By Ntombi Mhlongo
The Public Accounts Committee (PAC) has come down hard on the executive personnel of most of the country’s public enterprises.
In its recommendations towards findings made by Auditor General (AG) Timothy Matsebula in his Compliance Audit Report for the financial year ended March 31, 2021, the PAC noted that there were a lot of anomalies in the public enterprises. It also found that most of them occurred over several years but the Public Enterprise Unit (PEU), which is legally entrusted with the responsibility of monitoring public enterprises failed to execute its mandate.
As a result, the PAC stated in the report that the chief executive officers (CEOs) and Boards of public enterprises did as they pleased, sometimes even defying Parliament resolutions. It also stated that chief financial officers (CFOs) of parastatals acted as CEOs and approved irregular expenditures.
“Some CEOs and CFO are working without contracts. Some CEOs and Boards defy the Controlling Officers of their Ministries. Boards are failing to monitor the performance of CEO and allow employees to resign while owing the institutions. Parastatals are failing to submit audited financial statements while some submitted fraudulent statements,” reads part of the report.
Following the findings made by the AG, the PAC has made tough recommendations on the public enterprises which are housed in the various ministries. One of them is the Eswatini Tourism Authority (ETA) which has a long-standing case of a cash control account made up of payments issued amounting to E19 771 409.48, cumulatively, in the financial years ended 31st March 2016 to 2021, but could not be allocated to the correct expense accounts due to lack of supporting documents, something which resulted to unaccounted public funds.
The recommendation made by the PAC is that given that the authority’s CEO was given several opportunities to account for the funds but failed to do so, the Controlling Officer (principal secretary) should institute a forensic audit of the authority within three months after the adoption of the PAC report.
The report of the forensics should be tabled within 12 months and must cover the period between the 2016 and 2021 financial years. The National Disaster Management Agency (NDMA) has also been caught in the wrong by the PAC. This was after the AG reported that about E15 million was diverted from the Layoff Relief Fund to the NDMA’s account number and that only E11 million was transferred back to the fund in varying instalments resulting in unreimbursed funds of E4 million while there was no document received during the audit granting authority to NDMA to divert the funds.
The recommendation by the PAC is that The Controlling Officer should ensure urged that such decisions are made by either his office or the NDMA Board and not by management as they have no authority to take such decisions.
Also, the PAC recommended that the Controlling Officer should account for the interest that was generated by the diverted funds within seven days. The Eswatini Electricity Company (EEC) has also been included in the PAC recommendations following findings by the AG that the company made payments amounting to E2.72 million to Netcare Hospital (Pty) Limited relating to the former Managing Director’s (MD) medical expenses during the 2020/2021 financial year without obtaining approval from the Board of Directors.
The recommendation by the PAC is that the Controlling Officer in the Ministry of Natural Resources and Energy should institute disciplinary measures against the members of management involved in the whole transaction and the Board members who failed to exercise their fiduciary duties. The National Agricultural Marketing Board (NAMBOARD) also has a case to answer following a finding by the AG that assets valued at E49 897 were missing during a physical verification exercise and could not be accounted for. The PAC has recommended that the money should be recovered, and proof provided within 30 days. The Micro Projects Programme Coordinating Unit (MPCU) is also on the list of departments where the PAC has called for action to be taken.
This is in relation to a case where the AG made a finding to the effect that when he returned to a certain school a day after his first audit, he discovered that the material issue stock book had been unlawfully altered to cater for the stolen cement. The person who made the alteration was not aware that the Auditor General made certain symbols on the documents to prevent such.
In making its recommendation, the PAC first registered a concern that the Controlling Officer seemed to be taking the matter lightly, yet fraud was committed at the school.
OTHER RECOMMENDATIONS PY THE PAC:
|Name of public enterprise||Finding by Auditor General||Recommendation by PAC|
|Sincephetelo Motor Vehicle Accidents Fund (SMVAF)||Fund purchased gift hampers including alcoholic beverages for stakeholders and staff members amounting to E379,685.00||The Controlling Officer be fined E400.00 for this anomaly. She is further directed to discipline all the officers who were involved in this transaction and submit a report within three months on the action taken against the employees.|
|Eswatini Public Procurement Regulatory Agency (ESPPRA)||Existence of Material Uncertainties which include accumulated deficit of E3 138 189||Review the need/relevance of the Agency in light of the challenges it is facing and submit a report within six months.|
|Eswatini Television Authority (ETA)||Long outstanding creditors’ balances amounting to E4 340 308.06, have been outstanding for a long time with some going as far back as the year 2011||Controlling Officer urged to get the funds and pay the debts in order to avoid legal costs as some of them are 10 years old.|
|Royal Science Technology Park (RSTP)||Wage bill at 87.4% of the subvention received from government and only 12.6% left to finance the operations, repaying liabilities and increasing assets.||Come up with a turnaround strategy on how to make the Park sustainable and submit updates every six months on progress.|
|Eswatini Posts and Telecommunications Corporation (EPTC)||Payments to Telecom South Africa amounting to E2 454 928.42 revealed that the EPTC did not withhold any tax.||Since matter was being investigated by the Eswatini Revenue Services (ERS), an update should be submitted.|