‘Cope’s finances a shambles’
|Published
Top auditing company KPMG has confirmed that Cope “misrepresented” its financial statements to Parliament.
This is one of the findings of a forensic audit of the party’s parliamentary caucus and constituency fund.
Auditors also found that Cope used the constituency allowance it gets from Parliament on party political expenses, including on its failed conference, accommodation for the conference and settling pre-election debt.
It was also not registered with Sars and had not deducted income tax payments from staff salaries.
Acting chief whip Thozamile Botha, part of the new leading faction of the party in Parliament, said yesterday that legal action was being considered against ousted parliamentary leaders.
Chief whip Mbhazima Shilowa was among the leaders ousted by party president Mosiuoa Lekota last month after a six-month battle precipitated by the financial statements.
The KPMG investigation, which was commissioned by the party, found there had been misrepresentations to Parliament which included a signed declaration by the chief whip indicating that the party had effective, efficient and transparent financial management and internal control systems.
The declaration contained a representation confirming the contents by Anton Louw of Visser Louw, who has since distanced himself from the representation, saying he had not confirmed that the party had such systems in place.
“Our investigation has also established that this statement, as to the party’s financial management and internal control systems, is not an accurate representation,” KPMG said.
The auditors recommended that the matter be reported to Parliament and that “corrective action” be taken.
They also suggested that Cope obtain legal advice about inaccurate audited financial statements presented to Parliament.
The report, leaked to Independent Newspapers, reveals that Cope transferred more than R5 million of the constituency allowance it gets from Parliament to its party bank account to settle debt incurred during last year’s election campaign.
This is 25 percent of the R19.9m allowance received from Parliament for the period ending March 31.
The party also paid more than R2m from the parliamentary allowances towards its national conference expenses and reported this as an expense for the constituency allowance.
A further R2.1m was paid for accommodation, which KPMG “suspects” was related to the aborted conference.
Other payments in contravention of the policy include:
* Legal bills of R254 202.
* Travel and accommodation bills of R85 460.48.
* Travel bills totalling R35 000 to settle the personal liabilities of a former spin doctor.
* R580 474.43 for various branding-related items.
* Petty cash of R69 262.46.
The auditors said they also noted that MP Dennis Bloem’s signature was forged to effect a payment of R169 072.49 on May 7. They recommended that the matter be reported to the police.
The KPMG investigation found that Cope did not have adequate systems of control over certain key organisational processes, including people, procurement, assets and finance, which had resulted in a number of contraventions of the policy, as well as other possible statutory contraventions. - Political Bureau