The scandal-plagued National Lotteries Commission (NLC) is reviewing some of its processes before granting funding to worthy causes, amid concern that the current system is open to abuse.

The commission, which is tasked with regulating lotteries and the distribution of funds to good causes, has faced constant allegations of corruption in recent years. Some MPs have called for its proactive fund, totalling about R120m annually, to be investigated.

The commission was empowered to grant funding to worthy causes without the need for applications through a 2015 amendment to its enabling act. This was to address the need by organisations for funding when they did not have the ability to submit formal applications.

Many of the projects funded through the proactive fund are infrastructure projects, including schools and early childhood development facilities.

The latest corruption allegations implicate the commission’s COO, Phillemon Letwaba, who has been accused of channelling multimillion-rand grants to nonprofit organisations that involved his family and friends.

Recently, DA MP and spokesperson on trade and industry Dean Macpherson called for the board to be dissolved. Letwaba is said to have taken special leave in February pending the conclusion of the investigations into the allegations.

Briefing the portfolio committee on trade and industry on the distribution of funds from the National Lotteries Distribution Trust Fund, NLC executives said to ensure transparency and accountability, the commission had adopted a proactive funding framework to assist with an open and formalised process. This would facilitate basic checks and balances before any allocation is done.

“In this respect, an assurance committee has been established consisting of distributing agencies from different sectors for this purpose,” the NLC said in a presentation to the committee.

In terms of the law, at least 5% of the commission’s funds must be allocated to each province annually.

“Some provinces such as the North West, Northern Cape, Free State and others have been unable to get the requisite funding because of the low number of registered and eligible entities in those provinces. This method of funding has been instrumental in ensuring that most of these provinces and rural communities are identified and direct interventions ... made,” the NLC said.

Revenue from share of ticket sales as at the end of December was about R1.2bn. Proactive funding represents about 10% of total annual funding by the NLC.

Allocation of grants amounted to about  R1.1bn as at end of December.


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