Free State government studies Public Protector’s report

Monday, February 12, 2018

The Free State Provincial Government says it has noted the Public Protector’s report on Estina dairy farm in Vrede and will study it and familiarise itself with its contents.

“At this stage, the Free State Provincial Government will not be able to comment further on any of the contents of the report until it has satisfied itself and has also sought guidance on how to address it,” said the Premier’s office in a statement.

On Friday, Public Protector Advocate Busisiwe Mkhwebane released the report, which highlights irregularities, gross misconduct and maladministration by the Free State Agriculture Department in its handling of the Estina dairy farm project near Vrede.

The report highlighted the following procurement irregularities:

  • The HoD of the department did not follow the normal procurement process, as prescribed by the Constitution, Public Finance Management Act (PFMA) and National Treasury Regulations;
  • Payments to Estina were not in line with Treasury prescripts;
  • The agreement between the Free State's provincial Department of Agriculture and Estina, the Gupta-linked company that executed the project, seemed to have been invalid;
  • The HoD did not follow normal procurement processes, as prescribed by the Constitution, the Public Finance Management Act (PFMA) and National Treasury procurement regulations.

The investigation followed several complaints lodged by Democratic Alliance Member of the Free State Provincial Legislature, Roy Jankielsohn, on 12 September 2013, 28 March 2014 and 10 May 2016.

Jankielsohn wanted the Public Protector to look into allegations that, in implementing the project, the department had failed to adhere to Treasury prescripts and to exercise financial control.

“The department could not provide documents, policies or measures to demonstrate that proper financial control and risk management of the project had been in place,” said the Public Protector.

The Public Protector said her concerns were further supported by the report of the Accountant General of the department.

She said due to the lack of cooperation with the department, her office could not determine whether the prices for goods and services procured in respect of construction, processing equipment, cattle and administration costs had been inflated.

In addition, Mkhwebane found that the department did not enter into a public-private partnership agreement, as alleged, for the implementation of the project in the context of Treasury regulation requirements.

The Public Protector said due to capacity and financial constraints, her office could not investigate the following matters:

  • The cause of the alleged deaths of cattle;
  • The complaint lodged in May 2016, as issues pertaining to the investigation had already been identified and the investigation was at an advanced stage;
  • The issue of value for money obtained by the government in terms of the agreement, which had already been investigation by the National Treasury’s Account General;
  • Recent newspaper articles on the emails relating to the Gupta family that surfaced around June 2017 (these were noted but did not form part of the scope of this
  • investigation);
  • How the money transferred to Estina was spent by the company (the Directorate for Priority Crime Investigation is dealing with the issue); and
  • The issue relating to beneficiaries who were intended to benefit from the project due to lack of information.

Corrective measures 

Mkhwebane has directed the Premier of the province to initiate and institute disciplinary proceedings against all implicated officials that were involved in the project.

The Public Protector further directed the Premier to submit an implementation plan of the remedial action to her office within 30 days of the issuing of the report.

The Premier was also directed to conduct a reconciliation of the number of cattle initially procured.

To ensure that irregularities are kept at bay, HoD has been directed to ensure the training of officials on National Treasury regulations.

“We wish to request the members of the media to give the provincial government enough time to scrutinize this report. The response to it will be communicated in due course,” said the Premier’s office.

The full report can be found here: –

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