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The matters of emphasis are the legacy loan book and trade and other receivables (our diplapidated factories inherited from KwaNdebele and KaNgwane homelands). Once we clear these things, we can achieve a clean audit. – Isaac Mahlangu, MEGA CEO

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Sizwe sama Yende

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The Mpumalanga Economic Growth Agency (MEGA), which has been ailing for many years, is on the rise after achieving an unqualified audit report for the second time in a row following 11 years of adverse reports.

MEGA has year after year been slammed for massive corruption and weak financial control systems that have stymied its ability to grow the province’s economy through funding emerging businesses and attracting investment.

The Democratic Alliance (DA) has even been calling for its disbandment. DA’s spokesperson on economic development, Trudie Grove Morgan, told the legislature this week that MEGA needed to address its capacity challenges.

“There are numerous underlying issues within MEGA that is hindering the entity’ s functionality such as the outstanding debt and the massive loan book,” Morgan said.

“In order to improve the effectiveness of MEGA,” she added, “we have to revise set targets, enhance processes and inter-team dynamics and address the capacity challenges which exist in many areas. This is why year after year the DA calls for the disbanding of MEGA.”

More than anything, the entity has been let down by its board of directors who had being quarrelling among themselves and accusing each other of corruption.

MEGA CEO, Isaac Mahlangu, started in the position in 2020 and was eventually appointed on a fixed five-year contract in February 2022.

The unqualified auditor-general’s (AG) 2023/2024 report means that the entity is one step to achieving a clean audit, but still has many issues to address before it can reach that stage.

The AG still found financial control deficiencies, inadequate collection of revenue, irregular expenditure as well as procurement and contract management issue.

“MEGA has been receiving qualified reports since its establishment in 2010. Since 2021/22 to 2023/24, the report has been qualified with matters of emphasis,” Mahlangu said.

“The matters of emphasis are the legacy loan book and trade and other receivables (our diplapidated factories inherited from KwaNdebele and KaNgwane homelands). Once we clear these things, we can achieve a clean audit,” he added.

Before Mahlangu was appointed, MEGA already had an issue with the  Government Nutrition Programme, which aimed at feeding school children. The entity was appointed to implement the programme after the responsibility was taken away from the Mpumalanga Department of Education due to massive tender corruption.

MEGA entered into a three-year service level agreement with a service provider to act as a strategic partner to implement the programme on  May 3 2017.

The entity put the programme on hold in March 2019 and subsequently discontinued the programme, but it continued paying the service provider a management fee of R1.8 million a month until August 2019.

MEGA reached an agreement with the service provider on October 10 2019, R8 milion in management fees for the remaining months of the three-year contract.

The AG indicated MEGA had made some progress in disciplining officials that were responsible for the transaction and recover the money.

“In this regard, the accounting authority has demonstrated satisfactory progress in implementing the recommendations, although some actions committed to by the accounting authority are still in progress and have not yet been completed,” the AG said.

MEGA has been granted until September 10 2024 to fully address this matter.