Bank, Treasury in battle for control of R9bn jobs fund

2014-11-30 18:00

A battle over the R9?billion jobs fund launched by President Jacob Zuma three years ago has resulted in management of the fund being moved from the Development Bank of Southern Africa (DBSA) back to the Treasury.

Senior managers at the Treasury have been accused of hijacking the fund’s management from DBSA and of favouring certain projects even though they don’t qualify for funding.

Accusations of conflict of interest have also been levelled at the fund’s senior technical adviser, who ran a consultancy that worked on the same jobs fund before joining the Treasury.

United Democratic Movement leader Bantu Holomisa, who whistle-blowers first approached to complain about possible abuse of the fund, has written to the Public Protector asking for an investigation.

The aim of the fund is to identify and invest in job creation projects.

The Treasury says the fund has approved 91 projects totalling R4.96?billion since its inception and has created more than 160?000 jobs. It was announced by Zuma in his state of the nation speech in February 2011 and officially launched by the minister of finance in June that year.

DBSA, which manages large investment projects, was tasked with running the fund. It appointed experts who made day-to-day decisions about which projects to fund. But issues arose when the bank questioned some of the projects being presented for approval by the Treasury. One of the projects the bank objected to funding was the Western Cape Premier’s Advancement of Youth (PAY) project.

Insiders told City Press that a senior manager at the Treasury pushed for the project to be funded even though it did not fall within the scope of the jobs fund.

“[The manager] has been pushing for project PAY. The jobs fund had recommended its rejection because it did not belong within the fund but was a typical Expanded Public Works Programme project.

“It was approved, but unfortunately it ended up training 700 students and then letting them go at the end of the year.

“That is not what the jobs fund is about,” said one of the whistle-blowers.

Another whistle-blower claimed that a senior technical adviser to the fund was running her own consultancy that was working on the jobs fund before she was appointed to manage it.

The adviser apparently left her consultancy to two other people to manage after her appointment by the Treasury, and the claim is that the consultancy is still working on behalf of the fund.

But the Treasury insists that there’s nothing untoward about the management of the fund.

In a written response, spokesperson Phumza Macanda said the Treasury had taken over the management of the fund to allow the DBSA to focus on its core mandate.

“This allows the DBSA to focus on its core infrastructure finance business as envisaged in the recent restructuring of the DBSA.

“Staff who were employed in its jobs fund project management have been seconded to the National Treasury,” she said.

Macanda insisted that the technical adviser’s appointment to the fund was above board.

“She’s appointed as senior technical adviser to support the financial administration of the jobs fund. This appointment was made through an established panel of service providers following an open tender process. There is no conflict of interest in this appointment.”

She also denied that the Western Cape premier’s PAY project was being favoured over others, saying it was ideal for the jobs fund because it provided an opportunity for pupils to gain work experience and had agreements with potential employers to place them in jobs once the training was concluded.

But she conceded that there were often disagreements between DBSA and the Treasury about which projects to fund.

“In many cases, divergent views are heard from both the advisory staff and members of the investment committee during the review and decision process.”

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