Auditing firm KPMG says it uncovered the bursary fund fraud that led to one of its former employees facing criminal charges last week.
Fidelis Moema (pictured) was arrested on 2 April after he handed himself over to the Serious Commercial Crimes Investigation Unit of the Directorate for Priority Crime Investigation, also known as the Hawks.
Moema was employed as a bursary specialist at KPMG. It is alleged that, between 2021 and 2022, he diverted R16.5 million in bursary money meant for students.
“Instead of paying university fees on behalf of students, the accused would [allegedly] pay the money into the bank accounts belonging to friends and individuals who own companies. The money would then be paid back into his personal bank account. KMPG has suffered a loss of R16.5m due to his [allegedly] fraudulent actions,” Warrant Officer Thatohatsi Mavimbela said in a SAPS statement last week.
Mavimbela said investigations were at an advanced stage and more suspects would be arrested.
Moema appeared in the Palm Ridge Commercial Crimes Court on the day of his arrest and was charged with theft, fraud, and money laundering. On 9 April, he appeared in court for the second time for a bailing hearing, but the hearing was postponed to 18 April.
Following news of Moema’s arrest, users of X re-tweeted posts depicting the lavish lifestyle enjoyed by Moema and his purported girlfriend.
In a statement on Friday, KPMG said Moema was dismissed on 11 November 2022 following a disciplinary process related to non-compliance with the firm’s policies.
“Subsequent to his dismissal, KPMG identified potential fraud committed by Mr Moema and immediately initiated an internal forensic investigation. This investigation uncovered fraudulent behaviour related to bursary funds, and as a result, we reported the matter to the relevant law enforcement authorities in February 2023. We continue to work closely with the authorities to bring this matter to a close,” said Ignatius Sehoole, the chief executive of KPMG South Africa.
Although KPMG had internal controls in place to mitigate “such issues”, the forensic investigation identified improvements, and additional control measures have been implemented, Sehoole said.
The money was misappropriated through an elaborate scheme of fictitious accounts, over-riding internal controls, and collusion with external parties, he said.
‘No bursars affected’
Sehoole said the fraud has not affect KPMG’s approved bursars; “the firm has honoured all its commitments, and the bursary programme will continue to support students in enhancing the profession. The most disappointing aspect of this situation is the lost opportunity to assist additional students.”
KPMG’s statement that the fraud has not impacted bursary recipients was called into in question in an article published by News24.
A 23-year-old woman, who spoke to News24 on condition of anonymity, said she incurred debt and failed her accounting course after not receiving the full amount of a R100 000 bursary.
Despite repeatedly contacting Moema, she did not receive the funds, leaving her in a dire financial situation. News24 reported it has seen the emails between the woman and Moema in which she enquired about the bursary money.
“I didn’t reach out to [KPMG management]. I just felt maybe they were doing this because I was a girl from some village in Venda. I felt powerless to fight,” she was quoted as saying.
In 2022, when the woman was meant to receive the bursary, she said her parents were unable to send her money for food because they were not working at the time.
She said she owed the University of Johannesburg about R40 000 in tuition fees and R18 000 for accommodation in 2022.
“I was in pain during CTA [Certificate in the Theory of Accounting]. Hence, I didn’t pass in the end.”
Moonstone asked KPMG for comment on the News24 article and how R16.5m could have been siphoned from the bursary programme, yet all commitments to students have been honoured.
“According to what we have ascertained from our records, there have been no bursars that have met the terms of their bursaries that have not been paid the amounts due to them. It could be that the individual did not meet the ongoing requirements for the bursary, but we cannot confirm that for certain with the limited information provided in the News24 article,” KPMG said in response.
