MEC concerned about performance of economic development agencies

Wednesday, September 23, 2009

Johannesburg - Economic Development MEC Firoz Cachalia says the performance of Gauteng's agencies is unacceptable, after the Auditor General gave the department and its agencies a total of 11 disclaimers, 10 qualifications and 26 emphases of matter.

"This is not a pretty picture. This is unacceptable, said the MEC on Wednesday.

The agencies that fall under the department include the Gauteng Enterprise Propeller, Tourism Authority, Economic Development Agency, Film Commission, Gambling Board, Blue IQ, Dinokeng and the Cradle of Humankind.

Cachalia said the department's Chief Financial Officer had been asked to establish a task team, which includes the Chief Financial Officers of all the agencies. "They will analyse the Auditor General's findings and implement a project to achieve clean audits," said Cachalia.

In its report, the Auditor General queried the investment of R55 million in a private diamond beneficiation company, Wakegem. The department purchased shares in the company.

Cachalia said the department was not allowed to hold such shares and they were therefore working with the Industrial Development Corporation to find a replacement investor to recover its investment.

The report also found that there was a breach in foreign currency liabilities as the department did not obtain the required permission from National Treasury when it entered into contracts on behalf of the Gauteng Motorsport Company. There were also complaints relating to the lack of a proper register for refundable deposits.

Other concerns included amounts paid by operators for their liquor licence renewals.

On revenue collection, the department said it was encountering problems as it relied on the South African Revenue Services for revenue collection.

To address this, the department will during this financial year purchase electronic system which integrated licensing and revenue recognition.

The department has taken action against some senior managers who contravened the supply-chain and management policies and procedures with regard to a case on unauthorised expenditure.

It will also look into the irregular expenses through the department's Operation Clean-Up.