DA: Statement by John Steenhuisen, Democratic Allaince shadow minister of public works, on the Department of Public Works annual report (03/10/2011)

3rd October 2011

According to the Department of Public Works’ annual report, released today, the Auditor-General (AG) has given the Department a Disclaimer of Opinion. (A copy of the report is available on request.) This is the most serious opinion that the AG can express. That the deficiencies in this Department are such that the Auditor General could not even form an audit opinion, is a powerful illustration of its state of disarray.

Major problems noted by the AG include:
Unauthorised and irregular expenditure to the tune of R16.5 million
A lack of audit evidence regarding the Department’s immovable assets register
The Department’s involvement in a public private partnership for the leasing of vehicles that could not be verified or accounted for
Material underspending of the budget and conditional grants
Material losses of some R54.8 million
An inability to obtain evidence of some R1.3 billion worth of capital transactions reported in the Department’s books
An inability to obtain evidence of some R819 million worth of goods and service-related transactions reported in the Department’s books
The Department’s failure to disclose liabilities relating to claims against it to the tune of R5.09 million
Operating lease commitments totaling R115 million that were not previously stated, yet are now included even though they cannot be verified or accounted for.
The extent of the mismanagement in the Public Works Department was recently highlighted by the Public Protector in her report into the two controversial SAPS lease deals. The Minister of Public Works, Gwen Mahlangu-Nkabinde, was found by the Public Protector to have acted in a way that was unlawful, improper and amounted to misconduct.

It is clear from the state of her Department, and her handling of the SAPS lease deals, that the Minister is unable to fulfill her mandate and ensure that her Department functions effectively.

Thus far, the Minister has employed several tactics to avoid taking responsibility for the mess her Department is in.

These include:
Her failure, on two occasions, to appear before the Public Works Portfolio Committee to explain her involvement in the SAPS lease deal saga
An attempt to blame her Department’s disarray on her predecessors, saying that she “inherited a poisoned chalice”
Shifting the blame to the Department’s acting Director-General, who has subsequently been suspended
Failing to cooperate with the Public Protector’s investigation into the SAPS lease deals
Most recently, her failure to ensure that all of her Department’s financial dealings were reported in its financial statements – prompting the AG to give the Department a disclaimer of opinion.
There is no question that Minister Mahlangu-Nkabinde’s continued presence is preventing her Department from undergoing the radical reforms necessary to turn it around. Gwen must go, and an appropriate successor needs to be appointed who can put this Department back on track.