Case of the missing R5 million
GAUTENG PREMIER ORDERS AN INVESTIGATION INTO GDSD AND VARIOUS NGOS Court dispute involving the parties led to the decision.
Gauteng Premier David Makhura has commissioned an independent forensic investigation into the conduit transactions between the Gauteng Department of Social Development (GDSD) and various NGOs.
This is according to his spokesperson, Pumla Segonyane, who said yesterday his office was concerned with the nature of conduit transactions between the departments and NGOs after the disappearance of R5 million in a botched conduit transaction.
The department regularly uses some NGOs as conduits to send money to organisations, which are not able to receive the money directly from the department.
The investigation was sparked by a court dispute between A Re Ageng, an East Rand-based NGO, and GDSD, after a supposed agreement between the parties to transfer more than R23 million via the NGO to an organisation run by the Life Esidemeni hospital. The NGO is accusing the department of flouting regulations in two transactions they were involved in last year.
Gauteng Treasury is now investigating A Re Ageng and three other NGOs with which GDSD have conducted conduit transactions, after it was alleged that the now cash-strapped NGO refused to follow through on an agreement to transfer R10 million to Life Esidimeni’s Life Recovery Centre.
This was after the first trans- action in June last year was conducted, with the NGO charging government R50 000 for transferring R13 million to the Life Recovery Centre.
Subsequently, R5 million belonging to the department disappeared from A Re Ageng’s bank account in October last year, just weeks after the department sent them R10 million destined for the same third party.
A Re Ageng claims that it signed an agreement to only do one conduit transaction with the department.
The NGO said it was surprised to find that R10 million had been deposited into their Absa Bank account, without a recognisable reference and without prior warning.
The department has dismissed this claim, saying the NGO knew about it.
The matter is now at the South Gauteng High Court, after the provincial government obtained a court order to freeze the NGO’s accounts and is now seeking to recover the full amount sent to A Re Ageng in October last year.
The NGO has not received its government subsidies for the last quarter and has been struggling to pay salaries and running costs for the facility which houses abused women and children. Its application to force the department to pay them their subsidy will be heard when the matter continues tomorrow.