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DIANNE HAWKER and CANDICE BAILEY
AT least eight senior managers in the North West Department of Public Works, Roads and Transport have been suspended as part of a mammoth investigation into how the department irregularly spent R1.7 billion in the past three years.
The suspensions are among the first following the department receiving its third consecutive disclaimer from the auditor-general.
In the past financial year alone, the department accumulated more than R410 million in irregular expenditure as a result of supply chain management provisions not being adhered to. The department also underspent its budget by R460m, part of which arises from it halting 61 road projects during the financial year. More than R600m in commitments could not be verified due to poor record-keeping processes in the department.
Acting head of department Samuel Thobakgale said the suspension of the eight officials was just one of the legs of a multipronged plan to right the department.
The employees were suspended for financially overcommitting the department.
Among those suspended are the chief financial officer, three chief directors (transport infrastructure, transport operations and public works infrastructure) and four directors (supply chain management, financial management, legal services and property management).
“The department is in the process of linking all audit queries for the financial year 2011/12 to officials responsible and disciplinary process will ensue. This process will be completed by the end of October 2012,” Thobakgale said in response to questions from The Sunday Independent.
The auditor-general’s report had raised leadership as a major concern, as most of the financial discrepancies red-flagged in the past three years had not been addressed by management.
“The general lack of leadership presence and intervention have resulted in the department not being able to implement the effective turn-around strategy which could have had an impact on the outcome of the audit opinion.
“No punitive actions are taken against officials who fail to implement an action plan timeously,” the auditor-general’s report reads.
“Various errors could have been avoided by a proper review and monitoring of staff’s work activities. The failure to prepare financial statements which are free of any errors is of great concern,” the report said.
Movable assets, immovable assets, commitments and irregular expenditure were the auditor-general’s top four concerns.
But Thobakgale this week denied that the department was in disarray, saying there was “stability that was lacking in the past”.
Thobakgale said the department had this year developed an audit plan to address the audit queries on a global level in the department.
Top auditing firm PricewaterhouseCoopers has been roped into the turnaround of the department.
“The MEC was appointed at the beginning of the 2012/13 financial year and the management structure is taking shape and we are aware of the responsibilities and challenges lying ahead and importantly do have a plan to deal with all the shortcomings and will reclaim our mandate,” he said.
The provincial asset register also appears to be in disarray.
According to the auditor-general, more than R20bn in assets could not be verified because of the “unavailability of contractual agreements, title deeds, reconciliations, road proclamations and lack of details in the immovable asset register”.
The auditor-general had raised concerns about ghost employees, possible duplicate payments and fictitious suppliers.
Thobakgale acknowledged problems with the asset register.
“The department inherited properties from former Bophuthatswana that were not surveyed nor proclaimed as townships, hence the lack of title deeds.
“The department is in the process of getting all these affected areas proclaimed.
“We hope to finalise the process by the end of 2014 at the latest,” he said.
The investigation was launched four months ago and roads, pupil transport and property management had been highlighted as high-risk areas.
Thobakgale said the problem of overcommitment was linked to underspending.
Overcommitments had arisen when projects were gazetted without the necessary finances in place.
“To correct the gazetting takes time and by the time these projects are stopped, it’s the end of the financial year – and the department has underspent on the budget.”
He said the department was confirming which projects needed to be done through a needs analysis and correcting the process.
The provincial public works department’s disclaimer comes as the Special Investigating Unit continues its probe into the national Department of Public Works, looking at government property leases worth about R3bn a year.
Public Works Minister Thulas Nxesi has admitted widespread fraud and corruption among officials in his department and has told Parliament that the scope of the investigation has expanded beyond leases, to include other regions of the department.
Nxesi this week said Public Works’s capacity to process tenders, manage the supply chain, and project-manage construction and maintenance contracts was severely eroded.
“The resultant lack of financial controls and mismanagement has provided fertile ground for fraud and corruption.
“We have become a department of tenders in which corrupt officials collaborate with tenderpreneurs at untold cost to the public,” he said.
l See Thulas Nxesi’s article, Time to stop rot in public sector, on page 13