Friday, 26 April 2019

Letter in Business Day about corruption in the Dept Small Business Development

Yesterday's online version of Business Day publishes my letter about rampant corruption in the Department of Small Business Development. It seems corruption is now everywhere. People laud Minister Rob Davies for his sound management of the Department of Trade and Industry which he has run since 2009 but under his watch corruption has spread like a cancer and Minister Zulu has done nothing to stop it after inheriting the "small bits" of the DTI when her department was set up in 2014.

Until now. Last month she suspended nine officials on the strength of an Auditor General's report, and I hope this will be just the start of a cleanup process to root out corruption entirely.

You can read the letter here or below for non-subscribers to BusinessLive.

Minister Zulu must release the Auditor General’s report on corruption in her department and initiate lifestyle audits on all her officials
25th April 2019
Minister of Small Business Development, Lindiwe Zulu, must release the Auditor General’s report on its investigation into corruption by officials in her department which was finalised in March. She must also initiate lifestyle audits on all department staff, many of whom are living lifestyles way beyond what their salaries would afford.

The Portfolio Committee on Small Business Development suspected corrupt activities in certain programmes after conducting oversight visits to Limpopo, KZN and Mpumalanga. At the committee’s insistence the department called in the AG to investigate. On the strength of the report, Minister Zulu issued immediate suspension notices to nine department officials but is now refusing to release the report or name the offending officials.

Staff from the AG’s office presented the report’s findings to members of the portfolio committee last week at a specially convened meeting in Centurion.

The investigation probed allegations of corruption in the Black Business Supplier Development Programme and the Cooperative Incentive Scheme for the financial years 2015/16 and 2016/17.

During this period the department approved R699 million worth of BBSBD and R150 million worth of CIS grant applications. Of those the AG sampled in its investigation, up to 65% of the BBSDP grants and 50% of the CIS grants we suspect or the supposed beneficiaries did not exist. There was overwhelming evidence of collusion between officials, service providers and grant recipients, leading to the department initiating disciplinary proceedings and laying criminal charges against the individuals concerned.

The department inherited these programmes from the Department of Trade and Industry, along with the officials running them. They have both been operating for over ten years and have distributed billions of rands of grants since then.

In their presentation to the Committee, the AG staff expressed the view that a wider investigation into all the department’s programmes and entities should be conducted, including Seda and Sefa. Seda alone disburses R500 million of grants every year which are ripe to be corrupted.

Government has promised a naming and shaming approach to corruption and the identity of numerous alleged government officials have been revealed in recent months at the Zondo commission into state capture and through other media revelations.

It is unacceptable that money budgeted for deserving small businesses and cooperatives has been diverted into the pockets of corrupt officials who are now being shielded. Furthermore, Minister Zulu must ensure that these officials are not being scapegoated, protecting possible corruption and malfeasance by more senior officials in her department, many of whom came from the DTI where the corruption started.

This saga places a sorry marker at the end of Minister Zulu’s five year term. If she had been on the ball and taken action on the portfolio committee’s urgings sooner, millions of rands could have been saved instead of being used to buy fancy clothes, cars and houses for corrupt government officials.

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