UNAUTHORISED EXPENDITURE IN THE MARINE AND COASTAL MANAGEMENT

7 December 1999

The Minister of Environmental Affairs and Tourism, Mohammed Valli Moosa, today instituted a set of urgent actions to deal with at least R24 million of unauthorised expenditure in the Marine and Coastal Management (MCM) chief directorate of the Department of Environmental Affairs and Tourism.

The action follows the report of the "Investigation and Management Findings of an Internal Audit of the Chief Director: MCM" by the Acting Director General Dr Chippy Olver to the Minister and Deputy Minister Rejoice Mabudafhasi in Pretoria last night.

Minister Moosa said that the Department of Environmental Affairs and Tourism, like all other government departments, operates within the Treasury rules on expenditure. The unauthorised use of taxpayers money will not be tolerated. Those engaged in wrong doings of any kind can expect zero tolerance from government.

Minister Moosa said that both he and the Deputy Minister view this report on financial irregularities in a very serious light and he has requested that the Deputy Minister give her urgent and detailed attention to the matter and the operations of MCM.

On receipt of the report, the following immediate set of actions were taken:

• The Chief Director of Marine and Coastal Management (MCM) Dr Monde Mayekiso was removed from his post as programme manager and this has been temporarily transferred to Deputy Director General Tanya Abrahamse with immediate effect.
• Two senior officials in the Department have been suspended immediately, pending the outcome of a disciplinary inquiry. They are Mr G de Villiers (Director: Support Services) and Mr N Petersen (Assistant Director: Finance).
• Four other officials are also facing disciplinary proceedings. They are Dr Mayekiso, Dr A Payne (Director: Offshore Resource Management), Mr N Daniels (Deputy Director: Administration) and Mr A Barnes (Senior State Accountant).
• The Office for Serious Economic Offences has been brought in to investigate a number of cases of potential corruption in the Department, including systematic double payments to companies and irregular contracts with printing companies.
• The Minister has requested the Auditor General's Office to conduct an urgent special audit of MCM.

Furthermore in response to the discovery of major problems in the administration and financial management:

1. All manual cheque books have been seized.
2. The Deputy Directorate: Finance and Logistics in MCM has been brought under the direct control of the DEAT head office in Pretoria
3. The administration of the Marine Living Resources Fund has been transferred to the Acting Chief Financial Officer (CFO) in Pretoria.
4. All decisions on contracts and expenditure now have to be made by head office.
5. All contracts entered into on behalf of MCM are being reviewed.
6. The Acting CFO is determining whether any loss to state or fruitless expenditure and money is to be claimed from officials.
7. The Acting CFO is instituting urgent controls in MCM.

The audit report, which followed the Internal Audit Division of the DEAT being requested in August this year to review the financial management of the MCM by the former Director-General, 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.

There were 29 generic problem areas of financial control or irregularities in terms of Treasury Rules ranging from overtime and leave to harbour management. The lack of basic financial and administrative controls in MCM has resulted in unauthorised expenditure in excess of R24 million this financial year,

Included is a total of 56 contracts with a total value of R23,375 million, which are financed from the MLRF, are unauthorised for the financial year 1999/2000.

The internal audit report, it must be noted, only covered a three-month period during the 1999/2000 financial year.

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. The AG's Office has been requested to now do a special audit of MCM finances for the past three years.

Following the report a committee was established by the acting Director-General in Cape Town last week to verify the findings of the internal audit report. Their findings do not constitute disciplinary procedures in terms of the Public Service Act but rather a set of recommendations for urgent action by the Minister. 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.

The report recommended urgent, immediate steps as well as long-term steps to establish sound management and internal controls in MCM. Other matters such as the running of fishing harbours, remuneration of the Fishing Transformation Council and a policy on research contracts are also receiving attention.

The detailed findings of the committee and the report of the DEAT Internal Audit are attached to this media release.