By Thapelo Molefe
The Special Investigating Unit (SIU) has uncovered a string of irregularities involving millions of rands meant to fund training and skills development, including money paid for training that never happened, duplicate invoices and funds transferred between companies linked to project directors.
The findings, presented to Parliament’s Portfolio Committee on Higher Education and Training on Wednesday, involve the National Skills Fund (NSF), several TVET colleges and the Vaal University of Technology (VUT).
One of the most serious cases involves Rubicon Communication, which was appointed to train learners in clothing, textile, footwear and leather manufacturing.
The project was approved for R4.1 million, with an initial payment of about R2.7 million made to the company.
But the SIU found that the money was transferred into personal accounts and depleted within two weeks.
It also found that no students were trained and that no new equipment was bought for the programme.
“Unfortunately, no training was done,” SIU Forensic investigation specialist Paul Bulwana told MPs.
He said the SIU had already submitted a criminal referral to the National Prosecuting Authority (NPA) and disciplinary referrals against officials responsible for monitoring the contract.
The company has also entered into an agreement to repay the money, with the SIU pursuing civil recovery.
The investigation has also exposed concerns at Ingwe TVET College involving Ada Holdings in the Eastern Cape, where a project approved for R187 million was meant to help turn around the college and support artisan development in the Lusikisiki and Bizana areas.
The SIU found that the service provider did not train learners despite receiving payment and also failed to construct training facilities according to the required specifications.
Financial analysis found that ADA Holdings received R132.98 million from the National Skills Fund.
The investigation further found that substantial amounts were transferred to companies in which the director of ADA was also a member. These included R52.49 million paid to Artisan Development, R45.03 million to Umbani and R7.39 million to PWC Institute.
Bulwana told MPs that the financial movements were being investigated to establish why the money was transferred between the companies.
He said the investigation had found that more than R105 million had been transferred among ADA Holdings’ parent companies, while some lecturers involved in the project claimed they had not received certificates for training that had supposedly been conducted.
The SIU also found that the training facilities at the Ingwe TVET College campuses were incomplete, despite money having been paid for their construction.
“Unfortunately, the buildings were not completed, but money has been paid,” he told the committee.
Equipment supplied to the colleges was also allegedly not in line with the required specifications.
Bulwana said the SIU had appointed a quantity surveyor to assess how much had actually been spent on the buildings.
The SIU plans to use the findings to determine the appropriate amount to recover and has indicated that the matter could be taken to the Special Tribunal for what it described as just and equitable relief.
The investigation remains ongoing.
The SIU has also raised concerns about a R39.6 million rabbit farming project in KwaZulu-Natal (KZN) that was supposed to benefit 250 learners.
Investigators found that money had been transferred into personal accounts; only 43 learners were reported as having been trained and site visits did not find the number of rabbits that had been invoiced.
The company that was supposed to purchase the rabbits was liquidated before delivery.
Bulwana told MPs that investigators even visited the community where the project was supposed to operate.
“Unfortunately, no rabbits were then bred in KZN,” he said.
The SIU said it planned to approach the Special Tribunal to have the contract set aside.
At the Port Elizabeth TVET College dual-system apprenticeship project, which was intended to train 50 learners in plumbing and electrical work over three years, the SIU found that the college received more than R16 million in two payments but did not submit the required close-out or quarterly reports.
Some students interviewed by investigators also said they had not received certificates for the training they attended.
Another investigation involves Emanzini Staffing Solutions, which was contracted for a student placement programme intended to benefit 488 people in Gauteng, Limpopo and Mpumalanga.
The project was approved for R31.7 million, while R25.98 million was ultimately paid.
The SIU found that only 484 students were trained and that the company’s accreditation could not be confirmed.
It also found that R3.6 million could not be verified because invoices and monitoring reports had not been submitted.
The company’s director was also found to have transferred money into other accounts in breach of the agreement.
At Ekurhuleni West TVET College, the SIU found duplicate requests for quotations and quotes that had been approved at different prices.
The SIU said this resulted in the college potentially paying for the same equipment twice.
“The procurement process was not followed,” the SIU found, adding that relevant documents submitted by suppliers were overlooked.
A disciplinary process has already been held at the college, with one official dismissed after refusing to participate in the payment of what was described as wasteful expenditure.
The problems extend beyond the National Skills Fund projects.
At VUT, the SIU is investigating irregularities surrounding the refurbishment of student residences and campus security services.
The investigation found serious irregularities in the appointment of service providers for the residence refurbishment, including contractors who allegedly did not have the required accreditation.
The SIU has made five criminal referrals to the NPA, five disciplinary referrals and five administrative referrals to the Construction Industry Development Board.
The SIU also intervened in a VUT security contract that had remained in place for years despite being awarded on an urgent basis.
The contract was eventually cancelled following the SIU’s intervention, saving the university R109 million.
The unit has also made 11 disciplinary referrals against former and current VUT officials in relation to the security investigation.
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