Media Statement on the fraudulent disbursement of Guardian’s Fund Moneys at Master’s Office (Pietermaritzburg)
The Master of High Court is a division of the Department of Justice and Constitutional Development responsible for providing efficient, cost-effective and compassionate, yet specialised services of supervision, custodianship, arbitration and information regarding administration of deceased and insolvent estates, registration of trusts, as well as preservation of Guardian’s Fund.
The Guardian’s Fund is a reserved fund, created to preserve moneys paid to the Master on behalf of heirs of the deceased persons (the heirs includes surviving minors, unborn children, absent heirs and persons legally not capable of taking care of themselves). The Guardian’s Fund’ main purpose is to protect the interests of minors and to help manage their funds in a way that improves their quality of life.
The Fund is duly administered by the Justice Department using an on-line system called, the Guardian Fund System (GFS) which is linked to the bank system (of an appointed service provider) to enable shift and secure payments to the beneficiaries (heirs).
Early in April this year, the Department discovered an illegal breach on the GFS, and found that over R17 million had been lost from the Guardian’s Fund. The Department’s internal forensic investigation immediately set out to investigate the problem and discovered a potential violation of GFS security protocol. The preliminary investigation found that the GFS was breached internally by certain officials working in the GFS. These officials have since been placed on precautionary suspension pending finalisation of the investigations.
At this stage, the preliminary investigations have revealed that no hacking had taken place.
After discovering the incident, the Department took swift action and suspended payments out of caution and to establish the magnitude of the problem. The DG and the senior management of the department met with the senior management of ABSA - the appointed GFS’s banking service provider - to discuss, investigate and resolve the deeply concerning incident and its challenges to the Guardian’s Fund. The bank is collaborating with the Department to develop controls for further strengthening protection of the GFS and safeguard the Guardian’s Fund. Certain measures to improve the security of the payment system have been agreed upon and are being implemented with immediate effect.
The Department has also explored alternative ways to protect the payment system. As a result, the Department began making beneficiary payments last week in the Pretoria, Bloemfontein, Kimberley and Cape Town Offices of Master. The Pietermaritzburg and Makhanda Offices will soon start making payments as well.
The South African Police Services, the Hawks, Financial Intelligence Centre, and the Asset Forfeiture Unit are handling the ongoing investigation. These agencies have shared with the Department that their efforts are yielding positive outcomes.
We are pleased to inform the public that the Department has obtained a preservation order for some of the stolen funds, and thanks to the hard work of law enforcement agencies, progress is being made on all possible leads.
With the help of law enforcement agencies, we pledge to hold accountable all individuals involved in activities that seek to undermine the GFS. The Department is committed to continually review and enhance the internal control environment.
We apologise for the inconvenience caused to the beneficiaries, guardians and general members of the public and we are doing everything to ensure that they are paid without further delays.
The officials of the Department are working around the clock to process all outstanding payments. The Department is in the process of obtaining services of a professional service provider to conduct a comprehensive due diligence and review the entire system.
Enquiries please contact:
Mr. Bheki Mbonani
E-mail: bmbonani@justice.gov.za
Cell: 066 201 6952
Tel:012 357 6588
For any other enquiries on the Department’s services, please contact:
Mr Steve Mahlangu
E-mail: StMahlangu@justice.gov.za
Cell: 079 878 7587
Tel: 012 315 1623
Requests for interviews can be forwarded to:
Mr Victor Phala
E-mail: Vphala@justice.gov.za
Cell: 084 888 5162
Tel: 012 315 1817
