Nedlac executives probed for financial misconduct
The organisation tasked with ensuring that proposals by the recent jobs summit to create 275,000 jobs a year are implemented, has been rocked by scandal yet again, with two executives allegedly implicated in financial misconduct.
The National Economic Development and Labour Council (Nedlac), an entity of the labour department, is made up of government, business, labour and community constituencies, and formulates labour market policy and provides input on other legislation.
Business Day has been reliably informed that the council’s CFO Mfanufikile Daza has been suspended and is facing charges for allegedly breaching procurement policies. Daza declined to comment, saying he was not ready to discuss the issue.
Nedlac executive director Madoda Vilakazi said the CFO had been suspended over “a number of issues”.
“If someone has breached procedures, I would not want to specify what it was about. It’ sa number of things and we are still in the process of finalising investigations,” Vilakazi said.
However, Vilakazi could face a similar fate himself if an investigation to look into how the institution has incurred irregular expenditure amounting to R391,809 in the 2017/18 financial year finds that he abdicated his responsibility.
The auditor-general said Nedlac had contravened supplychain management requirements. On Wednesday, Vilakazi said the investigation into the reasons behind the organisation being cited for irregular expenditure by the auditor-general was yet to be presented to its executive committee.
“If they want to blow the Nedlac one out of proportion, so be it, but the report on that has not been tabled.
“There are few entities of the state that did not have irregular expenditure and it is incumbent on all of them to investigate it.
“There is no financial misconduct that has been identified, it’s just irregular expenditure. Every year, every organisation always has it,” Vilakazi said.
He told Business Day that “implicating people prematurely is malicious and slanderous”.
The investigative report will be tabled at the executive committee meeting on Friday.
Sources who are part of Nedlac structures told Business Day that the meeting could recommend that Vilakazi be suspended. Daza’s suspension is also expected to be discussed at the meeting.
A source who sits on Nedlac’s management committee said it was “unfortunate” that the organisation was distracted by internal issues related to its management when it should be focused on working on finding solutions to the country’s economic problems.
In 2015, a forensic investigation into Nedlac’s finances found that its former CFO Umesh Dulabh and former executive director, Herbert Mkhize, had fraudulently and illegally spent close to R2m in council funds.
Mkhize, who is yet to account, was appointed special advisor to labour minister Mildred Oliphant shortly after the revelations.
In 2017, the auditor-general flagged several irregularities in Nedlac’s financial statements after it was found the body had not been compliant with provisions in the Public Finance Management Act. Nedlac incurred more than R4m in irregular and wasteful expenditure, running up a deficit budget, and contracts were awarded to bidders that had not scored the highest points during evaluations.
R391,809 the irregular expenditure at Nedlac in the 2017/18 financial year