Private Security Industry Regulatory Authority (PSIRA) on its turnaround strategy

Meeting report

PSIRA on its turnaround strategies
Mr Samuel Chauke, Director: PSIRA, commenced by discussing how PSIRA had addressed the concerns raised by the Committee at a previous meeting on 2 November 2010 which were: non-payment of fees by debtors/industry; the de-registration of dormant service providers within the database; illegal operators and firearms in the industry; and the vetting of applicant service providers for criminal records.

In order to address funding and debt management, PSIRA had introduced the following changes: the de-centralisation of debt collection to the provinces and a greater focus on customer relations management; segregation of duties between billing, collections and updates; relocated “Letters of good standing” from legal to finance; aligned procurement processes to the Preferential Procurement Policy Framework Act (PPPFA) and Public Finance Management Act (PFMA); and appointed a reconciliation team to address credit balances, billing errors, and clearance and allocation of unknown deposits.

PSIRA reviewed the legal status of all providers on its database. Since the last meeting, PSIRA achieved the following objectives with respect to dormant service providers: introduced new requirements for applications by foreign nationals to prevent identity fraud; all foreign applications were subject to approval by the registration sub-committee based on policy guidelines; stopped the capturing of incomplete business applications to reduce the number of applications received without progress; suspended 212 service providers for non-payment of levies; de-registered 10 individual security officers following convictions on scheduled offences; and confirmed 88 findings of improper conduct against service providers.

PSIRA’s strategy in dealing with illegal operators and firearms was follows: analysed the data on the PSIRA master file to identify cases of identity fraud; partnered with the South African Police Service (SAPS) to tackle firearms and illegal operations; conducted a blitz on various places, for example shopping malls; established a dedicated team of investigators to identify fraud; arrested 13 service providers for firearm-related contraventions; participated in the seizure of 244 firearms by SAPS; and identified 742 cases of possible identity fraud by foreign nationals for investigation.

PSIRA’s strategy in dealing with criminals was as follows: reviewed the legal requirements of registration because it was misinterpreted by staff; currently motivating for promulgation of renewal of registration regulations; introduced guidelines for consideration of applications for registrations; and established a Registration Subcommittee EXCO to assess and consider applicants who were being prosecuted for scheduled offences, applicants with scheduled convictions and applications by foreign nationals. Since the last meeting PSIRA achieved the following objectives: suspended 197 security officers found guilty of scheduled offences after registration with PSIRA; rejected 759 applications of persons with records of scheduled offences, identified and rejected 933 applications with pending scheduled offences; identified 577 applications who were registered prior to 2010 for reclassification. Currently there is one High Court case against PSIRA by an applicant who was rejected because of a criminal conviction. PSIRA is drafting a registration policy to address legal ambiguities.

The tariff structure for services offered by PSIRA was also reviewed and a fee was introduced to recover fingerprint disbursements. As part of its mandate, PSIRA processed course reports on behalf of training institutions so that security officers could be registered in terms of the PSIRA Act. A tariff for the processing of course reports was also introduced to cover the cost of labour, maintenance of IT infrastructure and to recover maintenance costs paid to service providers.

PSIRA has reprioritised its regulatory inspections by adding four prosecutors to its legal services department to handle cases of improper conduct and fast tracking cases by considering speedy settlement of providers pleading guilty. Since the last briefing, PSIRA intervened and issued 653 new charge sheets; summoned 549 service providers for code of conduct hearings; finalised 408 code of conduct dockets; settled 114 matters of providers who pleaded guilty; recorded R1 023 400 in settlements; and collected R512 833 in cash since November 2010 on settlements (excluding other fines).

PSIRA had embarked on a robust debt collection process by appointing a debt collection agency and its target was R1 million per month. This target will be monitored with a view to increasing its performance so that the liquidity of PSIRA could be stabilized. The previous arrangement for debt collection had been fragmented for the following reasons: there was no synergy between the inspectorate and the finance division; debt collections were not linked to a specific region; and there was a lack of a reporting system. Management at PSIRA had taken a decision to allocate debtors accounts on a regional basis, including regional inspectors. This was done to create synergy between the inspectorate and the finance division. As part of the intervention, a new reporting tool called Clickview had been acquired to facilitate the reporting of debtor performance.

Cost-cutting measures on expenditure items have been instituted to increase revenue over the long term. Items earmarked for cost cutting were: office expenditure, electricity, telephone, water supplies, rental of machines, security costs, courier services and accommodation costs.

Disciplinary matters that had been dealt with since PSIRA’s last briefing included the issue of three final written warnings; suspension of five employees on allegations of corruption; dismissal of five employees for misconduct related to dishonesty; and four pending investigations of allegations of dishonesty.

In order to achieve a complete overhaul of PSIRA, seven key strategic priorities were identified: industry stewardship (knowledge and advocacy); stakeholder and customer relationship management; financial management and funding; excellent service delivery (effective regulation); efficient and effective processes and systems; effective organisational structures with a skilled, competent and motivated workforce; and an enabling environment (organisational culture). The 2012-2014 Strategic Plan had been considered and recommended to the Minister of Police for approval. PSIRA was confident that its current strategy would effectively regulate the private security industry and would continue to build on the successes of the interim turnaround strategy. The PSIRA funding model also still needed to be finalised.

Mr Nick Ligege, PSIRA Deputy Director for Finance, presented the financial situation at PSIRA. PSIRA does not receive any funding from Parliament and is self-reliant. Businesses pay PSIRA a fee of R250 per month. Costs at PSIRA were predominantly fixed in nature. Employee costs accounted for 56%, IT and consulting 8%, rental accounts 3% and governance costs (auditing) 3%. There were also variable costs such as information costs. At the end of the first quarter 2010, PSIRA had a deficit of R5,4 million, end of quarter two of 2010 the deficit was reduced to R 222 000 as a result of the reprioritisation of its objectives and at the end of quarter three of 2010 the deficit was R661 000.

Discussion
Ms M Molebatsi (ANC) asked what measures were taken during the vetting process of a foreign security officer. Also what had PSIRA done with regards to the training of security officers?

Mr Chauke replied that the vetting of foreigners did take place and they were treated like ordinary South African citizens. Vetting was also done in their country of origin prior to getting permanent residency status in South Africa. Training standards were developed in relation to the National Qualitative Framework and the relevant Sector Education and Training Authority (SETA) was involved. Also, the regulations that support these standards had been implemented. There was ongoing training take place, but not yet at full scale.

Ms A Van Wyk (ANC) asked what the fines were for businesses violating certain aspects of the PSIR Act and also wanted to know who the service provider was who did the fingerprinting checks and why a private company was providing the service, using information from SAPS.

Mr Chauke replied that PSIRA did not give specific figures with regards to fines because when they were creating a code for the system there was a mistake in the allocation of funds and it would have given the incorrect figures at the time. However, those businesses in contravention of the PSIR Act were continuing to pay the fines imposed. With regards to the service provider prior to 2004, PSIRA had being doing business with the Criminal Records Centre directly. However, in 2007 SAPS intervened and decided to commercialise the criminal record searches. IDECO was the service provider tasked to do the fingerprint checks. 

Ms D Kohler-Barnard (DA) asked about the outstanding amounts that still needed to be collected and whether PSIRA would receive a clean audit report in the future. Also, whether PSIRA could investigate an individual like its former head of human resources who resigned after finding out he was going to be investigated. Would the post of HR Director be filled soon or not?

Mr Chauke replied that there were no acting positions and a permanent HR Director had been appointed. PSIRA was in the process of collecting outstanding amounts which was an ongoing process and also it was aggressively appointing new inspectors to assist in the collection of these amounts. PSIRA has conducted an investigation into the former HR Director and he was arrested recently and the law would take its course. The individual was aware that the police was after him. It was a criminal investigation.

Mr M Swathe (DA) asked whether the dormant service providers would only be removed from the database or whether action would be taken against them as well. Secondly, was there a tender process when appointing the new debt collection agency or was it just awarded and how much would it cost to appoint the agency. Thirdly, what action would be taken against those staff that awarded themselves tenders and then resigned? Finally, would suspended employees receive an income or not?

Mr Chauke replied that PSIRA had appointed a debt collection agency and the book given to the agency at the time showed a debt of R208 million at the time. That amount was not a true reflection because the database was not accurate. They were paid commission on the debts collected. The older the debt the greater commission percentage they received. The procurement process was followed and the necessary appointment was done at the time.

Mr G Lekgetho (ANC) asked what steps were taken to suspend the employees since these were allegations. Could PSIRA please supply the Committee with a list of contact numbers and the physical addresses of its offices around the country.

Mr Chauke replied that the staff members suspended for improper conduct were suspended pending disciplinary hearings. PSIRA has an office in the Western Cape, KwaZulu Natal, Port Elizabeth, Nelspruit, Polokwane, Johannesburg and Pretoria. PSIRA did not have a national footprint currently but intended to have one in the near future. The addresses would be made available to Members. 

Mr P Mthethwa, PSIRA Deputy Director for Law Enforcement, replied that staff were suspended with full pay.

Ms P Mocumi (ANC) asked who constituted the reconciliation team and how many members were in the team. Could PSIRA categorise its operations per province? With regards to settlements, how would PSIRA recover the outstanding amounts since they had collected only roughly half of the settlement amount? How long would employees be suspended and finally, how many cases related to dishonesty and corruption?

Mr Chauke replied that there were four members in the reconciliation team. Figures for operations were mainly from Gauteng and KZN and a few from the Western Cape. Suspension of companies was regulated by law and it usually took three months to suspend the company/business.

Mr G Schneemann (ANC) asked whether the momentum shown by PSIRA would be maintained or not.

Mr Chauke replied that the momentum would be improved on.

The Chairperson asked what the Integrated Investigative Task Team had done thus far and what were its plans for the future. The Auditor General had also raised a number of issues about PSIRA’s finances as matters of emphasis. What had PSIRA done to ensure it would not slip back to where it had been? Had PSIRA appointed an audit team to deal with the Auditor General’s reports? How would PSIRA ensure that companies conform to all the requirements of PSIRA? He requested clarity on the “registration process as the source of criminals in the industry”.

Mr Chauke replied that it was difficult for him to give an indication as to whether PSIRA would receive a clean audit report or not. PSIRA had prioritized internal audit where it had lagged behind on this in the past. They have appointed an Audit Committee and PSIRA had moved forward immensely with this.

Mr Thula Bopela, Chairperson of the Council, PSIRA thanked the members for their respective questions and promised the Committee that the momentum shown by PSIRA would be accelerated and would be better prepared next time.

The Chairperson thanked PSIRA and the Members for their comments and questions.

The meeting was adjourned.