Johannesburg - Auditor-General Terence Nombembe has found evidence of financial mismanagement at the Commission for Conciliation, Mediation and Arbitration (CCMA).
He found that it failed to follow procurement rules and wasted millions of rands by failing to deduct taxes and allowing staff to abuse travel allowances.
In a report tabled in Parliament on Thursday, Nombembe identified wasteful expenditure of R1.2m on travel expenses and R11m on South African Revenue Service penalties and fines for failure to collect tax from part-time commissioners.
The travel expenses related to the CCMA's appointment of a corporate systems manager and three commissioners at its head office in Johannesburg.
It then paid them to fly from Cape Town every week for the whole of last year because they did not relocate.
Nombembe found that the CCMA also failed to follow Treasury regulations on appointing service providers for the supply and maintenance of printing services and IT services.
Without following procurement regulations, it appointed a quantity surveyor and project manager for office renovations, a company to redesign its web page, an accounting firm, and hired a company to supply portable voice recorders.
Nombembe recommended that the CCMA governing body address his findings "decisively" with the help of senior management, and said it would not be sufficient to deal with the specific cases of non-compliance.
Rather, the culture of management should be reviewed to prevent future problems.
"Corrective actions limited to the specific individual findings alone would most likely address symptoms, but not the underlying causes. This approach carries the risk of deficiencies recurring in future," he said.
Nombembe's investigation was prompted by a list of allegations handed to him by the labour department in October 2009.
The CCMA said in a statement it had already started regulating and implementing processes to address areas where the A-G had found weaknesses.
The findings had been closely scrutinised by the CCMA governing body, the finance and risk subcommittee and the commission's audit committee, said spokesperson Lusanda Myoli.
"There are still some areas where the final programmes for implementation need to be completed, but overall most areas have been addressed."
Where necessary, the CCMA had taken direct action.
"The CCMA has begun recovering any outstanding monies, including non-payment of money to the SA Revenue Service by part-time commissioners.
"We have sent staff on training, ensured tighter organisational controls and applied the appropriate accounting treatment to the CCMA financial statements," Myoli said.
- Sapa