Former Economic Development MEC Qedani Mahlangu dismissed members of the Gauteng Gambling Board. Photo: Simphiwe Mbokazi

Gauteng - The board members dismissed from the Gauteng Gambling Board earlier this year could find themselves repaying the member fees they were still receiving four months after they were kicked out of the entity.

And they might also have to repay more than R1 million they spent on the high court case challenging their dismissal by former economic development MEC, Qedani Mahlangu, if the provincial standing committee on public accounts (Scopa) has its way.

Bally Chuene, the administrator of the board, has asked a forensic audit team to investigate the payments.

The repayment issue arose in the public accounts hearing this week where the committee questioned the Department of Economic Development on R12.3m the entity irregularly spent in the past financial year.

The board had approved the irregular payments.

The auditor-general had found “the accounting authority did not take effective and appropriate steps to prevent irregular expenditure”.

The questions come 10 months after Mahlangu fired the board after it refused to move from its premises in Bramley to the Joburg CBD, where she planned to house all the department’s entities under one roof.

She gave the entity five days to give her reasons why they should not be dismissed.

The board challenged the dismissal in the Gauteng High Court, but lost the case.

In a meeting, the committee was keen to understand how the board would recoup the funds from the former board.

In a response to the committee this week, the department said the investigation was still under way.

Once complete, the entity would provide the committee with a report.

Chuene, speaking to The Sunday Independent, would not say if the board would repay the funds.

“We can’t pre-empt the outcome of the investigation, it would depend on the recommendations made to the board,” he said.

The forensic audit was not yet under way and would begin in the next week.

The board would approach the provincial treasury for assistance.

“The process as to when it would be complete would depend on the availability of the officials assigned,” said Chuene.

He expected the matter to be finalised in the first quarter of next year.

The committee has also asked for details of the traders who were issued with licences after the board was dissolved.

These licences would be invalid, as the board didn’t have the authority to grant them.

And it wants the entity to explain what action was taken against the acting CEO for remunerating members of the board whose services were terminated.

The entity and the department have to respond to the outstanding questions by next week.

The department’s submission to Scopa explained that the investigation would look into board member fees and whether the money in that period was appropriately spent – whether the board fees were paid in line with regulations and policies.

It will also investigate whether the R1.2m the board spent on legal fees challenging the MEC was appropriate and establish whether there were grounds for charges of misconduct against the former board.

And it will probe whether the board complied with regulations in appointing the chief operations officer as the acting CEO during the 2011/2012 financial year.

According to the submission, the forensic auditors will produce an outcome report with recommendations on how the administrator and acting CEO should proceed with the matter.

The dissolved board had only lasted for nine months.

According to the board’s annual report, the R12.3m that makes up the irregular expenditure includes R412 000 paid to the board for convening board meetings after their term of office was terminated; R1m for their legal fees in challenging the MEC’s decision to dismiss them; R5.3m in costs that were approved by the chief operations officer when he was appointed as acting CEO by the board; and R7m in payments that the chairman of the board approved after the board’s contract was terminated.

“The legal fees that are being paid for the court applications are not to assist the board in executing their function, or to promote the interest of the board.

“These expenses will not form part of the planned expenditure estimates and therefore the board would not have budgeted for these expenses.”

Chuene said the entity was in the process of shortlisting new board members.

“The appointment will be at the discretion of the MEC.

“Everybody understands the need as a matter of urgency.

“Based on the way things are moving, it should be finalised in the first quarter of next year,” he said.

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Sunday Indendent