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’Ghost employees’ steal millions from varsity via elaborate scam

Former Mangosuthu University of Technology vice-chancellor Dr. Duma Malaza has been cleared of allegations against him by an independent assessor. Picture: SIBONELO NGCOBO - African News Agency - ANA

Former Mangosuthu University of Technology vice-chancellor Dr. Duma Malaza has been cleared of allegations against him by an independent assessor. Picture: SIBONELO NGCOBO - African News Agency - ANA

Published Mar 30, 2022

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An independent assessor has recommended investigations into the elaborate scam at the Mangosuthu University of Technology (MUT) of having ghost employees through which the troubled institution is fleeced of millions of rand.

Details of the scam are contained in a 96-page report prepared by Cape Peninsula University of Technology deputy vice-chancellor Professor Anthony Staak.

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Higher Education, Science and Technology Minister Blade Nzimande appointed Staak as independent assessor following several allegations against former MUT vice-chancellor Dr Duma Malaza and his subsequent suspension in April 2020.

During his probe Staak worked with financial expert Bulelani Mahlangu, who assisted by providing the detailed analysis of MUT’s financial affairs.

Malaza, who was appointed in May 2018, left the institution in January this year and the MUT council expressed its hope that his departure will end a period of unwelcome stability in its executive management and leadership ranks.

He explained that the modus operandi for creating ghost employees was setting up a duplicate employee profile and manipulate banking details.

“The profile is deleted after the payroll has been processed. This matter was presented for further investigation and the recommendation was for MUT to first clean up the human resources data. The R2.4 million relates to only four instances/employee investigated, and as a result there is a strong view that this is just tip of the iceberg,” Staak said.

Staak recommended that independent and comprehensive investigations be conducted the integrity of the institution’s payroll and the human resources database with the focus on possible ghost employees.

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The report said during the investigation, no evidence could be found linking Malaza or any of the suspended staff to corruption at the institution.

“On the contrary, I gained the impression of a VC (vice-chancellor) committed to rooting out corruption,” reads the report.

He said during Malaza’s relatively short period in office, he had commissioned a number of forensic audits and investigations into various processes and activities at the university including the procurement process, the payroll system, an investigation into ghost employees and the part-time class system which uncovered irregularities and incidences of corruption.

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According to Staak, where required disciplinary action was taken.

Under Malaza’s leadership, MUT management also completed an investigation on the existence of ghost employees on the university payroll system, which uncovered irregular payments and was expected to soon execute a thorough review of the payroll system.

“There also appears to be evidence that a culture of self-enrichment has taken hold. This became apparent from the outcome of the investigation into part-time classes.

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On the balance of probabilities there are a number of irregular activities taking place in other areas as well, which are flagged as areas of concern in the report of the financial expert,” stated the report.

Staak said various audit reports that have uncovered irregularities in the procurement process, the payroll process, and payments and the identification of ghost employees.

“If proper policies, procedures and controls have not been put in place, there is a strong likelihood that these irregular activities are still continuing,” he warned.

Staak said he based this assertion on interviews and submissions of suspended staff who allege that that there are irregular activities particularly in the area of operations.

MUT has undertaken to appoint audit firm KPMG to investigate the issue of ghost employees.

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Political Bureau

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