Nehawu weighs in on high level performance bonuses Parliament says were ‘projections’, not real payments

On Tuesday Daily Maverick reported that Parliament’s 2017/18 annual report showed performance bonuses for top managers ranging from R56,000 for suspended Secretary to Parliament Gengezi Mgidlana (some two months into the financial year in early June he went on special leave, and was suspended in November 2017); R38,000 for acting Secretary to Parliament Baby Tyawa and performance bonuses of between R33,000 and R31,000 for other top managers, as well as most divisional managers.

The senior management performance bonuses were listed in the financial statements as at 31 March 2018 alongside monies under headings of “basic salary”, “post-employment benefits” and “total” – R2,889-millon for Mgidlana, R2,495-million for Tyawa and R1,677-million for Chief Financial Officer Manenzhe Manenzhe.

The parliamentary branch of the National Education, Health and Allied Workers’ Union (Nehawu) noted the report and called Thursday’s urgent meeting. There was concern that top managers benefited from performance bonuses for the 2017/18 financial year when “ordinary workers were denied performance bonuses on the claims that Parliament had no money and that the institution did not meet its performance target…”

And at one stage in that 2017/18 financial year it also had looked like staff would not even get a salary increase because of the cash crunch at the national legislature. With political intervention, a wage agreement signed in June 2017 in which workers received 7.5% and management agreed to no increase. Coincidentally, there’s a sticking point here now for the union, which claims management has awarded itself a backdated salary increase. Management salary packages tracked over the past three annual reports appear to support this union argument.

But on Thursday morning Parliament spokesperson Moloto Mothapo released a public statement – also issued as a so-called “info alert” to Parliament staff ahead of the Nehawu meeting – to express concern about “grossly erroneous”, “incorrect” and “irresponsible” reporting. That’s because the performance bonus monies reflected in the annual report financial statements were just “projections”, and actually had not been paid.

“The financial statements referred to in the 2017/18 annual report are prepared in terms of the South African Standards of Generally Recognised Accounting Practice (GRAP), which provides that revenue or expenses are recognised when earned or incurred, instead of when received or paid to the beneficiary respectively,” said Mothapo, after pointing out that “Parliament has not paid anyone bonuses for the 2017/18 financial year and has also not done so for the past three years”.

He went on to say: “The annual report reflects provisions, or projections, made for possible payment of bonuses subject to the outcomes of the annual performance assessments. This projection does not denote actual payments and this should be easy to comprehend by any vigilant reporter…

“A conclusion that Secretary to Parliament Mr Gengezi Mgidlana, who has been on suspension while undergoing a disciplinary enquiry, was paid R56,000 bonus, alongside other executive managers, is grossly erroneous and an unfortunate misapprehension of the financial section of Parliament’s annual report.”

Daily Maverick understands that Nehawu at its meeting later on Thursday did not buy that explanation. Senior managers were paid these bonuses, and if they were not, then the financial statements in the annual report are inaccurate and misleading. And, the arguments went on, with senior management getting bonuses, then staff who are at the coalface of Parliament’s business should also receive bonus recognition.

After the meeting Nehawu parliamentary branch Secretary Temba Gubula said the union would write to the auditor-general and National Treasury regarding Parliament’s assertion that the bonuses reflected in its 2017/18 annual report financial statements were “projections”, not payments.

“According to our members, including those who are specialists in finance and those who support committees in working though annual reports, annual reports’ financial statements do not contain projections. They reflect money spent… It’s a reflection of how money is spent in the financial year.”

And the official letter to Parliament’s presiding officers would point out that if bonuses for senior managers were accommodated, then money was clearly available, said Gubula.

“The same should be done for our members, and staff.” DM