October 17, 10:14IOL

Audit reveals weak controls and fraud risks in sports, arts, and culture structures

Despite the high status of major sporting and cultural events, the Department of Sport, Arts and Culture faces challenges in management and administration, including issues related to financial control and operational efficiency.

This was reported by the Auditor-General of South Africa (AGSA), who noted that while the department successfully spent the vast majority of its multi-billion rand budget, internal deficiencies remain. These include significant gaps in performance reporting, irregularities in procurement and contract management, a weak system for responding to internal failures, and critical vacancies, such as the prolonged absence of permanent leadership.

These findings were presented at a briefing for the Parliamentary Portfolio Committee on Sport, Arts and Culture during AGSA's review of the 2025/26 budget on October 1. However, Minister Gethon Mackenzie did not attend the briefing, offering an apology as he was attending a cricket match.

Although the department spent 99.6% of the R6.3 billion allocated for the 2025/26 financial year, it and its structures are under intense parliamentary scrutiny due to recurring structural and financial problems. While the department achieved 80% of its planned targets, five key targets were not met; reasons cited included insufficient supporting documentation and late approvals.

AGSA linked the failure to meet targets to weaknesses in performance management, monitoring, planning, and reporting. The auditor identified unexplained target shortfalls, achievements that were not adequately substantiated by evidence, as well as poorly defined or incomplete indicators and discrepancies between stated performance and supporting information.

The agency warned that reliance on external audits to detect and correct reporting errors reduces the reliability of performance information and affects accountability, transparency, and service delivery assessment.

Furthermore, AG reported ongoing significant non-compliance with legislation, particularly regarding procurement and contract management, financial reporting, irregular expenditure, fruitless and wasteful expenditure, consequence management, and the use of transferred funds.

AGSA also found weaknesses in internal audit, the effectiveness of the audit committee, and management across several structures. These shortcomings included inadequate monitoring of corrective action plans, insufficient internal assurance, repeated short-term extensions of internal audit outsourcing agreements, and critical vacancies that increased governance and accountability risks. Weaknesses were noted in disaster recovery planning and backup mechanisms for the Department's asset management system.

Regarding transfers and subsidies, AGSA reported delays in payments, poor beneficiary accountability, and risks of funds being misused.

Concerning the President's Employment Stimulus Programme, jobs were created in the arts and culture sector, but monitoring, reporting, and supporting evidence were weak. AGSA identified instances of fraud and misrepresentation, including invalid bank details, manipulation of payment information, and discrepancies between payment confirmation and supporting bank statements.

Mackenzie stated that the fraud was committed by beneficiaries who should face criminal prosecution and penalties. He added that if any official was involved in facilitating such fraud, disciplinary and criminal measures would be taken. He explained that the response addresses the vulnerability exploited by the fraud: dependence on documents provided by the beneficiaries themselves. In the future, bank details must be verified directly with banks and not accepted based on evidence of payment provided by beneficiaries. Furthermore, a system will be implemented to verify identification numbers. He also noted his readiness to appear before the AG's committee at any time if committee members deem it necessary to ask questions on these matters.

AGSA also pointed to delays in infrastructure projects and warned that prolonged delays could lead to increased costs, service delivery delays, and additional financial pressure.

The root causes identified across the entire portfolio were slow implementation of recommendations, ineffective monitoring of audit action plans, inefficient consequence management, and critical vacancies.

While the National Library Foundation of South Africa and Boxing South Africa improved their opinions from qualified to unqualified with reservations, modified audit results remained unchanged at the Mandela Bay Theatre Complex, Iziko Museums, the National Heritage Council, and Robben Island.

The Mandela Bay Theatre Complex received a qualified opinion related to the incomplete disclosure of irregular expenditure. Iziko Museums received a qualified opinion due to incomplete and incorrectly valued heritage assets. The National Heritage Council received a qualified opinion because supporting information was not provided for some transactions and balances, and Robben Island received an adverse opinion due to the lack of supporting information for various transactions and balances, leading to material and pervasive misstatements.

The Mandela Bay Theatre Complex announced on Thursday that it would revisit the situation after consulting with its board, which acts as its accounting body. An Iziko Museums representative, Fumzile Zonke, stated that the museum acknowledges its institutional responsibility for preparing accurate annual financial statements and maintaining precise and complete records of heritage assets. Zonke added that the board, as the Accounting Officer in terms of the PFMA, acknowledged the institutional responsibility to rectify historical deficiencies affecting heritage asset management and financial reporting.

The National Heritage Council did not respond, while Robben Island acknowledged the adverse audit opinion and the identified material weaknesses in its financial statements and internal controls, adding that these findings are under close management attention, and corrective action plans are being implemented to address the deficiencies, strengthen financial governance, and improve audit readiness.

Meanwhile, Mpho Masemola from the Association of Ex-Political Prisoners (AEPP) stated that the problems faced by Robben Island are the result of years of management failures, weakened financial control, and operational shortcomings that have damaged the reputation of an institution entrusted with preserving one of South Africa's most sacred historical sites.

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autopapo.com.brOctober 15, 12:00

Main complaints about the CFMOTO Ibex 450 are not related to product quality

The CFMOTO Ibex 450 is the best-selling model from the Chinese manufacturer in Brazil, having registered 1,375 units sold by September, according to Fenabrave data. However, this same model appears most frequently in complaints directed at the brand on the Reclame Aqui platform, where CFMOTO currently has a reputation rated as 'Regular,' with a score of 6.8.

According to AutoPapo's findings, CFMOTO's reputation on this platform deteriorated from 'Good' to 'Regular' since the brand began sales in the country in May 2026. To understand the reason for this drop, the main dissatisfactions regarding the trail motorcycle were compiled, covering issues ranging from reservation process failures to problems faced by owners who already possess the vehicle.

Analysis of Complaints

Of the 128 complaint records from the new Chinese company on the site, only 17 (13.28%) point to 'low quality' issues, and not all complaints are specific to the Ibex 450. Although no widespread serious problems have been reported, the current complaints allow an understanding of the challenges faced by buyers.

The largest portion of complaints comes from consumers who cannot acquire the Ibex 450. CFMOTO itself communicated to AutoPapo that 'the vast majority of complaints we receive do not refer to product defects or after-sales problems,' but rather to difficulties in reservation.

The sale of the motorcycle occurs exclusively in batches, requiring online reservation and payment of a deposit of R$ 2,000 via Pix, and these batches sell out quickly. Since July, consumers have reported that the Pix QR Code is not generated at the time of payment, resulting in the loss of the reservation. This problem repeated in the October 5 batch, which was postponed due to a database failure.

A consumer from Londrina (PR) reported receiving a pre-reservation confirmation email but was unable to make the payment, subsequently being notified that the reservation had expired. In response, CFMOTO justified the failure by high simultaneous access volume and reiterated that the reservation is only validated upon payment within the stipulated period.

Another customer from Rio de Janeiro, who tried to participate in all batches, complained about motorcycles resold for values exceeding R$ 40 thousand, surpassing the official price of R$ 35,990. CFMOTO responded that it does not operate with a waiting list and that units are sold solely through the official website, indicating that stock scarcity generated a parallel market.

Problems Related to Owners

Complaints from those who already own the motorcycle represent a minority, but they are accumulating as more units circulate. A significant part of these complaints is linked to the limited size of the dealership network.

CFMOTO's warranty terms establish that periodic maintenance must be carried out at an authorized dealer of the brand. Currently, these stores are located in only eight municipalities, all situated in the South and Southeast: São Paulo, Campinas, and Piracicaba (SP), Rio de Janeiro (RJ), Curitiba (PR), Florianópolis (SC), Porto Alegre, and Caxias do Sul (RS).

An Ibex 450 owner in Sete Lagoas (MG) faced this restriction when needing to perform the 1,000 km service. For him, the nearest dealerships were approximately 600 km away, in São Paulo or Rio de Janeiro. The consumer mentioned that he could change the oil himself, following the manual, but this would void the warranty. CFMOTO confirmed that maintenance performed outside the authorized network 'may impact warranty coverage' and listed the eight available cities. The owner concluded the complaint as unresolved, gave a zero rating to the service, and declared that he would not negotiate with the brand again.

In Adrianópolis (PR), a buyer from the third batch, reserved on July 27, received the bike on September 4. He reported that an oil leak occurred in the first 50 km of a 968 km trip to his residence. The seller initially attributed the problem to excess oil in the chain.

During the 1,000 km service, performed on September 11, the owner reported the leak. The dealership held the bike on September 18 and diagnosed a fault in an oil hose, but the part took until October 7 to arrive from the factory. The consumer expressed intent to return the vehicle and request a refund. In response, published on October 9, CFMOTO asked the client to specify which dealership the bike was at for case follow-up, as provided for in the Consumer Defense Code, which grants 30 days for the supplier to correct the defect.

In Governador Valadares (MG), another owner identified corrosion in the inner tube of the front fork after traveling about 1,500 km. The problem was detected by a trusted mechanic during preventive lubrication. According to the consumer, the damage is in an area protected by the inverted suspension and shows no signs of impact, fall, or misuse. The inner tube is the surface through which the suspension retainers pass, raising concerns about seal wear and potential future leakage. Although he admits not having performed the 1,000 km service at the authorized network, he requested the brand to evaluate the possibility of a hidden defect, including corrosion that occurred during transport. CFMOTO refused the warranty replacement, alleging that the stain is localized and does not have characteristics of chrome failure, such as bubbles, peeling, or cracks. The company also argued that the part was disassembled and sanded by an unauthorized workshop, which altered the surface and made it impossible to determine the origin of the problem. The refusal, according to the brand, was not based solely on the absence of the service. The consumer contested, demanding the complete technical report, and reminded that the nearest authorized dealership is over 600 km away, requesting evaluation in his region or coverage of transportation costs. If the denial persists, he stated he would take the case to Procon.

In Assis (SP), a buyer who had been trying to acquire the bike since the second batch managed to get the Ibex 450 in the fourth batch, through the Virage dealership in Piracicaba (SP), about 370 km away. With less than 100 km driven, the motorcycle showed the injection light illuminated, idle speed fluctuation between 1,500 and 2,100 rpm in neutral, and loose handguard bolts, one of which was lost. Furthermore, he could not register the Ibex due to a pending issue in RENAVE, the system responsible for registering new vehicles. As of October 9, this complaint had not received a response.

There was also a case where CFMOTO acted to mitigate the customer's loss. A buyer in São Paulo picked up the Ibex 450 on September 11 but could not activate the warranty because the system indicated the motorcycle chassis did not exist. The manual provided activation until the fourth week after invoicing, and the deadline was expiring. CFMOTO responded the next day that it would activate it internally, guaranteeing that the customer would not be harmed. On October 1, it was confirmed that the warranty was active, although the data was only visible on the website after the dealership completed the sales registrations.

Complaints persisted in the following days. Between October 11 and 13, the brand's page received complaints with the titles 'My zero km motorcycle has serious ABS and speedometer failures' and 'I did not receive the chassis of my CFMOTO IBEX 450 after two months of contemplation.' A complaint from a customer in Visconde do Rio Branco (MG) whose motorcycle, acquired through a consortium, was not released due to non-payment of the 'anchor' was also registered. None of these last complaints had a response as of the last check.

To AutoPapo, CFMOTO had already assured its commitment to answering all customer queries and analyzing each situation individually until resolution. The brand declared it to be 'in full expansion in Brazil.'

iol.co.zaOctober 15, 11:00

Department of Correctional Services faces audit crisis due to unreliable records and unauthorized expenditures of R636.9 million

The Department of Correctional Services is experiencing a sharp deterioration in financial audit results. The Auditor-General expressed serious concern regarding the authenticity of procurement documents, systemic failures in record-keeping, and the reliability of information provided by management.

The department received notification of a refusal to issue an audit opinion for the 2025/26 financial year, which is a regression compared to the previous unqualified opinion with qualifications. Although the Auditor-General warned of a significant risk of fraud related to inaccurate supporting documentation, departmental management acknowledged the shortcomings and promised to take corrective measures. These findings also prompted calls for more rigorous oversight of financial processes and accountability.

In its report, the Auditor-General of South Africa (AGSA) stated that it could not obtain sufficient and appropriate audit evidence to form an opinion on the department's financial statements. This occurred after questions arose about the authenticity of documents presented by management to support procurement procedures.

The report indicated: 'Serious issues were identified concerning the integrity of the supporting evidence provided by management, as some documents submitted in support of procurement processes proved to be inauthentic.' The Auditor-General warned that the circumstances point to a 'significant risk of fraud' and cast 'substantial doubt on the reliability of the information provided for audit purposes, the reliability of the audit evidence obtained, as well as the authenticity and completeness of the accounts and accompanying documentation.'

The report noted that the potential consequences are material and pervasive to the financial statements, preventing auditors from establishing the extent to which the documentation can be relied upon. This refusal represents a sharp decline from the qualified unqualified audit opinion in 2024/25. This raises questions not only about financial reporting but also about control systems designed to protect public funds and ensure the auditability of procurement decisions.

The annual report records unauthorized expenditures of R636.97 million for the year, as well as R138.6 million in irregular expenditures. Wasteful and extravagant expenditures amounted to R12.6 million and remain under investigation. While these categories do not in themselves prove fraud or theft, these amounts intensify scrutiny on the department, whose auditors could not obtain reliable evidence to express an opinion on its financial statements.

The department's Audit Committee expressed concern over this regression, noting the shift from a qualified unqualified opinion to a disclaimer of opinion. The Committee recommended an independent investigation into the circumstances that led to this outcome, including the scope and impact of unreliable or inauthentic documentation. The Committee also demanded the preservation of relevant evidence and the application of disciplinary action if wrongdoing is confirmed. It warned that the procurement control system 'was ineffective in preventing or detecting record integrity risks.'

The Correctional Services Portfolio Committee also stated that the findings require further examination. Following a briefing from the Auditor-General on the department's annual audit results and the Inspectorate of Judicial Oversight of Correctional Services (JICS), the committee stated that the disclaimer was due to 'systemic failures in record-keeping and falsified or altered supporting documentation, which jeopardized management's integrity.'

The Committee announced that it would meet with the DCS next week to discuss these findings, subjecting the department's explanations and corrective measures to parliamentary scrutiny. Specific demands from the committee for detailed expenditure breakdowns, accountability reports, and procurement remediation plans primarily relate to JICS, which received a qualified unqualified opinion. These demands pertain to the inspectorate and should not be confused with the findings against DCS.

The Democratic Alliance also criticized the department's audit results. The Alliance's spokesperson for correctional services, Janho Engelbrecht, characterized it as a 'direct accusation of compromised management.' In his statement, Engelbrecht emphasized: 'This audit failure is not an administrative oversight; it is a direct accusation of compromised management.'

The Minister of Correctional Services, Peter Groenewald, acknowledged this regression, calling it a 'significant impediment' that does not align with the standards of governance, accountability, and responsible public sector management upheld by the department. Groenewald stated: 'The Auditor-General was unable to obtain sufficient and appropriate audit evidence to support the audit opinion, mainly due to concerns regarding the authenticity and reliability of certain documentation presented during the audit.'

He added that the department recognizes the seriousness of the findings and has 'implemented measures to strengthen governance, record-keeping, internal controls, and assurance processes.' Deputy Minister Lindive Ntshalintshali also acknowledged weaknesses in the department's management and control system, stating that the findings require urgent attention. She noted: 'The department takes these findings with the utmost seriousness and is committed to implementing comprehensive corrective measures aimed at strengthening governance, enhancing information reliability, increasing accountability, and restoring confidence in its control system.'

Ntshalintshali reported that a targeted action plan is being implemented to address the root causes of the identified problems, strengthen audit readiness, and improve the department's audit outcomes in the next cycle.