Follow-up meeting on Audit outcomes of Department of Correctional Services for 2012/13

Meeting report

Discussion of Department of Correctional Services Audit Outcomes and Annual Report 2012/13
The Chairperson asked the Audit Committee to comment on Department of Correctional Services’ audit outcomes.

Mr Charles Motau, Audit Committee member, said that internal control procedures were lacking and internal audit was not functioning. The Chief Financial Officer (CFO) position had to be filled, and an audit culture had to be established. Audit actions had to be implemented. There had to be consolidated financial reports from the regions. There was a lack of IT capacity. The Chief Audit Executive post was vacant and there was a lack of “consequence management”. Recommendations were not implemented because no one would accept sole responsibility. There was a lack of concrete information and consistency.

The Chairperson asked Mr Motau how he would score the DCS performance.

Mr Motau replied that he would score the DCS four out of ten.

Mr L Max (DA) asked what was meant by risk. He asked if it referred to uncertainty about an event occurring. The Department had to assess its shortcomings in relation to the Auditor-General. Shortcomings had to be discussed on a regular basis and regulations complied with.

Mr Motau replied that there were four meetings per year. The Audit Committee had sat with the National Commissioner. The Audit Committee, the Auditor-General and internal audit team worked to the same end. Audit culture in the Department created problems of internal control. Things could be different if recommendations were implemented.

Ms W Ngwenya (ANC) said that she was worried about the post of the CFO. She asked what was recommended in terms of the CFO. The DCS needed assistance. Staff filled most of the top posts in an acting capacity. She asked the Audit Committee how the Portfolio Committee could assist the Department. Not only failure had to be looked at.

Mr M Cele (ANC) asked who represented the DCS at meetings with the Audit Committee.

Mr Motau replied that it was the National Commissioner, the Head of Human Resources, the CFO and Regional Commissioners.

The Chairperson asked about a meeting held with the DCS, subsequent to the AGSA report. There was departmental arrogance about accepting advice. He told Ms Nontsikelelo Jolingana, Acting National Commissioner that the DCS had to say what it had done subsequent to the AGSA report. The Audit Committee had stated that they were not satisfied with the quality of quarterly reports. The AGSA report had referred to unresolved money matters. The Portfolio Committee was the external arm of oversight, and Members had to express an opinion.

The Chairperson noted that the DCS had proposed amendments to the Audit Committee, who had not agreed. There was a culture of presenting to Parliament what sounded good, and not getting down to gory details. The Audit Committee was concerned about the development of the budget. They reported little cooperation from the Department. It was not a rosy picture of teamwork. The Auditor-General had referred to under spending of R300 million. There were un-funded vacancies. The organisational structure had been approved, but the Department was saying that there were no funds.

Ms Jolingana said that the reflections of the Auditor-General were welcomed. The DCS would ask the Minister about vacancies. There had been a report to the Audit Committee just before the tabling of the Annual Report. Factual inaccuracies were changed. The Department had to develop action plans, with a contribution by each component. There was an information gap. Some of the Audit Committee issues had been reflected on in the last meeting with them. The Department was committed to goals. A challenge was the 102 performance indicators in the Annual Performance Plan. A revised Strategic Plan would include fewer indicators, with realistic targets. It was hard to get a clean sheet. Leadership was concerned with quality. Identified deficiencies had to be addressed. The question was how best to develop policies and procedures. There was lack of implementation of policies and there were capacity challenges as well.

Mr Max remarked that the statements by the Audit Committee were an indictment. The Audit Committee was saying that if their warnings had been followed, things might have looked better. The management had a “don’t care” attitude. He asked if internal audit had a chief risk officer. He asked about vacancies and the internal control unit.

Ms Jolingana replied that management did care. The Department was also worried about non-performance. The credibility of the Department was at stake, and it had gone back to the drawing board. It was being asked what blocked achievement. She agreed that 102 targets were too many. The lack of a chief risk officer was part of lack of internal capacity in the internal audit section.

Ms Nandi Mareka, acting Chief Financial Officer for the Department, added that there were vacancies, and that the internal audit numbers needed to be beefed up.

Mr Max remarked that there was a lack of internal capacity to issue warnings. It was not just a capacity problem. There was not enough commitment from management. He asked why there were no consequences for management. In three years no one had been dismissed for not complying. He asked how many members of management had received performance bonuses.

The Chairperson remarked that the Department was complaining of under capacity, but yet R300 million had been returned. He asked why people were not hired. He asked if there was a moratorium on appointment. Skills were available in South Africa. It was not even a matter of retention. There had been an inability to fill posts from day one.

Ms Mareka responded that only funded posts could be loaded on Persal. Some posts had been approved but were still not funded.

The Chairperson said that the Department had referred to lack of capacity. He asked what that capacity was. Higher employment levels had to be discussed with the Minister. The question was what critical skills were needed, and why the Department was unable to get hold of them.

Mr J Selfe (DA) referred to page 121 of the Auditor-General report. Funded vacant posts had not been filled in 12 months. He asked why posts had taken more than 12 months to fill. It contributed to lack of capacity.

Mr Max remarked that most vacancies were funded. Lack of capacity was not a matter of new posts. The law stipulated that there had to be a chief risk officer. It was part of an existing structure as set out in the organogram.

Mr Teboho Mokoena, Chief Deputy Commissioner, Human Resources in the Department, replied that the position of chief auditing executive had been advertised. It was difficult to attract the right kind of person. Government stipulated that 50% of posts had to be filled by women. The post had to be re-advertised twice. Headhunters had been instructed to find the right kind of person.

The Chairperson noted that the President had said in the SONA of two years before, that government posts had to be filled within three months. The time taken by the DCS from placing the advert to compiling a shortlist had been four months. The new incumbent would still had to give notice at a current position, and by then six months would have passed. Half of the financial year would have been taken up for recruitment.

Mr Mokoena replied that previously all advertisements had been centralised. They were channelled to central level. The DCS decided to review the way it did things. There were currently decentralised adverts to shorten the turnaround time. Capacity to process applications had to be developed. Interns would be absorbed into the capacity selection unit.

Mr Max referred to consequence management and performance bonuses. There were 68 disciplinary fraud and corruption cases, of which four had been closed and the rest finalised. There were 50 final written warnings and 14 suspensions. There were eight verbal warnings. Those were for people guilty of fraud and corruption. Final written warnings could only fail.

Ms Jolingana replied that the DCS had taken a decision that no member of senior management would receive a performance bonus until there was an unqualified audit report. Salary levels 13 to 16 had not received bonuses. Each case of maladministration had to be unpacked. A presiding officer was appointed for each case. It came with a sanction. More information could be provided.

Mr Max noted that the catering budget had been R25.8 million. He asked if there was not a set budget, and whether glasses were being hired for R200 each.

Ms Mareka replied that catering had to be unpacked. There were new functions. There was a budget. Catering was related to outreach programmes. It was cheaper to procure from the DCS’s own clubs and messes.

The Chairperson remarked that it would be better if catering projects were campaign specific, if possible.

Ms Mareka replied that if she set up a cheque account, the Auditor-General saw that as non-compliance. She agreed that it would be better if catering were project based rather than item based.

Mr Cele commented that there was commitment, but there had to be willingness to walk the extra mile. He referred to page 42 of the Inspecting Judge’s report, and asked where the mentally ill were kept.

Mr James Smalberger, Chief Deputy Commissioner, Incarcerations and Corrections, replied that the mentally ill were under primary health care. They were not Weskoppies Psychiatric Hospital type people. They were held in single cells if possible, otherwise in communal cells.

Mr Cele asked why the National Prosecuting Authority (NPA) was not willing to prosecute four cases (page 59 of the Annual Report).

Ms Jolingana replied that details regarding the NPA decision had to be obtained.

Mr Cele referred to page 106 of the DCS Annual Report. He asked who determined policy with regard to disciplinary hearings.

Mr Mokoena replied that there was a disciplinary code; the Chairperson could fine three months without pay as alternative to dismissal.

Ms W Ngwenya (ANC) asked how the Department planned to ensure that the delivery agreement for kitchen repairs was adhered to.

Ms Jolingana replied that the target for kitchens repaired had been 61. 48 were completed. Reasons differed per case. In the Free State and Northern Cape, tenders had gone out late. There were challenges related to the Department of Public Works (DPW).

The Chairperson said that he had heard on the radio that two bodies had been found at Diepsloot. There was supposed to have been a police station in 2007, but it was still not there. The DPW had played a role. There was anger in Diepsloot. It was the kind of thing that caused uprisings. It would be better for the DCS to ask the Portfolio Committee to resolve the crisis. Service level agreements were not working. If inmates could not be fed, there would be riots at the centres.

Ms Jolingana replied that there had been little movement with the DPW, but dedicated DCS officials were currently following through on a daily basis, and movement was becoming visible. The DPW had followed the process and appointed a contractor, but the contractor had run out of money in the middle of the project. Another contractor had to be looked for. There was frustration. The DPW had to engage their own regional offices, to hold regional managers accountable. The DCS needed help.

Mr Ntlakane referred to escape statistics. They were currently at 43. The DCS was doing something right. There was increased infrastructure capacity. The DCS would achieve set targets.

The Chairperson asked how many of the prisoner escapes had been inside jobs. The escapes at Harrismith centre could only have happened if someone had turned a blind eye. He asked what was done when collusion was found.

Mr Ntlakane replied that all prisoner escapes were investigated. When integrity was suspect, technology could help. Escapes mostly occurred among remand detainees. Collusion could not be ruled out and could lead to imprisonment, as aiding and abetting escape was a crime. Escapes were mostly due to negligence, and led to dismissals.

Ms Ngwenya said that the DCS had to secure life in South Africa. There were increases in assaults in centres. The target for unnatural deaths had not been achieved. She asked how the DCS planned to prevent assault. She asked if panic buttons and intercom systems had been considered.

Mr Ntlakane replied that unnatural deaths were mostly suicides. Suicide risk profiling was being reviewed. Where infrastructure allowed, monitoring systems were looked at. Closed Circuit Television (CCTV) in all cells could not really assist as long as there was an after-lockup master key system at night. The response was too slow. Increased assault had to be seen in context. Increasingly aggressive inmates were entering centres, and this was combined with overcrowding. Assault also tended to be at times over-reported. If a gang member from the 28’s pushed a 26, and the latter complained, officials had to report it as assault to not look complicit. The success of panic buttons and intercom systems depended on the availability of staff.

The Chairperson noted that organised labour had complained that their members were at risk, with three officials having to deal with 100 inmates, in many instances. He agreed that panic buttons could not be effective without staff, and with the master key system at night. There had to be an Indaba about DCS core business.

Ms Ngwenya commented that some correctional officers were not trained to use a gun, whereas inmates could use guns.

Mr Ntlakana replied that firearm handling was part of basic training for officials, but many had not undergone refresher training. There was basic training in all management areas, especially the Emergency Support Team. Firearms had to be borne when officials performed escort duties. Training was with the South African Police Services (SAPS). Officials required to use firearms were trained, but programmes did not move fast enough.

Mr Cele asked why posts for the Judicial Inspectorate for Correctional Services (JICS) could not be filled, while the money was there. The Minister and the Judge had to meet. The budget for the Inspectorate was not enough. He asked about the independence of the Inspectorate.

Mr Mokoena replied that the DCS talked to the Inspectorate about funded posts, and then the Inspectorate had to fill the posts. The DCS was only responsible for the CEO.

Mr Cele told Mr Mokoena that in the report of the Judicial Inspectorate, it did not seem as if funded posts were with them.

Ms Jolingana replied that a post structure for the Inspectorate had been approved, but not funded. Bids had to be submitted for funding.

Judge Vuka Tshabalala, Inspecting Judge, remarked that he was not satisfied with the answers. The JICS budget had been submitted to the DCS and slashed down. The Inspectorate could not pay for the post structure. There was a difference between what was submitted to the DCS, and what they wrote. There had to be synergy between what the DCS and the JICS did. When the DCS said that the Inspectorate had to ensure that posts were filled, it indicated loopholes between the two entities.

The Chairperson said that the Portfolio Committee would report to Parliament on the matter.

Mr Cele referred to page 107 of the Annual Report. He asked about consequences for misconduct.

The Chairperson remarked that the police had to be measured by convictions, not arrests. There had to be a report on finalised cases. He asked if every case necessarily had to be listed in the Annual Report. Page 107 looked like a tabloid.

Mr Mokoena replied that the reporting focus would be adjusted to focus on completed cases.

Ms Ngwenya referred to education. The poultry project in Thohoyandou Correctional Centre had been closed down. There was no school at Rustenburg Correctional Centre and there were not enough educators. She asked how many schools were registered with the Department of Education.

Mr Smalberger replied that the school at Rustenburg centre would be opened during the current financial year. The chicken project had been small, and had closed down because there was no abattoir available. Requirements were very strict. There were eleven schools. Rustenburg centre school was not fully accredited, because two full time teachers were required, and the Department only had two part-time teachers.

The Chairperson noted that R870 million had been spent on Public/Private Partnership (PPP) projects. R800 million were for 160 000 prisoners. It was unacceptable to spend so much on only two facilities. The matter had to be discussed with the Minister.

Ms Jolingana replied that Mangaung Correctional Centre was a PPP nightmare. Government had gone back to the drawing board about PPP centres. They were a mistake. Cabinet had decided that PPP projects in their current format were unacceptable, as security could not be outsourced. The Department was looking at options. Sentenced people were in the custody of the state. It was not right to spend so much on a headache.

Mr Smalberger added that Ceres Correctional Centre would not be finished in the current year.

The Chairperson told him that Ceres and Vanrhynsdorp Correctional Centres happened right after Kimberley. Someone had to be fired.

The Chairperson remarked that the DCS had received a qualified audit opinion because the Auditor-General could not verify R36 million’s worth of assets (page 118 of Annual Report).

The Chairperson referred to pages 159 and 160 of the AR. There was irregular expenditure. Contracts had not been signed. He asked how the DCS could spend R294 million without following procedure. There was a lack of internal controls, and yet contracts were increased. The matter was perhaps to be handed over to independent investigators. The Department could not investigate itself. There were concerns raised by the Auditor-General about disturbing contracts awarded to officials. Tenders had been awarded to families and blacklisted contractors. He asked what steps would be taken. He asked if the Departmental Investigations Unit (DIU) was worth it. If not, it had to be disbanded.

Ms Mareka replied that there was engagement with the Auditor-General and the Treasury, to see who had been responsible. An investigation of supply chain management negligence had been called for. Matters would be finalised by December. It was difficult to pick up cases. Each had to be investigated. Only senior management DCS members had to declare business interests. Every bidder currently had to declare. Declaration was not compulsory for companies. Fraud and corruption was referred to the DIU. The DCS was currently checking for prohibited suppliers, who were restricted by the Treasury. The threshold for checking had been lowered.

Mr Max remarked that the National Commissioner had said in 2011 that interns would rectify the asset register. He asked what happened to that exercise.

Ms Mareka responded that the challenge lay in movement of assets. Assets moved from A to B, whilst remaining registered under A. The Accounting Officer had ordered that assets no longer be moved from one management area to another. Interns became contract workers after 12 months. Shortages could be identified. It had to be ascertained which locations were missing assets. Surpluses elsewhere had to be checked. The Department had taken to colour coding items like chairs, so that it could be clear where they belonged. There were asset lists everywhere. Regions would begin to finalise disposal processes. They were also keeping track of recycled items.

Mr Musa Hlongwa, from the Auditor-General of South Africa, said that the Department had to be assisted during the interim audit to see that asset management improved. There had to be a follow up on action plans.

The Chairperson asked who headed the internal audit unit.

Mr Max commented that there were intelligent people in the Department who could explain everything. People knew what they had to do, but it was just not done. He asked about reduced consultants (page 32 of the AR) and cost increases (page 150).

Ms Mareka replied that outsourcing did not apply to real consultants.

Mr Max referred to under spending (page 119). He asked what the critical issues were.

Mr Max referred to pages 121 and 96, related to turnover. The Public Servants Association (PSA) had said that the DCS had been willing to settle but had not withdrawn their review application. He had high hopes for Mr Mokoena. Nothing could be achieved if the spirit of the labour force was not healthy. There seemed to be obstacles to taking decisions. It seemed from the unions that no decisions were being taken at the Ministerial Task Team (MTT) meetings. Things were formalised and left for a further mandate.

Mr Mokoena responded that MTT decisions had been deferred until a meeting with the Minister. The Minister had been briefed at the last meeting. The Minister received a progress report on 8 August. There had been subsequent progress, with agreement about issues that remained. Discussions had not collapsed. There were discussions about artisans moved to centre based; OSD, and shift patterns. With regard to turnover, the challenge was to attract critical skills. When social workers left, efforts were made to retain them. In terms of the OSD, social workers were given bursaries to study. But the OSD stipulated that when they came back, they had to start at entry level. The matter had been discussed with the Department of Public Service and Administration (DPSA) in order to relax the ruling. Social workers had to use their skills when they graduated.

Mr Max referred to violence in correctional centres (page 55). There had been no gang management strategy in the previous year. The strategy also had to prevent gangsterism.

Mr Ntlakana replied that a gang management strategy had begun in 2009. The DCS had interacted with stakeholders and agreed to formulate a gang management framework. It was not restricted to prison gangs. Other departments like Social Development wanted to look at outside gangs. The gang management strategy had to be placed in a broader framework. It was an evolving phenomenon. The strategy would look at community and causal factors. Weaknesses of the framework would be discussed with stakeholders. Gang free centres were not possible. The strategy would be constantly reviewed, with clear milestones.

Mr Cele commented that the Minister and stakeholders had to meet soon. The question was what changes had to be made. The MTT had to get a report back, but it was not forthcoming. The PSA and POPCRU were contradicting each other.

The Chairperson asked why there had been under spending on core functions. The Department could explain but could not perform.

Ms Mareka replied that there had been under spending on computer equipment.

The Chairperson noted that there had been 70 core business targets of which 36% had been achieved. If money was not spent, targets could not be reached. The Audit Committee had to find a way to deal with the situation. There had to be a follow up on resolutions. The DCS knew what to do but lacked follow through.

Ms Jolingana said that underperformance issues would be dealt with. Funds were shifted to more critical projects like electronic monitoring and inmate gratuity. The Audit Committee had recommended that legal expertise was needed, and operations expertise. There were many human resources issues. The Minister would open Brandvlei Correctional Centre on 22 October 2013, for occupation. The Deputy Minister had launched the remand detention uniform. She assured the Committee that issues brought up by stakeholders and the JICS were taken seriously.

The Chairperson adjourned the meeting.