The Standing Committee on Public Accounts (SCOPA) wants answers from the National Lotteries Commission (NLC) and the Minister of Trade, Industry and Competition following two concerning briefings from the Auditor-General (AG) and the Special Investigating Unit (SIU) that revealed weak financial management, maladministration and corruption amounting to over R2 billion.
SCOPA Chairperson Mr Songezo Zibi said SCOPA will write a letter to the Minister of Trade, Industry and Competition about the criteria used for selecting board members and the selection process. “SCOPA has much to discuss with the Minister and the National Lotteries Commission when they appear before the committee. The important thing is that we see a system put in place that will minimise or eliminate what the SIU has been telling us here,” Mr Zibi said.
Last week, the AG briefed SCOPA on the NLC’s 2023/24 audit outcomes and financial performance. The NLC is a public entity responsible for uplifting communities through grant funding and has received a qualified audit opinion for the 2023/24 financial year. The AG cited systematic failures in governance, weak financial controls and lack of service delivery, warning that the NLC has undermined its own mandate by failing to ensure funds reach the intended beneficiaries.
Key audit findings included:
- Grants allocated to unqualified applicants with no supporting documentation.
- Overfunding of projects lacking feasibility studies or proper plans.
- Underspending of R957 million on grants from a R1.52 billion 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.
- Only 67% of grant targets and 75% of regulatory compliance benchmarks were achieved.
Mr Zibi said SCOPA wants to work with the Office of the AG to assess, mid-financial year, whether the interventions to assist government departments and entities achieve ideal audit outcomes are working. “SCOPA is always looking for ways to improve its impact and would like to work with the office of the Auditor-General to assess, mid-year, whether the underlying interventions are taking place or not,” he said.
Today, the SIU briefed the committee on investigations currently underway at the NLC. Chief Operation Officer at the SIU, Adv 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 enables 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.
Adv Lekgetho informed SCOPA that over R2 billion is under investigation and only R9.5 million recovered to date. The SIU has made 15 criminal referrals to the National Prosecuting Authority (NPA). Implicated individuals including the former Chief Operating Officer Mr Philemon Letwaba and former Board Chair Prof Alfred Nevhutanda.
Mr Zibi said, “In our letter to the Minister following this update, we will be very specific about the questions the Minister must answer to the committee about the criteria for selecting board members, and who gets to choose who those board members are, and who from the department’s perspective oversees the ongoing performance of those board members. Because it is also possible that within the department itself we also have people who do not have the capacity to oversee what these boards, which manage billions and billions of rands contributed by South Africans, are doing, to make sure they can meet their mandate.”
Faith Ndenze
21 May 2025
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