how the procurement framework operated, how work was allocated among service providers, whether there was genuine competition, whether the allocation of business was transparent and whether the Department obtained competitive pricing and value for money.
One company should not be able to become so deeply embedded in the financial operations of an education department that billions of rands flow through it without the most rigorous scrutiny of the underlying transactions, contracts and services.
I am particularly concerned by reports concerning the urgent processing of approximately R18.5 million in outstanding payments to Khumzi Investments, including a reported instruction issued in the early hours of the morning requiring senior departmental officials to assist with processing outstanding payments. If these reports are accurate, the circumstances surrounding such an instruction require detailed examination. It must be established who issued the instruction, why the payments required such urgency, which invoices and purchase orders were involved, whether the relevant services had already been delivered, whether all approvals were in place and whether the payments were properly supported.
These circumstances cannot simply be dismissed as administrative matters. They go directly to the effectiveness of internal controls, financial governance and accountability within the Department.
I therefore request that the Auditor-General consider undertaking an urgent special, investigative or forensic audit, within the scope of the AGSA's statutory mandate, into the contracts, expenditure and payments involving Khumzi Investments and the Eastern Cape Department of Education.
I further request that the Portfolio Committee on Basic Education urgently exercise its parliamentary oversight responsibilities in relation to this matter.
The Committee should summon the relevant officials of the Eastern Cape Department of Education, including the MEC, Head of Department, Chief Financial Officer and officials responsible for supply-chain management, procurement, finance, travel administration and contract management, and require them to provide a comprehensive account of the expenditure.
The Department should be required to place before Parliament the complete documentary record supporting the reported expenditure. Parliament should not be expected to accept assurances that procurement procedures were followed without examining whether those procedures resulted in responsible expenditure and actual value for money.
The Committee should specifically require the Department to reconcile the reported nearly R3.95 billion in contracts against actual expenditure and services rendered. It should establish how much was contracted, how much was paid, what was delivered and what measurable benefit accrued to the education system.
The Committee should also engage the Auditor-General regarding the matter and, where appropriate, refer the findings to the relevant structures of the Eastern Cape Provincial Legislature, including the appropriate provincial oversight and public accounts structures.
I also request that the Committee establish whether the Department has conducted any internal investigation into Khumzi Investments, including any investigation into potential irregularities, conflicts of interest, collusive practices or other concerns relating to the procurement and administration of the contracts. If no such investigation has been conducted, Parliament should establish why an expenditure portfolio of this magnitude has not received a comprehensive independent examination.
The circumstances demand urgency because this is not an abstract accounting matter. This is money allocated to an education system that is already under enormous pressure.
Every rand directed towards unnecessary expenditure is a rand that cannot be directed towards a classroom. Every rand wasted is a rand that could have contributed towards scholar transport.
Every rand improperly spent is a rand that could have provided stationery, learning materials, sanitation, school nutrition or infrastructure.
We cannot have a situation where children are expected to cross rivers to access education while billions of rands are being spent on travel and accommodation.
We cannot have children learning under trees while the public purse is carrying expenditure whose value remains insufficiently demonstrated.
We cannot tell communities that there is no money to address basic educational needs while expenditure of this magnitude is taking place without the public receiving a clear account of what it achieved. The public purse is not a luxury fund. It belongs to the people of South Africa.
The Eastern Cape Department of Education has a responsibility to ensure that every rand entrusted to it is used to improve the lives and educational prospects of learners. The scale of the expenditure now under scrutiny requires us to establish whether that responsibility was fulfilled.
I therefore urge the Auditor-General to urgently consider and institute the appropriate investigative process within its mandate, and I urge the Portfolio Committee on Basic Education to exercise its oversight powers without delay.
I request written confirmation of receipt of this correspondence and an indication of the steps that will be taken by both institutions.
Yours faithfully
Maj. Gen. (Ret.) BH Holomisa
President of the United Democratic Movement
Deputy Minister of Defence and Military Veterans
