Cape Town - The Robben Island Museum (RIM) is challenging the 2019/20 audit finding by late Auditor-General Kimi Makwetu who found the institution did not disclose R90.4 million in irregular expenditure for purchasing a vessel, MV Krotoa.
Makwetu deemed the purchase of the vessel as irregular in his audit report contained in the museum’s annual report, a move that saw the museum regress from its 10-year clean audit record to a qualified audit.
In his audit report, Makwetu said the museum did not disclose the required information on irregular expenditure as required by the Public Finance Management Act.
"This was due to the payment made in contravention of the supply chain management requirements which resulted in irregular expenditure of R90 985 598," he said.
"Management acquired a boat in the prior year without applying the preference point system in the procurement process which resulted in irregular expenditure that was not disclosed in the financial statements in the current financial year," he said.
Acting RIM council chairperson Khensani Maluleka said he was displeased that the museum obtained a qualified audit opinion for the first time after 10 years of unqualified audits, including an award from Makwetu.
"RIM notes with concern the reputational impact of the disclosure following over half a decade of clean audits," Maluleka said.
Maluleka said the matter has been considered by the RIM council, which included obtaining legal advice.
Maluleka said the matter has been reviewed by the AG's ethics department, but RIM would ensure all avenues were exhausted and escalate the matter on appeal to the Deputy Auditor-General.
Chief executive Mava Dada said should the museum have accepted the finding, the audit outcome would have been a clean audit for the financial year.
"However, as a matter of principle, I believe the outcome and interpretation by the AG in this respect should be challenged," Dada said.
He also said key issues were not taken into account by the AG ethics business unit in reaching its findings to their submissions that included what was considered irregular expenditure in court and advice and correspondence RIM obtained from the National Treasury.
"RIM will explore all AG internal processes in respect of challenging the finding and is in a process of appealing the outcome with the Deputy Auditor-General," Dada said.
Dada said based on Makwetu's audit and interpretation of the preference point system, a different vessel should have been chosen at a price of R87m, but it was a 200-seater as opposed to the 280-seater they bought.
"R3.4m saving costs and loss of 80 seats, which can easily amount to an annual opportunity loss of over R20m if the vessel is utilised for all RIM tours on a daily basis," Dada said.
In his audit report, Makwetu also found that the museum disclosed unspent conditional grants for infrastructure projects amounting to R108 317 687.
The report showed that there was a R102.6m infrastructure grant from the Department of Sport, Arts and Culture, R4.1m from the Tourism Department and a Grap grant of R1.5m.
The museum said the Department of Public Works and Infrastructure was the implementing agent for the majority of the infrastructure projects.
Maluleka said the museum has proposed a solution and tabled to the departments of Public Works, and Sport, Arts and Culture, a plan to take over the facilities management role as the implementing agent to arrest the slow delivery of the infrastructure programme.
Political Bureau