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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-blower
The 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.
"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-blower
The 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.
