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The department of employment and labour is seeking an order to place trade union, the Public Servants Association, under administration due to financial mismanagement.
In court documents filed on July 4, which Sowetan has seen, registrar of labour relations, Lehlohonolo Daniel Molefe, says the mismanagement shows the union is not acting in the best interest of its members. The union, which intends to reject Molefe’s claims, said it was still waiting to be furnished with Molefe’s court application papers.
Molefe, has filed an affidavit in the labour court in Johannesburg, making damning allegations about the state of the finances of the union.
According to the union’s 2022/2023 financial report, it had more than 241,000 members as at December 31 2022.
Molefe said his requests for information on an August 2020 forensic report into the affairs of the union which was compiled by Fundudzi Forensic Services was met with threats.
He accused select officials ran amok with the union’s money.
“I was furnished with an affidavit and a comprehensive forensic report by a whistleblower...during or [about] August 2023, in which serious allegations of corruption, fraud, nepotism, unlawful overspending and procurement and financial mismanagement were documented in respect of PSA,” said Molefe in the affidavit.
“As I am obliged to do, I requested the PSA to respond to these allegations in the affidavit, and the recommendation in the forensic report to report the matter to the Directorate of Special Investigations, which was met with a belligerent, threatening and off-handed response.”
He said he followed up with a comprehensive written request which was met with the same response as the first one, adding that the PSA had refused to comply with his requests.
“...I am therefore justified in concluding that the PSA has not done anything to give effect to the recommendations by the forensic auditors. If this is so, then the PSA is guilty of serious financial mismanagement...and is no longer operating as a bona fide union, obligated to act in the best interests of its members...”
PSA’s deputy general manager Claude Naiker said Molefe’s accusations have no merits.
“We will defend ourselves in court. We are waiting for his application papers, and we intend to oppose the application and have it struck off the court. He [Molefe] has been attacking us for the past three years without any merits. We believe we have done everything above board,” said Naiker.
Molefe said recommendations contained in the report indicated to him that there was serious mismanagement of finances.
Molefe highlighted part of the recommendations made on the procurement of 250,000 golf T-shirts for the union’s 100th year celebration.
A company that did not comply with all the tender requirements was re-evaluated and given the contract, according to the recommendations.
He said trade unions and employer organisations were obligated to furnish him with comprehensive financial reports and statements which are audited annually.
“The relevance of this is that my office has not been informed, in the audited financial statements submitted, of the alleged financial mismanagement, uncovered in the forensic report.
“...The audited financial statement provided to me by the PSA must be investigated and compared to the forensic report to establish whether there has been [repeated] misrepresentations made to me over that past three to four years, by perhaps not disclosing the irregularities recorded in the forensic report.
“GAAP [generally accepted accounting principles] requires that any such alleged irregularities be disclosed in financial statements...The administrator [Gerhard Vosloo] which I urge upon this court to appoint herein, will be best suited to embark upon this investigation. The administrator must be afforded the powers to engage the services of forensic auditors to do such an investigation,” Molefe said.
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