Govt must get fraud cash back

2009-10-12 00:00

MEMBERS of the provincial standing committee on public accounts (Scopa) said on Friday that government must be firm in recovering money from officials who benefited by defrauding procurement processes.

This recommendation was made during the committee’s discussions about the finances of the Education Department.

The committee was told that in one instance an amount of R2,7 million was made to a close corporation owned by an employee with invoices bearing fraudulent signatures being used to process the payments.

The officials said that another investigation is ongoing regarding a R2,5-million payment to a supplier who was supposed to provide services for the department, but never did.

It was suggested by committee members that government needs to involve the prosecuting authority, police, the South African Revenue Services (SARS), the Justice Department and auditor-general to finalise investigations into misuse and recovering of funds as well as bringing those implicated to book.

The committee also asked the department to ensure that it looks into an amount of R536 000 interest incurred by various schools in the province as a result of overdue accounts for lights, water and Telkom accounts. Msunduzi and eThekwini municipalities are the most affected municipalities by non-payment of rates by provincial government departments.

The committee was also told by officials that there was no knowing how the court proceedings on the matter involving the department and Indiza Group, regarding a payment of R99 million for stationery delivery, would pan out in the end.

Scopa members heard that the bulk of the department’s unauthorised expenditure, amounting to R654 998 million, emanated from over expenditure on the Occupation Specific Dispensation (OSD) and the reversal of the “no work, no pay” policy in 2007/2008 financial year, where teachers embarked on strikes, as well as payments in the recovery programme that year.

Irregular expenditure amounting to R751 935 million was incurred as well. Included in this amount is R11 054 million relating to improper supply chain management processes and R91 844 million being over expenditure on transfers and subsidies.


THERE are currently seven investigations in progress relating to appointments, payments to suppliers, salaries, qualifications and a bank account.

These include:

• an investigation to verify the authenticity of 63 suspected fake qualifications of departmental officials;

• an investigation on salary payments amounting to R201 631 made to an employee after the termination of his services;

• R2,3 million fraudulent payments processed by an unauthorized user of the payment system and

• an investigation into R939 153 paid into a fraudulent bank account to a school.

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