Corruption among Gauteng government poverty relief projects was so rampant that some project leaders allegedly invested funds in pyramid schemes while others bought luxury cars and houses instead of spending the money on intended beneficiaries.
Last week the Mail & Guardian reported that the Gauteng Department of Social Services and Welfare had shut almost all its poverty relief projects, citing corruption, fraud and mismanagement of funds.
In one case a brick-making project, funded to the tune of R1,2-million, was forced to shut down after the project manager disappeared with the funds, according to a dossier called the Exit Strategy Report.
A member of the project, who did not want to be named, claimed the manager used part of the money to buy a brand new Tacuma vehicle. Police are investigating the manager for fraud.
The report, compiled by Mulalo Nemavhandu, manager of the provincial poverty programme, raps the department for not having management systems and monitoring mechanisms to exercise proper oversight over the projects.
The department has spent R50-million since 1997 to fund 336 community projects. But the report says 85% of the projects did not achieve the department’s objectives because individuals empowered themselves and their families rather than their communities.
One of the affected projects is the Iketseng community project in Boipatong, east of Johannesburg. Iketseng, a baking venture, was allocated R50 000 between 1998 and this year.
The report claims that some funds allocated to Iketseng were invested in Miracle 2000, a Johannesburg-based pyramid scheme. The project has since shut down.
In a new approach to fighting poverty, the department has initiated development centres.
Nemavhandu said: ”Instead of inviting business plans as we did in the past, we now initiate development centres. We want to strengthen the work of the department by integrating those activities such as care and support for people living with HIV and Aids, the elderly, children, the youth and people with disabilities.”
The department said it has set aside R19-million to implement the programme.
But the Exit Strategy Report warned that if nothing was done, the department risked being caught in a similar situation.
”From the list of projects funded in 2001, there is absolutely no assurance that funds will not be misappropriated or that fraud will not occur. This is due to the fact that no proper system has been put in place thus far to safeguard against the problem.
”It has been identified that management systems have not changed. Service Level Agreement is still not informed by the Public Finance Management Act and Treasury Regulations.”
Approached for comment this week about the collapse of the projects, MEC for Welfare Angie Motshekga said she could not be held accountable for things done before she took office.
Motshekga said she was unaware of any fraud charges laid against any official or project leader. ”I am not aware of any police investigations regarding the poverty relief projects.”
However, last week Nemavhandu confirmed that the department was in possession of police files. On Monday Motshekga’s spokesperson, Panyaza Lesufi, was also quoted in a daily newspaper as saying the department had police dockets.
Regarding the legal team that Nemavhandu said was appointed to probe allegations of corruption and fraud against government officials and project leaders, Motshekga said she was not aware of such a team.
The Democratic Alliance laughed at Motshekga’s comments that she could not be held accountable.
”This does not make sense at all. It doesn’t work that way. Once you become part of any department you should inherit certain responsibilities. It is sad that we have MECs who decline responsibility that preceded them,” said Kate Prinsloo, the DA’s provincial spokesperson on social services.
Other projects hit by corruption, fraud and mismanagement of funds include:
- The African Early Child Care Project, which received R80 000 to run poultry and carpentry ventures in the Heidelberg area. It was supposed to benefit 20 people, but funds were misused and the project never operated. The Brakpan fraud unit is investigating the matter.
