SABC Wastage

The rot of fraud, corruption and waste at the SABC reaches all the way to the top, says a preliminary report by the Special Investigating Unit (SIU) into long-standing allegations of widespread graft at the public broadcaster. The ongoing SIU probe – covering the period September, 2007 to March last year – has unearthed a litany of abuses and financial shenanigans.

These include fraud and irregularities in the procurement of services, theft of assets, payments to fictitious companies, duplicate payments, fraudulent claims, and irregular appointments, promotions and pay hikes.

The SIU said only 10 of the 20 SABC current and former board members investigated had disclosed their business interests as required by law.

And even those board members who disclosed their interests – in 55 companies – failed to report that they had fingers in 1 106 other pies. It was the board itself that asked the SIU to investigate. Current board chairman Ben Ngubane said on Wednesday night the probe was launched after the auditor-general made damning findings in his 2009/10 report on the broadcaster’s finances. Responding to the findings on board members, Ngubane said: “I thought I had done all my declarations, but I don’t know about the other board members.”

The SIU also identified 20 SABC staffers who had personal interests in companies that conducted R1.2 billion worth of business with the broadcaster.

And of the 1 358 SABC employees investigated so far, only 178 had completed declaration of interest forms in which they declared 176 interests.

But further analysis revealed about 2 070 other business interests had not been declared.

The SIU found that the SABC wasted R150 million last year alone when a “senior staff member” bought high volumes of poor programming which later became “redundant”.

The employee accepted gifts from the company that sold him the sub-par content – a practice found to be “commonplace” at the broadcaster.

“The SABC also suffered revenue losses, because advertisers were not prepared to place their advertisements during the screening of these sub-standard programmes,” the SIU report stated.

More than R31m in payments to staff members were never recorded on the payroll system.

And R774 000 in third party payments “relating to personal protection” were made without the required fringe benefit tax being deducted, investigators said.

This means staff members were hiring bodyguards at taxpayers’ expense without declaring this benefit for tax purposes.

A second, similar case involving R411 000 was also uncovered.

Something of an embarrassment to the SABC is that staff apparently found the corporation’s programming so dull that they claimed R102 000 in “M-Net and DStv privileges”. They also failed to declare this benefit.

When investigators looked into “anomalies” in discounts and credit notes, they found the total of discounts, commissions and levies offered by the SABC made up 45 percent of its total revenue. The absence of industry benchmarks for discounts of this kind prevented investigators from making a specific finding.

It “appears that the appropriateness of the discount structures warrant further investigations by the SABC”, the SIU suggested.

Investigators also found that the broadcaster racked up a R29m fuel bill on its 843 petrol cards, of which 173 belonged to top and senior managers.

Further studies are under way to determine the extent of petrol card abuse at the SABC.

Between April, 2006 and August, 2009, the SABC paid R12.8m to 51 employees who were suspended. One “absent” employee was paid almost R1m in unearned salary.

Probing an allegation that a “senior SABC staff member abused his position to benefit his wife’s business partner”, investigators discovered the employee “promoted the services of his wife’s business partner in various ways which may have amounted to a conflict of interest (when) he had a duty to disclose them and failed to do so”.

“Offers of discounted airtime potentially would have resulted in a loss of approximately R12m to the SABC and would have benefited his wife’s business partner who would have been paid to produce the advertisements.”

The same person offered one advertiser a 48 percent discount despite the SABC’s discount policy limiting such discounts to 6 percent, causing a R838 000 loss.

The same staffer also swayed the SABC to invest about R2.2m in a Valentine’s Day campaign in which his wife’s business partner was involved. The return was only R18 352 – a 99 percent loss.

The SABC also lost R482 000 through double-invoicing and paid R1.6m for services not rendered.

Lisa Skinner, a co-ordinator for the Save Our SABC coalition, which includes labour and industry role-players, said the preliminary findings “point to a huge problem with financial systems and accountability”.

She also noted that the government was looking at a new funding model for the SABC which was expected to require greater public investment in the corporation.

“The SABC itself has also asked for more public funding, but you cannot justify this unless the SABC gets its house in order.

“The SABC has always said it wants to root out corruption. Now let’s see them do it.

“We need to see swift action,” she said.