Auditor’s report flags tender breaches

2017-09-10 05:59
Joe Maswanganyi. Picture: Stephens Molobi

Joe Maswanganyi. Picture: Stephens Molobi

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The South African Maritime Safety Authority (Samsa) has lost millions due to tender irregularities, according to a management audit report about the financial standing of the organisation.

No competitive bidding process was followed in awarding tenders, and contracts were extended above Treasury’s threshold, which was 15% of their original value.

The authors of the leaked report scrutinised segments of the state-owned enterprise, which falls under the department of transport.

They found that R74m was spent on various purchases and services, although there was no approval for deviation from supply chain policies.

There were no salary bands for employees, which meant they could be “paid more than what they qualified for”.

“Supply chain policies are there to reduce the likelihood of fraud, corruption, favouritism, and unfair and irregular practices,” the report reads.

No punitive action was taken against officials who flouted procurement policies, the report states.

Samsa management received the report from Madidimalo Singo, senior manager in Auditor-General Kimi Makwetu’s office, on August 22.

The report could lead to Makwetu issuing a disclaimer in his final 2016/17 audit, because it discloses that Samsa management did not provide information that could help auditors determine the state of its finances.

It puts irregular expenditure at R39.2m, which was incurred because contracts and payments for 42 suppliers were not provided to auditors.

According to the report, auditors noted this happened while R210.5m in irregular expenditure from previous financial years was still being investigated.

Other transgressions included awarding tenders and making payments to companies with no tax clearance certificates, and appointing service providers without obtaining the required quotations.

The report’s authors express concerns that fruitless and wasteful expenditure pertaining to a credit card expense and a forensic investigation still have to be quantified.

Samsa misstated financial statements by at least R17.2m as a surplus in the maritime fund, the fund’s cash and uncleared deposit amounts were not included in the financial statements.

A source at Samsa told City Press that management was contemplating having the report reviewed.

“Account investigators have told them it’s not possible to review it,” the source claimed, adding that Transport Minister Joe Maswanganyi was expected to meet management in a few days. Some senior executives were off on sick leave.

The report’s contents have so far supported some concerns Samsa employees had raised. They wrote to Maswanganyi’s office last month to complain about acting chief executive officer (CEO) Sobantu Tilayi’s management style. He arbitrarily increased the salaries of certain officials and gave jobs to unqualified individuals, they alleged.

Tilayi, a chief operating officer, acted as CEO for more than a year until last month.

However, he last month denied that he arbitrarily increased salaries. He blamed his predecessor, former CEO Tsietsi Mokhele, for reneging on promises he made to employees. He said he started putting in place salary grading to resolve the “big mess” he inherited.

According to the report, six executive managers had each of their salaries increased by between 9% and 69% without the remuneration committee having been consulted or the board giving its approval.

Another source at Samsa said: “What the employees complained about to the minister was correct. The executives were denying the truth and it is now proven in the management report.”

Samsa spokesperson Tebogo Ramatjie did not respond to questions about issues raised in the report and what the organisation planned to do.

The auditors met with Parliament’s portfolio committee on transport, Maswanganyi, Tilayi, the audit committee and audit steering committee.

“No commitments to implement initiatives that can improve the audit outcomes were provided,” the report states.

Ramatjie said: “We have noted your questions and also noted that they are based on a management report which is, in fact, a draft report as a complete audit exercise is yet to be concluded.

“We are therefore not in a position to engage on the questions raised in your email.”

Read more on:    joe maswanganyi  |  samsa  |  tenders

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