The Botswana Defence Force (BDF) Trust Fund has lost over P9 million through misappropriation, embezzlement and fraud, parliament has been told.
The Fund was established in 1991 for the general welfare of members and to encourage a culture of saving and facilitate emergency personal loans to members.
This week, Minister of Defence, Justice Security, Shaw Kgathi told parliament that the Fund was audited for the first time in 2013, a process which exposed maladministration.
Kgathi was responding to questions from Selibe Phikwe West Member of Parliament (MP), Dithapelo Keorapetse.
The MP had enquired whether contributions by soldiers into the Fund is compulsory, how much is in the account and at which bank, the names of the companies or fund managers managing the Fund and how the money has been invested.
In response, Kgathi notified parliament that currently the Fund has P37 million sitting at First National Bank Botswana (FNBB) and a further P87 million held in another account at Stanbic.
With respect to the embezzled money from the Fund, Kgathi said so far over P4 million has been recovered.
Furthermore, he told the House that criminal investigations are still ongoing and thus far eight people have been interdicted and files have been forwarded to the Director Public Prosecutions for possible prosecution.
Kgathi also revealed it was optional for soldiers to sign-up for the Fund, adding there is no legal instrument authorizing compulsory contribution.
“Individuals who have opted to join give the Fund the authority to deduct monthly welfare savings,” explained the Defence Minister.
The minister further noted that the Trust Fund is registered as a friendly society by Non-Bank Financial Institutions Regulatory Authority (NBFIRA).
According to Section 2 of the NBFIRA Act, a friendly society is described as, “An association of persons established with no share capital for the purpose of aiding members of the association or their dependents.”
Ever since its initial audit six years ago, Kgathi says the Trust Fund was audited four times between then and 2016.
“I should highlight that the 2013 audit was the first audit to be carried out, it therefore entailed a lot of audit work covering all the previous years which had not been audited,” declared Kgathi, explaining this created a backlog of two years, hence the delay in preparing the audits for 2017 and 2018 financial statements.
The Trust Fund money is said to be invested in various portfolios such as equity, fixed deposits and bonds.