The auditor-general (AG) has found that poor financial controls, irregular expenditure and faulty procurement have directly affected workers’ retirement funds at the Greater North Transport (GNT) in Limpopo.
This was revealed in a preliminary report by the AG, which was presented to the Limpopo provincial legislature in September.
Pensioners who have since retired and are demanding their pension funds picketed and slept outside premier Phophi Ramathuba’s office for days last month.
The SA Human Rights Commission (SAHRC) started a mediation process.
GNT is accused of deducting pension contributions but not forwarding them to fund administrators.
According to the Make It Happen Foundation, which is representing the workers, more than R500m in pension funds is unaccounted for.
The report shows that GNT has been accumulating irregular expenditure across multiple financial cycles.
The AG flagged irregular lease agreements entered into with third-party bus operators.
The AG also noted that the entities’ irregular spending kept growing each year. It was R528m in 2021/22, R629m in 2022/23, R651m in 2023/24, and is now R673m in 2024/25.
“This is a clear breach of the five pillars of procurement – equitable, fairness, cost-effectiveness, transparency and competitiveness. The main contributor here is simple: non-compliance with procurement laws and regulations," the AG said.
“The audit outcomes regressed from the prior year on financial statements, material findings on performance information and most compliance themes. The entity encountered a rise in significant internal control deficiencies identified, which contributed to material misstatements and ultimately influenced the current audit outcome.”
The latest audit identified a material irregularity of R5.9m linked to a security contract that was improperly extended and not managed in line with legislation.
“The entity incurred penalties as a result of non-adherence with the agreement that was entered into between Great North Transport SOC (LTD) and department of transport. The total penalties incurred are R5.9m as disclosed in the annual financial statements for the year ended 31 March 2023. This resulted in non-compliance,” read the report.
The report said this was due to the introduction of a new system without proper training of staff.
“This resulted in delays or non-capturing of transactions. There was also an inconsistency at the executive level, as suspensions were effected during the critical time of the audit,” read the report.
DA’s Limpopo provincial leader, Jacques Smalle, said: “Workers who still haven’t been paid will only see those benefits during the next financial year, which will be after March [2026].”
He said the audit has to be backdated to when GNT fell under the Gazankulu transport system, as well as the Lebowa transport system. This was 10 years ago.
He said there was an actuarial report which probed the disappearance of the pension funds, among other things, that was still outstanding. It was meant to be handed over by the office of the MEC for transport in September, but that did not happen.
Limpopo provincial office is working with the SAHRC to assist the remaining pensioners in getting their pension funds after the monies were mismanaged by the GNT.
The Make It Happen Foundation representatives of the pensioners claim some workers were underpaid or lost accrued interest due to issues with pension fund administration. The group alleges that over R500m has disappeared.
A May 2021 BDO forensic report found the GNT board of trustees failed to report non-compliance to the pension registrar and that 11 depots did not make timely pension contributions.
Limpopo provincial spokesperson, Ndavhe Ramakuela, said there were 170 employees who still need to have their claims settled.
“The call has been made to get those individuals to bring their information to access their pensions. The offices are open for all of them to submit necessary information.”
He said once the report is ready, it will be presented to the GNT.
“Then it would be brought to the executive council for feedback on the progress made. The actuaries are awaiting a list from Make It Happen Foundation to corroborate and finalise the report. Otherwise, the non-submission is the one that would delay the conclusion of the report,” Ramakuela said, adding that there was a criminal investigation.
HRC provincial manager, Victor Mavhidula, said the mediation process was continuing.
“Our focus is on helping these people get their money. There is no dispute regarding the mishandling of their pensions. All parties acknowledge that something was not done properly.”
Sowetan
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