Scopa fears fraud at fund

Parliament's Standing Committee on Public Accounts says the R2.5-billion in bail, maintenance, admission of guilt, traffic and court fines collected each year is at risk of being defrauded.

Yesterday, Scopa tabled a report in parliament on its visits to third-party fund centres in KwaZulu-Natal, the Eastern Cape, Mpumalanga, Limpopo and Gauteng.

The committee found "inadequate fraud-prevention plans; general weakness in the oversight and accountability by management of the funds; a lack of internal control systems" and officials who were not properly trained in financial management.

People who were owed payments from the fund had also complained about delays.

Last year, there were reports of poor service at the Pretoria Magistrate's Court with mothers complaining that, though their children's fathers had paid maintenance into the court accounts, the systems were often down when they tried to collect their money.

The Department of Justice and Constitutional Development manages the third-party fund through a network of 600 cash halls countrywide.

Auditor-General Terence Nombembe gave the fund a negative audit, or disclaimer, between 2006 and 2008 and in 2009. The fund did not bother to submit its financial statements to him so he could not audit them.

"The failure to make available the financial records of the third-party funds for the 2008-2009 financial year, pointed to a serious challenge within the justice department" the report found.

In a presentation to parliament earlier this year, the department said it was likely that the third-party fund would again get a negative audit in the 2010-2011 financial year.

Scopa has called upon the department to provide proper training for the cash-hall staff, and for security cameras to be installed in the fund offices.

The department has to submit a progress report to parliament within the next two months.