About R30 million that the Commission for Conciliation, Mediation and Arbitration (CCMA) spent "irregularly" was not fruitless and wasteful but used for goods and services that benefited South Africans, a member of the commission's governing body told Parliament.

Bheki Ntshalitshali, who represents organised labour on the governing body of the CCMA, told MPs on the portfolio committee on labour that the irregular expenditure, identified by the Auditor General, had occurred because the commission had "bypassed" the Government Bulletin when advertising for goods and services.

"The irregular expenditure occurred as a result of certain treasury regulations that were not followed," Ntshalitshali said.

"However, the expenditure was justified; hence it was not fruitless and wasteful. The money was for goods and services procured. It was for the benefit of the CCMA and people of South Africa at large. It was not lost".

Wrongly advised

Ntshalitshali said the CCMA were "wrongly advised" and had advertised in media which it believed to be "more accessible".

Treasury requires however, that the CCMA had to advertise in the Government Bulletin for amounts greater than R500,000.

"It was the manner and process in which goods were procured that was not up to letter of the law," he said.

"The AG said we first had to go to the Government Bulletin. If we had enough resources, we could have gone to other media to extend our reach."

The AG's forensic investigation found irregular expenditure of around R23 million, an amount which Ntshalitshali said was closer to R30 million.

The majority of this amount approximately R22.85 million was allocated to ICT expenditure.

Further investigation called for

Earlier in August Pramesh Bhana, a corporate executive in the AG's office, urged the CCMA to conduct its own investigation to determine the extent of wrongdoing as the forensic investigation only focused on allegations aired by a whistle-blower.

He said the organisation needed to review its management culture so as "not to just treat the symptoms but get to the root cause".

The current system of financial mismanagement was expensive, even where it was not downright irregular, and therefore unsustainable, he added.

The AG report, which investigated three reporting periods dating back to the 2007/8 financial year, was commissioned by the committee after one of its members, Eric Nyekemba, was contacted by a whistle-blower in his constituency in Vosloosrus.

The person was employed by the CCMA and contacted him late last year, Nyekemba told Sapa.

Inadequate oversight

The report's findings related to supply chain management deficiencies are "predominantly due to non-adherence to policies, directives and delegated authority by senior management of the CCMA".

The "significant" findings are indicative of inadequate monitoring and oversight by the leadership in the area of supply chain management, the report said.

After the publishing of the AG report, CCMA Governing Body chairwoman Tanya Cohen insisted to journalists in Johannesburg that the CCMA was "neither corrupt nor fraudulent".

The management irregularities identified by the AG have largely been historic, of a technical nature and had been rectified, she said.

They had not "impacted on CCMA's delivery against its mandate in any way".

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