R50 Million Missing: Military Personnel’s Mandatory Payments Allegedly Diverted, Generals’ Credit Cards Flagged

Millions of rands meant to support South African soldiers have allegedly ended up in the wrong hands.

The SA Army Foundationwhich administers life insurance policies, funeral policies, and loans for military personnelhas been rocked by a Financial Sector Conduct Authority (FSCA) investigation finding that roughly R50 million in mandatory contributions was allegedly misappropriated.

The Scheme

The foundation reportedly receives R6.5 million a month in mandatory contributions deducted from military personnel.

According to a report in Rapport on Sunday, the FSCA investigation found that funds meant for the foundation were diverted into the personal bank accounts of at least two fund managers.

Additionally, high-ranking generals were given credit cards backed by the fund. One general allegedly used the card to purchase a vehicle.

The foundation’s bank initially flagged discrepancies with the account, and external auditor oversight was allegedly compromised.

The Investigation

FSCA head of enforcement Gerhard van Deventer confirmed the investigation of officials and managers of the foundation.

“The investigation has now been finalised and the authority is currently considering options to apply the provisions of the law,” Van Deventer told Rapport.

“The FCSA is also not able to comment on any criminal proceedings related to this matter. However, it remains committed to providing its full cooperation to the prosecuting authorities.”

He did not confirm whether arrests are pending.

The Ombudsman Overspend

Separately, Minister of Defence and Military Veterans Angie Motshekga appeared before the portfolio committee on defence to discuss budget management.

The Military Ombudsman was questioned after overspending its R45 million salary budget for the last financial year by almost R4 million.

Despite the overspend, the ombudsman argued that more needed to be allocated to fill staff vacancies.

The ombudsman received almost 600 complaints last year, predominantly from members complaining about remuneration and benefits:

• 72 related to service benefits

• 51 due to service terminations

• 102 regarding remuneration, appointments, promotions and demotions

The Minister’s Response

Motshekga said complaints could be minimised by rectifying issues in the human resources department and reminded officials that budgets are limited.

“It has to be discussed within a basket. We are faced with a crisis around HR and therefore, it is difficult for us as a department to say go ahead and appoint. We have to sit down and say what is it that we do differently to contain budget overruns. Therefore, we have to make choices.”

The Bottom Line

Soldiers pay mandatory contributions to secure their families’ futures. Instead, millions were allegedly divertedinto personal accounts and generals’ credit cards.

The FSCA investigation is complete. The findings are in. Now, the question is whether the law will follow. And whether the soldiers who paid in will ever see their money accounted for.