The Chairperson welcomed the Minister, Ms Naledi Pandor, as well as senior officials from the Department of Home Affairs (DHA), and noted that the Committee would be looking into the 2011/12 Annual Report (AR) of the department. It was noted that not all departments appearing before this Committee were “sinners” but that it was necessary to seek clarity on certain aspects. The first issue addressed was that the DHA had submitted its financial statements late, and had regressed from an unqualified to a qualified audit again. Despite the assurances that the DHA systems were in place, there were discrepancies. The Committee stressed that in order to achieve a good financial report, a functioning audit unit and all proper financial controls must be in place. Whilst the Committee was generally pleased with the functioning of the audit committee, and commended its consistent attendance at all meetings, and its willingness to address matters with the Department and Minister, it needed to know what exactly had gone wrong. Questions were also asked about the fraudulent transaction at the Wynberg district office, what had been done to correct the situation and what action was taken against the officials, including the senior managers who should have been supervising the junior staff. The Committee wanted full details when the reports were finalised. Of particular concern to the Committee was the reference, by the Auditor-General, to lack of internal controls, and this took up a substantial amount of the Committee’s time. Another matter that gave rise to substantial debate was the indication that the DHA faced a challenge in officials not declaring their interests, particularly when they were intending to do business with other organs of state. It was noted that they would, in these cases, generally contract outside DHA so the Department would only become aware of the instances if notified by the other departments, and there was a fear that favours given in one department were expected to be returned in the DHA, which caused challenges to the correctness of tenders and other matters. The Committee said that this was an issue that must be addressed by the Minister of Public Service and Administration, and resolved that the Committee’s concerns be conveyed to her, with the suggestion that stronger legislative measures were needed to curb this tendency in the whole public service. The Committee also said there was a need to tighten up the legislative framework around government officials taking on other remunerative work, and to improve the disciplinary processes. They noted concerns of the Minister of Home Affairs that there were numerous senior management service officials who apparently, according to their statement of interests, did not own any fixed property, which she found astounding.
Other matters addressed related to pending legal claims of over R1 billion legal claims, with concern that although some might never eventuate, they posed a risk. Questions were asked about an electronic document management system tender, particularly whether this was the same supplier who had a dispute with another department, and why invoices were not yet being paid consistently within 30 days. The Minister said that part of the problem was actually the invoicing systems adopted by the contractors and said it would be useful to draw a schedule indicating on whose part the problems were found. Members asked about feedback to the public in respect of disciplinary steps and suggested that better communication methods be found, both to re-assure the public that corruption was not tolerated and as a deterrent to staff. The secondment of National Treasury officials to the internal audit unit was noted, and an explanation sought for more permanent solutions. Members were not happy that the provisions of the Public Finance Management Act were not being followed to the letter and asked how certain requirements could possibly have been ignored in relation to a particular tender for refurbishment, leading to irregular expenditure. The processes for those who overstayed visas, and collection and recordal of money at foreign missions, were also explained, and the Committee commented that it was a pity that the relevant departments had not sorted out an acceptable procedure years ago, and heard about the proposed legislative amendments. Further details were sought on the suspension of an official, and one Member commented that he was unhappy that actions dragged on for so long. Finally, the Minister spoke to issues of asylum seekers and border controls. The Committee was appreciative of the engagement.
The Chairperson welcomed the Minister, Ms Naledi Pandor, and said the meeting could have taken place much earlier. But due to other competing commitments the Committee had, the meeting was delayed. The Committee was also aware the report had already been tabled in Parliament by the former Minister.
The Chairperson passed a congratulatory remark on DHA’s slogan – “we serve with humility, talk to us” – and said it should be the premise from which civil servants related to the public. Off course, this was territory for the Portfolio Committee, the Standing Committee on Public Accounts only focused on the financials and how they were accounted for. Soon, Parliament would be passing budget, and 12 months later the Committee would be looking at whether the money was spent correctly.
It was not “entirely true” that departments appearing before the Committee were all sinners. The Committee’s mandate was to deal with the annual reports (ARs) and report to Parliament. If there were instances where lapses had occurred, the best option was to summon officials to Parliament for clarity. The presence of the Minister indicated that the political leadership took accountability seriously.
Department of Home Affairs (DHA) 2011/12 Annual Report: interrogation
Dr D George (DA) thanked the Minister for attending and said it looked as though there were improvements in the delivery of documentation at DHA. The Identity Documents (ID) and passport processes had been speeded up. However, he was concerned, as page 66 of the AR stated, about the performance on immigration services, where targets were not being met. A couple of individuals had complained to the media about their documents not being processed. An engagement with a departmental official indicated it was the Minister alone who had to sign everything, because there were huge problems, but he said that this sounded odd, and asked for comment on this. He also wanted to know how the process had broken down, and what was needed to fix it.
Minister Pandor replied that the AR was correct on the indicator. There were serious backlogs for permits, but action had been taken to improve the unit. DHA was deploying more staff to the unit, and it had taken the Department long to fill the critical posts in some of the units. This was beginning to improve, and the Department therefore had begun to improve on timelines significantly.
Although DHA was moving with more speed on a number of issues, the Minister was however worried at how the Department had devolved some of the functions. Changes in the system brought about deficiencies that had to be addressed. One of the aspects that DHA looked at was having proper protocols, instead of having everything sent to Pretoria, in order to avoid situations where the system was corrupted. With regard to signature, there was a problem initially with delegation, in that wrong directives were issued, but that had since been addressed. The system worked far better now.
The Minister was concerned with DHA’s ability to address complaints from the public. A number of complaints were reported in the newspapers after people had tried every other avenue in the system. This failure was receiving much attention, and would be addressed.
Dr George said his next query related to page 74 of the AR, where it was noted that the financial statements were late. The audit committee had observed the whole environment of internal controls, and item 8 referred to reassurance by management that sufficient action would then be undertaken to prevent recurrence. However, quite the opposite of this, the audit opinion had actually regressed, and the financial statements were late. Dr George emphasised that in order to obtain good financial results, it was necessary to have properly managed financial procedures, a functioning internal audit department, and to generate quarterly reports on time. The audit committee needed to look at all these, so that when the Auditor General (AG) came to audit, the details would be correct. Corrections were needed on the report. Something was not working properly at DHA. He asked where the problem was, and how and when it would be fixed.
Mr Nico Rossouw, DHA Audit Committee member, replied that indeed the financial statements were late and the whole process was rushed towards the end. The Department asked for an extension on a couple of things, which led to it then having only two days to finalise matters for the Auditor-General (AG).
There were significant problems and a head of the unit was suspended, and that did not help the process. It would appear that inconsistencies had taken place, but there were now improvements. The qualification was accentuated by problems right at the time the report was meant to be submitted, and that caught the audit committee off-guard.
Dr George asked if there would be better results in the next AR.
Mr Sathi Gounden, Acting Chairperson of DHA Audit Committee, confirmed that there would be substantial improvements. Reports for the current financial year were submitted on time, all financial procedures were in place, and things had been done correctly. The audit committee continually monitored the finance division, together with the AG and National Treasury (NT).
Dr George sought clarity on the fraudulent transaction relating to DHA’s district office in Wynberg, Cape Town. He said he was aware that an investigation had been going on for a while now, and asked for the current status.
Mr Mkhuseli Apleni, Director General, Department of Home Affairs, said the person involved was arrested. He explained that the Wynberg office was among those collecting high value of revenue for DHA. The Department used GS4 Company to collect revenue during the week, but on the weekends, the company did not collect. The person involved had fraudulently failed to deposit the money, something that was picked up during reconciliations. It had been resolved that the Department should in future reconcile daily, through the system called IRE. This talked to the Basic Accounting System (BAS) system, and DHA was able to monitor each and every office to check if any had failed to deposit the money.
Dr George asked if everybody involved in that process was disciplined. It was of concern that in many instances, it was the junior officials who took the rap, and he wanted to know if the investigation had also covered the supervisors who failed to do their job.
Mr Apleni replied that the investigation report was pending, and at the completion of the process, this would indicate all those against whom action should be taken. He indicated that the arrested official was at Level 8.
The Chairperson interjected and said he was not clear with levels.
Mr Apleni said this was the second level, just above the clerks.
The Chairperson clarified that Dr George had asked specifically if there were any senior officials, especially those tasked with supervising the arrested person, who had been brought to book.
Mr Apleni replied that all the officials involved in the matter had been investigated, but the names of those who would finally be disciplined would be determined by the final report.
R1 billion legal claims
Dr George sought clarity on page 81 of the AR, which dealt with the pending legal claims of over R1 billion. This was a lot of money, and the Minister had indicated that the process should be improved. He asked what reserves or contingencies were made to ensure that any potential damages were covered, and that decisions still pending were finalised.
Mr Apleni replied Government operated on a cash basis accounting so it did not budget for contingencies. The Department only had to report, so that the fiscus, at national level, understood that the DHA had pending claims. There was one big case, namely a R374 million case that was launched in 1998. The person claimed not to have been granted a permit when he should have been. However, this case had been dormant for many years. DHA had been trying to have the case struck out, but the Legal Unit believed that this could not be done, even if the person did not pursue the matter. The State Attorney had been approached to indicate that the person might not be interested in pursuing the matter, but the court assumed that the person might still choose to re-instate the matter at any time. This was a foreign claim, and it was linked to the exchanged rate.
Dr George said it was a pity because if the claim did come to fruition, this was a lot of money that could be allocated elsewhere in the service delivery system.
Vala IT dilemma
Dr George sought clarity on the electronic document management system, where a tender was not finally awarded. There was a claim was that the tender was finally awarded. There appeared to be a fault with the procurement and he asked for an explanation on what had happened.
Mr Apleni replied that government had established the State Information Technology Agency (SITA) to deal with all IT procurement. The responsibility of SITA was to recommend on behalf of departments, but not to award contracts. The DHA never took a final decision on the matter. At SITA, however, something happened with the result that the SITA had informed the supplier that there was a contract. The matter was set down for a court hearing on 15 August 2013.
The Chairperson commented the name of the company - Vala IT – looked suspiciously similar to the company that had a quarrel with the Department of Trade and Industry (dti).
Mr Apleni confirmed that it was the same tenderer.
Dr George sought clarity on the case of Double Ring Pty Limited vs the Minister , which was a dispute on the currency used for invoicing. He sought more details, asking for the nature of the dispute and how it had got out of hand.
Mr Apleni replied that the issue was not to do with a foreign exchange rate. The company purported to provide a satellite to DHA, to manage mobile offices. Prior to 1999, South Africa’s law did not allow companies to source bandwidth abroad, except through Telkom and Sentech. When the company billed the DHA for bandwidth sourced abroad, DHA argued this could not have been possible, given the legislative stipulation. It was then found that the DHA had in fact received bandwidth from Sentech, which was a local company. The pertinent question was why DHA was invoiced in foreign currency if the product was locally produced and delivered. The matter was in court.
The Chairperson sought clarity on whether the company was local, and if it had a local or an offshore account.
Mr Apleni replied it was local. The other major issue was that a department, when transferring money abroad, would have to go through the protocol of the Reserve Bank on transferring the money. He explained that all “contingencies” were old issues because the Department had put in place measures to counter them. If issues brought against the Department were genuine, it should be easy to bring them to court and be finalised.
Dr George commented that, more than once in the AR, the AG had indicated that the Director General had failed to exercise proper oversight in regard to financial and performance reporting, as well as to ensure compliance with internal controls. This was an indictment on the Director General and management. He asked if any action would be taken on this, noting that the Public Finance Management Act (PFMA) was clear on what had to happen.
Minister Pandor replied that it would have been ideal if the Chief Finance Officer (CFO) could be allowed to give an indication of measures put in place to address each of the items identified by the AG. She confirmed that DHA had indeed put measures in place to address all these. She had not instituted any other action against Mr Apleni, other than to request him to report regularly. The Department had instituted regular meetings with the audit committee to ensure that financial matters were under control.
The Chairperson interjected and said the question should be held back until the other Member had dealt with his section.
Dr George sought clarity on the Cuba project mentioned on page 181.
Mr Apleni replied that, following a realisation by the Department that it needed to put more effort in around immigration as a whole, it was resolved that officials at ports of entry needed to be re-trained. DHA was responsible for the management of the ports of entry, and the staff had been inadequately trained at this time. The project was piloted at OR Tambo International Airport when 350 employees were recruited and trained, off-site, using some of the techniques learned in Cuba. In a nutshell, the project referred to the internal training of staff at ports of entry.
Internal controls and lapses
Mr R Ainslie (ANC) commented that he was disappointed to see that DHA had regressed to a qualified audit opinion this year. The Committee had been citing DHA as an example to other Departments, saying that its experience had shown that it was possible to move from a qualified to unqualified audit. Currently, the Committee had the Department of Public Enterprises (DPE) and the Department of Science and Technology (DST) as models for other departments.
Mr Ainslie commented that the strength of the Department lay in its audit committee. The audit committee report on page 74 was comprehensively written, and showed the committee fully understood the challenges related to internal controls. Despite being only a three-member-committee, at the time of writing of the report, attendance was 100% and its members had regularly interacted with senior management, including the Director General, and had also expressed willingness to interact with the Minister. This approach was important for accountability. He thought the audit committee should have received all the possible warning signs of what could possibly lead to a qualified audit.
He therefore asked for clarity on page 74 of the AG’s report, which referred to lapses of effective monitoring and enforcement by management and asked the audit committee to speak to what kind of lapses were seen, and what had been done about them.
Mr Rossouw commented that there was a change in the internal audit division. That had an effect on the final outcome of the audit. It was the first time that the CFO then in place had taken over completely the running of that function. It did appear to come right at the very end, and DHA asked for an extension to finalise the audit in order to satisfy the AG. That took up a lot of time, and then a particular issue had arisen, right at the end, which put the audit committee and the management under a lot of pressure.
Mr Ainslie commented that the management and the committee were still in place. The entire audit function did not collapse so he questioned why they had allowed the financial lapses to take place. He asked if this could have resulted from lack of capacity.
Mr Rossouw suggested the right person to answer would be the Director General.
Mr Apleni replied that DHA accepted that there were faults in the Department, and said that it was necessary to improve the internal functioning. The lower-level staff were the ones tasked with the job of taking the problem through to the next level. This was realised, and DHA had thus resolved that senior staff must check the work of lower levels. However, he said that there were certain matters that did not go the way that DHA would have liked. There were regular meetings between the Directors General (DGs) of the DHA and of the Department of International Relations and Cooperation (DIRCO), but also with the chief auditors in both departments to share experiences.
Payment of invoices in 30 days
Mr Ainslie said it was distressing that officials still disregarded a directive of Cabinet to pay service providers within 30 days. This was having terrible effects on emerging black businesses and small companies were struggling as a result of this non-adherence to the time limits. He asked for an assurance that payment was now happening within 30 days and that there would not be a recurrence of this finding in the next financial year.
Mr Apleni replied that this aspect was monitored at the highest level. DHA was monitored by the Department of Performance, Monitoring and Evaluation (DPME) on how it performed in this regard. The Department had 80% compliance on that point. It had started decentralising LOGIS, and was rolling out a track and trace system for invoices. The matter was taken to Cabinet and had been given more attention.
The Minister said the Department was working hard on this item. DHA had, however, noted that some businesses did not provide the information needed to process the payment. She had personally followed two cases, and it was later found they had not followed the proper process for submission of documents that would allow the Department to pay.
She suggested that, alongside requiring departments to pay within 30 days, there also had to be an education campaign to the small companies to submit invoices in time. It was impossible for them to expect payment simply because they made a telephone call and they must understand that the requisite documents had to be in front of the right person. There were gaps there, and perhaps some form of communication with the departments with whom departments did business would be useful.
The Chairperson commented that it could be useful to indicate the percentages of invoices that were not attended to as a result of the contractors not submitting the right documents. This would indicate whether the government’s focus needed to be on systems or on education, as suggested by the Minister.
Feedback to audit committee
Mr Ainslie asked for comment on the claim that although there were investigations into senior management, there was no regular feedback to the audit committee. There were a number of cases that were quoted in the report. He asked why there was no feedback to the audit committee.
Mr Apleni replied this was something government had to work harder on. The thinking was that people had rights, even if they had transgressed, and there was no decisiveness regarding the feedback to the public.
The Minister said there were many arrests that the Department effected of its staff, but she conceded that it did not communicate these to the public. She confirmed that more work was needed to do this when cases were finalised, both to inform the public and in order to have a deterrent effect on other staff.
The Chairperson pointed out that the question had sought to establish if there were bottlenecks in terms of providing timeous feedback to senior management and the audit committee.
Mr Apleni replied that cases were reported to senior management, so the only shortfall was communicating information to the public.
Mr Ainslie said that the DHA should let the public know of the good work that DHA was doing. The wanted to know that DHA was winning the battle against corruption. He requested that written information on fraudulent officials be made available to the Committee, and listed some of the cases in which an answer was needed.
The Minister said DHA would be willing to present a report in Parliament, but cautioned that this should not jeopardise any of the investigations. The Department always respected that certain cases were still ongoing, despite having Parliament’s protection. Sometimes statements made during pending cases could be used against the Department. She also pointed out that sometimes the legal aspects moved at a snail’s pace.
Mr Ainslie said this explanation was accepted.
The Chairperson clarified that the Committee was interested in progress reports, and in hearing the result of those case that had been finalised.
AG listing of challenges
Mr Ainslie commented again that the root cause of most challenges, not only at DHA but at all other departments, was the lack of internal controls. On page 91, the AG listed all the challenges. These included absence of a three-year rolling plan, no audit charter, no annual internal audit plan, and no evaluation. DHA had been commended that it had taken action, as someone was brought in from NT to act as Chief Audit Executive. The AG pointed out that this was well and good, but also said that a longer-term sustainable solution was required. Seconding an official was essentially an ad hoc reaction. He therefore wanted to know what the DHA had done to ensure that, long term, there was a properly functioning internal audit.
Mr Apleni replied the matter was being attended to and the Minister had approved a contract for someone to occupy the position while the incumbent remained on suspension. When the official from NT was brought in, one of the Departmental officials had challenged this claiming that it amounted to constructive dismissal. It was clarified that the post was still in existence, but the seconded official would be performing certain functions. He added that the person who had been seconded from NT would shortly be leaving the DHA. However, there had been recruitment of a new appointee to fill the gap.
DHA had also trained other managers within the internal audit function. It was, however, also looking at a process of core sourcing. An IT director had been appointed, but there was still a need to look at the core sourcing arrangement to make sure that the Department was able to implement. That person would be starting at the end of June.
Mr Rossouw commented that the Department had brought senior people from outside to assist with training the staff, but it appeared that some had a negative attitude towards the situation. It was important that the employees were passionate and committed about their work, as that could only enhance the Department output.
Mr Beerson Baboojee, Chief Director: Risk Management, National Treasury noted that he was the official seconded to head the DHA internal audit unit. When he had arrived, the Director General and Chief Financial Officer made it clear that the internal audit was the one area that required improvement. A plan was thus immediately put in place to overhaul internal audits, over a three year period. The plan involved the revision of the internal audit methodology, in line with what the international internal audit standards were. The Department had progressed, but its internal audit lagged behind, and needed to be brought up to speed. The training had been ongoing, with two legs of the training. The second leg, seeking to capacitate the internal auditors on the technical art of auditing, was coming to an end now, and there would be a report indicating the levels of competency among staff.
The internal audit team could not have all of the required skills within DHA. However, it had been agreed that there would be a core audit team within DHA, and then it would also resort to the core sourcing model. The model was being put in place now, and was hoped it would address the spontaneity of the internal audit in the long term. This model would help a lot. The Department had invested heavily in training.
Mr Ainslie said he hoped the interventions would address the challenges raised by the AG regarding internal controls.
The Chairperson raised a question on item 35 on page 91. This matter related to the audit charter, undefined targets and how performance was measured.
Mr Baboojee commented that the issue was clearly an error that slipped into the report. The purpose and authority of the internal audit was clearly defined. It had been signed by successive audit committees, including the latest one, and it was revised every year.
Mr Sathie Gounden, DHA Audit Committee Chairperson, commented that the audit committee approved the audit charter at every meeting. He concurred that the entry was indeed an oversight on the part of the AG.
Disregard for PFMA
Mr Ainslie said he was disappointed with DHA’s “sloppy attitude” towards the PFMA. He noted that although the PFMA had now been operational for 14 years, departments were still not getting the basics right. He asked what the problem was, and whether it was related to lack of capacity or lack of skills. He could not understand how it was possible that financial statements were not prepared in accordance with what was required. The keeping of records was still a challenge, and material mis-statements resulted directly in qualifications. He asked what the problem was at DHA, and what needed to be done to put matters right.
Mr Apleni replied that the comment of the AG that the statements were not prepared in accordance with what was required was a major issue that led to the qualification. He contextualised the basis for the comment, by explaining that DHA collected revenue both locally and abroad. In terms of the framework, DHA was required to recognise revenue on the day of receipt of documents. However, there was a problem with this when it came to the collection of revenue abroad. DHA did not actually receive revenue at missions abroad on the same day as the documents were collected. The documents had to first go to DIRCO, and only once received from DIRCO would DHA would recognise the revenue. At a late stage of the audit, the AG had raised the matter, and said that, whether locally or abroad, DHA could not just fail to recognise revenue on the day of documentation.
The Department had since gone back to NT, and this was the reason there was a change in the accounting policy. The change said that in future, only those documents in possession of DHA would be audited. It was agreed, with the AG and the Accountant General (AccG), that there had to be a contingent asset amount raised, where documents were received later when the money had already been collected.
The issue of proper records was a challenge that was being addressed collaboratively with DIRCO. Sadly, the Department still worked on manual process. An electronic system would be ideal and could facilitate a lot of things.
Mr Apleni added that when people overstayed their visa allowance in the country, they were fined at departure. This was unrealistic because it was just not possible for people to come back and pay, and so once again an amendment was needed to this policy. He assured Members that revenue inside the country was collected.
Mr Ainslie commented that it was pity that these technicalities had not been resolved many years ago. The departments concerned, which were DHA, DIRCO, NT and AG, should sit down together and come up with a new framework. He said he heard a mention of the word “amendment” which seemed to indicate that the matter was being addressed.
The Chairperson interjected and said he expected further questions on the amendments.
Amendments to the Immigration Act
Mr Apleni explained that an amendment to the Immigration Act had already been passed by Parliament, and it defined the issue of defiance. In the future, DHA would not charge people for overstaying, but they would be blacklisted, and if they defaulted three times on their visas, they would never be allowed into the country again. That would resolve the issue on fines. In respect of the money, he explained that sometimes the defaulters may be leaving the country with no money, in which case they had to pay a deposit and the rest of the fine would be collected abroad. The fine was charged at the rate of a dual air ticket. The issue with visas and passports would remain. The AG had advised that the Department should have sight of the cash books from DIRCO, so that even if the documents were not there, DHA would be able to ascertain how much money was collected in a given month. There were processes put in place to ensure that this did not happen again.
Ms Rudzani Rasikhinya, Chief Financial Officer, DHA, commented that it was important to look retrospectively at issues. She reminded Members that these were documents dating as far back as 2004/05. There were large numbers of documents. However, looking at the 2012/13 financial year, all documents relating to revenue collected had been collected, as a result of the new processes put in place. Already, 70% of the documents for March 2013 had been collected. It was inconceivable to think that the problem would continue into the future, but the “old documents” issue would remain problematic for a little while because some of the documents had still not been received.
The Chairperson asked how that problem would be resolved.
Ms Rasikhinya replied there was a discussion between DIRCO and NT on how to write off the amounts and see how DIRCO could get the documents, as they were available in the missions.
Mr Ainslie interjected and said the Committee was satisfied with that response.
Mr Ainslie said that the Committee was not satisfied with the item on irregular expenditure, as cited in pages 133 and 91 of the AR. He said that the AG had noted an ongoing increase in irregular expenditure.
Mr Ainslie commented the table dealing with incidents that gave rise to the current irregular expenditure was incomplete, in that it did not detail steps taken against transgressors. This was out of line with what this Committee required. The Committee wanted to know if people were held accountable for irregular expenditure. He asked why there had not been proper investigations.
Mr Apleni explained that the finding on page 91 related to the refurbishment of DHA offices countrywide. DHA understood that contractors were graded, prior to being appointed to do work for Government. Procurement officials tasked with the contracts did not see a need to engage Construction Industry Development Board (CIDB) graded contractors, for refurbishment. However, with hindsight, it was realised that the regulations had stipulated refurbishment as well.
Mr Ainslie interjected and wanted to know if the AG’s observation that there were not proper investigations was correct.
Mr Apleni replied that this was so.
Mr Ainslie said he was concerned that senior management officials could not understand such a simple regulation as having to find CIDB-graded companies. He found the explanation a little difficult to accept. The stipulations were simple and straightforward, and were written in a way that any layman could understand, so it was disappointing that they had not been understood by senior management officials.
The Chairperson concurred, saying he too struggled to see how conditions and stipulations could be misinterpreted.
Mr Apleni said there were three contractors, and he gave the breakdown by price values of the contracts (citing one at R650 million, and the second at R691 million, but the third figure was not mentioned). The list of the full contracts was available.
Mr Ainslie asked for comment on items on page 40.
Mr Apleni replied that the items on page 40, 43 and 44 related to one case. An employee did not declare his interests, and his company had conducted business with the Department. DHA required SMS level officials to declare their businesses, and he explained that what was lacking was a control system that would be able to indicate, early enough, when officials tendered outside their DHA duties. He said he was being completely honest on this issue.
The Chairperson quipped that hopefully Mr Apleni had been honest in his other answers also.
Mr Apleni continued that the only time the DHA became aware of officials tendering was when other departments informed DHA that its officials were tendering for work. This was what had happened with the R34 000 case, and a disciplinary process had been undertaken. On the suppliers form, suppliers had to indicate if they had relatives in the Department, and without this exercise being completed honestly, the DHA could not know of these cases. Most DHA officials who were conducting other business did so with other departments and not with DHA. The list of those officials was available.
Mr Ainslie commented that this challenge had to be relayed to the Minister of Public Service and Administration, as she had taken a very firm stand on officials doing business with the state. These were the kind of challenges the Department of Public Service and Administration needed to know about, when formulating regulations to curb this habit.
The Chairperson commented that the Committee acknowledged the challenge faced by DHA. It was not sufficient for officials from other departments to simply inform DHA of its departmental officials doing work with their departments. This was frustrating, because it perpetuated a sense of impunity. The Minister should be able to assist.
He added that this Committee in particular had a strong interest in this matter, because of the number of officials involved. The pattern and method of operating looked like return of favours, where officials asked for something at one department, with the hope of returning the favour at their own department.
Mr Ainslie requested that the list be provided to the Committee, and that the issue be taken up with the Minister of Public Service and Administration.
Mr Ainslie voiced his disapproval of a statement made by the Director General, on page 134 of the AR, that there had been full compliance with various pieces of legislation. He pointed out that the Committee had just been informed about non-compliance with tender processes, officials not declaring interests, and various other transgressions, so this statement was not actually correct. He asked for comment from Mr Apleni.
Mr Apleni replied that the Department was now going to issue a communiqué to staff to emphasise the requirement for declaration of interests, if those officials were wanting to do business with the state. Another memorandum to staff would be issues to indicate those officials who failed to declare, and the kind of actions taken, which would be sent out after finalisation of disciplinary processes.
Mr Ainslie commented that the Committee supported that approach. He commended the AR as generally well written, but with patches of poor editing.
Remunerative work without permission
The Chairperson asked what legislative prescripts there were on officials doing other remunerative work without permission.
Mr Apleni replied that if this happened, misconduct processes would be followed and the presiding officer would make a determination as to whether further action, written warning or recouping was required.
The Chairperson said he had actually been asking whether there was not some legislation that stipulated that if a person did work without permission, any money earned needed to be paid to the state.
Mr Ainslie replied that he thought that this was wishful thinking on the part of the Chairperson.
The Chairperson retorted that he wished a lot of things, but he was bothered by the list of names.
Mr Gounden commented that NT regulations stipulated that a state official was bound to disclose interests.
The Chairperson asked what sanction would follow non-disclosure.
The Minister said there was a need to tighten up the regulatory framework. There were not sufficient instruments to act in such cases, and this was the main reason for the problems that the country was having with officials. Government could take action, but there rather needed to be a proper culture and moral compass instilled in officials, not to do such things. She also felt that more stringent disciplinary measures were needed, but the procedures to set up a disciplinary committee, and getting presiding officers, were exhaustive and took up much time and money. The country needed good legislation that addressed ethics within the public service, and this was what Minister Sisulu was attending to in the public service. She would appreciate it if this Committee could also stress that there was a gap in the current regulatory framework.
Mr Baboojee commented that, within DHA, it had been agreed, as one step to mitigate, that the question of officials doing business with the state would be a standing item, and that every year, the DHA would audit this before the external auditors came in.
The Minister added that each year, Ministers were required to sign off on the declarations of interest by senior management. The number of senior managers who indicated they owned no assets was astounding. It was strange that senior managers, earning well over R700 000 annually, claimed not to own any fixed property, and she said this pointed to something peculiar.
Mr Ainslie noted that two important gaps had been identified, and needed to be taken up with Minister of Public Service and Administration. He summarised that these were the lack of information on declarations, and legislative gaps on remunerative work without permission.
Dr George sought clarity on the suspension of the Chief Audit Executive, and asked for details on the process.
Mr Apleni replied the person was still under suspension, and the case was still ongoing. The official had instituted a bargaining chamber pre-dismissal arbitration. The disciplinary process gave a lot of rights to the person against whom charges were laid, and failure to adhere to those by the Department could result in dismissal of actions on technicalities.
Dr George reminded the Committee of a statement made by the Deputy Minister of Public Works, Mr Jeremy Cronin, two weeks ago, that contracts of senior employees needed to be drawn in such a way that if they failed to perform, it would be easier to get rid of them.
Mr Thobejane was worried also about the absence of any prescriptions on court cases going beyond five years. There were a lot of officials with pending cases, and nothing could be revealed because the matters were not finalised. Parliament needed to develop some policy about matters dragging on for so long in the courts. The Committee’s Research Unit should check this aspect, so that necessary recommendations were made.
Mr G Thobejane (ANC) commented that he was disturbed at the suggestion that the Director General could not adequately clarify issues regarding construction and refurbishing. He asked who had misled the Department into believing that certain specifications did not apply to refurbishing, and what had action had been taken against the official. He thought this was a bid misrepresentation.
Mr Apleni replied that this had been accepted as a genuine mistake.
Mr Thobejane commented that the Director General needed to read the PFMA again, and with understanding, as there was not one instance where this Act referred to a “mistake”. It did, however, make reference to negligence and dereliction of duty. It was not proper to use other words for the circumstances.
Mr Apleni replied that DHA had a bid committee that decided contracts above R500 000, after they had gone out to tender. The respective work had gone out to tender and was decided upon by the Committee, so it had been the Bid Committee who had made the “mistake” of not applying the rule of the CDIB.
The Chairperson clarified that Mr Thobejane’s question was directed to understanding if any action had been taken against anyone after DHA discovered that other requirements applied.
Mr Thobejane pointed out also that the Bid Committee would surely be acting on behalf of someone senior, in awarding the tender. He wanted clarity on that person.
Mr Apleni replied that no action was taken, but DHA would go back and deal with the matter.
Mr Thobejane commented there was no cooperation between government departments. It was important that the Committee looked at how to enforce good working relations amongst departments, as it was not something that could simply be left to officials. This could not just be left to officials. Members needed to deal with, and tighten up, on that area, as there were chance-takers in the public sector.
Declaration of interests
Mr Thobejane said that he was concerned about the Minister’s comment that many officials apparently did not own properties, pointing out that many of the officials owned properties in rural areas, but there was no valuation on those. He himself owned a property in Mafefe Village, Limpopo, but could not declare any value on this. He said that there was a need to develop financial policies that took account of rural areas, and said that part of the problem was that rural people could not derive equal benefit from financiers as the urban dwellers, which he regarded as tantamount to deprivation, and violation of human rights.
The Chairperson joked that the financial arrangements would be kept as they were.
Mr Thobejane replied if that was the Chairperson’s view, then they would meet at the Constitutional Court.
Ms S Mangena (ANC) sought clarity on whether the Director General had ever received a letter from other managers indicating their officials were doing business with DHA.
Mr Apleni replied he currently had one such case, but the other department’s official had maintained that the business belonged to his brother. He could not be disciplined because he claimed to have never received any money. The DHA did not have an instrument to deal with that case.
Using fraudulent names
Ms Mangena sought clarity on what happened to people who used false names when applying for passports. These people ended up staying permanently in the country, and she wondered how they were traced and fined for overstaying.
Mr Apleni replied that such concerns were the reason why the DHA was proposing changes in its way of working and the only way, as proposed by the Minister, was that all applications must follow the route of fingerprinting and biometrics. DHA did not have this at the moment, but was building it into the systems.
Ms Mangena commented this was worrying and asked then what was being done about those who were already staying in the country.
Mr Apleni replied that the process of registering all those in the country to ensure they legally in the country had started. The Smart Card rollout would also assist in the process.
Ms Mangena asked about the vacancy rate.
Mr Apleni responded that the vacancy rate for 2011/12, against the number of approved posts, was 15.1%.
Dr P Rabie (DA) sought clarity on improving border controls and if DHA effectively dealt with issues of asylum. He asked for comment on the status of asylum seekers and immigrants.
Ms T Chiloane (ANC) asked where DHA and NT would find the money that would be condoned, to the value of R687 million.
Mr Apleni replied that this figure related to an issue of irregular and wasteful expenditure, dating back to around 2008. It had been agreed with National Treasury that the amount would remain to be listed as irregular expenditure. The DHA and NT would engage further on how the money would be financed going forward.
Mr M De Freitas (DA: Portfolio Committee on Home Affairs) commented there was a need for computerised record-keeping. He requested a comment on page 40, relating to moving of the head office, when documents were lost.
Mr Apleni replied that the Department moved in 2000, and by the time the report was compiled it had long since occupied Hallmark (the current head office). There were no documents lost. DHA would soon be computerising all its documents.
Mr De Freitas sought clarity on whether mobile offices worked optimally. These were critical in rural areas for the provision of services.
Mr Apleni noted that there were some challenges with the mobile offices with SITA, but that had since been rectified. About 88% of the mobile offices were back on track.
The Chairperson commended the professionalism with which the report was prepared. It was rare that audit committee members sat consistently, for all meetings and that too was commendable. The Committee had been pondering how the work of the internal audit could be elevated beyond senior management, right through to the Minister. As indicated, this session was essentially for an exchange of information.
The Chairperson also said he personally had been impressed by the speed with which his passport application was processed.
He noted that the Committee would possibly invite the Minister again, so that she could share experiences on best practices. DHA’s performance could be used as a model for other departments.
The Minister referred to the earlier question by Dr Rabie, and conceded that DHA faced a backlog with asylum applications, but was putting measures in place to increase support to the unit dealing with the application. There was a need for an institutional overhaul. The Department would be crafting proposals on the immigration policy.
She noted there was a decline in the asylum applications but the institutions that were there should correlate with the number of applications to be finalised. The Department worked with the refugee appeals body and the Standing Committee on the matter, and would provide those institutions with additional support in order to ensure they completed their tasks. She commented that South Africa had to some extent failed in appropriately
processing information about asylum seekers. Much focus had been on personal information, but there was not sufficient attention to the education and skills of the applicants. There were some car guards who were, in their own country, maths and science teachers, precisely the areas in the which this country were so challenged. She had requested that skills audits be included on the asylum-seekers form, so that the country could try to use the skills appropriately. This was a matter that had to be addressed urgently.
The Minister commented she liked the idea of digitising documents, and the Department should be technologically-driven in its approach. This was the only way the country could trace those trying to enter the country illegally. It was important that the Department did not lose focus, particularly in light of the substantial achievements it had registered to date. However, she was aware that victory today did not mean victory always, and so the DHA would try all possible means to remain relevant and build on success.
The meeting was adjourned.
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