Shock at 'extent of the rot' at SABC

The South African Broadcasting Corporation (SABC) board is considering taking criminal action against employees and former staff after a “shocking” report on the broadcaster by the Auditor General (AG).

The SABC’s interim chairperson, Irene Charnley, said on Tuesday that the board had agreed to immediately act on all the AG’s findings on supply-chain management, human resources, and wasteful expenditure at the broadcaster.

“We will seriously consider instituting legal or criminal proceedings against individuals who are no more in the employ of the SABC,” Charnley told Parliament’s portfolio committee on communications.

“We have also said we will seriously consider and institute disciplinary actions against individuals still in the employ of the SABC.”

Charnley said the board had appointed two groups of legal counsel to advise on the AG’s report as well as another forensic report that had come to the attention of the board.

Board member Leslie Sedibe had been appointed to coordinate disciplinary actions on behalf of the board.

“We, as a board, can confirm that we are in full agreement with AGSA [the Auditor General of South Africa] that the underlying causes which contributed to the current situation have been the lack of quality reporting, governance arrangements as well as leadership oversight,” Charnley said.

The AG found evidence of hundreds of millions of rands in fruitless, wasteful and irregular spending at the SABC.

Findings relating to supply-chain management “pointed to inadequate monitoring and oversight by the leadership of the SABC” and the creation of the environment at the SABC where “the tone at the top” was inappropriate.

This, according to the report, “seems to have created a culture where management is not focused on public accountability or acting in the best interest of the SABC”.

One of the findings in the 72-page report was irregularities in the awarding of seven tenders, valued at R174-million, between September 2007 and June 2009.

“Evidence could not be found that a total of seven tenders awarded for an aggregate amount of R174-million were approved according to the appropriate levels stipulated in the delegation of authority framework [DAF],” the AG said in the report.

The report also found that 20 employees at the broadcaster were directors or members of companies that had received payments from the SABC to the amount of R3,4-million.

There was a further “deviation” in respect of two contract awards amounting to R8,4-million and R8,2-million, which were not approved in accordance with the DAF, it was found.

Another finding was that the former CEO entered into a material agreement for R326-million with a consultant in September 2006, even though he did not have the authority to do so.

‘Monumental failure’
The report said that no corrective action had been taken to address deficiencies in the acquisition of international programme content, despite the advice of a forensic investigation in August 2007.

The investigation had reported irregularities of R111,75-million relating to double payments, overpayments, material paid for but not received, agreements that had to be renegotiated and programme titles acquired more than once from the same supplier.

“Although concerns and detailed findings were brought to the attention of the acting group CEO and group chief financial officer, as well as the former SABC board in September 2008, no evidence could be provided that corrective actions were implemented by the SABC board or executive management to address deficiencies and possible transgressions in the acquisition of international programme content.”

The report found that R11,3-million was paid from September 2007 to June 2009 to a private travel company for travel arrangements. This was in contravention of the SABC’s travel policy, which required all travel arrangements to be made via the SABC’s own travel office.

The R11,3-million included R7,8-million in travel costs for the Beijing Olympics for the SABC board and its executive.

The report said the former SABC board members and executive managers who travelled with their partners to the Olympic Games were liable for tax arising from the fringe benefits in terms of the Income Tax Act.

“However, the human resources division was not notified of the benefits and did not levy the tax to the employees and former board members,” the AG said.

The report found that employees at the SABC were suspended for an average of 10 months, creating an “environment where management and those responsible for oversight were perceived as being indecisive” and contributed to an organisational culture of “impunity”.

The portfolio committee’s chairperson, Ismail Vadi, was shocked at the extent of the “rot” in the report.

“From the briefing we received this morning [Tuesday], I think we have before us a monumental failure of the executive management around financial controls and management at the SABC,” he said.

“We had a gut feeling that the rot had set in, but I must say that this morning when we got the briefing I was shocked at the extent of the rot.”—Sapa

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