Report of the Sessional Committee on the Accounts of the Kwazulu government for the financial year 1980/81

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Kwazulu ( South Africa ) . Legislative Assembly . Sessional Committee on Public Accounts .

Minutes of the meeting of the Sessional Committee on Public Accounts of the Kwazulu Legislative Assembly held on ....

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HOOVER INSTITUTION on War, Revolution, and Peace FOUNDED BY HERBERT HOOVER, 1919

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KWAZULU

LEGISLATIVE ASSEMBLY

REPORT OF THE SESSIONAL COMMITTEE ON THE ACCOUNTS

OF THE

KWAZULU

GOVERNMENT FOR

THE FINANCIAL YEAR 1980/81

1982

Kwazulu (South Cuca ), puute Accently Seccimal Commsthe on Public Accanto

MINUTES

OF THE MEETING OF THE

SESSIONAL COMMITTEE ON PUBLIC ACCOUNTS

OF THE

KWAZULU LEGISLATIVE ASSEMBLY

HELD ON

3 - 5 MAY , 1982

AT

ULUNDI

This Report will also be obtainable in Zulu and in Afrikaans

KWAZULU SESSIONAL COMMITTEE ON PUBLIC ACCOUNTS

CONTENTS

Page Rule 144 ( b ) of the Rules of Procedure of the KwaZulu Legislative Assembly

1

Announcement

1

Matters referred to the Committee

1

Report of the Sessional Committee on Public Accounts , 1982

2

Proceedings of the Committee

3

Verbatim Report Vote 1

Department of the Chief Minister and Finance

6

Vote 2 - Department of the Interior ...

18

Vote 3 - Department of Works ...

22

Vote 4 -

44

Department of Education and Culture

Vote 5 - Department of Agriculture

51

Vote 7 - Department of Health and Welfare .

54

Annexure 1

58

Annexure 2 ...

60

1 . PROCEEDINGS OF THE SESSIONAL COMMITTEE ON KWAZULU GOVERNMENT ACCOUNTS

RULE 24 ( 2 ) OF THE RULES OF PROCEDURE OF THE KWAZULU LEGISLATIVE ASSEMBLY

As soon as possible after the beginning of each Session the Legislative Assembly shall appoint the following Sessional Committees , each consisting of five members , including the Chairman thereof :

(2)

Committee on Public Accounts whose terms of reference shall be to examine the accounts showing the appropriation of the sums granted by the Legislative Assembly to meet public expenditure . When the Report of the Auditor- General is received by the Chief Minister it shall stand referred to this Sessional Committee .

ANNOUNCEMENT

1.

APPOINTMENT OF COMMITTEE : 23RD APRIL , 1982 :

The following hon . members have been

appointed as members of the Sessional Committee on Public Accounts :

Mr. McD . September Mr. M.A. Mkhwanazi

Chairman ·

Chief B. Zulu Mr. P.0 . Sikakana Mr. T.P. Dube

Member Member

-

Member Member

MATTERS REFERRED TO THE COMMITTEE

(i )

23RD APRIL , 1982 :

Report of the Auditor- General on

the accounts of the KwaZulu Government and of the Lower Authorities

2 -in the Area for the financial year 1980/81 , Tabled .

REPORT OF THE SESSIONAL COMMITTEE ON PUBLIC ACCOUNTS , 1982

Your Committee , having considered and examined matters arising from the Report of the Auditor- General on the Accounts of the KwaZulu Government for 1980/91 , referred to it , and having taken evidence , begs to report that it has no comments to offer thereon .

( Signed ) McD . September CHAIRMAN

ULUNDI , 5 MAY , 1982 .

- 3PROCEEDINGS OF THE SESSIONAL COMMITTEE

ON PUBLIC ACCOUNTS -- 1982

MONDAY, 3 MAY , 1982

VENUE :

CONFERENCE ROOM - DEPARTMENT OF AGRICULTURE , ULUNDI . 09h50 .

t PRESENT :

er APOLOGY :

Mr. McD . September Mr. T.P. Dube

-

Chief B. Zulu Mr. M.A. Mkhwanazi

-

Member Member

Mr. P.0 . Sikakan a

-

Member

-

Chairman Member

OFFICIALS IN ATTENDANCE : Mr. B.P. Kunene Miss G.M. Kleinbooi Mr. K.B. Clark Mr. W.C.C. Cele

1. ள்ல்

2.

-

Committee Clerk Asst . Committee Clerk Representative of the Auditor- General

Interpreter

The Chairman took the Chair and welcomed the members . The Committee Clerk , Mr. B.P. Kunene , read Rule No.

24 ( 2 )

of the Rules of Procedure of the KwaZulu Legislative Assembly and announcement of appointment of Committee .

3.

The Chairman distributed copies of a Circular , No. 4 of 1981 ( Ref . FT 1/1 dated 2/9/81 ) issued by the Treasury . (ANNEXURE 1 )

4.

After discussion , the Chairman moved the adoption of the proposed programme with alterations , which was accepted .

5.

The Chairman moved that evidence given before the Committee This

be recorded verbatim as had been the case in the past . was agreed to .

5.

Agenda for the following meeting was decided upon .

7.

Meeting adjourned at 11h20 until 09h00 on 4 May , 1982 .

4 PROCEEDINGS OF THE SESSIONAL COMMITTEE ON PUBLIC ACCOUNTS - 1982

TUESDAY , 4 MAY , 1982

VENUE :

CONFERENCE ROOM - DEPARTMENT OF AGRICULTURE , ULUNDI . 09h10 .

PRESENT : Mr. McD . September Mr. T.P. Dube

-

Chairman

-

Member

Chief B. Zulu

-

Member

Mr. M.A. Mkhwanazi Mr. P.0 . Sikakan a

-

Member

-

Member

OFFICIALS IN ATTENDANCE : Mr. B.P. Kunene

-

Miss G.M. Kleinbooi Mr. W.C.C. Cele

Mr. K.B. Clark

-

Mr. G.T. Liversage Mr. E.F. Oltmann

-

-

Committee Clerk Asst . Committee Clerk Interpreter Representative of the Auditor- General Chief Accountant Accounting Officer - Department of the Chief Minister

Mr. W.J. van den Heever

Deputy Secretary

-

Treasury

1.

The Chairman took the Chair and welcomed all present .

2.

The following officials were examined and evidence was taken : - Accounting Officer 2.1 Mr. E.F. Oltmann Department of the Chief Minister and Finance 2.2 Mr. A.M.J. van Rensburg - Accounting Officer - Depart-

2.3

Mr. E.A. Johns

2.4

Mr. K.B. Clark

2.5 3.

ment of the Interior - Accounting Officer → Department of Works

Representative of the Auditor- General Mr. W.J. van den Heever - Deputy Secretary - Treasury

The Committee deliberated and the Chairman moved the adjournment of the meeting at 11h20 until 09h00 on 5 May , 1982 .

- 5 PROCEEDINGS OF THE SESSIONAL COMMITTEE

ON PUBLIC ACCOUNTS - 1982

WEDNESDAY , 5 MAY , 1982

VENUE :

CONFERENCE ROOM - DEPARTMENT OF AGRICULTURE , ULUNDI . 09h00 .

PRESENT :

Chairman

Mr. McD . September Mr. T.P. Dube Chief B. Zulu

-

Mr. M.A. Mkhwanazi

-

Member

Mr. P.0 . Sikakana

-

Member

Member Member

OFFICIALS IN ATTENDANCE :

Mr. B.P. Kunene

Committee Clerk -

W.C.C. Cele

Mr. K.B. Clark

-

Mr.

Interpreter Representative of the Auditor- General

era

of

1.

The Chairman took the Chair and welcomed the members .

2.

The following officials were examined and evidence was taken : - Accounting Officer 2.1 Mr. J.E. Ndlovu Department of Education and Culture Mr. H.M.S. Ferreira - Accounting Officer - Department 2.2

2.3

Dr. M.V. Gumede

2.4

Mr. K.B. Clark

of Agriculture and Forestry - Accounting Officer - Department of Health and Welfare - Representative of the Auditor-

2.5

Mr. G.T. Liversage

General - Chief Accountant

tal

lepa ster

Jepa 3.

of Works , to a question raised by the Chairman on the previous day , was Tabled in the Committee . (ANNEXURE 2 )

Depa

east

May

A typewritten reply by the Accounting Officer , Department

4.

The Report of the Committee was drawn up , read and agreed to .

5.

The Chairman announced the adjournment of the meeting at 10h05 sine die and thanked all the members for their presence .

-- 6 VERBATIM REPORT 4TH MAY , 1982

09h00 .

VOTE 1 - DEPARTMENT OF THE CHIEF MINISTER AND FINANCE :

THE CHAIRMAN :

We will start now , Mr. Oltmann .

We welcome you

and we hope you will enjoy yourself . MR . OLTMANN : THE CHAIRMAN :

Thank you , Mr. Chairman . Mr. Oltmann , we will start with page 2 , paragraph 10 of the Report of the Auditor- General . I wonder if we could start with Mr. Clark in this case . Do you have particulars of the various amounts making up the total of R20 869 reported in this paragraph?

MR . CLARK :

Mr. Chairman , this amount of R20 869 is in the main , I think , made up of a fairly large number of small 1 amounts . There was only one large amount , namely , R7 773 involved , and this was a case in which a number of orders for petrol supplied to KwaZulu Government cars by the South African Defence Force were lost , with the result that the vouchers in support of the payment were incomplete . The Treasury was satisfied that there was no irregularity involved in so far as the amount claimed was concerned and they accordingly gave an order in terms of the Exchequer and Audit Act . Other orders were given ,

for example ,

for amounts

of R7 339 and R1 717 , but these were made up of numerous small amounts . The circumstances were that these were vouchers which had been received at Ulundi from magistrates , but on examination were found to be incomplete in some way and were returned to magistrates for completion or certification ,

et cetera .

They then went astray , presumably in the post , and were not available when required for auditing .

THE CHAIRMAN :

Mr. Oltmann , can you give us any reason why such a large number of documents should have gone astray and what has been done to prevent this happening in future as far as possible?

- 7 MR .

OLTMANN :

Mr. Chairman , these orders relate to vouchers ranging over a period going back as far as 1973. KwaZulu is spread over a large area and the fact is that they went astray in the post . As can be seen from the time lapse , thorough investigations were made to trace these vouchers but to no avail , and for this reason the Treasury orders were obtained . As Mr. Clark has already explained , the matter of the R7 773 was in respect of issue vouchers for petrol at the military base Jozini for use by water tankers which were carting water during the drought period and the issue vouchers were submitted for a refund but went astray and copies had to be obtained , and copies were obtained , in respect of these issues to effect payment . The originals could just not be traced and must have gone astray in the post .

THE CHAIRMAN :

So this can easily happen again then , by the look of things ,

MR . OLTMANN :

judging by your explanation ?

Mr. Chairman , I would point out that this covers a period from 1973 , so it looks formidable . It is not only in respect of the year under consideration .

THE CHAIRMAN :

But my main concern is a recurrence .

Is there any

possibility of ensuring that it will not happen again ?

MR . OLTMANN :

THE CHAIRMAN : MR . OLTMANN :

Apart from registering everything , which I believe they do - to a certain extent they are sent by certified mail and by registered mail . No duplicates are kept ? Well , duplicates were obtained in respect of this large amount and used , but they were not acceptable and therefore Treasury orders had to be obtained .

THE CHAIRMAN :

I do not know how the members feel , but I feel very uneasy about this , because it would appear that there are no means of making sure that this will not occur again . You do not see any possibility of making such arrangements ?

MR . OLTMANN :

Mr. Chairman , I cannot guarantee that there will not be any losses in the post in future , although all possible steps are taken to prevent it .

8 THE CHAIRMAN :

Has such a thing happened before?

MR . OLTMANN :

I can only say that from 1973 until now it has been recurring all the time .

THE CHAIRMAN :

Losses in the post?

MR . OLTMANN :

Yes .

THE CHAIRMAN :

I am glad the KwaZulu Government is not responsible for posts . I do not know whether any of the members have questions . There is just one point , Mr. Chairman .

MR . DUBE :

Has an

instruction been sent out to the different areas as to how to control the sending of mail to head office so that these documents will not get lost on the way? MR . OLTMANN : MR . DUBE :

I do not understand the question , Mr. Chairman . I mean , Mr. Chairman , has the Department sent a message to the different areas so that these documents will not keep on getting lost ?

Have you perhaps

instructed the districts in this regard , because it seems that these things get lost on the way from the districts to the head office? MR . OLTMANN :

Mr. Chairman , there is an instruction that these vouchers are to be sent by certified mail .

THE CHAIRMAN :

And this was sent by certified mail ?

MR . OLTMANN :

I cannot reply to that question on each individual item .

THE CHAIRMAN :

MR . OLTMANN :

Anyway , I suppose you are aware of the seriousness of the matter and that all the necessary steps should be taken that this does not recur ? Mr. Chairman , we will take all possible steps to ensure that this is obviated as far as possible .

THE CHAIRMAN :

Then can we turn to page 8 , paragraph 19 ( 4 ) ? Mr. Clark , what is the problem regarding these outstanding cheques ?

MR . CLARK :

Mr. Chairman , I should not think it would be necessary for me to explain what an " outstanding cheque list " is at this stage , because I think all members have already been informed on this subject .

- 9The books of account of the KwaZulu Government have , since this problem arose , been closed off by In calculating the amount of outstanding cheques . other words ,

a list of such cheques has not been drawn

up , but merely calculating the figure in this way is not acceptable ,

as no account is then taken of such

factors , for instance ,

as falsified cheques which may

have been cashed , outdated cheques which should have been cancelled , duplicate cheques issued when the originals may have been cashed ,

and so on .

In this way , in other words , the figure taken as being your actual bank balance may be substantially in error . Audit is therefore concerned that the situation as reported in this paragraph in the Report should be rectified as soon as possible . Now , the Committee will perhaps recall that this matter came up in evidence last year - the reference is page 10 of the verbatim report of the previous year and that the Accounting Officer then explained that the situation arose through a problem in the computer programme and it was also stated that the matter had THE CHAIRMAN : MR . CLARK : THE CHAIRMAN :

been rectified since . Was this after the computer problem? Yes . Mr. Oltmann ,

can you then please indicate why you

have not caught up and say what steps have been taken to clear up this problem ?

MR . OLTMANN :

Mr. Chairman , from the time that a large volume of cheques was issued by computer , a cheque reconciliation system by computer had to be introduced . The programme in use was adapted from a programme used by the Lebowa Government and this programme had to be adjusted to our needs . encountered .

However , many problems were

With a shortage of properly trained programmers and due to the fact that the programme had many shortcomings , difficulties were experienced in proceeding with the work . Certain programme adjustments had to be made . To correct the position , the services of an experienced programmer seconded from the South African Defence Force have been obtained .

Special

10 authority was obtained to make use of an experienced programmer on contract . This seems to have had fruitful results and progress has since been made . It is not anticipated that the backlog will be eliminated within this year . It must be mentioned that three months ' cheque reconciliations have been done in the last five weeks , that is , they are now reconciled up to the end of March , 1980 . The upgrading of the control post to one of Data Processing Manager has been recommended to the Public Service Commission , which will hopefully enable us to compete in the labour market for a sufficiently qualified person to remedy our shortcoming in the field of control and training .

THE CHAIRMAN :

Thank you .

I think that is acceptable . I do not know whether members have any questions on this one . Can we proceed then , Mr. Oltmann , 19 ( 5 ) , also on page 8?

to paragraph

Mr. Clark will you please introduce this item by explaining this paragraph in the Report? MR . CLARK :

Mr. Chairman ,

as is stated in this paragraph in

the Report , the Accounting Officer advised Audit that not all Suspense and Disallowances Accounts had been analysed and balanced as at the end of the financial year . Now , with regard to the detailed returns of items outstanding for six months and longer , I should like to just quote the relative Treasury Instruction , reference H.2/ 8 / 5 which reads as follows : "Accounting Officers are required to furnish the Auditor- General with half- yearly returns as at 30th September and 31st March of all amounts appearing in their Suspense and Disallowances Accounts which have been outstanding for over six months , indicating in which cases regular recoveries by instalments are taking place ,

- 11 giving a reference to the relevant Treasury authority . Where no recovery is being made , a full explanation should be given , showing how it is

proposed to deal with the matter . "

Now, these are the prescribed returns which have not been received by my office . There is also a Treasury Instruction in this connection which reads as follows - Instruction H. 2/8/4 : "Accounting Officers shall recover or adjust disallowances in their accounts and shall ensure that priority attention is continuously given to such recoveries or adjustments to finalize them as soon as possible after the disallowances have been raised . "

Now, Audit is concerned in this matter that such continuous priority attention is given to these items , but Audit can only do this through examining the detailed half-yearly returns of outstanding amounts . Now, because these returns are not received , Audit cannot be satisfied that regular attention is being paid to clearing suspense items .

In fact , from a

record kept of recent authorities granted by the Treasury for the writing off of irrecoverable disallowed amounts , it is clear that numerous amounts are having to be written off because priority attention was not given to adjusting them at the time they were disallowed and it is now no longer possible to trace the persons concerned . There is no objection to writing off such amounts , but the point is that they are having to be written off because priority attention was not given to them at

- 12 -

the time they were originally disallowed . THE CHAIRMAN :

Mr. Oltmann , can you advise the Committee on this matter ?

MR . OLTMANN :

Mr. Chairman , since 1972 , 128 Suspense Accounts came into operation .

Due to the shortage of suffi-

ciently trained staff it became practically impossible to analyse and control the Suspense Accounts continuously . Claims were rendered on other Departments in respect of expenditure on their behalf .

However ,

outstanding amounts were never followed up or cleared ; payments and receipts were wrongly allocated , which had to be adjusted ; and further, wrong procedures and methods were applied during the implementation and operation of the Suspense Accounts . The above unavoidably contributed to the state into which the Suspense Accounts deteriorated up to 1977.

However , during the course of the past three

years the Suspense Accounts Section , which practically did not exist before then , succeeded in analysing the majority of these Suspense Accounts and at this stage 32 accounts have been analysed and reflect nil balances , and 68 accounts have been analysed on which all outstanding items can be accounted for . Although only 28 accounts have not yet been completely analysed , these accounts have been analysed since April , 1980 , and all outstanding items since then can be accounted for . The Salary Disallowances and Suspense Accounts have been fully analysed and lists of outstanding amounts can be submitted . Lists of items outstanding for longer than six months were submitted to the Auditor- General on 29th October , 1981 , that is ,

after his Report ,

and will be

submitted again after the final closure of the books for the financial year 1981/82 . The best possible efforts will be made to bring this work up- to - date . THE CHAIRMAN :

You spoke of the follow- up . Can you elaborate on the follow- up? Are you doing anything in following it up?

- 13 Yes .

MR . OLTMANN :

On several occasions I went to the section

and enquired as to what the progress was , but there are problems with sufficiently trained staff . THE CHAIRMAN :

Mr. Clark , do you have any further comments on this ?

MR . CLARK :

Mr. Chairman , I can only say that the returns which Audit have received on occasion have been on very widely separated occasions and the details given have not been sufficient , in other words , they have not been as required by the Treasury Instruction , because these returns did not contain full explanations , showing how it was proposed to deal with each item that was outstanding . But apart from that , Mr. Chairman , these accounts and returns have been the subject to Audit Reports to the Legislative Assembly and also questions and resolutions in this Committee for a number of years now, and in spite of evidence given in the past similar to what has been given this morning regarding inexperienced staff , shortage of staff , overtime worked and promises and expectations of progress , we still have this problem . Now , from investigations made by members of my staff, it would appear that the reason why this matter is dragging on and on is possibly that the form in which Suspense Accounts are kept does not lend itself easily to the extraction of details required for these returns and there are also factors in the method followed which make an audit of the Suspense Accounts difficult to carry out in a satisfactory manner . Now , as all the improvements expected in the past have not up to now materialized , despite steps taken by the Department , it is my own personal opinion that the Treasury should now possibly take action to arrange an approved system of bookkeeping for Suspense and Disallowances Accounts , and the Treasury is empowered to do this in terms of section 12 of the Exchequer and Audit Act .

THE CHAIRMAN :

Thank you , Mr. Clark . Are there any comments from you , Mr. Oltmann ?

14 MR . OLTMANN :

Mr. Chairman , I might just mention that to analyse the outstanding amounts from as far back as 1972 , and you will realize that the problem was that it was not kept up - to - date right from the start ,

is

a considerable task and takes a long time . It is hoped that the unsatisfactory state of affairs will be cleared up . But we are all aware thereof that this has been

THE CHAIRMAN :

going on and on .

I mean , there is a suggestion by

the Treasury that a formula could be devised . I wonder whether Mr. Van den Heever can comment on this? MR . VAN DEN HEEVER :

Mr. Chairman , I listened to Audit's suggestion

that there should be a new system of keeping these Suspense Accounts , but in the light of the Accounting Officer's explanation of inexperienced staff - and I am not belittling Audit's suggestion , I think it is worth- while looking into

before Treasury would even

consider a new system , the question still remains : will the present staff be able ,

even with a new system ,

to cope with the work and to do the necessary analysis of Suspense Accounts ? But although it is worth- while looking into , Mr. Chairman , to see what system can be introduced , it will have to be done in consultation with the Department ,

and the system will have to come from the De-

partment because they are the people who will have to use the system every day .

THE CHAIRMAN :

Well , my understanding is that it is both the

This shortage of trained staff and not catching up . then gives rise to the question whether there is actually a system which is effective . So , if the suggestion is made here now for a system which will possibly provide an answer and this is not wholeheartedly supported , it puts me in a very difficult situation , because all we are trying to do is to get things to work .

MR . VAN DEN HEEVER :

I agree , Mr. Chairman . The only question that I have to ask is , will a new system really help to solve the problem if you sit with untrained staff?

- 15 THE CHAIRMAN :

It may be But you do not know the system yet . a system that will short- circuit the shortage of staff .

MR . VAN DEN HEEVER :

Mr. Chairman , as far as I remember the system

that is employed now is a system that is in force right throughout the Republic . Now , if there is a simpler system it might work , I do not know. Maybe we can ask Audit what they have in mind , what type of system they have in mind , because as you know , Treasury is very reluctant to almost dictatorially force a Department into a system , because it can cause complications , have said ,

Sir ,

and that is why I

that a system like this will have to

be devised in consultation with the Department and with Audit . It is not a thing that Treasury will lightly force onto a Department , because eventually the thing might not work and then the Department will come to this Committee and say ,

look , we have tried a system that

was forced onto us by Treasury and it does not work , and then we will be back where we started . MR . CLARK :

Mr. Chairman , the suggestion was not that Treasury should devise a system and force it upon the Department . It is a matter which would require discussion and consultation between the Department , the Treasury and Audit before it could be applied , but the suggestion was that the Treasury should assist in this matter ,

as

it would appear that in spite of all the attempts in the past this matter has not been solved and perhaps the addition of the Treasury's expertise will assist in the matter . Now, the Accounting Officer has not today made mention of the shortage of staff as a factor at this stage in this problem , so perhaps he could advise us how he expects , with the present system , to improve the situation with the staff he has at the moment , if he will not have sufficient staff to carry out a revised method . THE CHAIRMAN :

Well , I would look at it from another angle . I am thinking is as Mr. Clark has explained it now , that it is a matter of trying to get this off the

All

- 16 ground and not necessarily that the Treasury should impose itself on the system which is applicable all over South Africa , which unfortunately does not work in our instance , which poses another question , namely , why does it not work ? But what I am trying to get now is some comment from Mr. Oltmann , how he looks upon this .

Do you want

to retain the old system and assure us now that we will catch up by the time the next Report comes out ? I have no qualms about the Treasury's system here because we have hardly seen it and it was a matter of consultation , trying to get the best , but I see that Mr. Van den Heever is shying away from this one ... MR . VAN DEN HEEVER :

No , I am not really shying away , Mr. Chairman , and I am in agreement with you , Sir . If a system can

be devised then I think even the Department will accept it , but it will have to come about through consultation between Treasury and the Department and Audit .

THE CHAIRMAN :

Yes , we all agree on that .

MR . VAN DEN HEEVER :

My only question is , will the system work?

As

the Accounting Officer has explained , he has untrained staff , and you know how it goes . The moment these chaps are trained they are snapped up outside of KwaZulu . So will untrained staff , even with a new system, be able to catch up?

Although the Accounting Officer

has given an indication that they might catch up during this current year .

THE CHAIRMAN : MR . OLTMANN :

Do you have any comments , Mr. 01tmann ?

Mr. Chairman , an improvement has been made , as can be seen - 128 accounts do not sound very many but each one of these accounts has thousands of entries over a period of five years and progress has been made . It is a slow process and pressure will continuously have to be exerted to keep the section on its toes .

THE CHAIRMAN :

Thank you very much , Mr. Oltmann .

All we are

doing here is wrestling with the old problem , but we now know the story from both sides and it is up to you people here to see if you can come to an agreement

-- 17 -or get results out of this system . Can we pass on then? On the same page , page 8 ,

the Appropriation Account . Mr. Oltmann , referring to the excess on Main Division B , what claim was it that was settled late ? MR . OLTMANN :

Mr. Chairman , the transport claims ex 1979/80 , which also included certain chartered flights for the Cabinet , as far as I remember . The payments were made by KDC and then had to be refunded .

THE CHAIRMAN :

What The next question is on Main Division C. economy measures were applied which resulted in a saving of over a third of the amount provided ?

MR . OLTMANN :

Mr. Chairman , that could only have been the more effective control over the use of telephones and the telex .

THE CHAIRMAN : MR . OLTMANN :

Yes , but it is quite a sum . Mr. Chairman , there was also a ... No , I think

that is mainly the reason . THE CHAIRMAN :

Telephone and postal services?

I wish all the

Departments could make such a saving , because that is where the loophole seems to be in some of the Departments . Anyway , could I then refer you to Main Division E. What expenditure in regard to mission hospitals falls under this division of your Vote ? MR . OLTMANN :

Mr. Chairman , there is the R- for- R contribution in respect of the pensions of the staff under the Public Service Commission .

THE CHAIRMAN :

In mission hospitals ?

MR . OLTMANN :

Well ,

all the staff ,

and we mention here that

particularly the mission hospitals were not taken over , SO that accounted for some of that .

THE CHAIRMAN : MR . OLTMANN :

Was the staff taken over as well ? The mission hospitals were not taken over , the staff was not taken over as had been planned . delayed .

THE CHAIRMAN :

Then further , Mr. Oltmann ,

It was

for the information of

this Committee , would you please explain what councils ,

18 associations and boards are involved under this division of your Vote ?

You refer here to councils and

boards . MR . OLTMANN :

Under H?

THE CHAIRMAN :

Yes .

MR . OLTMANN :

We envisage bringing about councils for the urban representatives to assist them in their liaison and contact work . Up to now they have been managing through the liaison they have built up through the Inkatha organization , but this may have to be augmented in respect of certain aspects .

THE CHAIRMAN : MR . OLTMANN :

So this is something new that is going to start ? It is something that has to be started off and one has got to be careful in organizing it . It has been on the cards for several years and attention is still being given to it .

THE CHAIRMAN :

We then come to page 26 , Statement 6.

Up to

what stage have you now progressed with the distribution of interest to Trust Accounts ? As you know, this is an old story .

MR . OLTMANN :

Mr. Chairman , interest has been allocated up to March , 1980 ,

and if the present rate of work production

can be maintained , the backlog should be eliminated by November of this year . Four and a half years ' interest has been allocated since the sitting of this Committee last year . THE CHAIRMAN :

It is very nice to learn that , because we have Thank you as you know .

been struggling with this ,

very much for the improvement that you have brought about .

I think that is all , Mr. Oltmann , thank you very much .

MR . OLTMANN :

VOTE 2

Thank you , Mr. Chairman .

DEPARTMENT OF THE INTERIOR :

THE CHAIRMAN :

We welcome you , Mr. Van Rensburg ,

and we will

- 19 -start with page 1 of the Auditor- General's Report ,

paragraph 2 ( 3 ) ( c ) . This Committee passed a resolution last year which was followed up by a Treasury Instruction concerning the keeping of an Audit Query Register . Has this instruction been applied in your Department and with what results ? MR . VAN RENSBURG :

It has been applied , Mr. Chairman .

A circular

was issued to all my township managers , an Audit Query Register has been opened ,

and the Audit queries are

split up in the register under different headings .

Say

there are Audit queries relating to thefts or internal checking or informal queries , then they are split up into those various categories and then each category is followed up and when we reply to the Auditor- General , either by way of a progress report or a final report , we mark it off against the specific item which has been queried , so that we do not get confused . Mr. Chairman , I may say that as far as Audit queries are concerned , we are getting on top of them and at the moment I have two of my most senior officials , namely , Mr. John Evert , who is one of my Assistant Secretaries , and Mr. Bronkhorst , who is a Chief Clerk , on Audit queries ,

and Mr. Bronkhorst at

the moment is at Mpumalanga until he has sorted out all the Audit queries at Mpumalanga. I have big problems at Mpumalanga but he is not coming back until he can come back with all those Audit queries answered one way or the other . I must say that there has been ,

as far as I am

concerned , a very big improvement in following up Audit queries and reporting back to the Auditor- General . But here is my register if you would like to see it , and here is my circular if you would like to see it .

THE CHAIRMAN :

MR . CLARK :

Well , I do not doubt your statement , Mr. Van Rensburg . Could I have your comments , Mr. Clark ? Mr. Chairman ,

I would just like to say that as

it says in this paragraph ,

at the time of writing this

Report there was little or no improvement regarding replies to queries .

20 Now , I might say that since this Report before the Committee was written , which was in approximately September or October of 1981 , replies to Audit queries from the Department of the Interior have shown a very gratifying improvement . In fact , I have been able to reduce the frequency of reminders and this has brought about a big reduction in the burden of unnecessary correspondence on my staff .

As I have said ,

this is

very gratifying .

THE CHAIRMAN :

We offer you our compliments .

MR . VAN RENSBURG :

Thank you , Mr. Chairman .

THE CHAIRMAN :

Let us look at page 9 , paragraph 20 ( 2 ) .

This is

the same old story . Mr. Clark , have you any remarks in connection with these thefts and irregularities in this Department ?

MR . CLARK :

Mr. Chairman , it will be recalled that the Committee passed a resolution in this regard last year and it was recommended that certain steps should be taken by Departments to publicize the special 1980 amendment to the KwaZulu Public Service Act and to take other steps to tighten up control . I think it is perhaps at this stage too early to expect any results from this action , but perhaps Mr. Van Rensburg will be able to tell us how things are going in his Department .

MR . VAN RENSBURG :

Mr. Chairman , I am afraid thefts and irregularities you will always have with you - it is the human factor , you just cannot get it out of the way alto-

gether . But I have issued a circular in regard to the amendment of the Public Service Act . I have also made every official in the relative office signify in writing that he has read the circular and that he has it in his possession and if I have any further thefts I will take action against the checking officer or the officer responsible in the relative office ,

for him to

repay that amount of money .

THE CHAIRMAN :

Yes , I quite agree with your approach , but I cannot accept wholeheartedly your statement to the effect that we will have to agree to live with thefts

-- 21 and irregularities , because one must try and cut them down as much as one can . Although we know that the human factor is involved , we should do our very best . MR . VAN RENSBURG :

No , that is correct , Mr. Chairman , and I am not

saying that because we have them , we are not doing anything about it . We are trying our best to avoid it but human nature is such that every clerk designs some way of filling his pocket from Government funds in an unauthorized manner .

THE CHAIRMAN :

Can we then proceed , Mr. Van Rensburg , to page 9 , paragraph ( 2 ) ( d ) ? There mention is made of a case of survey equipment which was stolen . Can you give details

MR . VAN RENSBURG :

of this , please ?

Yes , Mr. Chairman .

The surveyor was on duty in the vicinity of Durban and he had the survey equipment in his Landrover . He then went and found accommodation but there was no garage for his vehicle , and although it was parked in the yard and the car was locked , people broke into the car and stole the equipment . They thought they were cameras , but I mean , they did steal it and the matter was reported to the police immediately and I think some equipment was found back , but the balance we could not find at all . There was nothing we could do about it .

I could

not make out a case against the official , holding him responsible , because he had ,

as far as I am concerned ,

taken all reasonable steps to safeguard the equipment . As a matter of fact , he wanted to park the vehicle at the Government Garage , but the Government Garage would not accommodate a ZG vehicle . So he really had nowhere to park it where it was absolutely safe , and it was locked , it was on the premises . Further than that I

THE CHAIRMAN :

Well , Mr. Van Rensburg , I think this is something that happens , but I think in future it should be recommended that they take the stuff into the house , I mean , valuable things like that , instead of leaving it in the vehicle .

MR . VAN RENSBURG :

Mr. Chairman , that is very difficult because it

- 22 This survey equipment is very is bulky equipment . bulky , but I have issued an instruction to my Chief Land Surveyor that they must either park the car at the police station , no matter how far they have to walk , or if they have to take a taxi , rather to debit my Government with the taxi fare than to lose thousands of rands ' worth of equipment .

I agree with that .

THE CHAIRMAN : MR . VAN RENSBURG :

So if it happens again that a car is parked on

the premises of private people and equipment is stolen , then that official will be held responsible . THE CHAIRMAN :

I think that is quite fair . Well , that is about all I have for you , Mr. Van Rensburg .

MR . VAN RENSBURG :

Thank you , Mr. Chairman .

COMMITTEE ADJOURNED AT 10h14 COMMITTEE RESUMED AT 10h30

VOTE 3

DEPARTMENT OF WORKS :

THE CHAIRMAN :

Mr. Johns , we are on your Vote and could we get some information about some of the queries according to the Report of the Auditor- General ? We turn to page 1 , paragraph 2 ( 3 ) ( c ) . I first want to ask Mr. Clark whether there has been any improvement in replies from this Department .

MR . CLARK :

Mr. Chairman , I am happy to say that most of the backlog of replies to Audit queries and minutes has been cleared at this stage . What is now outstanding are only bits and pieces needing to be cleared up . But before Mr. Johns gets too happy about the situation , I may also mention that as a result of a spate of resignations , Audit inspections have come to a virtual standstill for the last six months and I trust that when the flow of inspection reports and queries is restored , the Department of Works will be able to

- 23 maintain this good record of replies . THE CHAIRMAN :

Thank you . Mr. Johns , have you found that keeping a register of Audit queries as recommended by this Committee last year , has helped you to keep abreast of progress in replies to Audit queries ?

MR. JOHNS :

THE CHAIRMAN :

Yes , Mr. Chairman , very much so . It is gratifying to know that recommendations are carried out . I am glad that everything is going smoothly . Let us now turn to page 10 , paragraph 21 ( 1 ) ( a ) . Mr. Johns ,

can you give the Committee an idea of

the types of vehicles purchased and indicate what the policy of your Department is with regard to the types of vehicles allocated to particular persons or ranks?

MR . JOHNS :

Mr. Chairman , first of all I think I must say that the KwaZulu Government as such does not call for tenders or contracts for vehicles .

We abide by the

State Tender Board's contract which is called for for the whole of South Africa .

In this way we get a much

better price and then we only order those vehicles which are approved for that particular State contract which is applicable , as I say , to everybody in South Africa, and this is reviewed every year . So really we do not have much choice in the types of vehicles we order according to what has been approved .

THE CHAIRMAN :

MR. JOHNS :

Approved by? By the State Tender Board , the South African State Tender Board , which is also acceptable to our Tender Board . That is the first point . The second is that as far as it concerns the issue of vehicles to various Departments , there is a laid down salary scale in respect of what a person is entitled to . As far as my Department is concerned , we get requests from the various Departments for replacement vehicles once they have done their allocated official mileage , and we then supply in terms of that and in terms of whatever money is made available . I can only say that in the present financial year only

- 24 · 40% of Departments ' requirements are able to be met , because we have not got sufficient money to meet 100% of their requirements . I do not know if that answers your question , Mr. Chairman .

THE CHAIRMAN :

Yes , partly it does , but I am also interested to know whether there is a discrepancy as far as the requirements of Departments are concerned . Does each Department accept what it gets or does it have a specific choice ?

MR . JOHNS :

They only have a choice in terms of what is approved under contract .

THE CHAIRMAN : it? MR . JOHNS :

Yes , but it cannot all be in the same range , can I mean , we can have super and the ordinary ... Yes , well , the lower ranks are either given a

1200 or a 1300 cc vehicle , depending on the type of job they have to do . Like the Department of the Interior , for instance ,

they have now decided that what

is most suitable for their superintendents to get around townships and so forth is a bakkie . Now, a bakkie is much cheaper to the Government than a motor- car , so now we are ordering bakkies , and the same applies in the case of most of my staff who also do inspection work and that sort of thing . We now issue them with bakkies instead of motor- cars , because this is a very much cheaper vehicle . Then you get the 1600 cc . As you rise in the service , so you become entitled to a bigger motor- car , until you eventually reach the position of Secretary , where you can have a vehicle of Well , at the moment ... most of us are driving 4.1 Commodores ,

and then ,

of

course , we have got special dispensation for the Ministers to be given Mercedes Benz cars , which are not on contract . THE CHAIRMAN :

Well , what I wanted to know specifically was whether certain types of officers are entitled to certain types of cars ?

MR . JOHNS :

That is correct .

THE CHAIRMAN :

Then let us look at page 11 , paragraph 21 ( 2 ) .

· 25 -· This is the same old story .

Will you please in-

form the Committee what steps you have taken in response to Treasury's circular No. 4/81 in so far as it concerns publicizing the amendments to the KwaZulu Public Service Act and informing the officers of their duties ?

MR . JOHNS :

Mr. Chairman , I want to first of all apologize, because unfortunately we only received this Treasury It was circular after we made enquiries last week . not sent to my Department , it never went through my registry , although I see that it was issued in September , but I am happy to be able to say that most of the recommendations of that circular had already been complied with . All stores officers have been informed in writing and the same applies to all checking officers . Meetings are held once a month with regional directors and stores personnel and all problems relating to control of stores , checking , stocktaking , et cetera , are discussed . A comprehensive procedure manual has been drawn up for the guidance of all staff engaged in the checking and control of stores and will be ready shortly for submission to Treasury . Checking and stores officers have all undergone courses in stores administration and these courses are conducted whenever necessary . There is a stocktaking team comprising of six persons who are continually taking stock throughout KwaZulu and it is from the ranks of this unit that stores inspectors and officers are appointed . Extracts from the KwaZulu Public Service Act , Act No. 7 of 1975 ,

as inserted by section 1 of the

Amendment Act , Act No. 5 of 1980 , have been distributed to all officers handling Government property in the Department . I can only add to that and say that in all cases of theft at the moment the alternative charge under the Public Service Amendment Act is now being insisted upon .

THE CHAIRMAN :

Thank you . Mr. Johns , on the same page , page 11 , paragraph

- 26 21 ( 3 ) , can you please explain why there were such substantial surpluses of electrical goods and fuels and oils , and does this not indicate a lack of proper control over these items ? MR . JOHNS :

Mr. Chairman ,

can I deal first with the electric-

al goods , because that seems to be the biggest amount , namely , R53 392,01 ? What actually happened there was that electrical material was drawn from the stores at Mpumalanga and Umlazi by the electricians for a job of streetlighting that had to be done at Mpumalanga Township , but on investigation at a later stage it became apparent that far too much material had been drawn from the stores and the material was subsequently returned to the Mpumalanga store and taken on charge again . Correct procedures were followed throughout the operation , but I think the mistake we made was that we then regarded this as surplus material , which it was not . A Board of Survey was convened and the material was approved and Treasury approval was given , whereas in fact this was not necessary . That is as far as it concerns the electrical material . Coming to surpluses of fuel and oils , they are normally caused by faulty flow meters . Dipstick readings should be taken every day but faulty dipstick readings can occur owing to the inexperience or negligence of the person responsible . Many of these depots are in remote places and can only be inspected once a month , when the defects are discovered . But I also want to make the point , Mr. Chairman , that the surplus in oils forms a very small part of the total amount and from what we can gather ,

this is common , not only to the KwaZulu Go-

vernment and our depots , but this is also the experience of most garages and I think we are well within the percentage allowed as far as this is concerned .

THE CHAIRMAN : MR . JOHNS :

So you reckon the control is sufficient? Well , we have got another problem , Mr. Chairman , and that is that the staff turnover at the depots is very large and it is very difficult to recruit suitable

-- 27 candidates for appointment . THE CHAIRMAN :

Is there no over- issuing of stock perhaps , in some instances ?

MR . JOHNS :

Not as far as I am aware , Mr. Chairman .

THE CHAIRMAN :

Mr. Clark ,

MR . CLARK :

can you help us on this one ?

Mr. Chairman , regarding the electrical goods , Mr. Johns has said that this amount represents electrical material issued in excess of what was required . The question may arise then , what control is there over the issue of electrical goods that this could have happened? Are issues not controlled by something like a bill of quantities or something of that nature?

MR . JOHNS :

Well , I think what happened in this particular instance - or it is not what I think , it is what actually did happen in this case . We had an overzealous control inspector who felt that he was going to get the job done much quicker than was actually possible in practice and they encountered all sorts of problems and they had already withdrawn the material and it was only subsequent to that that we found we could not get on at the rate we thought we would get on and these materials were then returned to the store . I mean , I cannot see that there was anything ... ( INAUDIBLE )

The control inspector goes to the store

and he says , I need these materials for this job and the stores officer acts quite within his rights in issuing it .

THE CHAIRMAN :

The ordering and the control , you do not find that there is a discrepancy there ?

MR . JOHNS :

The ordering and the control ?

THE CHAIRMAN :

Yes .

MR . JOHNS :

No.

Before any job is tackled , of course , we

plan and order all the materials and we get them into the stores , or onto the site in some instances , before the job is started . We do have a little bit of trouble now and again , like we recently had in the

- 28 Pietermaritzburg area , where the Department of Education and Culture requested us to build five offices for their circuit inspector and we were informed by them that they had got permission for us to build on a site which is not in KwaZulu .

We went there with our team ,

and we programme

these jobs , Mr. Chairman , it is not a case that you can just take a person today and tell him to start a job . This is programmed months in advance . Now, the team arrived there with the building materials and everything and we were told that we had no permission to use that site . So that job has not got off the ground . I mean , you get that sort of thing .

Now it is

back to the Department of Education and Culture to get permission for the site . The circuit inspector had spoken to the local magistrate and the local magistrate had said that he had no objection , but he was not the person who was authorized to give permission .

THE CHAIRMAN :

I mean , Yes , but you referred to programming . this could have been detected during the process of programming ,

MR . JOHNS :

such discrepancies ?

No , Mr. Chairman , because it is that Department's responsibility .

They ask us to do a job for them and

it is their responsibility to get the site aspect cleared and all permissions obtained and they then advise us in writing that this has been done , which was the case here . The circuit inspector advised the Secretary of his Department that he had got permission , but he got permission from the wrong person . THE CHAIRMAN : MR . JOHNS :

So this is just an isolated case? No , it is not so isolated , it happens reasonably frequently , Mr. Chairman . We had the same thing at Nkandla with offices there for Education . We had the same thing recently with the Table Mountain Clinic , which is being built at the request of the chief and the people and the Department of Health in an area which actually has not yet been transferred to KwaZulu , and there in fact I

- 29 went to a meeting where the Chief Commissioner of Natal picked me out and said , well , what right have you got to be there? You have not had any authority . Now, I got most annoyed over this , because it was not only serving ...9 well , let us say it was serving the Zulu people , whether they are in what is termed a Trust area or a KwaZulu area . So it was serving people who are his responsibility as well as people who are the responsibility of the Department of Health and Welfare of KwaZulu . I then said to him , well , if that is your attitude , I will tell my people to go and bulldoze what we have built - we were up to window- sill height at that stage - we will bulldoze the lot and we will find somewhere else to build our clinic and you can build your own clinic ,

and only then did he say , no ,

alright , I give you permission to build in my area . So we do have these problems . It is not all straightforward .

You can plan to the best of your

ability but the end result is not always what you expect .

THE CHAIRMAN :

Mr. Johns , are you in the process of devising something to overcome this , because as you say , this occurs now and then ? Now , is that not causing some losses ?

MR . JOHNS :

It certainly causes us a time loss , because you go to all the trouble to programme it and then you find you cannot get on with the job , and then you have got to possibly bring forward another project and you This can happen might not have the materials on hand . and it does happen . I think Mr. Liversage will possibly be able to help me out here , but what we are trying to insist on now is that no project is given a priority by any Department until such time as they have got the site aspect cleared .

THE CHAIRMAN :

That is what I was more or less trying to get from you .

We are still on the same page , page 11 , paragraph 21 (4) . Mr. Clark , will you please explain this paragraph

- 30 and give details ? MR . CLARK :

Mr. Chairman ,

the Tender Board is an institution

established in KwaZulu by an Act of the Legislative Assembly , Act No. 16 of 1979 , and the basic purpose of this Board is to procure supplies and services for the Government of KwaZulu to best advantage . Departments are obliged to obtain services and supplies through the Tender Board and in accordance

with the procedures laid down . Now , provision is made for the Tender Board to approve the arrangement of services without going through the whole procedure of calling for tenders , et cetera , if such an arrangement is in some way adBut such approval vantageous to the Government . or exemption , forehand .

as it is called , must be obtained be-

Now, in the three cases mentioned in this paragraph of the Report , the Department of Works arranged for contracts to be extended and in one case for additional work not related to a contract , to be performed , without first approaching the Tender Board for exemption from normal tender procedures . The Department rationalized its action in these cases by issuing so - called variation orders and when these cases were queried by Audit , the Tender Board was approached for post facto approval , which the Board was not at that stage prepared to grant . But I suggest that before the Committee goes into detail of the individual cases reported , perhaps we should first discuss this whole concept of variation orders . To introduce this subject , I would like to mention that most construction contracts I think Mr. Johns will agree with this - of any reasonable size usually contain a clause making provision for details of the work to be varied if it should be found to be necessary , and this is done by the issue of variation orders . In terms of such a contract the contractor is then bound to carry out the changes , but in order to protect him ,

that is , the contractor , variation orders

are limited and can only be issued for work described

- 31 .in the contract and they can only be concerned with the quantity , the quality and the form of the work

concerned . Now, the main point I am trying to make is that work not described in or not forming part of a contract , cannot be added by means of a variation order . THE CHAIRMAN :

MR. CLARK :

So there are two separate things here in variation of a contract ? Yes , variation is a possibility but a variation order is limited to varying the details of work already described in a contract . In circumstances where it is necessary to add something additional not described in the contract , then the approval of the Tender Board and the Treasury must be obtained beforehand .

THE CHAIRMAN :

Mr. Johns , do you have any comments on what Mr. Clark has just said?

MR . JOHNS :

Mr. Chairman , Mr. Clark has said that we must not go into detail but I would like to put to the Committee the circumstances under which this was done . There were special reasons or special circumstances attaching to all these variation orders . The variation orders were issued with my authority , to the best advantage of the KwaZulu Government , as I saw it and as I still see it , and with no loss to the KwaZulu Government as I see it , and we have , as Mr. Clark has said , tried to get post facto approval of the actions that were taken . We must accept what Mr. Clark says , but strictly speaking we were outside of what was actually described in the approved contract . But in actual fact I at that time still saw it as additional to the contract that had already been approved and that was the reason why the variation orders were issued , and I would like to give some of the particulars if I may , Mr. Chairman .

THE CHAIRMAN :

If I may just interrupt you , Mr. Johns .

I think

the main thing I am concerned about is to get an understanding of the variation of a contract , is what Mr. Clark has just explained to us .

and this You went

32 beyond that variation ... MR . JOHNS :

No , we issued a variation ...

THE CHAIRMAN :

Of a contract .

MR . JOHNS :

... of the contract , but it was for work that was not actually specified in the original contract .

THE CHAIRMAN :

Yes , but then it is not on the contract .

If it

is not specified it could not have been . MR . JOHNS :

That is correct , Mr. Chairman .

THE CHAIRMAN :

So we agree on that one ?

That is the main thing

that I was trying to find out and to see where we can agree or disagree . MR . JOHNS :

Certainly .

THE CHAIRMAN :

So you faulted with your contract?

MR . JOHNS :

MR . CLARK :

That is why I said I would like to give the specific instances and the cases , ... We can do that and I can give the details as reported .

MR . JOHNS :

... because I think we were to a certain extent

justified . THE CHAIRMAN :

I do not know how the other gentlemen feel here , but now we have a clearer picture . Mr. Clark , can we now have details of the cases reported?

MR . CLARK :

Mr. Chairman , I suggest we take them one by one . The first of the two cases making up the amount mentioned of R19 350 was the cost of surveying an access road from the landing strip to Manguzi .

Now,

the Department made use of consulting engineers who were at that time engaged on contracts concerning the Mr. Manguzi Hospital and a hostel complex in the area . Johns will say whether he agrees with the details I am giving . Now , the Department made use of these consulting engineers , obtaining prior authority to dispense with the prescribed tender procedures for such additional services and the Department charged the cost of R1 616 odd to the provision for the hostel complex .

- 33 Post facto Treasury authority for the expenditure was obtained after the matter had been queried by Audit , but it was then pointed out that the exemption of the Tender Board was necessary in order to comply with the law and the Department then made application for the extension of the contract , facto basis .

as they put , on a post

The Tender Board rejected this application with the following comment :

" The Board fails to give post facto approval as the matter on hand is not an extension but a completely different project . " THE CHAIRMAN : MR . JOHNS :

THE CHAIRMAN :

MR . JOHNS :

Mr. Johns , is that correct ? The facts are correct , yes , except that I would like to add to it , if I may . Go ahead . At the beginning of 1980 I attended a site meeting at Manguzi Hospital as well as an inspection of the site on which the Shayina Hostel complex was to be built . I was taken to Manguzi by the consultants employed on both these projects by air from Ulundi to Maputa and we landed on the airstrip there . We then drove in Landrovers for about 30 minutes over a distance of plus - minus 15 kilometres and finally arrived at the hospital . During my visit I established that although the airstrip was only plus - minus 3 kilometres from the hospital , there was no direct access due to swampy ground , and that was why a deviation of plus - minus 15 kilometres had to be undertaken . I would like to add also that this is over the veld , there is no road , nothing . As my Department was going to be involved for at least two years in these projects Mr. Clark has mentioned , that is , the Manguzi Hospital which was a plus -minus R1,5 million extension ,

and the Shayina

Hostel complex which was plus - minus R700 000 , and as the airstrip would be used frequently for visits and inspections ,

I personally instructed that a more direct

- 34 route to the airfield be investigated , As the consultants , Messrs . Bosch and Associates , were already employed by the KwaZulu Government in that area - and I also want to make the point here that they were not appointed by the KwaZulu Government , they were appointed by the Department of Co - operation and Development , we do not appoint consultants they were requested to do a survey for a new route and this amounted to R1 616,61 and it was erroneously debited to the Shayina Hostel complex . The road of three kilometres was subsequently built by my Department at a cost of R1 004 and it is still in use . The saving of 24 kilometres on the round trip to and from the airstrip has resulted in thousands of rands being saved in fuel ,

time and

travelling costs . I am satisfied that the extension of contract ZTV.1291 was in the best interests of the KwaZulu Government .

THE CHAIRMAN :

I do not know , Mr. Johns , whether you are in agreeI mean , I have no qualms about this , ment with me . you had good intentions , but we are more or less trying to comply with the regulations .

MR . JOHNS : THE CHAIRMAN :

I agree .

We have tried ...

Yes , but were there no other means of getting a contract for that specific arrangement , other than varying the contract ?

MR . JOHNS :

Actually , in the work we did not vary the contract . It was only the use of consultants who were already employed in that area .

THE CHAIRMAN :

Did you go to the Tender Board?

MR . JOHNS :

We did go subsequently to the Tender Board ,

as

you have heard from Mr. Clark , but they refused to give approval .

THE CHAIRMAN :

Was that not an indication then that you had to consider it seriously , because I mean , if the Tender Board does not back you up then what chance do you have?

MR . JOHNS :

No , we went to the Tender Board after we had

35 already appointed the consultants . MR . DUBE :

Mr. Chairman , what is the end of the story from

here? MR . CLARK :

Mr. Chairman , if I may say something at this

stage . Mr. Johns has admitted that the correct procedure was not followed in obtaining prior Tender Board approval for an exemption from calling for contracts in this matter and he has also given us a very strong motivation why he acted as he did . Now, as the Chairman has also said , no one is objecting to the fact that this was done , it is a question of regularizing the whole matter at this stage , and I would say in this connection that the Tender Board has not Their reentirely closed the door on this matter . jection was based on the fact that the application was made post facto for this survey job to be approved as an extension to the Shayina Hostel contract , which of course it was not , being an entirely different project . This was the reason for the Board's rejection and it may be that the Tender Board will still consider an application for granting of post facto exemption . However , if they do not grant such exemption , if they are approached again , then as I see it , this expenditure will technically have to be regarded as unauthorized and as such it will have to be submitted for specific appropriation by the Legislative Assembly during its next Session . I cannot speak for the Tender Board , but I would say there is a very strong case to approach them again .

THE CHAIRMAN :

I think I am in agreement with Mr. Clark here . We have got to tidy up this thing , it is untidy as it stands now . What do you say to that suggestion , Mr. Johns ?

MR . JOHNS : THE CHAIRMAN :

We will definitely approach them again . I think it will be best for us all if that can

be done . Mr. Clark can you , or Mr. Johns ,

say how the

- 36 .amount of R1 616 was made up ? It was just consultants ' fees , survey fees .

MR . JOHNS :

As

I have said , the work was actually done departmentally by my Department at a cost of R1 004 which is not ... So this can be included in the ...

THE CHAIRMAN : MR . JOHNS : case . MR . CLARK :

No , the R1 004 is not relevant at all in this It is just the consultants ' fees .

Mr. Chairman , I have before me a copy of the invoice from the firm Bosch and Associates for this amount of R1 616,61 , which gives the following details : The professional fee on the part of a surveyor It was R471 , 25 , and his assistant's fee was R25,00 . assistants technical two for subsistence also includes for three days amounting to R89,96 and airfares from Durban via Ulundi and Empangeni to Manguzi for five persons and airfares from Manguzi via Ulundi to Empangeni for five persons , the airfares amounting to R1 010 , 40 . These amounts together amount to R1 616 , which was the amount paid by the Department for this survey job .

THE CHAIRMAN :

Thank you . Mr. Johns , if these people were then available at Manguzi , how is it that they had to be flown from Durban to do this job ?

MR . JOHNS :

That is their head office and all their personnel came from Durban .

THE CHAIRMAN :

Mr. Clark , what are the details of other cases included in this paragraph?

MR . CLARK :

Mr. Chairman , the second case concerns a fencing contract in the Mahlabatini and Nongoma districts . This contract was for an amount of R56 960 and it covered fencing to be erected at the Ulundi Legislative Assembly , at the Ulundi cemetery , at 25 houses in Ulundi and 46 houses in Nongoma . Now , by means of a variation order for an amount of R17 732 additional work was added by the Department to this contract , namely , fencing of the Ulundi High

- 37 -· School , the Chief Minister's house and a further 17 houses at Nongoma . In this case also it is felt that additional work al

was added which should have been put out to tender , or

N

at least approved by the Tender Board through an exemption . As far as is known , no approach has been made by the Department to the Tender Board in this connection . It is my contention that here too the additional work , and therefore the expenditure involved , will be unauthorized if exemption from tender procedures is not granted by the Tender Board .

THE CHAIRMAN :

Can we treat this the same way , Mr. Johns ?

MR. JOHNS :

Yes , we are going to the Tender Board for exemption .

THE CHAIRMAN :

And then again , Mr. Clark ,

can we now have details

of the further case reported , namely , that involving R54 821 ?

MR. CLARK :

Mr. Chairman , this case concerns the action of the Department in arranging for the servicing of the landing strip at Ulundi as a variation on an existing contract for streets and drainage in Ulundi itself . The Treasury approved the expenditure but qualified its approval subsequently by stating that post facto approval of the Tender Board should be obtained .

1

The Department of Works approached the Tender Board office ,

stating that it was under the impression

that the Treasury had already approved its action ,

I

but the Tender Board office rejected this application as well .

S In this case also it is clear that the Tender Board will still consider an application for an exemption if it is sufficiently motivated . Also in this case ,

if such authority again is not granted ,

then the expenditure will also in my opinion have to be dealt with as unauthorized .

THE CHAIRMAN :

Mr. Johns , were these such pressing occurrences that you had to act? Could it not have been delayed instead of getting into this situation ?

-- 38 -MR . JOHNS :

May I give the circumstances of this case , Mr. Chairman?

THE CHAIRMAN :

Just briefly , we do not want details .

MR . JOHNS :

No , briefly .

As Mr. Clark has quite rightly said , we had a contract for the completion of the tarred streets here in Ulundi A Township and also for the resurfacing of the existing tarred streets between all the administrative complexes . The amount approved for this tender was R624 757.

The final amount paid for that

job was R565 518 , so there was a saving of R59 239 . However , just before the completion of the work it so happened that we had a storm at Ulundi and as a

RMAN

result the plane bringing the Chief Minister back from a trip could not land on our airstrip as it was too slippery , and as far as I can remember the plane had to be diverted to Richard's Bay and we had to send vehicles down from here . The cars were waiting up

KEMAN

here for them to land and we had to send them posthaste to Richard's Bay to bring them up here . A day or two later , I cannot remember exactly how long after it was but a day or two later a request was made by the Chief Minister that efforts be made to

BTS:

prevent a recurrence of such a thing , that our landing strip be tarred and be made suitable and safe for the plane to land at any time under any circumstances and in any weather conditions . Knowing that there was this saving on the contract ,

and the contractors were still completing the

job , we went to them and asked them whether they would do that as an extra , as a variation on the contract , at the same rates that they had previously tendered for . In other words , they were the lowest tenderer for this job , and we then issued them a variation order in an amount of R54 821 and within two weeks we had that airstrip tarred and resurfaced . Those are the special conditions under which this was done .

THE CHAIRMAN :

So you did not go to the Tender Board ?

MR . JOHNS :

We did subsequently and they were not ... 9 we got

R

39 Treasury approval for this but not Tender Board approval . MR . CLARK :

MR . JOHNS :

Both approvals were obtained after it was queried by Audit . That is correct .

In fact , we felt that this was

a legitimate variation of an existing contract and we were not exceeding the existing approved value of that tender . In fact , we still have not exceeded the Tender Board authority , in that they approved R624 000 and even with this work done we are still R3 000 under what was approved . THE CHAIRMAN :

Yes , but that is ...

MR . JOHNS :

But it is a job outside the contract .

That is

the point , I think . THE CHAIRMAN :

Yes , that is the main thing . It is most unfortunate that these instances come one after the other , because in fact it looks very , very untidy like this , as though you are just overlooking the regulations . I suppose you will go back on this one too then?

MR . JOHNS :

MR . MKHWANAZI :

Yes , we will have to . Mr. Chairman ,

for purposes of economy I agree with

Mr. Johns , while I would also like to point out that , as you say , to tie it up it is the proper thing to go to the Tender Board . There may be problems if it seems that this is being done purposely , because it comes back to the Estimates , that perhaps the Estimates were wrong and that they overestimated because of the ... ( INAUDIBLE )

THE CHAIRMAN :

Well ,

as I say , it does put Mr. Johns in a

better position if this can be tidied up , in that it gives an indication that you are underestimating , and somebody needs to give an explanation before one knows all the facts , which is most unfortunate .

MR . JOHNS :

I would like to say that in this case , Mr. Chairman , I do not know , it depends on a person's viewpoint , but I regarded it as an emergency and we are empowered to carry out emergency issues , let me put it that way ,

40 and obtain post facto approval from the Tender Board for it . For argument's sake , as has happened quite recently at Tugela Ferry , the pump broke down , there was no water supply to the schools , the hospital , and it required R37 000 to replace the pump . All that happened was that a telephone call was made to my office and I told them to take a truck , go to Durban and get a new pump at R37 000 and put it in , without any Tender Board approval . We subsequently went to the Tender Board and got ex post facto approval for this . Now , I do not know whether you also regard this as an emergency , seeing that the request actually dealt with the safety and security of the Chief Minister . THE CHAIRMAN :

No , no , I do not think you can put it that way . I mean , this has nothing to do .. , the explanation you have given ... All I am saying is that if there is a contractor who is doing a job , who is on the spot , and then you vary that contract without the Tender Board's approval ,

that is completely against the law

and we have to explain in the Report here how we looked upon this . MR . JOHNS : THE CHAIRMAN :

I accept that , Mr. Chairman . So whether it was the Chief Minister or anybody else , it is immaterial . Here we have got to specify how we treated the matter financially .

MR . JOHNS :

No , I agree with that .

All I am trying to show

is that I am also in an invidious position when it comes to requests of this nature . THE CHAIRMAN :

We are with you , that is why we say ,

tidy this up ,

because we do not want you to be badly reflected . With us also being in the same light we know what the position is , but we have to explain it . In summarizing I wonder whether Mr. Clark has any other comments ? MR . CLARK :

Mr. Chairman ,

seeing that everyone is busy

explaining their invidious positions in this matter , perhaps I can say something about my position .

"

- 41 The Auditor- General , in terms of the Exchequer and Audit Act ,

is obliged to report to the Legislative

Assembly all cases where authority for expenditure has not been obtained , in other words , unauthorized expenditure , and I would just like to point out that in this case ,

technically , these three items are at

this stage still unauthorized and it requires the Tender Board's final seal of approval before we can regard them as authorized . Therefore I trust that Mr. Johns

will take the necessary steps to approach

the Tender Board and that Audit will be advised of the outcome so that we will know what to do in this matter next year . MR . JOHNS :

I will do so , Mr. Chairman .

THE CHAIRMAN :

Thank you , Mr. Johns .

MR . CLARK :

Then perhaps I should also just confirm the Department's approach to the matter of variation orders , because there can be some doubt in certain cases as to whether a variation order is permissible or whether it is a case that is outside a contract and should be referred to the Tender Board . Now , all I can say at this stage is that my advice to the Department would be that if there is any doubt whatsoever , go to the Tender Board rather than issue a variation order and find later that it is not sufficient to cover the case . We do do that in most cases , Mr. Chairman .

MR . JOHNS :

MR . CLARK :

I might also mention , Mr. Chairman , that the Central Government Treasury issued a circular in which this matter was dealt with . I do not know whether the KwaZulu Treasury would perhaps consider it necessary to issue something on similar lines in connection with such cases as those that have now been discussed .

MR . VAN DEN HEEVER :

We will look into that , Mr. Chairman , and I think it will in that case help the Department of

Works to regularize their actions and to prevent this sort of thing from happening , if they have a guide - line . So I think it is worth-while looking into .

THE CHAIRMAN :

Let us then pass on to page 11 , Appropriation

42 -

Account . Mr. Johns , with regard to Main Division C , why was this provision not made ? MR . JOHNS :

The overexpenditure was caused by our share in the installation costs of the new telephone system . We did not have any idea at that point in time , when the Budget was drawn up , what this was going to be and we could only rectify it with the Revised Estimates .

THE CHAIRMAN :

Mr. Johns , referring to the explanation for Main Divisions H , J and M, will you please give details of the specific projects involved and explain why they were not commenced on time or not undertaken at all ?

MR . JOHNS :

Mr. Chairman , I am sorry , you will have to give me time to get all those details of those projects because there is a long list of them . There are probably 30 or 40 projects which were all enumerated in the Revised Estimates and in fact the surplus that was surrendered was actually re - asked for in the First Revised Estimates to complete those projects . I think Mr. Liversage can bear that out . Referring to the development of the capital ,

the

saving was because of the fact that we originally awarded the contract to the lowest tenderer and after a delay of , I think ,

some six weeks , it was established

that he could not provide surety to the satisfaction of the Tender Board , so he did not get the contract and then they had to renegotiate , well , not really renegotiate , they had to then offer the contract to the second lowest tenderer . All this caused a delay of three months and in those three months this amount of money would have been spent had the original contractor gone on site . We are now talking about the building of the Legislative Assembly Building here at Ulundi . But if you want details of all the other projects , I can get it , it is available but I do not have it with me at the moment .

THE CHAIRMAN :

Yes well , the item itself shows here that it would have been wise to sort of prepare a guide when questioning you about this , because it is open to

-· 43 questions as it stands . MR . JOHNS :

That is correct , but I did not realize that you would want all that detail , Mr. Chairman . It is just the figures -

THE CHAIRMAN :

this figure for this

and that figure for that and so on . MR. JOHNS :

I have already mentioned one of the projects when I mentioned the Nkandla offices where we had trouble with the site , and that project was not undertaken at all . That is one of those projects that was not undertaken at all for that reason , but it is now being done because we subsequently got approval for the site .

THE CHAIRMAN :

I think it would be a good thing to give us You can submit it at added information about others . a later stage . Do I understand clearly now , Mr. Chairman , that

MR . JOHNS :

you want ...

THE CHAIRMAN :

H , J and M. it is H and J.

MR . JOHNS :

Well , M you have just explained , so

Why there was a saving of R979 000 and R413 000 odd?

THE CHAIRMAN :

Which projects are involved .

MR . DUBE :

Which projects were not undertaken at all or on

time . MR . JOHNS :

With pleasure , Mr. Chairman .

THE CHAIRMAN :

Otherwise that is all , Mr. Johns , thank you very much .

MR . JOHNS :

Thank you , Mr. Chairman .

THE COMMITTEE ADJOURNED

44 5TH MAY , 1982 09h10 .

VOTE 4 - DEPARTMENT OF EDUCATION AND CULTURE :

THE CHAIRMAN :

We welcome you , Mr. Ndlovu . We have now come to your Vote , so let us turn to page 1 of the AuditorGeneral's Report , paragraph 2 . Mr. Ndlovu , has a register of Audit queries been established in your Department , as was instructed by the Treasury?

MR . NDLOVU :

Yes , Mr. Chairman , we have established a register and we are making use of it .

THE CHAIRMAN :

And are you up- to - date with it?

MR . NDLOVU:

Yes , we are .

THE CHAIRMAN :

Do you find it very helpful ?

MR . NDLOVU :

It is , because it enables us to check what progress is being made and we can follow up each and every case with ease .

THE CHAIRMAN :

I am pleased to hear that . Now , the promptness of replies , has your Department kept this up constantly or have you had any difficulty in replying to queries ?

MR . NDLOVU :

Yes , but we have been able to reduce the number of queries by following up cases and in fact I can only remember one reminder that I received this year . This was in connection with the Bhekuzulu ( ? ) High School . Now, we have problems with the changing of staff and this makes it difficult for a new man to answer for the sins of his predecessor and so on . This is a delaying factor , but I am very pleased with the progress that we have made in that direction .

THE CHAIRMAN :

Still on replies to Audit queries , has there been a satisfactory improvement in the promptness of replies , Mr. Clark ?

MR . CLARK :

Mr. Chairman , I think I can say that there has been some improvement in the promptness of replies received from the Department of Education , but there

- 45 are still some matters outstanding , as Mr. Ndlovu has just said . But in view of what Mr. Ndlovu has now said , I think that these matters will presumably receive his personal attention now through this register and that they will be dealt with in the near future , that is , these outstanding items .

THE CHAIRMAN :

Are there many of them?

MR . CLARK :

Not many , but then again , on the other hand , there are not many institutions falling under Education which are subject to audit . So there is not a very large volume of queries for Education , but as I have said , there are still some outstanding ,

for long

periods actually . However , as I have said , I presume Mr. Ndlovu will now attend to these because he has information as to which items are outstanding in that register , which he can consult at any time .

THE CHAIRMAN :

Let us proceed then to page 12 , paragraph 22 ( 1 ) . Mr. Clark , can you please give me some background information concerning this matter of incomplete records regarding bursaries ?

MR . CLARK :

Mr. Chairman , with regard to this matter I would like to quote an extract from a minute sent by Audit to the Secretary on the 2nd December , 1981 , which I think will perhaps give the history of this matter in a nutshell : "Your Department has annually furnished statements in respect of paragraph 24 of my abovementioned standing circular ( that is , in connection with bursaries ) , regularly indicating that there were no amounts outstanding due to failure of bursary holders to make refunds following breach of contract , and it was only upon enquiry instituted by this office ( that is , Audit office ) in November , 1980 , that it became clear that despite annual statements to the contrary ,

cases

- 46 of such indebtedness did exist and that no effective control was being exercised over recoveries .

1

To date , a full year after the matter was first raised by this office , no advice of steps taken to establish proper records and control other than that a register had been obtained , has been received . " Mr. Chairman , up to yesterday no reply at all had been received from the Department to this minute , so Audit is now completely in the dark as to whether any progress at all has been made in instituting a control register in connection with bursary debts of students who break their contracts . THE CHAIRMAN :

I wonder whether Mr. Ndlovu could reply to this and give us the cause of the delay?

LO MR . NDLOVU :

Yes , it is true that my Department never had a register to reflect which students had been given bursaries and which of them had observed their undertakings by going to teach for the number of years they were trained ,

and when this query came up we had to

start from scratch , which meant starting from 1978 ,

and

LO

it is not an easy task because you do not only write down the names of students that you supported with bursaries , you also want to know what happened to them . Now , this involves enquiring from colleges where they were trained whether they went to teach or not and it is quite a tedious job . It ought to have been started as soon as this bursary scheme was established .

So it is a tedious job and we cannot do it overnight . It involves a num-

ber of colleges and on investigating what happened to the students the colleges often have no means of verifying what happened to the students , whether they were eventually employed or whether they went to industry , and these are the things that are holding us back . But we are getting on with the job , although it

LO

· 47 -

is not easy . THE CHAIRMAN :

It sounds very strange to me that there is such an important undertaking without any proper facilities to keep control . How did that come about? Yes , I agree with you , Mr. Chairman .

MR . NDLOVU :

I think it

was not right for my Department not to keep this type of record . Although we kept a record of all the students who were given bursaries , we did not follow up these students to find out whether they eventually actually went into teaching or not , which would also have given us an indication whether they owed the Department any money or not . If we were to concentrate on students that we gave bursaries to from 1980 or so , it might have been easier , but we started right back from 1978 .

THE CHAIRMAN :

Mr. Ndlovu , in other words , you hardly know whether there are any at all or the number involved ? That information is not available , you cannot say offhand?

I can only tell you the number of students who

MR . NDLOVU :

were given bursaries but how many of them honoured There was no record their contracts , I cannot say . kept of that . THE CHAIRMAN :

Have you improved on this ?

MR . NDLOVU:

This is what we are working on .

THE CHAIRMAN :

Since you came into the picture have you made any arrangements ...

MR . NDLOVU :

This is what we are working on and if things went the way I would have liked them to go , we could have been through with it and we could have been in a position to answer Treasury about this , but because of the fact that the investigations involve people other than the Department here , we have got to wait to find This is the thing . out what their reports are .

THE CHAIRMAN :

I wonder , Mr. Clark , did you know about this set-

up? MR . CLARK :

Mr. Chairman ,

as I said just now , Audit is com-

pletely in the dark as to what progress has been made

48 in this connection , but I presume that progress is being made and hopefully this matter will be under control by this time next year .

MR . NDLOVU :

Yes , in fact I have been checking , but they have not been able to go beyond 1979 in this investigation . They are going on and on , but they have all the names . The tedious thing is to find out whether these people eventually went into teaching and to verify this .

THE CHAIRMAN :

So , in other words ,

there are substantial sums of

money which are not controlled , where it is not known whether they can be recovered?

MR . NDLOVU : THE CHAIRMAN :

I have no idea . Well , I am just saying this because from your description of the situation it sounds as though there is quite a big loss on the part of the Government .

MR . NDLOVU :

Yes well , we cannot say much about this until we have established the fact as to how many of these students did not go to teach .

THE CHAIRMAN :

Well I can say much because I am a watch- dog of the Government and I need to know exactly what amounts are outstanding , which information should have been available . Whether or not the students themselves have repaid it , I think it is important for us to know the amounts involved .

MR . NDLOVU :

Mr. Chairman , this query came up when?

Did it come

up for the first time last year or is it a query that has been coming up ... MR . CLARK :

In 1980 .

THE CHAIRMAN :

For the first time ?

MR . CLARK :

It was queried by Audit in 1980 , but before that the Department every year gave us a certificate to the effect that there were no cases of breach of contract as far as bursaries were concerned .

This was given to

us annually by the Department , a certificate , and for When we that reason no investigation was carried out . eventually did carry out an investigation in 1980 , it was discovered that there were actually such cases , despite the fact that the certificate had been given

-- 49 .in previous years by the Department , rise to this query . THE CHAIRMAN :

and that gave

It is a pity that it was the incorrect information .

MR . MKHWANAZI :

Mr. Chairman , I believe Mr. Ndlovu is also carrying the sins of his predecessors ,

so if he has in-

stituted means to correct the position , perhaps this Committee can also help , because as he has said it is a tedious job to trace a person when you do not know where he is now and who was in school in 1979 and who completed his course . I can state that sometimes when somebody owes somebody else some money , there are certain bodies perhaps Mr. Liversage can tell us about it - that are hired to collect such moneys .

I can see that some

moneys may be lost in this instance because this was not discovered by this Committee for a long time , or by Education .

MR . NDLOVU :

What worries me , Mr. Chairman ,

is that I have

asked these people to get down to investigating cases since 1978 and if , on investigating cases in respect of which a certificate had been issued by my Department saying there were no people owing , then I do not know what will happen .

THE CHAIRMAN :

No , we do not blame you for that , but this has come to our notice now and you can go and sort out the sins of your Department later , not necessarily that you should take the responsibility . But I wonder , Mr. Liversage , do you have any idea of this ?

MR . LIVERSAGE :

Mr. Chairman , the expenditure in regard to burIt is only saries is legitimate and we pay it out . when a bursary holder breaks his contract that it becomes recoverable and the Accounts Branch of the Department cannot take any action until such time as the Staff Section of the Department concerned advises that a bursary holder has broken contract . Otherwise the expenditure is legitimate . So it is entirely up to the Staff Section of the Department concerned to advise us that recoveries must

50 be made , and I think that the record we are talking about is the Staff Section's record of who has actually broken contract .

The result is that the Accounts

Branch is not advised of people who have broken contract and that they have to collect the money . THE CHAIRMAN :

I am quite aware of that , but where I thought you Can you conwould help us is in regard to the past . firm that certificates were issued to the effect that everything was in order ?

MR . LIVERSAGE :

Mr. Chairman , it is a certificate issued by the Department and we must assume then ,

if they issue

such a certificate to the auditors , that the record exists for them to give a certificate like that ,

that

no bursary holders have actually broken contract . THE CHAIRMAN :

This is a very shady area here and we sincerely hope , Mr. Ndlovu ,

that you will do everything you can

to straighten things out . Let us then proceed , gentlemen , to the Appropriation Account . I do not know whether any members have questions on this one , but referring to Main Division J , Mr. Ndlovu , I would like some clarification . The explanation here says :

" Saving due to non-

submission of requisitions " . Can you cast some light on that one ? What kind of requisitions are these supposed to be and was it in regard to the training of industrial workers ? MR . NDLOVU :

Yes .

THE CHAIRMAN :

What requisitions were these ?

MR . NDLOVU :

We do not supply equipment or materials to industrial schools without requisitions being submitted by the principals running these institutions ,

and if

they do not , then it means we cannot spend money .

We

depend upon the requests that are made by these institutions . Sometimes if they do so very late , at about the end of the financial year , then we are unable to pass these requisitions on .

THE CHAIRMAN :

So the teachers at the industrial schools submit requisitions ?

MR . NDLOVU :

Yes .

51 THE CHAIRMAN :

I just wanted to get clarity on that point because we were not aware of the procedure . Do members have any questions on the Appropriation Account? Well , I think that is all then , Mr. Ndlovu , for the time being , until we meet again . Thank you very much .

VOTE 5 - DEPARTMENT OF AGRICULTURE :

THE CHAIRMAN :

We welcome you , Mr. Ferreira . We are now dealing with your Department in the Report of the Auditor- General , Mr. Ferreira , and of course there are particular things on which we would like some light . Will you please turn to page 13 of the Report , paragraph 23 ( 1 ) , which states : " Recoveries amounting to R634 had been made at the time of writing this Report . " . Are there still further efforts in the pipeline in this regard?

MR . FERREIRA :

Yes , Mr. Chairman , but the other outstanding money , unfortunately , concerning the one amount amounting to about R880 we had to get Treasury authority to write that amount off . What happened was that in Okhahlamba ,

at night ,

unknown people broke open our diesel tank and pinched some diesel out of it ,

and after they had broken off

the tap they could not close it again and we lost about 2 200 litres of diesel that ran into the soil . That amounted to about R880 and in the following financial year we got Treasury approval to write that off . In the other case there is just over R600 still outstanding in cheques that were stolen . Those two cases are still with the police , for them to try and solve the cases of the stolen cheques , but they have not been able to finalize them yet .

THE CHAIRMAN :

Cheques ?

How did this come about ?

- 52 ·MR . FERREIRA :

Salary cheques .

A case a Cwaka and a case here

of one of my own staff , William Mkhungu , where people pinched their salary cheques and disappeared with them . These matters are still being dealt with by the police .

THE CHAIRMAN :

Still on the same page , paragraph 23 ( 3 ) , can you give us some background to this fruitless expenditure?

MR . FERREIRA : case .

Mr. Chairman , yes , this is a very unfortunate It concerns a requisition that was placed for

fertilizer for the Empangeni /Ladysmith area .

The

requisition was made out for a certain number of bags of fertilizer , which was approved by the Economy Committee , but the clerk who made out the order , when he looked at the contract , saw that the contract stated " tons " and when he wrote out the order to the firm , he wrote so many tons , giving the same number of tons as bags requested . In other words , ten times more fertilizer was ordered than was actually required by the area . What happened then was that when this fertilizer was being delivered ,

the area immediately realized that they were getting too much fertilizer and we stopped some of the deliveries but we could not stop

all of them and too much had already been consigned to the different stations . We managed to sell some of this extra fertilizer through our co - ops , the Ekwezi and Nala ( ? ) Co - ops , but where it was too much we managed to get the firm to allow us to rail it to other stations , but then we had to pay the railage . So this fruitless expenditure here was actually on railage in rerouting fertilizer to the co -ops and to other people where the fertilizer could be delivered . Fortunately we did not have to pay for the extra fertilizer , we could get rid of it , but the railage on the fertilizer constitutes this fruitless expenditure .

THE CHAIRMAN :

Where was this transaction done ?

MR . FERREIRA :

The Ladysmith office placed the requisition for

- 53 the fertilizer . Then the requisition came down to the Economy Committee over here . The order was written out here and usually a Mr. Van Staden in my office signs the orders , but he was very busy , other work ,

tied up with

and the orders were then sent through to

Mr. Fouche , just to help him get the orders signed and sent off , and he was also in a very big hurry and he signed them . Then the orders went to the firm in Johannesburg and they started delivering the fertilizer . So it was to Ladysmith that this extra fertilizer was delivered , and as I have said , some of the fertilizer was then sold to the Ekwezi Co - op in Msinga and the other to the Nala Co - op in Madadeni . THE CHAIRMAN :

MR . FERREIRA :

I merely asked this because I thought there would be means of cross - checking orders ... Mr. Chairman , you are right .

Mr. Fouche should

have checked the requisition against the order before he signed it .

That is why we have this system where

somebody else signs the order , but he was in such a hurry that he just signed it , he did not notice what he was signing , and it was just the difference between the words "bags " and " tons " . But both the clerk and Mr. Fouche were fined in this case . I cannot remember , but I think it was R25,00 in the case of Mr. Fouche and R5,00 in the case of the clerk . This was just to make sure that in future they do look properly . THE CHAIRMAN :

Being an old teacher like you , I think you know how to impose fines too . I do not know whether you have any questions , gentlemen ?

I think that is about all relating to your Department , Mr. Ferreira . MR . FERREIRA :

THE CHAIRMAN : MR. FERREIRA :

Mr. Chairman , thing ?

can I just point out one small

Yes . I refer to the Appropriation Account , Main Division B. There you see that we had a surplus of

54 R1 million . As you will remember ,

at the previous sitting you

yourself queried us because we had dropped our estimates by R1 million , mistake .

and that was to rectify this

THE CHAIRMAN :

Thank you , Mr. Ferreira .

MR . FERREIRA :

Thank you , Mr. Chairman .

VOTE 7

DEPARTMENT OF HEALTH AND WELFARE :

THE CHAIRMAN :

We welcome you , Dr. Gumede . We are now on your Vote and can we first of all turn to page 1 , Dr. Gumede , paragraph 2 ( 3 ) ( c ) ? Is a register for the control of replies to Audit queries being kept in your Department as instructed by the Treasury in a circular that was issued?

DR . GUMEDE :

Yes , Mr. Chairman , such a register is being kept by my Department . I believe the circular was only issued in September and we have been keeping that register since May .

THE CHAIRMAN : DR . GUMEDE :

So your register is up- to - date? In fact , at Sir , we do follow up the queries . this stage we have submitted our replies to Audit and we are only waiting to go to Audit to find out which of our replies are acceptable . up- to - date .

THE CHAIRMAN :

But we are keeping it

I wonder , Mr. Clark , whether you can comment on that?

MR . CLARK :

Mr. Chairman , I think I can honestly say that although there has been a great deal of improvement as far as this matter is concerned ,

the situation is

still far from satisfactory from Audit's point of view . Perhaps I can quote a couple of examples to illustrate what I mean . There was a minute despatched to the Department

on the 27th February , 1980 , in connection with cash assets at the take - over of the Ekuphumeleni Hospital . Now , to this minute issued in February , 1980 , we have not received any reply to date ,

except a notice to the

e

- 55 effect that the matter is still under investigation . Another minute ,

for example , dated 19th June ,

in connection with an inspection at St. Anne's Hospital has not been replied to as yet . A third example is another minute dated 22nd June , 1981 , in connection with the inspection at the Umlazi Place of Safety . This also has not been replied to to date . Now , these are quoted merely as examples to show that there are a number of queries which are still outstanding . DR . GUMEDE :

Sir , with your kind permission , if I may comment . Sir , that we have some , but perhaps

I appreciate ,

the Sessional Committee will appreciate that we do Firstly , have several problems in this Department . it is a very large Department with a large Vote , and it is only secondly , we are a very young Department Thirdly , we are very about four and a half years old . short of trained staff . We could recruit staff , but we have serious problems in relation to accommodation , both office and residential accommodation ,

and this

really makes it very difficult to go through this matter with a fine- tooth comb . We are But I must say , we are trying our best .

aware of our shortcomings and we are trying our best to overcome them . THE CHAIRMAN :

Yes , Dr. Gumede , I think what Mr. Clark is trying to draw your attention to is the fact that you are not quite as up- to - date as your records are expected to be . We quite appreciate your difficulty , but as you also are aware , the register is a means to enable you to administer your Department efficiently . You do agree on that point ?

DR . GUMEDE :

THE CHAIRMAN :

I agree ,

Sir .

So I think your priority is that register ,

and

although you are short of staff , if your register is kept up - to - date I think you will be able to do your work more efficiently than at present , because now you are losing on both sides - both your register and your work are suffering because of lack of control of the

56 register . Am I correct , Mr. Clark ? MR . CLARK :

Mr. Chairman , if I may say something in this connection , it seems to me that there is a possibility that the register of Audit queries kept by the Department may not be altogether complete in so far as some of these old outstanding queries are concerned and I would just like to say to Dr. Gumede that Audit is quite prepared at this stage to go through that register with a member of his Department and see that everything that is outstanding in our records is reflected in their book . I think this might be of assistance in starting off on the right foot .

DR . GUMEDE :

THE CHAIRMAN :

Mr. Chairman , the offer is very much appreciated and we will start on it immediately . Dr. Gumede , do you agree that the register is of great help to you?

DR . GUMEDE :

Yes , Sir .

THE CHAIRMAN :

I do not know whether members have any questions . If not , let us turn to the Appropriation Account , page 15 . Do you still experience problems , Dr. Gumede , in Are you getting

relation to thefts and irregularities ?

to grips with this problem , do you have any control over it ?

DR . GUMEDE :

Yes , we have a problem 4 concerning thefts and irregularities . Perhaps I may just illustrate this problem with a few examples . For instance , we had thefts at one of our hospitals , the Hlabisa Hospital , where there was one theft These moneys of R1 510 and another theft of R1 095. Howwere stolen by a clerk , Mr. Physical Ndwandwe . ever , he is paying this money back at the present moment . There was another theft at the KwaMashu Polyclinic and here Mr. G.T. Shabalala is being held responsible .

He is paying back the money .

Then at the Ohlange Clinic there was also a

- 57 burglary and the police could not apportion any blame . The matter was returned to us as undetected and we did get Treasury authority , F.T.3 / 5 /7 , to write off that amount . We do have a few outstanding items ,

for instance ,

...

Well , some of them happen to fall under pensions , these were pension moneys . Of course , in respect of For example , pensions we have Justice as our agent . we have a theft of about R20 000 outstanding at Ndwedwe but the police are still investigating . Likewise there is another matter at Morrison Post Clinic .

The police reported to us that the matter was

undetected , but as we had statements from a nightwatchman that he had seen the people commit the burglary , we went to out police here and Colonel Fontini has come back to me to say that the matter has been re- opened again . So we are aware of these thefts and irregularities and we are doing something about them . THE CHAIRMAN :

Well , that is about all , Dr. Gumede . is over and it was very short .

DR . GUMEDE :

Thank you , Mr. Chairman .

THE COMMITTEE ADJOURNED

The operation

-- 58 ANNEXURE 1 TREASURY - 2 September , 1981 . CIRCULAR NO . 4 OF 1981 SESSIONAL COMMITTEE ON PUBLIC ACCOUNTS ' REPORT :

1.

1981

In its submission to the Legislative Assembly the Sessional Committee on Public Accounts gave special attention to the following cases and expressed its concern in respect of the laxity shown by some Departments in this connection .

1.1

1.2

REPLIES TO AUDIT REPORTS AND QUERIES 1.1.1

In his Report for 1979/80 the Auditor- General reported that undue delays occur in replying to minutes and queries relating to unsatisfactory features of control observed during audit inspections of Government offices , institutions , depots , etc.

1.1.2

Failure to furnish prompt and adequate replies not only places an unnecessary burden of correspondence on Audit staff in ensuring that all points are followed up and brought to finality , but also indicates that timeous steps are not always taken to eliminate weaknesses in control and so prevent irregularities and consequent possible losses of Government moneys and property .

1.1.3

The responsibility of Accounting Officers to institute and maintain adequate systems of internal checks and control and also to furnish replies to all queries which the Auditor- General may direct to them , is clearly described in the Financial Regulations and Accounting Officers should take particular notice of these responsibilities .

1.1 . 4

To satisfy themselves of the position at any time and to ensure that Audit minutes and queries are receiving due attention , the necessary registers shall be instituted immediately and properly maintained by all Departments .

THEFTS AND IRREGULARITIES

1.2.1

In the same report the Auditor- General pointed out that sixty- five out of one hundred and thirteen cases of theft and irregularities notified during 1979/80 involved Government officials .

1.2.2

It is clear that existing procedures and checks are generally adequate to prevent most irregularities , or at least to ensure early discovery thereof , provided these procedures and checks are diligently applied . It is al so clear that adequate measures also exist for

- 59 dealing with staff who are guilty of defalcations or who are negligent in the performance of duties relating to the receipt , custody and banking of moneys and the control of stores and equipment belonging to the Government .

1.2.3

If these available measures are strictly applied SO as to make examples of those who transgress , this will also act as a deterrent to others .

1.2.4

To tighten control and to ensure that adequate checking procedures are followed and penalties publicized , the following steps shall be applied : ( a ) all officers responsible for checking should be properly informed of the procedures to be followed , if necessary by means of detailed written standing departmental instructions , to be approved by the Treasury before issue and embodied in their duty sheets ; (b ) the provisions of section 19A of the KwaZulu Public Service Act , Act No. 7 of 1975 , as inserted by section 1 of the Amendment Act No. 5 of 1980 , should be made known to all officers handling public moneys or property ; ( c ) the powers of Secretaries of Departments to impose surcharge on officers where losses result from failure to carry out duties assigned to them ( such as checking ) should be exercised where applicable and also publicized among officers charged with the custody of cash or property ; ( d ) Extracts from the Acts as at ( b ) and ( c ) to be posted up in all offices where cash is handled ( together with the existing extracts from Treasury Instructions ) .

- 60 ANNEXURE 2

H.

PROJECTS NOT COMPLETED

AMOUNT NOT SPENT

S.29/78

VulaAgricultural District Office mehlo . Building complete but outstanding accounts still to be paid .

R 1 000

S.86/79

15 Houses for Justice at Umzumbe ( Turton ) . Rainy weather delayed completion of septic tank .

R 5 000

S.88/79

3 Houses and offices for Justice , Contractors could not Hlangan ani . supply G.R.C. materials in time .

R26 000

S.93/79

Etanjimeni Clinic Ezingolweni . Work delayed due to faction fighting . Workers removed at police request .

R 1 000

S. 108/80

Accommodation and Renovations George Town High School . Work started late due to other priorities .

R43 000

S.109/80

Hostel accommodation - George Town High School . Work started late due to other priorities .

R46 000

S.110/80

Additions Commercial High School , Emlazi - fencing contract . Delayed by Port Natal Admin . Board .

R10 000

S. 112/80

4 Offices and Storeroom Polela for Education and Culture . Contractors could not supply G.R.C. materials in time .

R20 000

S.123/80

1 KZB House and Office for Agriculture - R15 000 Amabomvu Hlanganani District . Contractors could not supply G.R.C. materials in time .

S. 122/80

1 KZB House · Umbumbululu . Only one tender received and this was not acceptable . Later done by labour only contractor .

R 9 500

S.124/80

1 KZB House , 1 Office , 1 Storeroom for Agriculture at Ndwalane , Izingolweni . Delayed approval of site .

R 3 000

S. 126/80

3 KZB Houses and Toilets - Agriculture , Dududu . Delay in completion of septic tank due to rainy weather .

R 3 000

S.140/80

1 Office and Storeroom - Agriculture Dweshula - Umzumbe . Labour only Contractor could not complete in time due to financial

R 3 000

- 61 -difficulties in payment of his own artisans . S.144/80

2 KZB Houses and Toilets - Agriculture - Polela Hlanganani . Contractors could not supply G.R.C. materials in time .

R23 000

S.148/80

1 KZB House and Office - Agriculture Centicow - Hlanganani . No tenders received and was then programmed for completion departmentally .

R 1 000

S.153 /80

Odidini Clinic - Umbumbulu . Water supply and sanitation had to be redesigned at request of Department of Health and this delayed completion .

R 5 000

S.154/80

Efumi Clinic - Umbumbulu . 18 Departmental artisans and workers injured in vehicle accident and work on this project had to be delayed .

R15 000

S.155/80

Additions Gcilima Clinic - Izingolweni . Sanitation - delayed due to design problems .

R 3 000

S.156 /80

Ncameni Clinic Izingolweni . Building completed but accounts outstanding .

R 1 000

S.106/80

Additions to In- service Training Centre , R35 000 Emlazi . Project delayed by Port Natal Admin . Board and City Engineers ' Department , Durban .

C.86/80

1 KZB House - Agriculture - Ogwini region - Nseleni . Labour only contractor went insolvent .

R 2 800

C.89 /80

1 KZA House - Agriculture - Ogwini region - Nseleni . Delayed approval of site .

R 1 400

C.83 /80

2 KZA Houses - Agriculture . Reserve 2 - Ogwini Nseleni . Labour only contractor went insolvent .

R 6 000

C.80 /80

2 KZA Houses -- Agriculture - Reserve 5 - Ogwini - Nseleni . Labour only contractor went insolvent .

R 3 000

C.75 /80

Girls Hostel Cwaka Agricultural College . Work completed but outstanding accounts .

R 3 000

C.72/80

3 Houses - Cwaka Agricultural College . R 4 000 Work completed but outstanding accounts .

- 62 C. 48/79

Rewiring Amatikulu Institution . Delay due to shortage of trained personnel . Available staff worked on emergency electrical problems at Umpumulo and Ekombe Hospitals .

R22 000

C.71/80

Water Supply improvements - Cwaka College . Delay due to design problems .

R20 000

M. 74/80 M. 76/80 83/80 M.85/80 94/80

Houses various places for Agriculture and Forestry . Contractor delayed materials not being available . Factory production stopped because of fire .

M. 60/80

Construction Laboratory and Store Madadeni Hospital . Tender price too high and not accepted . Work subsequently programmed and done departmentally .

R17 000

M. 73/80

Ncibidwane Clinic . Delay in obtaining labour only contractor .

R 6 000

M. 71/80

Halambo Clinic . Delay in obtaining labour only contractor .

R15 000

M. 72/80

Tembelihle Clinic . Delay in obtaining labour only contractor .

R30 000

M.90/80

Store for Agriculture at Pieters . Delay in design of steel structure .

R65 000

M.95/80

Single quarters at Tugela Ferry Justice . No tenders received - work programmed and done departmentally .

R 2 000

N.51 /80

Ndumo Periodic Court . Delay in obtaining materials on this site which is on Mozambique border .

R40 000

N.49/79

Convert diesel burners at Ceza Hospital . Awaiting planning by Department of Co -operation and Development .

R 6 000

N.39/79

Shayina Hostel - Outstanding accounts and retention building completed .

R140 000

N.53/80

Ncemani Clinic - St. Francis Ward . Late start due to delay in approval of site and also strikes and problems with artisans and workers .

R10 000

N.54/80

Makhosini Clinic - Nkonjeni Ward . Late start due to delay in approval of site .

R10 000

R194 838

-

- 63 N.55/80

Steadham Clinic . Site originally approved at Steadham but subsequently changed to Ntabeni .

R42 597

c.69/80

Hlabisa Clinic - Hlwati . Labour only contractor went insolvent and work had to be completed departmentally .

R20 000

N.37/80

1 KZB House and Office - Agriculture , Mahlabatini . Tender too high and not accepted later done departmentally .

R43 000

N.82/80

District Offices and Store - Agriculture , Hlabisa . Tender too high and not accepted later done departmentally .

R43 000

J.

PROJECTS

SAVINGS

(i)

An amount of R350 000 was approved for the dam and water scheme for Mosvold Hospital and Ingwavuma . This scheme was built departmentally but before it could be started consultants had to be appointed by the Department of Co - operation and Development and a feasibility scheme undertaken . This delayed the start of the project and there was a saving of R213 906 .

( ii )

An amount of R200 000 was approved for a water scheme and reticulation for Mfolweni Settlement in the Umbumbulu District . However , this scheme was built by the Department of Co - operation and Development with their funds and there was a saving of R200 000 .

Verbatim report recorded , transcribed and editorially processed by the Contractors : Lubbe Administration ( Pty . ) Ltd. , and printed by Pretoria Duplicating ( Pty . ) Ltd. , both of 18 , Van der Stel Building , P.0 . Box 1689 , Pretorius Street , Pretoria , South Africa , for the Publishers : THE KWAZULU GOVERNMENT SERVICE , ULUNDI , KWAZULU , SOUTH AFRICA .

J711 T365

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