Parliament, Wednesday, 16 October 2024 – The Portfolio Committee on Tourism on Tuesday raised concern about the regression in audit outcomes for South African Tourism (SAT). SAT briefed the committee on its annual report for the 2023/24 financial year.
The entity received a qualified audit outcome for the 2023/24 financial year, a regression from the previous year’s audit outcome. Among the findings that the Office of the Auditor-General (AG) flagged was the lack of proper record-keeping and reconciliation of control accounts. The entity also recorded irregular expenditure amounting to R24.2 million, resulting from failure to follow procurement processes such as inviting competitive bids. The AG also identified a material irregularity, which will be included in the auditor’s report for the next financial year.
Committee members also wanted to know how the board would ensure proper governance and financial management at SAT. SAT experienced instability at board and management levels during the financial year. On 21 April 2023, the SAT board was dissolved, and a new board was appointed until 28 February 2024. A new board was appointed with effect from 8 March 2024.
The Minister of Tourism, Ms Patricia de Lille, told the committee that new board appointments were made in September this year. She said the board still has two vacant posts and processes are underway to fill these vacancies. The Minister assured the committee that the new board meets the requirements for representation stipulated in the Tourism Act of 2014.
The Minister acknowledged SAT’s regression in its audit outcome and told the committee that efforts are in place to improve this in the new financial year. The new board Chairperson, Dr Gregory Davids, also acknowledged SAT’s governance and performance challenges and said the new board is committed to changing these dynamics. The committee also heard that the AG has provided a clear audit action plan that will assist in improving the current situation.
The committee also flagged the vacancy rate at SAT. The percentage of vacancies in the 2023/24 financial year was 16.8%. The committee heard recruitment processes are underway, especially for critical posts such as the chief financial officer, head of audit, chief operating officer and the chief conventions bureau officer.
The committee urged SAT to pay close attention to reasons provided by exiting staff to ensure that these are addressed internally, where applicable, and that the staff turnover rate is reduced.
The committee was also concerned about SAT’s surplus of R229 million for the financial year. SAT has since submitted a request to the National Treasury to retain R194 million of the surplus. SAT assured the committee that it does not budget for a surplus or a deficit, and measures will be implemented to manage the budget better.
Committee Chairperson Ms Lungi Mnganga-Gcabashe asked SAT to outline the causes of the regressed audit outcome and the measures that will be put in place to address the finding. She asked SAT to develop an audit action plan with clear timeframes detailing how the audit outcomes will be addressed and stability maintained. “Progress on this should be reported to the committee every quarter,” she said.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON TOURISM, MS LUNGI MNGANGA-GCABASHE.
For media enquiries or interviews with the Chairperson, please contact:
Name: Alicestine October (Ms)
Cell: 083 665 4345
E-mail: aoctober@parliament.gov.za
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