The Eastern Cape Development Corporation (ECDC) was yesterday accused of “side-stepping” questions on the auditor-general’s (AG) negative findings for the 2014-15 financial year.An ECDC delegation led by board chairman Nhlanganiso Dladla appeared in front of the Bhisho legislature’s public finance watchdog committee Scopa.
In the AG’s report various issues were raised, such as irregular expenditure of R41.4-million as a result of non-compliance with procurement processes, a lack of documentation involving R696-million and write-offs relating to loans advanced amounting to R39.7-million.
Scopa sent the ECDC a list of 54 questions with a September 30 deadline to respond.
The responses were sent to the AG for evaluation before being discussed during a Scopa hearing yesterday.
Of the 54 questions sent, the AG was unable to evaluate responses in 24, saying the corporation was off-point and did not answer the specific questions asked by Scopa.
The AG “partially agreed” with 14 responses, agreed with seven and disagreed with nine responses.
In the report presented yesterday, the AG further said ECDC’s responses covered their 2015-16 “future plans” and not the year under review, or what action had been done to address issues raised.
In one example, the ECDC was asked by Scopa what action was taken to deal with irregular expenditure incurred during year under review.
The corporation’s response was that “the capacity constraint was noted by the accounting authority and a new structure with senior manager and two managers has been approved to ensure the corporation complies with all applicable laws and regulations around supply chain”.
The ECDC was further asked what action had been taken against officers responsible for irregular expenditure.
The written response was: “The main reason for irregular expenditure was extension of contracts over and above acceptable period.
“This was due to lack of capacity within procurement. Capacity has since been addressed”.
This did not sit well with committee members and Scopa chair and UDM MPL Max Mhlathi. They said the responses showed the report was not “quality assured” by the board before being sent to the committee.
Mhlathi said: “This was tantamount to disrespecting and undermining this committee.”
COPE MPL Bishop Lievie Sharpley was also critical: “This means there are no answers to our questions. It makes one suspect that we are being side-stepped deliberately”.
A member of the corporation’s audit and risk committee in the delegation replied in Xhosa saying: “I agree that the way we have answered has elements of disrespecting the committee, we did not answer you”.
She then pleaded for another chance to submit “proper responses” but was declined by committee member and ANC MPL Phumza Fihlani.
Asked about investigations into the funds spent over the period of Nelson Mandela’s funeral in 2013, ECDC CFO Sandile Sentwa said they were yet to receive feedback from the public protector investigating the spending.
Scopa grills ECDC on finances
An ECDC delegation led by board chairman Nhlanganiso Dladla appeared in front of the Bhisho legislature’s public finance watchdog committee Scopa.
In the AG’s report various issues were raised, such as irregular expenditure of R41.4-million as a result of non-compliance with procurement processes, a lack of documentation involving R696-million and write-offs relating to loans advanced amounting to R39.7-million.
Scopa sent the ECDC a list of 54 questions with a September 30 deadline to respond.
The responses were sent to the AG for evaluation before being discussed during a Scopa hearing yesterday.
Of the 54 questions sent, the AG was unable to evaluate responses in 24, saying the corporation was off-point and did not answer the specific questions asked by Scopa.
The AG “partially agreed” with 14 responses, agreed with seven and disagreed with nine responses.
In the report presented yesterday, the AG further said ECDC’s responses covered their 2015-16 “future plans” and not the year under review, or what action had been done to address issues raised.
In one example, the ECDC was asked by Scopa what action was taken to deal with irregular expenditure incurred during year under review.
The corporation’s response was that “the capacity constraint was noted by the accounting authority and a new structure with senior manager and two managers has been approved to ensure the corporation complies with all applicable laws and regulations around supply chain”.
The ECDC was further asked what action had been taken against officers responsible for irregular expenditure.
The written response was: “The main reason for irregular expenditure was extension of contracts over and above acceptable period.
“This was due to lack of capacity within procurement. Capacity has since been addressed”.
This did not sit well with committee members and Scopa chair and UDM MPL Max Mhlathi. They said the responses showed the report was not “quality assured” by the board before being sent to the committee.
Mhlathi said: “This was tantamount to disrespecting and undermining this committee.”
COPE MPL Bishop Lievie Sharpley was also critical: “This means there are no answers to our questions. It makes one suspect that we are being side-stepped deliberately”.
A member of the corporation’s audit and risk committee in the delegation replied in Xhosa saying: “I agree that the way we have answered has elements of disrespecting the committee, we did not answer you”.
She then pleaded for another chance to submit “proper responses” but was declined by committee member and ANC MPL Phumza Fihlani.
Asked about investigations into the funds spent over the period of Nelson Mandela’s funeral in 2013, ECDC CFO Sandile Sentwa said they were yet to receive feedback from the public protector investigating the spending.
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