File picture: Independent Media
File picture: Independent Media

Damning report exposes financial irregularities at Samwu

By BULELWA PAYI Time of article published May 19, 2019

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Cape Town - A damning report on allegations of misappropriation of funds at the South African Municipal Workers Union (Samwu) paints a bleak picture of the union’s financial status.

The report, which according to some sources was blocked from being tabled to the union, contains shocking details of how millions of members’ funds kept in the several accounts held by the union had declined significantly over a three year period.

The union’s highest decision making structure, the central executive committee (CEC) hired the services of Ernst & Young, one of the country’s leading accounting firms, to investigate the alleged misappropriation of funds and other irregularities between 2012 and 2015 - after it became concerned about the rate at which the funds were depleted.

At the time the investigation was commissioned, the union was concerned that, whereas in the 2012 financial year in three of its accounts including the operational account it had approximately R176 million, by November 2015, this had gone down to R538 in the operational accounts and R8 million in the reserve account.

A source said the union was insolvent and was struggling to pay officials.

Samwu is the largest local government trade union with membership estimated to be over 160 000.

Among the issues the auditing company looked into was the transfer of funds between the several accounts the union had and whether there were any further accounts that the union had but was unaware of.

In the case of whether additional accounts existed, the union wanted answers on: whether they were used for the union’s activities or not; the depletion of funds in the strike fund; irregularities in respect of costs incurred when the union’s head office was moved from Cape Town to Johannesburg; costs incurred in renovating the Johannesburg head office; and payments related to the union’s Diners Card.

The investigation was frustrated by the non-availability of some bank statements and information requested from either the union officials and/or suppliers and the refusal by some officials to be interviewed.

But it found among other things, that the rot included R60m paid to beneficiaries without bank account numbers and it was also alleged by one official that payments to one of the beneficiaries were irregular.

Samwu spokesperson Papikie Mohale confirmed that the report, dated September 2018, had not yet been presented to the CEC, but would be done so at a meeting scheduled to take place tomorrow and Tuesday.

Mohale would not be drawn into whether action had been taken against those mentioned in the report and what steps were being taken to recoup the monies.

“It would be unfair for us to comment on a report which has not yet been formally presented by the compilers to the commissioning structure,” he said.

Weekend Argus

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