Community Schemes Ombud Services; Estate Agency Affairs Board progress reports

Human Settlements, Water and Sanitation

03 December 2019
Chairperson: Ms M Semenya (ANC)
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Meeting Summary

The Community Schemes Ombud Services (CSOS) said that there has been a failure thus far to identify all the community schemes and track them on a database to ensure that all submitted their levies. To remedy this they will liaise with the Deeds Office to get a list of owners of properties and approach the CIPC to identify contact information. The lack of revenue collection was a key finding by the Auditor-General. They need teeth to compel entities to register and make payments.

The Estate Agency Affairs Board said it had come a long way and compared to 2017/18 there had been a substantial improvement in many aspects and a stronger financial position despite the qualified audit. The Board Chairperson responded to questions about the Minister's request for information about the CEO  appointment and allegations against her by employees. The EAAB also provided information on its transformation initiatives and its IT system.

Meeting report

Acting Director General of the Department of Human Settlements, Mr Joseph Leshabane, said that the Estate Agency Affairs Board (EAAB) is soon to be the Property Practitioners Regulatory Authority. It and the Community Schemes Ombud Service have prepared comprehensive reports covering matters that Auditor-General South Africa (AGSA) found wanting. The Department will have to monitor the implementation of these plans and the Department CFO is present as well.

Community Schemes Ombud Services (CSOS) audit action plan
Mr Mthobi Tyamzashe, CSOS Board Chairperson, said the last time CSOS presented it was about the backlog of audit findings the board inherited and a number of other items. Today he is accompanied by the Acting Chief Ombud and colleagues from internal audit. CSOS has completed almost a year now without a Chief Ombud on a permanent basis and they are thankful for the Department which assisted CSOS in the absence of an appointed CFO on these financial matters.

The 2018/19 audit identified these key findings:
- The main finding is the lack of completeness of the CSOS information on all community schemes. This is due to the number of new entrants and also inability to locate a database with this information. They liaised with the Deeds Office to get a list of owners of such properties and they approach the Companies and Intellectual Property Commission (CIPC) to identify other information such as contact details. They also had meetings with stakeholders to source methods to locate community schemes.
- Revenue collection. They need assistance with managing revenue collection. They have met with other revenue-collecting agencies to be mentored on best practice.

The Board Chairperson said that they are working on resolving the audit findings. CSOS wants to be among those who are getting awards for clean audits.

Acting Chief Ombud, Ms Ndivhuo Rabuli, addressed the findings raised in the 2018/19 audit. In a nutshell, CSOS is not collecting levies from all the community schemes in South Africa. To do that they need the community schemes on a database register. During the audit, AGSA engaged them on its recommendations about the findings. CSOS came up with a plan to implement corrective action to resolve the audit findings. They formalised an audit action plan. Thereafter, each CSOS executive provides quarterly progress reports to the Board. They confirm if the methods identified are effective and make further recommendations if needed to on how to better clean up the audit findings.

The adverse finding was given as the completeness and accuracy of the revenue in the form of levies could not be verified as CSOS did not use the accrual method to record the levies and supporting documentation could not be provided to enable the audit of revenue from levies to ensure that transactions that occurred are accurately recorded. Further, there were some material misstatements that had to be corrected. This included an overstatement of the opening balance of other financial assets. There were also misstatements on the figures for contingent liabilities. Effective steps were not taken to collect the revenue due. There was irregular expenditure of R41 million due to tenders from prior years and fruitless and wasteful expenditure  of R669 000.

The audit action plan to mitigate these findings includes a revenue management strategy that paves the way to commence with the process for collection of levies.

The Auditor-General found the finance division capacity wanting. A revenue manager is now appointed and they also appointed accountants. They have appointed a CFO and it is currently sitting with the Minister for approval.

National Treasury allowed CSOS to retain R50 million. The levies are allocated by registered schemes so there are no funds sitting in a suspense account. The scheme pays a levy to CSOS. CSOS acknowledges receipt of payment and says this is the payment it received from the scheme. It gives the scheme confidence that their money is acknowledged and it can feel safe about continuing to pay.

It is possible that the reason why some schemes are not registered is because they are not aware who CSOS is. They are going to do a marketing campaign so that schemes can come forward. “Everyone will know who we are". When CSOS knows where the schemes are, then they can provide education and training in terms of the CSOS Act.

The CIPC agreed to give them information on homeowners to supplement the database from the Deeds Office. When they have a complete universe, they can go door to door for payment of levies.

At the end of the financial year, they are hoping to do an analysis of information received from CIPC. Then they can see which schemes are registered or still outstanding. The information comes with contact details.

They have met with several revenue-collecting bodies such as ICASA and SARS to benchmark their approach. ICASA has a levy it collects on a cash basis, then it has accrual. CSOS will come up with a report on what is best suited for CSOS. If you want to accrue then you need to know beforehand how much you are collecting. It is a challenge to accrue and they need to formalise a recommendation which Treasury must approve. CSOS only recognises levies paid by the 7th after year end. This is one of the items already implemented, there is a practice directive in place that is approved by the Board.

On the contingent liability, they will address the inconsistency in the amount of prior years and will ensure it corresponds.

The R41 million in irregular expenditure comes from the AGSA investigation on tenders A recommendation was made for disciplinary action. She testified last week and they will report on the outcome of that.

The fruitless and wasteful expenditure includes flight bookings where someone missed a flight. There is an amount they have approached Treasury to condone. By end year we hope to clear all wasteful expenditure off our books.

Once they have a database system in place, they will be sure of how many personnel they need. They do not want to hurry in appointing employees and then find when the system comes into place, there are too many employees appointed. Doing it gradually also assists with managing salaries.

To improve internal controls, they developed a checklist so they can prevent irregular expenditure before it materialises. They are currently sitting with minimal findings left over from the internal and external audit.

The Acting Chief Ombud said that they have picked up that CSOS does not have the power to compel schemes to pay levies or to register. If they do not pay or register then CSOS must have the teeth to say they must comply. “We need this".

Mr Tyamzashe, CSOS Board Chairperson, summarised the CSOS roadmap: define the community schemes universe; increased awareness and enforcement teeth; accounting compliance such as the ability to recognise revenue in the period to which it applies; and a permanent Chief Ombud and CFO. They will interview on 5 December for the Chief Ombud. The Board is waiting for a reply from the Minister on the CFO it recommended. Even though informal, he is sure that the forum with sister government revenue-collecting entities, is beneficial to learn from. “We are scared of taking risks now". The meeting with AGSA was about the future. “It scared us to no end as it was talking about the possibility of going to jail for not complying and about huge fines like a million rand. Essentially the meeting was talking about a no-nonsense approach going forward. It made us sit down and take note".

The Acting Chief Ombud said that remedial action is planned and they will return to give progress on this.

Discussion
Ms S Mokgotho (EFF) asked how long the Minister will take to approve the CFO appointment? What is the cut-off date for CSOS to obtain share block companies from CIPC? Have timeframes been set for each goal in the 2018/19 audit action plan? Some of the irregular expenditure was committed in 2015 and there are only disciplinary hearings now? She referred to the fruitless and wasteful expenditure for missed flights. "If I were a scheme why would I pay CSOS my money if it is not managed properly?" CSOS reported it had had meetings with sister entities such as SARS but why is the remedial action taking so long to implement?

Ms N Sihlwayi (ANC) referred to the senior appointments and not having a community schemes database. She was not convinced by the audit action plan. If CSOS is not putting in a timeline for these actions she feared that it would have the same challenges next year. It is important to state its expectations for resolving each of the audit findings. She was happy they are doing some marketing and asked when this would happen. It was a huge loss of revenue for their budget that they failed to collect. They must have clear plan which gives hope this would not happen again.

Ms N Mvana (ANC) said that it was an embarrassment to have so many vacancies. CSOS stated it will submit how it is going to fill those vacancies but how can it convince the Committee if it never puts in timeframes. CSOS must submit that in writing to the Committee.

Mr M Mashego (ANC) noted the presentation had an incorrect date of Feb 2019 while it is December now. He asked how the Committee can take CSOS seriously when it presents a matter to Parliament that is not correct. CSOS is not here to tick a box. He then asked if CSOS thinks it must exist. And if so, why? If one assumes there are more than a 100 schemes in South Africa and only five register and there is no compulsory rule to force them to register, CSOS is going to receive an adverse audit report for not receiving the revenue. It means you will not have the expected budget of a R1 million if all the schemes had paid. You have to think what it is that you want to do to meet the requirements for your existence. If CSOS is a bulldog with no teeth then failure will come to you.

He noted that as a public entity, the CFO must be appointed by the Board. Why must the CFO be appointed by the Minister? The board must run the entity – it which cannot be done politically by the political administration.

The Committee Chairperson intervened and said that the power to appoint is in the Public Service Act so it is the responsibility of the Minister.

The Chairperson addressed CSOS saying the presentation does not have timeframes. CSOS was called to the Committee to get its commitment about resolving these findings and you come here and promise to do so. If these audit findings are repeated then the war will start between CSOS and the Committee. In the next financial year CSOS must get better audit outcomes. The Committee wants action plans with time frames. CSOS said it had promised the AG and that the Committee must trust it is going to implement. The Committee Report tabled to Parliament will state that CSOS has made the commitment to correct the audit findings. For the Committee to lie to Parliament, somebody must pay, so take cognisance of that.

Estate Agency Affairs Board (EAAB) audit action plan, transformation and SAP
EAAB Board Chairperson, Mr Nkosinathi Biko, said that 2017/18 was a very difficult year as an entity, as reflected in that Annual Report. A comparison between 2018/19 and 2017/18 shows a substantial improvement in many aspects and they were able to get the entity to a stronger financial position. They were however left with one matter that qualified the EAAB and they are delighted to report on the process to cure those ills. Virtually all the audit findings have been actioned.

Acting CFO, Ms Karen Son, went through the audit findings. On the finding that led to the qualification, she explained that the figures disclosed for commitments in the annual financial statements differed materially from the totals in the commitment schedule. Subsequent information provided for auditing was deemed insufficient. She explained that that they did re-provide this information to the Auditor-General and the information was audited. The AG accepted the evidence on contracts but not on open purchase orders. Internally EAAB creates purchase orders and they do not close them. AGSA said that it cannot rely on the purchase orders closing and it was not happy to rely on third party evidence.

Other material items raised were the board emoluments. The supporting schedules given to the AG did not agree with the financial statements. The rates used were not in line with National Treasury guidelines. The rates they are now using are in line with Treasury approved rates.

She went through the audit findings (see document).

Ms Mamodupi Mohlala, EAAB CEO, spoke about transformation in the organisation. She mentioned, amongst other things, that they have an internship / learnership programme to place interns with host employers and to write exams (see document)..

Chief Risk Officer, Mr France Mantsho, spoke on the SAP system procurement. He corrected the error in the document as the Property Practitioners Act was promulgated in 2019 not 1999. The EAAB has been using SAP Business One for over 10 years. The system was not custom made to EAAB business needs. As a result IT companies put some add-ons on the module to  be able to produce reports and print Fidelity Certificates. The EAAB has been continuously having  system challenges  for the past 10 years that has financial impact in resolving IT challenges. This  also have potential negative impact on the audit report. The ERP tender has been cancelled to accommodate new IT challenges after the  Property Practitioners Act was passed. The EAAB currently has challenges of printing  FFC. An IT service provider has been appointed to fix this as an interim measure before 31 December 2019. A new ERP solution will be procured as part of the transition to the new Act.

Discussion
Ms Mokgotho asked why the EAAB did not follow the proper PFMA procurement procedures. She asked for EAAB's total irregular expenditure and what they had put in place to deal with this.

She said that according to the PFMA, it is their responsibility and the Department’s to prevent unauthorised and fruitless and wasteful expenditure. What have you done to curb irregular expenditure, such as Umgeni Water spent nearly R225 million on eight contracts without following proper procedure. Almost R1 billion was spent without following proper procedure to lay pipes.

The Committee Chairperson said to Ms Mokgotho that they are dealing with human settlements not water.

Ms Mokgotho replied that she thought they cannot separate human settlements and water and sanitation because it belongs to one department. It is about one action which is irregular expenditure.

The Chairperson said that they continue to have two departments under one ministry until the President decides otherwise. Unfortunately the Water and Sanitation DG and team are not present to respond.

Mr S August (GOOD) welcomed the report. The EAAB had done quite a bit in 2018/19. She could live with the audit qualification by the AG of R 450 000 if one consider the millions incurred by other bodies.

He noted that they mentioned engaging the provinces and asked for a timeframe on when they will engage the provinces about the high unemployment.

He also asked, “Why only FNB and not the other banks?”

Ms E Powell (DA) said that section32(2)(c) of the current Act obliges estate agents to pay the interest from their trust accounts into the EAAB. This provision was omitted from the new Property Practitioners Act. Given that this cannot be remedied through regulations, how does the Board intend to remedy this approximately R50 million loss to the budget?

She asked about the EAAB Board Chairperson's response to the Minister who recently requested the records of the process followed in appointing the CEO as well as proof of her competence, qualifications, Ministerial approval and Cabinet concurrence. In terms of its oversight duty, she asked if the Committee could get this response. The Committee has an oversight duty and therefore she wanted to know about this response. A second letter by the Minister to the EAAB Board Chairperson asked about alleged irregularities and mismanagement which may implicate the CEO and the programme of action to address this.

She said that a letter was drafted to the EEAB board by employees that alleged that the CEO appointed New Dawn Technology using capital budget which was then changed to consultancy fees when there were no budget for this appointment and without a formal procurement process. A Mr Masela was appointed as a temporary staff member of EAAB Board as shadow IT manager but is allegedly the owner/manager New Dawn Technology and is receiving both a salary as employee and the contract fee. She asked for clarity.

She asked if the CEO undertook to sue the employees that raised these matters and implement disciplinary hearings by a law firm appointed by the EEAB allegedly without a formal procurement process. She asked which law firm has been formally hired and the total cost spent by EAAB on legal fees since February.

Mr M Mashego (ANC) asked the same question as earlier. Entities are created to manage on your behalf. One cannot meddle with their administrative processes. If you do, you might as well in-source the entity. He did see the allegations raised. He referenced the possibility of resistance to transformation. He noted that in a previous meeting the Committee had asked about structures that were not Cabinet approved and we asked for a status quo report. Your report is convincing but it is a nice-to-hear report. Give us the problems you are facing in order for us to solve the problems. He suggested that transformation might be a challenge. If we listen to your report we might close the door and celebrate we have the best EEAB and that is not the case. He spoke about the lack of black ownership of banks. One cannot change the status quo if they do not transform, specifically referring to banks. On the allegations made, he said that when people leak information it is treated as if it were a fact. “We need to be given proper information".

He asked if there are plans to help young people after training on the internship / learnership programme.

He heard EAAB say that it will source consultants and asked if it can partner with Department of Labour to save money on this.

The Chairperson intervened and said that the agenda is on the audit action plan and transformation. She said that any questions raised outside that can be responded to by means of written reply.

She asked for the names of those individuals involved in the irregular expenditure and what consequence management EAAB has followed with them. The Committee wants the names of individuals responsible for irregular expenditure and if it plans to condone the irregular expenditure.

She said the Constitution allows for fair discrimination to address injustices of the past. "So do not panic about letters and reversing the progress". There are those who want to do away with affirmative action and BEE which is the programme to turnaround the injustice of the past. The ruling party will never allow those programmes to be reversed. The Committee wants a list as the institution transforms itself. It should continually address gender as well.

She noted that in most entities, supply chain management is a problem. The EAAB must fully comply with the PFMA in terms of supply chain management and procurement processes.

Department response
Acting Director General, Mr Leshabane, replied that a governance framework is in place and applied fully. Part of that governance framework means that the CEO and the CFO can only be finalised by the Board in consultation with the Minister. It is important because it is part of governance.

A Minister is accountable to Parliament in the same way as the Office of the DG is and cannot be absolved from accountability. In the CFO appointment at CSOS, the governance framework requires consultation with the Minister – that is the process. Safe to say, we are at the point where the matter is before the Minister.

He can confirm that instances of allegations and complaints if brought to the Minister’s attention, the Minister must engage with the Board through the Chairperson. The Board attends to that issue, is charged with that, and then the Minister has to investigate the matter. The Minister cannot overreach and step in when the Board is there. The process must run its course.

The process for irregular expenditure is that when an irregularity is detected, it has to be investigated to establish who the transgressors are, what loss accrued and what is the cause of action. Treasury wants to know what happened and who did what. Treasury does not just condone. That process is currently underway. Where the matter is still under investigation, they cannot name people. When those matters are concluded they can indicate that.

He must confirm that the PFMA regulates how they handle public finances and provides guidance on how to treat certain matters. There is nothing an accounting officer such as himself can do to prevent CSOS from PFMA infringements as he is not there every day but he can rely on the framework there. The CEO runs operations. He sees the results at the end of the quarter. He is the accounting officer for the overall programme, but he can only see after the fact where he can hold the entity accountable for its part. The Committee should find confidence in their capacity to detect transgressions, misdeeds, maladministration, and such. This enables interventions when they are required. When they detect the transgressions after the fact for the benefit of peer review and knowledge sharing, they are engaging in that forum, including all the matters that arise from the audit.

Perhaps there is a conversation the Committee would want to enter into on the transformation agenda. The full life cycle of transformation is embedded in the sector as a whole. When the tenure of the CEO comes to an end what happens to those initiatives? They are talking to the CEO to look at these matters.

Department CFO, Ms Funaneng Matlatsi, said that she agreed with the Committee on picking up on irregular expenditure. The understanding by Committee members is that if they do not follow the procurement process, it is tantamount to an irregular process and, if left, it becomes worse with financial consequences. In the past where there was irregular expenditure, one requested condonation from the Department, through internal processes, for the Director General to write it off. National Treasury saw this and realised lots of funds were being misused across all departments and being written off by the DGs.

Treasury issued a practice note that before the accounting officer can request condonation, a thorough investigation or internal audit has to determine the extent and value of the transgression. Treasury must be satisfied that investigations were done and referred to the Hawks if needed. It can only be Treasury, together with the accounting officer, informed by the report, which can condone. She said that they have reduced the irregular expenditure to a certain degree.

CSOS response
Acting Chief Ombud, Ms Ndivhuo Rabuli, apologised for the typing errors of 2019 and 2020. CSOS expects to put the ICT system into place before end of the 2019/20 financial year so that it can utilise the R52 million Treasury said it can retain.

On irregular expenditure, it was only after the investigation was completed that they can commence with disciplinary hearings. Therefore they do not mention names of employees implicated until the whole process is completed.

She explained that they are negotiating an MOU with CIPC and they are hoping it is signed by end of December and during January 2020 they will get access to information from CIPC. CSOS will engage in intensified marketing with GCIS in January 2020 to reach stakeholders.

Mr Tyamzashe, CSOS Board Chairperson, replied about the timelines. It took time to address the CFO vacancy. They recommended two but by the time they made an offer the first choice had accepted an offer elsewhere. So now the Board is looking at the second choice.

Ms Rabuli said they are hoping that the fruitless and wasteful expenditure check is finalised. They are waiting to see if Treasury will condone the transactions or not. The bulk of that relates to some tenders they had to cancel, and some flight cancellations. She explained the fruitless and wasteful expenditure due to lost interest. The ABSA investment was not made in the name of CSOS, it was in the name of a third party. They had to get the money back into the name of CSOS. The investment could not remain in the name of someone else.

In reply to the Chairperson saying he hoped that the person is gone from CSOS who invest the entity's public money like that, Ms Tyamazashe said that the person is no longer at CSOS.

The Acting Director General added that the method for investments is set out in the PFMA regulations. In this case it was a transgression and once detected, it had to be corrected. The bank says if you take the money out early from the investment, there is a penalty. That lost interest is then deemed fruitless and wasteful expenditure.

The Chairperson asked how they will claim the money back.  

Ms Mokgotho said one cannot condone people not following proper procedures.

Acting Chief Ombud replied that they approached the professional body that the employee belongs to. Action has been taken to ensure that the money is being recovered. They also have a civil case in the high court relating to the amount of the investment.

On the vacancy rate, CSOS submitted its staffing plan when doing the budget, and the caution given to CSOS by the Department and Treasury was that CSOS is not stable enough as it has only been established for one year so it has to be cautious about filling all the vacancies at once. Due to the problem about the schemes levy collection, there is lack of certainty about paying the salary bill. They will fill the vacancies when the CSOS is stable.

Acting Chief Ombud replied that it would need an amendment to the Act to make it compulsory for schemes to register and pay levies. They need that muscle.

Mr Mthobi Tyamzashe, CSOS Board Chairperson, replied that they are taking the audit matters seriously. The date error was explained by the Chief Ombud. They take the adverse finding very seriously. That is why he said they are envious of entities with no audit finding against them. They get the message about the slow pace of execution and missing timelines for the completion of the database and the appointment of senior management and disciplinary hearings. They have noted the Committee concerns about the quantum of the amounts written off such as the interest foregone on the ABSA withdrawal; the lack of trust by the Committee who asked why we must trust your promises and the request for a rationale for why the CSOS should exist and getting more teeth through legislation amendment. They accept this and will improve. He confirmed that the protocol for the appointment of Chief Ombud and CFO is that the Board reports its recommendations to the Minister. For lower level positions the Board does these.

EEAB responses
EAAB Board Chairperson, Mr Nkosinathi Biko, replied that the response  has been submitted to the Minister about the process of appointing the CEO. That response speaks to the Board ensuring the appointed candidate complies with all processes and that there were consultations with the then-Minister. They agreed with the approach as explained to the Committee by the Director General on the process going forward. On the second letter about various allegations made against the CEO, it has been wrongfully reported in the media that there was a delay in the Board response and that is why the Minister wrote to the Board because there had been no action on the matter. He noted that the Board had responded to the Minister timeously on the action plan of the Board which was well on the way, and he trusts the Minister will provide further details on the matter.

It would be important to share with the Committee some of the pressure points on the entity that explain a number of these allegations. 1. There is a cohort in the industry that is advancing the argument for self regulation. The new Act will provide a regulated environment for property practitioners. It would appear players in the industry wanted a different regime. The Act looks at regulating players that have not been formally regulated. The Committee needs to be alive to that. Unfortunately some of those tendencies have combined with internal HR matters to create rather a difficult environment. 2. It has led to some of the allegations against the EAAB CEO which are very bold and many very defamatory with a clear plan to remove the CEO. As long as that outcome is not achieved, one can imagine the pushback that EAAB has to deal with. The Board cannot act on allegations only but only on fact. The allegations have to be subjected to processes and some of these processes have been explained in the letter to the Minister. 3. The third pressure point is in the area of transformation and seemingly resistance to this. The new Act is very specific about transformation such as a fund must be set up. Those are some of the shifting sands that the entity has to deal. The Committee has to rest assure that the institution has processes to deal with this. The institution is mandated to deal with these headaches and it does not wish to burden the Committee with them. If matters become unmanageable, the EAAB will inform the Minister, the DG and the Committee. The institution is moving to a better place.

Ms Mamodupi Mohlala, EAAB CEO, explained that there is no substance to the allegations against her.
 

The Chairperson interjected to say she was not to respond the allegations.

Ms Mohlala outlined the irregular expenditure. R90 000 was for the Ghana trip undertaken by a board member which was unauthorised and the board has made recommendations to the Minister. Consequence management has taken place and the staff member disciplined. Irregular expenditure related to the Internal Audit has been referred to Treasury for condonation. The reason was that the procurement process did not appoint the first recommended entity but the third recommended entity. R1 million was for IT services and irregular appointments. She elaborated that IT is very problematic at EAAB and most service providers were historically not properly procured and 90% of those entities were not transformed. Transformation must be applied both internally and externally. They need to regularise procurement. When she started at EAAB she was given the mandate from the Board to ensure that procurement processes were proper and if need be to cancel from scratch and restart the process. In the middle of the audit, the issue of not having a proper IT system was again raised by the AG. To address this, a service provider had to be identified.  New Dawn Technology was procured properly. A full investigation was done. The IT system had to be fixed. EAAB procured the SAP system but it did not have a configuration to produce Fidelity Fund certificates. EAAB had to ensure that the service provider contracted to do this does not own the source code as this intellectual property must be owned by the EAAB, not by a third party, so it cannot be held to ransom. They ensured that the service provider was transformed.

On transformation, they look at black, disabled, male/female, they look at everything. Transformation is critical. It is imperative to ensure the industry is properly transformed. It might not be overt but there are undertones that the industry is not comfortable with this.

Ms Mohlala replied about the EEAB budget being affected by the new Property Practitioners Act and pointed out that the EAAB can use only the interest from the R50 million which is R7 million. For transformation initiatives, they need capital injections to stimulate SMEs in those areas where there are none. It is also critical to monitor the utilisation of money for transformation to realise the full benefits of transformation. They have a stakeholder group responsible for amendments to the Act. Currently there is no provision for interest paid to the Fidelity Fund. They are dealing with this and it is top of the agenda.

The EAAB CEO went on to discuss a personal matter of her suing an employee. She had issued summons for defamation of character. The Committee must be mindful it was an abuse to her as a woman executive in the workplace, and it was important to pursue as part of the 16 Days of Activism month currently in play.

The Chairperson said that this is not a court proceeding and those issues have their own forum. She asked Ms Mohlala to leave out personal issues. The Board Chairperson has responded and dealt with it. Do not panic and think everyone is joining the queue to persecute you.

The EAAB CEO replied to the question about what happens to the interns after they have completed the internship. She said this was a joint initiative of internship and incubation. When the SMEs are set up, they will plug these intern graduates into these incubator entities.  

She replied that FNB was the first bank ready to sign. They are talking to Standard Bank and other banks too. They are approaching mobile operators such as Telkom, Cell C and Vodacom. They will talk to different mobile operators to get them into the programme.

They have engaged most provinces except the North West and the Eastern Cape. Systems differ from province to province. Free State and Northern Cape are on the way to dealing with all issues required.

Mr M Tseki (ANC) commented that if media articles arise, they should forward these to the Committee Chairperson. He said that a Member of Parliament cannot protect members of staff when there are allegations against the CEO. The platform to raise these issues is with human resources and industrial relations. This is not the first time this has been done (referring to Ms Powell).

The Chairperson said Ms Powell can respond and fight her own battles.

Ms Powell said that they must hold the Department and its entities to account. She was not being abusive by requesting the EAAB response and she had not been called to order by the Chair. The question she posed was to ask for the EAAB Board responses that had been furnished to the Minister. The question did not cast aspersions. She was acting in terms of her oversight function and she requested the response. The Minister directed her letter on 25 November with a seven-day response time. She said that the Member had made spurious comments about her character.

The Acting DG concluded by saying that the Committee had invited them to outline the audit action plans. This is the work of the oversight the Department will continue to look at until completion. With EEAB they will return with the balance of the matters.

The Chairperson said that the elected have a constitutional right to oversight but one's constitutional right does not infringe on another’s. The entities were called to answer on the Auditor-General's findings, and she is not going to protect anyone if they are not dealing with that. Their constitutional right is limited to the agenda. Questions can be put to the Minister if the Minister is present. If the Minister is not present, it will not be helpful to raise random questions. The more systematic they are, the more they will get coherent responses.

Committee programme
The Chairperson said that the Committee decided to go to Lesotho Highlands Water Project. They had applied to the Chair of Chairs for approval. Two committee programmes have been circulated. If the oversight visit is approved, then the programme with the oversight included is the one to follow. If not, then we invite the municipalities to come and present.

Mr August asked when they would get confirmation on which programme to use.

The Chairperson replied as soon as possible. It depends on the House Chair and Chief Whip.

Meeting was adjourned.

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