Public works CFO appointment irregular‚ says PSC

23 October 2018 - 13:37 By Thabo Mokone
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The Public Service Commission (PSC) has found that the appointment of the CFO of the department of public works - which is responsible for a multibillion government property portfolio - is irregular.

In its provisional report presented to the Standing Committee on Public Accounts (Scopa)‚ the PSC has found that the secondment of Cox Mokgoro as the CFO of the department from the Independent Development Trust (IDT) was irregular because it violated prescripts of the Public Service Act‚ the Public Finance Management Act and the constitutional values of clean governance and ethical conduct in the public service.

The PSC investigation‚ which was instituted at the behest of Scopa after they picked up possible breaches of laws in relation to Mokgoro's appointment‚ also found that it was irregular for the department to enlist the services of Honey Cloud Enterprises‚ a company in which Mokgoro is a sole director and employee‚ to manage his secondment from the IDT.

The report also states that Mokgoro's secondment to the department was irregularly approved first by former public works minister Nathi Nhleko in November 2017 and by the latest public works minister Thulas Nxesi in June 2018‚ with both signing the employment contract "retrospectively".

The damning provisional report also states that Mokgoro was enjoying a special remuneration regime unlike other government CFOs‚ earning an annual package of more than R2.2-million while receiving salary increases higher than his counterparts in the civil service.

Mokgoro has been receiving yearly increases of 7% while his colleagues got average increases of 5%.

"No justification existed for awarding a higher percentage cost-of-living adjustment to Mr Mokgoro that determined by the minister of public service and administration for members in the senior management service‚" said PSC director-general Dr Dovhani Mamphiswana.

Mamphiswana also reported that it was irregular for Mokgoro's Honey Cloud Enterprises to trade with the department because civil servants were not allowed to trade with the state.

"Honey Cloud Enterprises was purchased in August 2015 as a shelf company‚ and the seeming utilisation of this entity as vehicle through which Mr Mokgoro was seconded with effect from 1 November 2017 is regarded as an effort to circumvent the regulatory framework related to secondments."

Nxesi‚ who was present on the tense Tuesday meeting with Scopa‚ said: "For now chair I will reserve my comment until the final report … and the consideration of what I've submitted to the PSC"‚ when asked to speak by committee chair Themba Godi.

MPs now want all contracts signed off by Mokgoro to be investigated‚ saying they will also call him to a meeting to hear his version of events.

They said the financial mismanagement of the department had not improved despite going out of its way to hire him due to his special financial management skills.

"The appointment was actually fraudulent because he was never an employee. So the CEO of the IDT who wrote letters of secondment was actually part of the report‚" said Godi.

"Here in his letter requesting extension‚ Mr Mokgoro says he was advised by a director in the department that he should go and establish a company‚ so that person was part of the fraud. Who's that person?

"That determination is ours to make … this practice of hiring Honey Cloud or Mr Mokgoro‚ was it an isolated case or are there other cases like that in the department?"

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