National Lotteries Commission vows to right wrongs identified by A-G
The National Lotteries Commission (NLC) says it remains committed to addressing systemic failures and other problems cited by the auditor-general (A-G) in its 2023/24 audit outcomes.
Last week, the A-G issued a qualified audit outcome for the NLC. It noted systematic failures in governance, weak financial controls, lack of service delivery and failure to comply with legislation. The A-G warned that the NLC had undermined its own mandate by failing to ensure funds reached the intended beneficiaries.
In a statement on Wednesday, the NLC said corrective actions were under way.
'The NLC has implemented stricter pre-payment documentation checks, updated its accounting policies in line with generally accepted accounting practice, strengthened asset management controls and is automating key elements o the grant funding process.'
The commission said it had suspended payments on flagged grants, pending individual compliance reviews. It had also established a loss control committee to investigate irregular expenditure and oversee consequence management.
'Progress on these measures will be reflected in the commission's forthcoming mid-year performance update.' This will be in October.
The commission said a stable and skilled workforce was essential for effective oversight of grant funding and regulatory functions.
'Therefore the NLC is advancing senior leadership appointments and driving an organisation-wide hiring programme to reduce current vacancy levels and strengthen critical capabilities.'
The commission said it was also collaborating with the A-G, the portfolio committee on trade, industry and competition and the National Treasury to align remedial milestones and secure technical support.
'We confirm that the finance team has worked tirelessly to enhance governance and improve policies and processes to address the internal control deficiencies identified. The NLC board and senior management have made significant strides in closing off these matters and is confident that in the new financial year 2025/26, the outcome will improve,' said NLC commissioner Jodi Scholtz.
Meanwhile, the standing committee on public accounts says it wants answers from the commission and the department of trade, industry and competition after two concerning briefings from the A-G and the Special Investigating Unit (SIU) that revealed weak financial management, maladministration and corruption at the NLC amounting to over R2bn.
Last week, the A-G briefed Scopa on the NLC's 2023/24 audit outcomes and financial performance.
Scopa said key audit findings included:
grants allocated to unqualified applicants with no supporting documentation,
overfunding of projects lacking feasibility studies or proper plans,
underspending of R957m on grants from a R1.52bn budget
incomplete or undelivered infrastructure projects, including the Motheo Sports Complex and eDumbe Old Age Home,
high vacancy rates in critical units such as finance, ICT and grants adjudication, and
only 67% of grant targets and 75% of regulatory compliance benchmarks were achieved.
On Wednesday, the SIU briefed the committee on investigations under way at the NLC.
The COO at the SIU, Leonard Lekgetho, told Scopa that investigations mandated by Proclamation R32 of 2020 — for the period January 2014 to November 2020 — uncovered a corruption network involving senior NLC officials, board members, professional enablers and hijacked non-profit entities.
The SIU also noted a modus operandi of funnelling grants through hijacked non-profit organisations and non-profit companies as well as fraudulent applications backed by doctored financials from complicit auditing firms.
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