More allegations of widespread irregularities at the National Development Agency (NDA), including the hiring of a private intelligence company to vet staff and investigate other NGOs, are detailed in documents obtained by the Mail & Guardian this week.
The latest allegations emerged after Minister of Social Development Zola Skweyiya ordered a forensic investigation into the agency, after indications emerged at the beginning of September of widespread irregularities in its operations.
The NDA appears to have angered the minister because of its propensity to get headlines for all the wrong reasons and not for its core job of distributing funds to NGOs that focus on development and poverty eradication in the country.
The M&G has learned that the minister warned the NDA in May about spending excessively on advertising instead of helping communities that really need the money. But in the same month the NDA went on to sign a contract worth more than R1-million to advertise itself on different radio stations.
NDA CEO Delani Mthembu this week issued a statement saying the agency does not advertise its services and activities excessively. ”From time to time the organisation places public service announcements, usually in the form of calls for proposals from worthy poverty eradication projects,” Mthembu said.
Explaining the decision to hire a private intelligence company, Mthembu said: ”As a procedure, the NDA engages external firms to conduct due diligence exercises on funded projects. We believe this is responsible and contributes to good governance. Any amounts paid are in accordance with fees charged by professional organisations.” He refused to put a value on the contract.
However, the M&G independently learned that the intelligence company is contracted for a year, starting September 2003, and is paid a R50 000 a month retention fee.
The company’s terms of reference, obtained by the M&G, say: ”The agency wishes to engage the contractor to provide professional services on areas of vetting, business intelligence, profiling of staff, crime research, risk assessment, scoping and specialised training within and outside the organisation.”
In a further blow to the NDA, the auditor general has issued a qualified statement on the agency’s accounts for the past year.
The statement says: ”Material deficiencies regarding the management, administration, authorisation, monitoring and control of project payment existed during the year.
”These deficiencies included that certain project files could not be submitted for audit purposes, there was non adherence to internal project policy regarding minimum documentation on files and not all minute books of meetings could be presented.”
The statement noted that, even as Skweyiya was launching the investigation into irregularities in the organisation, key financial personnel such as the director of finance, director of internal audit and the finance manager were leaving the organisation.
”There is a forensic investigation looking at the allegations against staff, including the CEO,” social development Director General Vusi Madonsela told the M&G. ”We get weekly briefings from the investigation team and they have given us their preliminary findings. This is information that we must verify, so it would be premature to release it to the media.
”Depending on what is found there is possibility of suspensions, but suspensions are a precautionary measure and we must be sure that there is good reason to implement them. The investigation will be complete within weeks,” Madonsela explained.
The investigation by Gobodo Forensic Audit Consultants and the auditor general focuses on allegations of conflict of interest relating to senior managers in the NDA, the use of public funds earmarked for poverty alleviation projects, and malpractices with regard to the employment of staff.
Ever since the organisation began operating in 2000, it has been dogged by allegations of corruption, misuse of funds, infighting and incompetence among senior managers.