NEARLY half of the Limpopo government departments and another entity submitted sub-standard financial statements, thus flouting the Public Finance Management Act (PFMA) and contributing to the province’s unprecedented disintegration.
The statements were neither prepared in accordance with the prescribed financial reporting framework nor supported by full and proper records as required by the PFMA, according to the Auditor General and the Standing Committee on Public Accounts (Scopa) reports.
The reports, tabled at the Limpopo Legislature two weeks ago, show that the Limpopo Departments of Agriculture; Sports; Safety and Security; Public Works as well as Limpopo Gambling Board had submitted statements that did not meet auditing standards.
These were amongst a string of irregular expenditures and other violations of supply chain policies that dogged the Limpopo government during the 2015/2016 financial year, resulting in it getting no clean audit.
ANC and opposition MPLs subsequently said the regression was proof that procurement processes had collapsed, and corruption and fraud skyrocketed under Premier Stan Mathabatha’s watch.
MEC Jerry Ndou’s Public Works Department had not even bothered to submit quarterly reports to Mathabatha as required by Treasury regulations.
“The committee has heard and considered evidence that the financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework and supported by full and proper records as required by section 40(1)(a) and (b) of the PMFA. On paragraph 42 the AG reports that quarterly reports were not submitted to the Office of the Premier as required by Treasury Regulation 5.3.1,” read the report.
Scopa noted that Sports MEC Onicca Moloi’s department “did not adequately review the financial statements before submitting them for auditing, therefore misstatements were not identified and corrected”.
It recommended that Ndou, Moloi and Agriculture MEC Mapula Mokaba-Phukwana must ensure that their heads of department develop a “tangible turnaround strategy” to ensure proper financial statements were prepared.
Transport, Safety and Security MEC Nandi Ndalane was ordered to take “appropriate action” against both the head of department and the Chief Financial Officer.
All the affected MECs’ were ordered to brief the legislature every six months from October 1, 2017 on “progress made in the implementation of the resolutions” until they were “fully implemented”.
It also emerged that five other departments, including COGHSTA, had failed to appear before Scopa for nearly a year to account for their financial irregularities.
COGHSTA MEC Makoma Makhurupetje has had a catastrophic tenure, with at least five municipalities collapsing on her watch.
MEC Rob Tooley’s Treasury had procured goods and services with a contract value of below R500 000 “without obtaining the required price quotations, as required by the Treasury Regulation 16AB.1”.
Limpopo Health MEC Dr Phophi Ramathuba had presided over R15 million worth of fruitless and wasteful expenditure, “due to expired medicine, negligence and interest on late settlement of accounts”. She also failed to take “effective steps” to “prevent fruitless and wasteful expenditure” as required by the PMFA.
Scopa ordered Limpopo Economic Development MEC Seaparo Sekoati to investigate and verify the recoverability of all loans given by state-owned development financier LEDA after its Managing Director Ben Mphahlele had made “material impairments” to the tune of more than R440 million.
“[The Executive Authority] must take appropriate action against LEDA MD [Ben Mphahlele] and the CFO for making material impairments to the tune of R165 516 516, R183 334 535 and R92 866 096 respectively to loans to (from) group companies-associates, other financial assets – loans and receivables, and trade and other receivable respectively, as a result of irrecoverable loans and debts.”
Mathabatha last week called a media conference following the African Times story, but stayed clear of the financial rot.
Instead he shared the contents of the yet to be released 2016/2017 AG’s report, which showed slight improvements in audit outcomes. He also paraded trophies as “proof” of his governance successes.
“I can assure you now that we currently have Treasury and Gambling Board as having clean audits, six departments have improved, 12 remain unchanged while three departments have regressed,” Mathabatha said.
“So, that is our good story. We are not responding to anything. If we have to respond to anything, we will respond. We are now currently presenting what the AG was presenting to us in today’s EXCO.”
However, Mathabatha instructed Scopa, through Limpopo Legislature Speaker Polly Boshielo, to cancel a parallel media briefing on the state of affairs in his government, sources said.
Mathabatha’s spokesperson Kenny Mathivha blamed the regression on former Premier Cassel Mathale’s government which collapsed in 2011.
“The 2015/2016 AG report is on audits done in 2013/2014 which means the said Departments were recovering from the 2011/2012 Administration period. There was no leadership in all these departments since most if not all HODs including the Provincial DG were either on suspension or fired,” Mathivha said.
“Most senior officials numbering not less than 300 were being disciplined. You will also know that when administrators left, Education had to again be put under provincial administration until the AG said it has improved tremendously.”
Mathabatha would not say what action he had taken against Ndou for failing to give him the required quarterly reports, saying only that those who do not comply either receive “verbal or written” penalties.
Asked what action the premier took against Moloi after her department submitted substandard financial statements, Mathivha said: “This is the Department that only managed to hire a full-time HOD this year, making it the last one. In the absence of leadership, all was left to chance.”
He added that Mathabatha “will comply with all recommendations” of Scopa in relation to sanctions against Mphahlele.
Both Kennedy-Monyemoratho and Boshielo confirmed the media briefing cancellation but denied Mathabatha was behind it.
“We cancelled because the communication [unit] of the legislature was not ready with the statement. They cannot stop us. Otherwise it will be political interference. We as Scopa must do our work without fear or favour and must make the Exco to account,” Kennedy-Monyemoratho said.
Boshielo said: “I hereby confirm that the Premier never asked me or Snowy Kennedy to stop the press briefing”.
Mathabatha boycotts African Times and labels it a ‘Gupta-funded project’
EMBATTLED Limpopo Premier last year issued a secret instruction to his government not to do business with African Times, labelling the paper a so-called “Gupta-funded project”, sources said this week.
They said the premier told his close associates this week that the paper’s expose into his government’s financial mismanagement, and the three-year regression, was proof that he was right about it being funded by the controversial family. “They say they checked on CIPC and found that you (Piet Rampedi) are the only director, which shows you are being funded by the Guptas because you don’t have the money,” said a source.
“They say you also investigated Pravin [Gordhan] when you were at Sunday Times and later defended Steve Motale when he was fired by Citizen.”
Asked whether Mathabatha had personal evidence that African Times was being funded by the Gupta family, his spokesperson Kenny Mathivha replied: “The Premier never did such a thing. He does not discuss media houses, he has never and will not do it now nor in the future.” Mathivha also denied that Mathabatha had instructed his administration to boycott African Times after its launch in August last year.
“Such a thing never happened, and the Premier is extremely busy building a Province instead of gossip. The Provincial Communication would not be engaging AT editor to give him business and we think he should include this engagement in the story, because not doing so will prompt us to engage further and expose it.”
Mathivha was referring to one of the bulk-buying advertising proposals which African Times submitted to the provincial government in May this year for consideration. He denied that Mathabatha’s claims against the paper smacked of prejudice and a smear campaign aimed at deflecting attention from the premier’s poor governance record.
Mathivha said African Times, a “black-owned newspaper”, was “respected by the Provincial government for its accuracy, promptness and being reliable at all times”.
Who owns African Times?
LAUNCHED in August last year, African Times is owned by Mohlakamotala Media, of which Rampedi is the majority shareholder.
Two Limpopo businessmen (Dr David Sekete and another business man) own a 40% equity stake. However, the investors agreed to make ownership changes (sign the Memorandum of Incorporation (MOI), Memorandum of Understanding (MOU) and Subscription Agreements) only after paying for their 20% equity stakes each within 12 months.
They are expected to formally take their seats as directors and shareholders at the end of this month.