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A forensic report alleges that millions of rands were squandered through misconduct, fraud and gross negligence by board members, as well as excessive claims submitted by the CEO
The North West Gambling Board allegedly paid its chairperson R7 350 to enjoy a golf tournament and a luxurious two-night stay at The Palace of the Lost City, situated at the Sun City Resort in Rustenburg.
This is one of the potentially fraudulent claims made against board members as part of corruption allegations associated with the gambling regulator.
Board chair Lavelle Vere was also allegedly paid to attend a gala dinner, for which he raked in a total of R18 525.
The amount incorporated two preparation fees and two sitting fees, as well as a 560km travel claim – all in one day – on December 18 2017.
This is just the tip of the iceberg when it comes to allegations of excessive board fees claimed.
The allegations are contained in a damning draft report, dated August 19 2019 and prepared by independent forensic auditing firm Gobodo Forensic and Investigative Accounting.
City Press has seen the report.
It also contains findings on irregular appointments and tender irregularities.
EXCESSIVE AND FRAUDULENT CLAIMS
According to the draft report, R1.7 million was recorded as total expense claims for the board and its audit and risk committee for the 2017/18 financial year.
Expenses for the financial year 2018/19 rose to R2.4 million, paid in similar claims – including R930 812 paid in travel claims alone.
Vere was supposedly paid R342 825 in sitting fees and R50 216 for kilometres travelled while on business for the board for the 2017/18 financial year.
However, it appears from the draft report’s findings that Vere is not the only board member whose seemingly unreasonable board fee claims were processed and paid.
The report found that some claims had not been approved or signed by claimants.
And, in certain instances, board members claimed for two or three sitting fees in one day.
When questioned by investigators about these findings, board members said claims had been processed on their behalf by the gambling regulator’s legal unit, which appeared to have been aware that the claims were wrong all along.
“All board members informed us that they could only claim for one sitting fee and one preparation fee for any 24-hour day,” the report reads.
“They further explained that, should there be two meetings a day at the same venue, they could claim [for] one sitting fee. But if they had another meeting at another venue, they could claim [for] another sitting fee.
“This is not in accordance with the National Treasury circular. When they [board members] were at a conference or workshop, and there was dinner afterwards on the same premises in respect of the same event, they could not claim [for] a sitting fee for dinner.”
Vere’s deputy was supposedly paid R436 493 for the period from April 2018 to May 2019 in sitting fees and kilometres travelled.
And, while Vere accepted an invitation for him and a partner to attend the Nedbank Golf Challenge at Sun City in 2017 – which included free accommodation at The Palace of the Lost City – the report claims that his deputy also claimed R6 825 in two sitting fees for November 10 and 11 2017.
The claim showed that the deputy attended the same event, but there was no official invitation.
The forensic report has recommended that money be recovered after a further probe is conducted to establish whether misconduct, gross negligence and fraudulent misrepresentations did, in fact, occur, or whether claim amounts were merely overstated.
Vere failed to respond to questions sent by City Press.
But the gambling regulator’s acting chief executive officer (CEO), Jacob Montshioa, said there was nothing wrong with submitting multiple sitting claims for one day.
“That is correct. The policy used by the board at the time allowed for board members to claim per sitting, including for a gala dinner,” Montshioa said.
“The 2009 policy on remuneration, which entitled members to claim per sitting, and the subsequent rates [stipulated] by the National Treasury, were made available to Gobodo during its investigations. Therefore, it boggles the mind why Gobodo resolved to ignore such and pursued its own narrative.”
LEGAL FIRM FROM GOOGLE
According to the draft report, the board had decided in September 2018 to probe sexual harassment accusations made against its then CEO, and had asked his deputy to get Mbada Labour Relations Practitioners to conduct the investigation.
Instead of adhering to the stipulated supply chain management process of obtaining three quotations, a memorandum was written in which Mbada was cited as the identified consultant – even though the company allegedly did not appear on the gambling board’s list of service providers or its supplier database.
“She [the deputy] informed us that she was advised to contact Mbada,” the report said.
“When we inquired as to who advised her, she stated that she ‘googled’ to find a labour relations practitioner ... She found Mbada, and [it] had good reviews, so she requested a quotation from the company.
“We questioned why the deputy seemingly only consulted with Mbada on October 8 2018, and appointed the company on October 10 2018. It appears that the subsequent deviation and appointment were an attempt to regularise the appointment of Mbada through a deviation of obtaining three quotations.”
On November 12 2018, Mbada submitted a R73 762 invoice detailing work done over four days – work which, it claimed, entailed interviewing witnesses and compiling its report.
“We questioned the invoice submitted by Mbada as no report was submitted by the company,” the Gobodo report reads.
“As stated earlier in the report, the complainant mentioned that every encounter happened when there was no one else present. The witnesses interviewed have not been identified.”
The gambling regulator also appears to have spent a large chunk of its budget on law firm Bokwa Attorneys, which was paid R6.8 million for 16 invoices submitted in 2017/18, and R8.2 million for 14 invoices submitted in 2018/19.
This, while the board had allegedly spent R7.1 million and R8.3 million in legal expenses for the financial years 2017/18 and 2018/19, respectively.
MORE GAINS FOR THE CHAIRPERSON
The forensic report further found that a company, Bokone Bophirima Craft and Design Institute, was allegedly paid R300 000 from the North West Gambling Board’s socioeconomic development fund.
It later emerged that Vere was one of the directors of that company. A search by City Press showed that Vere is still listed as one of its three directors.
The report found that another company linked to Vere, TTT Foundation, received R110 000 in February 2019.
“Vere informed us that he resigned from TTT Foundation. He could not explain what the funds were for.”
DUBIOUS APPOINTMENTS
The appointment of the board itself was questioned after it was established by investigators that Wendy Nelson, the North West’s former economic development MEC, had appointed four members.
This, despite objections. The objections were never investigated, as was required.
There were also questions about the 2008 appointment of Montshioa as the board’s legal manager.
ALL NOT WELL WITH THE BOARD
Bitsa Lenkopanye, the economic development committee chair in the North West legislature, said the committee was aware of the challenges at the provincial gambling board.
“It was clear that all was not well there from the moment we took office, with the Auditor-General pointing to a net loss of R4.8 million at the gambling board. Indications were that lots of money was spent on litigation. We have the forensic report by Gobodo. We agree with findings contained there and with the need, as recommended, to dissolve the current board,” she said.
“As the committee, we have already opened criminal cases against wrongdoers, and investigations are under way. We have also written to the MEC, asking her to dissolve the board, which is the only right thing to do.”
North West premier Job Mokgoro’s spokesperson Vuyisile Ngesi on Saturday said the premier had received the forensic report into the North West Gambling Board and had directed authorities to implement the recommendations.
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