Officers flagged for Lotto's R4.4m 'siphoned' from NGO

Three former administrators of a Limpopo NGO and a person only known as "Dineo" have been implicated in siphoning R4.4m from the organisation through unauthorised withdrawals. 

This is contained in a forensic report compiled by Black Hawk Private and Forensic Investigation and Risk Solutions into the alleged abuse of funds at Hlahlolanang Health in Sekhukhune.  

According to the report, then administrators Elizabeth Madisha and Honey Phala allegedly acted as sole signatories of the NGO’s bank accounts, and used their positions to allegedly facilitate payments between themselves and then chairperson Maile Nickson.  

The funds were donated by the National Lottery Commission (NLC), Marula Platinum Mine, and the department of social development, and were allegedly diverted into the four people's personal accounts between April 2021 and March 2023 through irregular withdrawals, misrepresentation of signatories, and staged benefit-sharing schemes.

According to the report, seven transactions totalling R4.4m were siphoned between April 2021 and March 2023, with the last amount withdrawn amounting to a staggering R3.3m.

There is clear evidence of deliberate financial misconduct, manipulation of signatory powers, systematic concealment of income and expenditure.Papi Jonathan Lebese, forensic team investigator

According to the report, a R101,345.20 donation landed in the NGO’s account on April 20 2021, and shortly thereafter, R62,000 was split among the four individuals: R15,000 each to Dineo and Maile, and R16,000 each to Madisha and Phala.  

A similar pattern followed after R316,740.90 was deposited in September 2021, with each receiving between R50,000 and R70,000 in transfers with no legitimate justification recorded. The investigation further found that in March 2022, after the NGO received R633,444.65, R450,000 was again allocated to Madisha, Phala and Maile.

The records indicate that there was no authorisation from the board, and no expenditure reports or procurement documentation was filed. 

The forensic team, led by investigator Papi Jonathan Lebese, found that signatory access to the NGO's bank accounts was altered without the board’s knowledge. These unauthorised changes enabled Madisha and Phala to approve transactions without oversight.  

“There is clear evidence of deliberate financial misconduct, manipulation of signatory powers, systematic concealment of income and expenditure. These actions reflect gross violations of the law and the NGO’s constitution, warranting immediate criminal, civil, and disciplinary action,” said Lebese. 

The report recommends that the matter be referred to the Hawks, Special Investigating Unit, and the National Prosecuting Authority for criminal investigation. 

“We have identified significant financial irregularities involving the misappropriation of donor funds and unauthorised changes to bank signatories. Given the complexity and scale of the suspected fraud, we recommend the involvement of the Special Investigating Unit to conduct a comprehensive forensic audit and assist with recovery processed,” Lebese said in the report. 

Investigators also flagged the need to trace the funds using banking subpoenas and to recover the misappropriated money through civil litigation.

We’re no longer receiving funding or support, and beneficiaries have been left in the dark.Emily Shilakoe, who's part of the NGO

Meanwhile, the charges brought forward for the disciplinary hearing and internal resolution include gross dishonesty for misappropriating NGO funds, fraud through false documentation and personal enrichment, and breach of trust by bypassing board processes.

Additional charges include insubordination, negligence in handling donor money, unauthorised access to organisational resources such as bank accounts, and failure to disclose conflicts of interest while occupying managerial roles.

Emily Shilakoe, who's part of the NGO, said programmes have collapsed allegedly because of the mismanagement. "The worst part is the impact on the ground. Hlahlolanang runs crucial HIV/Aids programmes, including voluntary counselling and testing, with trained counsellors who used to receive stipends from Lotto and the department of health.

"But once the funds started being misused, those payments stopped, and the department and the commission refused to send more money because there were no progress reports coming in. So the programmes collapsed. We’re no longer receiving funding or support, and beneficiaries have been left in the dark," Shilakoe said.

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