Roughly R50 million allegedly misappropriated from army members’ fund – report

Payments totaling roughly R50 million meant for the SA Army Foundation have reportedly been misappropriated.

The Financial Sector Conduct Authority (FSCA) this week confirmed that it had completed an investigation into the misconduct, but could not comment on whether arrests were pending.

The SA Army Foundation is the administrator of life insurance policies, funeral policies and loans for military personnel.

Millions made in mandatory contributions

The foundation reportedly receives R6.5 million a month in mandatory contributions made by military personnel.

Board members of the foundation include military chiefs, with the FSCA investigation finding funds meant for the foundation diverted into the personal bank accounts of at least two fund managers.

Additionally, high ranking generals were given credit cards backed by the fund, with one purchasing a vehicle with the card, Rapport reported on Sunday.

The foundation’s bank initially flagged discrepancies with the account, with external auditor oversight allegedly being compromised.

FSCA head of enforcement Gerhard van Deventer confirmed the investigation of officials and managers of the foundation.

“The investigation has now been finalised and the authority is currently considering options to apply the provisions of the law.

“The FCSA is also not able to comment on any criminal proceedings related to this matter, however, it remains committed to providing its full cooperation to the prosecuting authorities,” Van Deventer told Rapport.

Ombudsman overspend

Meanwhile, Minister of Defence and Military Veterans Angie Motshekga was before the Portfolio Committee on Defence discussing the need to properly spent budget allocations.

The Military Ombudsman was questioned after overspending its R45 million salary budget for the last financial year by almost R4 million.

Despite the overspend, the ombudsman said more needed to be allocated to the entity so that could fill a staff vacancies.

The ombudsman received almost 600 complaints last year, predominantly from members complaining about remuneration and benefits.

Of the 593 complaints, 72 related to service benefits, 51 due to service terminations and 102 regarding remuneration, appointments, promotions and demotions.

Motshekga said that complaints could be minimized by rectifying issues within the human resources department, and reminded officials that budgets were limited.

“It has to be discussed within a basket. We are faced with a crisis around HR, and therefore, it is difficult for us as a department to say go ahead and appoint.”

“We have to sit down and say what is it that we do differently to contain budget overruns. Therefore, we have to make choices,” the minister concluded.

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