Nzimande wants explosive report kept ’confidential’

MINISTER of Higher Education and Training Blade Nzimande has been trying to keep under wraps a report that exposes the disappearance of millions of rand from his department.

On Sunday, the DFA’s sister publication the Sunday Independent lifted the lid on the Nexus Report that Nzimande has requested Parliament to keep “confidential” as it exposes how 10 projects milked the National Skills Fund (NSF)’s coffers on unverified skills development expenditure. The NSF is responsible for the management of at least R2.5 billion that is meant to assist young people.

According to the report, the NSF funded these projects to 10 different entities with the hope that thousands of unemployed youth around the country would be trained and empowered but investigators established that millions of rand have disappeared without any supporting documents.

The Sunday Independent can exclusively reveal that the investigation by Nexus Forensic Services reveals:

• Million of rand were transferred into unknown bank accounts shortly after NSF deposited the funds for a project;
• Some of the payments from an R33.9 million project “were made with a criminal intent of committing fraud and theft”;
• No evidence that students were indeed trained after a project worth millions of rand for training was approved;
• One company submitted names of students that were trained elsewhere as their graduates;
• Another company “applied for voluntary sequestration” after receiving R15.2 million for a project; and
• R131 million project fund advances, from one company, “could not be verified with bank records, supplier invoices and reports.”

These are some of the shocking findings that minister Nzimande doesn’t want to make public. In his letter to the chairperson of the standing committee on public accounts (Scopa), Mkhuleko Hlengwa, Nzimande said he was requesting the report’s confidentiality because “all the people whose names are mentioned in the report have not been engaged at all, while the department is finalising its internal processes”.

The minister requested Parliament to keep the report private “until all the processes before the law enforcement agencies and internal departmental disciplinary processes are concluded”.

Nzimande added that “our request for confidentiality is reasonable and justifiable in an open and democratic society like ours and we would not want to be the ones violating people’s rights to a fair trial.”

A member of Parliament, who leaked the report to Sunday Independent and asked to remain anonymous, said Nzimande was trying to keep the report confidential to protect certain individuals.

“It is strongly believed that some of the money, meant for these projects, was syphoned out to fund certain political parties and politicians. I suspect that Blade is trying to protect certain individuals so that they can’t sing about how these millions were used to fund political parties and politicians,” the member of Parliament said.

The Nexus report, seen by Sunday Independent, investigated:

• An R39.6 million project to train youth in KwaZulu-Natal after the company submitted an “unsolicited proposal” to train 115 learners on rabbit farming.
• The company promised to build an abattoir that will process 96,000 rabbits per annum and breed about 10,500 others, but investigators found that the company had only 450 rabbits, no abattoir facility was ever built and “no rabbit meat has been produced for local and export markets” as per their project proposal.
• R35.1 million was spent “without any supporting documentation”.
• Some of the students told investigators that the course they attended was not beneficial “because the skills taught will not be applicable anywhere”. And less than 100 learners were allegedly trained.
• An R11.6 million project was funded to train 300 youth on clothing, textile and footwear in Limpopo, but “no evidence was obtained that students were indeed trained”.
• R10.9 million was transferred to an unknown bank account shortly after NSF deposited the funds for the project.
• An R33.9 million project was funded also in Limpopo to train 1,025 learners on basic agricultural programmes, but at the time the project was awarded, the institution’s “accreditation with the African SETS had lapsed”,
• About R9 million “remains unaccounted” and investigators deemed the project to be “irregular, fruitless and wasteful expenditure”.
• A R15.2 million project was funded for a nationwide “capacity development for student leadership” and the company applied for voluntary sequestration after receiving the funds.
• R4.3 million was paid into an unknown account which created “a reasonable suspicion of corruption, theft or fraud”.
• An R31.1 million project was funded to benefit 488 learners.
• An R187.4 million project was funded to train 1,025 learners over nine months and R131.5 million of that money couldn’t be verified with bank records, invoices and reports, as the company awarded the project failed “to provide supporting documentation relating to their expenditure”.

Investigators concluded that NSF “irregularly” awarded an Ekurhuleni-based institution R27 million for a project after it submitted a proposal with “several mathematical errors”.

A Cape Town-based institution received R13.4 million for a project and spent almost R10 million on two service providers but failed to submit “documentation for these payments”, and the service providers are business associates of the owner of the institution.

The investigators noted that it was a common trend “that as soon as payments are received in the service provider bank accounts, the money is transferred to the second and third account from where the funds are dispensed”.

Hlengwa failed to answer questions sent to him on whether or not he will grant Nzimande his request to keep the report confidential.

Nzimande’s spokesperson, Ishmael Mnisi, on Friday confirmed that the department opened a criminal case against all those implicated in the report at Pretoria Central police station on Monday.

“We opened a criminal case and we are going to give the law enforcement agencies a chance to tell us who are they going to charge and what charges they are facing,” Mnisi said.

Former Scopa chairperson Themba Godi said Nzimande’s request to keep the report confidential was “misguided” and “astounding”.

“The National Treasury once requested that we shouldn't discuss a forensic report on the Integrated Financial Management System (IFMS) until they have engaged people mentioned in it. I dismissed that request and insisted that they submit it to us and we had an open committee meeting. The fact is, when the report was researched all affected people were interviewed. The final report is supposedly the factual product, no one is prejudiced by anything,” Godi said.

“It's about the misuse of public funds, what considerations should be there for thieves and maladministration? It is a misguided, conservative approach meant to protect people and the department from exposure to the rot. It is astounding coming from someone who is a supposed socialist, covering for rent-seekers at the expense of poor working-class people.”

Nzimande is the national chairperson of the SACP and was the organisation’s secretary general for more than two decades.