Pretoria: Staff siphon R20-m from State Theatre coffers

The South African State Theatre in Pretoria has lost more than R20-million in an alleged sophisticated ongoing scam that spans over more than five years, Rekord East reports.

State Theatre spokesperson Thakgatso Setseta said, “unverified information” suggested that more than R20-million had been stolen.

The theatre was alerted to the alleged scam by a bank.

“We were alerted about the potential fraud and corruption involving employees and external parties by Absa, our banker.

“The bank informed the CEO and CFO of suspicious payments. We believe our payment system has been compromised by one person or more in the finance department, who have been making irregular payments to their bank accounts or the accounts of their friends, family and other associates.”

He said according to bank records, this fraud had been going on for more than five years.

Setseta said the fact that this fraud had not been detected by various external and internal audit teams pointed to the sophisticated nature of the scheme.

“It is likely that it’s being done by a criminal syndicate.”

Setseta was referring to an audit held of the 2015/16 financial year, by an outside firm.

“We had appointed an audit firm to specifically investigate anomalies in our cash and bank records. The auditors, however, did not detect this fraud.

“Preliminary investigations, which included interviewing the implicated officials, have shown that the administrative clerks in the finance department manipulated the electronic banking system and diverted funds into their bank accounts as well as those of other parties.”

The theatre has since opened a criminal case with the police, while also suspending an employee last week Friday, as it investigated the alleged fraud involving millions of rand at the theatre complex.

Setseta said while investigations were underway, the State Theatre has strengthened controls in its banking and payment systems. It also updated its risk management system.

A forensic audit firm was also appointed to conduct a detailed analysis of the extent of the fraud, as well as the exact amount stolen.

“We are confident the forensic investigation would also determine whether any person with technical expertise on banking was involved in this fraud, more especially in making it undetectable for such a long time.”

He said the incident has been “extremely devastating and disheartening” to both the State Theatre’s staff and management, who were “entrusted with safeguarding the public entity’s assets in terms of the cultural institutions’ act of 1998 and the public finance management act”.