How crooks milked dept

Ghost NPOs used to siphon nearly R1m
Number of children inflated to get more cash

Like most other retirees, 65-year old, Nthabiseng Motsoeneng** is a woman of modest means. Her small pension pay-out, supplemented by an occasional allowance from her son who lives and works in Johannesburg, is her only source of income.

But you wouldn’t know of Motsoeneng’s frugal existence by looking at the records at the Free State department of social development.
According to the department, Motsoeneng is running a thriving early childhood development centre (ECDC) that, in addition to monies paid by parents of children enrolled there, receives regular financial support from the department.

For example, department figures show that in the 2014/2015 financial year it gave Motsoeneng more than R60 000 for her ECDC.
That’s quite a sizeable figure, especially considering the department cash is in addition to whatever Motsoeneng collects from parents. She, surely, should be able to pay herself a handsome salary or allowance — except it’s all a lie.

The ECDC does not exist and neither has Motsoeneng ever received money for the centre from the department or anybody else for that matter.

In a shocking case of rampant corruption and common fraud, an on-going investigation by the department has unearthed eight ghost non-profit organisations (NPOs) from Mangaung Metro that were being used by some unscrupulous elements amongst its staff to siphon nearly R1 000 000 in cash that should have been used to support the sick and poor.

“It is just so sad to see people trying to rob the department of money that is meant for children who are from impoverished families,” said Samuel Mohoboko, director of the department’s anti-fraud, corruption and security unit that is leading the investigation.

He added: “These are the children who depend on these funds for a meal. This must stop and people (culprits) held accountable.”

Social development MEC Sisi Ntombela has said she will ensure that anyone who was involved in the alleged scam is brought to book
“We need to send a strong message to those behind these illegal activities that we cannot, under any circumstances condone their behaviour and that their actions have consequences. Justice must take its place,” said the livid Ntombela.

With the probe — that the anti-corruption unit began following an April report by The Weekly that exposed rampant mismanagement by NPOs of funds they get from the state – set to be extended across the province, more ghost organisations are expected to be exposed.

The figure of stolen funds is also expected to exceed the R 939 688.65 so far suspected to have been pilfered.

But the bit uncovered so far by Mohoboko and his team makes a shocking revelation of corruption, dishonest, lies, theft and extortion.
A report compiled by the team, a copy of which was shown to The Weekly, shows how some officials would falsify records, creating fictitious NPOs, complete with street addresses and bank accounts.

They would even compile reports explaining the good work that the non-existent NPOs were doing, running ECDCs or caring for poor people living with HIV and AIDS in their communities.
The officials would use the false reports to justify money being given to the phantom NPOs or non-governmental organisations as they are also called.

In the case of Motsoeneng, her ECDC, according to the false records at the department, was supposed to be operating from her house along Seiso Street, in Phase 2, Mangaung Metro.
In motivating for more funds for the ghost ECDC, a department official wrote that it had implemented its programmes well, providing vital services to communities in Phase 2 and surrounding areas.

The centre that received R64 960 from the department in the 2014/15 year had requested R240 000 for the 2015/16 year.

In what probably was meant to give the whole fraudulent transaction an air of legitimacy and to create the impression this was a genuine application for funding which department officials had prudently examined, the request to quadruple the grant was turned down.

However the official who handled the matter recommended that the grant be increased by only R5000 to R70 960.

The official wrote that the ECDC was offering services to orphaned and vulnerable children in: “Phase 2, Khotha Square, JB Mafora Square and Caleb Motshabi Square arrears.”

“During the financial year 2014/2015 they managed their programmes well and adhered to their MOA (memorandum of agreement with the department). It is recommended that an additional R5 000 be allocated to the organisation,” the official wrote.

But the department had already caught up on the scam and blocked release of any more funds while carrying out investigations that showed the Phase 2 ECDC did not exist and that its business address was actually the home of Motsoeneng, a former University of the Free State worker who retired a year ago and lives at the house all by herself.

“This cannot be true,” was all a visibly shocked Motsoeneng could say when told by our news team that visited her this week that her home was being falsely used as the address of an ECDC to steal money from the department of social development.

After recovering from her shock, she added: “I live alone here, and my son works in Johannesburg … these people are using me to enrich themselves, please tell me who they are I am going to sue them.”

In another case of alleged corruption and fraud, R224 240 was in the 2014/15 financial year given to an organisation known as Free State Christian Church Leaders Forum that is supposed to be assisting orphans and other vulnerable children in Bloemfontein’s Turflaagte township and Botshabelo’s Section L area as well as in Thaba Nchu.

But the forum does not exist. It was just one of the fronts that were being used to siphon money from the department.
The phantom group had applied for another R224 240 this financial year with the department official who handled their application recommending it be given the money because it had managed its programmes well.

“The organisation is rendering … services at Turflaagte, Bloemfontein as well as in the indicated area in Botshabelo and Thaba Nchu. They have managed their programmes well during the financial year 2014/2015 and have adhered to the MOA,” the official wrote.

But thanks to the probe by Mohoboko and his team, the department blocked release of the funds.

While most of the cases of suspected fraud unearthed so far involve fictitious NPOs that were used to steal money from the department, there were also cases were some officials would approve funds to properly registered and existing organisations but would later go to these groups to demand their cut from the funds received from the department.

In one such case that is now under police investigation two department officials from Senekal took turns to extort money from the matron of an ECDC in the town, receiving a total of R8 800 over a period of eight months.

From July 2012 the one official was getting R1 100 each month from the matron up until October of that year when the other official took over receiving the payments until around February 2013.
In other cases officials working with some dishonest ECDC operators inflated the number of children attending the centres to get more money from the department and would pocket the difference.

The more children at a centre the more the money it gets from the department.
Mohoboko said: “We requested the lists of names of children being supported by the department but they were not forthcoming with this … I was told that they only have the numbers of the children and not their names.

“We found out that this was because the numbers are inflated because people want to get more money.”

There are more than 1 600 NPOs in the province working in various fields from running crèches to HIV and AIDS work. Many of these groups receive funding or other support from the department as they play a vital role in implementing the government’s social support programmes.

For example out of the 1 400 early childhood development centres in the province 940 receive funding from the department for use to buy things like food and toys for the kids and to pay caregivers.

But it has always been suspected that some of the NPOs could be mere fronts to siphon money from the department, while they have also been cases of management at the groups that are actually operating using some of the money from the government to pay their private bills. **Not her real name.