2012/13 Annual Report of the Private Security Regulatory Authority (PSIRA): Financial Statements and Performance

This premium content has been made freely available


17 October 2013
Chairperson: Ms A van Wyk (ANC)
Share this page:

Meeting Summary

PMG did not attend this meeting as it was held outside of Parliament. The minute below was provided by Ndifuna Ukwazi. 

Meeting report

Portfolio Committee of Policing


Private Security Industry Regulatory Authority (PSiRA)


Date:                                                    17 October 2013

Venue:                                                  Bishop Lavis Police Academy

Chairperson:                                         Ms. Annelize Van Wyk

Members of Parliament:             Honourable ME George

Honourable D Kohler-Barnard

Honourable MA Molebatsi

Honourable D Sibiya

Honourable DJ Stubbe



The purpose was for PSiRA to account for their performance in the past financial year, 2012/13.

The procedure was that PSiRA would present on a programme and then answer questions from the Portfolio Committee members stated above.

Most of the issues found to be amiss by the Auditor General in the 2011/12 period were again identified, amongst them being financial loss (where the current liabilities were found to be greater than current assets). The labour retention strategy has been in draft form since last year (2011/12) and still is at the time of the Portfolio Committee in 2013/14.

PSiRA management were not taking note of the questions asked and had to be reminded of the questions and consequently did not answer some questions. Failures regarding financial performance, achievement of predetermined goals, information technology control amongst many others were attributed to poor leadership by. Council is not aware of all decisions that are occurring in the Authority and as a result was apprehensive, felt challenged about it when questions were asked. Management was not aware about what was happening in their respective departments except for some information that was on the presentation slides. When asked to explain in detail, they often had to defer most of the questions for submission to the Portfolio Committee in writing the next day on the 18th of October and on Tuesday the 22nd of October 2013.

Below are some of the responses to the questions asked by the Portfolio Committee (PC): The questions are in bold and just below are the responses from PSiRA.





1.       Only 3 people were in the council in 2012/13 instead of 5. What is the status of the council now?

(They did not take note of all questions and thus did not response to this one.)

2.       After the introductions the Chairperson of the Portfolio Committee (PC), Annelize van Wyk asked why all the council members were not present. The Chairperson of the Council of PSiRA responded by stating that they had full-time jobs; he was not able take them out of their important commitments and thus they were absent. Annelize responded saying that there was never a full attendance by the council members for the past years, yet they are only required to meet the PC only twice a year.

3.       There has been no improvement. If you were a private company you could have been liquidated years ago. Why should you not be shut down? (No response.)

4.       When are you going to break even and ensure that you spend the money you have? They always target to break even or to have a surplus. The main contributing factor to the deficit is the pension fund deficit of R6.9 million from the previous year (p.139 of the AR, last paragraph, second sentence). Net adjustments led to a R3.9 million loss. If they did not have the historical deficit, they would have a surplus of ±3 million.

(This was not an adequate response as far as the PC was concerned. They said it was not enough to respond based on ifs or wishes.)

5.       What is in your investment account at the moment? The finance manager said they had a marginal surplus of ±R81 000 and said that the exact amount was on the investment account statement.

(The Chairperson made a ruling, demanding that the one of the PSiRA management collect the information as soon as possible.)

6.       What is the status of the building which was intended for sale? The matter was referred to the executive authority to determine if the building would be sold. The executive decided to demolish and reconstruct the building instead of selling. They are still awaiting the National Treasury to report back on the feasibility of this operation.

7.       So you are still paying rates and taxes? Yes, the building is one stand where two properties are utilized. One property is used for registrations; the other (the main building) is not operational.

8.       How will you change the organisation when you say system developments can be done because you do not have funds? There are selected development processes that are underway, so there is some progress.

9.       What is the breakdown of tax clearance certificates and the current situation? (Did not have the information on the tax clearance information and requested the opportunity of respond in later). PSiRA later found the amount to be R1 078 361.

10.   Explain the drop in fines. The drop in fines was due to regulations; the collection of the annual fees moved from 77% to 100%. Fines emanate from the non-payment of annual fees, which was reduced because of the regulations. PSiRA could not charge them for penalties or interest because they are just not paying. Most of the revenue is from the individual security officers.

11.   But you have argued that the companies are not paying because of the SIA case. Are you saying that all the fees are from the individual security officers? There were 10 000 additional employees, meaning R70 000 therefore, where did the rest come from? The companies were paying but according to the old fees. Payment increased due to the new regulations PSiRA initiated that allow annual payment of fees instead of monthly fees.

12.   Has there been progress after the internal audit unit has been conducting follow-ups after the fraud case, as recommended by the AG? Yes, there is improvement. After obtaining the results of the audits, they then take steps to address the problem.

13.   The AG identified material losses of R53 million on p. 102, yet on the PSiRA’s slide material losses are recorded at R33 million on page p.105. Explain the discrepancy. The bad debts write-off figure was R53 million, bad debts provision (recognized) was ±R19 million, leading to a net effect of R33 million.

14.   Why is the pension fund still an issue since last year; why has it not been dealt with? The type of pension fund the Authority is holding is one that gives a deficit the Authority has to pay. PSiRA investigated the source and reason for the deficit and were informed that the deficit increases if the cost of employees increases. This year they were provided a current deficit; they did not know it would accrue. In 2013/14 they are trying to convert to the other fund which does not create liability, for which they need R3-5 million. It is a protracted process that requires evaluations and statutory requirements. They are awaiting the statutory evaluation, which is to come out between October and November before they can decide to transfer to another pension fund system.

15.   How many new employees did you employ in 2011/12 and 2012/13? In 2012/13 they employed 12 additional employees. Still looking at the sum for 2011/12.

16.   You want to tell me that 12 additional employees added a deficit of over 6 million? I am not qualified to explain how the actuaries made their calculations; the answer received from the actuaries is that when you increase the cost of employees, you increase the liability. The major [issue?] is with the type of the pension fund.

17.   What we are talking about here is the cost of the employees rather than the number of employees that have been added. That is correct .

18.   So this is about the doubling of salaries since last year? I cannot dispute what you (Chairperson Van Wyk) are saying but from the way the actuaries explained it is due to increases in the cost of employees. It is however not because of the increase in one person’s salary.

19.   On what levels are these 12 employed: junior level, middle management? The liability is attributed to the increase in salaries; the people who can best explain this are the actuaries. The salary increase is not the sole reason for the increase in employee cost. There are more reasons why the salaries increased. The following were employed in 2012/13: 1 top management, 2 senior management, 2 professionally qualified, 2 skilled and 5 semi-skilled.

20.   The AG expressed uncertainty about this entity continuing as a going concern. What are the concrete measures of how you are going to stop this from happening? (Question directed to the chairperson of PSiRA.) He could not answer and tried to direct the question to the management but was told several times to answer the question. He read p.98. He only said that he is aware that PSiRA was struggling to continue as a going concern. He reluctantly implied that PSiRA would still be able to continue running. He also responded, degrading the PC’s presentation procedure without addressing the measures to be taken to address the situation.

21.   They were asked who they tendered the rehabilitation of the building they are using, where their offices are, and the physical address. JD Marketing from Durban. PSiRA had insufficient information and were to provide information in writing by Tuesday, 22 October. (They looked at it during the tea break and responded that the value of the tender was R466 223.)

22.   Give us the nature of the fruitless and wasteful expenditure; on what it was spent on and what you did to address the issue? They hired a suitable manager for supply chain management.

23.   Why did you fail to meet the targets you set and what are you doing to address that? There is a performance monitoring committee put in place to determine the performance and make corrective measures. (They did not look at the 45th target and did not know what it was and asked for more time.)

24.   Explain why some the members of the audit committee did not receive remuneration and what is the remuneration they were entitled to per meeting? The last member of the council is employed by government and is not to be paid. The 2013/14 rate is R2 424 per hour. They could not explain the remuneration per meeting for 2012/13. Finally they got it: R2 199 per hour.

25.   You have been in court year after year with a number of people. What is the status now? No response given.

26.   They were asked to account for the increase in revenue by 24%. The response given was that they have increased the number of people (individual security officers) from which they collected fees.

27.   The Annual Report (AR) stated that there were 44 targets whereas the Annual Performance Plan (APP) had 45 targets. What was the missing target and the result of that target? They were asked about the strategies they would to employ to address the number of targets not achieved (38%). They requested that they defer the question for later but were denied. They then mentioned various action plans, one of which was to established a performance monitoring policy where progress would be monitored against predetermined objectives and identify the problem. They said they didn’t look at the target outstanding in the AP. The chairperson had to tell them that the outstanding target was “The integration of firearms systems.” They did not have the answer at that time and were asked to report back on it on Tuesday the 22nd of October.

28.   Why did they set a target lower than the performance in the previous year 2012/13? They had no response. We were told that in future the target should be based on previous performance, not below it.

29.   Explain the high labour turnover/resignations. PSiRA stated that employees left for a number of reasons, the chief of them being discontent with the salaries. They did not give other reasons.

30.   What were the disciplinary cases about? One was dismissed for accepting bribes. The other two were dismissed for absconding.

31.   What strategies does PSiRA intend to use to counter the high labour turnover? They could only provide the draft of the labour retentions strategy which was not approved by the council.

32.   How many females do you have at the top management? There were no females at top management in 2012/13. During the 2013/14 period there is one.

33.   The chairperson of the PC expressed concern over the high vacancy rate (11%) in law enforcement. What they were going to do to change the situation? They explained that they were struggling to get funds and as a result could not get more employees to fill the vacancies in their core business. They were going to verify how critical the position is before they fill the position. If the position is not critical they would not fill it. This was a direct contradiction as they had previously stated that they were aware that they were facing losses and the AG expressed reservations about them being able to continue as a going concern. They implied that they could still continue running.

They promised to fill positions within a year or two.

The Chairperson highlighted that their priorities were skewed; they were willing to pay R4 million more for rental on their building, they were spending on court cases, yet they are unable to fill critical vacancies. Rental was R13.5 million. The chairperson of PSiRA’s council tried to interject but was not permitted to do so.

34.   Explain why employees have been consulting counselors. Some have experienced abuse as children; some employees are abusing drugs and alcohol, causing problems in their families, hence the need for counseling.

35.   The inspection on security officers increased significantly due to the AFCON. Yet before and after the big events, inspections plummet. Why was priority given during big events? They had no response.

36.   What caused delays in the go-line account? The process was delayed by the consultations that had to take place. They have only recently secured Nedbank.

37.   PSiRA stated that four publications were completed. Which are these? They could not respond.

38.   What do you consider as non-compliance with PSiRA uniforms? The employer should issue a full uniform with name tags, with the name of the company and the security officer.

39.   Where on the financial statements do you account for ID cards? ID cards are reflected under stationery and printing. They want to address in the future, put this element under cost of sales.

40.   Are you in a position to give the cost of the cards in the year under review? They deferred the question for later. They are to provide this to the PC in writing.

41.   How many of the applications in the previous years have been made as the presentations only refer to the previous and current year? No response.

42.   What is the oldest application? The target is to process the applications within 90 days. The oldest applications are about over 3 years. This is because people submit insufficient information and then much time is spent contacting the person to update the information. Sometimes the applicants do not follow up. One member of the PC provided an application that has been not attended to for years, and which has received no feedback, as evidence of the inefficiency of PSiRA. They are trying by all means to clear up the applications. The PC encouraged PSiRA to reflect on changing their implementation of the 90 day rule to ensure that they inform the applicant to send in all the relevant information within the 90 day period. If there is no response from the applicant they should refer to the application as a new one for the purpose of the application process.

43.   How many forums do you have, how many times have they met and how frequently, and what was the cost involved? Four forums (Gauteng, Western Cape, KwaZulu-Natal, and Eastern Cape) have been established. They were supposed to meet quarterly but they only met twice. The cost is over R100 000, which is expected to increase with the increase of the other provinces.

44.   Did you check the firearms control act regarding security officers who carry firearms and the number of them using personal firearms if they are not competent? Did you report to the police because there seems that there is an element that PSiRA is not reporting, thus contravening the firearms act? What measures do you have in place? They do inspections once a year, unless there are complaints lodged. They report the use of personal firearms to the police.

45.   What are the results of the firearms audit? They requested the response for later since they did not have the information.

46.   There is non-compliance by the security providers who are on the database. What happens after they have been discovered? They are reported to SAPS and cases are opened against them.

47.   What is the difference between the first-time inspection and infrastructural inspection, because infrastructural inspection can also be for the first time? Infrastructural inspections are simply considered as infrastructural inspections, even if they are done the first time. Infrastructure inspection involves the inspection of the premises to see if the organisations have the capacity to hold the employees. Infrastructural inspection involves investigating the buildings to see if they meet the requirements. The first time inspections refer to the first time inspections on security officers.

48.   Why are you not following up on first-time inspections which are businesses that have not been followed up since the first inspection? They follow up once a year, otherwise based on employees.

49.   Explain why you are so far behind with the applications; for how long are you going to let them sit waiting? They committed to doing something about it.

50.   You complain that you have too few inspectors when you have achieved and overachieved your targets. On what grounds they do you say you need more law enforcement employees? They have a set target for each inspector, 10 businesses and 70 security officers per month.

51.   The AR states that you have achieved employing 10 additional law enforcers, yet another part of the part of the report says 12 additional workers and another statistic shows an increase in the number of law enforcers by 1. Explain the discrepancy? In 2011/2012 there were 127 law enforcement workers and yes 2012/2013 total is 128. 10 addition workers were employed but some left during the year. The chairperson said that the target cannot be stated as achieved when replacements were made because the target states additional, not including replacements. They state that other employees were employed from the legal services section of PSiRA to law enforcements, hence the number only increases by 1 to 128. PSiRA changed its statements and stated that the value of 12 additional workers includes other staff excluding law enforcements.

52.   Are you implying that there are other vacancies in PSiRA? No response.

53.   How many law enforcement workers were working in 2011/2012. They stated they had 52 in 2011/12 and 62 in 2012/13.

54.   Now you are pushing us into asking: how many were employed, from which posts to which posts? No response.

55.    Why are some of the programmes such as training that should be under HR included under law enforcement? Not answered.

56.   Why did you cluster 4 provinces (GP, NC, L and NC) into one section of the chart (headquarters) and compare it to 3 other provinces, because it does not make for sound comparison? They did not understand what was wrong with their methodology and continued to argue that there was nothing wrong. They eventually requested that the Chairperson, in future, gives them the proper layout for the presentation. The chairperson was concerned that this is evidence that the other provinces are overlooked.

57.   Why are two provinces not included in the analysis of the Free State and Mpumalanga? They are part of the headquarters. (This even worsened the situation, reducing the average performance.) PSiRA still remained adamant and argumentative. This was evidence that the council did not go through or question or their management processes and output and execute their oversight roles.

58.   Can you give a breakdown of the performance (the number of inspections) per province? They were unable to. They were told to provide the number of inspections per province by the end of the next day, 19th of October.

59.   What steps are taken to improve revenue growth? To increase fees of the businesses and security officers.

60.   Do your research topics identify with national priorities? Have you identified research topics related to the NDP? They admitted that they have not read the NDP and are unaware if their research topics are in line with the NDP.

61.   You received a qualified audit; why did you then record the outcome as unqualified? They suggested that it was a typing error.

62.   Why did PSiRA underspend in their law enforcement duties? They responded saying that because of the SIA court case they anticipated low revenue and therefore decided to cut down on expenditure even in law enforcement. It did not make sense to the PC that PSiRA would cut expenditure in their core duty, once again showing that their priorities are skewed.

63.   What outcomes have the research department done, which publications were stated achieved? They did not know.

64.   It took PSiRA’s research and development department a full year (2011/12) to identify topics, with full pay, so what have topics have they come up with and what progress have they made with the research? Why only two topics? In 2011/12 they identified two topics and in 2012/13 they only developed concepts on the research. PSiRA has had workshops on policing and the collection of crime statistics. One topic was the impact of PSiRA on crime prevention in South Africa. The issue of challenges with the budget was raised.

65.   Why were the grants not spent? They did not know.

66.   How many researchers are employed and at which levels were they employed, their names, their salaries, the sources and value of each of the research grant? They have two researchers, one being a senior researcher. They did not know. The Chairperson of the PC stated that they were working against the PFMA requirements that information on grants received should be made public.

67.   What is the outstanding target from the AR and what was the outcome? They did not know what it was. The chairperson had to tell them that the outstanding target was “The integration of firearms systems”.

The Chairperson concluded with reading the results of the AG. For every outcome not achieved, the AG stated that it was due to the poor leadership. This was very evident on the day the PC met PSiRA to discuss its performance. The management, including the chairperson, of PSiRA could not account for what was happening in the organisation. They did not have solid strategies to address issues that were dysfunctional such as revenue increment, staff retention, and the achievement of predetermined goals, amongst others.

A.      Information requested by the end of the meeting.

·         When council will go through and approve the labour retention strategy;

·         A breakdown of all the training content for security officers and law enforcement workers;

·         A full report on outstanding applications and the plans to resolve them;

·         A full report on the number of companies involved in contraventions, type of contraventions, and PSiRA's actions;

·         A full report on the data of firearms in the private service; and

·         A full report of all 12 appointments that were made, their level rank, and where they were appointed. 


No related


  • We don't have attendance info for this committee meeting

Download as PDF

You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.

See detailed instructions for your browser here.

Share this page: