Report of the Ad Hoc Committee
on the Commission for Gender Equality (CGE) Forensic Investigations, dated 19 April
2011
The Ad Hoc Committee on the Commission for Gender Equality (CGE)
Forensic Investigations reports as follows:
1.
Introduction
1.1.
The Acting
Speaker established the Ad Hoc
Committee on the Commission for Gender Equality (CGE) Forensic Investigation on
19 October 2010. The National Assembly ratified the decision on 26 October
2010.
1.2.
The
Committee’s mandate is to consider and report to the National Assembly on the
following:
·
The
Auditor-General of
·
The Report of the Public Protector on an
investigation into complaints relating to misconduct and maladministration in
connection with the affairs of the Commission for Gender Equality.
1.3.
The
Committee was to report by 26 November 2010 but given the limited time
available it requested that this deadline be extended. The Committee is to
report by 31 March 2011.
2.
Composition of Committee
2.1.
The
following members of the National Assembly were appointed to serve on the
Committee:
ANC
Dlulane, Ms
B
Holomisa, Adv. SP
Malgas,
Mrs HH
Ramodibe,
Ms DM
Sibanyoni,
Mr JB
Smith,
Mr VG
Snell,
Mr GT
Tlake,
Ms MM
Van Wyk, Ms
A
DA
Duncan,
Mrs P
Robinson,
Mrs D
COPE
Rwexana, Ms
SP
IFP
Lebenya-Ntanzi,
Ms P
ID
Paulse, Mrs
S
3.
Procedure
3.1. The Committee requested
the Auditor-General South Africa (AGSA) and the Office of the Public Protector (OPP)
to brief it on their investigations at the Commission for Gender Equality (CGE).
The CGE also reported on its implementation of the recommendations that emerged
from the investigations. The Committee asked the AGSA and the OPP to submit a supplementary
report on progress made.
3.2. The National Treasury
was requested to brief the Committee. The presentation addressed its assessment
of the CGE’s internal control environment, its role where there were
allegations of financial misconduct, and its suggestions for the CGE in this
regard.
3.3. In proceeding with its work, the Committee had regard to the
following:
·
The
Auditor-General South Africa’s Report to
Parliament on an investigation at the Commission for Gender Equality,
October 2010.
·
The Report of the Public Protector on an
investigation into complaints relating to misconduct and maladministration in
connection with the affairs of the Commission for Gender Equality, 27
September 2010.
·
Presentations
from AGSA and OPP on their respective forensic investigation reports relating
to the CGE.
·
A presentation
to the Committee by the CGE on progress made on the AGSA and OPP reports.
·
A presentation
to the Committee from National Treasury on the AGSA and OPP reports.
·
Representations
from CGE staff.
·
The
Committee’s deliberations.
3.4.
The
approach of this report is to give a brief summary of the presentations made to
the Committee, highlighting key findings and recommendations, as well as
progress made and remaining challenges. This is followed by the Committee’s
response and its recommendations. Copies of the reports and the presentations referred
to in paragraph 3.3. can be obtained from the Committee Secretary.
3.5.
The
Committee received a letter from the former Chairperson, Ms N Gasa, dated 24
January 2011, in which she requested an opportunity to address the Committee on
the findings of the OPP’s report relating to her. The Committee, however, did
not accede to the request as it related to matters that were sub judice on account of a court case
involving Ms Gasa.
4.
Key findings of the Auditor-General South Africa and
Public Protector‘s reports
4.1.
As
previously mentioned, the Committee requested the Auditor-General South Africa (AGSA)
and the Office of Public Protector (OPP) to brief it on the findings and
recommendations of their investigations at the CGE. The OPP’s investigation
focused on issues of good governance, while the AGSA’s investigations dealt
with concerns relating to the CGE’s financial management. Both investigations
related to the 2007/08 and 2008/09 financial years.
4.2.
The AGSA’s
investigations highlighted that there were:
·
Irregularities
in the Commission’s bank accounts.
·
Irregularities
relating to travel expense claims of commissioners and the former chairperson.
·
Irregularities
with financial lease contracts.
·
Fraudulent
activities in the Commission’s payroll system.
·
Unjustified
refunds or back pay to Commission employees.
4.3.
The AGSA
commented that its findings flowed mostly from non-compliance with the Public
Finance Management Act 1 of 1999, and National Treasury Regulations, as well as
non-adherence to internal policies and procedures. The findings also highlighted
inadequate planning and weak monitoring and oversight by the CGE’s leadership
to ensure performance, compliance and ethical behaviour. During the time under
review, the CGE operated in an environment that was ‘high-risk’ and susceptible
to fraud.
4.4.
The AGSA’s investigation
report was presented to the CGE’s management for input and comments on 21 April
2010, as well as to the plenary on 12 May 2010. The former Chairperson was also
provided with an opportunity to respond and was furnished with specific
findings relating to her on 4 June 2010. In June 2010, the CGE’s management
responded that it had noted all the recommendations and committed itself to
implement corrective measures. Management further stated that the
recommendations would be included in the Commission's turnaround plan to be implemented
during the 2010/11 financial year. A final response was also received from the
former chairperson on 30 June 2010.
4.5.
The AGSA
recommendations included that the CGE:
·
Needs to
comply with laws and regulations relating to its finances.
·
Should
address transfers that the Auditor-General could not verify, including holding
the relevant officials to account.
·
Should establish
a proper framework for the delegation of authority.
·
Should ensure
that the contractual processes with its service providers are managed
effectively.
4.6.
The OPP’s
findings highlighted the following:
·
The CGE’s
enabling legislation is outdated.
·
Vacancies
among commissioners require filling.
·
The
position of the Chairperson had been filled in an ‘acting’ capacity for some time
now.
·
Two commissioners
had been appointed as joint Chief Executive Officers. This was unlawful,
irregular, and constituted maladministration. The expenditure incurred by the two
commissioners might constitute irregular expenditure and might require investigation
in terms of National Treasury Regulations.
·
The CGE had
not effectively implemented the findings of the OPP’s 2008 report into various
allegations made against it, as well as the recommendations contained in the
report of the National Assembly’s Ad Hoc
Committee on the Review of Chapter 9 and Associated Institutions (31 July
2007).
·
Issues relating
to personnel practices and human resource management need addressing.
·
Approximately
R4 million was spent on an organisational diagnostic process but without
tangible results.
·
A lack of
capacity and skills in the CGE’s finance department required urgent attention.
·
There is need
for guidelines/policy arrangements to regulate the relationship of the Commissioners
and Secretariat.
·
The CGE’s
policy framework is outdated.
·
The CGE’s housing
allowance was a cause of many complaints.
·
No progress
had been made regarding the implementation of the Occupation Specific
Dispensation (OSD) for CGE staff members.
·
No
performance assessment of the staff had taken place in the 2008/09 financial
year.
4.7.
The Public
Protector met with the CGE’s Acting Chairperson, Commissioners and the Acting
Chief Executive Officer on 14 January 2010 to discuss the investigation. The
former chairperson of the CGE, Ms N Gasa, approached the OPP in connection with
the investigation on 11 May 2010. The response included a request that Ms Gasa
submit any information that could be of assistance to the investigation. In her
reply, dated 3 June 2010, Ms Gasa requested a meeting with the investigator
assisting the Public Protector. Her request was granted and she was invited on
1 July 2010 to indicate a suitable date for the meeting. According to the
report she never responded to this invitation.
4.8.
The OPP’s key recommendations were that:
·
Parliament
amends the CGE’s enabling legislation to bring it in line with the Constitution
and the CGE’s organisational requirements.
·
The
National Assembly facilitates the process necessary to ensure that the vacancies
in the CGE are filled as a matter of urgency.
·
National
Treasury investigates irregular expenditure incurred by various officials as
well as by commissioners acting as CEO’s for appropriate action, if required.
·
National
Treasury investigates fruitless and wasteful expenditure incurred relating to
payments to consultants appointed for the ‘organisational diagnostic process’
and that, if required, appropriate action is taken.
·
The CGE
urgently implements the recommendations contained in the OPP’s previous
reports, as well as those contained in the report of the Ad Hoc Committee on the Review of Chapter 9 and Associated
Institutions.
·
The CGE expedite
arbitration processes relating to the organisational diagnostic process.
·
The CGE
audit the skills, qualifications and experience of its staff.
·
New staff
are appointed and inducted.
·
The
capacity of the CGE’s finance department is increased and skills development
occurs.
·
There is
compliance with the relevant regulations and policies that impact on staff
development, salaries and benefits.
5.
The CGE’s progress report on the AGSA and OPP reports
5.1.
The CGE’s Chief
Executive Officer (CEO) reported that the following had been done to address the
AGSA’s recommendations:
·
The ten
bank accounts opened without following National Treasury Regulations were
closed. The call account has also been closed.
·
An electronic
funds transfer system has been set up to ensure that no payment in excess of
R2000 is made by cheque.
·
A new
supply chain management unit has been established and has been functioning
since December 2010. A supplier database has been created. The alleged lease
agreement for laptops had been converted to a sale agreement.
·
The CGE is
currently documenting processes to address issues of internal control,
reliability and to ensure that there are proper delegations of authority.
·
A cell phone
policy had been put in place to curb expenditure.
·
Mechanisms
had been put in place to prevent future abuse of flight bookings.
·
Matters
relating to the former Chairperson’s travel expenses are sub judice on account of there being a court case involving her.
·
Disciplinary
processes have been recommended against certain officials relating to irregular
and unauthorised expenditure.
·
The CGE
also reported that compliance with certain of the OPP’s recommendations might
have direct legal and financial implications, for example, apologising may be
construed as an admission of guilt.
·
The CGE has
asked to meet with National Treasury to discuss irregular expenditure relating
to the two acting CEO’s.
·
The matter
relating to the organisational diagnostic process involving Four Rivers is
subject to arbitration.
·
The CGE has
begun a skills audit of its staff.
·
Unfunded
positions where proper appointment processes were followed have been regularised,
but positions where standard recruitment processes had not been followed needed
to be resolved.
·
Induction
programmes had taken place and steps are being taken to ensure that this
becomes standard practice.
·
Capacity in
the finance department has been improved through the appointment of
appropriately skilled staff.
·
A policy to
regulate interaction between Commissioners and the secretariat is still an
agenda point.
·
A process
to review and improve the CGE’s policy framework has begun.
·
The CGE had
noted the recommendation relating to the OSD but uncertainty remains as to whether
the CGE’s legal officers’ job profile fits the OSD’s definitions.
·
The CGE had
not conducted performance assessments as no performance tool was in place at
the relevant time and no performance agreements had been signed.
·
Detailed
action plans were provided to the Committee that included deliverables,
timeframes and progress made.
6.
Progress reports from AGSA and the OPP
6.1.
The
Committee asked the OPP and the AGSA to submit a progress report on remedial
action undertaken by the CGE. Both informed the Committee that although there
had been progress in some areas, challenges remained.
6.2.
Specifically,
the AGSA highlighted that:
·
Issues
related to amendment of policies and putting in place of delegations had been
addressed.
·
The CGE had
now implemented the process of electronic funds transfer and was no longer
writing cheques.
·
Ten of the
eleven bank accounts, including a call account had been closed. A supply chain
unit had been created.
·
A policy on
cell phone use at the CGE had been put in place.
6.3.
The OPP informed
the Committee that:
·
The CGE was
examining its policies and regulating its employment practices.
·
The CGE has
also begun work on its policy framework.
·
A skills
audit of staff has been done.
·
It did not
appear that the CGE had acted on the Public Protector's 2008 report.
·
The
appointment of a Chief Financial Officer has still to be finalised.
·
There appears
that there is still no policy to guide relations between the Commissioners and the
secretariat.
·
The
appointment of a consultant as the CEO still needs investigation.
·
There is no
clarity as to whether CGE’s staff members qualify for the OSD.
·
Outstanding
performance assessments for staff have not been done.
·
Various
staffing issues have not been addressed.
7.
Presentation from the Public Finance Division,
National Treasury on the OPP’s and AGSA’s findings
7.1.
National
Treasury highlighted that the Chief Executive Officer (CEO) of the Commission
is appointed in consultation with the Minister of Finance but this procedure
was not followed. Specifically, the appointment of two members of the CGE as
chief executive officers was unlawful and irregular. Expenditure incurred during
the period of the appointment might constitute irregular expenditure and should
be investigated by National Treasury. The National Treasury has sought legal
opinion on the above matter but is not certain that the monies can be
reasonably recovered. It recommended that the proper procedures are put in
place to prevent this from happening in future. The expenditure should also be
reported to National Treasury as irregular expenditure, with a request that the
amount is regularised.
7.2.
Also, the
appointment of a consultant as CEO and accounting officer appeared to be
unlawful and irregular. The relevant person was not employed as an official of
the CGE at the relevant time. Again, expenditure incurred in the period of the
appointment might constitute irregular expenditure and should be investigated
by National Treasury pending a legal opinion on the matter.
7.3.
The OPP had
referred to R4 million spent on an organisational diagnostic process with no
tangible results. The National Treasury requested the CGE to provide documents
to demonstrate the value derived from the diagnostic process. If it is unable
to do so, National Treasury recommended that the CGE take the necessary steps
to recover this money.
7.4.
The
importance of a proper corrective plan to address the irregularities identified
by the AGSA was highlighted. The Office of the Accountant-General is to assist
with monitoring the implementation of this corrective plan and to report to the
CGE’s management on a regular basis. Any irregular expenditure should be
reported to National Treasury.
7.5.
There has
been some progress. AGSA’s audit findings had improved from a disclaimer in
2008/09 to a qualification in 2009/10. The importance of filling management
positions was emphasised, as most findings could be addressed with the
appointment of appropriately qualified people. An internal audit section and
audit committee is in place. That most management positions remain vacant is a
concern.
8.
Presentation from the CGE staff
8.1.
The CGE
staff representative explained staff members’ concerns. These included the
following:
·
There are vacant
commissioner posts (The Commission on Gender Equality Act 39 of 1996 provides
that, in addition to a Chairperson, the CGE should have between seven and
eleven commissioners. At present there are six commissioners. This means that at
least two more commissioners are required to comply with the provisions of the
Commission on Gender Equality Act 39 of 1996).
·
The CEO had
met only with the management committee and not with staff members.
·
Training and
staff development needs were not being addressed. Staff members within the
research units of the Commission do not have proper resources to enable them to
perform their duties efficiently and effectively.
·
There is a
lack of proper communication between the CGE’s National Office and the
provincial managers.
·
The annual programme
of action has never been implemented and there is no follow-up on the one that is
presently adopted.
·
Issues
relating to staff members’ benefits had not been addressed.
·
The new
cell phone policy had not been communicated adequately to administrators.
9.
Committee’s observations
9.1.
The
Commission for Gender Equality is established in Chapter 9 of the Constitution
as a State Institution Supporting Constitutional Democracy, to promote, among
others, gender equality. The Constitution provides for its independence, and
other organs of state must assist and protect it to ensure its independence,
impartiality, dignity, and effectiveness. It is to assist the CGE that the
Committee makes the findings and recommendations that follow.
9.2.
The
Committee has duly considered the findings and recommendations of the
Auditor-General and Public Protector contained in the reports. The Committee was
told that there had been some progress, but remains cautious in accepting this,
especially after learning from staff members at the CGE of problems at the CGE.
Overall, the Committee believes that there are a great many challenges to
overcome, especially relating to the CGE’s corporate governance and leadership.
9.3.
It is also greatly
concerning that there have been previous investigations and reports, which
reflected similar concerns to those contained in the reports that are presently
before the Committee. However, the Committee learnt that in most instances, the
corrective measures suggested in these reports have not been taken up by
leadership.
9.4.
Similarly, many
of the problems raised in the reports were identified in the report of the Ad Hoc Committee on the Review of Chapter
9 and Associated Institutions to the National Assembly in July 2007 and are not
unique to the CGE. Many of its conclusions and recommendations, specifically
those relating to the need to address outdated enabling legislation, to ensure
the timely appointment of commissioners when vacancies arise and to establish clear
lines of command and authority, particularly among commissioners and the
secretariat, remain pertinent. To the best of the Committee’s knowledge, the
only recommendation that the National Assembly has adopted led to the
establishment of a parliamentary unit to co-ordinate all interaction between
the National Assembly and the state institutions responsible for strengthening
democracy.
9.5.
The
Department of Women, Youth, Children and People with Disabilities should
introduce legislation to Parliament to amend the Commission on Gender Equality
Act 39 of 1996 in order to bring it in line with the Constitution of the
9.6.
The number
of commissioners is less than the prescribed minimum. The Commission has six Commissioners
presently, all of whom are appointed in a full-time capacity. This is fewer
than the prescribed minimum: The Commission on Gender Equality Act provides
that, in addition to the Chairperson, there should be between seven and eleven Commissioners.
Of these, a minimum of two and a maximum of seven should be appointed in a
full-time capacity. The Committee is of the view that the vacancies undermine
the CGE’s operations.
9.7.
It is clear
to the Committee that the CGE faces many operational challenges and is
especially concerned about its capacity to implement the ‘turnaround strategy’
presented to it. For this reason, the Committee believes the plan needs close and
regular monitoring.
9.8.
The
Committee notes the concerns of staff members. Their concerns provide valuable insight
as to what is happening ‘on the ground’ at the CGE. However, the Committee’s
mandate is limited to the reports before it. It believes that the matters
raised could be referred to the Portfolio Committee on Women, Youth, Children
and Persons with Disabilities to be addressed.
9.9.
The
Committee learnt of specific matters where non-compliance and non-adherence to the
Public Finance Management Act 1 of 1999 and the relevant National Treasury
regulations created an environment conducive to financial transgressions. In
addition to internal disciplinary proceedings against the official responsible,
the Committee suggests that, where appropriate, the CGE consider laying
criminal charges against official(s).
9.10.
The
Committee notes the National Treasury’s comment on the importance of ensuring
managerial positions are filled with appropriately qualified persons. It is
pleased that the position of Chief Executive Officer has been filled but urges
that the appointment of a Chief Financial Officer is expedited. This is of
particular importance as a lack of capacity in the financial department has
been identified as contributing to the findings. Other key management positions
should also be filled urgently.
9.11.
The
Committee is especially dismayed that there has been little progress in establishing
clear lines of command between Commissioners and the Secretariat. Again given
the importance of ensuring that governance at the CGE is strengthened, the
Committee suggests that this is attended to urgently.
9.12.
The
Committee notes that the former Chairperson of the Commission for Gender
Equality, Ms N Gasa, did not take up the opportunity to address the Public
Protector. The report of the Public Protector, therefore, did not have the
benefit of Ms Gasa’s side of the story.
10.
Recommendations
The Committee recommends that:
10.1.
The
Commission on Gender Equality Act 39 of 1996 is revised expeditiously to bring
it in line with the Constitution of the
10.2.
The
National Assembly urgently facilitates the process of filling the vacancies within
the Commission. The appointment of the new Commissioners must be
in line with the revised Commission on Gender Equality Act 39 of 1996.
10.3.
The
National Assembly considers the report of the Ad Hoc Committee on the Review of Chapter 9 and Associated
Institutions to the National Assembly, dated 31 July 2007.
10.4.
The CGE incorporates
the recommendations of the AGSA and OPP reports in its turnaround strategy. Progress
reports should be submitted to the National Assembly quarterly.
10.5.
A policy
guiding relations between Commissioners and the CGE’s Secretariat is clarified
within three months of this report being considered and the policy is submitted
to the National Assembly.
10.6.
The CGE
ensures that vacant positions in management are filled without delay.
10.7.
The
concerns of staff members at the CGE are referred to the Portfolio Committee on
Women, Youth, Children and Persons with Disabilities for further consideration.
10.8.
The Public
Protector affords Ms Gasa another opportunity to be heard, and thereafter
report to the National Assembly.
10.9.
The National
Assembly is updated on the progress relating to the court case involving the
former CGE chairperson.
Report to be considered.