The Auditor-General (AG) can’t explain why Onderstepoort Biological Products (OBP) obtained clean audit records in previous years, despite clear signs of regression.
The OBP received a qualified audit report for the 2010/2011 financial year, after being audited by the AG for the first time in over five years.
This came to light at the AG’s presentation to the Portfolio Committee on Agriculture, Forestry and Fisheries of the 2010/11 annual financial statements and audit of the Department of Agriculture, Forestry and Fisheries (DAFF) and its entities.
Meisie Nkau, business executive at the AG, told committee members that she could not give any reason why the OBP received clean audits in previous years because the institution’s books had been audited by a private firm.
Mlungisi Johnson, chairperson of the committee and ANC MP, asked why the DAFF had opted not to have OBP audited by the AG. Nkau explained that certain entities within DAFF were permitted, in terms of the Public Finance Management Act, to appoint their own auditors, and this had applied to OBP.
Yaasir Haffagee, a senior manager at the AG, briefed the committee on the audit outcomes for 2010/11 and said that OBP’s qualified audit could be blamed on inadequate record keeping, weakening financial statements, inadequate systems and ineffective monitoring controls to improve compliance and internal controls.
However, this was only the latest in a series of problems experienced by OBP in recent years.
The entity has faced many challenges, including a serious lack of funds to upgrade its collapsing infrastructure; the suspension and subsequent dismissal of its former chief executive, Andile Dyasi, who was found guilty of charges ranging from alleged fraud and misconduct to self-enrichment; and painstakingly slow progress on the part of DAFF in appointing new board members.
The presentation made it clear that these problems had had a negative impact on the OBP. In response to a question by Deetlefs du Toit, committee member and DA MP, on why the OBP was regressing, Nkau said it was due to major problems in its governance structure.
During a separate meeting in which DAFF and some of its entities, including OBP, presented their annual reports to the portfolio committee, MPs warned the OBP to get its house in order.
Salam Abram, ANC MP, said these are “serious matters” and OBP should provide a detailed report on how it is turning the situation around. Acting chief executive of the OBP Theresa Smit said it is addressing issues identified by the AG.
The DAFF and its other institutions, including the Agricultural Research Council, the National Agricultural Marketing Council, Ncera farms, and the Perishable Products Export Control Board, received clean audit reports for 2010/11. – Denene Erasmus
