The Special Investigating Unit is probing over R9.59 billion invested by the National Lotteries Commission over a period of four years.
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The National Treasury has explained the mystery around the over R9.59 billion invested by the National Lotteries Commission (NLC) in a period of four years while the Special Investigating Unit (SIU) probes the matter.
Treasury stated that the National Lotteries Act regulates the treatment of funds not immediately required, as well as unexpected balances of the NLC.
“In this regard, the National Lotteries Act requires that any unspent funds of the NLC be transferred back to the National Lotteries Distribution Trust Fund (NLDTF).
“Furthermore, Section 25 of the National Lotteries Act prescribes that ‘any money of the fund or the board which is not required for immediate allocation, may be invested with the Public Investment Commission or with a financial institution approved by the Minister of Finance and may be withdrawn when required’,” Treasury added.
According to Treasury, this permits the NLDTF to invest any unspent monies or surplus funds with a financial institution as regulated by Treasury Regulations.
Last month, the SIU told the National Assembly’s Portfolio Committee on Trade, Industry and Competition that one of the mandate bestowed upon the unit is to investigate the investment of funds by NLC.
The SIU indicated that investment of funds is guided by the investment strategy, reserve strategy, investment policy, and delegation of authority.
The unit revealed that the NLC invested an amount of R9,591,964,358.40 with various financial institutions for a period of four years.
Between January 2014 and March 2015, the commission invested over R5.6bn, and more than R3.23bn between June 2015 and November 2015.
In addition, another R599 million was invested between August 2016 and February 2017, as well as another R137m between April 2017 and May 2017.
“The SIU requested some documents relating to the above investments, and to this date, we have not been provided with any investment approval documents and/or authorisation of the above investments by the Minister of Finance. The investigation and financial analysis are also ongoing,” the unit stated.
The SIU also noted that one of the important requirements in submitting an application for grant funding at NLC is that the application form must be accompanied by two years' audited financial statements.
It has been found that some of the non-profit organisations and companies that did not meet the requirements for NLC application were enabled by certain accountants to submit fraudulent financial statements for the commission’s grant funding application.
The SIU added that none of these enablers were registered with professional bodies such as the SA Institute of Chartered Accountants, the SA Institute of Professional Accountants, and the Independent Regulatory Board of Auditors.
loyiso.sidimba@inl.co.za