Cape Town - Managers at the Commission for Conciliation, Mediation and Arbitration
(CCMA) seemed to have deliberately split tenders to circumvent procurement
rules, the auditor general's (AG) office said on Tuesday.
"It appears there was a deliberate attempt to split the process,"
Pramesh Bhana, a corporate executive in the AG's office, told Parliament's
portfolio committee on labour.
A report by the AG tabled in Parliament last week, found the CCMA appointed
a service provider to do work worth R612 760, but split the contract to avoid
inviting competitive bids, as the rules require for any contract worth more
than R200 000.
"The nature of service is similar ... It is a R600 000 service. It was
done in the form of various quotations rather than a competitive process. Did
someone take advantage of the process deliberately?" Bhana asked.
Irregular expenditure"Was it a case that maybe there is an official taking a shortcut, to
not follow a longer process? ... The contract as a payment documentation is an
indication that something was not done properly."
Bhana said the report found irregular expenditure of more than R23m, but
because his terms of reference were limited, this actual amount misspent in
recent years could be much higher.
He urged the CCMA to conduct its own investigation to determine the extent
of wrongdoing as the forensic investigation only focused on allegations aired
by a whistle-blower.
"Our investigation focused on allegations received. Those allegations
were aimed at certain contracts only. We did not look at all payments."
He warned that while there was a chance of recovering money misspent, the
organisation needed to review its management culture so as "not to just
treat the symptoms but get to the root cause".
The current system of financial mismanagement was expensive, even where it
was not downright irregular, and therefore unsustainable, he added.
Whistler-blowerThe AG's report was commissioned by the committee after one of its members,
Eric Nyekemba, was contacted by a whistle-blower in his constituency in
Vosloosrus.
The person was employed by the CCMA and contacted him late last year,
Nyekemba told Sapa.
The briefing at one point degenerated into a political spat when DA MP Ian
Ollis suggested the irregularities uncovered by the report were not "very
serious" because a researcher from the opposition party had advised him
that it did not merit writing a press release.
This drew an angry response from committee chair Lumka Yengeni from the ANC,
who said Ollis was dismissing the severity of the findings purely because they
were not made at the instigation of his party.
"Every day we hear about the ANC, the ANC this... Today when we have
implicated somebody, it is reduced to 'I have been told by the researchers it
is a minor issue'."
Ollis later reiterated that the loss suffered may eventually be minor
because some of the money might be recovered.
The CCMA has notably indicated that it will try to recover PAYE taxes from
employers from whom the commission failed to deduct it. The CMMA then lost this
amount through fines and back payments it was forced to make to the SA Revenue
Services.
Others steps that may follow from the report, are sanctions against
employees who failed to follow the proper procurement process, and agreed to
unauthorised advance payments to staff.