Department of Home Affairs Annual report 2011/12, Committee Programme adoption

NCOP Health and Social Services

26 February 2013
Chairperson: Ms R Rasmeni (ANC, North West)
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Meeting Summary

The Department of Home Affairs (DHA) briefed the Select Committee on its Annual Report for the 2011/12 financial year. The vision and mission were outlined, and the DHA stressed that these encompassed creating a safe and secure South Africa, where people valued their dignity, identity and citizenship. DHA was committed to being people centred and caring, patriotic, professional, having integrity, being free of corruption and ethical, efficient and innovative. It was explained that the strategic programme was in line with priorities of government. In the 2011/12 financial year, there had been a focus on achieving and maintaining a clean and secure National Population Register (NPR). 51% of new-born children were registered within 30 days, representing an 11.2% increase on the previous year, and 90% of births were registered within 12 months. The late registration of births had declined by 41%. Another of the priorities was efficient management of immigration. The DHA chaired the Inter- Agency Clearing Forum of departments involved in the border environment, as well as another committee that prioritised and coordinated security operations related to immigration generally. The Dispensation for Zimbabwean Project progressed well during the 2011/12 financial year, and there were 203 364 resolved cases by March 2012. The Refugees and Immigration Acts were amended, to streamline and secure the key processes and address gaps in the legislation. A National Framework was developed for the implementation of the Cessation of Angolan Refugees, in consultation with Angola and the UN High Commission on Refugees. There had been transfer, training and deployment of 350 new immigration officers from the Defence Force to the OR Tambo International Airport. More secure crew-member certificates were produced for the airlines, and this had laid the foundation for the introduction of the Smart Card in 2012/13. The Back-end System for the Smart Card was designed, blank Smart Cards obtained from GPW and integration testing initiated, and this allowed for verification of the identity of clients in real time by banks, Human Settlement and SASSA. The insurance companies also wanted to be linked to the system.

The Chief Financial Officer presented on the financial statements. In this year the DHA had received a qualified report, largely based on material misstatements in respect of revenue collected at the foreign missions. This had necessitated a request for the audit of the financial statements to be delayed, which was granted. A full explanation was given of how the misunderstandings about foreign revenue arose and it was explained that, after discussion with National Treasury and the Auditor-General it had been agreed that two new categories of revenue would henceforth be included. This, however, necessitated re-stating financial statements back to the 2009/10 financial year. Contingent assets were calculated, where it was likely that the Department of International Relations and Cooperation owed DHA, but when this was checked, there was an overstatement of R34 million. Plans had been developed to avoid the problem in future. Other issues raised by the Auditor-General included
an emphasis of matter about uncertainty on pending legal claims, amounting to R1.2 billion, restatement of figures (most of which related to the change in accounting policy for foreign revenue), the fact that not all contracts were disclosed because of poor contract management processes, and the fact that 30% of performance indicators were ill-defined. Plans to address all of these had been set in place, including amendments to the Immigration Act, although regulations were still to be finalised. Weekly and monthly meetings would track the regularization of accounts, and an interim audit would be conducted by the Auditor-General.   

Members asked about the timelines for addressing the issue of illegal migrants who ended up owning shops and businesses, and how the DHA actually addressed the problems of undocumented foreigners. They asked about the vetting processes for staff, saying that there was a huge risk of corruption if this was not done. They asked if DHA regarded the financial position as having deteriorated again, and urged that more proactive steps were needed by DHA to isolate the problems itself, rather than relying upon the Auditor-General to do so. They asked why there had been confusion over allocations for refurbishments and construction, asked for more clarity on the foreign revenue, how the fruitless and wasteful expenditure would be cleared, and enquired how services would be extended to outlying areas. They asked for more detail on how permits were given, encouraged the keeping of records in schools, and asked about retention and training of staff. They were also interested in how DHA curbed the problem of its own employees doing business with government, and wanted more details on the Smart Card, the steps taken to establish an office at hospitals, and the reason why fingerprints were now taken from corpses.

Members adopted minutes from 30 October to 27 November 2012, and adopted the First term programme.

Meeting report

Department of Home Affairs Annual Report 2011/12: briefing
Mr Mkuseli Apleni, Director-General, Department of Home Affairs, outlined the vision, mission and values of the Department of Home Affairs (DHA or the Department), emphasising that this Department aimed to create a safe, secure South Africa where all of its people were proud of, and valued their dignity, their identity and citizenship. The DHA was committed to being people-centred and caring, patriotic, professional, maintain good integrity, be free of corruption and work in an ethical, efficient and innovative way.

contributed directly to three of the twelve outcomes of the Medium Term Strategic Framework (MTSF) of government (see attached presentation for full details). The performance agreement with the President emphasised the completion of all strategic information and identification projects within already defined budgets and time frames. DHA would look at the most effective and efficient refugee management strategies and systems that would contribute to the level of skills and general economic development in South Africa. There was a target to realise a positive skills migration trend of around 50 000 migrants annually. The focus should be on critical skills shortages, supportive of the medium term strategies and government’s outcomes. It aimed to have registration of every child birth within 30 days of delivery, to issue identity documents to every South African 16 years and above, and to improve the turnaround times for all services, queuing times and unit costs per service. Finally it would determine and improve the maximum distance that a citizen had to travel to access Home Affairs services.

The Strategic Plan was grounded on three outcomes. The first was based on secured South African citizenship and identity
. Outcome 2 was based on immigration that was managed effectively and securely in the national interest, including economic, social and cultural development. Outcome 3 was to offer a service that was efficient, accessible and corruption free.

The main priorities of the DHA for the 2011/12 financial year were to achieve and maintain a clean, secure National Population Register (NPR)
, and to have effective implementation of proactive, risk-based and efficient management of immigration. To support this, there would be ongoing transformation of DHA values as embodied in its organisational and service delivery approach, practice and capacity, as well as effective harnessing of technology.

The main achievements of the Department in 2011/12 were outlined. In respect of the NPR, it was noted that 51% of new-born children were registered within 30 days, representing an 11.2% increase from the previous financial year. 90% of total births were registered within 12 months. Late registration of births declined by 41%.

The DHA chaired the
Inter- Agency Clearing Forum of departments involved in the border environment, and chaired a committee to prioritise and coordinate security operations related to immigration generally. The DHA played a key role in South Africa’s successful hosting of the United Nations Climate Change Conference. Improvements were recorded within the Immigration environment through the approval of a new Permitting structure and implementation of the Permitting Project resulting in enhanced security and the reduction of backlogs. The Dispensation for Zimbabweans Project progressed well during the 2011/12 financial year. There had been 203 364 cases resolved by 31 March 2012. The Refugees and Immigration Acts were amended to streamline and secure key processes and address gaps in the legislation.  A National Framework was developed for the implementation of the Cessation of Angolan Refugees, in consultation with Angola and the UN High Commission on Refugees (UNHCR).

Mr Apleni described the ongoing attempts to transform the Department. The human resource capacity in the Immigration Services Branch was strengthened through the lateral transfer, training and deployment of 350 new immigration officers from the South African National Defence Force (SANDF) at OR Tambo International Airport, where they were currently rendering excellent service. The Department was voted among the Employers of Choice, and was also honoured with the Special Ministerial Award by the Ministry of Public Service and Administration, for “the innovative turnaround and modernisation of service delivery”
. The Department introduced the first-ever South African Qualifications Authority (SAQA) accredited Home Affairs course, aimed at training and producing a well-rounded Home Affairs official capable of dealing with all aspects of the Department. Enhancement of leadership capacity continued with a further three Leaders Forums taking place during the 2011/12 financial year, and through the Outbound Management Leadership Training Programme and other management programmes. A  Coaching Clinics Framework was developed and the Coaching Programme was launched in March 2012. Top management were involved as “Champions” of specific provinces. Posters in every office showed the cell phone numbers and e-mail addresses of top management, with the statement “We serve with Humility. Talk to us.” Improvements were also made in the functioning and monitoring of enquiry and complaints channels.

The DG said that the effective harnessing of technology p
roduced a more secure crew-member certificate for airlines, using smart-card technology. This had laid the foundations for the introduction of a Smart ID Card to be piloted in the 2012/13 financial year. In addition, the Back-end System for the Smart Card was designed, blank Smart Cards obtained from Government Printing Works (GPW) and integration testing was initiated to allow for verification of the identity of clients in real time by banks, Department of Human Settlements and South African Social Security Agency (SASSA). A historic agreement was signed with banking industry bodies. In addition to previously upgraded ports of entry, an Enhanced Movement Control System (eMCS) was deployed to 11 ports of entry, to bring the total to 45 ports. Infrastructure Capacity Assessment (bandwidth) for offices planned for Live Capture deployment was performed in 167 offices, and they would be upgraded to increase bandwidth capacity to improve services.

Ms Rudzani Rasikhinya, Chief Financial Officer, Department of Home Affairs, noted that the audit for the 2011/12 financial year commenced in January 2012. No interim audit was conducted, as the Head office was in the process of relocating.
Towards the end of July 2012, the Auditor-General (AG) reported material findings, all of which were resolved except the accounting treatment for revenue collected in Foreign Missions. This issue posed the risk that the DHA might get a disclaimer, and so DHA and the AG had together approached National Treasury (NT) to find a solution. Due to the unique dynamics of the DHA relationship with the Department of International Relations and Cooperation (DIRCO), NT approved a new accounting policy for revenue generated at the foreign missions and received by DIRCO. This issue was raised quite late, so DHA sought and obtained permission for an extension of the audit.

The new accounting policy provided for the treatment of revenue received abroad by allowing for new items for revenue payable, and contingent assets. Management had to revise the information to align with the new accounting policy, and the policy had to be applied retrospectively from the 2009/10 financial year.
She explained that this involved re-allocating revenue between Fines, ‘Other’ Revenue, Repatriation Deposits and Unallocated credits. However, when preparing the revised Annual Financial Statements (AFS), management was not sure about the classification of unallocated credits in an instance where one voucher was issued for all the money collected on a particular day – without any split to show the allocation – and it was in a foreign language with a general description “Consular fees”. DHA classified the items as unallocated credits, which formed part of Payables. All issues were cleared, except the transactions disclosed as contingent assets under the new policy. She explained that a contingent asset was assessed where there was a likelihood that DIRCO owed DHA funds, but there was no supporting documentation that was clear enough to allow for a calculation. The amount was calculated as the difference between what DIRCO owed DHA in total, less the amounts that could be confirmed. The outstanding amount was classified as a Receivable. There was a direct relationship between the receivable and contingent asset. Disclosure notes were made, and these were not recorded in the trial balance, although they had been disclosed in the Supplementary Annexure to the Annual Financial Statements, which were not audited. At year end, DIRCO and DHA balances of what was owing agreed, for the 2010 and 2011 financial years. However, because the value of misstatements over the years was material (R34.4 million overstated), the AG qualified the opinion.

Ms Rasikhinya set out some of the other issues raised in the audit report. There was an emphasis of matter about uncertainty on pending legal claims, amounting to R1.2 billion. There needed to be restatement of corresponding figures for Receivable for Departmental revenue, accruals, payables, contingent assets, commitments and Receivable for Departmental Revenue. The majority of the restatements related to the change in accounting policy for Foreign Revenue
. Not all contracts entered into were disclosed, due to poor contract management processes. In regard to performance, the AG had commented that 30% of performance indicators were not well defined, that 26% of the indicators were not verifiable due to inadequate processes and systems, and that 32% of actual reported performance was not valid when compared to the source information or evidence provided.

Ms Rasikhinya set out the plans to address these matters. DHA was acquiring an accounting system to record these transactions
. It would develop a procedure manual for Missions and Officials to ensure there was consistency, and there would be monthly monitoring and reporting of progress made; The Immigration Act had been amended, so that the DHA would in future not collect a repatriation deposit from travelers, but they would instead be required to produce a return ticket. The regulations for this Amendment Act still needed to be finalised, and officials trained to supervise.  

DHA had arranged a session with the AG and NT to diagnose the root cause of the findings and had also developed an audit action plan with inputs from all managers, a sign-off plan for EXC and weekly meetings to monitor progress. There would be monthly reports to the Audit Action Monitoring Committee. DHA intended to update existing policies and procedures, there would be an ongoing audit of the Action Plan and audit of interim financial statements by Internal Audit. An interim audit was to be conducted by the AG, in line with the decentralization of functions to the provinces.

Finally, she thanked the Committee for its
continued support during the financial year under review. Appreciation was also expressed to the AG for the dedication shown during the audit that would ensure that DHA improved its financial management processes, as well as the support from the Audit Committee and NT.

Ms B Mncube (Gauteng, ANC) asked what the department’s timeline was for addressing the migration f foreign nationals who ostensibly came to visit South Africa, but ended up owning shops and businesses in the townships.

Ms Mncube wanted to hear what the Department was doing about corruption, particularly how it checked up on new employees.

Ms Mncube asked if the DHA saw the financial statements as having deteriorated and, if so, asked why this was so.

Ms Mncube wanted to hear more on how the DHA took the services to people in far outlying areas.

Mr M De Villiers (Western Cape, DA) asked if the department could clarify the question of the overstatedR34 million, as he did not fully understand the explanation given. He also asked if the mistake was due to mistaken information, or human error. He also wanted to know why it was only discovered so late.

Ms Rasikhinya explained that the auditors would audit a sample. If this showed misstatements, they would make projections on others. The R34m was a projected misstatement, not a final figure. There had been two transactions classified incorrectly. One had been allocated as a credit, and this related to London expenditure, where the transaction was treated as an allocated receipt. The other, in another month, was treated as revenue, and that had caused the problem. The actual amount of this transaction was R9 000. However, taking this a sample, the AG had then predicted that the possible total misstatement could be R34 million. She stressed that in fact the DHA had not lost this amount, as the misstatement ha been projected as possibly being this amount, based on the sample taken, that could apply to the whole of the financial statements. The DHA realised that more review was needed on the work of junior staff.

Mr de Villiers asked if there were more stringent controls now that led to the AG isolating more problems with  legal and regulatory requirements.

Mr de Villiers asked what was to be done about the fruitless expenditure.

Ms M Boroto (ANC, Mpumalanga) wanted clarity on the difference in procurements for refurbishment, and for construction. She asked why DHA did not appear to be clear on this point, and it was a serious if money was allocated for one purpose but used for another.

Ms Rasikhinya said that in one year, the DHA conceded that there was about R400 million irregular expenditure over the years. In this year, DHA conceded that its interpretation was incorrect, because it had misunderstood the terms “refurbishment” and “construction”. Refurbishment was intended to give the offices a certain look and feel, and DHA did not think that this was the same as building from scratch. However, there had been facelifts done to the buildings, and the AG noted that this fell under the definition of construction. The AG had been asked to comment in full on what it was that the DHA was doing correctly, and incorrectly, and it was putting processes in place to ensure that it dealt with the incorrect matters, including the DIRCO issues.

She added that some of the controls were not in place, in accordance with the legal and regulatory framework. For instance, the Standard Operating Procedures needed to be revised, and DHA should be able to benchmark itself against other departments that were doing very well. In the current financial year, DHA was  reviewing the standard operating procedures so that it could detect and prevent irregular expenditure specifically.

Ms Boroto commented that although the DHA had been praised for achieving improved audit results in the past, she felt that it was still only picking up the problems when they were pointed out by the AG, and not able to isolate them itself. She urged that DHA had to take steps to close all the gaps. She was also not happy with some of the explanations. For instance, if an invoice was in a foreign language, surely the DHA would be expected to have it interpreted. She felt that the DHA seemed to regard the issues as not so serious, although they were important. DHA should take more proactive steps and not attempt to shift the blame.

Ms Rasikhinya noted that DHA had only discovered the problems a year later, because the auditors had to look at how the Department operated, and find problems where the Department had not seen them. DHA fully admitted that it needed to be told. The shift to accrual accounting had caused some of the problems. The amounts were included in the  supplementary annexures, which were not audited and audited in this current financial year. She fully agreed that in the future DHA would have to look at the matters itself, and would be preparing itself properly, although at this stage there were no systems yet in place.

Ms Boroto questioned objective 2.4 – realising skills migration – and noted that skilled migrants who were given permits were not included. She asked on what basis those permits were given. There was a realisation that many more undocumented foreigners were entering the country, either to open businesses or as genuine refugees. In the townships most foreigners did not have documents, and although DHA was trying to curb xenophobia it was not addressing the causes of it.

Ms Boroto asked why there was a problem in the State Security Agency (SSA) conducting vetting of the Department’s officials, saying that if a person was not vetted, that posed severe risks of corruption.

Ms Boroto urged DHA to keep records of entries into schools, and said this Committee should be informed of any problems in the schools.

Mr S Plaatjie (COPE, Northern Cape) asked whether the Department did have a strategy that would actually put it back on the map as a well-functioning department with clean audits. He would not like to see it revert to getting qualified audits.

Mr Plaatjie asked what retention strategies there were for staff, particularly those trained. He also asked whether the officials were required to pay for the training, or whether it was funded entirely by DHA.

Mr Plaatjie asked about the security at the points of entry, referring to an area named “Lagos” in Gauteng, where it was unsure whether the residents were legally in the country.

Mr Apleni noted that the position was very different, prior to and after 1994. At one point everything was opened up and with hindsight the country had become so lax that it had removed the Department of Defence from checking on the borders. However, it was later realised that this was a mistake, and this department was once again recalled to the borders, and the issue needed to be revisited. There was a process, and DHA and others were working on it. However, the question was actually who held the ultimate responsibility for the points of entry. DHA, South African Police Service, Department of Defence and others all held a stake and certain responsibilities. There were also issues of fencing, which all partners were working upon. The Cluster was working on a strategy in terms of illegal entries. There was a clear distinction made between legal and illegal migrants.

The Chairperson asked how the DHA had addressed the challenge of its own employees doing business with the Department, and if there was disclosure of interests by departmental officials.

Mr Apleni said that this was covered in the National Development Plan, but at the moment there was actually nothing legislated to curb the practice. DHA was trying to ensure that the correct principles were being followed. He noted that this had been something commented upon by the AG. However, it was difficult for him, as an Accounting Officer, to know exactly what every employee had put on a form. When the appropriate legislation was passed, the DHA would be in a better position to deal with such issues.

The Chairperson asked when the Smart Cards would be fully operational, across the board, at other departments.

Mr Apleni answered that although the Smart Card had the potential in future to assist all the departments, it was, at the moment, started as the Smart ID Card project. The intention was that every citizen and resident should only have to carry one card. Because there was a chip inbuilt into the card, any departments, be they health or traffic, should automatically create links to the ID number. The Minister would be giving an explanation shortly on the rollout and how it could be taken further.

The Chairperson noted the challenge that hospitals faced with space for DHA services, and asked if the Minister of Health had been approached to fast-track the process.

Mr Apleni responded that DHA had raised the issue of space with the Minister of Health, and was working with the Director General of the Department of Health to try to ensure that space was allocated in all hospitals. In many instances, DHA had already managed to exceed the target of getting a presence, and in others, where there were competing space priorities, it was discussing with Transnet the possibility of getting containers on site as temporary offices. The staffing of these offices was another priority.

The Chairperson asked how the DHA was tackling the issue of foreigners using false marriage certificates to gain residence. Mr Apleni noted that the current system required those claiming to be married to have photographs and fingerprints so that it was now not possible to claim marriage to a person who was unaware of it, as had happened in the past. The DHA was still trying to regularise the position of the false marriages in the past.

The Chairperson also asked about the taking of fingerprints from corpses.

Mr Apleni noted that the DHA now required all registered funeral undertakers to ensure that fingerprints were taken from any corpses brought in for burial. Any death certificates must bear the fingerprints, to ensure that the records were correct. If this was not done, then the body was not allowed to be removed. The advantage of this was that the DHA would now not only be able to verify who the dead person was, but would also be able to trace back if the fingerprints were incorporated into a fraudulent ID document, and track the official who had done this. The insurance industry, like the banks, wanted to be linked in to a similar system to check and verify all information. The Smart Card would facilitate the process even further.

The Chairperson thanked the DHA and said that Members were generally pleased and urged it to work hard to improve its financial management and expenditure. She also noted that during oversight visits, Members had noted that in general the attitude and behaviour of officials was also improving and cordial relationships were being built with the public. If there was a problem, the Councillors were able to assist in bringing forward the information. She noted that the Committee looked forward to interacting with the Minister.

Adoption of Committee Minutes
members adopted the Minutes of 30 October 2012, 13 November 2012, 20 November 2012, and 27 November 2012.

Adoption of First Term programme
The Committee adopted the First Term programme.

The meeting was adjourned.


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