The Gauteng Department of Economic Development is to set-up a task team to analyse the Auditor-General's findings and to implement a project to achieve clean audits.
Economic Development MEC Firoz Cachalia made this undertaking while addressing the media on the annual report in the city on Tuesday, 22 September 2009.
"The Auditor-General's opinion and the audit outcome are not acceptable as the department and four of its agencies (Blue IQ, Gauteng Enterprise Propeller, Gauteng Tourism Authority, Dinokeng and the Cradle of Humankind, have material audit findings. In total there are 11 disclaimers, 10 qualifications, 26 emphasis of matter, and 52 other matters," said Cachalia.
Cachalia expressed unhappiness at this state of affairs in his department, saying "one of this administration's priorities is to instil a culture of sound financial management and accountability across the Gauteng government departments and agencies."
According to Cachalia, the Auditor-General raised concerns about several contracts entered into by the department or agencies without following provisions of the Public Finance Management Act (PFMA).
One such contract was the department's purchase of shares worth R55 million in a private company named Wakegem, a diamond beneficiation company. It is reported that the PMFA does not allow the department to hold such shares. Cachalia said his department was working on finding a "replacement investor and if successful this initiative will enable the department to recover its investment earlier than provided for in the contract."
The former Community Safety MEC bemoaned the practice of "people entering into contracts without following the country's law."
The task team, which forms part of 'Operation Clean Audit', will be made up of the Chief Financial Officer (CFO) in the department and CFO's from the agencies.
"The CFOs have identified immediate successes and are working at issues that require more time to resolve. Target dates have been set in all instances. The department and its agencies have also identified systems which must be addressed in order to achieve clean audits. This includes training, succession planning, risk management and exposure of finance staff to operations. Most officials are keen to do their jobs well and it is my responsibility and that of the HOD to ensure that they have the support they need to do so," said Cachalia.
Cachalia also said he had appointed a law firm to advise him on the motorsport contracts entered to by the department. He is expected to report on this to the Premier by the end of October.
Issued by: Department of Economic Development, Gauteng Provincial Government
22 September 2009
Source: Department of Economic Development, Gauteng Provincial Government (http://www.ecodev.gpg.gov.za)
