Blue IQ meets for less

Blue IQ members will get less than half their previous meeting attendance rates, after Gauteng economic development MEC Firoz Cachalia slashed the remunerations.

Cachalia says the move follows an outcry that the fees paid to the agency's board members were too high and not in line with those paid out to board members of other entities of the provincial government, says the Government Communication and Information System. In total, board members were collectively paid R4.2 million during the 2009/10 financial year, merely for attending meetings.

Democratic Alliance (DA) corruption spokesperson Jack Bloom says it is outrageous that they were paid such fees in the first place, “especially since it is admitted that they did not perform well and wasted huge amounts of taxpayers' money on fruitless projects”.

Blue IQ, an agency of the Gauteng Economic Development Department, was established in 2003 to spur economic growth in key sectors in the province, including business tourism, high value-added manufacturing, logistics and ICT.

However, the agency has been dogged by controversy. In January, Cachalia promised a turnaround after expressing disappointment when a report by the auditor-general (AG) revealed irregularities and financial transgressions in its technology holdings.

In May, it was revealed that board members are paid excessive fees and two members were overpaid by R700 000. Bloom says this sum was not recovered or paid back. “He [Cachalia] said it was legally debatable.”

Cachalia said he had requested a review of the board remunerations, as payments to members should be “appropriate for a public entity, which is not a profit-generating corporation”.

Board members will now receive R7 500 per meeting, instead of the R20 000 they were previously paid. The fee for the chairperson drops from R25 000 to R10 000 per meeting, he explained.

Media reports add that members will now receive R5 000 for attending special meetings, instead of the previous R7 500, and can claim R625 an hour for “consultation” meetings, instead of the previous R937.50 an hour.

"The board members and I have reached agreement that the fee structure has to be significantly dropped, because I have always believed that it was too high and since members are now required to attend many more meetings given their current responsibilities," Cachalia said.

Bloom says: “I think Cachalia is trying to clean up. The problem is that he never holds anyone accountable. No one has been held accountable for all of this.”

Cachalia added that a "more rigorous" benchmarking exercise would be carried out by his department before the next financial year, ahead of the establishment of a new growth and development agency for the province.

"We will ensure that a fair board remuneration framework is in place when the reconfigured agency commences operations on 1 April.”

In May, Gauteng premier Nomvula Mokonyane mentioned that the number of agencies under the department would be consolidated into three: growth and employment, tourism promotion, and industry regulation.

Cachalia also dismissed media reports that the provincial Standing Committee on Public Accounts (Scopa) has allegedly launched an investigation into the finances of the entity.

"After being made aware of this report, I phoned the chairperson of the committee [Scopa] and I can tell you there is no investigation taking place," he said.

However, Bloom says Scopa met on Friday and made a resolution, along with the AG, to look into the agency. “I'm hopeful that Scopa and the AG will uncover what's happening here. This investigation was not initiated by Cachalia. He has been passive in all this.”

Cachalia added that Scopa had merely formed a committee to look at various matters concerning Blue IQ.

Xead = Massive rot

In the agency's annual report for the 2008/9 year, Cachalia wrote that the “most concerning questions are obviously the ones that arise from the auditor-general's audit opinion”.

The AG indicated insufficient evidence was provided for audit purposes; there was unauthorised, irregular and fruitless expenditure; and the agency did not comply with legislative, regulatory and internal controls.

“These findings suggest systemic weaknesses in financial management, inadequate oversight by the board, and governance failures relating, in particular, to the lack of accountability in Blue IQ subsidiaries,” wrote Cachalia.

Bloom said there was “massive rot” in the agency, and all its projects needed to be investigated. “Blue IQ has their fingers in many pies... We need to get to the bottom of the rot here. A huge amount of money has been wasted, and I suspect corruption,” he said.