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Prasa's finance chief missing in action for months

Feb 23 2016 14:19
Liesl Peyper

Cape Town -  The Passenger Rail Agency of South Africa (Prasa) has had to function without a chief financial officer for more than seven months, MPs belonging to the Standing Committee on Public Accounts (Scopa) heard on Tuesday.
 
Minister of Transport Dipuo Peters told the finance watchdog that she has never seen or met Prasa’s CFO since she was appointed to the position in June 2014.
 
Peters attended a Scopa hearing on Prasa’s annual report for the 2014/15 financial year and suggested that MPs ask Prasa’s acting CEO for details about the financial head’s whereabouts.
 
Nathi Khena, who has been acting CEO since former CEO Lucky Montana’s dismissal in June last year, said he has also not seen the financial head since he took over last year. “The CFO apparently has a medical condition and it impacts her performance,” Khena said. “She hasn’t been at work for quite a long time. She came back two to three weeks ago, after her request for medical boarding had been declined.”

Prasa chairperson Popo Molefe added that the CFO had a psychiatric condition which led her to be “unstable” at times, but that Prasa was taking steps to ask her to resign from her position.
 
The Prasa board and management had to face a second grilling in Parliament on Tuesday morning when Scopa members questioned them over irregularities in their annual report.
 
Defective supply chain management systems, which have led to irregular expenditure of R550m, fruitless and wasteful expenditure of close to R20m and the awarding of an unsolicited proposal to the value of R91m are but some of the issues the auditor general raised in his report.  
 
In addition, the agency reported a loss of R1.18m for the 2014/15 financial year.
 
There were also substantial inconsistencies in contracts issued by Prasa, to the tune of billions of rands. This includes an increase of R8bn in a contract for new trains for Metrorail and noncompliance when the agency awarded a R17.9bn contract to broad-based black economic empowerment equity partners. Prasa failed to disqualify certain bidders in terms of conflict of interest, as stipulated in the Public Finance Management Act (PFMA).
 
Both Prasa chairperson Popo Molefe and Khena as acting CEO admitted that supply chain management and record-keeping were not up to scratch, but they emphasised that investigations are under way to hold transgressors who had committed fraud and contravened the PFMA accountable.
 
However, like last year they once again could not provide details of Prasa contracts under investigation.
 
MPs wanted to know if the Prasa board intends to resign because of its messy internal affairs.
 
“These are all legacy issues and they’re major,” Molefe, who was appointed chairperson of a new board in 2014, responded. “There would be no basis for anyone to resign. Only some of these issues happened on our watch and we’ll deal with them when the time comes.”
 
Conflict between Molefe and former CEO Lucky Montana led to the latter’s dismissal in June last year. Montana was accused of improperly awarding the tender for a modernisation programme, which the board attempted to reverse.

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prasa  |  state-owned enterprises

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