Johannesburg - The findings made by Public Protector Thuli Madonsela against the Passenger Rail Agency of SA (Prasa) was a matter of concern, Prasa Board Chairman Popo Molefe said on Thursday.
“The recent Public Protector’s report, Derailed, which is a report on the investigations on maladministration relating to financial mismanagement, tender and appointment irregularities against Prasa are a matter of concern to this Board and management as well as to the Shareholder, to whom we are accountable,” Molefe said in a statement.
“The widely publicised Public Protector’s Report is equally of public interest. Accordingly, the Board of Prasa is impelled to take necessary measures on the reported maladministration and irregularities raised therein.”
He said the Public Protector’s office received a total of 37 complaints and made several “damning findings which the Board has already begun to address appropriately”.
In her findings, Public Protector Thuli Madonsela implicated former Prasa boss Lucky Montana in several instances of alleged financial mismanagement.
Madonsela’s report, titled ‘Derailed’, and released on August 24, made numerous adverse findings against Montana, including alleged maladministration and financial mismanagement involving millions of rands, as well as improper conduct.
Molefe said that as part of the remedial actions on the findings, the Board directed management to strengthen internal controls and to overhaul the supply chain management structures.
Prasa had requested the Chief Procurement Officer at National Treasury to second to it an experienced procurement officer whilst it restructured its procurement management systems, he said.
“Furthermore, Prasa is considering appropriate legal steps in respect of some of the remedial actions recommended by the Public Protector. Internally, management applying the disciplinary code of the company, will deal with the employees implicated in irregularities and wasteful and fruitless expenditure,” said Molefe.
He said that prior to the release of the report, the Board had already commissioned an independent investigation led by Werksmans Attorneys into several irregularities identified by the Auditor General in his Draft Report.
“This is all part of the cleaning up of the company and enhancing good corporate governance,” Molefe said.
“Regarding contracts identified or suspected to have been irregularly awarded, the Board directed the Acting Group Chief Executive Officer to take appropriate steps to suspend all such contracts and to engage where appropriate with the relevant parties. In addition, all employees unlawfully suspended, their suspensions continue to be appropriately addressed.”
Molefe said in April, Prasa’s Internal Audit was instructed to review all payments of over R10 million made from April 1, 2014, to check irregular, wasteful and fruitless expenditure.
The Internal Audit was also directed to conduct probity checks on all future payments and procurements above R10 million.
“As resolved by the Board and also as directed by the minister of transport, Prasa will immediately begin an academic qualifications verification audit – a process to be conducted by the South African Qualifications Authority. Communication will be addressed to all affected levels of management and other technical staff in this regard,” he said.
“We remain committed to ensuring the roll out of a modern passenger rail system of the future, which will deliver on the Prasa mandate. Prasa strives to remain a leader in public transport solutions and a preferred mode of transport.”
At the time, Madonsela said that there were complaints that she either could not fully investigate because of late arrival of or inconclusive information and, further complaints that she received at the time of the finalisation of Volume One of her report which she said would deal with some in Volume Two of the report.
Molefe said Prasa was committed to cooperating with Madonsela’s office.
“Prasa committed to cooperating in this regard, has asked the Public Protector’s Office to forward it the new complaints as some of them might be the subject of the ongoing internal investigations already commissioned by the Board which the Public Protector might find helpful,” he said.
After the report was released, Montana denied the allegations, and reportedly said the report was inaccurate and inconsistent. He indicated that he would approach the courts to have the report set aside.
After making numerous adverse findings including maladministration and financial mismanagement against Prasa, Madonsela urged Transport Minister Dipuo Peters to act.
“The minister of transport [is] to ensure that the Prasa board considers the acts of maladministration and improper conduct referred to in this report and take appropriate disciplinary [action] against the officials of Prasa in respect of their conduct referred to therein,” Madonsela said on August 24.
Madonsela urged Peters, “to take cognisance of the findings regarding the unethical conduct and maladministration by Prasa.”
The Prasa investigation followed 37 complaints lodged by the South African Transport and Allied Workers Union in 2012. The complaints were later pursued by the National Transport Movement.
ANA