The Gauteng Department of Education is investigating allegations of mismanagement of funds at a Soweto school dating back over several years. A series of eyebrow-raising incidents at Firethorn Primary School in Klipspruit – which include the fraudulent cashing of cheques – prompted a member of the school’s governing body (SGB) to lodge a complaint with Corruption Watch last year. The department’s probe started this year and, as spokesperson Steve Mabona confirmed to Corruption Watch, continues, with its completion expected soon.
The source, who wanted to remain anonymous, reported that the Gauteng Department of Education needed to take action against principal Lorriane Erasmus for negligence. This after two blank cheques signed by her went missing from her office back in 2013, only to be cashed by unknown individuals soon afterwards, robbing the school first of R80 000 and then a few days later of R300 000. The reason given by the principal for leaving blank cheques in her office was that she was going on leave and did not want the staff to be inconvenienced when procuring goods for the school.
According to the whistle-blower, the people who made the withdrawals gave the bank officials the impression that they had the permission of Erasmus.
“When the bank called the person she confirmed that she is the principal of the school,” said the source, explaining that although a criminal case of fraud was opened with the police, there had been no sign of progress made.
When Corruption Watch initially contacted Erasmus in December last year to hear her side of the story, she requested that questions be presented to her in writing by Corruption Watch’s investigations team. When this was done, however, she changed her tune and said on the advice of the school’s Institutional development support officer, she would not provide Corruption Watch with answers.
“We called the school principal to obtain her version of events relating to the R380 000 which was withdrawn by unknown individuals from the school’s account,” said Corruption Watch’s Modupi Moloto. “In response the principal advised us that the whole incident was a scam, that the bank was negligent and has accepted liability and that the bank had undertaken to reimburse the school 70% of the lost funds.
“The principal advised further that the matter had now been reported to the South African Police Services and was currently under investigation.”
Standard Bank, which oversees the account of the school, acknowledged that the withdrawals were made in 2013. “Standard Bank concluded a without-prejudice settlement with Firethorn Primary School, on a goodwill basis and due to their long standing relationship with the bank,” explained spokesperson Ross Linstrom, who would not be drawn to say how much the bank paid back. “The amount in question was paid in accordance with the settlement.”
According to the whistle-blower, the settlement details were not shared with school administrators or the SGB, either. “Erasmus gave all assurance that Standard Bank had agreed to reimburse the school for R200 000 of the R380 000, citing her own negligence in the instance as the bank’s reason for not repaying the full amount.”
Standard Bank maintains that it promotes good governance practices in its business with schools. In acknowledging the incident involving Firethorn, Linstrom said: “Each case will always be looked at on its own merits and in the event of settlement, it should not be assumed that Standard Bank was at fault.”
Targeting a school’s resources
In a recent incident, Firethorn was robbed of several laptops as well as some cash, just days after a fund raising event was held. Exactly how much cash was taken is unclear, and depends mostly on who of the staff members you ask.
“I heard different accounts of how much was stolen [in the recent burglary] from several different people,” said the source, “which tells you we do not have an official record of how much money was being kept on the school premises.”
“As it stands, the thieves should not have found money on the premises, because it should all have been banked to keep it safe.” The source added that Firethorn had recently held a fundraising event a few weeks prior to the incident, so the money raised there could well be among the amount stolen as there was no proof in sight of it having been banked.
“When the principal has taken cash to the bank and obtained a bank deposit slip, this is usually presented at the next SGB meeting. It’s a simple act of good governance.” But, he said, all would be ok if such meetings happened regularly as is required by law. “We have not had a SGB meeting in a long time, and no-one knows when the next one will be either.”
In acknowledging the enquiry from Corruption Watch, Mabona mentioned that a report of the investigations would be finalised soon and once done, recommendations will be implemented. The additional allegations brought to the department’s attention would also be taken into consideration to support the investigation.
Disregard for procurement processes
Corruption Watch deputy director and head of campaigns, Ronald Menoe, weighed in on the need for good governance practices by school management, including principals and SGBs. Menoe has been running the organisation’s campaign on schools since 2013.
“The largest source of income for schools is the budget allocation from the state,” he explained. “Schools, through SGBs, have to put control systems in place to ensure that funds are used properly.”
“In the case of Firethorn Primary School, like many other reports we receive from whistle-blowers, the finger points at a total disregard for procurement processes. Signed blank cheques kept in the principal’s office indicate that proper procurement processes were not being followed.”
Unfortunately, said Menoe, the tendency of signing blank cheques seems to be a trend used by those in power in schools to direct school funds for personal use.
“Fundraising is one way schools can supplement funds from the state. However, a large number of schools raise funds indefinitely without proper plans for the funds raised”.
“Again in this school we see this undisclosed amount of money was kept in the principal’s office for a long time after the fundraising event, and consequently stolen. The South African Schools Act is clear that all funds should be kept in the school’s bank account.”
The most worrying factor on the Firethorn saga, Menoe added, was the fact that the SGB makes allegations that they were side lined in making all these decisions by the principal.