(Gallo Images / Sowetan / Elijar Mushiana)

Auditor-General: SARS R4.3m in performance bonuses paid without ministerial approval

SARS does not appear to be accepting responsibility for much lately.


(Gallo Images / Sowetan / Elijar Mushiana)

Auditor-General, Kimi Makwetu, has come out with some serious revelations this past week. In his annual audit report for 2017/2018, he has charged the South African Revenue Services (SARS) with paying performance bonuses — a total of R4.3-million — to its executives without ministerial permission.

This, according to Makwetu, is the second time this has happened.

Auditor-General exposes SARS executives over unauthorised bonus payments

Furthermore, the Daily News reported that

The bonuses, paid to five executives, have been classified as irregular expenditure. Moyane had previously authorised R3-million performance bonuses to the executives committee without the approval of then-financial minister, Pravin Gordhan last year.

The bonuses now form part of a battery of charges levelled against Moyane, who faces a disciplinary inquiry for contravention of the Public Finance Management Act.

Read – Beware: This fake email from “SARS” is scamming people out of their money

Makwetu indicated in the report that this time around, the bonuses were yet again not authorised by the finance minister, Nhlanhla Nene. This, according to the auditor-general, was in contravention of the SARS Amendment Act.

“Management was unable to ensure the bonuses paid to employees in the management structure were approved by the minister. Effective steps were not taken to prevent irregular expenditure amounting to R4.352-million related to performance bonuses” Makwetu noted.

This is not what was reflected in SARS’ annual report, where, according to the Daily News, it is stated that the R4.352-million was

“in line with approval received”.

Read – Top SARS official appointed as new NSFAS administrator

It is not clear at this moment if this approval was authorised by current Finance Minister, Nhlanhla Nene, or his predecessor, Malusi Gigaba.

“A request for condonation has been sent to the Minister of Finance”, SARS noted.

A growing trend of mismanagement of public funds for personal benefit

In 2017, when the revenue services company was in hot waters for issuing R3-million in performance bonuses, its excuse was that it had sought the declaratory order on the interpretation of the powers of the SARS commissioner at the North Gauteng High Court.

However, it later withdrew the declaratory process and state that

“it will seek ministerial consent for all future bonus payments”.

Read – SARS: South African taxpayers are losing faith in the system

A further revelation by Makwetu was that SARS had allegedly extended a contract without disclosing this with the National Treasury. In the auditor’s annual report, this has been noted as a further R38.1-million in irregular expenditure.

“Management did not ensure there was adherence to supply chain management regulations as contracts were extended in 2016 without appropriate approval from the National Treasury”, he noted.

SARS’ position in this?

“The National Treasury instruction note was unclear on how transactions that are already in progress should be treated.”