Allegations of corruption rock KZN
A damning report from the provincial auditor general partly reinforces the allegations. The education department concedes that some of its employees have perpetrated ‘fraudulent practices”, but denies that these have any relation to the R700-million under the spotlight.
This sum is at the centre of allegations levelled by the South African Democratic Teachers’ Union (Sadtu). The union claims that R700-million out of a total education budget of R7,8-billion in the 2000/2001 financial year cannot be accounted for.
‘We have been reliably informed that some officials are using personal details of educators to get money paid into their personal accounts,” says Ndaba Gcwabaza, Sadtu’s provincial secretary for KwaZulu-Natal. Hassen Lorgat, Sadtu’s national office representative, adds ‘We believe that corruption and mismanagement account for the missing R700-million ... We back the provincial office in calling for a judicial inquiry.”
Gcwabaza claims that senior departmental officials in the housing, finance and salary sections used administrative clerks to facilitate the misappropriation of funds. Whenever investigations into the corruption within the department are launched, ‘only the administrative clerks are punished and not one official is exposed,” Gcwabaza says.
Provincial Auditor General Barry Wheeler’s report on the 2000/2001 financial year found that ‘no documentation could be produced [by the department] in support of amounts of more than R600-million ascribed to ‘contingencies” and R5-million put down to ‘foreign aid”. Contingencies are funds set aside for circumstances that have not been budgeted for.
The report said there is ‘inadequate control and management” of a large portion of the department’s finances. In one case the report found that appropriate tender procedures were not followed, resulting in irregular expenditure on stationery of more than R6-million and overpayment of R1,3-million on another contract.
In addition, the department could not produce 14% of personnel files for the auditor general’s analysis, effectively limiting the extent of the audit, the report said.
The department admits that some fraud has occurred. The education department’s director in internal control and risk management, Mlemeni Mkhize, says ‘the alleged fraudulent practices which include diverting of salaries to unknown accounts cannot be disputed.
‘There are such cases that are detected now and then. Such cases are being investigated as and when they are discovered and appropriate steps taken.” But Mkhize denies Sadtu’s claims that senior management has been involved in these cases: none has been found to be involved so far, he says.
Mkhize also denies that the R700-million Sadtu is questioning is unaccounted for. He says the exact amount being referred to is R755,5-million, which ‘reflects the total assets of the department” as at the balance sheet date (that is, March 31 2001). The schedule of individual amounts making up this total was not available at the time the auditor general made his query about the figure, Mkhize says.
‘Hence the people who do not understand how to read financial statements concluded that R755,5-million was misappropriated. This conclusion is categorically incorrect,” Mkhize says.
Gcwabaza alleges that one of the methods of misappropriation involves teachers’ personal details being inputted into the department’s computer system on the morning that salary cheques are processed. False details are included so that an amount is credited to the accounts either of top management officials or their relatives, he says. The educators’ names are allegedly then run through the system later so that they receive their salaries.
Sadtu also alleges that such practices have been going on for years, apparently without the knowledge of the educators whose names are being used. Last year the KwaZulu-Natal provincial legislature’s Standing Committee on Public Accounts found unauthorised expenditure dating back to 1997.
Other problems the committee identified included the non-stamping of vouchers as paid, which can result in duplicate payments; improper control over leave records; failure to undertake annual stocktaking; poor vehicle management; non-production of expenditure vouchers for audit and absence of Treasury orders for missing vouchers; and failure to blacklist companies that have made fraudulent claims for payment.
Last week Sadtu sent Premier Lionel Mtshali and provincial MEC for Education Gabriel Ndabandaba a memorandum threatening strike action, citing ‘corruption” in spending amounting to millions of rands, as well as the ‘protection” of management officials as some of the reasons for possible union action.