Special Investigating Unit on its 2015/16 Budget and Strategic Plan

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Justice and Correctional Services

28 April 2015
Chairperson: Dr M Motshekga (ANC)
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Meeting Summary

Special Investigating Unit (SIU) Budget and Delivery Plans for 2015/16

The Special Investigating Unit (SIU) reported that there were currently 45 active investigations covering 53 proclamations, including extensions or amendments to some proclamations. Revenue was projected to increase from R445.9 million in 2015/16 to R512 million in 2017/18, with an average growth rate of 7.1% due to inflation. Total expenditure was projected to increase by 14.8% from R445.9 million in 2015/16 to R512 million in 2017/18 mainly due to the targets set for the Medium Term Expenditure Framework (MTEF) period. Of the total expenditure, 60% was allocated to compensation of employees and 40% was reserved for support functions and investment in capital projects as defined in the Strategic Plan.

The target for Potential Cash/Assets Recoverable was R200 million and this had been surpassed. The most significant contribution was from the Gauteng Department of Health investigation for three forfeiture orders to the value of R828 million. Other contributions came from Acknowledgement of Debt (AOD) documents that were signed. The target for the Actual Cash/Assets Recoverable was R100 million and this had been achieved. The Department of Rural Development and Land Reform (DRDLR) investigation secured final forfeiture orders to the value of R111 million. R21 million had also been recovered by the AOD Enforcement Section of the SIU on behalf of various state institutions from debtors that signed AODs. Four civil matters were instituted in court by the SIU for the proclamations by the Department of Communications (Media Corner), DRDLR and the State Information Technology Agency (Gijima), the Department of Public Works (Nkandla) and the Universal Service and Access Agency of South Africa (USAASA). To date, 160 matters had been referred to the NPA, six fraud related matters had been referred to the Asset Forfeiture Unit (AFU) and 3 715 disciplinary referrals had been made to state institutions. The Eskom investigation team had identified more than 3 400 officials who had contravened Eskom policies and disciplinary action had been recommended. It was important to note that all the figures provided were unaudited. 

The Committee debated the SIU’s reporting to Parliament. Some Members felt that it was important for the SIU to provide the Committee with a report outlining the status of ongoing investigations. Other Members disagreed and said it seemed pointless for the Committee to invite the SIU to provide a report on cases under investigation that could in essence not be discussed since most of the cases would be before court and thus sub judice. Members focused on the relationship between the SIU and the National Prosecuting Authority (NPA) and the extent to which the SIU remained involved in cases referred to the NPA. The Committee also asked questions around the establishment or reactivation of the Special Tribunal, the turnaround times of the SIU and the status of the civil proceedings in the Nkandla matter.

Meeting report

Special Investigating Unit (SIU) Budget and Delivery Plans for 2015/16

Mr Gerhard Visagie, Acting Head, SIU, said the SIU’s ultimate strategic outcome was to uncover corruption, malpractice and maladministration and to win the war against these practices. The SIU had two strategic objectives:

-Quality forensic investigations, conducting civil litigation and assisting with other processes

-Developing and maintaining strategic partner relations

There were currently 45 active investigations covering 53 proclamations, including extensions or amendments to some proclamations. There were 33 reports covering 41 proclamations which were in the process of being prepared for submission to the President with 12 ongoing investigations. There were nine motivations for proclamations that were with the Department of Justice and Constitutional Development. The SIU was preparing six motivations for proclamation for submission to the Department of Justice and Constitutional Development. For strategic objective one, 12 proclamations would be issued for 2015/16 with a potential recoverable value of R220 million in cash and/or assets and with 15 civil matters instituted in court or the Special Tribunal. For strategic objective two, a projected 45 referrals would be made to the National Prosecuting Authority (NPA).

Revenue was projected to increase from R445.9 million in 2015/16 to R512 million in 2017/18, with an average growth rate of 7.1% due to inflation. Total expenditure was projected to increase by 14.8% from R445.9 million in 2015/16 to R512 million in 2017/18 mainly due to the targets set for the Medium Term Expenditure Framework (MTEF) period. Of the total expenditure, 60% was allocated to compensation of employees and 40% was reserved for support functions and investments in capital projects as defined in the Strategic Plan.

Mr Visagie gave an overview of the staff complement and the organisational challenges. These challenges included instability due to the constant change in leadership and the inconsistent interpretation of the SIU Act by the NPA in terms of referrals. The process to set up the Special Tribunal was still to be dealt with and experienced lawyers were not readily available and it was a challenge to recruit such skills. There was a culture of non-payment by state institutions the SIU were investigating and it might result in a cash flow challenge for the organisation. This matter was being closely monitored. Proclamation flow, possible failure to achieve expected targets and failure to coordinate work within the partner relations were identified as risks to achieving the strategic objectives. In mitigation, the SIU would identify and motivate for proclamations, continue to improve operating methodology and secure quality skill/specialists for investigations. Furthermore, expectations would be managed through effective communications and meetings with relevant entities would be targeted to ensure practical cooperation and to peruse protocols to regulate relationships.

Highlights for the SIU:

-The target for Potential Cash/Assets Recoverable was R200 million and this had been surpassed. The most significant contribution was from the Gauteng Department of Health investigation for three forfeiture orders to the value of R828 million. Other contributions came from Acknowledgement of Debt (AOD) documents that were signed.

-The target for the Actual Cash/Assets Recoverable was R100 million and this had been achieved. The Department of Rural Development and Land Reform (DRDLR) investigation secured final forfeiture orders to the value of R111 million. R21 million had also been recovered by the AOD Enforcement Section of the SIU on behalf of various state institutions from debtors that signed AODs.

-Four civil matters were instituted in court by the SIU for the proclamations by the Department of Communications (Media Corner), DRDLR and the State Information Technology Agency (Gijima), the Department of Public Works (Nkandla) and the Universal Service and Access Agency of South Africa (USAASA).

-To date, 160 matters had been referred to the NPA, six fraud related matters had been referred to the Asset Forfeiture Unit (AFU) and 3 715 disciplinary referrals had been made to state institutions. The Eskom investigation team had identified more than 3 400 officials who had contravened Eskom policies and disciplinary action had been recommended. It was important to note that all the figures provided were unaudited. 

Discussion

The Chairperson asked the SIU delegation to attend to the questions they could and to send written responses to the Committee if some of the answers were not readily available.

Adv S Swart (ACDP) asked why the consultants’ item for the Anti-Corruption Task Team (ACTT) had been removed from the expenditure of the SIU. He referred to the importance that the Committee was furnished with a report of the cases under investigation and he asked for comment in this regard and the status on the Nkandla investigation. Whilst it did not seem to impact the budget of the SIU, state institutions being investigated not paying their fees, was clearly a problem. He asked whether the lack of payment did not frustrate the work of the SIU, because the legislation had been amended to ensure this did not happen. He asked how long the process took from the point that corruption was alleged to the motivation to the Department of Justice and Constitutional Development to the proclamation by the President. Delays could be a problem area in finalising the good work done by the SIU.

Adv Visagie replied that ACTT consultants were an internal administrative issue, because in the past the Criminal Assets Recovery Account (CARA) funding was made available to the SIU to procure consultants for ACTT. It led to various practical difficulties in the supply chain management process to obtain these consultants and it resulted in potential irregular expenditure for the SIU which Adv Vas Soni (ex SIU Head) in particular was not happy with. Adv Soni then insisted that this function be performed at a different level and the funding was returned. There was an upcoming meeting within the next week with Adv Du Rand of the Department who was the administrator of the CARA funding as well as with a representative from National Treasury to find a mechanism to allow ACTT to access their own funds and to procure their own consultants. It was an intrinsic part of their success to be able to procure forensic accountants and other specialists to perform their functions. The removal of consultants from the SIU budget did not mean that ACTT would not be able to procure these consultants because it was an internal logistical supply chain management matter that prompted the removal of the item from SIU’s budget. Reporting to Parliament remained a particular difficult issue for the SIU and the Judicial Matters Amendment Act was being followed with interest in terms of whether it would empower any interested party, even outside of government to demand information from the SIU, and in particular what information should be provided. The SIU had no hesitation to reveal outcomes already in the public domain where criminal and disciplinary referrals had been made. It was very difficult however to divulge information on ongoing investigations and it was not appreciated by the Presidency. In the proclamations it stated that reporting should be done to the Presidency. In the past, under Adv Willie Hofmeyer (previous SIU Head), the SIU was fairly free to report on ongoing investigations, but that was stopped by Adv Soni. The SIU’s policy on the disclosure of information would be regulated in line with the outcomes of the Judicial Matters Amendment Act.

The Chairperson interjected and said it was not correct to say that the SIU did not disclose information because of the attitude of the President.

Adv Visagie agreed and said it had not been his intention. He personally agreed that it did not make sense to divulge information on ongoing investigations and it was not in the best interest of justice to reveal information into the public sphere if the investigations were still ongoing. Action proceedings had been instituted in terms of the Nkandla investigation with no trial date set yet. Unfortunately civil court proceedings, particularly action proceedings, were often protracted. Departments not paying fees did have the potential of hindering investigations, because it limited the SIU’s capacity to appoint qualified staff to deal with matters. It had improved over the last six months, but any intervention form National Treasury in this regard would be appreciated. The time it took from the receipt of an allegation to a published proclamation varied, because it depended on the type of allegation. In some instances, allegations had no substance and when the matter fell within the exclusive competence of the province, recommendation or at the very least a consultation with the premier of the province was needed, which might take a while. The time concern used to be a major problem, but the SIU had a very good working relationship with the Department who did most of the logistics and in appropriate instances, a proclamation could be published within a period of two weeks. This process could be anything from two weeks to three to four months depending on the available information.

Adv Swart referred to the reporting to Parliament and said it was very clear that Adv Soni broke from accepted practices and breached Section 4 of the Judicial Matters Amendment Act. The Committee did not want to know details of investigations that would prejudice investigations, but would want a list like Adv Hofmeyer provided in the past, showing the possible amount involved and how far the investigation was. This could be done on a quarterly basis and it was in line with Section 4, which would not be amended.

The Chairperson asked what purpose would such reports serve.

Adv Swart replied Section 4 of the Judicial Matters Amendment Act prescribed that reporting to Parliament should be done twice annually at the least.

Ms G Breytenbach (DA) said the SIU had been in existence since 1996 and she asked why the difficulty in interpretation of the SIU Act by the NPA was only highlighted now. If it had been highlighted before, she asked when it was discovered and why it had not been dealt with. She wanted to know what became of the SIU’s interest in a matter once it had been referred to the NPA. She asked why collecting monies were not part of the strategic objectives of the organisation. The targets for the 2015/16 financial year had been more than halved and she asked for comment, especially concerning matters referred to the NPA. The USAASA matter had been referred to the NPA seven years ago and there had been no progress.

Adv Visagie said referrals to the NPA did not used to be a problem and referrals were done in terms of the SIU Act. About two years ago, monthly meeting with the MPA was stared to discuss matters of mutual interest. A difference in opinion arose between members of the NPA and the Head of the SIU at the time on a rather simple matter as to who should open the docket at the police station. There was somewhat of an impasse on that particular point. This issue had now been addressed and the SIU had undertaken to lay the charges at the police station after the NPA had indicated that a prosecution would be instituted. It should never have become an issue that impacted the work the way it did and it would not be a problem in the future. It should not be necessary to follow-up on referrals, because the onus was then on the NPA to inform the SIU of development. It was good practice to enquire from time to time. Referrals by the SIU to the NPA usually just showed that an offense might have been commissioned with supporting documentation attached. In the referral letter to the NPA, the SIU stated that when their report was submitted to the Presidency, this referral would be mentioned and that the SIU should be advised of the fact, should the matter be finalised in the meantime so that it could be included in the report to the Presidency or in a supplementary report to the Presidency. The collection of money did not rank high in the last review of the SIU’s strategic objectives. It was a diminishing problem and the collection rate had picked up significantly. There was not a problem when doing major investigations, but collecting becomes a problem in terms of the smaller investigations done by the SIU. Targets could only be based on past performances and it was much easier to set lower targets and justify overachievement. The USAASA matter dated back to 2008 and it was an unreasonably long time for a matter to be finalised. The SIU had handed everything over to the NPA and the South African Police Services (SAPS) and looked forward to the matter proceeding to the trial stage in the foreseeable future.

Ms Breytenbach proposed that the SIU revisit the way the targets were revised.

Mr W Horn (DA) said the SIU reported to the Committee in October 2014 that a process would be set in motion to establish the Special Tribunal, but this was not reflected in their targets or in the Annual Performance Plan (APP). Turnaround times had also been identified as a priority by the SIU in the past and the 2014/15 financial year had a target to finalise the 32 proclamations by the end of the current financial year. He asked how many of those proclamations had not been finalised. The Committee might want to look at strengthening the oversight role of Parliament over the SIU legislatively. The mere fact that proclamations originated from the Presidency could not imply that only the Presidency should be reported to. Whilst the Committee did not need details on ongoing investigations, the public purse funded the SIU (57%) and Parliament would have to fulfill its duty of financial oversight and by implication also oversight in terms of the effectiveness of the institution. In terms of the Nkandla matter, when the Committee met with the SIU last year, it was indicated that civil actions would be instituted against one of the possible parties involved. He asked if any other party had been joined in the civil action and whether pleadings had been closed on this matter.

Adv Visagie replied that ever since the amendment of the SIU Act in 2012, it had been the intention to motivate for the reintroduction of the Special Tribunal. It was all the SIU could do because it had to be activated by the President by way of proclamation. It was debatable whether it existed or not currently, but it was dormant if it did exist. It had always been the understandings that if there was a sufficient case load of matters due to proceed, it would be motivated for. That had not been the case for the last year. Of the 33 presidential reports in the process to be finalised, about 16/17 had been finalised internally and would be presented to the Presidency in the next month. The SIU had not been able to deal with each and every one of the old matters. For instance, there were proclamations to investigate procurement at the Department of Public Works (DPW) over approximately six years. There were large numbers of transactions of which some had been finalised but it was a “never ending supply of matters” that had to be dealt with. The SIU wanted to get to the stage where work was only done on “fresh” matters and it was major target in the forthcoming year. The status of the Nkandla matter would be provided for in writing. So far, no other parties had been joined as yet and Adv Visagie wanted to make sure of this fact and the pleading status before reporting to the Committee.

The Chairperson asked for clarification on whether the activation of the Special Tribunal was solely dependent on the case load.

Adv Visagie replied that the Special Tribunal was a specialist court that had jurisdiction to hear civil matters emanating from investigations by the SIU. It would only make practical sense to have a dedicated specialist court if it was warranted bt sufficient case load and that was a decision for the Executive.

Ms C Pilane-Majake (ANC) congratulated the SIU on the work done and applauded the drastically reduced use of consultants. She referred to SIU’s challenge to find experienced lawyers and she asked if only lawyers were needed since the SIU did investigative work. She referred to progress reports and said politicians used these reports in debates which put people at loggerheads and most of the time the finished product was opposite to what was being debated in the public space. People had a right to information, but they also had a right to truthful information. Although the SIU investigations mainly focused on government departments, she asked whether these investigations had not come up with a link to address some of the issues (crime, xenophobic attacks, etc.) South Africa was currently facing.

Adv Visagie said experienced lawyers were highlighted because the renewed focus of the SIU after the 2012 amendments was on the legal outcomes of civil litigations, criminal referrals and disciplinary referrals. Lawyers had been repositioned in the organisation where they played a more controlling role in regulating the outcomes of various projects. Other skills were also needed and the SIU employed a significant number of people with a background in the SAPS and accountants and auditors and could do with a lot more. In fact, an organisation such as the SIU should have a high level of specialised skills inside the organisation to preserve the reputation of the organisation. The SIU currently had no consultants working for the organisation, but specialist services were sometimes needed for specific projects. A proper supply chain management process was then followed to appoint service providers.

The Chairperson said it was still not clear what the Committee wanted to ‘discuss’ if a matter was still under investigation. Matters before the court were sub judice and not to be discussed anyway.

Adv Visagie replied that it would be most helpful if the Committee had its own discussion and gave the SIU some guidance on what would be expected in terms of reporting to Parliament. Mentioning names could seriously damage reputations and it was the sort of situations the SIU wanted to avoid. The Head of Communications at the SIU, Ms Sefura Mongalo, was also in charge of knowledge management, which was basically noting down experiences in order to learn form best practices, not just for the SIU, but also for others to learn from. It was relatively new (six months) and the SIU had never had proper research capacity.

The Chairperson said South Africa had a pool of unemployed graduates that could be trained as forensic investigators.

Adv Visagie said the SIU had a programme specifically aimed at growing the pool of forensic lawyers. The SIU had a large number graduates working as forensic investigators with degrees in various disciplines. 

Mr M Maila (ANC) said the SIU received an unqualified audit opinion with matters of emphasis. He asked what the SIU was doing to address those matters raised by the Auditor-General.

Ms Nthombi Mothibidi, CFO, SIU, asked for an opportunity to provide the Committee with a written response. A big issue that had been previously identified was the instability that the lack of a long-term CFO created in the organisation.  This had been addressed with the hiring of a permanent CFO.

Ms Pilane-Majake referred to the human resources of the SIU and said senior management was still white male dominated. It should be looked at to create a transformed balance, because it seemed the bulk of women were still classified under the semi-skilled category.

The Chairperson asked if university qualifications really laid the foundation for the type of people the SIU needed to assist with the transformation of the organisation.

Adv Visagie replied that the organisation was well represented in the senior management meetings and this figure was somewhat skewed by the fact that senior professionals and programme managers were included in senior management. For historical reasons, particularly in the pool of lawyers, that has been with the organisation a long time, white males made up the majority. In the last 15 months, five new appointments (four African women and one African male) at the senior management level had been made. Transformation was a priority for SIU and it was being dealt with in the Employment Equity Plan of the organisation, but it did not mean that anybody would be fired.

Adv Swart said it was not the intention because experienced people in an organisation such as the SIU were valued.

The Chairperson agreed and he said transformation did not mean ‘firing people’, it meant that that structures in place needed to be inclusive taking the demographics of the country into account. Institutional memory was also needed through highly skilled and seasoned people so that those skills could be transferred to the younger generation. At some point educational institutions needed to be engaged with, because degrees awarded and offered should be relevant to the needs of the country.

The meeting was adjourned.

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