Cases investigated in Limpopo Province: progress report by Department of Public Service and Administration & Special Investigating Unit

NCOP Finance

20 August 2013
Chairperson: Mr C J De Beer (ANC, Northern Cape)
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Meeting Summary

The Department of Public Service and Administration (DPSA) briefed the Committee on the progress with disciplinary matters in the Provincial Departments of Education, Health, Public Works, Roads and Transport and Treasury in the Limpopo Province which were all placed under administration in terms of section 100(1) (b) of the Constitution in December 2011. In January 2012 the Special Investigating Unit (SIU) was requested to assist in matters to do with non compliance with supply chain management policies, directives and legislation and disciplinary matters. The SIU and the National Prosecuting Authority (NPA) met with DPSA to discuss the distinction between disciplinary hearings and the criminal matters emanating from investigations and how they should be handled. It was decided that the SIU and forensic firms would investigate matters; thereafter they would hand the investigation reports to the DPSA to pursue disciplinary actions and the NPA to pursue criminal action. The DPSA should examine whether any officials were identified as having committed acts of misconduct.

A total of 303 cases were referred to the SIU and forensic firms for investigation. The SIU forwarded 41 cases for investigation to the DPSA. In addition, 47 cases were received from the forensics firms during the month of June 2013. A total of 18 cases had been finalised, 11 from the provincial departments of Health and 7 from Treasury. The total number of cases handed over to the DPSA by the SIU and forensic firms were 88. Of these, 44 senior staff members and 44 junior staff members were charged; 41 of these cases dealt with remunerative work outside the public service and contravention of section 30 of the Public Service Act; 47 cases were high priority involving fraud and corruption. The DPSA hoped to finalise matters within 60 days.

The Special Investigating Unit briefed the Committee on the progress made with the 303 disciplinary cases being investigated in the Limpopo Province. The Director General of National Treasury had requested the SIU to become involved in the Limpopo Intervention in January 2012. On the 23 March 2013, Proclamation R21 was issued in respect of the SIU’s involvement in the Intervention. The initial focus of the SIU’s proclaimed investigation was the preparation of disciplinary files about undisclosed business interests. These would be submitted to the DPSA Anti Corruption Task Team for investigation of criminal matters regarding undisclosed business interests and to render testimony.


A data analysis exercise was done by the SIU which ran PERSAL and BAS electronic data against the Companies and Electronic Property Commission (CIPC) system. The results from the data analysis highlighted possible undisclosed interests from the Limpopo Province’s Health, Education, Public Works, Roads and Transport and Provincial Treasury departments. The SIU reviewed the information and identified actively employed officials who had business interests in businesses and prioritised investigation of 303 (later reduced to 302 due to duplication) matters. It identified 138 cases in senior management and 164 in middle management. The SIU investigated 216 of the 302 matters. However the SIU’s focus subsequently shifted to the investigation of 18 procurement contract investigations to the value of over R1bn. The need for the refocus was because the SIU had to look at where it could make the maximum impact by way of civil recovery and disciplinary and/or criminal referrals for possible misconduct, fraud and corruption.

The breakdown of non disclosure of business interests in five provincial departments were: Health - 91; Education - 92; Provincial Treasury - 40; Public Works - 49 and Roads and Transport - 30. Of the 302, 41 disciplinary cases had been referred, 48 cases were to be referred, investigations had been closed on 114 cases, 13 disciplinary cases had been completed by departments and 86 disciplinary cases matters had not been investigated. In the course of the proclaimed investigation, administrators of the various departments had also referred ad hoc matters to the SIU which fell outside the scope of the SIU Proclamation.

A breakdown of the 18 procurement matters - totalling well over R1bn - that the SIU was focussing on was: Health - 4; Education - 5; Provincial Treasury - 1; Public Works - 5 and Roads and Transport - 3. Some of the constraints experienced by the SIU were non cooperation from the custodians of information, that is, forensic firms, the unavailability of documents, insufficient capacity, unclear role clarification and non payment of invoices.

The Committee was disappointed by the briefings as they had not given any indication of the progress being made in the turnaround of the Limpopo Province. Members were still unclear about the processes involved and on role classification in the Task Team. The figures seemed contradictory and members complained that progress in investigations was slow as over a period of 19 months, only 18 cases had been resolved. The briefings had focussed more on disciplinary cases but not much information had been provided on prosecutions and persons who had been arrested. Why were officials suspended with pay? Members needed to see results. The total value of procurement matters investigated was over R1bn but how expensive was the total cost of investigations? Members were concerned about the possibility of the intervention in Limpopo Province being lifted and agreed that even if it were lifted, investigations needed to continue. The SIU was asked why it had found it a challenge to access reports from forensics firms. Was everyone involved not working towards a common goal? The Committee agreed that it would invite the Anti Corruption Task Team (ACTT) to a meeting. Members wanted details about prosecutions and arrests.
 

Meeting report

Department of Public Service and Administration (DPSA)
The DPSA was represented by the Director General, Mr Mashwahle Diphofa, Ms Mamodupi Mohlala-Mulaudzi Director General, Office Service of Standards and Compliance (OSC): DPSA, and Mr Percy Tshabane Director: DPSA.

The Department of Public Service and Administration briefed the Committee on the progress on disciplinary matters in the Provincial Departments of Education, Health, Public Works, Roads and Transport and lastly Treasury in the Limpopo Province which were all placed under administration in terms of section 100(1)(b) of the Constitution in December 2011.

Ms Mohlala-Mulaudzi explained that on the 22 December 2011, the Anti Corruption Task Team, which comprised of the South African Police Services, the National Prosecuting Authority (NPA), DPSA, National Treasury, the Hawks, the Special Investigating Unit (SIU), the Asset Forfeiture Unit (AFU) and the South African Revenue Service (SARS), was requested to make capacity available to ensure the fast tracking of investigations and prosecutions where corruption and criminal conduct had been identified. In January 2012 the SIU was requested to render assistance in matters concerning non compliance with supply chain management policies, directives and legislation and disciplinary matters. The SIU and the NPA met with DPSA to discuss the distinction between disciplinary hearings and the criminal matters emanating from investigations and also on how they should be handled. It was decided that the SIU and forensic firms would investigate matters, thereafter they would hand over investigation reports to the DPSA to pursue disciplinary actions and the NPA would pursue criminal action. The DPSA would examine the reports to see whether any officials were identified as having committed acts of misconduct.

A total of 303 cases were referred to the SIU and forensic firms for investigation. The SIU forwarded 41 cases to the DPSA which had to be investigated. In addition, 47 cases were received from the forensics firms during the month of June 2013. A total of 18 cases had been finalised, 11 from the provincial department of Health and 7 from Treasury. A breakdown of cases per provincial departments was Health 26; Education 21; Public Works 13; Treasury 16; Roads and Transport 0 and Cooperative Governance, Human Settlements and Traditional Affairs 12. Subsequently two heads of departments were handed precautionary suspension letters and charged by the Premier of Limpopo. The total number of cases handed over to the DPSA by the SIU and forensic firms were 88. Of this, 44 senior staff members and 44 junior staff members charged; 41 of these cases related to remunerative work outside the public service and contravention of section 30 of the Public Service Act; 47 cases were high priority involving fraud and corruption.

The DPSA, in taking things forward, hoped that the SIU would speed up the completion of investigations, that SAPS would inform the DPSA in time of any possible cases of misconduct against officials who were facing criminal investigations before making arrests, and lastly for itself to finalise matters within 60 days.

Special Investigations Unit (SIU) on the 303 disciplinary cases investigated in Limpopo Province
The delegation comprised of Mr Faiek Davids, Deputy Head: SIU, Ms Rose Boatwright Acting Projects Director: SIU and Mr Leonard Lekgetho Programme Manager: SIU.

Mr Faiek Davids SUI Deputy Head, stated that after the Director General of National Treasury had requested the SIU become involved in the Limpopo Intervention in January 2012, Proclamation R21 was issued on the 23 March 2013 for the SIU’s involvement in the intervention. The initial focus of the SIU proclaimed investigation was the preparation of disciplinary files relating to undisclosed business interests. These were to be submitted to the DPSA, to assist the ACTT with the investigation of criminal matters to do with undisclosed business interests and to render testimony in the disciplinary matters concerning undisclosed business interests.

Ms Boatwright spoke to some of the SIU’s processes. The SIU Forensic Data Analysis Division obtained from various systems electronic data pertaining to Limpopo provincial departments including information pertaining to the Basic Accounting System (BAS) and the Personnel Administration System (PERSAL). A data analysis exercise was done which ran PERSAL and BAS electronic data against the Companies and Electronic Property Commission (CIPC) system. The results from the data analysis highlighted possible undisclosed interests from the Limpopo Province’s Health, Education, Public Works, Roads and Transport and Provincial Treasury departments. The SIU reviewed the information and identified actively employed officials who had business interests in businesses and prioritised 302 matters for investigation. It identified 138 cases in senior management and 164 in middle management. The SIU investigated 216 of the 302 matters identified. However the SIU’s focus subsequently shifted to the investigation of 18 procurement contract investigations the value of which had amounted to over R1bn. The need for the refocus was because the SIU had to look at where it could make the maximum impact by way of civil recovery and recommendations for possible disciplinary and/or criminal referrals in relation to possible misconduct, fraud and corruption.

Mr Lekgetho continued with a breakdown of the 303 cases (which later was reduced to 302 due to duplication). The breakdown of non disclosure of business interests in five provincial departments were: Health - 91; Education - 92; Provincial Treasury - 40; Public Works - 49 and Roads and Transport - 30. Of the 302, 41 disciplinary cases had been referred, 48 cases were to be referred, investigations had been closed on 114 cases, 13 disciplinary cases had been completed by departments and 86 disciplinary cases matters had not been investigated. In the course of the proclaimed investigation, administrators of the various departments had also referred ad hoc matters to the SIU which fell outside the scope of the SIU Proclamation.

A breakdown of the 18 procurement matters - totalling well over R1bn - that the SIU was focussing on was: Health - 4; Education - 5; Provincial Treasury - 1; Public Works - 5 and Roads and Transport - 3.

As previously stated the procurement matters investigated totalled well over R1bn.

In summary, 216 non disclosure of business interest matters were investigated and 41 disciplinary matters were referred; 18 ad hoc matters were investigated. Two disciplinary matters were referred, two matters were referred to the NPA, two matters were also being dealt with by the ACTT and one matter was pending. As mentioned previously, presently 18 procurement matters were being investigated.

Some of the constraints experienced by the SIU were non cooperation from the custodians of information, that is, the forensic firms, the unavailability of documents, insufficient capacity, unclear role clarification and non payment of invoices.

Discussion
The Chairperson said that procurement matters amounting to over R1bn was a great deal of money. The success of the Intervention in Limpopo depended upon the success of actions and implementation. Regarding the SIU not getting cooperation from the custodians of information, who were they?

Mr Davids said that outside of the 302 matters, forensic firms also did 38 investigations on irregularities. The disciplinary related matters should be referred to the SIU but the information was not forthcoming from the forensic firms. He did not know where the 38 matters were currently.

Mr T Chaane (ANC, North West) asked any one of the presenters to explain the process to the Committee.

Mr Diphofa said that at this stage the DPSA was not so involved in investigations. Some of the investigations had been done by forensic firms and by other entities as outlined by the SIU. Investigations that needed disciplinary action to be taken were forwarded to the DPSA. The DPSA informed the relevant provincial departments on what changes were formulated and the necessary steps that needed to be taken by heads of provincial departments. The SIU had referred 41 matters to the DPSA for disciplinary action and 47 other matters were referred by forensic firms and National Treasury.
 
Mr Davids said that the SIU had been asked to brief the Committee on the 302 disciplinary matters. The SIU had done so and had gone beyond what had been requested. He welcomed the engagement with members.

Mr D Bloem (COPE, Free State) said that the DPSA had already briefed the Committee previously on the Limpopo Province. Which parts of the current DPSA briefing was new?

Mr Chaane remarked that the Committee was still confused on the issue of role classifications. There was a contradiction somewhere. The SIU had noted role classification as a challenge. What happened in practice? All that was wanted was that processes should be fair. Having said that, in order for fairness to prevail the process needed to be clear. He pointed out that the breakdown of figures given by the SIU on the total number of cases, was confusing and asked for clarity.

Turning to the DPSA, he asked if 41 cases had been referred to them by the SIU and 18 of them had been completed, at what stage were the remaining low priority cases. The forensic firms had referred 47 cases to DPSA. He also asked at what stage were the 47 high priority cases and at what level were they. Much was said about disciplinary cases. How many of the 88 cases were with the courts? He asked for clarification on the statement by DPSA that it concluded cases within 60 days.

Mr Davids said that role classification issues had already emerged at the beginning of the process. When the SIU had applied for the proclamation, it had depended on forensic firms to do investigations. He noted that different agencies had different mandates. Once the SIU received the proclamation, roles became clearer.
Regarding the 38 matters, the SIU had expected the forensic firms to refer disciplinary matters to them. Some of the 38 matters would be forensic investigations that would lead to criminal investigations and hence were not of a disciplinary nature. He pointed out that cooperation had gotten better.

Ms Mohlala-Mulaudzi said that a breakdown of the high priority cases would be forwarded to the Committee.

Mr Bloem asked the SIU how much it had spent since January 2012 up until the present. If the procurement matters being investigated amounted to over R1bn, he felt that the investigations could cost more than that. He asked how many people were incarcerated already. On Monday, 19 August 2013 two officials in Limpopo were suspended with full pay. The Committee wanted results. Insufficient capacity was identified by the SIU as a challenge, did the SIU have a lack of staff. If it was true then it was a concern.

Mr Davids did not know whether the 18 matters would translate into recoveries amounting to millions. At present he estimated that R3.5 to R4m had been spent by the SIU. The issue was about managing costs of investigations.

On how many people were incarcerated, Ms Mohlala-Mulaudzi replied that it was best to ask other role players like the SAPS and the Hawks to comment.

Mr R Lees (DA, KwaZulu-Natal) said that it seemed that the process was that disciplinary matters were handed over by the SIU to the DPSA and the DPSA in turn handed it over to the respective provincial departments. Over the period of 19 months, only 18 cases had been resolved. He asked who was going to sign off on the disciplinary action in the Limpopo Province. He pointed out that with no reference to the National Council of Provinces or the Committee; the Executive had decided to lift the intervention in Limpopo. The very departments that were being investigated would now look at the cases themselves. The Committee had been given no names of persons who were investigated in the departments. The Committee was only given figures which were very vague. The Committee had been told that 303 cases were referred to the SIU. He felt that the figures were weird. The outcomes from 19 months of investigations were farcical. He agreed with Mr Bloem that the total cost of the investigations could be huge. How could only 18 cases have been resolved? He felt that the process had been extremely slow and now it was going to come to a halt with the intervention being lifted.

Mr Davids said that on overall progress, whilst the SIU reported on disciplinary matters it also looked at forensic and criminal matters. Unfortunately the SIU had not brought the information regarding forensic and criminal investigations to the briefing.

Ms Mohlala-Mulaudzi stated that the DPSA appreciated the frustrations of the Committee but there was movement. At the last meeting with the Committee the DPSA had 41 cases. Since June 2013 an additional 47 matters had been referred to it. On the 47 matters, charges had been laid and disciplinary actions taken.

The Chairperson said that he wished to clarify that the intervention had not as yet been lifted. Work was being done towards the lifting of the Intervention. The Executive who decided to impose the intervention could also lift it. Parliament had a role to play as well. What was the next step once the intervention was lifted? The process would continue. He noted that Chapter 10 of the Public Finance Management Act was clear on misconduct. There had to be consequences where there was misconduct. Guilty persons should not get off free. The Committee would play the role of the National Assembly’s Standing Committee on Public Accounts (SCOPA) in the NCOP.

Mr B Mashile (ANC, Mpumalanga) was seriously disappointed by both briefings. The information provided did not give an indication that the Limpopo Province could be turned around. Persons in provincial departments had been subjects of investigation but yet officials remained in place. The turnaround strategy was being restricted. Who was actually in charge? Who gave the yes or no? Did the DPSA have any power over the forensic firms that had been appointed by National Treasury? Did the SIU not have the authority to demand outcomes from forensic firms? He felt that the 60-day completion period alluded to by DPSA was only a promise and could not be realised. The 60 day period was a moving target. An institutional arrangement was needed for agencies and the DPSA. There needed to be a clear line of authority. Given that heads of provincial departments had been investigated and suspended, would acting heads of departments be appointed? Referring to the SIU, he said that if there was an area in law or in regulations that frustrated its work, it should come up with suggestions on how to resolve the issue. He asked both the SIU and the DPSA if there was at any time during the intervention when either of them could not do their work. From the briefings it seemed that there was no progress.

Ms Mohlala-Mulaudzi clarified that the 60 day turnaround time referred to the disciplinary process and not investigations. When the DPSA commenced with charge sheets, then disciplinary actions also commenced. The DPSA took charge and it made sure there was no lag. The DPSA did identify initiatives and presiding officers. Sometimes objective persons were needed who were not attached to the Province. She responded to who was in charge, saying that charge sheets relating to junior officials would be signed by heads of departments. Premiers signed the charge sheets of heads of departments.

Mr Diphofa explained that where a precautionary suspension was in place, then the post was not regarded as being vacant. The post could not be advertised. The provincial departments could take steps to beef up capacity though.

Mr Davids explained, on institutional arrangements and constraints, that the SIU had powers of search and seizure. There was an inter-agency arrangement in place to try to make matters work. He emphasised that the SIU had been asked to brief the Committee on disciplinary matters and not to comment on the success of the intervention. For comment on the success of the iIntervention, the Committee should perhaps invite the other agencies involved to address the Committee on the issue.

Mr S Montsitsi (ANC, Gauteng) referred to slide 19 of the SIU presentation and spoke to the figures for the provincial department of Education. There seemed to be a contradiction in the figures and he asked for an explanation. The SIU had referred disciplinary matters to the DPSA and had referred criminal matters to the NPA. What was the difference between the matters? The non cooperation by forensic firms was a concern. On slide 4 of the SIU presentation, it stated that the SIU had powers of subpoena. It could also seize and interrogate. Why was the non cooperation by forensic firms tolerated? He noted that cases were referred by National Treasury to forensic firms. There were reports available but National Treasury refused to make the reports available to the SIU. Why was there no cooperation with the SIU? He agreed with the Chairperson that investigations in the Limpopo Province needed to continue. The Committee could also call on other entities such as SAPS and the SARS to address the Committee on the intervention. He noted that the DPSA was the custodian of the entire civil service. Wrongdoing was rife at national, provincial and local government level. Had DPSA developed a team of whistleblowers? How many cases had been referred by the SIU for prosecution? The NPA needed to provide the Committee with figures on prosecutions.

Mr Lekgetho replied that the SIU only dealt with the cases referred to the SIU. He did not know what the other cases involved. On the Provincial Department of Education in the Limpopo Province, three cases had been received by the SIU and three investigations had been completed.

Mr D Joseph (DA, Western Cape) said that there needed to be cooperation between the DPSA and the SIU. Each of them had their specific roles. He asked what the DPSA was doing about the issue of forensic firms not making reports available to the SIU. DPSA had mentioned an additional provincial department, that is, Cooperative Governance, Human Settlements and Traditional Affairs. He asked whether declaration of interests was a policy with the DPSA. Why were suspended officials suspended with pay? Where officials were suspended for long periods of time, how did the provincial departments function? Given the challenges highlighted by the SIU, he asked the DPSA what recommendations it had about these. He added that Parliament needed to obtain a report from the NPA on the charges that had been laid against officials. Speaking to investigations of cases that had not been investigated by the SIU, he asked them to clarify the matter. If cases were not investigated, then should they not be referred to as allegations?

Mr Lekgetho responded that the 86 cases referred to was the number of cases which the SIU had to investigate. The focus of the SIU had shifted to procurement investigations as the impact would be greater. The role of the SIU was two-fold. It was firstly involved on the ACTT and secondly it was involved in the Limpopo Intervention by virtue of the Proclamation. The SUI did not deal with disciplinaries itself, but only did the investigations. The Intervention was a multi-agency process which involved agencies like SAPS and the Hawks.

Ms Mohlala-Mulaudzi, referring to suspensions with pay, said that it was so provided in terms of law. The DPSA tried to deal with issues. A head of department from the provincial department of Education had been suspended and a disciplinary procedure would commence on the 10 September 2013. On the provincial department of Cooperative Governance Human Settlements and Traditional Affairs, the disciplinary process was to start in October 2013. The DPSA did not simply sit back but had its own investigative reports. Sometimes reports were withheld by SAPS because they wished to protect the identity of persons. On the declaration of interests, she said that it was provided for in regulations and laws, but now it was being implemented.

Mr Diphofa pointed out that since the oversight visit by the Committee in April 2013, the issues raised by the Committee had been dealt with. At the time the DPSA had received 41 cases. The distinction with the Limpopo Province was that it had a separate accounting officer and a head of department. Usually they were one and the same person. There was no issue between the DPSA and National Treasury on reports. The problem with some of the reports sitting with National Treasury, was that they formed part of court proceedings. The DPSA was working with National Treasury on how to obtain access to reports. The DPSA had received 18-19 reports from National Treasury. There was an ongoing relationship with National Treasury. Where there was a precautionary suspension, then it was a suspension with pay. If a person was suspended in terms of a sanction, then there was no pay attached to the suspension.

Mr Lees referred to the Chairperson’s comments regarding the lifting of the intervention and that oversight should continue. He suggested that perhaps the NCOP and the Committee could recommend that the Intervention should not be lifted. He asked the SIU and the DPSA if it was the correct time to lift the intervention in Limpopo Province. He asked the SIU if  “Mr Matala” was under investigation or not. A simple yes or no would suffice.

Mr Davids responded that the SIU was not investigating “Mr Matala”.

The Chairperson asked whether the ACTT was a coordinating body for the Limpopo Intervention. Who was in charge?

Mr Lekgetho responded that the Hawks was in charge of the ACTT.

Mr Chaane noted that once public servants were found guilty they should be disciplined and removed from their jobs. Thereafter criminal action should be instituted against them. For those persons who were not public servants should be dealt with by SAPS and the Hawks. He was still confused about the figures that had been presented to the Committee by the DPSA and the SIU. Clarity on the figures was still needed. The SIU was part of the ACCT but it seemed as if the ACCT did not meet that often. The Committee needed to know who the people that were arrested in the process were. The SAPS, the Hawks and the NPA should address the issue with the Committee.

Mr Bloem agreed that all role players like the SAPS, the NPA and the Hawks etc should appear before the Committee. If the SIU had spent approximately R4m, what had the other agencies spent? He was convinced that in total more than R1bn had been spent. He felt it was premature to lift the Limpopo Intervention.

Mr Lees emphasised that the figures presented did not gel. Was it correct that the SIU had its own 302 cases in addition to the 303 DPSA cases?

Mr Mashile once again reiterated that he was disappointed that the intervention had not turned the Limpopo Province around. The figures presented did not speak to the turnaround of the Province. Members needed to know which heads of provincial departments had been arrested. The result was not what had been expected of what the intervention should have achieved. The Committee needed figures on the numbers of dismissals.

The Chairperson stated that it was evident that the Committee needed to have an interaction with the ACTT. A meeting with them would be scheduled in September 2013.

Ms Mohlala-Mulaudzi wished to clarify that the 60 day period was the commencement of the disciplinary period and not the completion thereof.

The meeting was adjourned.
 

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