Lotto’s R114 mln unkind cuts

2012-02-18 00:00

THE National Lotteries Board withdrew, allegedly illegally, over R114 million in funding to non-profit organisations, internal lottery documents show.

The documents, leaked to Media24 Investigations, emerge as the National Lotteries Board agreed to reinstate a R20 million lottery grant to a Gauteng literacy project.

The project, the Molteno Institute for Language and Literacy, a charity that sets up mobile libraries in impoverished townships, launched a review application in the North Gauteng High Court, and last week the board agreed to a settlement and reinstated the grant.

But the leaked documents show the board withdrew more than R114 million in grants to arts and culture bodies between July 10 and August 30 last year. The main legal point on which Molteno’s legal team was preparing to argue their case was the fact that the board was not authorised to withdraw the grant.

Lotto funding applications are decided by a “distributing agency”, which is supposed to function independently of the board and which reports directly to the minister. Critics say the board’s action blurred the lines of independence.

Molteno’s attorney, Jac Marais, said other organisations that saw their funds withdrawn under similar circumstances could launch similar suits.

Among the affected organisations are the African Conservation Trust, which had almost R17 million withdrawn; the South African Heritage Resources Agency, which had R2,3 million in funds withdrawn; the Greater Taung Municipality (R6,6 million); and the Aggrey Klaaste Nation Building Foundation (almost R4 million).

But Lotteries Board spokesperson Sershan Naidoo defended the move, saying grants were withdrawn “in order to share the funds available to as many deserving NGOs as possible”.

When pressed about the argument that the board was not authorised in law to withdraw grants, and that only the Trade and Industry minister may withdraw grants within seven days of them being made, he said the board’s definition of “withdrawal” was different to that which described the minister’s powers.

He said the board had decided to revoke some of the larger grants of applicants that had not yet been informed of their applications having been approved.

The organisations that had heard about the grants being withdrawn, including Molteno, found out because staff had “erroneously” sent out letters informing them of the withdrawals, even though they had not been notified that their grant applications had been successful in the first place.

The funds were allocated to Molteno shortly before the lottery’s outgoing arts distributing agency’s term was concluded.

Trade and Industry Minister Rob Davies then gave the agency’s powers to the board itself, and it reversed grants totalling R114,6 million in the six-and-a-half weeks before the new agency took over.

Naidoo said the grants were revoked “as a precautionary measure in the spirit of sharing the lottery funds with as many deserving NGOs as possible”.

“Should the beneficiary choose to appeal the decision on the application, the distributing agencies will consider the appeals case by case.

“The NLB is currently considering the appeals of those applicants who followed the required procedures.”

In a statement the board said decisions to withdraw grants were also linked to the board’s compliance site visits that “raised questions about some of the line items being funded”.

The board’s chairperson, ANC heavyweight Alfred Nevhutanda, said that “much of the recent outcry is a result of the reduction in the size of grants” due to new regulations that stipulate that 50% of lottery funds should go to rural projects.

Nevhutanda said all members of the board and distributing agencies had agreed to an independent lifestyle audit, and would consider requests from the public to attend the sessions at which funding applications were adjudicated, “in order to better understand the processes and to see how decisions on applications are taken”.

• investigations@media24.com

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