A forensic audit has been launched to determine how money from Blue IQ has been spent and managed since October 2003. The audit is expected to be handed to the Gauteng standing committee on public accounts (Scopa) for review next week.

At the heart of the matter is a R400m deal between Blue IQ and Johannesburg Development Agency (JDA) in which the agency was to oversee the development of the Newtown precinct and Constitution Hill for a sizeable commission, which would be funded by Blue IQ.

In return, the municipal land on which the projects were built was supposed to have been handed to the province.

Blue IQ, an investment holding company that holds Gauteng’s equity stake in a number of projects, including the Innovation Hub in Pretoria and the Cradle of Humankind World Heritage Site, is wholly funded by the provincial government and is to receive R93m this financial year. It is key to the efforts to create sustainable economic growth and jobs, and Gauteng’s efforts to meet its 8% growth target.

This week , Blue IQ CEO Nomhle Canca told Scopa that not only had the land not been handed over, which meant they had pumped millions into projects that now had no assets, but that the company could not account for how the money had been spent by the JDA. Canca and her team of managers, none of whom have been at Blue IQ longer than a year, are battling to find accurate financial statements for Blue IQ’s early years.

Blue IQ functioned under the finance and economic affairs department until 2003, when it was established as a private company. Canca said it was not clear whether the money allo- cated was supposed to be classified as a grant or a loan in some of the projects.

Scopa chairman Mike Seloane said yesterday that the committee would decide how to proceed after reviewing the report. Blue IQ had now submitted financial statements to the auditor-general for the years from 2004.

“The statements for the 2005-2006 years were submitted to the auditor-general but were rejected and eventually withdrawn because they had been drawn up on bad advice from an official at Blue IQ, who has since left. Blue IQ has since resubmitted all the financial statements.”

Concerns surfaced in November after Scopa was notified by the auditor-general that the company had failed to submit its financial statements for the second consecutive year.

According to JDA head Lael Bethlehem, the financial reports for the Newtown and Constitution Hill projects had been submitted and accepted for all years except 2005-2006 because the department was still waiting for Blue IQ to tell them whether to list the money as a grant or a loan.