The Pan South African Language Board owes South African Revenue Service, (SARS) R3.3m, mainly in PAYE tax deducted from employees. It also owes its suppliers more than R13m.
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The body, set up to promote the use of all South African official languages, received a damning audit report and its employees have gone to court to challenge its restructuring.
Aggrieved staff members want the Labour Court to declare the appointment of acting chief executive Mxolisi Zwane unlawful and to set aside his appointment of 44 senior managers, some of whom have had their fixed-term contracts converted to permanent positions.
This is in contravention of public service regulations, which state that all senior managerial appointments in government departments and other state entities must be on a performance-contract basis and such contracts must not span more than five years.
According to papers in the possession of The Times, the board is struggling to pay at least 137 creditors.
But its biggest debt is to the taxman and employees fear that this indebtedness will affect their tax status and that SARS might come after them. "Staff fear that SARS will want the money owed by the board from them," said an anonymous source.
In court the employees argue that Zwane appointed his cronies to non-existent and duplicate positions and that the board cannot afford its bloated salary bill.
"After his appointment Zwane appointed all the [44 managers] when their positions were not budgeted for by Treasury, and as a result their [salaries] were paid from what little money was meant for the core mandate of the board," say the employees.
They told the court that they feared that the board would run out of money and not be able to pay them. Phone services were cut off in October last year because of non-payment, and the national lexicography units were not given their full allocations of money.
The Pan South African Language Board was given a qualified audit in the 2012/13 financial year, the auditor-general finding that it could not account for about R21m and that its liabilities exceeded its assets by R5m.
Source: The Times via I-Net Bridge