The constitutional body tasked with advising the Treasury on its fiscal framework and intergovernmental relations has decided to charge suspended CEO Kay Brown with various charges of misconduct.
This was confirmed on Thursday by the chair of the Financial and Fiscal Commission (FFC), Patience Mbava, who said the commission “remains committed to ensuring that a fair and just process takes place”.
Business Day reported early in December that Brown had been placed on precautionary suspension pending an investigation into the allegations of misconduct on the basis of a number of financial irregularities. Precautionary suspension is usually applied to ensure that the person involved does not obstruct investigators.
Brown was not willing to discuss the matter on Thursday, saying “this is an internal matter and hence it would be unethical of me to make public comments in the media”.
Brown, who joined the FFC in April 2018 after working for about 16 years for the Treasury, where she was well regarded, was replaced in an acting capacity by the head of research, Chen Wei Tseng.
The FFC, which exercises oversight over government spending, should be an example of financial rectitude but its 2020/2021 annual report shows that it has been beset by high levels of irregular, fruitless and wasteful expenditure, and has suffered from supply chain weaknesses.
The auditor-general is understood to be investigating possible material irregularities at the institution. In terms of the Public Audit Act, this refers to any noncompliance with or contravention of legislation, fraud, theft or breach of fiduciary duty identified during an audit which is likely to result in a material financial loss, the misuse or loss of a material public resource or substantial harm to a public sector institution or the public.
The FFC itself has expressed concern about the high levels of corruption across the three spheres of government and told SABC News last month that it was working on a new model to advise the government on how to better spend public funds and improve service delivery.
One of the matters revealed in its financial statements is the possible misappropriation of assets related to a data warehouse project. The amount of fruitless and wasteful expenditure involved was R1.9m in the 2019/2020 financial year and arose because the value created was less than the amount paid.
The closing balance for fruitless and wasteful expenditure in 2020/2021 was R2.9m and for irregular expenditure, R12.8m. These are relatively high amounts for an organisation that had total revenue of R64.3m in that year, R63.8m of which came in the form of a government grant.
Irregular expenditure relates to the awarding of contracts; noncompetitive bidding or the lack of proof thereof; nondeclaration of interest; and failure to choose the supplier with the highest preference points or the supplier with the lowest price.
The auditor-general noted that the commission had not taken effective steps to prevent irregular, fruitless and wasteful expenditure and that inadequate disciplinary steps were taken against the officials who had incurred or permitted irregular expenditure.
The audit and risk committee also noted that the FFC had not adopted aggressive anticorruption measures and highlighted internal control weaknesses.
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