FSB response - Sunday Times tender story

17 February 2016 FSB

On 24th January the Sunday Times featured a story on the alleged mishandling of dormant and inactive pension funds. Secondary to this article, was a piece on an alleged tender cover up, published on 07 Feb 2016.

While the FSB cannot comment on the first article as it is currently sub judice, it is necessary to clarify the facts, and our policies and procedures that have clearly been misrepresented in the second article.

1) The FSB adheres to the highest standards of corporate governance, with no tolerance for corruption. Allegations of any breach of improper tender activity are without foundation, and are strongly rejected.

2) Acting under the guise of a whistle blower, Mabulenyana Marweshe claims to have “saved taxpayers millions”. The actual cost of the internal audit service to the FSB for 2014/2015 was just over R850 000. This is a necessary expenditure given that the FSB is statutorily required by the Public Finance Management Act (PFMA) to maintain a system of internal audit control.

3) The FSB has stringent controls and governance procedures in place to ensure that the risk of impropriety in its supply chain process is reduced to the absolute minimum. In line with the PFMA FSB tenders are considered by three committees before they are awarded. This is to ensure that no one individual makes the decision on who the tender should be awarded to.

4) Contrary to Marweshe’s claims, it was the FSB’s Supply Chain Unit (SCU) that alerted FSB executives in April 2015 to the fact that the internal audit tender was awarded a few days after its validity period had expired. The executives sought legal advice and disclosed this validity issue to the FSB Board’s Audit Committee on 22 April 2015.

5) Following the advice obtained, a decision was taken to engage the winning bidder, Sekela Xabiso, to abandon the award. Final agreement on this issue was reached in July 2015. Marweshe only formally filed a complaint on the 24th of December 2015.

6) Following this experience, the FSB has put in place an additional tracking system for all advertised FSB bids which provides an early warning for bids approaching the end of their validity period. The terms of reference for this system have been shared with other public entities.

7) The FSB also strongly rejects the claims by Marweshe of alleged victimisation relating to his MBA funding and prohibiting his “foreign work trips”. Marweshe’s official position at the FSB is Manager: Secretariat. His job has never warranted or included any “foreign work trips”. In January 2015, he applied for a study bursary to fund his MBA studies, which exceeded R200 000 for the first year. With the current economic climate, and the strict austerity measures that the FSB is adhering to, we could not find any financial justification to commit the organisation to a bursary of this magnitude. Instead, a study loan of R20 000, covering the first installment of his MBA, was granted and paid in February 2015.

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