Mystery R10m lands in NPO’s ac­count

Saturday Star - - NEWS - MARK OLALDE

THE bat­tle be­tween a West Rand non­profit and the Gaut­eng Depart­ment of So­cial De­vel­op­ment (DSD) rages on at the South Gaut­eng High Court five months after a mys­te­ri­ous R10 mil­lion de­posit turned the NPO into whis­tle-blowers.

Staff at A re Ageng, which op­er­ates shel­ters for vic­tims of do­mes­tic abuse, claim the pro­vin­cial DSD has ha­rassed them ever since the money landed in the NPO’s bank ac­count last year.

The depart­ment claimed the money was meant to be trans­ferred to the Life Re­cov­ery Cen­tre, an NPO open­ing a new sub­stance abuse treat­ment cen­tre.

A re Ageng had pre­vi­ously trans­ferred R13m to the cen­tre at the pro­vin­cial DSD’s re­quest, but the depart­ment could not prove the source of the sec­ond pay­ment, leav­ing it in limbo.

R5m van­ished from A re Ageng’s ac­count and ended up with a fuel whole­saler in Pre­to­ria, Kish Gas, where it was used to buy diesel headed for Zam­bia. A re Ageng claimed its ac­counts had been hacked, and a court case en­sued.

The premier’s of fice re­cently launched an in­ves­ti­ga­tion into the money flow­ing to Gaut­eng NPOs.

Gaut­eng spokesper­son Thabo Masebe said the pro­vin­cial Trea­sury was prepar­ing an­other in­ves­ti­ga­tion into the use of three spe­cific NPOs as con­duits to trans­fer the pro­vin­cial DSD’s money.

A re Ageng’s staff have not been paid since Jan­uary be­cause the DSD froze pay­ments to the NPO.

The DSD moved the ben­e­fi­cia­ries from one of A re Ageng’s two shel­ters to an­other or­gan­i­sa­tion in De­cem­ber. The fol­low­ing day, many ben­e­fi­cia­ries re­turned, but the depart­ment ar­gued on Tues­day that there was no need to pay A re Ageng be­cause it was not serv­ing any ben­e­fi­cia­ries.

Life Re­cov­ery Cen­tre’s ser­vice level agree­ment with the DSD was ex­posed in court on Tues­day and showed mis­cal­cu­la­tions in pay­ment owed.

For ex­am­ple, detox­i­fi­ca­tion and treat­ment for pa­tients were listed as cost­ing nearly R19m even though the cost per ben­e­fi­ciary, mul­ti­plied by the num­ber of ben­e­fi­cia­ries listed, came to just more than R2m.

Court doc­u­ments also un­veiled an in­ter­nal memo from the Gaut­eng DSD, which was sent from the di­rec­tor of NPO fi­nanc­ing, Themba Msi­manga, to other depart­ment staff, in­clud­ing the head of depart­ment and a deputy di­rec­tor-gen­eral.

The memo de­scribed ef­forts to adapt fa­cil­i­ties be­long­ing to Life Esidi­meni, a con­tro­ver­sial NPO re­lated to Life Re­cov­ery Cen­tre, for an­other use.

The memo stated: “The depart­ment did an as­sess­ment to de­ter­mine the suit­abil­ity of the fa­cil­ity to be con­verted into a sub­stance abuse in-pa­tient treat­ment cen­tre and half­way house in the month of May 2016.”

How­ever, a sep­a­rate NPO called Sanca Hori­zon had al­ready trans­ferred R14m to Life Esidi­meni at the re­quest of the depart­ment a month be­fore the as­sess­ment and this is now part of the in­ves­ti­ga­tion.

In Jan­uary, A re Ageng’s at­tor­neys checked the R10m pay­ment with a fi­nan­cial an­a­lyst at the of­fice of the ac­coun­tant-gen­eral to lo­cate its source.

“We’ve checked the cash book data for (a) match­ing amount but no records could be found,” the an­a­lyst replied in an e-mail.

In court this week, it emerged that the mys­te­ri­ous pay­ment came from the pro­vin­cial Trea­sury, although the State’s coun­sel ar­gued it be­longed to the pro­vin­cial DSD’s bud­get.

Judge Brian Spilg then in­vited Na­tional Trea­sury to pro­vide fur­ther clar­ity in fu­ture court dates on the right­ful owner of the money. Ob­servers said a pat­tern was start­ing to emerge in the depart­ment’s use of NPOs to act as con­duits chan­nelling money.

The Gaut­eng DSD memo said A re Ageng was cho­sen specif­i­cally be­cause it was long-es­tab­lished and had “good fi­nan­cial and ac­count­ing man­age­ment sys­tems”.

An ad­min­is­tra­tive fee of R50 000 was paid to A re Ageng to cover bank costs. The ex­cess went to the NPOs gen­eral op­er­at­ing bud­get, although al­le­ga­tions abound over the size of such fees paid to other NPOs used as con­duits.

The third NPO un­der in­ves­ti­ga­tion, 20ptp in Mohlak­eng, al­legedly re­ceived fund­ing in­ap­pro­pri­ately sent to it through a re­lated NPO.

Adriana Ran­dall, the DA’s MEC spokesper­son on fi­nance in Gaut­eng, said she was not al­lowed to give a state­ment on the mat­ter in leg­is­la­ture on Tues­day.

“This is a big can of worms that was opened by A re Ageng. This is just the tip of the ice­berg.”

The next court date is set for March 27.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.