Tourism Department and SA Tourism get qualified audits

SA Tourism and the Department of Tourism both received qualified or negative audit opinions from the Auditor-General, Tourism Minister Mmamoloko Kubayi-Ngubane revealed in a statement on Friday.

Kubayi-Ngubane, who took over from Derek Hanekom in May, said she “received with concern” the annual performance report of SA Tourism and the audit outcome of the department.

Read: SA’s international tourist arrivals ‘not looking good’

She cited an unidentified amount of fruitless and wasteful expenditure related to Expanded Public Works Programme (EPWP) projects within the department as the main reason behind the qualified audit. “While the department received a qualified audit, it has managed to achieve above 80% [for] performance,” she said.

The minister’s comments on SA Tourism’s audit performance, however, shed more light on issues at the national tourism agency that saw its CEO Sisa Ntshona being put on “precautionary suspension” in April.

Moneyweb reported last week that Ntshona is now facing an internal forensic inquiry. SA Tourism’s board suspended him following a tip-off from a whistleblower that led to the board appointing law firm Bowmans to undertake an independent investigation.

Read: SA Tourism: Why are whistleblower allegations still a secret?

Allegations against Ntshona were never revealed publicly. The Bowmans investigation was completed in July, and Moneyweb understands that it forms the basis of the internal inquiry currently underway.

In her statement on Friday, Kubayi-Ngubane revealed that the Auditor-General’s report on SA Tourism had flagged about R98 million in irregular expenditure. She also expressed concern about SA Tourism’s overall audit performance of 56% against its annual performance target.

And all that jazz …

While the minister did not go into detail about the irregular expenditure, former insiders at SA Tourism told Moneyweb on condition of anonymity that some of the irregular expenditure relates to the agency’s sponsorship of events such as the Cape Town International Jazz Festival.

Kubayi-Ngubane held a meeting with current SA Tourism staff and the board on Friday. “A number of issues were raised including how to turn the corner and ensure improved performance in the current financial year and the following years,” she said.

“The CEO of SA Tourism, Sisa Ntshona, is currently going through a disciplinary process as instituted against him by the board,” she added. “This was after an investigation by Bowmans.”

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Kubayi-Ngubane said in her statement that following the Bowmans investigation report being shared with her, and having noted the seriousness of the findings, she gave concurrence for the disciplinary process to be instituted.

While she reiterated that she believes Ntshona “must be afforded his day to answer on these serious investigation findings”, she did not go into further detail. “This process must be allowed to take its course and the board [has] appointed an independent chairperson to ensure fairness of the process,” she added.

Moneyweb reported last week that in addition to Ntshona’s suspension, four SA Tourism board members have since resigned, including chair Pam Yako and deputy chair Tanya Abrahamse.

“The stability and well-functioning of SA Tourism remains an urgent priority,” said Kubayi-Ngubane.

“And as such, I will in the coming weeks embark on a process to replace both board chairperson and deputy chairperson.”

She added that she is confident that the men and women at SA Tourism, under the leadership of acting CEO Sthembiso Dlamini and interim board chairperson Ravi Nadasen, would “help turn the tide of performance” at the agency.

Public Works projects

Commenting on the negative audit findings related to EPWP projects within her department, the minister noted that a forensic investigation will be conducted to fully deal with the issue. Moneyweb understands that challenges around the EPWP initiative go back several years.

Read: Transnet disputes qualified audit finding

“The EPWP capital projects have experienced many challenges – among them poor project implementation and other systems failures. These challenges in the EPWP capital projects led to the department incurring fruitless and wasteful expenditure,” she said.

“The sixth administration has committed itself to clean governance, accountability and transparency.”

More significantly, she added, is the importance of consequence management where things have gone wrong.

“It must be noted that in cases where clear information of wrongdoing is available, criminal cases and civil claims have been instituted against service providers by the accounting officer,” she said.

“Furthermore, as a department, we have placed two senior managers on precautionary suspension while the investigation is being conducted.”