Analysis of State of Nation Address for Correctional Services; State Information Technology Agency interventions in the DCS; DCS 3rd quarter 2012 expenditure

Meeting report

Analysis of the State of the Nation Address (SONA) by the Committee Researcher
Mr Mpho Mathabathe, Committee Researcher, noted the five priorities singled out in the SONA, namely education; health; combating crime; creating decent work, and rural development and land reform.

Specially relevant to the DCS were the fight against corruption and the filling of vacancies in the upper echelons of the Criminal Justice System.

The DCS had taken a number of initiatives to fight corruption in the Department, including the establishment of the Departmental Investigation Unit and the implementation of the Fraud prevention Plan. The importance of the National Development Plan (NDP) was stressed in the SONA. There was the need to build a resilient and independent anti-corruption system that enjoyed public and official support. Implications for the DCS were related to strengthening the internal promotion of a whistle-blowing culture; ensuring that cases of corruption were forwarded to external agencies for investigation and prosecution, and tightening internal controls over procurement.

Mr Mathabathe noted with reference to filling upper echelon vacancies, that there had been instability since 2008 as a result of resignations and suspensions of senior DCS managers. A number of vacant senior positions were filled in 2011/12. However, the vacancy rate within senior management stood at 19.2% at the end of 2011/12. In addition, the Chief Financial Officer terminated his services with effect from 30 November 2012.

Under issues to be considered by the Portfolio Committee,  Mr Mathabathe included reviewing the capacity of the Departmental Investigation Unit, and whether all members were vetted. The Committee had to ask the DCS to report on the promotion of a whistle-blowing culture, and had to monitor progress on all reported cases of corruption in the Department. The Committee could ask the DCS to provide their Fraud Prevention Plan. The Committee could probe measures in place to retain top and senior management.

Discussion
The Chairperson noted that the President had said in the SONA that education was an apex priority. Correctional Services had to obtain more teachers. The National Development Plan (NDP) centered around building a capable state. Corrections officials had to do what they were supposed to do. It was unacceptable that officials of the DCS did business with the Department. The analysis of the SONA had to contribute to the shaping of a compass that could give direction.

Mr L Max (DA) referred to vacancies for top senior managers. There were vacancies around core functions like nurses, artisans, and psychologists. There were frivolous excuses for underspending in those areas. There were no windows in the toilets at Groenpunt. Artisans could fix that. There was too much engagement with top management, and not enough with grassroots staff.

Ms W Ngwenya (ANC) remarked that the DCS had to explain why there were teachers and learners at Durban Westville for instance, and not everywhere. An inmate there had asked to have parole deferred to write his matric exam, and had passed with four distinctions. There had to be more classes and teachers, and professionals had to be taken on board. Health was an old song, but there had been little improvement. More doctors were needed. There was one doctor and two nurses for 3000 inmates, at some centres.

Ms M Phaliso (ANC) remarked that not much information seemed to have been given to the President about Corrections. Oversight had pointed to a moral breakdown in officials. They were human. There were no programmes to instill moral values in officials. The Committee had been talking about bribery for the preceding two years. The Committee had asked how officials strengthened themselves to work with hardened criminals.

Ms Phaliso remarked that the DCS Strategic Plan would have to be analysed to see if it spoke to the National Development Plan (NDP). The late Honourable Ms Nyanda had always insisted that vetting be done for DCS officials. The question was whether the DCS had the necessary appetite for vetting.

Ms Phaliso saw no reason to applaud the DCS for recovery of funds from the medical aid scheme fraud some years before. It was like a sugar dummy for a baby, to keep the Committee satisfied that corruption was being fought. She remarked on underspending and the lack of education.

Ms Phaliso commented that DCS good intentions were not enough. The Department had failed to retain institutional memory because of constant shifting of staff. It had caused moral values to get lost. The DCS kept shifting people around because they could not handle the pressure.

Ms Phaliso emphasised that the Departmental Investigations Unit (DIU) had to be vetted. It had to be clean.

Ms Ngubeni (ANC) said that there was a lack of gender balance in the 183 vacancies that had been filled. She asked about the current status quo in that regard, among the top management.

Mr V Ndlovu (IFP) referred to control of procurement. It was a problem that there was currently no permanent CFO. The question was why the Department had not been mentioned in the SONA. Vetting itself could compound the problem, if those tasked with it were not properly vetted themselves.

The Chairperson pointed out the importance of the DCS achieving an unqualified audit. He was perturbed about IT. He had stated a year ago that he could not see how a complex organisation could survive without it. The DCS provided accommodation, health, teaching and security. He asked why there had been no progress with IT. The DCS and the State Information technology Agency (SITA) had to explain about "the R90 million", the Remand Detention Offender Management System (RDOMS), and the R34 million owed to SITA by the DCS.

State Information Technology Agency (SITA) progress report on IT interventions in the DCS
SITA executive of ICT services, Ms Mmakgosi Mosupi, reported on progress in SITA-DCS challenges that had been noted in a meeting with the Committee on 12 September 2012:

A new Business Agreement had been workshopped and submitted to the DCS for signing. DCS debts to SITA were being paid off regularly. The balance was R44 million, of which R10 million was for the current financial year. The DCS had requested supporting documents on outstanding invoices, in order to pay a R34 million debt to SITA. SITA had retrieved documents to the value of R18 million and would complete the process in three months. SITA, the DCS and Dimension Data were engaging on the matter of the delayed installment of the Remand Detention Offender Management System (RDOMS).

Mr Tom Moyane, DCS National Commissioner, said that there had been amicable meetings with SITA. The RDOMS matter had been there since 2008. There were complexities that caused the matter to be put in abeyance. The problem was that a third player, Dimension Data, was also involved. The matter had been placed before the courts by Dimension Data.  The R90 million was under investigation, and could not be reported on. The previous Minister had been informed about IT problems. The IT unit had disaggregated, and the matter was currently being dealt with at the level of Deputy Director General. 183 consultants had been used over 15 years, and there was still no system. IT was a DCS problem, not a SITA problem. There had been a forensic analysis and an audit that could assist with implementing a system.

Ms Nthabiseng Mosupye, DCS Government Information Technology Officer (GITO), said that there were still challenges around migrating from the LOGIS system to the Virtual Private Network (VPN). LOGIS could not take the number of users. R18 million of the R34 million owed to SITA was due to contracts. R14 million was part of the investigation into the R90 million.

Mr J Selfe (DA) said that there had been a lot of things said "in code". The Committee had been briefed on 12 September the year before, about RDOMS. Now it was said that meetings were held about it. The Committee had been told that the necessary steps would be taken, but now there was talk of arbitration. A system had been contracted for, and it was not operating. The question was what was really going on.

The Chairperson stated that Remand Detention was the biggest problem in the country. If RD problems could be solved, there would be no overcrowding. The Correctional Matters Amendment Act stated that no remand detainee could be held for longer than two years. It was a law that could not be implemented. The RDOMS system could prevent the situation where there was no clarity about which charges had to be faced, and where. Talking shop could not continue. The matter had to be escalated. It was setting up government and the Act could not be implemented.

Ms Mosupye responded that agreement could not be reached with the system provider. The RDOMS system had to provide full information on offenders, but what the DCS got from Dimension Data were just blank screens. The DCS could not pay for a system that did not function. Dimension Data had taken the matter to court.

Mr Blake Mosley-Lefatola,  SITA CEO, added that the DCS was disputing value for money and contract management. SITA would be willing to accept an out of court settlement. Currently they were waiting for court procedure to take its course, but negotiation on the sidelines was continuing.

Mr S Abram (ANC) reminded the DCS and SITA that a bad settlement was better than a good court case. There had to be a court obligation before the Committee was told that service had been thwarted because systems were not yet in place. There was no point in arguing about who had been wrong or right. The question was why things had not been done. The matter had already dragged on for years. State interests were being put at peril. He advised that an arbitrator from a legal background be brought in. Taxpayer money was not being spent judiciously. There had to be an arbitration with time frames. If things were left to the Department they would be at loggerheads with Dimension Data. Their body language betrayed that.

Ms Ngwenya said that taxpayer money could not be paid for a system that did not work. She asked why the service provider had been paid first, and when the contract was entered into. Both sides had contributed to bad relations, and the case had gone to court. It was worrying.

Ms Ngubeni commented that the project had either not been outlined clearly, or the service provider was not capable. She advised that if the DCS considered the service provider to be capable, that they be paid a certain amount. If not, they had to get someone else.

The Chairperson said that the Committee could insist that National Treasury come back to them. The Committee wanted to see the original agreement, and what Dimension Data had been supposed to do. The Committee would write to the Treasury, and even to the Minister of Finance if need be. The DCS and Dimension Data would be required to submit original documents. It would not do to argue whether Dimension Data could do it or not. There was a legal obligation to put the system in place. It was a payment and operational issue.

Mr Jerry Vilakazi, Chairman of the SITA Board, said that he wished to appeal to the Committee for a timeline. He would get involved with the DCS and Dimension Data, but needed a month or two to do so. The deadlock between the two parties revolved around the question of whether there had been clear specifications. If those had not been there, there could be a serious problem.

The Chairperson asked Members to comment.

Mr Selfe agreed that two months sounded reasonable. He advised that the totality of the service provider’s service to the State be looked at.

Ms Ngwenya was also in agreement with two months.

The Chairperson remarked, rather to the amusement of all, that Mr Vilakazi would have to make sure that he hand the matter over to someone, if he was redeployed or fired. SITA would be held accountable on the matter within two months.

Mr Selfe commented that the matter of the R90 million required further explanation. The Committee had insisted that the forensic audit be done by an outside agency. Yet the DCS had done it themselves. The disputed R34 million was included in the R90 million. He asked about progress with the investigation, and an account of people involved who were still in DCS employ.

Ms Mosupye responded that the investigation had indeed been done by an independent party. It had been completed, and there was a report. There had been consultation with legal services. Only one of the three people implicated were still with the DCS, the other two had resigned from the DCS and State service.

Ms Ngwenya remarked that there was a DCS tendency to resign when caught for corruption. Enough was enough. Ranks had to be closed and people arrested.

Mr Ndlovu noted that it was interesting that people resigned when they were about to be investigated. People got away, without facing consequences. Anyone implicated henceforth had to be found and locked up.

Ms Ngubeni agreed that whoever ran away had to be charged criminally, else money would never be retrieved.

Mr Abram noted that the National Commissioner had first admitted that IT in the DCS was not at a high level, and had then claimed that there was a fully fledged IT division. He asked what that fully fledged division were doing. The DCS vision included the achievement of what had not been achieved in the past. There had to be a concrete plan with time frames. Too many promises were simply not carried out.

Mr Abram told Mr Vilakazi that he understood that the RDOMS problem was not of his making. He encouraged Mr Vilakazi to adopt a business approach, based on the fact that if a business did not get money on time, there were costs. The Department got money from the fiscus, which had to be used. Mr Vilakazi had given a vision of how to lay the matter to rest.

Ms Ngwenya asked why SITA had to wait until the Committee intervened. If it had not happened, it would have taken forever.

Ms Ngubeni asked if there was a signed Business Agreement, and what had been negotiated.

The Chairperson commented that 361 days would not do. He told the Commissioner that when he decided to pay it would be counted as irregular. Monies that might have gone towards teacher’s salaries, would be used to pay. The Commissioner and the GITO would have to talk to the matter. It was liable to result in an audit qualification.

Mr Musa Shongwa of the Office of the Auditor General agreed that late payment was a non-compliance issue.

Mr Moseley replied that a business agreement and a service level agreement with the DCS was submitted in November 2012. There was interaction with the GITO in order to sign before the end of March. Monthly billing for SITA services was not a problem, it was just the matter of the R34 million.

Ms Mmakgosi added that monthly debt payments ran through the CFO month by month, and were on track thus far for the year.

The Chairperson asked if the political authority for SITA was aware of the graveness of the situation.

Mr Moseley replied that the Minister knew about issues with the DCS, but not about RDOMS.

Mr Shongwa commented that nothing had changed regarding the LOGIS system. There was still an inability to take care of transfers.

The Chairperson asked the Commissioner to set down the GITO mandate in writing. LOGIS was not specific to DCS. The weakness was government wide. He asked the AG why the DCS were qualified on LOGIS.

Mr Moseley commented that Dimension Data had initiated the legal action. They had to be told that they were doing business with government, and had to toe the line.

Briefing by the DCS on the state of expenditure for the period ending 31 December 2012
Ms N Mareka, Acting CFO, noted that as at 31 December 2012, the year-to-date expenditure of the DCS showed underspending of R389 million.

There was underspending in the programmes of Administration; Incarceration; Rehabilitation; Care and Social Reintegration.

The national state of expenditure for the year to date per economic classification, showed underspending on Compensation of Employees, due to unfilled vacancies. There had been underspending on Goods and Services, and overspending on Transfers and Subsidies. There had been underspending on Payments for Capital Assets, mainly due to no progress on the procurement of IT infrastructure, as well as underexpenditure on buildings and fixed structures.

Discussion
Mr Max asked that the Commissioner inform the Committee about the recent stabbings at St Albans.

Ms Nontsikilelo Jolingana, DCS Chief Operations Officer, replied that St Albans had been visited the day before. Three officials were attacked by two inmates. The injured staff were taken to hospital, and were currently booked off. Reasons were not known. There would be a report later that day.

Mr Max asked for DCS comment about the inability of the DCS to fund posts for the Judicial Inspectorate for Correctional Services, seeing that the JICS had to depend on the DCS budget.

Ms Mareka responded that the DCS had talked to the Inspecting Judge, telling him that the general state of the fiscus impacted on all.

Mr Moyane added that the Committee could raise the matter of JICS posts with the executive, about possible funding from other sources. JICS independence was not a problem to the Department. The DCS did not control them.

Mr Ndlovu asked about underspending on the DCS Care programme. Care was at the core of rehabilitation. People who left got everything, while those inside did not.

Ms Ngwenya said that there were staff shortages at every centre she visited. There were funded posts that were simply not filled. She asked when the post of CFO would be filled.

Ms Mareka replied that artisans, psychologists and nurses were crucial to rehabilitation. The current problem was that people were not applying for advertised posts. There was an urban bias. People did not want to work in the deep rural areas. There was a partnership with the Department of Health to obtain pharmacists. They did internships with the DCS. Head hunting had been done, but people were leaving. The DCS could not compete with the private sector.
 
Commissioner Moyane added that the approach adopted by a country like Brazil to attract scarce skills, was to pay bonuses to teachers for instance. The Memorandum of Understanding (MOU) with Health worked up to a point. Internships were in fact a "bandaid". The Department of Health itself was paying better. The State had to assume responsibility for health and education in prisons.

Mr Teboho Mokoena, Chief Deputy Commissioner, Human Resources, added that panels went through shortlists for senior vacancies like CFO. Advertisements had closed on 20 December the previous year.

The Chairperson told Mr Mokoena that people had toyi-toyed because posts had been advertised while they were away. They claimed that they had been selectively disadvantaged. The number of applications received had to be checked to disprove that notion. Educators and social workers were challenging the Occupation Specific Dispensation (OSD) for correctional officers. Bursaries were granted to officials, and they ended up guarding gates. The Minister had written a letter requesting that they be paid as officials.

Mr Mokoena responded that a task team of organised labour and DCS management were in arbitration about the 7day establishment matter. When learners were appointed, they were formerly released after 12 months, but currently they were given a contract. In the past they had relied on the DCS to teach them to shoot, and had then gone to the private security sector. There had been an audit on Group 2, with legal opinion sought about awards against the Department. The DCS needed R104 million to pay officials. Control room operators were sitting idle. 500 had been sent to college.

Mr M Cele (ANC) said that there had to be a plan to deal with DCS underspending, or else an unqualified audit would not be achieved.

Mr Cele asked from where the DCS ordered equipment.

Ms Mareka replied that important equipment was not directly imported. The DCS needed to know the sendoff time and how long the equipment would take to arrive.

The Chairperson noted that three quarters through the year, the DCS had only spent 20% of the budget for machinery. Things were being ordered from outside the country while support had to be given to BEE projects. R46 million had been spent out of R230 million. There was lots of money for job creation.

Ms Phaliso asked about medical suppliers and the slow clearing of stores. Clearing of stores could not be accepted as a reason for underspending.

Ms Mareka replied that the DCS projected and bought in bulk. It was only when items had been requisitioned that the programme knew the costs. There had been time delays with clearance.

Ms Ngubeni commented that underspending included lower spending on officials. They were complaining about the back overtime still owed to them. They were demoralised. She reiterated her question about gender equity.

Mr Mokoena replied that there was currently a Ministerial consultative forum on overtime. The 7day establishment did not include an overtime regime. R1,3 billion in unpaid overtime accumulated. The DCS had presented shift models, but labour insisted that overtime be paid first. There had to be agreement on the shift pattern.

The Chairperson referred to a meeting with the Public Servants Association (PSA) and Police and Prisons Civil Rights Union (POPCRU). The DCS was sitting with a potential litigation of R1,3 billion.

Mr Moyane replied that five women were employed at the level of Chief Deputy Commissioner. Equity would be cascaded down to the Director level.

Ms Ngwenya referred to the low pay for DCS foot soldiers. It could not be expected of them to deliver on insufficient pay. Overtime had not been paid for a long time, and yet the Department wanted to attract professionals. The Act did not provide for proper pay for the foot soldiers. Their plight was not being taken seriously. People were paid next to nothing and then expected to refrain from activities like smuggling.

Mr Max commented that the DCS top management did not reflect the broad definition of equity in the Employment Equity Act. The Act included Coloureds and Indians together with Africans.

The Chairperson adjourned the meeting.