PRASA Board members paid R3 million incorrectly but no plan to pay it back

A reply to a DA Parliamentary question has revealed that during the 2016/17 financial year, eight PRASA board members incorrectly received a total of R3 million that they were not entitled to. The reply also confirmed that no plan had been made to ensure the millions are paid back to the embattled entity.

This violates Section 38 (c) i-iii of the PFMA of the general responsibilities of the accounting authority (in this case the PRASA board) which in terms of Section 86 justifies criminal proceedings to be instituted.

The breakdown of the incorrect remuneration is as follows:

(a)(i) During 2015/16 no remuneration monies were incorrectly paid.

During 2016/17 the following Board members had remuneration monies incorrectly paid to them:


Employee No.

(b)(i) & (iii)



Amount paid back


Amount Still owed


Payment Arrangement

(e) & (f)

Interest paid

1. R211 420. 92 Not paid back R211 420. 92 None None
2. R358 532. 19 Not paid back R358 532. 19 None None
3. R245 797. 44 Not paid back R245 797. 44 None None
4. R315 028. 27 Not paid back R236 271. 20 None None
5. R324 036. 04 Not paid back R324 036. 04 None None
6. R350 909. 18 Not paid back R350 909. 18 None None
7. R291 941. 62 Not paid back R291 941. 62 None None
8. R 1 077 322. 12 R 1 077 322. 12 None None

This is especially disturbing considering that the entity’s annual report recently released by the Auditor General found R1 billion in fruitless and wasteful expenditure. PRASA’s net loss for the previous financial year was R925 million.

It is clear that PRASA is in shambles and is plagued by scandal after scandal. The DA will formally write to the Minister of Transport, Blade Nzimande, asking why he has not done anything about this situation. It’s clear that these board members are blatantly ignoring their responsibilities and the Minister is protecting them by not acting.

The DA demands that the Minister explain how more than R3 million was wasted on the over payment of PRASA board members’ remuneration and why no plan was made to ensure that this money is repaid.

DA submits PAIA and parliamentary questions regarding SABC top management salaries

Please find attached a soundbite in English by DA Shadow Minister of Communications, Phumzile Van Damme MP.

The DA will not let the matter of the SABC’s top management’s alleged reduced salaries rest.

The public has a right to know, and fight for that right to know we shall.

We have today submitted a Promotion of Access to Information Act (PAIA) application to the SABC requesting the full salary packages of the public broadcaster’s GCEO, COO and CFO.

PAIA aims to to promote transparency, accountability and effective governance of all public bodies, like the SABC. The grounds for refusal of information in the Act do not apply to the SABC in this instance. We trust that the public broadcaster’s management will reveal the requested information in the spirit of promotion of transparency, accountability and effective governance at the SABC, as they often proclaim to be adherents of.

We have also submitted parliamentary questions to the Minister of Communications, Nomvula Mokonyane requesting full details of the salary packages of the GCEO, COO and CFO, including information regarding the process followed in their employment.

Mokonyane has an obligation in terms of the Rules of Parliament to respond in writing within ten working days. We look forward to a written reply which will provide full details of the information requested.

The SABC is currently facing a serious financial crisis – it has been declared by the Auditor-General to be commercially insolvent. Instead of taking the public into confidence regarding all measures that it will be taking to turn the SABC to calm waters, and how it has, as it claims, contributed to reducing the SABC’s R3.1 billion salary bill, management is choosing to place a veil of secrecy on their own salaries. This at the same time is considering retrenching a bloated middle management staff component and indeed junior staff.

The DA will not stop until the information is made public and will use all mechanisms available to us to provide this information to the public.

SABC 2017/18 annual report reveals top management still earned highly inflated salaries and a public broadcaster technically insolvent

Please find attached a soundbite in English by DA Shadow Minister of Communications, Phumzile Van Damme MP.

The South African Broadcasting Corporation’s (SABC) 2017/18 annual report tabled in Parliament, without the usual press conference and announcement from the public broadcaster, reveals that for the year ending in March 2018, the SABC’s top management still earned highly inflated salaries.

The report also reveals a public broadcaster that is commercially insolvent and received a disclaimed audit opinion from the Auditor-General.

The A-G found that the SABC only achieved 40% of its targets and:

  • Irregular expenditure balance: R5 billion, incurred in 2017/18: R571 million
  • Fruitless and wasteful balance: R230 million, incurred in 2017/18: R84 million
  • Financial loss for the year: R622 million
  • Cash flow for the year: -R1.2 billion

Top management for the year ending 31 March 2018, earned exactly the same inflated salaries of the Hlaudi Motsoeneng era with the basic salaries of the GCEO being R6.5 million, the CFO R4.1 million and the COO, R2.7 million. Group Executives salaries range from R3.8 million (GE: Head of Television), to R3.5 million (GE: Risk and Governance).

In a statement earlier this week, the SABC indicated that “we would like to place on record that the salaries of the recently appointed executive board members and executive management have been significantly reduced...” and refused to reveal the amount of the reduced salaries.

This would mean GCEO and CFO hired in June 2018, may have received reduced salaries, and the COO, Chris Maroleng appointed January 2018, earned the same salary as Hlaudi Motsoeneng.

It is utterly baffling why the SABC will not reveal the reduced salaries of its top management. Reduced salaries should be a source of pride and a way to build confidence that the era of SABC management feeding at the trough has come to an end.

The DA will not let the matter rest.

We have started a “Struggling SABC Monitor” which will run until the SABC reveals the amount that its top honchos earn. As the public broadcaster, this is not confidential information and should be released publicly.

We are committed to ending the days of the SABC being a piggy bank to fill the pockets of the SABC’s management. The secrecy around the salaries only serves to create fears that the feeding at the trough continues. We implore the SABC to put our, and the public’s fears to rest.

DA calls on COGTA to urgently intervene in collapsing municipalities

The DA notes with concern the findings of the Auditor General (A-G), Kimi Makwetu, as contained in the Consolidated General Report on the Local Government Audit Outcomes: 2016-17. The A-G reported “an overall deterioration in the audit results of South Africa’s municipalities” for the period, admitting that it is “five years later, and we are still faced with the same accountability and governance challenges we had flagged throughout these years. There has been no significant positive change towards credible results; instead, we are witnessing a reversal in audit outcomes”.

Despite the grim overall picture painted by the A-G, the DA is proud of the Western Cape’s performance, as 86% of our municipalities received a “good” overall assessment for financial health. Once again the DA-governed Western Cape has come out miles ahead of ANC-governed municipalities, with only 47% of municipalities in second-placed KwaZulu-Natal achieving the same assessment for financial health and none at all in the Free State. This is further proof that where the DA governs our people have transparent and efficient governments.

In the DA-run metros in Johannesburg, Tshwane and Nelson Mandela Bay, we inherited a mess from years of ANC mismanagement. We have, since August 2016, worked tirelessly to run clean governments which deliver services to over 16 million South Africans. Our Mayors will continue to work hard to bring much-needed change and rid the metros of the rot the ANC has left.

Alarmingly, the A-G found that all municipalities in the Free State, 59% of municipalities in the North West and 56% of municipalities in the Northern Cape require interventions. These findings are a damning indictment on the ANC-led governments in these provinces. In particular, Ace Magashule and Supra Mahumapelo have single-handily destroyed local governments in the provinces that they led. Instead of being punished for depriving South Africans of the much-needed change, the ANC has now rewarded them both by simply redeploying them.

The DA strongly condemns the lack of intervention and support from the Department of Cooperative Governance and Traditional Affairs (COGTA) and we call on Minister Zweli Mkhize to timeously address this failure by acting boldly and urgently implementing financial recovery plans in the 83 municipalities which require interventions. It is simply not good enough to have these damning reviews years after our municipalities have been plunged into a state of crisis. COGTA must have a far more active role in ensuring that we do not lose billions to corruption like has been the case for the past 3 years.

It is clear that South Africa needs total change. The ANC has demonstrated it cannot be trusted to run clean and effective governments.

Auditor General exposes corruption in the Expanded Public Works Programme

A report from the Auditor General on the Department of Public Works’ Expanded Public Works Programme (EPWP) has revealed that the program is riddled with poor administration and corruption that has seen payments being made to ghost workers, individuals without identity documents and a poor paper trail on payments made.

The report was presented during a briefing by the Department on Monitoring and Evaluation (DPME) and Office of the Auditor General on the 3rd Quarter 2017/18 Performance of the Department of Public Works and its Entities.

The DA will write to the Minister of Public Works, Thulasi Nxesi, requesting that he launches a full-scale investigation in the EPWP programme to expose individuals who have been ‘cooking the books’ to line up their pockets to the detriment of millions of South Africans sitting at home without work.

The audit report revealed that:

• reported beneficiaries in EPWP programmes were in some cases deceased.
• identity documents of some beneficiaries were found to be invalid.
• work opportunities at EPWP projects were not always supported by reliable supporting evidence, such as identity documents, attendance registers and proof of payments.
• some beneficiaries were included on multiple projects when they worked on only one project.
• beneficiaries not listed on the beneficiary list of the project.

This is clear evidence of gross manipulation of the EPWP to corruptly benefit DPW employees charged with administering the programme or entities working in partnership with the Department. Worse still, the Department has missed its target of employing more job seekers by more than 375 000 based on the combined Quarter 1-3 of Financial Year 2017/18 target of 1.8 Million job opportunities.

Minister Nxesi must take urgent steps to ensure that investigation into this corruption is concluded urgently and the implicated individuals brought to book.

SAA and Mango Audit reports a ‘horror show’

South African Airways (SAA) and Mango airlines have received qualified opinions according to their audit reports, which were due in September last year, tabled in Parliament today. The reports can be found here and here.
The adverse findings by the Auditor General partly explain why there has been a such a reluctance by SAA to release its financial statements for 2016/17, which are yet to be made public after former Finance Minister Malusi Gigaba requested an extension after SAA missed the deadline.
The DA will write to the Finance Minister Nhlanhla Nene asking him to release SAA’s financials as a matter of urgency.
It is odd that the Auditor General has chosen to table the audit reports in Parliament, which is a complete departure from standard practice where audit reports are released as part of annual reports.
The audit reports expose a horrific picture of poor governance and alleged instances of looting, such as:
• assets not being recorded in financial statements, while the existence of some assets recorded could not be verified.
• SAA’s Technical unit’s inventory could not be verified and there is a lack of controls in place to manage the inventory.
• glaring accounting irregularities on maintenance costs and using incorrect exchange rates were recorded.
• the SAA group has not established controls to maintain complete records of irregular expenditure and wasteful expenditure
Minister Nene will need more than a good reputation to clean the mess at SAA. It is a horror show which requires a complete change to the culture and business model of the airline if its fortunes are to be revived.

SARS unlawfully pays out R3 million in staff bonuses

The South African Revenue Service’s (SARS) Annual Report, tabled under the cover of darkness late last night, has revealed that SARS allegedly failed to comply with legislation by unlawfully paying R3 million in bonuses to members of the Executive Committee.
The fact that there does not seem to have been any bonus paid to the SARS Commissioner himself would seem to indicate that he was aware of the legal requirement to obtain the Finance Minister’s approval and so stopped short of paying a bonus to himself. Despite this, he went ahead and paid astronomical bonuses to senior executives such as the R930 000 paid to Jonas Makwakwa who is under investigation by the Hawks for possible money laundering.
The DA will now interrogate this non-compliance and question SARS thoroughly when they appear before the Standing Committee on Finance next week Tuesday.
The tabling of the Annual Report missed the Parliamentary deadline of 30 September 2017 because of a dispute between SARS and the Auditor-General (AG) with regard to the payout of these bonuses.
According to the AG, the non-compliance represents a significant internal control deficiency that resulted in material non-compliance. This is because, according to section 18(3) of the SARS Amendment Act, management needs to obtain approval for bonuses from the Finance Minister.
SARS narrowly avoided a qualified audit opinion and this is indicative of institutional decay at the revenue service.
One of the main concerns of the ratings agencies is the weakening of institutions of which SARS lies centre stage. The crisis at SARS only adds to the possibility of yet another downgrade by Moody’s and S&P, who are expected to make an announcement tomorrow.
The continued institutional weakening and scandals that have rocked SARS recently is perpetuating the notion of a Tax Revolt. This is the last thing that we need in South Africa given that we are already facing a R50.8 billion revenue hole.

R2 billion in irregular expenditure by Departments of Human Settlements could have built more than 16 000 RDP houses

According to the Auditor-General (AG), Kimi Makwetu, various Provincial Human Settlements Departments have lost billions, which could have been used to build more than 16 000 RDP houses, to irregular expenditure.
According to the AG presentation, the following provinces are the biggest offenders:

  • Free State – irregular expenditure of R974 million;
  • Mpumalanga – irregular expenditure of R745 million;
  • KwaZulu-Natal – irregular expenditure of R559 million; and
  • Gauteng – irregular expenditure of R345.5 million.

These four provinces, collectively, account for R2 billion in irregular expenditure.
While hundreds of thousands of people on housing waiting lists are denied the dignity of owning a house, the ANC government is failing to spend available funds to deliver houses.
The fact that the money lost to irregular expenditure could have been used to build more than 16 000 RDP houses is an unacceptable waste.
The DA will write to the Chairperson of the Human Settlements Portfolio Committee, Ms Nocawe Mafu, to request that she summons Minister Lindiwe Sisulu and all the implicated MECs to appear before Parliament to account for this shocking careless expenditure.
This is clear indication that the ANC has forgotten about our people. They simply do not care about the people who have been waiting for decades for a house.
Minister Sisulu’s failure to respond immediately to these damning revelations is indicative that she is neglecting her ministerial responsibilities in pursuit of her Presidential ambitions for the ANC.
The DA will await the Minister and the MEC’s appearance before Parliament to account for the monies which could have gone towards improving the poor South Africans’ lives and bringing them a sense of dignity they deserve.

Basic Education Department failed our children by missing construction targets

The Department of Basic Education’s (DBE) annual report reveals irregular expenditure amounting to R1.4 billion and underspending of R874 million on a critical programme which is responsible for school and infrastructure construction. The underspending on payments for capital assets in the school infrastructure budget is R558 million.
Given these massive problems in the construction of schools and school infrastructure, DA Deputy Shadow Minister of Basic Education, Nomsa Marchesi MP, will now conduct oversight visits to failed and delayed school projects in the fourth Parliamentary term.
Next week, the Parliamentary Committee on Basic Education will also receive a briefing by the Financial and Fiscal Commission on spending patterns on infrastructure and the Accelerated Schools Infrastructure Delivery Initiative and will thoroughly interrogate the issue following this.
School infrastructure should be a major priority for the DBE, but this is clearly not the case as it failed to achieve their targets for all four school infrastructure performance indicators.
Schools cannot be fixed – or even built – if the issue of irregular spending is also not resolved. Among the main reasons many schools have not been completed is the fact that contractors were changed without proper procedures being followed. The Auditor-General drew special attention to the high amount of irregular expenditure. This year alone, R621 million was mismanaged in this way.
This points to a complete failure by the DBE to manage this crucial programme properly. The department and the minister, Angie Motshekga, cannot continue blaming provinces and bad contractors for the delay in delivering safe schools.  It is time for them to take responsibility for the fact that thousands of children continue to learn in substandard buildings.
At an estimate of R40 million per school, 14 state of the art schools could have been built for close to 10 000 learners, but the money is simply not being spent.
Basic education is vital for improving the circumstances of South African children and building their futures, but they cannot achieve and thrive if their learning environment is falling apart. The DA will ensure Motshekga and the DBE are held accountable for once again failing our children.

DA reveals evidence that the first phase of nuclear deal is corrupt

The DA can today confirm that the first phase in the nuclear deal has been found to be corrupt by the Auditor-General (AG). The DA is in possession of extracts of the AG’s forthcoming report for the financial year ending March 31 2017.
The AG’s findings are unequivocal – the nuclear procurement process to date is irregular and unauthorised. The report makes the following findings:

  • The procurement of the Nuclear Procurement Management System (NPMS) – awarded to Central Lake Trading t/a Empire Technology and owned by close Zuma ally, Vivian Reddy, was irregular. The original amount of the contract was also inflated from R60 000 to R171 million by the Department of Energy (DoE).
  • The procurement of Nuclear Transaction Advisory Services, awarded to Mahlako A Phahla, was unauthorised as there was vast deviation from the original specifications from 11 work requirements in the original contract to four work requirements – all unrelated to the original, in the subsequent contract issued by the DoE. This deviation meant that the DoE was, in fact, embarking on a new contract which would, in turn, need to be subjected to a new and separate competitive tender process.
  • The AG’s report further seems to confirm last week’s media reports which indicate that Mahlako A Phahla obtained a contract extension without the necessary approval from the DoE’s own bid tender committee or National Treasury, as required by law.

The DA can confirm that AG’s report has served before to the DoEs Audit Committee. However, the DA is reliably informed that the Director General, Thabane Zulu, has refused to sign off.
This may be due to the allegations, as indicated in media reports last week, that Mr Zulu may have played a direct role in both irregular contracts.
The fact is that South Africans cannot afford nor do we need the nuclear build programme and now it appears that the first phase has been corrupted. The DA is currently exploring all avenues on this matter and with a view to legal action should it be warranted.