/ 6 March 2012

Little progress on AG’s SABC findings

Little Progress On Ag's Sabc Findings

The South African Broadcasting Corporation (SABC) has implemented little or none of the auditor general’s recommendations on improving corporate governance at the state broadcaster, MPs heard on Tuesday.

Sully Motsweni, head of compliance and monitoring at the SABC and chair of the AG task team, told Parliament’s portfolio committee on communications that most executives at the broadcaster had left the organisation since the AG’s report was compiled in the second half of 2009.

“Despite the critical findings and recommendations of the AGSA report dated September 2009, there was little or no implementation of the recommendations at 30 November 2011,” Motsweni said.

This was because most of the executives who were charged with these responsibilities had left.

AG uncovers a lot of problems
Auditor General Terence Nombembe uncovered widespread mismanagement and fruitless and wasteful spending and his report contained various recommendations for the broadcaster.

Motsweni said the root causes of the problems at the SABC were “still prevalent”.

“It is our view that most of the investigations conducted by the SIU [Special Investigating Unit] were not brought to conclusion as many cases have been referred back to the SABC for further investigation,” she said.

It had also become apparent that most of the work by the SIU, which had cost the broadcaster R19.5-million, had already been done by other groups, including auditing firm KPMG, legal firm Cliffe Dekker Hofmeyr, the AG and an SABC internal audit.

“Since the initial engagement, most investigations are still in progress or at a quality control stage,” she said.

Signs of progress
Motsweni said the SABC task team had made progress in cracking down on some abuses.

Nine criminal cases had been lodged and more than R200 000 recovered, she said.

These included an investigation that was underway into the South African Music Rights Organisation (Samro), a new case relating to the 2010 World Cup public viewing areas, and the arrest of two “suspects” in connection with fictitious invoices.

Five criminal cases had also been opened following the investigations carried out by the SABC’s group internal audit.

One of these included a fraud case against the former head of the SABC’s legal services, Mafika Sihlali.

Sihlali allegedly outsourced legal services to a company belonging to co-accused Sylvester Sithole. This was despite the SABC having sufficient capacity to handle these services.

Sihlali allegedly received R2.5-million from Sithole through a football club account he held.

Warrant of arrest issued
Motsweni said a warrant for arrest had been opened for a service provider on the run, who was wanted regarding fictitious invoices in 2007 related to the broadcaster’s Woman of the Year Awards.

A full report is expected from the SIU at the end of March.

She said of the 20 SABC employees who conducted business with the public broadcaster, only one had obtained permission from their respective line managers.

Charge sheets had been drawn up and letters had been sent to the 19 employees enquiring why they had breached procurement rules.

Abuse of petrol cards
Petrol cards had since been withdrawn from all senior managers, except for fleet cars and those allocated to sales team members. Limits had been placed on the cards and measures taken so that the cards could only be used for petrol and toll gates.

Motsweni said the SIU had recovered R203 000 from two SABC officials.

This included R180 000 for abuse connected to an official who had taken his child to the 2008 Beijing Olympics and R23 000 from staff members who had abused the organisation’s petrol cards.

The troubled public broadcaster received a shot in the arm from the Treasury when it faced a cash crisis in 2009 after Finance Minister Pravin Gordhan approved its application for a R1.47-billion loan guarantee.

Among the stringent performance-based conditions put in place was that the SABC raise advertising revenue by R535-million and sponsorship revenue by R128-million.

SABC fails to meet all its guarantees
The SABC was also instructed to trim its R1.5-billion salary bill and increase net profits. Although some of the conditions were met, the SABC failed to cut the salary bill and raise revenue.

A task team comprising high-ranking officials from the department of communications, the treasury and the SABC told the portfolio committee that the broadcaster was projecting a net loss of R92-million for the financial year ending in March.

SABC board member Suzanne Vos said a lot of work still needed to be done to tackle the problems at the organisation.

There were still some employees who tried to defraud the public broadcaster, she said. — Sapa