INVESTIGATION AND MANAGEMENT FINDINGS OF AN INTERNAL AUDIT OF THE CHIEF DIRECTORATE: MARINE AND COASTAL MANAGEMENT

REPORT BY THE ACTING DIRECTOR-GENERAL OF ENVIRONMENTAL AFFAIRS AND TOURISM

DECEMBER 1999

INDEX

INTRODUCTION

TERMS OF REFERENCE AND COMPOSITION OF THE COMMITTEE

THE INTERNAL AUDIT REPORT [Read the Audit Report]

EMPLOYEES INTERVIEWED

FINDINGS OF THE COMMITTEE

ACTION STEPS TO CORRECT IDENTIFIED PROBLEMS

SPECIFIC FINDINGS AND RECOMMENDED ACTIONS WITH REGARD TO INDIVIDUAL STAFF MEMBERS

TIME FRAMES FOR FUTURE ACTION

ACKNOWLEDGEMENTS

PART 1
INTRODUCTION

The Internal Audit Division of the Department of Environmental Affairs and Tourism (DEAT) was requested to carry out a review of the financial management of the Chief Directorate: Marine and Coastal Management by the former Director-General. The review was conducted during August 1999.

Arising from the review a report was drafted which indicated an extreme lack of basic financial and administrative procedures and controls, substantial amounts of unauthorised expenditure, transgression of treasury instructions, and potential financial irregularities and corruption.

Previous investigations by the Auditor-General’s Office have failed to detect these irregularities, although it is clear that many of the problems are of a long standing nature.

As a result of the report a Committee of Investigation ("the Committee") was appointed by the Director-General (Acting) of the Department of Environmental Affairs and Tourism by way of a letter of appointment A/4/8/1 dated 16 November 1999. The terms of reference were set out in the letter. (Appendix I)

The Committee had as its objectives to:

interview key employees who were implicated in the internal audit report;
verify the findings of the internal audit report;
gain an understanding of MCM and its management, administration and finances;
determine culpability; and
institute appropriate remedial action(s).

It must be emphasized that the investigation by the Committee was an internal process established by the acting Director-General to verify the findings of the internal audit report, and that it does not constitute disciplinary procedures in terms of the Public Service Act.

Allegations against specific staff members will need to be substantiated in terms of formal disciplinary procedures set up in terms of the Public Service Act.

PART 2
TERMS OF REFERENCE, TASKS AND COMPOSITION OF THE COMMITTEE

The terms of reference were:

to respond urgently to the issues raised in the report, and we [the Committee] therefore need to verify the findings of the report, and determine the appropriate steps to be taken with regard to each of the matters raised, including:

establishing proper administrative and financial procedures and controls;

training and capacity building of staff members;

instituting disciplinary action against staff members involved in mismanagement or corruption;

claiming unauthorised expenditure from the relevant staff members;

initiating criminal procedures where necessary; and

restructuring of management and processes in MCM.

These terms of reference form the basis for the action steps recommended in this report.

The Committee consisted of the following persons:

Dr C Olver, Director-General (Acting), Department of Environmental Affairs and Tourism, (Chairperson);
Mr P Maclons, Deputy Director-General (Acting), Department of Environmental Affairs and Tourism;
Mr L Buys, Chief Director: Corporate Services, Department of Constitutional Development;
Mr S Nyoka, Chief Director: Corporate Services, Department of Land Affairs.
The following observers were requested by the Committee to be present during the interviews with members of Staff:
Mr K Ngema Chief Director, Corporate Services of the DEAT
Mr G Msiza, Internal Auditor

The Secretariat from the Office of the Director-General supported the investigation, and consisted of:

Mr F Mashamba Director,(Cape Town)
Mr B M Fenn, Assistant Director, (Pretoria)

PART 3
THE INTERNAL AUDIT REPORT

During August 1999 the Internal Audit section of the Department of Environmental Affairs and Tourism (DEAT) performed an internal audit review of MCM. The period reviewed was April to July 1999.

The report recorded the results of the internal audit findings and recommended possible ways in which controls and operations could be improved to overcome the identified weaknesses in financial management and control in MCM.

The final report which served before the Committee included MCM management responses to the contents of the report.

The internal auditor reported that he found 29 generic problem areas in the following categories:

Manual cheques

Overtime arrangements and expenditure

Leave arrangements

Unauthorised expenditure

Investment of Marine Living Resources Fund monies

Telephones and cellular phones

Compliance with the Marine Living Resources Act, 1998 (Act 18 of 1998)

Receipts

Subsistence and Travelling

Procurements

Authorisation of payments

Tenders

Subsidised Vehicles

Harbours management

More details are set out in the attached full internal audit report (Appendix II).

The Committee has verified and confirmed all the findings of the internal audit report.

PART 4
EMPLOYEES INTERVIEWED

Twenty eight employees were requested to appear before the committee. The following employees were interviewed over the three day period (1 - 3 December 1999):

Dr M Mayekiso, Chief Director: MCM
Mr G de Villiers, Director: Support Services
Mr D Fredericks, Senior Administrative Officer
Mr N Petersen, Assistant Director: Finance
Mr N Daniel, Deputy Director: Administration
Ms A Booth, Senior State Accountant
Capt G Davidson, Acting Chief Marine Superintendent
Dr R Tilney, Assistant Director: Oceanographer
Dr M Kerstan, Principle Oceanographer
Dr A Cockroft, Assistant Director: Oceanographer
Ms M Burger, Assistant Director: IT and Office Management
Dr T Probyn, Specialist Scientist
Mr C Wilke, Control Oceanographer Technician
Dr A L Payne, Director: Offshore Resource Management
Dr D J van Zyl, Director: Coastal and Inshore Management
Mr A Barnes, Senior State Accountant
Mr M Mashinini, Director: Finance and Logistics
Mr A Venter, Deputy Director: Financial Management
Mr T Potgieter, Senior Provisioning Administration Officer
Mr G Wingate, Deputy Director: IT

In addition, Dr T E Abrahamse (Deputy Director-General: Tourism and Resource Management) and Mr K Ngema (Chief Director: Corporate Services) will have separate discussions with the Acting Director-General to ascertain their role and responsibilities and to address the following:

when were the problems in Marine and Coastal Management first detected;
what steps were taken;
were these steps adequate;
what is the responsibility of the above managers for the lack of internal controls in Marine and Coastal Management.

PART 5
FINDINGS OF THE COMMITTEE

The Committee, after detailed consideration of the responses from interviewed staff members, as well as the results of the internal audit investigation, found that with regard to management controls the following situation prevails:

There is an absence of leadership by MCM management, and a lack of general management competence at the level of the Chief Director and Directors within MCM. Management does not appear to fully understand the seriousness of the situation, or the steps required to deal with it.
Despite the existence of performance contracts for MCM managers, there is a lack of clear job descriptions, lack of clear responsibility for certain critical functions, and confused lines of accountability. The system of performance management within MCM, and between head office and MCM, is grossly deficient. Line officials have not been clearly informed about their responsibilities for financial and administrative control, or the rules and regulations with which they must comply.
The existing organisational structure for MCM in relationship to head office is inherently weak, with fragmented "satellite" financial and administrative systems for MCM which are not directly accountable to the finance and provisioning sections in head office. The Director in MCM dealing with finances and provisioning reports to the Chief Director: MCM.
There has been general failure by head office to exercise internal control within MCM, including a lack of mechanisms to timeously detect irregularities and to respond promptly with corrective actions. Senior management in the Department has also given implicit or tacit approval for the procedures at MCM.
There is a lack of management training and staff development systems within MCM, and a failure by head office to adequately capacitate MCM management in relation to general administrative and financial controls.
There is a "culture" of ignoring instructions and guidelines issued by head office, and a general view that head office does not understand the situation within which MCM has to operate. Rules and regulations are flouted by MCM managers.
There is a lack of basic financial and administrative controls within MCM, including:

a lack of expenditure control, particularly as regards overtime payments;
a failure to comply with treasury regulations and tender procedures in procuring goods and services, particularly in relation to research contracts, I contracts, and personnel contracts for the staffing of vessels;
a lack of segregation of authorisation requirements, in which the person who requests procurement of goods and services can also verify receipt, approve the payment advice and authorise actual payment - this creates a fertile environment for corruption;
a bypassing of the provisioning section in procuring certain goods and services, with goods being delivered to line officials rather than through the provisioning depot;
manual cheques are used frequently, and there is a lack of proper control over manual cheques;
supporting documentation and procedures are not properly verified before payment is authorised;
double payments to companies via electronic banking as well as manual cheques are frequent;
advances to staff for subsistence and travel are not repaid promptly;
this lack of internal controls has resulted in unauthorised expenditure for the current financial year in excess of R24 million.

All contracts which are financed from the Marine Living Resources Fund are unauthorised, and are in breach of the following:

authorisation from the Director-General for the contracting out of the function or service has not been obtained;
there are no delegations from the Director-General to officials in Marine and Coastal Management authorising the approval of contracts;
no approval has been obtained for exemptions from tender procedures;
no tender procedures have been followed.

A total of 56 contracts with a total value of R23.375 million are unauthorised during the 1999/2000 financial year.

The system of administering the Marine Living Resources Fund (MLRF) is deficient, with the following major problems:

recommendations submitted by MCM to the Consultative Advisory Forum (CAF) for expenditure from the MLRF have not been approved by the Director-General - explicit instructions from the previous Director-General in this regard have been ignored;
there is no systematic process for planning expenditure from the MLRF;
the MLRF does not have a separate account, and is outside the Department’s budget vote;
there are no clear procedures or control mechanisms for the MLRF.

While MCM has particular requirements for prompt, responsive research in order to support its core functions, which requires special arrangements for tendering and approving research contracts, such arrangements have never been properly authorised. MCM has developed ad hoc procedures which are not documented, and are communicated between officials by word of mouth.
A number of financial transactions have been detected which are highly irregular, and probably involve misappropriation of funds by officials - these cases need to be investigated in more detail by forensic auditors.
The policy on overtime arrangements for staff on vessels and in the marine inspectorate is deficient, and there is a lack of controls on overtime expenditure, resulting in massive over expenditure on personnel.
FTC members have been remunerated at a "negotiated" rate which is contrary to treasury regulations. Procedures to determine the appropriate category of remuneration for FTC members have never been instituted, resulting in unauthorised expenditure in relation to all payments to FTC members.
There is a lack of credit control systems and procedures, resulting in monies owed to the Department not being recovered. Collection of fees for Fishing Harbours is irregular, and tariffs for fishing companies using the Harbours are not authorised in terms of legislation.

PART 6
RECOMMENDED ACTIONS TO CORRECT PROBLEMS IDENTIFIED

The Committee has recommended a number of action steps that need to be taken in order to correct the problems identified above.

These action steps are dealt with under the following headings:

establishing sound management
organisational restructuring
establishment of internal controls
recovery of funds
disciplinary actions
MLRF procedures
research contracts
corruption procedures
further investigations required

reporting

dealing with unauthorised expenditure

Fishing Transformation Council (FTC) payments.

6.1 Establishing sound management

It is recommended that the programme manager responsibility for MCM is transferred from the Chief Director: MCM to the Deputy Director-General, Dr Abrahamse with immediate effect, and that steps are taken to recruit a new programme manager. The appointment on short term contract of an interim programme manager, pending the permanent appointment of a new programme manager, should be initiated.

The Director: Finance and Logistics should be suspended on full pay pending the outcome of a disciplinary hearing, and the Director: Antarctica and Islands should be appointed as acting Director responsible, in particular, for management of the fishing vessels.

Clear job descriptions, linked to business plans for each component of MCM, as well as performance contracts, must be drawn up for all MCM managers.

A system of quarterly performance reporting and evaluation, linked to a system of rewards and incentives must be instituted.

A management training programme for MCM staff must be designed and implemented, and training, counselling and development of staff on financial and management procedures and systems must be initiated as a matter of urgency.

Staff should be made aware that they are part and parcel of the DEAT. Although MCM has special needs and service delivery goals that should be met, it should be within the confines of the tender regulations and legal financial procedures.

6.2 Organisational restructuring

The subdirectorate in MCM responsible for finances and provisioning must be transferred immediately to the Chief Directorate: Corporate Services, and all requests for provisioning and expenditure must be processed through Corporate Services.

The longer term restructuring of MCM must be expedited, with particular attention to:

contracting out the fleet management function;
transferring the regulation of the fishing industry to the Department of Trade and Industry;
transferring the regulation of mariculture to the Department of Agriculture;
establishing public/private partnerships for the management of fishing Harbours;
agentising and building the capacity of the marine inspectorate.

A specific contract for supporting and expediting the above restructuring should be entered into with a management consultancy.

6.3 Establishment of internal controls

As a matter of urgency the acting Chief Financial Officer (CFO) must establish the following:

all contracts and expenditure must be processed through the acting CFO in head office;
all communication with CAF must be authorised by the Director-General;
all manual cheque books must be transferred immediately to the acting CFO, and no manual cheques may be issued by MCM officials;
all MCM staff must be notified, in writing, of treasury regulations and tender procedures, and instructed to comply therewith;
clear segregation of authorisation, provisioning and payment authority must be established.
access to tender procedures and financial regulations for all staff need to be facilitated in MCM and staff need to be informed and kept up to date on all regulations related to their work areas.

No further staff appointments may be made until a full plan for the appointment of staff within the MCM personnel budget has been submitted and approved.

A policy and set of procedures for control of overtime in MCM must be drawn up as a matter of urgency, with particular attention to the needs of the marine inspectorate and the staffing of vessels.

A system of credit control must be put in place for MCM, and arrangements for collection of fees at Fishing Harbours must be tightened up.

6.4 Recovery of funds

The acting CFO must review all contracts in MCM and all financial transactions identified as irregular or unauthorised, in order to determine whether any expenditure is fruitless or has resulted in a loss to the state. The culpability of the officials implicated in these transactions must be established and steps taken to recover these funds from the relevant officials.

6.5 Disciplinary actions

Disciplinary actions must be taken against the staff members identified in the following section, including Mr Monde Mayekiso, Mr de Villiers, Dr Payne, Mr Daniels, Mr Petersen and Mr Barnes. Mr de Villiers and Mr Petersen should be suspended pending the outcome of the disciplinary procedures, as they are implicated in serious financial irregularities and could potentially interfere with further investigations in this regard.

The Chief Directorate: Corporate Services must prepare charges to be levelled against particular officials, establish disciplinary panels, and prepare the necessary evidence for the disciplinary procedures. An investigation team consisting of Messrs Ngema, du Preez and Msiza should investigate charges against identified members of staff with the support of the Labour Relations section of DEAT.

Letters must be written to all implicated staff members informing them of their transgressions and possible actions that could flow from their actions.

The request from the DG (A4/3/4/14/DG dated 24 November 1999) and the non-compliance therewith needs to be addressed through disciplinary actions against members of management and staff involved.

6.6 MLRF procedures

The management of the MLRF must be transferred with immediate effect to the acting CFO.

All submissions for requests for expenditure from the MLRF must be approved by the Director-General prior to referral of such requests to the Consultative Advisory Forum (CAF).

Proper budgetary planning for the MLRF must be instituted.

A separate account for the MLRF must be established.

A clear system of controls and procedures for the MLRF must be drawn up by the acting CFO.

6.7 Research contracts

It is clear that MCM has particular needs and requirements for research contracts that will require special systems for procurement.

A policy on marine research must be prepared and adopted, with proposals made regarding:

The process of identifying research priorities and preparing detailed research briefs;
consultation procedures with the academic community;
procedures to involve and empower historically black universities, NGOs and black owned and/or managed research organisations in marine research;
processes to ensure value for money in marine research contracts, and to ensure fairness and competition in the appointment of research organisations.

An assessment of the appropriate institutional arrangements for the future management of marine research (e.g. establishment of a separate research institute) must be made, and proposals in this regard put forward.

6.8 Corruption procedures

A number of financial transactions are of a highly irregular nature, and potentially involve corruption and misappropriation of funds.

As a matter of urgency the acting CFO must finalise the list of transactions that require criminal investigation. These cases will be referred to the Office for Serious Economic Offenses for further investigation. The following cases require specific attention:

double payments to companies for vessel staffing, and the investigation of a pattern of payments which indicates collusion with the companies in regard to interest earned on double payments prior to correction of the transfer;
contracts for IT support services which have continued with the same companies for many years without any tendering process;
irregular payments to printers in which the official involved in ordering the services and verifying receipt of goods has also signed the manual cheques.

The Public Service Commission should be requested to conduct an investigation into MCM in order to determine

whether further cases of corruption can be identified;
mechanisms to be put in place to detect and prevent corruption.

6.9 Further investigations required

In addition to the proposed above involvement of the Public Service Commission and the Office for Serious Economic Offences, it is recommended that the Auditor General should be requested to conduct a special audit of MCM for the last 3 years.

It must be noted that the internal audit report has only covered a three month period during the 1999/2000 financial year.

6.10 Reporting

The findings of the internal audit report and the report and recommendations of the Committee should be submitted to the Auditor General, the Public Service Commission, and the Department of State Expenditure.

In addition the Consultative Advisory Forum and the Fishing Transformation Council should be informed of the contents of the reports, and consulted regarding the implementation of the recommendations.

6.11 Dealing with unauthorised expenditures

In relation to the actual amounts of unauthorised expenditure, and the contracts that have been entered into in this regard, the following steps need to be taken:

The State Tender Board must be approached and requested to grant ex post facto approval for these contracts: even though they are unlikely to grant such approval, the request is mandatory in terms of treasury regulations;
all contracts must be reviewed as a matter of urgency by Dr Abrahamse, in order to determine:
- whether the motivation for entering into the contract is sound, and whether the services are justified;
- which contracts can be terminated forthwith without incurring further liability for breach of contracts;
- whether contracts can be phased or sequenced in a manner which allows for subsequent phases of the contract to be regularised and approved in terms of treasury regulations;
- any further steps which can be taken to regularise and approve contracts in terms of treasury regulations.

6.12 FTC Payments

The payment of FTC members needs to be regularised in terms of treasury regulations, and the Department of State Expenditure must be approached to determine the appropriate category for remuneration of FTC members. No further payments of unauthorised amounts are to be made to FTC members, and FTC members need to be informed of this arrangement.

PART 7
SPECIFIC FINDINGS AND RECOMMENDED ACTIONS WITH REGARD TO INDIVIDUAL STAFF MEMBERS

After interviewing management and staff, and inspecting documentation with regard to the findings in the report of the Internal Auditor, the Committee recommend that the steps as indicated hereunder be taken with regard to the identified individuals.

The acting Director-General places on record that he does not absolve any other member of MCM from any future or past wrongdoing and disciplinary action or any other legal action might still be instituted against future identified members of staff if evidence comes to light to that effect.

Dr M Mayekiso, Chief Director: MCM

The Committee found that Dr Mayekiso neither denied nor accepted any form of responsibility and there was no clear indication from him as to how he sees himself responsible for the actions of his staff. It was clear to the Committee that he was not in control of activities in MCM, and that he was out of his depth as a manager. He exhibited a basic lack of insight of the enormity of the problem. The Committee believes that Dr Mayekiso is not suitable for the position he holds. He should be absolved from his responsibility as programme manager, and this function should be transferred to Dr T Abrahamse, with immediate effect. Disciplinary action in terms of the Public Service regulations should be instituted against Dr Mayekiso.

Mr G de Villiers, Director: Support Services

Mr De Villiers was found by the Committee to be extremely defensive. He did not answer questions directly and talked around issues and questions. The Committee believes that he is manifestly incompetent to perform his current functions, alternatively that he has substantially misled the Committee in regard to his knowledge of the situation. The Committee recommends immediate suspension with full pay pending the outcome of disciplinary actions against Mr De Villiers for employing Captain Davids without a contract, signing letters of intent without delegated powers, unauthorised expenditure by violation of tender procedures and blatantly ignoring direct instructions of the DG not to present the budget of MCM to the CAF. The Committee recommends that Mr D van Schalkwyk, Director: Antarctic and Islands takes over Mr De Villiers’ tasks with regard to the management of the fishing fleet as an interim measure. The other management functions have already been placed with the CD: Corporate Services as per the DG’s instructions (A4/3/4/14/DG dated 24 November 1999).

Dr A L Payne, Director: Offshore Resource Management

The Committee found that Dr Payne admitted liability and that he acted in contravention of tender procedures. His excuse was "that is the way it has always been done". Disciplinary action should be instituted in terms of the Public Service Regulations. Dismissal or demotion as a sanction is not recommended by the Committee at this stage. A defined performance agreement with Dr Payne must be entered into.
Dr D J van Zyl, Director: Coastal and Inshore Management

The Committee found that Dr van Zyl admitted that he should have known better. He accepted responsibility for the contracts that he has signed. Dr van Zyl told the Committee that Mr De Villiers told him that delegations existed and that it was in order for him to sign the contracts. The Committee recommends that no disciplinary action be instituted against Dr van Zy,l but that he be counseled on his actions, empowered with management skills through appropriate courses, and his progress monitored closely and regularly. Liability for his actions must be ascertained by the acting Chief Financial Officer of the Department (Mr G du Preez).
Other Members of the research staff that appeared before the committee

The Committee recommends that Dr Payne must institute corrective action and disciplinary action against members of his staff that transgressed the laid down procedures and report his actions and the outcome of his findings directly to the DG.
Mr G Wingate, Deputy Director: IT

The Committee found Mr Wingate alleged that he just "facilitated" the contract process and that he is of the opinion that he is not liable. He used the "historical" argument to justify irregular contracting procedures. He was not prepared to answer questions directly. The Committee recommends that Mr Wingate be informed in writing of his transgressions and that he be warned that disciplinary action might be instituted pending the outcome of further investigations.
Mr N Daniels, Deputy Director: Administration

The Committee found that Mr Daniels was and is aware of the irregularities and discrepancies that exist in the system. He acted irresponsibly in not taking corrective action and informing senior management in the Department. The Committee found that Mr Daniels should have done more to prevent irregular contracts and procedures. The Committee recommends that disciplinary action be instituted against Mr Daniels in terms of the Public Service Code of Conduct.
Mr N Petersen, Assistant Director: Finance

The Committee found that Mr Petersen admitted irregularity in respect of contracting with and payments to L P Printers, and heard evidence of possible other improper acts by Mr Petersen from other persons interviewed. Evidence submitted to the Committee indicates highly irregular and suspicious transactions. The Committee recommends that all the transactions with which Mr Petersen was involved in one way or another be investigated by Mr G du Preez and Mr Msiza, as a matter of extreme urgency, and that a forensic auditor be contracted to establish whether there are sufficient grounds for a criminal investigation. The Committee recommends that he be suspended immediately with full pay, pending a disciplinary enquiry.
Mr A Barnes, Senior State Accountant

The Committee found Mr Barnes a very tense and unreliable interviewee. He admitted that he deliberately made the double payments as alleged in the internal audit report. The committee recommends that all the transactions with which Mr Barnes was involved in one way or another be investigated by Messrs Du Preez and Msiza pending possible disciplinary action against him. If reasonable grounds are found to exist, he should be suspended with full pay pending a disciplinary enquiry.
Mr M Mashinini, Director: Finance and Logistics

The Committee found that Mr Mashinini did not accept responsibility for the actions of his sub-ordinates and that he failed in terms of his delegated powers to exercise internal control over the financial processes in MCM. The committee recommends that he at least be reprimanded and that an investigation be held with a view to instituting possible disciplinary action.
Mr A Venter Deputy Director: Financial Management

The Committee found that Mr Venter pleaded non-compliance of control due to "capacity" problems resulting from a shortage of staff. Mr Venter failed in terms of his delegated powers to exercise control over the financial processes in MCM. As Departmental Accountant he was not performing at the level one would expect. The Committee recommends that he at least be reprimanded and that an investigation be held with a view to instituting possible disciplinary action.

PART 8
TIME FRAMES AND IMPLEMENTATION

No	Action	Target date(s)	Person(s) Responsible
1.	Discussion of the report with the Minister and Deputy Minister	6/7 December 1999	DG and Committee
2.	Finalisation of the report	7/8 December 1999	DG, Committee and Secretariat
3.	Letters and report matter to the Auditor General to do forensic audit of MCM	9/10 December 1999	Mr Du Preez/Finance
4.	Implementation/appointment of new interim management team of MCM and associated HR	1 January 2000	DG/3D
5.	Forensic audit and further investigations	Start by 15 December 1999, to be completed by 31 January 2000	Messrs Ngema, du Preez and Msiza
6.	Disciplinary Action	Start process by 13 December 1999 to be completed by 15 February 2000	Messrs Ngema, du Preez and Msiza and Labour Relations
7.	Implementation of other recommendations in the report	All actions to be finalised by 30 June 2000	All identified role players

PART 9
ACKNOWLEDGEMENTS

Dr C Olver Director-General (Acting) is indebted to the Directors-General of the Departments of Land Affairs and Constitutional Development for the services of Messrs. Nyoka and Buys and their assistance during the investigations and acting as members of the Committee.

In particular he wishes to thank members of his management team for their assistance and contributions to the work of the committee.

Mr F Mashamba and his staff were of invaluable assistance to the Committee in arranging meetings and logistical support.

The Staff of the Subdirectorate Governance Support Services in the Office the DG in Pretoria, who drafted the report and lent secretarial support are thanked for their diligence and hard work.

Finally the members of Internal Audit are thanked for the conscientious and efficient manner in which they facilitated the task of the Committee and for bringing the matter to the attention of management of the DEAT. The internal audit report is an excellent example of the value of internal audit procedures in detecting financial irregularities and mismanagement.