SA Tourism recovers R35-million in irregular payments, New York office under scrutiny

Former SA Tourism executives have been implicated in dodgy payments worth millions of rands that were slipped through via invoices generated by the tourism marketing agency’s offices in the US and South Africa, days before the end of the financial year.

The tourism agency has since recovered the misappropriated funds and reported the matter to the Auditor-General.

The invoices, amounting to R35-million, were signed off by the outgoing acting CEO, the chief operations officer and the acting chief financial officer. All three no longer work for the agency.

In a statement issued by the Department of Tourism, Minister Patricia de Lille said she had recently become aware of irregular payments made through SA Tourism’s US and South Africa offices for services not rendered.

The implicated individuals were not named.

SA Tourism falls under the tourism department. As part of its mandate, the agency has hub offices in key source market countries around the world where they promote and market the country.

‘Irregular invoices’

De Lille said several irregular invoices were created about three days before the end of the previous financial year (31 March 2023) and processed “piecemeal in order to override banking controls”.

The discovery of the misappropriated funds was triggered after a review by SA Tourism confirmed that a significant portion of the payments received by a media agency in March 2023, and signed off by the three executives, were for services that had not been rendered.

The unnamed media agency was informed about the irregularities and conceded that a “significant portion” received by them and signed off were for services not rendered.

De Lille called the irregular payments “completely shocking”, saying that an internal audit report was being finalised.

An audit of the SA Tourism office in New York will also be conducted.

Nombulelo Guliwe, a chartered accountant, will lead SA Tourism for the next five years. She was appointed in February this year after the position became vacant in May 2021.

Turmoil

The agency has been in turmoil for years, with five officials acting as CEO since 2021.

In January 2023, Daily Maverick reported that the South African government was on the verge of approving a three-year deal worth just over R910,000 for SA Tourism to sponsor the English Premier League football team, Tottenham Hotspur. The deal was to have been announced by President Cyril Ramaphosa during his State of the Nation Address on 10 February.

However, the controversial proposal “and other matters” led to the mass resignation of previous board members, the tourism department said.

At the time, then tourism minister Lindiwe Sisulu flatly denied having tried to force SA Tourism to push through the deal before she left the portfolio.

De Lille was appointed tourism minister on 6 March last year. Her first public action that day was to write to the then chair of the SA Tourism Board, Dr Thozamile Botha, asking for reasons why she should not dissolve the board.

She outlined several concerns, including the conduct of the board regarding the Tottenham Hotspur sponsorship deal, the composition of the board, and whether the members had the required experience or qualifications for the job. Other concerns were raised by the then-acting CEO Themba Khumalo.

After taking legal advice, De Lille dissolved the board on Friday, 21 April 2023.

Praise

In response to the recovery of funds for SA Tourism, the Federated Hospitality Association of Southern Africa (Fedhasa), Southern Africa Tourism Services Association (Satsa) and Association of Southern African Travel Agents (Asata) issued a joint statement, praising Guliwe and De Lille for “proactively identifying and recovering the full misappropriated funds, processed in March 2023; rapidly engaging the Auditor-General for a comprehensive audit; and demonstrating an unwavering commitment to transparency and good governance”.

The associations represent major stakeholders in the country’s tourism industry.

Fedhasa national chairperson Rosemary Anderson said the matter was handled in an “exemplary” manner, demonstrating an “unwavering commitment to upholding the highest standards of accountability, transparency and good governance within SA Tourism and the Department of Tourism”.

Asata’s CEO Otto de Vries said the “swift identification and recovery of misappropriated funds, coupled with the proactive engagement of the Auditor-General of South Africa for a comprehensive audit, demonstrates a rigorous adherence to public finance laws and regulations.

“Such actions are essential to maintaining trust and confidence in our vital tourism sector.”

David Frost, Satsa’s CEO, said they were “encouraged by the resolute leadership displayed by Minister de Lille and Ms Guliwe in addressing these challenges directly and decisively.

“Their actions secure the financial integrity of SA Tourism while reinforcing South Africa’s reputation as a premier global travel destination committed to ethical conduct.”

Frost said that as key stakeholders and representative bodies within the travel and tourism industry, they affirmed their steadfast support and collaboration with the department and its agency.

“We look forward to further strengthening our partnership in advancing South Africa’s tourism industry through principled leadership, sound governance and a shared commitment to excellence.” DM