Hawks investigating four Prasa cases
• Hawks head says 138 others referred are still at an inquiry stage
Hawks head Mthandazo Ntlemeza told Parliament’s standing committee on public accounts that the crimefighting unit had started investigating four out of the more than 140 cases that had been referred to it by the Passenger Rail Agency of SA (Prasa). Prasa incurred irregular expenditure of R13.9bn in the 2015-16 financial year, making it the biggest state-owned enterprise contributor to the total state quantum.
Hawks head Mthandazo Ntlemeza told Parliament’s standing committee on public accounts that the crime-fighting unit had started investigating four of the more than 140 cases referred to it by the Passenger Rail Agency of SA (Prasa).
Prasa incurred irregular expenditure of R13.9bn in the 2015-16 financial year, making it the biggest state-owned enterprise contributor to total state irregular expenditure. Prasa is also custodian of a multibillionrand modernisation programme steeped in controversy over corruption and irregularities.
Prasa has referred 142 issues to the Hawks, which are at an inquiry stage where the Hawks are gathering evidence. Four of these matters have criminal case numbers while the rest remain at an inquiry stage. The Hawks did not provide details on the criminal cases and the schedule crimes involved.
Prasa chairman Popo Molefe and CEO Collins Letsoalo told the committee the agency had spent R108m on forensic investigations affecting 102 contracts in the past five years. The contracts under investigation were valued at R24bn.
In the auditor-general’s consolidated audit outcomes for the 2015-16 financial year, Prasa was recorded as having clocked up close to R14bn in irregular expenditure “as a result of significant noncompliance with its own supply chain management policy and legislation”.
The public accounts committee’s chairman Themba Godi told Business Day the Hawks would soon brief it on the cases, while the Treasury would brief the committee on its own probes into Prasa early in 2017.
The “Treasury has told us that they are rounding off the cases of all tenders valued at over R10m they are probing by early next year and will be able to give the committee a report”.
“The Hawks are looking at cases already investigated internally where it is believed that there is a case to answer against those,” Godi said.
The minister of transport and the Prasa board needed to take responsibility, since it was “unacceptable to talk about these matters in retrospect when officials have been charged with ensuring good governance”.
“There are contracts to the value of R24bn being investigated at Prasa. They suspect that there might be irregularities in how they were awarded. Our greatest worry was the breakdown in proper administration and financial management.
“The audit and risk committee chaired by a board member was dysfunctional and not helpful in terms of proactive intervention. It is only now that they are pulling things together,” Godi said.
Asked whether political meddling had caused or worsened the problem, Letsoalo said that between 2012 and 2014 there was a lack of consequence management at the agency, which had nothing to do with politics.
“I would not say the problem is political. Political oversight would not have known if irregular spend was being picked up in any event. There are a couple of things we have done to ensure consequence management,” Letsoalo said.
Molefe told the committee that while the board was aware that it had contributed more than any other parastatal to irregular spending, it had incorporated methods to address breaches in procurement and supply chain rules.