South Africa: Press Release – Tourism Committee Calls on Ministry to Help South African Tourism Improve Performance

The Tourism Portfolio Committee today received a briefing from South African Tourism (SAT) on its 2020/21 Annual Report as part of its Budget Review Report and Recommendation (BRRR) process.

The chair of the committee, Ms. Tandi Mahambehlala, said that the Auditor General of South Africa (AGSA) report on the SAT does not look good as the entity has received a qualified audit with important findings. She called on the Ministry of Tourism to help the entity improve its performance.

AGSA found unsuccessful, irregular and unnecessary spending of R20 million. Ms. Mahambehlala said the entity is not in compliance with the Public Financial Management Law (PFMA); it had poor internal controls; it has not implemented the verification action plan; and has not performed adequate reviews of the annual performance plan.

The AGSA found that there were payments that were made to 58 beneficiaries who are employed by the municipalities; municipal entities, ministries and government entities; 17 deceased beneficiaries; 26 duplicate payments; 273 beneficiaries who received the grant from the South African Social Security Agency (Sassa); 100 beneficiaries who received the tourism aid fund; 1,172 beneficiaries with invalid identity documents (ID) or no identification number, and 641 beneficiaries who received payments from the Unemployment Insurance Fund (UIF).

Tourism Minister Ms. Lindiwe Sisulu informed the committee that she was aware of the AGSA findings and the general corrupt relationship between the former Managing Director and Tourism Marketing South Africa. She made a commitment to meet with the SAT and AGSA Board of Directors and get back to the committee regarding consequence management or recovery of lost money.

Acting Board Chair, Ms. Mojanku Gumbi, informed the Committee that this was the first time in 17 years that the SAT had received a qualified audit opinion. She explained that SAT works with the Tourism Business Council of South Africa (TBCSA) which supports SAT activities and that TBCSA follows its own supply chain management processes.

Ms Gumbi further informed the committee that the former CEO resigned before the investigation could be finalized and the board found that payments were made through the Collaboration Fund instead of direct debits.

Regarding the issue of capital funding 2019/2020 of the Expanded Public Works Program, the Director General of the Department of Tourism, Mr. Victor Tharage, informed the committee that an investigation has been carried out on payments made from 2005 to 2014 and that his results were reported to law enforcement agencies and communicated to the state prosecutor.

The committee also noted that the financial performance of the SAT did not correlate with the actual performance of its programs. The SAT had set 28 targets for fiscal year 2020/21, but of these targets the entity was only able to meet 23. The committee expressed concern about the entity’s overspending of 29%.

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