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E2.7M FRAUD ROCKS SITEKI SOS CHILDREN’S VILLAGE

09/06/2022 08:40:00 Mbongiseni Ndzimandze and Kwanele Dlamini

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MBABANE – An investigation into operations of Siteki SOS Children’s Village has unearthed alleged acts of corruption, forgery and fraud involving millions of Emalangeni.

According to a forensic audit report, out of E3 699 606.60 that was spent by Siteki SOS Children’s Village from January 2021 to September 2021, a total of E2 736 567.59 covering the seven months of January, February, April, May, June, August and September had no documented records supporting the expenses. According to the auditors, the whereabouts of the files could not be established, both at Siteki SOS Children’s Village and the national office.

The alleged acts of corruption, fraud and nepotism within the Siteki SOS Children’s Village, were unearthed after the management of SOS Children’s Villages conducted a project costs analysis where it uncovered fraudulent activities, which were allegedly carried out by the management of Siteki SOS Children’s Village. The forensic audit report, which was carried out by an independent auditor, also reportedly found that there were many fraudulent activities which took place in the Siteki SOS Children’s Village and were among others allegedly perpetrated by the management.

Investigations

In their report, the auditors further highlighted that in their investigations they also unearthed that a total of E517 657.26 was withdrawn by the local leadership (programmes director, finance assistant and human resource assistant), using staff not connected with the activities for which it was withdrawn. This was allegedly done to disguise their fraudulent acts. It alleged that Ezrome Magagula, who was the Programme Director in charge of the Siteki SOS Children’s Village and Themba Shija, who was the Director of Finance Administrator, were behind the fraudulent activities in the institution. The auditors stated that in a period spanning from 2019 to 2021, Magagula and Shija allegedly abused the eWallet system (from First National Bank) and sent monies to their subordinates and would immediately request them (subordinates) to forward them the PINs for withdrawing the money.

Payments

It was further alleged that some of the eWallet payments were loaded by the director of finance on Saturdays and/or weekends through the online banking service and were approved by Magagula. In the report, the auditors mentioned that the conduct of the duo (Magagula and Shija) was deliberate and calculated to defraud SOS Children’s Village of the monies sent via eWallet to their subordinates. The auditors also pointed out that SOS Eswatini might get penalised by regulatory authorities like Eswatini Revenue Service (ERS) as loss of financial records was deemed as an action to evade taxes. They stated that missing of key payment documents was an indicator of fraud.

It was further the auditors’ findings, that in November 2018, SOS Children’s Village paid E7 304.17 to Baceth Hardware in Siteki for the construction of a guardhouse. The materials, according to the auditors, were requested by the child and youth development coordinator and approved by the programmes director. The auditors said they did not find any documented evidence to prove that the materials were delivered and used in the SOS Siteki facility. The procurement was reportedly made before any process covering design of the guard house and bill of quantities had been initiated.

“An interview with the manager of Baceth Hardware found no details of the staff member who picked the items as the payment was made in cash on March 20, 2019. Audit also noted that, Siteki SOS Children’s Village did not indicate the details of the member of staff who initiated the purchase,” reads part of the report. The child and youth development coordinator reportedly told the auditors that she had no knowledge of the procurement of the material above.

Fraudulent

The auditors mentioned that SOS Children’s Village suffered financial loss due to the items procured and not delivered. It was further their observation that payments into different accounts were an indication of fraudulent transactions. The audit noted that the Siteki programmes director appointed three co-workers as procurement committee members, namely; child and youth coordinator, kindergarten cook and Siteki SOS Children’s Village driver. The investigation revealed that the kindergarten cook and the driver never participated in any procurement committee meetings to deliberate on items to be procured by the Siteki SOS Children’s Village, much as their names were used in procurement documents.

“Audit also noted forgeries of the signature of the driver and the kindergarten cook in the report allegedly from the procurement team dated October 22, 2019, supporting the procurement of building blocks and river sand for the guard house of E7 775 paid to R.D. Kaye through eWallet,” reads part of the report. It was observed by the auditors that all the illegal procurement team members never participated in any process but their names and signatures were used multiple times in various transactions. “The appointment of the junior staff with limited knowledge of the procurement process and limited ability to question the intentions of the senior staff was as a result of fraudulent intentions of the programmes director, who in collusion with finance assistant, human resources assistant and child and youth development coordinator, were the principal staff behind most procurement activities as noted in financial records,” said the auditors.

Communication

It was also allegedly discovered that in all the subsequent communication from the procurement committee supporting the various purchase material, the audit noted that the human resource assistant signed in place of the driver indicating (PP), while the kindergarten cook had no knowledge of the construction of the guard house, yet her signatures were on the procurement report as a member. The audit team recommended that the child and youth development coordinator for the Siteki Children’s Villages, who initiated the procurement of the construction material for the guard house, must account for the undelivered construction material and that the costs of same should be recovered from her, the former finance assistant, former human resource assistant and the former programmes director.

Review

The audit implored the management of the Board to establish an internal audit department for regular and timely review of internal controls and follow up of allegations raised by whistle-blowing calls. The finance assistant of Siteki SOS Children’s Village, according to the report, made himself the procurement officer both in-charge of paying for goods and services and receiving goods. “In the malpractices above, the finance assistant disguising his fraudulent activities as having proper segregation of duties would transfer funds for most activity owners to majorly two junior staff members namely; Family Strengthening Field officer, Abel Lukhele and Siteki SOS Children’s Village driver, Nhlanhla Mngometulu through eWallet payment to their respective cellphone numbers,” observed the auditors.

The auditors’ report now forms part of court proceedings in the matter where SOS Children’s Village is demanding payment of part of the money from the implicated former employees.
“The finding is that the manner in which the former programmes director of the Siteki SOS Children’s Village and the finance assistant worked conflicted with SOS policies, in that they never produced physical documents before authorising payments. Upon enquiry from the Siteki team, the former finance assistant would tell them to submit motivation letters through an email, since he was rarely in office,” said the auditors.

Furthermore, the auditors found that a total of E517 657.26 was unaccounted for. These, according to the report, were eWallets that were allegedly abused by the former management team. The forensic audit report cites the construction of the guard house that was overpriced by E54 717. SOS Children’s Village is demanding E517 657.26 from Magagula who was the Programme Director in charge of the Siteki SOS Children’s Village and Shija, who was the Director of Finance Administrator. The plaintiff (SOS Children’s Village), through its lawyers from Musa M. Sibandze Attorneys, has since taken the duo to court where they are demanding the aforementioned amount.