Tourism Committee expresses concern over appointments of acting Chief Financial Officer and Chief Executive Officer

22 September 2023

The Portfolio Committee on Tourism received a briefing from the Department of Tourism and South African Tourism on Tuesday on the implementation of the Budget Review and Recommendation Report (BRRR) recommendations for the 2021/2022 financial year and implementation of the recommendations made in the Limpopo and North West oversight visits reports.

Responding to the presentations delivered by the department and the South African Tourism (SAT), the committee expressed its dissatisfaction with how the recommendations have been implemented. The committee was of the view that the department did not respond to the recommendations as it provided general responses to specific recommendations.

In some instances, the department just indicated that the recommendation was noted without tangible explanation of its translation into action. The committee said the responses were incomplete and lacked detail. The committee called on the department to furnish it with a comprehensive report that addresses matters raised in the BRRR and given it until Friday, 22 September 2023 to submit adequate responses to the committee.

The committee will also afford the department an opportunity, in a closed meeting session, to provide an update on the outcomes of its forensic audits and consequence management taken against companies and officials who have been found to have committed financial malfeasance in the implementation of tourism infrastructure projects and other departmental programmes. This decision was taken after relentless, but futile efforts by the committee to get an update on the forensic audit report commissioned by the department.

The committee expressed its concern and shock when it was informed that the moratorium has not been fully lifted on the appointment of staff at SAT. The committee was assured by the Minister of the department that the moratorium had been lifted and that the entity will be able to start the recruitment process. However, on Tuesday 19 September 2023, it emerged that the moratorium has only been lifted on critical posts only.

The committee learned that the former Acting CEO was removed by the board based on the whistle-blower alert that led to an investigation. The committee acknowledged that the whistle-blower information was about an alleged bribe taken by the former Acting CEO. The committee accepted the decision of the board in bringing somebody without a cloud hanging above to allow a full investigation. However, the concern is not about the replacement of the former CEO, but rather about appointing the CFO as an Acting CEO of the organisation.

The Chairperson of the committee, Ms Tandi Mahambehlala, voiced her concern after the committee learnt that the Acting CFO at SAT, Ms Nombulelo Guliwe, has been appointed as Acting CEO at the entity. She said: “There is something problematic about this appointment and arrangement.” The committee raised an issue with financial delegations of the CFO as an Acting CEO in that there will be no clear demarcation if the Acting CEO who is the CFO takes financial decisions with organisational implications.

Ms Mahambehlala said the appointments of the CFO and the CEO should be corrected. She said good governance does not allow the CFO to act as CEO. “It is a wrong practice and as a committee we will stand by our conviction. This is an unfortunate situation where governance has been compromised at SAT, where someone is a referee and a player something which compromises the entity. We are a committee vested on knowledge and education, hence today we can refer to King IV report on the principles of governance.”

The King IV code of governance and principles assist the country and everyone in public administration for effective governance. National Treasury subscribes to these codes and implements them accordingly. “We now have an entity that disregards such important aspects as if it has no capacity. We take this matter seriously,” said Ms Mahambehlala.

On continued underperformance by SAT, the committee was concerned that although the entity has developed an audit action plan and a monthly dashboard to track performance, it was still underperforming whilst incurring over expenditure.

Regarding the first presentation that was delivered by the National Heritage Project Company, which has a monumental procession of 100 life size bronze statues located at Century Cit, Ms Mahambehlala said: “We note what the Director-General of the department suggested, in saying the government cannot fund establishments if the land of the tourist attraction or business is being run and operated privately.”

She added: “For the state to be able to assist, the Heritage Monument Project needs to have land that is leased by government. The committee will advise the National Heritage Project Company to approach the Department of Public Works and Infrastructure to identify and provide a suitable land to support the project. “

Issued by Yoliswa Landu, Media Officer, Parliament, 22 September 2023