A+nation+crippled,+Barry+Sergeant,+Fear+and+Loathing,+Moneyweb





=A nation crippled=


 * Barry Sergeant, Fear and Loathing, Moneyweb, Johannesburg, 29 Jan 2008**

//Financial affairs in government departments, provinces and municipalities are rotting and rolling into a state of advanced decomposition.//

Bloated pay packages and bonuses regardless of performance are one thing at parastatals such as Eskom, but the parlous state of financial affairs in national government departments, provinces and municipalities is yet to gain the same glaring attention as yielded by Eskom's recent supply collapse. The traction is waiting for takers.

Unlike the case of Eskom, when no one can lie about an absence of electrical current, the nation's spin doctors work around the clock to band-aid the increasing financial rot enveloping the nation. These people are building the biggest dung heap in country history.

The core evidence, once again, is in the public domain: surveys show that during the 2007 financial year, just three government entities received "clean" reports from the auditor general (A-G); 19 entities were blotted by "other matters" and/or "matters of emphasis", and 11 entities received "qualified" audit opinions.

For a taste of the vile brews available out there, consider the Department of Defence, with five consecutive qualified opinions - over five years. Among 11 of the 16 counts of qualification outlined by the A-G in 2007 was "unverifiable travel and subsistence claims" in an amount of R463,4m. Putrid as the concept described may be, and horrific as the amount of money under question may be, it was an improvement over the R567,7m that went Awol under the same heading the year before.

Then consider one of the most dysfunctional entities in the world: the South African Department of Home Affairs. This disgraceful scoundrel finally produced its 2007 annual report earlier this month, long after the final prescribed deadline. Here, the neglect and mismanagement is truly world class, if the context is nothing more than wasteland occupied by villains and vermin.

The A-G couldn't make the vaguest sense of the department's accounts and issued a disclaimer of opinion, the latrine pit of opinions. The A-G's report includes nine pages of errors, blunders and casual neglect in the management of the department's financial records, ranging from the recording of transactions in the wrong places, to failure to provide supporting documentation for expenditure, to the inclusion of outdated records of transactions as current transactions. Among some of the specifics: no apparent register for property and other assets worth R1bn, which seems to mean that the department has little idea of what it owns, or the value of its assets.

Then consider the Department of Land Affairs, with 2007 down as its second consecutive qualified audit. The A-G reported that 69% of a comprehensive sample of assets from the department could not be physically verified, thanks, in short, to advanced incompetence. The department records more than 1 200 vacancies.

The Land Bank itself was panzer-butted with its fourth consecutive qualified audit. The A-G could in certain respects not verify the financial position of the Land Bank, given uncertainty over validity of contracts of land on which the bank issued loans. Worse, the loans appear to have been issued outside of the bank's mandate. The Land Bank's operating capital has continued its decline by dropping from R3,1bn in 2001 to R1bn last year.

And so it goes. Paraphrasing remarks made by the A-G, a large swathe of reasons for the financial meltdown in government entities can be traced directly to the effectiveness of departmental leadership, not only as it relates to the accounting officers - the departmental directors-general - but also to the executive officers. That means president Thabo Mbeki's own cabinet ministers.

Beyond the national government entities, the provinces are increasingly in disarray. The Eastern Cape - a province notorious for it gross financial mismanagement - is reported to have misspent more than R1bn of its budget for the 2006-2007 financial year. The A-G also expressed alarm over a R1,6bn contract awarded by the provincial education department. Beyond the provinces, down at the municipal level, repeated failures in service delivery are par for the course, as is the increasing emergence of gangsters that rip control of the municipalities.

Where do all dodgy billions go? Pride of place goes to dodgy tenders, which involve shady characters in the private sector. Take the case of numerous tenders awarded to a "supplier" of oxygen for provincial hospitals. Intaka Tech, purported manufacturer of the oxygen units, has been awarded numerous deals without its product being certified by the Medicines Control Council.

Intaka has been awarded contracts in KwaZulu-Natal, Northern Cape, Limpopo and Western Cape. In KwaZulu-Natal, Intaka was awarded the tender to supply all 52 hospitals despite other entities offering better deals and prices. In the Northern Cape, Intaka was awarded a contract to supply twelve hospitals; here, no tender was issued at all. In Limpopo, Intaka is supplying two hospitals and in the Western Cape, it won the tender to provide seven units.


 * From: http://www.moneyweb.co.za/mw/view/mw/en/page84?oid=189153&sn=Detail**

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