Gordhan: A decade of officials’ conduct to be probed in lifestyle audits

A decade of conduct will come under the microscope in lifestyle audits that will probe government and state-owned enterprise heavyweights active from 2009 to 2019, Public Enterprises Minister Pravin Gordhan has said.

The audits would take place using existing mechanisms and will be used to hold those who have unduly benefited from state resources and procurement accountable.

Gordhan’s remarks are included in a written reply to a question from Democratic Alliance MP Alf Lees, who sought clarity on remarks by President Cyril Ramaphosa during his State of the Nation Address.

Ramaphosa had said in February that lifestyle audits would establish the extent to which government and parastatal leaders and managers were conflicted – if at all – when procuring on behalf of the state.

In his written reply, Gordhan said the audits would focus on the period from April 2009 to date and were planned for completion by March 2019. Eskom had already commenced work on lifestyle audits, he added.

Cabinet members declare their financial interests with the Presidency and the Parliamentary Ethics Committee, while senior management service members declare financial interests with the Public Service Commission annually.

Gordhan, who previously served as finance minister, said entities such as the Public Service Commission, the Special Investigations Unit and the Office of the Chief Procurement Officer would assist in lifting the lid on officials using state procurement to assist cronies.

Several of South Africa’s state-owned entities have been plagued by mismanagement, financial strain and other scandals. Finance Minister Nhlanhla Nene has also noted that audit outcomes of state departments and entities – procuring billions each in goods and services – have suffered immensely due to financial mismanagement and weak governance.

The audits were currently in phase two, Gordhan said.

“The first phase of the audits will cover board members, executives in SOCs (state-owned companies), company secretaries and prescribed officers that had served in the SOCs since 2009 to date.

“The SIU’s mandate will be extended to commence lifestyle audits that will cover all six SOCs under the ministry of public enterprises,” he said.

Gordhan said the second phase of the lifestyle audits, which is currently underway, would focus on officials in supply chain management, auditors as well past and present officials in the department of public enterprises.

“Among others, the work would reflect how SMS members within the Department and SOC officials may have abused their positions of authority to unduly benefit themselves and their family members through state procurement opportunities,” he explained.

He said the audits would be used to hold those who have unduly benefited from state resources and procurement accountable.

They would also enhance procurement governance practices within the department, as well as help to recover monies the state lost as a result of abuse, he added. — Fin 24

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Khulekani Magubane
Khulekani Magubane

Khulekani Magubane is a senior financial reporter for Fin24. 

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