The Information Systems, Electronics and Telecommunications Technologies Sector Education and Training Authority (ISETT SETA) has come under fire for improperly auditing about R37 million in training grants over the 2004/5 financial year.
A former board member, who does not wish to be named, says invoices for grants for projects under the National Skills Fund (NSF) would typically be approved by ISETT SETA, but not recorded correctly.
While this came to light in an auditor-general`s report, which highlighted the inconsistencies, there also appears to be no monitoring procedures in place to ensure monetary grants are channelled to legitimate training initiatives.
"No procedures are put in place to check if the projects even went ahead," the source admits.
In his report, auditor-general Shauket Fakie points to a "lack of controls to facilitate a system of valid, complete and accurate record-keeping in respect of NSF project expenditure and learnership allowances.
"It was not possible to audit project expenditure - expenses in the general ledger did not contain description of details of the invoice to ensure correct allocation of project expenditure," he adds.
However, CEO of ISETT SETA Oupa Mopaki says adequate control measures to ensure grants are spent correctly are in place, and always have been.
"There are legislative provisions to ensure funds are used in the correct way," he says.
"I`m aware of people who sit on the board criticising [the way we check training grants] but it is unfair that they say these things - they will not come out and say it in board meetings either."
Mopaki explains that one of the reasons for the poor accounting of the 2004/5 financial year is that ISETT SETA inherited the old IT training board as a going concern during that year.
Dismissing criticism
Aside from R37 million in improperly recorded skills expenditure, the auditor-general`s report found R6 million in incorrectly accounted for VAT liability and VAT receivable accounts, plus unrecorded liabilities of over R8 million and an "inaccurate fixed assets register" of R4 million for property and plant equipment.
ISETT SETA chairman Lucky Masilela has downplayed the possibility of the mismanagement of state funds.
"We are confident that whatever concerns raised by the auditor-general will be resolved - we are on the right track," he says.
Spokespeople from the auditor-general`s office are unable to say, at this stage, what the next step will be in the auditing process.
No allegation of
Meanwhile, the former ISETT SETA board member has offered reasons for the inconsistencies, saying the management of financial matters was unsatisfactory.
"We would meet and figures would not be available, or they would be incomprehensible," he explains.
The previous CFO Moshe Motaung was dismissed late last year.
The unnamed source says, however, that the accusations levelled at the organisation are for mismanagement, not fraud.
This is supported by Fakie, who writes: "Although it is not my responsibility to detect fraud, the sample tested did not reveal indicators of fraud."
Masilela comments that there were "areas of unhappiness" with the previous CFO.
ISETT SETA has, since Motaung`s departure late last year, appointed a new financial manager, who declines to speak on the record about the issue.
Motaung and Fakie could not be reached for comment at the time of publication.
The auditor-general`s report can be accessed here.
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