ATC150312: Third report of the Committee on Public Accounts on the unauthorised expenditure of the Department of Trade and Industry, dated 03 February 2015

Public Accounts (SCOPA)

Third report of the Committee on Public Accounts on the unauthorised expenditure of the Department of Trade and Industry, dated 03 February 2015
 

The Committee on Public Accounts (the Committee) considered and heard evidence on the unauthorised expenditure of the Department of Trade and Industry (the Department) in relation to the 2004/05 financial year and reports as follows:

1. Background

The Department incurred unauthorized expenditure of R37.380 million during the financial year 2004/05 resulting from the following:

 

a) Arbitration award against the Department: R25 000.00

An amount of R25 000.00 was paid by the Department as an award granted against it by the Council for Conciliation, Mediation and Arbitration (CCMA), following the dismissal of an official.

 

b) Staff debts written off: R125 229.71

An amount of R125 229.71 was written off as irrecoverable debt following resignation of some staff members.

 

c) Irrecoverable General Export Incentive Scheme debt: R31.075 million

When the Minister of Trade and Industry introduced the General Export Incentive Scheme (GEIS) in April 1990, several companies claimed incentives from the Department. When the Department sent inspectors after five years to verify export documentation, some companies had closed down and others had relocated back to Taiwan. The R31.075 million debt arose from the fact that the Department had, in most cases, to accept settlement amounts, while in some cases companies had no moveable assets.

 

 

 

d) Claim against the Department by W Schlaepfer (Pumlani Lodge)

 

This expenditure was incurred through failure of the police and government authorities to detect, prevent and investigate; and prosecute crimes relating to the destruction of the property at Pumlani Lodge, leading to a legal award of R6.154 million which the Department became liable for on account of a trade agreement.

 

Recommendation:

In line with the provisions of Section 34(1) of the PFMA, the Committee recommends that Parliament approves the amount of R37.380 million as a direct charge against the National Revenue Fund.

 

Report to be considered.