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Audit concerns at Tourism Department and SA Tourism

Minister hints that R98m in irregular expenditure at tourism agency could be behind its CEO’s suspension.

The national Department of Tourism has received a qualified audit from the Auditor-General, while R98 million in irregular expenditure has been flagged at SA Tourism for the 2018/2019 audit year, Tourism Minister Mmamoloko Kubayi-Ngubane revealed in a statement on Friday.

Kubayi-Ngubane, who took over from Derek Hanekom in May, said she “received with concern” the annual performance report of SA Tourism and the audit outcome of the department.

Read: SA’s international tourist arrivals ‘not looking good’

She cited an unidentified amount of fruitless and wasteful expenditure related to Expanded Public Works Programme (EPWP) projects within the department as the main reason behind the qualified audit. “While the department received a qualified audit, it has managed to achieve above 80% [for] performance,” she said.

The minister’s comments on SA Tourism’s audit performance, however, shed more light on issues at the national tourism agency that saw its CEO, Sisa Ntshona, being put on “precautionary suspension” in April.

Sisa Ntshona, SA Tourism’s suspended CEO. Image: Supplied

Moneyweb reported last week that Ntshona is now facing an internal forensic inquiry. SA Tourism’s board suspended him following a tip-off from a whistleblower that led to the board appointing law firm Bowmans to undertake an independent investigation.

Read: SA Tourism: Why are whistleblower allegations still a secret?

Allegations against Ntshona were never revealed publicly. The Bowmans investigation was completed in July, and Moneyweb understands that it forms the basis of the internal inquiry currently underway.

In addition to revealing the R98 million in irregular expenditure at SA Tourism, Kubayi-Ngubane raised concerns in her statment on Friday about SA Tourism’s overall audit performance of 56% against its annual performance target.

Following Moneyweb’s initial report on the matter on Monday, SA Tourism’s acting CEO Sthembiso Dlamini clarified that the national tourism agency had in fact received an unqualified audit opinion from the Auditor General. However, she said that there were “material compliance findings” related to the R98 million in irregular expenditure.

“The findings in the 2018-19 financial year are related to four incidents of contractual variations. SA Tourism has presented the circumstances and reasons to the Auditor General’s office in relation to these findings,” she explained in a brief statement to Moneyweb. 

And all that jazz …

While Minister Kubayi-Ngubane did not go into detail about the irregular expenditure, former insiders at SA Tourism told Moneyweb on condition of anonymity that some of the irregular expenditure relates to the agency’s sponsorship of events such as the Cape Town International Jazz Festival.

Kubayi-Ngubane held a meeting with current SA Tourism staff and the board on Friday. “A number of issues were raised including how to turn the corner and ensure improved performance in the current financial year and the following years,” she said.

“The CEO of SA Tourism, Sisa Ntshona, is currently going through a disciplinary process as instituted against him by the board,” she added. “This was after an investigation by Bowmans.”

Read: Rising Cape Town dam levels to buoy agriculture and tourism

Kubayi-Ngubane said in her statement that following the Bowmans investigation report being shared with her, and having noted the seriousness of the findings, she gave concurrence for the disciplinary process to be instituted.

While she reiterated that she believes Ntshona “must be afforded his day to answer on these serious investigation findings”, she did not go into further detail. “This process must be allowed to take its course and the board [has] appointed an independent chairperson to ensure fairness of the process,” she added.

Moneyweb reported last week that in addition to Ntshona’s suspension, four SA Tourism board members have since resigned, including chair Pam Yako and deputy chair Tanya Abrahamse.

“The stability and well-functioning of SA Tourism remains an urgent priority,” said Kubayi-Ngubane.

“And as such, I will in the coming weeks embark on a process to replace both board chairperson and deputy chairperson.”

She added that she is confident that the men and women at SA Tourism, under the leadership of acting CEO Sthembiso Dlamini and interim board chairperson Ravi Nadasen, would “help turn the tide of performance” at the agency.

Public Works projects

Commenting on the negative audit findings related to EPWP projects within her department, the minister noted that a forensic investigation will be conducted to fully deal with the issue. Moneyweb understands that challenges around the EPWP initiative go back several years.

Read: Transnet disputes qualified audit finding

“The EPWP capital projects have experienced many challenges – among them poor project implementation and other systems failures. These challenges in the EPWP capital projects led to the department incurring fruitless and wasteful expenditure,” she said.

“The sixth administration has committed itself to clean governance, accountability and transparency.”

More significantly, she added, is the importance of consequence management where things have gone wrong.

“It must be noted that in cases where clear information of wrongdoing is available, criminal cases and civil claims have been instituted against service providers by the accounting officer,” she said.

“Furthermore, as a department, we have placed two senior managers on precautionary suspension while the investigation is being conducted.”

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If there was wrongdoing when are the arrests and prosecutions going to happen? Even for those who resigned?

Next three years will be spent on the inquiry, the findings, the appeals and some way of trying to ensure nobody is guilty (nobody is the famous SA scoundrel). All this while on full pay, doing no work. By the time the indecisive conclusion is reached everyone will have forgotten about it and all concerned will have moved on to different scandals and stories of yet more corruption. No arrests or prosecutions. The record to date speaks for itself. No doubt your question was put rhetorically.

Anybody surprised at these ANC cadres anymore?

The rule should be that any qualified audit that isn’t remedied within 90 days results in firing of the 3 top people in that department.

Only R98 million ? Cheap round. This must be one of their best performing departments. I’m sure a new batch of re-deployed cadres will get it right and take it into the billions.

This Department is the reason that we have so many illegal immigrants. They want our borders left wide open without anyone being vetted, and in fact to do that, immigration and customs officers have been turned into a cheering and welcome troupe of clowns at places like O.R. Tambo International Airport. As a result they don’t ask serious questions, and if you get the visa or seek it upon arrival, they just fall short of giving you a hug and a hook up. It is tougher to get into Disney World in Orlando, that to enter this country because of prioritizing a couple of rands over long term costs of these overstayers (people overstaying their visas because they had no intention to depart in the first place. Get rid of this department – its more harm than help.

R98 million in irregular expenditure? Not even a billion! What’s the fuss?

And are those ‘two senior managers on precautionary suspension while the investigation is being conducted’ on full pay? And for how long? How hard is it to read the documentation and fire them?

How has it been possible for this government to find SO many inept, corrupt and stupid people to appoint to run this entities?
Are there really SO many of them on earth?

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