The National Development Agency (NDA) is tightening up its systems to prevent a repeat of an R8,8-million misappropriation of funds discovered in a recent forensic audit.
It has also begun criminal proceedings against the former NDA employee allegedly at the centre of the fraud, NDA chief executive Godfrey Mokate said in Johannesburg on Monday.
Mokate was releasing the poverty alleviation body’s annual report for the 2004/05 financial year, ahead of its presentation to Parliament.
He hoped to release the full report of the Price Waterhouse Coopers forensic investigation next month. He expected to receive the final report later this week.
The misappropriation, which took place from November 2004 to June 2006, was detected in about May.
The fraud had ”damaged our name, our reputation”, said Mokate.
Although there was no evidence of the involvement of anyone other than the woman since handed over to the police, the NDA was considering trying to establish whether there were any other frauds pre-dating the probe.
According to the NDA’s annual report, the forensic audit discovered that R8 866 657 had been misappropriated.
It was in the form of money given to fictitious grantees.
The National Prosecuting Authority and the Asset Forfeiture Unit were ”working even now” to recover the money, said Mokate.
”From what I can gather, they have seized assets that are close to R2-million, but they are still continuing.”
Those assets included a house belonging to the woman, a motor vehicle and money held in trust with lawyers for the purchase of another house.
He said the NDA was dipping into its investment income to cover the resulting shortfall and to ensure no actual projects suffered.
NDA board chairperson Bishop Malusi Mpumlwana said he did not believe there was ”rot” in the organisation.
However, there had been a system in place that lent itself to ”laxity”, which was of great concern to the board.
”This, for us, has been a very important discovery and finding. We [need] to go to the bottom of every aspect of it … We want to be accountable,” he said.
Mokate said the misappropriation was unrelated to R7,5-million it owes the European Union for projects that could not be accounted for.
He said the EU money was used on 72 projects in Limpopo, KwaZulu-Natal and the Eastern Cape, not all of which could document their spending.
The EU had held the NDA responsible for the money as guarantor, he said.
Instead of closing down these poor, community based organisations or taking them to court, the NDA board had decided to set aside money to pay the EU.
Mokate said documentation since recovered had reduced the amount to R5-million.
”There is no evidence… that the R7,5-illionm was used in a corruptive manner. There is no evidence that shows that. There is no evidence that anybody stole any part of that money.”
Mokate said the NDA’s approval of the R68,7-million funding of 104 projects in the past financial year benefited 40 000 people directly and 156 000 indirectly. — Sapa