South Africa’s 15-million illiterate people were left in the lurch when the National Literacy Co-operation had to close because of financial irregularities, writes Mungo Soggot
The long-awaited forensic probe into the financial scandal that shut South Africa’s biggest literacy organisation reveals expense-account abuse on the part of its national director and mismanagement.
The national director of the National Literacy Co-operation (NLC), Enrico Fourie, resigned in January, but the full extent of his alleged spending spree has only emerged now after auditors Ernst & Young were commissioned by the European Union, the NLC’s key funder, to examine its books. Ernst & Young’s findings are expected to be released shortly – three months after the organisation closed amid allegations of widespread financial mismanagement.
The NLC was an umbrella organisation which steered South Africa’s literacy programme. About 200 NGOs involved in literacy training, about 60 of which have folded over the last two years, are affiliated to the NLC. South Africa has 15-million illiterate people.
The report is understood to accuse Fourie, a former employee of the University of the Western Cape and the Congress of South African Trade Unions, of a R35 000 splurge of ”unrecovered personal expenses”.
He allegedly used his company petrol card to buy a R5 000 compact disc player for his car, and ran up enormous accounts on his NLC cellphone. In September last year he allegedly clocked up a R15 000 cellphone bill, with the help of two overseas calls which cost at least R600 each. It is understood that the audit report describes this expenditure as ”unreasonable”.
Sources close to the NLC say the auditors reported that Fourie ”apparently spent an excessive amount on his NLC credit card, including cash withdrawals”. On August 21 last year Fourie owed R25 000 on his credit card.
In a spending spree reminiscent of excesses at the Independent Broadcasting Authority, Fourie allegedly used the card at outlets such as a liquor store in the Johannesburg suburb of Yeoville, a record shop, as well as making cash withdrawals of up to R800. Fourie also allegedly obtained a R6 000 loan for an MBA course he did not attend, but R5 000 was nevertheless transferred to his corporate credit card.
The NLC employed about 45 people at its Johannesburg headquarters, which were donated by the Rotary Organisation. It expanded from a shoestring organisation in 1996 after its previous director, Kumi Naidoo, secured the EU funding. Since then the EU has pumped more than R11-million into the NLC.
It is understood the report describes how salaries were often paid in cash – after cheques were made out to administrators – and describes instances in which employees overpaid themselves. In April 1996 a woman in charge of salaries paid herself R30 000 on top of her monthly salary and paid a friend an extra R10 000.
Ernst & Young discovered that several unauthorised loans were dished out to affiliated organisations.
Employees apparently embarked on unauthorised overseas trips at the NLC’s expense. Fourie went on one jaunt to the United States, claiming it was being sponsored by the Department of Education when he in fact billed the NLC. Two other employees, Derick Peo and Sheri Hamilton, arranged unauthorised trips to the US to coincide with their leave.
The auditors’ tour of the NLC’s provincial offices unearthed endemic financial mismanagement; in some instances there were literally no accounts. Sources say that in its report on the Eastern Cape, the auditors reported: ”We noted an absence of third- party supporting documents for payments to educators.”
In KwaZulu-Natal, the books show that the chief administrator serviced her car four times in one month. ”These expenses are considerable as it is our understanding that company cars are bought with full maintenance contracts,” the report is understood to say.
Fourie said this week that most of the allegations in the report were ”not true”. He said he would withhold further comment until he had seen a copy. He said the auditors never contacted him. ”I really think it is unfair to do a forensic audit without questioning me.”
A representative of the board of trustees of the NLC said the board would consider suing, but the amount involved might not warrant it. He declined to comment further.
It is understood that senior officials from literacy organisations linked to the NLC will meet this weekend to conduct a post-mortem and discuss a possible replacement body.
Sources say Fourie was to have taken up a contract at the secretariat for safety and security, but that the job was canned in the wake of the NLC’s collapse in March.