DA welcomes A-G's swift investigation of SABC irregularities, but calls for full investigation of outstanding allegations

The report of the Auditor-General's office into allegations of financial irregularities and tender-rigging at the SABC - which was tabled before Parliament's Portfolio Committee on Communications this morning - has revealed alarmingly high levels of organisational rot within the public broadcaster's management and staff complement, which have contributed to the SABC's current financial crisis.

The report has revealed supply chain mismanagement, and massive fruitless and wasteful expenditure committed by executive committee members and other senior management at the SABC.

Supply chain management irregularities include:

• Deviations from complying with tender procedures in the awarding of contracts worth R24.8-million;
• Further deviation from proper tender procedures in the awarding of a contract for R17-million;
• A material agreement entered into by the former GCEO and former Head of Legal and Business Advisory Service for R326 million without proper authority;
• 8 consultants appointed without following proper procurement policies;
• Bid adjudication team set up for a R7.5million tender without approval of GCEO.

Fruitless, wasteful and irregular expenditure include:

•  R111.46 million paid for the acquisition of international programme content -"...double payments, overpayments, material paid for but not received, programme titles acquired more than once from the same supplier during the same license period." No corrective action taken by the former GCEO, despite his knowledge thereof;
•  R11.3 million paid to a private travel company for travel arrangements in contravention of the SABC's own Travel Policy, which states that arrangements must be made using the corporation's in-house travel office;
•  Excessive use of petrol cards by some employees and top and senior management levels

Moreover, the A-G's findings have also confirmed the Democratic Alliance's (DA) contention that the former SABC Board was not solely responsible for the problems at the corporation, and that the blame for the financial crisis at the SABC was laid at the previous Board's feet solely in order to justify the ANC's political purge.

The Auditor-General was requested by Parliament's Communications Committee to conduct this investigation, following the dissolution of the previous Board, in order to diagnose the problems at the SABC, bring those responsible for engaging in criminal and/or unlawful conduct to book, and to help the new SABC Board begin the process of turning around this crucial public asset. The investigation was conducted on the basis of allegations submitted to the Committee by, amongst others, former SABC Board members and labour unions representing ordinary workers at the broadcaster.

The DA is, however, concerned that the time constraints associated with ensuring that the A-G's report was tabled before the end of this parliamentary term have made it impossible for him to complete the investigation, and as it stands, the report includes a long list of allegations received by his office but not covered in this investigation.

These include allegations of:

• Extravagant and irresponsible wastage of money for conferences, entertainment, catering and gift
  • R1.3million for a financial strategy meeting (waiters, food, chairs, etc)
  • Gift sets to the value of R265 342
  • A conference held in Zanzibar to the value of R79 221
• Payments made to consultants/service providers that provided services outside the business scope of the SABC to the tune of R212 million.
• Duplication payments for the implementation of business software which cost the SABC an amount in excess of R200 million
• Two different companies paid to supply ANC conference t-shirts

 Over 10-million paid to consultants without legal contracts being in place

The SABC lost the rights to soccer, boxing and cricket. The Executive Manager is not being held responsible for causing this significant financial loss.

The A-G's report has identified the symptoms of the problems at the SABC, but the investigation must continue in order to ensure that the broadcaster is also cured of its current malady. One of the crucial requirements for turning around the SABC is to restore staff morale within the corporation, as well as revive public confidence in the broadcaster. This can not be achieved as long as a cloud of suspicion still hangs over the heads of some staff and senior management members, who have been implicated in fraudulent activity and other financial irregularities.

The DA therefore calls on the Interim Board and the incoming SABC Board to institute a full forensic investigation into all the allegations not covered in the Auditor-General's report, so as to ensure that the public broadcaster is able fully to recover from this dark episode in its recent history.

The Democratic Alliance (DA) commends the Auditor-General, Terence Nombembe, and his team for their swift and thorough investigation, and for reporting back to Parliament and the Interim Board of the SABC within the requested timeframes, so as to enable the Board and the majority shareholder - the Minister of Communications - to take the necessary corrective action to remedy the organisational rot which has set in at the public broadcaster.

Statement issued by Lindiwe Mazibuko MP, Democratic Alliance deputy shadow minister of communications, September 22 2009

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