An internal probe into the Civil Aviation Authority (CAA), the government body responsible for air safety, has uncovered a sorry tale of financial mismanagement, inefficiency and sheer management incompetence.
The CAA, funded largely from the public purse, has been dogged by a series of scandals.
Now a report by the CAA’s internal auditor, Sizwe Ntsaluba vsp, shows that the public entity has not corrected issues of corporate governance.
The report, dated December 2003, paints a gloomy picture of widespread misconduct, poor management controls and failure to adhere to regulations, resulting in many instances of ”fruitless expenditure”.
In one instance the CAA paid R800 000 for the rental of computer equipment that was no longer in use despite having bought new equipment for R3,2-million — R600 000 more than what the CAA board had approved.
Senior CAA officials who spoke to the Mail & Guardian this week said the authority’s management woes are affecting its ability to effectively discharge its statutory mandate.
The CAA was established by an Act of Parliament in 1998 to regulate aviation security and safety, which include investigating aircraft accidents. It falls under the Department of Transport and it is funded by user fees and government funding. The report is the latest in a series of management setbacks that have rocked the authority in the past few months.
Two weeks ago the CAA suspended a senior official on allegations that he inflated a subsistence allowance.
The official, KC Marobela, general manager for legal service, was due to appear before a disciplinary inquiry this week.
The CAA was also in the spotlight last year after an M&G investigation revealed allegations of irregularities and corruption against former CEO Trevor Abrahams.
Abrahams’s contract ended last September and was not renewed by the CAA board after an internal disciplinary hearing found him guilty of corruption. Sizwe Ntsaluba reviewed the CAA management accounts for a six-month period ending last September.
The report, CAA officials say, ”shows that the CAA has a long way to go to address problems of financial mismanagement”.
The report exposes the CAA management for failing to deal with financial control weaknesses, which had been identified in prior audits.
”Previously reported critical au- dit findings and recommendations have not been implemented to improve the integrity and reliability of financial and operational information,” the report said.
CAA company secretary Maximiliam Mathabathe this week confirmed the audit report, but said: ”The auditors are still engaging with the management. After that the report would go to the internal audit committee of the CAA board.”
The report incorporates, in some instances, the CAA management’s response. In the report, Sizwe Ntsaluba said the CAA’s internal control systems ”are partially adequate but ineffective to ensure that the CAA board and the executive management can fulfil their responsibility to control CAA’s revenue and expenditure; safeguard the assets of CAA; ensure integrity and reliability of financial and operational information and ensure compliance with laws, regulations and contracts”.
The report’s findings include:
l Purchase of computers: In May last year the CAA board approved the purchase of computer equipment from two IT companies, Masakhane and Nabithi Technology, for an amount of R1 484 373 and R1 181 513 respectively. However, orders that were eventually placed with the two companies exceeded the amount approved by the CAA board by more than R600 000. ”Management could not provide us with documentary evidence supporting approval to exceed the amount initially authorised by the board. Numerous attempts were made by us to obtain the processed invoices, however these could not be provided to us,” the report said.
l Rental of computer equipment: The CAA had a rental agreement with Rentworks and the contract expired in March last year. In June the CAA bought its own computer equipment and Rentworks’s equipment was placed in storage. Despite this, the CAA paid R837 420 rental for the equipment that was no longer in use. ”At the date of our report, there was no evidence that the CAA gave notice to terminate the contract with Rentworks, and could therefore be liable for rental under the terms of the expired agreement [the agreement states that the CAA must give Rentworks written notice of intention to terminate the agreement at least 90 business days prior to expiry of the agreement. If the CAA does not give the notice, the contract period will be automatically extended for a further term of 12 months].”
l Disposal of vehicles: The CAA sold vehicles to staff without using book values and the transactions were not signed by the manager responsible. This means that there can be no guarantee that the correct values were arrived at.