The auditor-general’s report to parliament on the Transkei Public Debt Commission is a litany of corruption and incompetence, writes Gaye Davis
SPARE a thought for Eastern Cape premier Raymond Mhlaba, for he has inherited the shambles left by the administrative collapse of Transkei. Spare a thought too for taxpayers, for they will be footing the multi- million rand bills racked up by incompetence, laxity and mendacity of the homeland’s civil servants.
The gory details are spelled out in the auditor- general’s reports on the Transkei Public Debt Commission and 16 parastatals, including the University of Transkei (Unitra), which were tabled in parliament this week.
Transkei’s former military ruler General Bantu Holomisa wasn’t present when the corrupt flesh of the Transkei’s rotten administration was laid bare: the deputy minister of Environment Affairs and Tourism was attending a Commonwealth plastic waste conference in Malaysia.
Had he been present, he would have learned how homeland officials persisted with incorrect or lax accounting procedures, despite these having been identified and highlighted in previous auditor-general’s reports.
At Unitra, for example, lack of accounting knowledge by staff led to monies being dealt with in the wrong accounts — distorting the university’s financial position, hindering effective budgetary control and making informed decisions difficult if not impossible.
There was little or no security over fixed assets. Departmental heads would resign and staff left behind had no knowledge of where things were. There was no monthly check by department heads to confirm employees on the payroll in fact existed. There was no formal documentation from department heads informing the personnel department of staff resignations and department heads weren’t required to get clearance on resignations so that loans could be repaid or university property reclaimed. Nor could the auditors locate most of the title deeds for properties owned by Unitra.
The accounts of the Transkei Public Debt Commission (PDC) revealed a poor accounting system, missing certificates for stocks and treasury bills, incorrect account allocations and no files kept on PDC investments, including some R461-million invested with banks.
Investment income was lost by keeping surplus funds in current and call accounts bearing low rates of return. Budget expenditure figures for the year ending 31 March 1993 were not provided, so expenses for that year could not be vouched for. Documents relating to expenditure of more than R18-million were missing.
Minutes of board meetings were not properly filed. The PDC lost a lot of money through lack of controls and inefficient collection of money owed it: there were no lease agreements for 24 of 33 tenants in commercial properties owned by the PDC, no checks were run on interest due from financial institutions and late interest payments on loans granted by the PDC were not chased up.
The reports on projects such as the Qamata Irrigation Scheme, started in 1970 as a rural development programme and, 25 years later, still reliant on government funds to continue as a going concern, reflect a similar spread of inept accounting. A schedule of payment certificates from the Transkei government for the scheme showed a total of more than R330 000 had been received but the amounts were not traceable to bank statements or deposit books and it was unclear whether the money had been banked.
At the Ncora Irrigation Scheme, a payroll audit showed wages being paid to non-existent employees, among other anomalies. Fixed assets could not be physically located.
A report on the Magwa Tea Corporation showed it was insolvent by the end of March 1993 and that the operating budget for 1994 posted a loss of about R10- million. While government intended making a R20-million cash injection, cash-flow and solvency problems would soon arise if financial support was not ongoing — especially as some R6-million in loans had to be repaid, the report noted. Lax accounting practices made it impossible to verify whether assets worth more than R19- million in fact existed.
The Transkei Unemployment Insurance Fund (UIF) had no formal investment policy for funds of more than R246- million; decisions were being taken by the UIF commissioner on the advice of the UIF’s investment brokers — despite their appointment being irregular and the potential for earning significant commissions by investing in particular securities.
Nor was any register of investments kept by the UIF, which relied on periodic statements from its brokers — sometimes incomplete summaries. An audit of employers’ contributions revealed missing, incorrect and incomplete files. One inspector was required to cover the whole of Transkei and made his reports verbally.
An audit of the Transkei Workmen’s Compensation Fund revealed massive irregularities in payments of claims, including overpayments. There was no means of checking where employers were in default with contributions.
Earlier this year, in response to a statement by President Nelson Mandela that millions, if not billions, had been siphoned out of public coffers by corrupt civil servants, Holomisa blamed the former National Party government for underfunding the homeland and delaying transfers of funds from the central exchequer. “… the problem is not of Holomisa’s making,” he said.
De Klerk responded by denying there was ever a cut-off of funds to Transkei, saying the backlogs and imbalances of which Holomisa complained could be “ascribed to a large extent to the mismanagement of the Transkei under his regime”.