Mbabane – Some Eswatini Multi-purpose Cooperative Union (ESWAMCU) members are hopeful that sense is prevailing after a systemic plunder of funds by the fired board members.
Based on a forensic audit probe by the SNG Grant Thornton early this year, the Minister of Commerce, Industry and Trade, Manqoba Khumalo, appointed new board members to sweep clean their predecessors’ grand loot.
SNG Grant Thornton uncovered that for at least three years, serious maladministration, abuse of power and the looting of ESWAMCU funds were the order of the day by the previous board. ESWAMCU prompted the minister’s intervention.
Minister Khumalo had said that the government was exercising its mandate to ensure a conducive environment for the growth and sustainability of all types of cooperatives in the country.
One of the members said such anomalies did not only harm ESWAMCU’s core mandate, which is to supply farm inputs to Emaswati at affordable prices and ensure that they organise markets for farmers’ produce, but also cast doubt on its stakeholders.
In terms of the Cooperative Societies Act, 2003, as amended, the minister placed under the Commissioner of Cooperatives’ administration and supervision after at least three members of ESWAMCU cried wolf.
Evidence shows that external trips, acquisitions and duplication of activities enabled board members to have their cake and eat it too.
“We noted through inspection of board minutes that there were 14 trips taken by the board to Kenya, ICA, Botswana, Zimbabwe, and South Africa under the period 2022/2023, totalling E 192 336.84. Trips were not included in the 2022/2023 approved budget of the Union,” the report said.
The board occasionally paid themselves ineligible special allowances. On December 18, 2023, E3 500 was paid among seven board members, each receiving E500 as bonuses, the report said.
This was against the Cooperatives Societies Act, as board members are not entitled to receive bonuses, as they receive an honorarium at the end of the year.
“We further gathered from the minutes that the former accountant, the former BDM manager and the current accountant refused to comply with the bonus payment order, and they were called and reprimanded by the board (they were told that their actions will be charged as gross insubordination).
“Upon further questioning for refusing to process payment, they were ordered by the president and the treasurer to effect the payments, which they eventually did,” the report said.
It was recommended that, as per corporate governance rules, the board should be only involved in strategic decisions or duties of a business but not in the day-to-day operations of a business.
However, at SWAMCU it was noted that some of the board members were undertaking staff duties, including attending to tenant issues.
The report uncovered that the board purchased contract phones from MTN Eswatini, which were meant to ease the approval process of payment, where all the other members purchased phones for E3 000.
“…and the president purchased a phone costing E30 000,” the report said.
It was reported that a claim of E56 828 was lodged by the President of the Board on February 5, 2024, which had sitting allowances, travel claims, breakfast and lunch allowances dating from October 2022 to August 2023, coinciding with the period when he was on suspension.
“Upon inspection of the financials, dividends were not declared by the board for both periods 2021/2022 and 2022/2023. According to the AFS, profits were as follows: 2021: E 1 500 500 and 2022: E 929 048. The statement of changes of equity does not reflect declared dividends,” the report said.
According to SNG Grant Thornton, there was no small or big budget line restrictive to the board members.
The auditing firm produced evidence that about E38 738.65 in petty cash vouchers lacked supporting documents and that there was no other investigation by the office of the expenditure.
Some of the petty cash vouchers were half completed, as some did not have details of items being purchased and the purchase date, it was said.
SNG Grant Thornton said starting in 2021, there was a high usage of petty cash and that petty cash vouchers were processed without approval systems. The organisation said over E70 000 petty cash vouchers did not have supporting documents attached as proof of expenditure.
“We performed a surprise petty cash count on the 23rd of March 2024, and we noted the following: Cash on hand amounted to E 57.54, while expenses as per the receipts were recorded as E E1 881.80. The amount that was expected to be at hand at the time of the petty cash was E118.20. The balance was less by E60.66. One of the staff members in the finance department forgot to bring back change,” SNG Grant Thornton said.
The report also showed that over E30 000 Momo transactions were not adequately supported by either receipts or memos in 2022 and 2023.
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