Recently there have been allegations in the press that various trade unions have mismanaged workers' money. Numsa has not been amongst these. Pite Mogoje* examines the work of Numsa's own scorpions – its National Finance Committee (NFC) and its staff in the finance department, including Mogoje himself and exposes how Numsa is trying to ensure that workers' money is spent responsibly.
Six years ago the Numsa finance department was in a shambles. There was a lack of supporting documentation on files sent by the Regions. Sometimes a cheque was made out for R12000 but the invoices attached would account for only R7000 of the actual amount paid.
The capturing of transactions on the Accpac system was behind by two to three years and this slowed down the process of dealing with wrong doers. For example, one claim cheque for Funeral Benefits was written a week before the member died. How the writer of the cheque knew that the member would die the next week is a mystery. And how the signatories at the Region signed the cheque for a member who was still alive and would die later is also questionable.
Other claims were worse – our members died several times and were paid out each time! For one of the payments, there were no supporting documents. The reason was that "the recipient is a blind person".
All this meant that external auditors spent seven months or more trying to verify Numsa's books of account and Numsa spent millions of rands paying external auditors their hourly rate.
Overall "there was no transparency," says National Treasurer, Omar Gire.
Improvements
But there have been major improvements since these times. Some staff members have been dismissed and charged with defrauding the union.
Additional staff members in the Finance Department ensure that double or non-payment of rentals and other services rendered, are no longer happening.
And "good team-work" between the Head Office and Regions has improved things.
Numsa's own National Finance Committee (NFC) team did a sterling job by re-negotiating contracts with service providers. By doing so the union saved almost R 10 million.
The NFC has also tightened up on financial systems so that in its monthly meetings, if there is a question mark on a certain payment they will not hesitate to demand an explanation.
Numsa also instituted an internal audit procedure from 1996. The functions of the internal audit are:
To check compliance procedures both at the regional and head office To examine supporting invoices for cheques disbursed. To examine invoices for indication of cheque and date. Examine supporting documents for appropriateness of expenditures. To examine whether there has been accountability on the funds received from head office by regions. And various other finance related programmes.
In Gire's view, "60% of the internal audit programme objectives have now been realised."
Because of this process:
The Regions are more cautious on spending monies allocated to them and they spend responsibly. Unlike previously, now when we request supporting documents agreeing with the payments, they are almost always presented. The external auditors, i.e. KPMG, are no longer spending more than six months waiting for documents from Regions, mostly they are around for about three weeks. The Finance Department both at Head Office and the Regions have made this possible. The bad image we had for several years due to some of the regions reluctantly sending the documents for external audit is gradually disappearing.
Gire agrees that the internal audit programme does help him understand better how the union's finances are handled. "You have a hands on approach. It keeps the external auditors on their toes. We have seen what happened in America where auditors are part of corruption and fraud," he says.
"The internal audit programme was meant to save money, so that external auditors must not stay too long when they are around, and that objective has also been realised", he says.
Concerns
But Gire believes there "are still areas of concern:
Sometimes regions spend but do not submit vouchers or supporting documents. Loans are being given but not recovered. Some regions are not redepositing monies that remain from activities that have been carried out.
But our income is the biggest problem, we need to work harder in this area", he says.
As you can see from the graph, although Numsa's income is more than its expenditure, in real terms, income is dropping. This can only be stopped through recruiting more members and tightening up on companies that don't pay union subscriptions.
Some officials have accused us of exposing them through the internal audit process. But that is not its task. The task of the internal audit is to help the NFC and regional secretaries do better in their responsibilities of looking after the union's finances – not to expose anyone. And this means dealing aggressively, tirelessly and without showing any favours when there is no attachment of supporting documentation and no redepositing of unspent monies! The organisation will lose a lot of money if the improper use of allocated funds is not questioned and rectified.
* Pite Mogoje is a book-keeper based in Numsa's head office with the responsibility of the internal audit.
Source
Numsa News