Foreword by the Minister
The NLC is an important entity and its work is intended to serve the poorest and most vulnerable of South Africans. This Report provides details of the activities of the NLC, and list of beneficiaries in the 2021/22 financial year.
I am confident that this report and the provision of the list of beneficiaries will facilitate transparency and accountability in the affairs of the NLC after attempts by the Commission and the previous Board to restrict access to information on the distribution of funds.
After several years of effort by the Ministry and department in pursuing allegations of malfeasance in the granting of public funds to the most vulnerable in our society, I am pleased to report that the veil on maladministration in the (NLC) began to lift during the period under review.
Since August 2019, at the start of the new Administration the Ministry and department took several steps to address allegations of misconduct, including:
- Undertaking physical visits by the dtic internal audit team on claimed project buildings.
- Commissioning an independent forensic investigation into specific projects.
- Requesting implicated NLC staff to be suspended.
- Laying criminal charges with SAPS.
- Supporting the appointment of the Special investigating Unit (SIU) to look into maladministration at the NLC.
- Resisting pressure from orchestrated marches on the offices of the Ministry.
- Opposing a number of applications by external entities to suppress disclosure of beneficiary information and successfully challenging the NLC’s grounds for refusing to disclose such information. And
- Opposing a number of court applications by the NLC against the Ministry on governance matters, including the decision to commission an independent forensic investigation, which decision was upheld by the Gauteng High Court.
Following a referral letter by the SIU in August 2021 containing details of findings involving an NLC Board member and an official, I requested that the Auditor General be advised of the contents thereof; which was done in September 2021.
The NLC received a qualified audit opinion on the financial accounts and a number of internal controls and compliance deficiencies that the accounting authority did not effectively oversee relating to financial reporting and compliance with legislation were identified. The new Board on an urgent basis must address these issues.
At the time of the audit, investigations were still ongoing against the NLC, being the Special Investigating Unit (SIU) investigation on the NLC for the period
1 January 2014 to 6 November 2021 and the investigation by the Directorate for Priority Crime Investigation (Hawks) relating to grant funding allegations levelled against beneficiaries, management and previous board members.
During the course of investigations, the Commissioner, the Chief Operating Officer and Chief Financial Officer resigned.
Against the background, I am gratified that a new Board with persons of high integrity and standing in our society were appointed. The Board is headed by Dr Barney Pityana, a respected public figure and the Board members comprise Dr Cassius Lubisi (former head of Cabinet), Ms Precious Mvelane, a chartered accountant, Mr Willie Hofmeyr, former head of the Asset Forfeiture Unit and Ms Beryl Ferguson, a previous MP with experience in governance.
I have requested the Board to prioritise measures to hold implicated persons to account and I am confident that the process of re-building trust in the NLC is now in good hands.
Ebrahim Patel
Minister of Trade, Industry and Competition