PMTE CFO appointment at Public works: hearing; with Deputy Minister

Public Accounts (SCOPA)

27 November 2018
Chairperson: Mr T Godi (APC)
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Meeting Summary

The Standing Committee on Public Accounts (SCOPA) had to cancel the meeting in connection with the investigation into the appointment of the Chief Financial Officer of the Property Management Trading Entity, an entity of the Public Works Department. The Chairperson had received a communication prior to the meeting from the office of the House Chair responsible for committees, which had indicated that the process that had been followed during the engagement with the Public Service Commission (PSC) had been flawed, irregular and illegal, and therefore must be aborted. This was because in terms of Parliamentary procedure, SCOPA could not engage the PSC to conduct any investigation.

Members of the Committee felt that the mandate of SCOPA was being undermined, as its role was to determine whether departments spent their budgets appropriately and to take action if budgets were being misspent. A Member insisted that it should not be prevented from engaging with the PSC to investigate individuals. The work of the PSC was exactly what the Committee had requested. The public sector was investigated by the PSC, and any individual could send a grievance to the Commission for them to investigate. It was therefore difficult to understand why, when a Parliamentary committee wanted to investigate a certain individual who was associated with other individuals in Parliament, it was now being told what to do and how to do it. If this was the case, the Committee might as well not exist.

The Deputy Minister said the DPW was also extremely disappointed at this development, but it appreciated that there were some legal grounds. However, it should be placed on record that the Department had had no role whatsoever in preventing the process from proceeding. The Department retained its extreme unhappiness with what had happened at the last meeting with SCOPA, where a preliminary report of the PSC had been presented, despite an assurance from the PSC that it would not be presenting a preliminary report unless it was in camera. It had been completely irregular. The Department was strongly considering a judicial review against SCOPA, and also taking action against the PSC for the massive irregularities and the huge damage it had done to the reputation of the Minister and Mr Mokgoro.

Members agreed that there should be a meeting with the Office of the Speaker to determine the reasons behind this development  

Meeting report

PMTE CFO appointment investigation

Chairperson said the meeting had been meant to discuss what had been concluded, but there would be no presentation. The Committee would not be considering the report despite the fact that it possessed the report already. A call had been received at around 6 pm the previous day from the office of the House Chair responsible for committees, which had indicated that the process that had been followed during the engagement with the Public Service Commission (PSC) had been flawed, irregular and illegal, and therefore must be aborted. This was because in terms of Parliamentary procedure, SCOPA could not engage the PSC to conduct any investigation. The Commission was expected to know that without a resolution of the House on this investigation, this process could not be concluded.

Guidance had also been sought from the legal division of Parliament, which had confirmed that the process had to be aborted, and formal communication had been received and supplied to Members, A response to this communication had been sent, stating that the Committee accepts the guidance that the process taken was illegal and had to be stopped. However, it was also stated that the Committee was willing to engage further in order to ensure that issues were clarified in order to avoid a repeat of what had happened.

Further guidance was required in order to take the matter forward, because the issues that the PSC had been asked to investigate were very serious, as they referred to challenges in relation to the use of companies that employed individuals by circumventing normal processes and salary scales that were laid out in the public sector.

He explained his uncertainty over whether to call and cancel the meeting, or to wait for the meeting and inform Members of the new developments.

Mr M Booi (ANC) thanked the Chairperson for providing a true reflection of what had happened, the PSC for delivering the report, and the Department of Public Works (DPW) for coming to the meeting. There was not much that could be said or done, and the Committee should continue engaging with the relevant people to find a solution in order to move forward. It was unclear whether the reason the process was being stopped was because of a rule or not.

Ms N Mente-Nqweniso (EFF) said that she was surprised by the developments, and questioned why the Committee had been allowed to call the PSC in the past and receive the information that it had received, and then ask for more information but was now required to stop, and a resolution of the House was suddenly required. If this was the case, then SCOPA might as well stop doing anything because the resolution of the House was taken on the basis of the majority, and if the Committee was investigating individuals that were associated with the majority party, then the resolution would not happen. It meant certain individuals could not be investigated, so why did the Committee police the finances of the state?

The Chairperson clarified that the advice had been provided to the Office of the Speaker. 

Ms Mente-Nqweniso said that this was not how the Committee was supposed to be operating, especially when it came to matters pertaining to the PSC. The work of the PSC was exactly what the Committee had requested. The public sector was investigated by the PSC, and any individual could send a grievance to the Commission for them to investigate. It was therefore difficult to understand why, when a Parliamentary committee wanted to investigate a certain individual who was associated with other individuals in Parliament, it was now being told what to do and how to do it. If this was the case, the Committee might as well not exist.

The Committee needs to see the office of Mr Cedric Frolick, House Chairperson of Committees, to find the basis of their argument and how the office could stop the Committee from doing its work, otherwise SCOPA had to be scrapped as its job was to investigate, and it should be able to use all the resources awarded to it, such as the PSC. The Committee needed to remove people who had been employed wrongfully, as it policed the finances of the state.

Mr D Ross (DA) said that SCOPA’s role was to establish whether departments spend their allocated budgets prudently and act when budgets are being misspent, and extend investigations to legal entities in order to work towards consequence management. If the Public Management Trading Entity (PMTE) in the DPW was non-compliant and there was a lot of irregular expenditure, it was difficult to understand why the Committee was being stopped by the Speaker’s office from engaging with the PSC to provide more information about what was happening in the entity. This rang a bell that there was some damage control being done at higher levels so as to not expose the real extent of what was happening in the DPW and their entities.

The PSC, as a section ten institution, would provide guidance and clarity in terms of what was happening with regard to appointments, and the Committee was supposed to then determine if individuals were guilty or not and further investigate non-compliance in terms of the financial management in that department. When one looks at section ten of the constitution, the PSC, in terms of the conditions of employment, says the Commission is accountable to the National Assembly, and SCOPA is mandated to investigate irregular expenditure, and it should be assisted by an independent commission that will present its findings. The Committee can then take an informed decision as to what is happening in the department. There were very serious allegations, as people had said that there was an individual who had been in full control of a department and entity over many years, and when the Committee tries to find out what is happening, it is being blocked.

He said that he agreed with fellow colleagues that the mandate of the Committee was being undermined, and recommended that the Committee should get an immediate legal opinion. Furthermore, the late notification in cancelling meetings seemed to be a trend now and if this was being condoned by the Committee, then it might as well pack up and go home. SCOPA was  mandated to address the scourge of corruption and mismanagement in public entities and departments, and it should not waver from that.

The Chairperson said what Ms Mente-Nqweniso had said would be taken into consideration, and it was also included in the response that was provided. A meeting with the office was necessary to clarify issues in terms of process, but the fact was that the issues were not going to disappear, so they could not just be ignored because of technicalities

He asked if there was anything the PSC wanted to say.

A PSC representative responded that as far as it was concerned, it had been requested by the Committee through the Chairperson to do was it had done. It had received a communication from the Committee’s office to come to the current meeting, and it had complied. As a constitutional body set up in terms of chapter 10, which states among other things that the PSC is a constitutional body that is independent and is supposed to carry out its duties without fear or favour, it had done what it was supposed to do, and did not want to engage in a debate about technicalities. The PSC would be dictated by Parliament, as it was accountable to Parliament.

Mr Ross said that if the Commission investigated matters, the reports of the investigation should be made available to SCOPA.

The Chairperson responded that these matters would be discussed outside the meeting.

Mr Booi said that a legal opinion had not been seen, and therefore it would be unfair to carry out any interrogations. He encouraged the Chairperson to engage properly with Mr Frolick, and invite the Committee to join that meeting. The Chairperson had just been conveying the contents of a letter that had been provided. He advised that the meeting should be closed so that the Chairperson could carry out his duties.

Deputy Minister’s comments

Mr Jeremy Cronin, Deputy Minister: DPW, said that before the meeting was closed, he wanted to say that the Department of Public Works, and the ministry in particular, had been consistently present during the whole process. It was also extremely disappointed at this development, but it appreciated that there were some legal grounds. However, it should be placed on record that the Department had no role whatsoever in preventing the process from proceeding. The Department retained its extreme unhappiness with what had happened at the last meeting with SCOPA, where a preliminary report of the PSC had been presented, despite an assurance from the PSC that it would not be presenting a preliminary report unless it was in camera. It had been completely irregular.

SCOPA had the right to investigate, and certainly the PSC had the right to investigate, but the Department had been the subject of two parallel investigations and very serious unfounded allegations had been made in the previous SCOPA hearing against individuals. The Department had not seen the final report of the PSC, and the Department had been hoping that in the current meeting it would be able to clarify matters. If there were technical issues, it would accept any recommendations that would be made. However, the allegations of fraud and corruption that were made were on the basis of the preliminary report were extremely irregular, and the Department was strongly considering a judicial review against SCOPA, and also taking action against the PSC for the massive irregularities and the huge damage it had done to the reputation of the Minister and Mr Mokgoro.

The Chairperson said that he did not believe the Deputy Minister. He thought that the current situation was caused by the Department, and proof of the matter could be provided only after engagements.

The meeting was adjourned.

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