More than a year after two damning reports of financial mismanagement at the Agricultural Research Council (ARC), potentially costing R150-million, no action has been taken against the senior staffers indicted in the report.
In fact, Minister of Agriculture and Land Affairs Thoko Didiza stepped in to reverse the suspension of the ARC’s chief financial officer, Lazarus Gopane, in the wake of the reports commissioned by the ARC board.
Didiza ordered the reversal on grounds of ”procedural inaccuracy”, insisting that the suspension could only be effected by the CEO, president or acting president. At that stage, CEO Nthoana Tau-Mzamane was on leave and Gopane was the acting president. He would thus have had to suspend himself.
Since Gopane was reinstated, no further action has been taken.
One of the reports finds Tau-Mzamane failed to exercise adequate financial control and was repeatedly absent from work. She was said to have awarded herself several months’ leave without a proper explanation.
An investigation in November 2004 by a Pretoria-based advocate, Ben Stoop, focuses on the relationship between Gopane and employee Morailane Morailane, who had previously worked together at Rand Water.
Among other alleged irregularities, Gopane was found to have appointed and promoted Morailane without following procedures and to have paid him a R60 000 bonus for which the investigators could find no justification.
The reports paint a distressing picture of Africa’s only agricultural research institute. Stakeholders like AgriSA and GrainSA have been vocal about the decline of research output at the ARC .
The ARC’s annual report, tabled in Parliament last November, reflected ”non-compliance with the Public Finance Management Act with regards to internal controls and the submission of financial statements”. Officials said as much as R150-million might have been lost because of financial mismanagement and corruption.
Financial investigators Integrasol, who reported in February last year, found that the council had spent R18,2-million on consultants in 2004, a R5,6-million increase over the previous year. It could not rule out the possibility that one or more executives might have had an interest in independent contractors used by the council.
Integrasol was worried about the council’s ”low [financial] control consciousness” and the fact that policies and procedures are not adopted timeously. The investigators also point out that in 2004 external auditors could not rely on the work of their internal counterparts.
Agriculture department spokesperson David Tshabalala said the minister only intervened to ensure due process was followed.
”The department does not get involved in the hiring and firing of officials of the ARC,” he said. ”We leave the administration to the CEO and her board, and only deal with legislative issues regarding the institution. Thus the suspension of Gopane should be by the CEO herself.”
Gopane took office in October 2003 and appointed Morailane as a consultant a month later. He then ordered Morailane to be appointed as a full-time council employee for six months at a monthly salary of R45 000.
Stoop found that Morailane’s contract was renewed without a report being issued on the quality of his work. Gopane also instructed the payroll office to pay him a R60 000 bonus.
”The CFO [Gopane] indicated that the bonus was paid because Morailane satisfactorily completed all the projects or tasks listed in … the agreement,” Stoop wrote. However, he was unable to confirm Gopane’s claim.
Gopane received a 6% salary increase, which Stoop indicated was reserved for permanent ARC employees. Stoop recommended that Morailane’s unauthorised salary be paid back to the ARC.
The ARC has disqualified the reports’ findings as unsubstantial, the organisation said in a statement prepared by its communication consultants.
”The [auditor general’s] audit opinion does not support the allegations of financial mismanagement. [This] is an indication that they had no substance,” the organisation said. It added that Gopane faced a disciplinary hearing chaired by an independent senior counsel, and was exonerated. Morailane, however, never faced a hearing.
The parastatal says a review of the Integrasol report does not support the above assertion that the ARC is ”spending too much on consultants”.
In a written statement Gopane and Morailane told the M&G that a contractual agreement existed with Morailane, which made provision for a bonus payment on successful completion of the agreed deliverables.