Issue: Oct 2010/Jan 2011
Editorials

Adjudicator

Big bash

On the face of it, to spend some R600 000 of pension funds’ money on an anniversary celebration does sound ‘fruitless and wasteful’. Perhaps a forensic investigation will have something to say.

Hang on a moment about Mamodupi Mohlala. A few skeletons have begun to rattle. Before she’s again appointed to a cushy government job – either as a result or in settlement of her application to the Labour Court for her dismissal as communications department director-general by minister Siphiwe Nyanda to be set aside – consider her former life as the pension funds adjudicator.

Always controversial in her adjudicator role, not only for some questionable determinations but also for her illogical ‘scorecard’ of complaints against pension-fund service providers, controversy has dogged her firing as director general as well. It’s ironic that she pointed a finger at her ministerial boss, for irregular spending in the communications department, because a similar finger is now being pointed right back at her.

According its website, in June the Financial Services Board awarded a tender to Gobodo Forensic & Investigative Accounting for “a forensic investigation into possible fruitless and wasteful expenditure incurred by the office of the pension funds adjudicator in terms of the Public Finance Management Act...as well as Treasury Regulations”.

So let’s wait and see what happens. Certainly, nothing should happen on another senior appointment for Mohlala until the investigation is concluded and she has been cleared by it. Clearly, anything less sets a shoddy example for the public service.

The 2008-09 annual report of the adjudicator, Mohlala’s last year in this position, was signed off by the auditor general. It contains a note that “internal controls will be implemented to leave no room for fruitless and wasteful expenditure”, thus implying that during the review year these controls had been rather wonky.

Fruitless and wasteful expenditure is defined as “expenditure which was made in vain and would be avoided had reasonable care been exercised”. The report doesn’t identify how much waste there was or where it happened. So hazard a guess.

Perhaps a clue is contained in Mohlala’s prelude to the annual report. She proudly states that the year “was marked by the tenth-year anniversary of the Office of the Pension Funds Adjudicator which was celebrated by this office in November 2008 in a glittering function attended by the media, industry captains as well as representatives from other institutions. “It was at this event that the sterling work, which was done and is still being done by this office, was exhibited through real life cases affecting the most vulnerable of our society and how their lives have been changed pursuant to intervention by this office.”

Jurgen Boyd

Mohlala . . . party girl

Those most vulnerable in our society might like to know that this party cost R554 000, which indicates that it was glittering indeed. Take it at a minimum of R400 per head for food and booze, after venue and entertainment expenses. Certainly, it’s generous hospitality. But to what good effect is another matter.

“Expenditure which was made in vain and would be avoided had reasonable care been exercised”.

Then there was an additional R82 000 for invitations. The mind boggles at how a cost of say R1 000 per invitation, conservatively, must have been reached. But then, don’t such important guests deserve only the best in design and stationery? Was the post office too boring for delivery? Combine the cost of the party to the cost of the invitations. R636 000 for a “glittering function” isn’t bad going, provided the money isn’t your own.

Oh yes; there’s another little expenditure item mentioned in the annual report. It’s for R73 000 spent on flowers, plants and gifts. Enough said.

In its 2008-09 fiscal, the office of the pension funds adjudicator was funded by a R33m “contribution” from the Financial Services Board. In turn, the FSB is funded by levies from financial institutions. However, the office of the adjudicator is funded from a levy on pension funds alone. They might also await keenly the outcome of the FSB-instigated investigation.

Should it find that there was “fruitless and wasteful expenditure”, the question will arise of liability for recompense. Mohlala must be praying that there won’t be a claim against her, for she can ill-afford it. Her annual remuneration as adjudicator was a paltry R1,7m.