Fraud suspected in ex-miners’ retirement fund
MBABANE – The Auditor General (AG),Timothy Matsebula, has raised suspicions of wasteful expenditure and fraud committed in the ex-miners’ retirement fund.
The AG alleged that the wasteful spending and fraud might have occurred between 2009 to date, in the Voluntary Deferred Pay (VDP) special fund due to missing records.
The auditor general highlighted these suspicions in the Financial Audit Report on the Consolidated Government Accounts of the Kingdom of Eswatini for the Financial Year ended March 31, 2023.
Matsebula reported that there were funds which were unaccounted for in the VDP fund, amounting to E23 941 973.23 from the financial year 2009 to date.
“There were no financial statements prepared for the fund, as such, its operating activities were not disclosed in the Government Consolidated Financial Statements and the transactions incurred were not recorded in the Government Accounting System,” he said.
Established
The VDP special fund dates back to 25 years ago. According to records, the fund was established when the government agreed with certain several mines in South Africa. Eswatini mineworkers made monthly contributions to the fund which had a defined benefit structure. Over the years, when miners were retiring, they received their payouts. The administration of the Workers’ Voluntary Deferred Pay Special Fund Regulations, 1977, Section 6(2), states that the VDP Board shall, within three months after the end of each financial year, present to the Minister of Labour and Social Security a report in such form as may be prescribed by the minister and detailing the exercise and performance by it or its functions during such financial year.
The AG’s report indicates that the funds comprise E16 425 758.51 made up of the balance after payouts and interest earned at the Swaziland Building Society from July 29, 2009, to December 1, 2023: E1 637 443.75 also include the balance after pay-outs and interest earned at Nedbank from June 11, 2021 to March 31, 2023.
The AG also observed that the department had an account at Nedbank which had earned funds amounting to E4 339 134.23 from June 28, 2021, to March 31, 2023.
“EswatiniBank has two active accounts which received funds through transfers and interest to the value of E12 937.40 and E1 526 699.34 from November 8, 2019, to March 31, 2023, respectively.
Defined
The AG stated that there was no instrument submitted to the auditors which defined how the mineworker’s funds were to be managed by TEBA, including a financial statement showing the funds transferred to TEBA at that time along with a redefining instrument of the remaining funds in the Ministry of Labour and Social Security.
“I am concerned that the financial performance of the Board could not be ascertained, hence its decisions could not be evaluated. There may have been wasteful expenditure and fraud occurrence which could have gone unnoticed,” he said.
AG upon enquiring about the financial statements of the fund, the Ministry of Labour and Social Security controlling officer told the AG that the financial statements were prepared by Deloitte and Touche in 1998. At that stage, it may not be known if they were sent to the Accountant General and the Auditor General. It was also revealed that the funds ceased operating in 1999 and were then revived in 2021 when a new Board was appointed to look after the monies. Moreover, in the year 2023, the current Board members made a formal request to the AG to audit the funds to ensure that all monies used during the two years were accounted for. However, the AG stated that the justification for not preparing the financial statements to account for the public funds does not hold water.