The Committee met with the Executive and Council of the Private Security Industry Regulatory Authority (PSIRA) on its 2013/14 annual report. The first part of the briefing covered matters which were raised in the last budget briefing with the Committee and included the lease of the corporate head office, disposal of the previous head office, appointment of the CFO and contingent liability. The briefing also looked at compliance inspections carried out per provinces and among the different business sizes, enforcement inspections, criminal investigations, compliance analysis and legal services and regulatory prosecutions.
Members were particularly concerned by issues of governance in the Council and that Council members did not attend committee meetings when the Council was accountable to Parliament. Members expresed disquiet that a CFO had not yet been appointed. Members questioned how awareness around PSIRA was created, the consequences of having untrained security officers, the impact of foreign security officers in terms of intelligence gathering and pending criminal investigations and the backlog in this regard also discussed were the outcomes of research projects, the increase in active armed response businesses, cooperation with the SA Police Service’s (SAPS) Central Firearm Registry (CFR), processing of fees when companies re-registered, weapons from de-registered companies, tools to counter corruption and the process with the property lease.
The second part of the briefing looked at registration, applications processed, security officers registered, business registration per province, accredited training centres/provides and course reports. The presentation also covered human capital in terms of staff numbers and cost per programme and vacancies. Under performance information, the un-achieved targets in each programme were highlighted before moving onto governance and financial information.
The Committee wanted to know about the curriculum and grading of posts, the retention strategy and duration of fixed contracts along with the vacancy rate and increase in sundry income. Members also questioned the internal audit capacity, financial sustainability, performance appraisals and performance bonuses as well as a request on an update on the PSIRA Bill.
Introductory comments by Chairperson
The Chairperson said the Committee noted the arrest of a suspect in the Taegrin Morris[U1] matter. The Committee commended the SA Police Service (SAPS) and detectives for this breakthrough. The Committee also noted the recent high-profile shooting of Member of Parliament, Jackson Mthembu, and the unfortunate and untimeous killing of the captain of Bafana Bafana, Senzo Meyiwa. All these indicated the need to address the scourge of unlicensed firearms in SA. The Committee was recently briefed by the Central Firearm Registry (CFR) on its action plan. The Committee however believed more should be done to ensure the firearm environment was cleaned up and regulated where there was accountability. It was very important to bring violent crime down and unlicensed firearms formed part of this. Part of the solution lied in communities. Community safety and policing forums played a role in ensuring people with unlicensed firearms were made known. The problem could only be dealt with effectively with the support of the community. Going forward, the Committee would look at the Report of the CFR and call on SAPS for briefings to ensure serious crimes in SA was brought down because everyone needed a safe and secure environment.
Ms A Molebatsi (ANC) asked how many members of the PSIRA Council were present.
Mr Thula Bopela, Chairperson, PSIRA, replied that one member of the council was present, along with himself. The attendance of the other three members was unable to be obtained.
Ms Molebatsi thought this was a trend that Mr Benjamin Ntuli was the only council member to attend Committee meetings.
The Chairperson thought this was an important point given that the Council only interacted with the Committee annually. In future it was important that the full Council attended as it was part of good governance.
Private Security Industry Regulatory Authority (PSIRA) 2013/14 Annual Report Presentation
Mr Manabela (Sam) Chauke, Director, PSIRA, provided an overview of the presentation.
Looking at the matters raised in PSIRA’s last budget briefing with the Committee, five matters were outlined for attention. With the corporate head office in Centurion, the lease would expire in 2016. The Council was awaiting National Treasury to complete a feasibility study for the erection of new offices at the previous head office (Arcadia site) and the Minister would make the final decision on the way forward. With the appointment of the CFO, the Council conducted interviews and an appointment was pending while the contingent liability, annual fees were not implemented due to the interdict and contingent liability for fees would be provided.
Adv Philani Mthethwa, PSIRA Deputy Director: Law Enforcement, said compliance inspections were conducted at security service providers with a total of 27 073 inspections for the 2013/14 financial year. This was an increase in inspections from the 23 827 in 2012/13. The breakdown of numbers for the provinces was also provided. In terms of business size, 1958 inspections were carried out on small businesses, 365 on medium businesses and 476 inspections on large businesses in the previous financial year.
Adv Mthethwa explained that a total of 2015 enforcement inspections were carried out in 2013/14 while 301 criminal investigations were completed. 740 criminal investigations were reported and 1740 criminal investigations were pending.
Compliance analysis was also carried out looking at the areas where there were contravening activities. This was in the areas of deploying unregistered security officers, deploying untrained security officers, failure to pay annual fees and failure to pay minimum wages. There was also non-compliance with uniform and non-compliance with PSIRA ID cards.
Turning to the compliance analysis of firearms, 313 security businesses used firearms, 48 businesses allowed security officers to use their own firearms, 345 security officers carried firearms, 55 security officers used personal firearms and 55 businesses were found to be non-competent or could not submit competency certificates.
Adv Mthethwa indicated that 1119 applications were received from the CFR, 370 applications were declined and 749 applications were recommended for firearms.
Turning to legal services, and regulatory prosecutions, in 2013/14, PSIRA received and perused 1375 dockets, 1366 charge sheets were issued, 1039 summons were issued, 160 cases were finalised at code of conduct enquiries and 1303 cases were finalised through settlement. The settlement numbers for provinces were also provided. A total of seven applications for exemption were received by PSIRA of which one was granted and two cases were dismissed.
Mr D Twala (EFF) asked the Chairperson of the Council to enlighten the Committee on the state of the Council itself – were meetings frequently attended? What was the attendance of council members at meetings like?
Mr Bopela replied that there were five Council members including himself and all were engaged in income-generating work. As a result people were very busy. The corporate secretary for the Council tried very hard to schedule meetings in advance and correlate diaries of all Council members. He admitted this was not easy – he did not choose the members of council. This was done by the Minister of Police and Cabinet. He believed the members tried to honour their commitments but there were always apologies but members always received full reports on the meetings.
Ms Molebatsi thought the explanation was very unacceptable. She did not want to compare people but Mr Ntuli was also employed but he availed himself to attend the Committee meeting.
Mr Benjamin Ntuli, Council Member, PSIRA, said Council members attended scheduled meetings and then a quorum was formed. The problem was with ad-hoc and unscheduled meetings.
Mr P Groenewald (FF+) requested the meeting attendance lists of the Council.
Mr Bopela replied that he would provide this at the earliest opportunity as he did not have the register with him currently. All meeting attendance was recorded.
Mr Groenwald was happy to hear this could be provided
Ms L Mabija (ANC) wanted to understand if the other three members of the Council only attended scheduled meetings and no other meetings. She was concerned that this hindered work. She wanted more insight into the modus operandi of the Council.
Mr Bopela felt the only remedy would be for the Minister to only appoint Council members who had no other employment so that there would be no excuse whatsoever to attend meetings. The situation was such that the Council had no option but to accept the members decided on by the Minister. It had been underlined to Council members that when they took on the duty, they were obliged to attend Council meetings and make inputs. The regulations in the PSIRA Act said that if a member of the Council was unable to attend two meetings in succession, a decision needed to be taken about the behaviour of that Council member. The problem was that members would not miss successive meetings but attend alternative meetings. He would examine whether there was a serious problem of attendance.
The Chairperson reiterated the Committee’s view that all Council members needed to be on board. There were problems of board with other entities and the Committee wanted to ensure that there was attendance of all meetings and honouring commitments to Parliament by all boards in the cluster.
Ms Mabija wanted to know why only four provinces were covered under prosecutions.
Adv Mthethwa explained that Gauteng, North West, Northern Cape and Limpopo provinces were serviced by the prosecutions stationed at head office. This was a cost effective measure.
Mr Z Mbhele (DA) questioned the challenges that seemed to exist around record keeping and documentation. He asked this because the AG noted a lack of documentation during investigations conducted. Was this a system or staffing issue?
Ms M Mmola (ANC) asked how awareness of PSIRA would be achieved.
Ms Mpho Mofikoe, Deputy Director: Communication and Training, PSIRA, answered that the target was to really segment what the industry was about especially to the direct customers. This was not limited to the elite but to the township as well. In June, two campaigns were carried out to enlighten people about PSIRA and opportunities that existed in the private security industry.
Ms Molebatsi asked about the progress made with regulations. She also wanted to know what was being done about the pending appointment of the CFO. What were the consequences of having untrained security officers in a company? Who trained investigators?
Adv Mthethwa answered that companies without trained security officers were fined as it was a very serious matter especially if there were serial offenders. Letting untrained officers in public was like unleashing an untamed animal among sheep. With the training of investigators, these trainers were recruited and preference was made to those with experience like ex-police members, forensic investigators and those with enforcement experience. In-service training was also offered with carious courses in the field of investigation.
Mr Groenewald noted that under criminal investigations/cases, the number of pending cases in the 2012/13 financial year had been carried over into the 2013/14 financial year. This would mean there was a backlog and he wanted more information on this.
Adv Mthethwa admitted that there was a problem in this area but highlighted that the matter was not only in the hands of PSIRA but also with SAPS and the NPA. PSIRA had vowed to follow the progress of cases and it was working on the problem experienced in criminal investigations so that the 2014/15 financial year results would not be the same.
Mr Groenewald asked how many of the new reported cases were finalised or was it correct that no cases were finalised.
Adv Mthethwa replied that he would provide a written response to the Committee on which exact cases were finalised.
The Chairperson also wanted to know when the appointment of the CFO would be made. The position of CFO was critical and some of the issues could have been avoided in the audit opinion if there was a CFO in place. He wanted a clear date for when this appointment would be made. He wanted to know what “special assignments” was referring to and the budget set aside for this. For the research conducted, he questioned the outcome of the research and if there were any reports in this regard.
Mr Bopela responded that two problems were encountered with respect to the appointment of a CFO. The first was a South African problem. He had read somewhere that 80% of CVs were either exaggerated or there was no basis for the claims of qualifications. The CFO appointed in 2012 was found to have serious discrepancies on his CV. This triggered a background check on all appointments and at times there was reluctance on the part of recruitment agencies or the institution from which the qualification was claimed to be obtained. Recently three candidates were considered to be qualified for the position of CFO. The panel was very impressed by a certain candidate but the background check proved the degree on the CV did not exist and the person was not appointed. The next candidate named a vice-chancellor of a university as a reference. When the vice-chancellor was approached, he was reluctant to provide a reference. After looking through CVs sent through by recruitment agencies with the audit committee as late as yesterday afternoon, a candidate for the position of CFO was chosen but this was subject to a background check. By next week the background check would be complete and an appointment made.
Ms Molebatsi accepted that the problems were beyond the control of the Council but the appointment was taking too long and was hampering the activities of PSIRA because this was a key position. She asked this be speeded up.
Mr Bopela said there was a woman who was appointed on a six months basis to take over the duties of the CFO who had run away once he was fired. This woman did a sterling job of preventing PSIRA from getting a disclaimer or qualified audit opinion. This contract was coming to an end but by next week there should be a CFO in place. He was on top of the problem in terms of risk management to not leave the entity without a CFO. He accepted the criticism that the process was taking long but it was out of the Council’s hands.
Mr Groenewald asked if this was an affirmative action position.
Mr Bopela explained that affirmative action was only looked at if there was a black candidate and a white candidate who had performed almost equally and a decision was made when the equity of PSIRA was looked at. If there was black woman and a white male who had both performed well, the black women would go forward.
The Chairperson said credible headhunting agencies were available and he trusted the Council would move with the issue as fast as possible because a CFO was needed.
On the issue of research, Ms Mofikoe explained the two research topics identified were completed and the results were published. There was a great concern to increase the database and bring integrity to it. Sectoral determination was also critical and research was also done in the electronic sector to acquire more knowledge and training in the sector. Research was also conducted on the funding approach to be aligned to international standards.
Mr Bopela added that the State Security Agency (SSA) reported that some private security companies were carrying out intelligence gathering activities and PSIRA did not have the capacity to counteract activities of security companies doing this. SSA was the organisation for counter-intelligence.
Mr Chauke explained some of the assignments related to the appointment of the internal auditors but details could be provided to the Committee.
The Chairperson emphasised the importance of good governance and duality of roles which the Council needed to look at going forward. He noticed the increase of 66% in active armed response businesses. This was a big increase – would PSIRA be able to deal with monitoring this sector? Were there any challenges with the CFR in setting up the liaison committee?
Adv Mthethwa said there were no problems of cooperation with the CFR. Business firearm inspections would be done quarterly based on the information received from CFR. With the 66% increase, he noted there was a high number of armed response businesses registered but not all business registering as armed response actually rendered this service or currently had firearms. Lastly, he added that there was also a Memorandum of Understanding (MOU) with the CFR on matters relating to firearms.
Ms Molebatsi asked which supporting documents were not available to the AG. If a company withdrew for non-payment of fees and at a later stage re-registered, what happened in this case?
Adv Mthethwa explained that the supporting documents dealt with inspections and was accounted for as a lost book lost by one of the inspectors. With the companies applying for registration again, these companies would apply for re-instatement pending the debt being cleaned up.
Ms Mabija thought the world was suffering with bribery and asked if PSIRA had tools to prevent corrupt personnel.
Mr Chauke answered that PSIRA’s recruitment process was very robust and people with criminal records would be eliminated. Security clearance carried out by SSA was conducted on every employee at PSIRA. This was where unwanted personalities were picked up.
Mr Bopela added that the problem of bribery was worldwide and not limited to SA. Everyone had a price and maybe if the price was known, bribery could be eliminated. However this was not possible but one needed to try. At times, corrupt activities began only once the employee was in PSIRA. It was therefore important to check on employees all the time and not only at the recruitment phase.
Mr Twala was heartened that there was a degree of interface between PSIRA and SSA. He asked if PSIRA had ever undertaken a study on intelligence to establish the impact of non-South Africans in the private security business particularly at a guarding level. This was a key level for the gathering of intelligence because of close proximity.
Mr Bopela responded that there was a degree of cooperation between PSIRA and SSA but there was a boundary with SSA operating on a “need to know” basis. Meetings were held and were considered adequate. This interaction was helpful with PSIRA finding out things from SSA on what was happening in the private security industry which they otherwise would not know. The Department of Home Affairs could really assist in the problem of non-SA guards. These guards also often paid a lot of money to acquire SA IDs.
Mr Chauke said that an impact study was not conducted. At one stage, a desktop study was attempted but there were a number of challenges. For one, SAPS did not collect such information on whether arrested security officers were foreign nationals or not. Perhaps such a study needed to be attempted in the future.
Mr Groenewald asked what was happening with the property lease in Arcadia.
Mr Chauke said PSIRA was in talks with Treasury from time to time. It had also raised concerns that time was running out but PSIRA maintained it could be done or a building built in the time remaining before the lease expired.
The Chairperson asked that PSIRA fast track this process with Treasury so that it was not out on the street come 2016.
Ms Molebatsi asked of PSIRA offered internships. If it did, she sought more information.
Ms Mofikoe replied that internships were offered and the programme was working very well with interns contributing in assisting inspectors. Key performers were identified amongst the interns to be retained.
Ms Mmola wanted to know about the number of inspections for the different security business sizes.
Adv Mthethwa indicated that small numbers were not particularly targeted but the large numbers came from small business where there were less than 50 employees. The medium sized business employed between 51 and 100 people while the large businesses employed more than 100. The large businesses were far less in number and it was noted that new companies also fell within the small business bracket for inspections.
Ms Molebatsi asked if inspections involved checking hard bodies or just the record of businesses.
Adv Mthethwa said physical inspections were carried out and sites were inspected at random at times. If the records did not match what was found at the physical inspection, this was a contravention and would be dealt with. This could even lead to a criminal process where a charge was laid against such businesses.
Mr J Maake (ANC) asked what happened to the weapons from de-registered companies. Were there quotas in terms of foreigners in the industry or could companies employ anyone? He suggested PSIRA ask the Committee to question what was happening with Treasury in terms of the property lease because this was within the Committee’s right. If this was not done, the same questions would continue to be asked.
Mr Bopela knew why the issue of the lease was taking this long and why it would never be solved. The fact of the matter was that the amount involved in the new building would be very hard to justify when looking at the current amount paid for rent.
Adv Mthethwa looked at the number of employed security officers for 2013/14. The figure was 487 058. Of these, 393 034 were male and 94 024 were female. The registered active (employed) security officers had increased by 9.35% since 2012/13. With the registration of security officers, Gauteng was leading the provinces with 196 530 registered security officers for 2013/14. Gauteng was also leading the provinces with the number of business registered totalling 3053.
Moving to training, there was a total of 464 accredited training providers up from 406 in 2012/13. Again Gauteng was leading the provinces with the most accredited training providers totalling 173.
Mr Chauke discussed human capital looking at the composition of permanent staff per programme: 59.24% of staff was employed in law enforcement, 19.43% in finance and admin, 15.17% in communication and 6.16% in corporate services.
Turning to the vacancy rate, there was a 24% vacancy rate in law enforcement, 35% in finance and admin, 14% in communication and 19% in corporate services. During the year, 28 appointments were made and there were 23 terminations. Most of the vacancies were experienced in the skilled and technical field. The total number of vacancies for the year under review was 75.
For the reasons for termination, this included resignation, dismissal, retirement and expired contracts. At least 37 disciplinary actions were taken during the ear under review including matters related to formal counselling, 10 verbal warning, 8 written warnings, 7 final written warnings and 6 dismissals.
Mr Chauke moved on to performance information highlighting where targets were not achieved for each programme. The presentation was concluded by looking at governance and financial results
Ms Molebatsi asked if the curriculum had changed in terms of the grading of posts. She wanted to know if PSIRA had a retention strategy and the duration of each of the 12 fixed contract positions.
Ms Mofikoe responded that the curriculum had not changed and the old grading system was still being used which was not aligned to the national qualification framework. This alignment needed to happen to establish the minimum entry into the private security sector and how progression from entry level to director level would occur for a professional industry.
Mr Chauke indicated there was a retention strategy which was recently approved by Council and the implementation plan would follow. The matter could go either way in that PSIRA trained people and thereby retained them or trained people which made them competitive and move to other sectors. Nevertheless there was a retention strategy. There were fixed term contracts ranging between four-six months per contract. Most were hired permanently thereafter.
Ms Mmola was concerned about the large discrepancy between male and female security officers. She asked what strategy was in place to fill all the vacancies and if the necessary funds was available for this.
Mr Chauke answered that the entire structure was not looked at in terms of vacancies and this was factored into the budget. There were many things to balance when recruiting to fill vacant posts such as priority positions critical to operations and the impact on the payroll to keep it at a minimum threshold. The impact on the pension fund would also needed to be considered so that liability was not increased especially given the kind of pension fund PSIRA had which transferred the liability of the excess to PISRA if there was a shortfall in terms of the deficit. Of course there was money to recruit but there was a careful basis on which recruitment was conducted so that it did not affect the budget and threshold. Quite a lot of positions had been filled this year.
Mr Mbhele sought detail on the large increase in sundry income. He asked what recourse there was for someone with a criminal conviction from more 20 years ago arising from a mistake but was now trying to make a livelihood after cleaning up their act. It was encouraging to see the strengthening of internal financial controls but he asked if the audit company contracted was doing any internal capacity building so that there would not be a permanent reliance on an outsourced audit service.
Adv Mthethwa explained that an administrative rejection could still be taken up on appeal. The appeal, which was currently free of charge, was in the hands of the Minster who appointed the appeal committee to decide on such matters.
Mr Chauke was still waiting for data on the sundry income information. The internal audit was outsourced because PSIRA was a smaller organisation so the capacity would be built slowly as the organisation grew – this had already begun. A risk manager was hired and the audit unit would be transferring skills so that there was full capacity within in PSIRA to deal with internal controls.
Mr Groenewald asked how many interns there were, what salaries they were paid and what their job description was. He questioned the reasons for resignation and nature/offences involved for disciplinary matters mentioned under labour relations management.
Ms Mofikoe answered that during the 2013/14 financial year, PSIRA had 20 interns.
Mr Chauke indicated there were 20 interns at the beginning of the year. They were being paid a stipend of R3500. There were internships and learnership programmes and the individual would get paid according to this.
Ms Mofikoe explained that resignations related to people complaining PSIRA was not paying sufficient salaries and then sought greener pastures. Other people simply moved on to other opportunities.
The Chairperson asked about the sustainability of financial management. Who was going to determine internal audit projects? Would this be done by the audit committee or the CFO as this was quite critical. Was there a set agreement between PSIRA and the audit company on the outcomes? He was concerned about the 50% vacancy rate in the financial environment and that the key issues in the AG’s report would not be addressed. What measures were in place to ensure there was control in the financial environment?
An official from the audit committee noted the audit plan was recently approved after being revised. A new risk management exercise would also be developed going forward.
Mr Maake noted his questions relating to weapons from de-registered companies and quotas of foreign employment were not responded to. He also wanted to know what “course reports” referred to.
Ms Mofikoe explained “course reports” referred to training required and the grade the person was qualified for. The reports went into detail around whether the person went into the proper training required for the particular grade.
Adv Mthethwa explained that the licensing of firearms was with SAPS. PSIRA assisted in assessing whether the companies had the capacity for firearms and then made recommendations to SAPS. In terms of the Firearms Controls Act, if businesses were no longer using firearms, it had the duty to inform SAPS. PSIRA was trying to assist SAPS with this obligation when companies were de-registered. These arms needed to be returned to the dealers but companies were reluctant to do this because it was up to the dealer how much money was given in return for the firearms. At times, the money would only be paid until the firearm was purchased again by someone else. The Act also spoke to storage facilities at SAPS but there were challenges in that currently there were no such facilities. With the employment of foreigners, the 1987 Security Officers Act allowed people with working permits to be security officers. The current Act required that foreign security officers required permanent status in SA. There were still remnants of non-SA citizens still registered with PSIRA and eligible to be employed. The current amendments to PSIRA Act, once it came into law, would not allow non-South Africans to be employed as security guards.
Ms Molebatsi asked if the grading of officers per area was taken into account when professionalising PSIRA.
Adv Mthethwa replied that sectoral determination was still in place in the absence of the bargaining council in the guarding sector of the security industry. Currently there were only three areas but there would be further engagement when the current sectoral determination changed next year. PSIRA was not involved in these talks as it was only for the Minister and role-players.
Ms Molebatsi asked if this grading formed part of PSIRA’s investigations to check if companies were graded according to the area. She knew of companies trying to abuse the sectoral grading process.
Adv Mthethwa indicted that the grading applied more to the payment of posts. Abuse of the system did happen but this was checked during investigations. There were also joint operations with the Department of Labour who was more capacitated in this regard
Mr Twala asked what information PSIRA’s performance appraisals provided.
Ms Mofikoe said the performance assessments were critical to the Executive and Council. Gaps were identified through these assessments and then how to close these gaps could be explored. It was important for the Authority to know what was happening especially in the surrounding areas in order to develop. Training was a particular area identified in this regard.
The Chairperson sought an update on anticipation of when the PSIRA Act would be signed. Once it was signed, was PSIRA ready to move with the Act?
Mr Chauke met with the Civilian Secretariat and he was informed the Bill was sent to the President two weeks ago along with recommendations. He did not have the details of these recommendations.
Ms Molebatsi asked if the integration of PSIRA and SAPS firearm registry had been completed.
Mr Chauke replied this had not taken place. In the past, an electronic interface was discussed but there currently was cooperation to regulate firearms in the industry.
The Chairperson asked how many staff members received performance bonuses.
Mr Chauke explained there was a provision for this but the bonuses were actually never paid. It was also not true that PSIRA personnel received an 8% salary increase.
The Chairperson found there was improvement in PSIRA in comparison to last year and the unqualified audit was a good sign. Moving forward, emphasis needed to be placed on good corporate governance, participation/attendance of the Council in Committee meetings to account, proper interview to be held with all candidates for the CFO position, 50% of vacancies in finance to be filled as a priority, move forward with Treasury on the issue of the building lease, jack-up investigations and following up with the audit committee.
The meeting was adjourned.
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