Fokothi’s M28m student debt unexplained

…as Auditor-General refuses to give opinion on the polytechnic’s books

Mohloai Mpesi

THE National Manpower Development Secretariat (NMDS) and the Ministry of Education and Training have told auditors they owe Lerotholi Polytechnic nothing in student debts, despite the institution’s financial statements showing an outstanding balance of more than M28 million.

The contradiction has prompted Auditor-General ’Mathabo Makenete to disclaim an opinion on the polytechnic’s 2025 financial statements, saying she could not obtain sufficient appropriate evidence to establish whether the reported figures were accurate.

According to Ms Makenete’s audit report, both the NMDS and the Ministry confirmed zero balances, while Lerotholi Polytechnic’s books showed student debt of M28,211,463.

The monies are said to be part of those the NMDS pays to Lerotholi Polytechnic as part of state-sponsored students’ tuition fees.

The report says the unexplained discrepancy was among the matters that prevented the Auditor-General from forming an opinion on the institution’s financial statements.

The findings are contained in the Audit Report on the Financial Statements of Lerotholi Polytechnic for the year ended 31 March 2025.

The report was submitted to the Clerk of the National Assembly, Advocate Lebohang Fine Maema (KC), on 8 June 2026 and was made public last week.

An auditor issues a disclaimer of opinion when sufficient appropriate audit evidence cannot be obtained and the possible effects of undetected misstatements are both material and pervasive.

“There was an unexplained discrepancy in the balance between the financial statements and the balance per external confirmations. External confirmations consist of National Manpower Development Secretariat (NMDS) and Ministry of Education and Training (MoET) students’ debts, where they both confirmed M0.00 balances while the financial statements reflected M28,211,463,” the report states.

Balances unchanged for six years

Ms Makenete also raised concern over several balances that had remained unchanged for more than six years without supporting documentation, making it impossible for her to verify their existence, valuation and accuracy.

They include work in progress of about M12 million, a bank overdraft of approximately M3.6 million and accrued liabilities of about M3.8 million.

“There were balances that remained the same from the previous six years and were unsupported, as shown below in the financial statements. As a result, I was unable to confirm the existence, valuation, rights and obligations relating to these balances,” the report states.

The Auditor-General further drew attention to a long-running fraud case disclosed in Note 6 of the financial statements.

She said the case relates to fraud committed in 2014, when M31,238,686 was stolen and withdrawn from several Lerotholi Polytechnic bank accounts to pay fictitious suppliers.

“I draw attention to the pending fraud case in Note 6 to the financial statements, which indicates that other debtors relate to the fraud that happened in 2014, where an amount of M31,238,686 was stolen and withdrawn from several bank accounts of the institution to pay fictitious suppliers,” Ms Makenete says.

“A criminal case was opened against the perpetrators, and the case is ongoing.”

She said management had been given a letter detailing matters that came to the auditors’ attention during the audit and had responded to it.

But the Auditor-General said the problems were significant enough to prevent her from expressing an opinion on the financial statements.

“I do not express an opinion on the financial statements of Lerotholi Polytechnic because of the significance of the matters described in the Basis for Disclaimer of Opinion section of my report. I have not been able to obtain sufficient appropriate evidence to provide a basis for an audit opinion on the financial statements,” she says.

The Lerotholi Polytechnic fraud has haunted the institution for years.

A Public Accounts Committee (PAC) report found that the polytechnic lost about M32.4 million between 2007 and 2015 through fraudulent payments to nine South African companies for educational equipment that was never delivered.

Former accountant, Motale Noosi, was charged in February 2019 and reportedly confessed to forging signatures to siphon about M16 million.

Former rector, Tsietsi Lebakae, has denied involvement, saying he was deceived by fabricated delivery documents.

Deputy Commissioner of Police, Sera Makharilele, was later charged with allegedly giving false information in connection with the police investigation into the case. However, he has since challenged the indictment in the Constitutional Court, with the matter still pending.

The PAC has urged the courts to finalise the case and the Directorate on Corruption and Economic Offences (DCEO) to recover the stolen funds.

NDSO fails to account for M15m

In another audit report, Ms Makenete says the National Drug Service Organisation (NDSO) has failed to adequately account for M15.7 million.

The finding is contained in the Audit Report on the Financial Statements of the National Drug Service Organisation for the year ended 31 March 2025, submitted to Adv Maema on 16 March 2026.

Ms Makenete said she could not verify the existence, completeness, accuracy or validity of a M15,673,105 balance arising from prepayments made to UNICEF on behalf of the Ministry of Health.

She consequently issued NDSO with a qualified audit opinion.

A qualified opinion means that, except for the matter giving rise to the qualification, the financial statements are fairly presented.

“In my opinion, except for the effect of the matter described in the basis for qualified opinion, the accompanying financial statements present fairly, in all material respects, the financial position of NDSO as of 31 March 2025 and its financial performance and cash flows for the year then ended,” the report states.

The disputed amount was recorded under trade payables as a debit balance resulting from prepayments made to UNICEF on behalf of the Ministry of Health.

Ms Makenete said auditors requested direct confirmation from UNICEF, but the balance remained unconfirmed.

Management also failed to provide adequate reconciliations or supporting documentation by year-end.

“As a result, I could not determine whether any adjustments were necessary to trade payables, related accounts, or the associated disclosures in the financial statements for the year ended 31 March 2025,” the report states.

NDSO is a statutory body established in March 2007 as a trading account of the Ministry of Health.

Based in Mafeteng, it procures and distributes medicines and other medical supplies to government health facilities.

It received M450 million from the ministry in the 2018/19 budget.

Project implementation failures

Ms Makenete also uncovered serious weaknesses in the implementation of the government development projects, including projects undertaken without the required approvals.

The findings are contained in a Performance Audit on the Implementation of Government Development Projects for the year ended 31 March 2025, which was also submitted to Adv Maema.

“Certain infrastructure projects were implemented without obtaining the required approvals from the Public Sector Investment Committee (PSIC),” the report states.

The audit further found that some projects were undertaken without mandatory Environmental and Social Impact Assessments (ESIA), while PSIC itself lacked a legal framework underpinning its work.

“Infrastructure projects were undertaken without conducting the mandatory Environmental and Social Impact Assessments (ESIA), resulting in community opposition and subsequent delays in project implementation.

“PSIC was established by Cabinet decision as a policy directive, but without a supporting legal framework. Consequently, PSIC lacked the enforceable authority to regulate, reject, or hold MDAs accountable for non-compliant projects,” the report states.

Ms Makenete also criticised the Public Sector Investment Database (PSID), saying the Department of Planning, Coordination and Monitoring (DPCM) had failed to provide evidence of an updated database for tracking development projects.

“This made it difficult to monitor project progress, review performance, and ensure accountability,” the report states.

The Auditor-General further found that development projects at community council level were poorly implemented because available funds were spread across numerous projects in different councils, leaving individual councils with inadequate resources.

“Development projects at community councils were inadequately implemented, as the allocated funds were spread across multiple projects in different councils, leaving each council with limited financial resources,” the report states.

She also criticised delays in completing development projects, warning that extended timelines were increasing costs and undermining efficiency.

“Several development projects did not progress as planned, leading to extended timelines, increased costs, and lower efficiency in achieving development goals,” she said.

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