Auditor-general Terence Nombembe has found allegations of irregularities in the way the Commission for Conciliation, Mediation and Arbitration (CCMA) procured goods and appointed key staff members were valid — and resulted in irregular expenditure of R23,6m. A report tabled in Parliament yesterday blamed the CCMA leadership for “inadequate monitoring and oversight in the area of supply chain management”.
CE Nerine Kahn said the commission did not agree with all the findings, many of which were technically exacting, but had already addressed most of them as they had already been raised in last year’s financial statements. “We have also put processes in place to ensure that these things don’t happen again in future.”
While mistakes had been made, the intentions of the management and the board had always been “honourable”. Ms Kahn said the CCMA’s governing council had also condoned much of the irregular expenditure, none of which was found by the auditor-general to be due to fraud or corruption.
The investigation by the auditor- general’s office, requested by Labour Minister Membathisi Mdladlana and his suspended director-general, Jimmy Manyi, highlighted the CCMA’s flouting of Treasury regulations and provisions of the Public Finance Management Act. This related to tender processes between 2007 and this year in the awarding of eight contracts that were not advertised, evaluated and adjudicated as they should have been.
In some instances the successful bidder was chosen on the recommendation of a director and was paid more than the amount in the bid proposal. The commission also incurred fruitless and wasteful expenditure by failing to pay pay-as-you-earn tax to the South African Revenue Service for part-time commissioners and by not paying R1,6m in employees’ contributions to the provident fund in due time.
Mr Nombembe called on the CCMA governing body and executive management to “decisively” address the findings in the report and ensure the implementation of effective accounting and internal control systems. Deficiencies highlighted by a previous auditor-general report had not been adequately dealt with, his report noted. “Within the context of the public service and state-owned entities, the primary responsibility for the prevention and detection of fraud and error rests with management of the entity and those charged with governance,” said the report.
Ms Kahn said the dispute resolution organisation’s funding model continued to be problematic and that once again the organisation would experience a shortfall this year and would have to ask the Treasury for more funds.
Source: Business Day
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