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Five auditing firms allegedly helped compile fraudulent financial statements for 40 organisations.
The Special Investigation Unit (SIU) says the 40 nonprofit organisations (NPOs) and nonprofit companies (NPCs) it investigated allegedly received help from accounting firms and auditors to qualify for National Lotteries Commission (NLC) grants.
The SIU, South African Police Service (Saps), Hawks and National Prosecuting Authority (NPA) briefed parliament on the investigations and prosecutions in relation to the alleged corruption and misadministration at the NLC.
In November 2020, President Cyril Ramaphosa signed a proclamation authorising the SIU to investigate the NLC and recover any losses.
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The SIU divided its investigations into three phases.
The estimated value of the matters investigated in the first and second phases is R279.7 million and R246.6 million, respectively. The SIU has completed investigations in these phases.
Phase three, which is ongoing, has an estimated value of R905.9 million. It has an estimated date of completion of 31 December 2024.
The value of contracts under investigation with potential civil litigation is about R2 billion. However, the SIU has recovered only R9.5 million of this.
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It said it was in possession of several allegations that have not yet been investigated.
“We have a considerable number of preservation orders that have not yet turned into forfeiture orders. These will increase the number of actual recoveries,” said SIU head Andy Mothibi.
SIU: Auditors were in on it
During its investigation, the SIU established that accounting firms and auditors were alleged enablers of organisations that did not meet the requirements for NLC applications.
One of the requirements is that an application form must be accompanied by two-year audited financial statements.
The accounting firms include Tuphe Trading and Projects trading as TTP Consulting, which allegedly compiled fraudulent financial statements for at least six NPCs.
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Dzata Accountant allegedly compiled fraudulent financial statements for at least 14 organisations, while Magodi Consulting allegedly compiled statements for at least 12 NPOs.
Mageba Ntuli Consulting allegedly helped Ubusu NPC, which was funded by the NLC. The funds were not used for their intended purpose.
Tafta Consulting & Accounting Services allegedly compiled financial statements for at least four NPOs.
“These NPCs were funded by the NLC and the funds were not used for their intended purpose,” said acting chief national investigations officer Zodwa Xesibe.
The SIU has since preserved the pension of former NLC chief operating officer Philemon Letwaba to the value of R2.2 million.
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Seven directors and 13 companies have also been referred to the Companies and Intellectual Property Commission (CIPC) to be placed under the delinquency list and to be barred from registering companies with CIPC in future.
The directors and companies were allegedly utilised to launder money that was funded to the NPCs.