R286m is still missing after being given to National Skills Fund projects – report

A report into financial mismanagement by the Department of Higher Education’s National Skills Fund (NSF) reveals massive fraud and forgery.

In five cases mentioned by Nexus Forensic Service’s audit of a select number of projects, the total amount of unaccounted funds is R286 million.

The money was intended to go towards NSF projects to help the poor. Most of the funds instead benefited a select few.

Parliament has been aware of the report since 2022 and the Hawks are continuing their investigations into the NSF beneficiaries.

R187 million for Eastern Cape artisan training

Fund recipients in the Eastern Cape failed to account for a R131 million advance they were given to train 1 025 artisans, City Press reports.  

The contract to training people from Bizana and Lusikisiki was supposed to run for nine months at a total cost of R187.4 million.

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Money used to buy farm and expensive car

A short-lived KZN rabbit farm spent only R1.6 million of their R123 million grant on matters relating to rabbit breeding.

The eight listed directors of Yikhonolakho Women and Youth Primary Cooperative are alleged to have misappropriated the funds, leaving intended promises unfulfilled.

Yikhonolakho is owned by the Manzini family. The family bought a Nissan Navara and a farm, while the organisations that were supposed to benefit from the project’s value chain did not receive any money.

The report stated that when investigators went to visit the rabbit farm, there was no indication that it existed.

In other examples, an Ekurhuleni TVET is alleged to have wasted R17 million, while a human resources consultancy received R13.4 million that they could not account for when their contract was cancelled. A TVET college in Port Elizabeth could not account for R1.2 million of the R7 million received from the NSF.

Lack of oversight

The Department of Higher Education and Training (DHET) provided an update to the Standing Committee for Public Accounts (Scopa) in February

ALSO READ: National Skills Fund: more than R130 million fails to reach youth-owned SMMEs

Citing the examples given, the DHET’s reports noted that NSF staff failed to ensure proper compliance, resulting in unfit companies being granted funds.

Irregular site visits, poor record-keeping and lack of thorough verification were all listed as contributing factors to the alleged misappropriation.

“Almost all the tender entities breached the provisions of the memorandums of agreement by not opening a dedicated bank account to deposit the funds paid by the NSF,” stated Parliamentary Monitoring Group’s summary of the report.