Allegations of long-standing fraud and rampant financial mismanagement in the KwaZulu-Natal Department of Education have surfaced again, this time with questions about the use of R700-million — nearly a tenth of the province’s education budget.
A damning report from the provincial auditor general reinforces some allegations of financial mismanagement.
The KwaZulu-Natal education department concedes that employees have perpetrated ”fraudulent practices”, but it denies that these have any relation to the R700-million under the spotlight.
The R700-million is at the centre of allegations levelled by the South African Democratic Teachers’ Union (Sadtu). The union claims that R700-million of a total education budget of R7,8-billion in the 2000/01 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,” Ndaba Gcwabaza, Sadtu’s provincial secretary for KwaZulu-Natal, told the Mail & Guardian.
Hassen Lorgat, Sadtu’s national office spokesperson, told the M&G: ”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 have made use of administrative clerks in the misappropriation of funds. Whenever investigations into the corruption within the education department are launched, ”only the administrative clerks are punished, not one official is exposed”, Gcwabaza says.
Barry Wheeler, the provincial auditor general, reported that in the 2000/01 financial year ”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 was ”inadequate control and management” of much 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.
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 KwaZulu-Natal education department admits that fraud has occurred. The M&G directed queries to Gabriel Ndabandaba, MEC for Education, and Charles Dlamini, the department’s superintendent general. Mlemeni Mkhize, the director of internal control and risk management, responded: ”The alleged fraudulent practices, which include diverting of salaries to unknown accounts, cannot be disputed,” he said. ”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 managers have been involved in these cases: none has been found to be involved so far, he said.
He also denies that the R700-million Sadtu is questioning is unaccounted for, saying that this allegation arises from a misreading of the department’s financial statements. ”The exact amount is R755,5-million,” he told the M&G, and this reflected total assets of the department ”as at the balance sheet date (i.e. 31 March 2001)”.
The schedule of individual amounts making up this total was not available at the time the auditor general queried the figure, Mkhize said. ”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 said.
Gcwabaza alleges that one of the methods of misappropriation involves teachers’ personal details being entered 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 of top managers or their relatives, he says. The teachers’ names are allegedly then run through the system later so that they receive their salaries.
Sadtu alleges that these practices have been going on for years, apparently without the knowledge of the teachers 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 vouchers not being stamped as paid, which can result in duplicate payments; improper control over leave records; failure to undertake annual stock-taking; poor vehicle management; non-production of expenditure vouchers for audit purposes and absence of Treasury orders for missing vouchers; and failure to blacklist companies that have made fraudulent claims for payment.
Sadtu’s allegations come in the wake of the KwaZulu-Natal education department’s firing and suspension of about 280 staff members over the past year. The employees include teachers and administrative staff, the department announced in April. Charges against them include theft, fraud and misuse of state vehicles.
Last week Sadtu sent Premier Lionel Mtshali and the education MEC a memorandum threatening strike action, and citing ”corruption” in millions of rands of expenditure and ”protection” of management officials as one of the reasons for possible union action.