Accountant Faces Legal Action for R17 Million Theft from Non-Profit
Edward Mwanandimai, a Zimbabwean accountant and member of the UK-based Association of Chartered Certified Accountants (ACCA), is accused of stealing over R17 million from the Education and Training Unit (ETU), a Johannesburg-based non-profit. The misappropriation spanned six years, from 2014 to 2020, and was discovered only after Mwanandimai resigned in May 2020.
The ETU focuses on democracy and development across Southern Africa, making the theft a significant breach of trust. Mwanandimai admitted to stealing R6.8 million and partially repaid the amount, but further reconciliation revealed that over R17 million was taken. He manipulated the organisation’s online banking system by replacing legitimate creditors’ bank account numbers with his own or his company’s.
Court Ruling
The North Gauteng High Court issued a provisional sequestration order for Mwanandimai’s estate. He and other interested parties must present reasons by next Friday why the sequestration should not be finalized. The court dismissed his efforts to strike out accusations as irrelevant or defamatory.
Lessons Learnt
This case serves as a stark reminder of the importance of ethical behavior among accountants, especially those affiliated with professional bodies like ACCA. It also underscores the necessity of robust internal controls to prevent such misconduct.
Strengthening Internal Controls
To safeguard organisations, particularly non-profits, the following measures are critical:
Segregation of Duties: Ensure no single individual has complete control over financial processes. For example, separate the roles of initiating, authorizing, and processing payments to minimize opportunities for fraud.
Access Controls: Limit system access based on job roles. Mwanandimai exploited his position by persuading colleagues to grant him broader access than his role required. Clear policies on system permissions and monitoring access changes are essential.
Regular Oversight and Reconciliation: Conduct routine reviews and reconciliations to detect irregularities early. Independent oversight of banking transactions can prevent unauthorised changes to beneficiary accounts.
Ethical Training and Awareness: Accountants should be regularly reminded of their ethical obligations and the severe consequences of misconduct for their careers and reputations.
This incident highlights the need for organisations and accountants to prioritise integrity, transparency, and robust financial governance to protect their assets and the communities they serve.