funds totalling over R8,7 million at the National Development Agency
17 January 2007
The Auditor-General (AG) today tabled a report identifying irregularities
amounting to over R8,7 million at the state-owned National Development Agency
(NDA).
The purpose of the report is to make known the findings of an independent
investigation conducted by the AG at the request of the NDA, the developmental
entity of the Department of Social Development.
The AG was informed of alleged misappropriation of funds at the entity. The
NDA requested the AG to conduct an investigation into these allegations.
The period under review was from January 2004 to June 2006.
The investigation found that:
1. Between 3 December 2004 and 31 May 2006 an amount of R8 770 082,26 was
misappropriated. The misappropriation involved 28 irregular transactions in
which money was transferred from the NDAâs bank account into four bank accounts
linked to the organisationâs accounts clerk.
2. None of the 28 payments were made in accordance with the contracts that
were entered into between the NDA and the respective projects against which
they were recorded. There is prima facie evidence to suggest that the payments
may be irregular as no payment was due to the recipients.
3. The following information was obtained regarding the possible use of the
misappropriated funds by the accounts clerk:
* In March 2006 the clerk purchased a Toyota Hilux (Double Cab) for R318
240,12, for which she traded in a BMW X3 and paid the difference of R63 605,12
in cash.
* On 4 and 12 April 2006 she made two payments totalling R740 000 representing
the full purchase price of a Land Rover.
*In May 2006 the accounts clerk paid R1,4 million into an attorneyâs trust
account for the purchase of a property. It was also noted that in July 2006 she
sold her property for R1 040 000.
4. The following weaknesses in the control environment of the NDA were
noted, these largely allowed for the misappropriation of the funds and for the
fraud not to be detected on time:
* No proper reconciliations were performed between the budgeted funds for
projects and the actual payments made;
*Reconciliation of the cashbook to the bank statements was not properly
performed;
*The absence of proper password control; and
*No proper control over documents.
5. A review of the accounts clerkâs personnel file indicates that
allegations of her misrepresenting her academic qualifications had been brought
to the NDAâs attention in 2001. There is no indication showing that any action
has been taken to investigate this allegation.
Says Africa Boso, Auditor-General spokesperson: "The NDA laid criminal
charges against the accounts clerk who subsequently pleaded guilty and was
sentenced to 15 years imprisonment on 10 January 2007. The matter has been
referred to the Asset Forfeiture Unit for possible seizure of her assets. In
our report we have also recommended that the NDA addresses the identified
internal control weaknesses. The deficient internal controls implemented by NDA
management allowed for the misappropriation. We therefore recommended that
disciplinary action against the responsible official(s) be considered. Also,
the alleged misrepresentation of academic qualifications by the clerk should be
further investigated."
Enquires:
Africa Boso
Tel: (012) 426 8273
Cell: 082 8899 527
E-mail: africab@agsa.co.za
Issued by: Auditor-General South Africa
17 January 2007
Source: Auditor-General South Africa (http://www.agsa.co.za)
