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SAIEE reports internal fraud of R703 452 at its AGM |
At its annual general meeting on 26 March 2010, outgoing president of the South African Institute of Electrical Engineers (SAIEE), du Toit Grobler, and honorary treasurer Les James reported "a significant fraud" having taken place within the SAIEE during the year ending 31 December 2009... (more)
The qualified audit report presented by external auditors PriceWaterhouseCoopers at the AGM states that "An employee stole R703 452 due to fraudulent transactions. A forensic audit has been conducted, but has not yet been completed. A further amount of R234 320 relating to the financial year has been identified as suspicious transactions. As the forensic audit is underway, the impact on the financial statements could not be established".
SAIEE office bearers and senior executives are reluctant to comment further pending the outcome of the forensic investigation.
Incoming president Dr. Angus Hay is at pains to stress that at present it is believed that only one individual has been implicated. He says that the alleged fraud was identified some weeks ago in the course of the annual audit. The SAIEE launched a quick investigation which established grounds for an external investigation, which is now in progress. A special SAIEE council meeting was called last week where the matter was disclosed to council members, and the employee allegedly implicated was suspended. In the meantime, the matter is being reported to the police.
Dr. Hay indicated that the alleged fraud appears to have taken place in the financial year ending 31 December 2009, but when questioned, he would not be drawn on whether this could have started in earlier years during which the suspect was employed within the accounts department of the SAIEE, or whether any further fraudulent transactions have taken place in 2010.
Du Toit Grobler indicated at the AGM that the SAIEE has done everything and will continue to do everything required by its constitution and the law to protect the interests of its members. Dr. Hay said that the SAIEE will address not only the alleged fraud itself, but also the underlying causes and issues that made the fraud possible, including any possible governance issues arising. Rumour has it that spyware may have been used to compromise passwords and codes to gain access to online payment facilities.
Some years ago, the SAIEE Finance Committee, an oversight committee of members, was disbanded, and the SAIEE office bearers (comprising the immediate past president, president, two vice-presidents and honorary treasurer) assumed the financial oversight role, although ultimate responsibility for the financial controls at the SAIEE rests with the honorary treasurer. The SAIEE Finance Committee was subsequently re-instated in the last quarter of 2009 during du Toit Grobler's term of office. Les James, the longstanding honorary treasurer of the SAIEE was re-elected in this position some months ago (before the alleged fraud was uncovered) in accordance with normal SAIEE election procedures, and his position was formally confirmed at the AGM yesterday.
The honorary treasurer's report at the AGM disclosed that in the 2009 financial year revenue decreased by 6,5% to R4,2-million, while financial income increased marginally. Expenses increased by 44% to R4,67-million, with the result that the overall surplus decreased by 91% from R1,042-million in the previous year to R174 000.
This incident heightens the need for financial vigilance by all organisations - within government, statutory bodies, the public and private sectors, professional institutions, voluntary associations and even our individual lives - against the scourge of fraud and corruption. It also highlights the possible fraudulent uses of our new electronic technologies.
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