Hijacked organisation gets millions in Lottery grants
Police demand proof before accepting criminal complaint
- The National Lotteries Commission paid R22.5 million to an organisation called WAR_RnA to build an old age home.
- The organisation was dormant and the directors had no knowledge of the grant.
- The old age home was supposed to be completed in March 2020 but as of end of May was still incomplete.
- It’s unclear how the care home will be staffed or run.
- The police told a registered director to provide proof of Lottery funding before they open a case.
- The financial statements are a mess.
Five years ago, a group of young friends in Polokwane, Limpopo, became so concerned about rape and the abuse of women in their community that they set up a non-profit organisation to help combat this scourge.
After registering their new non-profit organisation, which they called WAR_RnA (War Against Rape and Abuse), on 5 January 2015, they opened a bank account, hoping to fundraise to support their project. The new office bearers all chipped in to raise a deposit of R400 to activate the new bank account.
But beyond donations in kind of ten golf-shirts, some printed leaflets for a silent anti-rape protest, and 200 water bottles, they were unable to raise any funds, says treasurer Alex Mokonyama.
“Many of the founders moved away to take up jobs around the country and those of us who were left tried really hard, but we couldn’t get our organisation off the ground. We held a few silent protests to highlight the abuse of women … We tried really hard but in the end, we gave up,” said Mokonyama.
WAR_RnA fell dormant and was all but forgotten for the next five years until, “out-of-the-blue”, Mokonyama and some of the other original directors were alerted to a GroundUp story that revealed how their ill-fated non-profit organisation (NPO) had received Lottery grants totalling R22.5 million. This was made up of an initial grant of R20 million in 2017 and a further R2.5 million in 2019.
The founders of WAR_RnA are still registered with the Department of Social Development (DSD) as office bearers of the organisation. This was confirmed by DSD in February 2020 in response to a request for details of the NPO and its office bearers. What the DSD response also showed is that WAR_RnA is both non-compliant and dormant: it has never filed annual financial reports or any of the other statutorily-required reporting with DSD.
The Lottery funding awarded was for an old age home in the remote village of Tshidilamolomo in North West Province, one of six interrelated villages that straddle the Botswana border with South Africa.
“We were totally shocked [when we learnt of the Lottery funding] as we knew nothing about this at all,” said Mokonyama, adding: “Legally our organisation should be dormant. I just feel like something that had so much potential to give people courage and a voice became tainted. … the organisation had pure intentions, but other people had their own intentions. [What has happened] is an abuse of power, the very same thing we stood against.”
“We are very worried that people will think we are involved and that our good names and reputations will be harmed,” said Mokonyama, adding that another founder of the NPO, who does not wish to be identified, “has even removed WAR_RnA from her CV because of this”.
In response to detailed questions about the grants, NLC spokesman Ndivhuho Mafela, replied: “There is an urgent application against GroundUp by a group of NGOs who charge that in breach of the Lotteries Act regulations you are disclosing private details of their grants from the NLC with the effect of harassing and intimidating them. The NLC has been cited in the matter as a second respondent. We are advised that under sub judice rules it would not be proper for us to respond to your questions which in any event are not objective and loaded with false and injurious innuendo.”
Behind the scenes
After some digging, Mokonyama, who is studying accountancy, discovered that the person now in control of WAR_RnA is Polokwane businesswomen Matodzi Jeannette Mashele.
Mashele is registered with the Companies and Intellectual Property Rights (CIPC) as a director of 15 companies. She has resigned from her directorships in three other companies. At least one company is involved in property development and another in construction. The rest are IT, financial advisory services and investment companies, as well as a security company, and a slimming “clinic”.
Mashele failed to respond to detailed questions about WAR_RnA and the Lottery grants, sent via WhatsApp and email. A return receipt confirmed that the email had been opened.
When Mashele’s daughter-in-law, Khomotjo Mashele, was approached by a member of WAR_RnA, she responded by emailing annual financial statements for the NPO for 2019 and a “brief narrative report“. The email chain shows that she had received the statements and the report from her mother-in-law.
The report confirms that the NLC granted WAR_RnA “proactive funding” to build an old age home in North West, which it says would be completed in March 2020. The report claimed the project was 85% complete.
The funding was to build a facility to accommodate “80 elders, 40 males and 40 females,” the report says. “The project was welcomed by the Department of Social Development and the community. [It] will provide a 24 hour clinic to the elderly accommodated in the home as well as the elderly around the community.”
A year after the report, the home is still unfinished. It’s unclear how the home will be staffed or operated.
Numbers don’t add up
The unsigned financial statements, reflecting the NPO’s financial position as of 31 March 2019, are confusing and make little sense. They show that the NPO had “cash and cash equivalents” to the value of R3,014,752. This retained income stems from revenue that year of R8,904,146 minus operating costs of R5,889,394.
The cash flow statement that follows suddenly switches to figures for a completely unrelated entity, Limpopo Young Development Leadership Foundation. It states that cash utilized by operations totals R3,014,752, and reflects the identical amount as WAR_RnA as its year-end balance.
The notes to the statements, which would ordinarily provide explanations for the income and expenditure, are incomplete. It provides no information as to where the money came from or how it was spent. No bank interest is recorded and it reflects that the NPO has no assets apart from the money in the bank.
The accountant who signed off the financial statement, Carlon Mabapa, said that there “were several pages missing”, but he could not share them “without my client’s permission.”
From pillar to post
As soon as Mokonyama became aware of what had happened, he immediately went to the main police station in Polokwane and tried to lay a criminal complaint. But he was told that he would have to file the complaint in North West Province, even though he would be unable to travel because of lockdown restrictions.
Instead, he went to another police station in Polokwane where he was told that he had to prove that the Lottery had paid the money to WAR_RnA.
“I had a printed copy from an [NLC] annual report reflecting the R20 million payment but they would not accept it. I also had a copy of the GroundUp story and confirmation from DSD that the people involved were not office-bearers. They said that I had to get proof from the NLC that money was paid,” he said.
So Mokonyama then contacted the NLC in Polokwane and was told that Mashele’s daughter had signed as the NPO’s chairperson on an earlier funding application from WAR_RnA. They also confirmed to him that none of the people registered with DSD were named in the application, Mokonyama said.
“They said they could not give me details of that application as my name did not appear on it and the information was confidential.”
The most likely reason why the Polokwane office could not access details of the old age home funding is that it falls under proactive funding and only a limited number of very senior people at the NLC have access to details of these projects.
Mokonyama subsequently met with General Lesiba Mashilo, who heads up the police’s Polokwane cluster, to ask for assistance to lay a complaint.
In a telephonic interview with Mashile, he told GroundUp that Mokonyama would have to prove that a crime had been committed “before we can investigate. At the moment what he is saying is based on hearsay from a newspaper article. We are not saying we won’t open a case, but we need documents to prove what he is saying. Until then we cannot open a case.”
Mokonyama said: “I do not have the power to demand documents from the NLC or DSD. I don’t know what more I can do.”
Similar modus operandi
The hijacking of WAR_RnA is similar to what occurred when a hijacked NPO, Denzhe Primary Care, was used to successfully apply to the Lottery for a series of grants totalling R27.5 million to build a drug rehabilitation centre near Pretoria.
Like the Denzhe case, the home in North West is still incomplete almost three years after the Lottery paid over millions of rands.
Last month GroundUp revealed how the NLC had thrown millions of rands more at unfinished multimillion-rand Lottery funded infrastructure projects.
In response, the NLC published a poorly-edited document expounding the virtues and success of the projects featured in the GroundUp story. It included a write-up with photos about the WAR_RnA old age home, which suggests it is almost completed.
But, photos taken by a resident in Tshidilamolomo Village at the end of May tell a different story. It is clear from these photos that construction is not complete, especially the interiors where there is clearly much work still to be done.
The Tshidilamolomo Village old age home was funded via proactive funding, in which the NLC identifies a need and then appoints a non-profit organisation to implement the project. The NLC ignored a question from us about how WAR_RnA was chosen to manage a multimillion-rand infrastructure project. According to its constitution, the NPO was established to combat sexual and domestic abuse, create awareness of these crimes and assist victims and survivors.
A source in Tshidilamolomo, who asked not to be named as he feared for his and his family’s safety, said: “The work is not finished, there is still a lot to do. Construction has been slow with regular delays because, they say, the money has run out. I have also heard that people who did work have struggled to get paid.”
This is not the first time that sources commenting on other unfinished Lottery-funded projects have complained about a shortage of money as the reason for unfinished construction and unpaid service providers, despite the Lottery having paid out millions.
Millions for old age homes, slow delivery
The North West old age home is one of six funded by the NLC in rural South Africa. During our ongoing two-and-a-half year-long investigation, GroundUp has reported on other unfinished Lottery-funded old age homes. These include facilities in Mpumalanga, Kuruman in the Northern Cape - where companies linked to NLC COO Philemon Letwaba were involved - and Maila village in rural Limpopo.
In a newsletter rebuttal to GroundUp’s reporting, the NLC admitted that a Lottery-funded old age home in Free State funded to the tune of R27.5 million is also still unfinished after nearly three years.
“The project was delayed due to land disputes between community members,” the NLC says in the publication.
Dodgy NPOs cash in on Lotto millions
The issue of “pop-up” and non-compliant NPOs that receive millions in Lottery funding, has made the news headlines on several occasions over the past few years. In 2018 the Limpopo Mirror, a community newspaper based in northern Limpopo, reported on several multi-million rand grants made to dubious organisations.
The publication reported: “Inactive and non-compliant non-profit organisations (NPOs) are raking in millions in Lottery grants, while applications from some long-established, cash-strapped organisations are being declined, or they receive a fraction of what they had asked for.”
The NLC has repeatedly said that the law only required it to check whether an NPO was registered with the DSD and not whether the NPO is active and compliant and that the people applying for funding were legally registered as office bearers.
In response to questions from journalist Anton van Zyl in February 2018, NLC COO Phillemon Letwaba - who has been on a “leave of absence” since late February pending the outcome of an investigation into Lottery funding - replied: “… as I have indicated … we do not check whether the NPO has filed the returns with Social Development because it is not one of the requirements in terms of the Act. The NLC must ensure that the applicant complies with the legislated requirements and filing of returns with social development is not one of them.”
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