De Lille kept in the dark as tourism department’s assets go ‘missing’

An asset verification exercise by the department of tourism has revealed a gap between its asset register and the assets in its possession — a state of affairs minister Patricia de Lille has apparently been kept in the dark about.

This is despite the department’s management having kickstarted a process to procure external fraud investigators to help it uncover the magnitude of the problem.

The Sunday Times understands that the department’s management has found serious weaknesses in its internal controls, leading to director-general (DG) Nkhumeleni Vele appointing external experts to conduct an investigation into the asset register over at least the past five years.

According to the terms of reference of the investigation, seen by the Sunday Times, the department’s preliminary investigations point to financial misconduct and criminality.

“The accounting officer of the department of tourism identified serious concerns regarding the management, safeguarding, control, and disposal of assets within the department,” the terms of reference say. “These concerns arose from internal control weaknesses identified during asset verification processes, management oversight activities, and/or an investigation that was conducted.”

The terms of reference were signed off by Thabo Makhubedu, director in the office of the DG.

The DG has not informed me about the allegations

—  Patricia de Lille, tourism minister

The internal investigation found four areas of irregularity:

• Servers that are missing from designated locations;
• Assets that appear in the asset register but can’t be physically accounted for;
• Sale of assets without approval; and
• Financial losses due to asset mismanagement or criminal conduct.

Missing hardware servers pose severe security threats, such as creating access points for hackers, and leaving critical data vulnerable to catastrophic hardware failure.

In addition to quantifying financial losses suffered by the department, the investigators will be required to:

• identify responsible officials and service providers; and
• determine whether recovery of assets is possible.

On the allegedly missing servers, the investigators have been asked to establish:

• the total number of servers purchased by the department;
• the physical location of any purchased servers; and
• whether the loss of any missing servers was reported.

For assets that cannot be accounted for during physical inspection, the investigators are expected to determine:

• the total number that could not be verified;
• whether the assets were properly recorded in the asset register; and
• the financial value of any unaccounted assets.

They will also seek to identify:

• assets sold without approval; and
• whether the proceeds from the disposals were properly accounted for.

According to the terms of reference, the investigation covers the period April 1 2022 to March 31 2026 but may be extended “if additional irregularities are identified”.

The investigators have been given powers to:

• review the department’s asset register and supporting documentation;
• do a physical verification of the assets; and
• review the procurement and disposal documents.

The terms of reference state that investigators will also be required to interview relevant officials and collect and preserve evidence.

They will have two months to complete their work and produce a report with recommendations on possible disciplinary, civil and criminal charges.

When approached for comment, De Lille said she was not aware of the investigations.

“The DG has not informed me about the allegations. I will ask for a full report, and there will be consequence management for anyone found guilty of contravening the Public Finance Management Act,” she said.

Vele is a seasoned public servant, having spent more than two decades with the department, including as DG over the past decade.

Poor asset management in government departments is a growing concern. The auditor-general’s (AG) office has flagged that asset registers are not being reconciled to financial records, resulting in material differences between the two.

In May the AG took the department of defence to task over its register and the department’s inability to account fully for its assets, including weapons, a situation that poses significant security risks. The majority of the assets not accounted for consisted of specialised military assets, as flagged by the AG.