Times Of Swaziland: E2.7M FRAUD ROCKS SITEKI SOS CHILDREN’S VILLAGE

E2.7M FRAUD ROCKS SITEKI SOS CHILDREN’S VILLAGE
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Mbongiseni Ndzimandze and Kwanele Dlamini on 09/06/2022 08:40:00


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they also unearthed that a total of E517 657.26 was withdrawn by the local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withdrawn.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.