Gaal’s R5,2m payroll crisis

Gateway Airports Authority Limited (Gaal) is facing financial troubles and had to borrow money from Provincial Treasury to pay salaries for the month of February.
It was learnt when the entity appeared before the Standing Committee on Public Accounts (Scopa) last Wednesday that monthly salaries for employees at the entity amounts to R2,6 million.
Transport and Community Safety Head of Department, Hanli du Ples­sis divulged that the entity had borrowed R5,2 million from Provincial Treasury, seemingly to assist with February and March salaries. She further indicated that the money will be deducted from the entity’s 2018/19 financial year budget.
Scopa committee member Jossey Buthane said some service providers had not been paid to which Du Plessis responded that the entity allocated funds the wrong way and appointed service providers without a budget and this was one of their major concerns as the department.
Although the entity falls under the Department of Transport, MEC Makoma Makhurupetje made a statement that raised eyebrows: “I only learnt about the entity’s financial troubles during the Executive Council (Exco) Budget Lekgotla and I was told that the entity board had approached Treasury without communicating with me.”
She further said she had convened an urgent board meeting after learning about the financial crisis to come up with solutions. A Chief Executive Officer (CEO) has yet to be appointed despite a new board having been elected. Makhurupetje said their mission was to appoint a CEO as soon as possible to help run the entity. She indicated that the Exco had resolved that the province should consider a public private partnership to help run the facility. Du Plessis on the other hand said they were planning to bring Airports Company South Africa (Acsa) on board to form what she regards as ‘public-public partnership’.
She stressed that such a partnership would assist because the Provincial Government does not have enough money to run the entity. Scopa committee member, Elias Nong said that there was no way a private company could invest in a business built on a piece of land owned by government. He added that if the province was not careful, Gaal would sink and this could result in their international operating licence being terminated.
“The entity does not serve any purpose in the province more like the Department of Economic Development, Environment and Tourism. These two must generate profit for the province but they continue failing. Acsa should just take over Gaal without engaging in any sort of partnership because the Provincial Government has nothing to lose. What is left now at Gaal is a festival for corruption and maladministration,” he stated.
Gaal board Chairperson Tom Nkoana emphasised that the entity’s financial difficulties were due to accruals from previous financial years amounting to R11 million. The entity does not get its budget in full every new financial year because of accruals. The committee was unhappy with the fact that Gaal was getting a cut from the provincial budget and reiterated that the entity has to run itself and generate income. Nkoana agreed with the committee and alluded to Du Plessis’ statement by saying they were still in talks with Acsa to rescue the entity.
He confirmed that the entity was in financial distress but stressed that they had managed to pay employees after the intervention of the department but could not pay some of the service providers.
“We are in a serious financial crisis but we are going to have a meeting as the board to come up with a turn-around strategy. At the moment, we don’t have a plan to save the entity but I am sure a planned meeting will guide us,’ he explained.
The committee chairperson, Snowy Kennedy-Monyemoratho said the issue of salaries was important and wished that Premier Stan Mathabatha was part of the meeting to explain why he allowed such a disturbing matter to happen. She further said it was unacceptable for employees not to get paid. She continued to say that all the parties involved are required to provide the committee with comprehensive reports explaining why they had allowed such crisis to occur and have until the end of the month to submit the reports.
The committee further requested the Gaal board and the department to recover monies incurred by fruitless and wasteful expenditure in the previous financial years from relevant officials.
The entity incurred fruitless and wasteful expenditure amounting to R655 631 in 2016/17 financial year and R1 244 574 in 2015. The entity in its written responses blamed fruitless expenditure on leadership instability, late submission of Value-Added Tax (Vat) returns, reimbursement of travel claims for cancelled interviews and Commission for Conciliation, Mediation and Arbitration (CCMA) hearings and re-advertisement of vacant positions and tenders.
Kennedy-Monyemoratho said the entity must hold officials accountable and recover the monies, adding that the board must get their house in order and adhere to recommendations made by the committee. She further said most departments and state entities lack consequence management that is why officials do as they please and this affects the Provincial Government.
When asked if action had been taken against relevant officials, the entity responded by saying matters were referred to its financial misconduct committee for recommendations.

Story & photos: ENDY SENYATSI
>>endy@observer.co.za