The Special investigation unit (SIU) has exposed serious mismanagement, irregular grant allocations and unauthorized expenditure within the EU Office of the Prime Minister (OTP) in the Free State, where officials allegedly awarded scholarships to ineligible recipients, including family members of officials, foreigners and a deceased student, misusing millions of rand in public funds.
At a media briefing on Tuesday, acting SIU chief Leonard Lekgetho said the investigation had been approved by President Cyril Ramaphosa under Proclamation 123 of 2023, following concerns raised by the Auditor General of South Africa in its 2019 and 2020 reports.
Lekgetho said the bursary scheme was intended to support needy students and address shortages of scarce skills in the province, but officials failed to adhere to eligibility rules and financial controls.
”The Free State provincial government has allocated funds to support needy students in accessing higher education and to address the shortage of scarce skills in the province through bursaries.
”Each year, funding is provided to Free State students pursuing scarce skills occupations at higher education institutions.”
However, Lekgetho said the SIU found that grants were wrongly awarded to relatives of civil servants without following due process, while in other cases civil servants themselves unlawfully benefited from state funding.
”OOfficials awarded scholarships to their relatives, the deceased and foreign nationals, as well as to ineligible officials, and left millions of Rands unaccounted for in university accounts.”
Lekgetho said some officials received grants without submitting valid applications, while others continued to receive benefits even after leaving government service.
He said the investigation further revealed that students who failed modules had their scholarship contracts extended without proper termination or review, in some cases from three to seven years.
Lekgetho said scholarships were also awarded for qualifications not included in the approved provincial skills plan, where the required approvals were not obtained.
Among the findings, according to Lekgetho, one official awarded grants to family members without following due process, while another official received funding despite not meeting the requirements of the applicable Human Resource Strategy and Development Circular.
He said the SIU also found that scholarship contracts were wrongly extended after students failed modules.
“Certain students failed some of their modules during their studies, but the scholarship contracts were never terminated by the OTP and went from a three-year contract to a seven-year contract,” Lekgetho said.
He said researchers also found that some applicants received funding for qualifications that were not included in the 2018/19 Provincial Workplace Skills Plan, and that required approval processes were not always followed.
Lekgetho said a civil servant who received an international government-funded scholarship continued to benefit from the program after resigning from public service.
He further highlighted irregularities in an agreement between the OTP and an international tertiary institution.
“However, the SIU found a contradiction in the agreement, with OTP ultimately contributing 65% of the grant,” he said.
He said an incomplete agreement between the OTP and an international institution showed conflicting financing arrangements, which led to the provincial government contributing 65% instead of the targeted 35%, leading to irregular expenditure of more than R8.3 million.
Lekgetho said a deceased student had also received a scholarship from both the OTP and NSFAS, with R34,891.60 paid to the University of the Free State and later transferred to a suspense account after the student’s death NSFAS had deposited R13,000 into the student’s account, which was used by the family.
He said recovery of the funds was limited due to legal and financial constraints.
”The SIU identified the officials who approved the grant and renewal, which resulted in the payment of R34 891.60as well as financing courses that the student has not completed, resulting in breach of contractual and policy obligations. ”
Lekgetho said seven foreigners also received grants in breach of the policy, which limits funding to South African nationals living in the Free State, resulting in irregular expenditure of R576,734.48.
He said government officials received full-time student grants during the 2019/2020 budget year, despite the fact that the policy only allows part-time student support.
Lekgetho said excessive stipend payments amounting to R1.8 million were identified, mainly involving students studying abroad.
He said the SIU had recovered R6.3 million from seven universities after tracking unused funds in suspense accounts.
Lekgetho said 18 promissory notes totaling R1.9 million had been signed with persons benefiting irregularly, with R283,571 already recovered in installments.
He said 38 officials had been referred for disciplinary action for alleged violations of the Public Finance Management Act and stock exchange policies.
”The SIU has created 38 disciplinary referrals against concerned officials, including personnel officers, administrative clerks, deputy directors, deputy directors and directors, for contravening the Public Finance Management Act and the Free State stock exchange policy.”
”In addition, evidence showing that there has been a criminal offense against seven individuals have been referred to the National Prosecuting Authority (NPA) for possible prosecution on charges including fraud, theft and money laundering,” he said.
Lekgetho said evidence involving seven individuals had been referred to the National Prosecuting Authority for possible prosecution on charges including fraud, theft and money laundering.
“These referrals are not symbolic. They represent the SIU’s unwavering commitment to accountability and ensuring that those who abuse power face the full weight of the law,” Lekgetho said.
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Hope Ntanzi
iol.co.za