Department of Correctional Services: 2013/14 Audit: hearings continued, with Department of Public Works input on facilities; Deputy Ministers of Correctional Services & Public Works in attendance

Public Accounts (SCOPA)

24 June 2015
Chairperson: Mr T Godi (APC)
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Meeting Summary

The Committee resumed its hearing on the 2013/14 Annual Report of the Department of Correctional Services (DCS). The Department of Public Works (DPW) was also asked to comment on certain issues around the facilities. The Deputy Ministers of Public Works and Correctional Services were both present and gave input, as well as officials from the Office of the Auditor-General.

The Committee started by commenting that after the previous engagement on 17 June 2015, an official had written to the Committee indicating that some of the answers given in that meeting had been misleading or incorrect, and this cast doubt on whether any of the answers could be trusted. This point was tested in the very first question put to the DCS, when the DCS was asked whether the amount of R908 million that had been spent on Information Technology Services (IT) included amounts from blocks 2 and 3, which comprised matters relating to IT, customer relations and systems development, and gave a response that was contradictory to the responses given at the previous meeting. Members would get the transcripts typed and compared. This led to a discussion on how far the systems were completed, to try to ascertain whether anything had been duplicated, and why so much had been paid for something that actually did not include implementation. Members were very concerned not only that such large figures had been paid to consultants, but that appeared to be no passing on of skills, and probing questions revealed that at the moment, the DCS would still be unlikely to have the right skills to be able to carry on with the projects when the service providers contracts expired in six months. The Committee interrogated again the contracts and litigation with Dimension Data and State Information Technology Agency. An attempt was made to shift responsibility on the previous administration, and the Committee attempted to get clarity from the Auditor-General whether any value for money was achieved, but it claimed that this was not something it was able to test in this instance since the systems were not being implemented.

Numerous questions were asked about whether there was a disaster recovery plan, what had been said to the Auditor-General, what the plan comprised and how disasters would be addressed. Again, the Committee was very unhappy with the responses, and suggested that perhaps a further investigation was needed on what the service provider had been asked to do, what was received and whether it achieved value for money, particularly given that the DCS admitted that the systems frequently went down.

The DPW was asked to give input on the failure to fulfil the aim of providing extra bed spaces because facilities at Tzaneen, C Max and Matatiele had not been completed, all of which had been outstanding since 2012. The DCS was asked to explain why contracts had been given to the same contractors who had been unable to finish construction of the Tzaneen and C Max prisons. The Committee was very concerned that contracts were awarded to sub-contractors without proper vetting of their financial and technical capabilities. DPW was also asked to comment on the fact that it had frequently had to sort out problems that the Independent Development Trust, one of its entities, had been involved in, as was the case with some of the DCS projects. Members were concerned that R158 million had apparently been paid purely for feasibility studies. The Deputy Minister of Public Works asked that this should not be a finger-pointing exercise, and indicated that DPW had been poor in risk management, but was taking steps to correct this, and was working closely with the Central Procurement Office, whose requirements were not always fit for purpose of construction matters. Members were unhappy that the cases had taken so long to resolve the issues. There was also a lengthy discussion over issues of accountability and the need for the Department to accept responsibility for the past performance.

One Member then proposed that when the 2013/14 Annual Reports were due to be presented, the report of DCS needed to be interrogated thoroughly and it must show exactly what the Department had been doing, and furthermore that this was the first report that should be interrogated by SCOPA, which would give the Department and executive time, between now and September, to sort out the issues. Another Member disagreed that they should be allowed that leeway. A counter-proposal was made that the DCS should produce a report prior to that to detail what action it was taking against "unaccountable officials", and what exactly it was doing to address skills shortages. Yet another proposal, which was accepted, was to combine both proposals and call for monthly reports on what was being done to resolve all pending cases.    

Meeting report

Chairperson's opening remarks
The Chairperson noted his concern that one of the officials of the Department of Correctional Services (DCS or the Department) had sent an e-mail to him after the previous week's engagements, indicating that some of the responses that had been provided by the Department to this Committee were misleading and incorrect. He had not made a decision on what to do, but this was a serious matter as it created some doubt about the legitimacy of some of the information provided by the Department.

Department of Correctional Services: 2013/14 Annual Report & Financial Statements (continued)
Members continued to interrogate various aspects of the DCS Annual Report and financial statements.

Information Technology (IT)

Mr V Smith (ANC) referred to page 39 of the Annual Report (AR) showing the actual expenditure for 2013/14 financial year. R908 million was spent on Information Technology Services (IT) and the Committee wanted to know what made up that amount, as it was indicated last week that block numbers 2 and 3 were not included in that amount.

Mr Zachariah Modise, National Commissioner of Correctional Services, responded that block numbers 2 and 3 were indeed included in the total amount of R908 million

Mr Smith wanted to know whether there was any specific reason why such information was not provided last week, and whether this was out of sheer ignorance or poor oversight, as this question was asked twice last week. It would be impossible for the Committee to merely accept the provision of inaccurate information without any substantial reason.

Mr Modise indicated that the provision of inaccurate information last week had to do with poor oversight and he could now confirm that the R908 million included amounts for block 2 and 3.

The Chairperson reminded Members that one of the officials of the Department had sent him an e-mail stating that some of the responses that had been provided by the Department last week were inaccurate. The answer to the very first question today had confirmed that suspicion. It seemed that the Committee would need to review every response that had been provided by the Department to check the accuracy.

Mr M Booi (ANC) warned the officials that misleading Parliament was regarded as a serious offence in terms of the Public Finance Management Act (PFMA). It was clear that that the official from the Department had been correct to point out that some of the responses provided last week were inaccurate, and this could be construed as contempt of Parliament.

Mr Modise wanted to confirm again that indicators 2 and 3 were also part of the overall expenditure of R908 million. The IT was in the operational plans of the Department, and this, customer relations, as well as systems development, totalling R262 million were all included in the total of R908 million.

Ms Nthabiseng Mosupye, General Information Technology Officer, DCS, responded that the R908 million was for the services that were provided, and not only for two services.

The Chairperson wanted to know whether Ms Mosupye was deliberately misrepresenting the question that had been asked.

Mr Smith noted, to the Committee and the Department, that transcripts could be made available to compare the information provided last week with the answers now being given. The Committee had asked what made up the total of R908 million, on more than one occasion last week, and the answer given then was that block 2 and 3 did not form part of the R908 million. He suggested that the Committee should get the transcripts of the last meeting in order to resolve this matter.

The Chairperson said there had been a similar problem with the Department of Arts and Culture (DAC), where senior officials had said they had done a particular programme, only for it to be discovered later that such statement was not true. It is quite clear that the Department was deliberately misrepresenting the question, as it had indicated last week that those two sets of items did not cost the Department a cent.

Mr Booi wanted to take the matter of misleading Parliament further than just requesting the Committee to be provided with the transcripts of last week’s meeting. He recommended that the matter should be investigated and disciplinary action had to be taken.

The Chairperson promised that the Committee would get the transcripts typed and distributed to Members. It was not an accident that Mr Smith had started the meeting on the matter of the R908 million as the Committee had discussed and deliberated on this matter after last week’s meeting.

Mr Smith stated that since it had now been confirmed that there were costs involved in the two sets of items, it was now important to get the ballpark figures related to block number 3, Integrated Correctional Management System (ICMS), as it was indicated that this programme was 99% complete. The Department had said, when discussing the way forward, that the implementation of the Inmate Management System (IIMS) was still to be finalised. He asked what was the difference between the two programmes and how much of the R908 million was spent on the ICMS? He wanted to be assured that there was no duplication of programmes, so as to avoid unfruitful and wasteful expenditure.

Mr Modise responded that the ballpark figure that were related to ICMS was R3 million for the two systems that had been developed by the Department.

Ms Mosupye added that the ICMS and the IIMS were the same programme, merely named differently, as it was just the naming of the performance indicator and what the Department aimed to achieve at the end of the financial year

Mr Smith added that the Department had indicated last week that the programme was 99% complete meaning there was still 1% that was incomplete. He asked how much of that 1% that still needed to be completed in the IIMS.?

Ms Mosupye replied that the performance indicator remained the same throughout a reporting period and the planned target was what the Department needs to deliver per annually. The deliverable for the 2013/14 financial year was the Business Process Re-engineering Project and aligning the business processes and this would be automated by the ICMS or IIMS. The deliverable for that particular year was not a system itself but part of the deliverables, as the project planned for that indicator. There were usually various deliverables per financial year.

Mr Smith asked a follow up question on who was paid R3 million for the conceptualisation of the system, which he found "absurd" if it excluded the implementation.

Ms Mosupye responded that it was not necessarily the conceptualisation only. The first process looked at various business processes that were delivered by the Department and then made sure that there were synergies between what was to be delivered in different provinces. There were three consultancies that were employed, who had to confirm that there was a standard way of doing things.

The Chairperson wanted to know the names of the three consulting firms.

Ms Mosupye responded that the company with the consulting services was Software Consulting Services (SCS).

Mr Smith mentioned that page 88 of the Annual Report indicated that there were 17 consultants that had been paid R20 million. He asked how the R3 million paid for conceptualisation of the whole system reconciled with the R20 million that had been paid to the 17 consulting firms.

Ms Mosupye responded that the R3 million was part of the overall R20 million that had been spent on the 17 consultants. There were various deliverables that had been offered by the 17 consultants and these included, but were not limited to the configuration of the learning environment, business intelligence and the support and the maintenance of the existing Admission and Release (AR) system. The other firms were responsible for the total project management business planning and the performance management and the enterprise architecture.

The Chairperson wanted to know whether all these other sub-items were related to the programme that had been referred to on page 39, or to other programmes and projects.

Ms Mosupye responded there were other programmes and projects that were totally unrelated to what had been delivered on page 39 of the Annual Report.

Mr Smith stated that he was glad that there were representatives from the Auditor-General (AG) present, as the Committee would eventually ask questions on the value for money. He wanted to know how it was possible that the Department had paid R20 million for the AR system, as this system was not up and running yet, but part of what was still to be done. He asked if the R20 million was paid just for the planning, or for the full implementation of the system, as he thought there would be a serious problem in spending R20 million just on documentation and design of the system.

Ms Mosupye responded that the AR system and the Community Corrections System (CCS) had been up and running since the 1990s. The ICMS was being replaced; it had to be maintained, and dealt with daily reporting and documenting of important information.

Mr Smith said the main concern should be on the value for money achieved. It would be helpful for the Committee to get input from the AG, as the systems were necessary, and it was clear that they had just been delayed. The report given to the Committee in 2013/14 had referred to "virtualisation" and had indicated that clarity was sought on the R11 million that had been paid to a service provider. The review on the project had concluded that “the solution was not properly implemented due to technical incompetence of the service provider”. He asked how it was possible that the Department could pay a R11 million to a service provider and only discover later that the service provider was incompetent.

Ms Mosupye responded that the procurement of the system was done between 2006 and 2008. When the present Department staff took office in 2012, it was clear that the system was not fully utilised, and that the service provider could not implement the system. The Department had indicated that only one member had been trained to do the work, who was still at junior level and the virtualisation process was more about storage and installing the system with the assistance from State Information Technology Agency (SITA).Mr Smith wanted to know if there was any money spent over and above the R11 million, for the virtualisation process.

Ms Mosupye said the company that delivered the system was paid R11 million during 2008-2009. The Department did not then have the internal capacity to implement the whole system. The system was installed in the 2012/13 financial year. There were currently consultants in place, supporting the system, to ensure that capacity was available at all times.

Mr Smith reiterated that it was important for the Department to buy a system that was fully inclusive, as it did not make sense for the Department to buy the system and then pay extra money to make that system functional and relevant. It was clear that the Department was not utilising taxpayers' money effectively. He hoped that the service provider that had been doing the work with the Department would never be re-hired as it had been demonstrated that this service provider was totally incompetent. The Committee also needed to know whether the detention management system was correctly placed, and what the DCS expected to spend on that system.

Ms Mosupye said the Department was engaged in litigation with Dimension Data, which had claimed that DCS owed it R27 million. A settlement was reached. The DCS made it clear that no financial compensation still needed to be paid to the company as the deliverables were not in line with the services required. In an agreement signed on 13 March 2014, Dimension Data agreed to install, implement and configure the whole system, which took place in the 2014/15 financial year. The Department had implemented the whole system without any changes. However, there were a number of serious flaws that were detected during the testing of the system, on which discussions and meetings were held. Finally, the service provider could not deliver according to the needs and requirements of the Departments. This was a 12-month agreement, which went with other packages that the service provider needed to deliver to the Department, including a biometric system for the identification of the offenders.

Mr Smith wanted to know whether this meant that the system was therefore not up and running. If so, he asked if there was any strategy to resolve this matter. It was unacceptable that the Department could spend five years fixing IT, as it clearly had to have systems up and running.

The Chairperson said that he wanted to get the exact details clear. He asked if the tender was given to SITA, and SITA had then appointed Dimension Data as the service provider, who in turn subcontracted another service provider to implement the system. SITA had told the Committee that the DCS owed it some money - and he wanted to know if that was correct, and if there was still money to be paid to SITA. Ms Mosupye's response did not make it clear whether DCS had now terminated the contract with the service provider, who could not successfully implement the system to the standard required. He asked how much was paid to SITA.

Ms Mosupye clarified that the contract worth R27 million was awarded to SITA. DCS had paid the money into a trust account, to be released according to set deliverables being reached. The Department had paid about R17 million for what had been delivered. A further R10 million was not paid to Dimension Data. It would have had to be released from the SITA trust account.

The Chairperson wanted to get clarity still. If the service provider had not delivered the system after 12 months, he asked whether the contract with that service provider was still continuing or if it had lapsed, and whether the DCS was looking for a new service provider to allow the system to become functional.

Ms Mosupye responded that the Department was still using the internal resources as part of the consulting services that were used.

The Chairperson wanted to know the name of the consulting services.

Ms Mosupye responded that these were software consulting services, and the Department had gone out on tender to do further enhancement of the system to meet the requirements of the business.

The Chairperson interrupted and wanted to know if the software consulting services were merely conducting maintenance of the existing system, since it had already been indicated that the system was flawed.

Ms Mosupye responded that the system was merely being tested with the business users, to look at the areas where the correct processes had not been captured properly.

Mr Smith wanted to move on with the matter. He indicated that the Department had 31 consultants and the issue of the software consulting services continued to be raised, as they had a contract of three years. The key argument of government had been that if consultants were used, they should assist in building internal capacity. The Committee needed to be told if there was a specific reason why these software consulting services were awarded a three-year contract. The Department was currently embarking on massive programmes, including ICMS and Remand Detainee Offender Management Systems (RDOMS), and he asked if there was a possibility that it would be further using consultants, or if it had built internal capacity, especially on IT. It had also been said that a further R56 million would be paid to these software consulting services over the period of three years. The Department had already spent 50% of the money on conceptualisation and some maintenance, as presented earlier on. There was a concern that the Department was throwing away R56 million on consultancy and there was still no clarity on what needed to be achieved.

Ms Mosupye responded that all of this was in line with stabilising the environment. Prior to 2012 the Department was very unstable, as it was mainly run by consulting services which were not properly controlled by the AG. Therefore the National Commissioner agreed that there was a need to stabilise the IT in the Department to deal with various challenges, including inexperienced staff members with limited skills. The Department was even battling with basic things like e-mails. For long periods, systems would go down, and be plagued with computer viruses. To address this, the DCS brought in technical skills. It was thought that a three-year contract would be sufficient to sustain and maintain the system going forward.

The Chairperson asked when the three-year contract signed with the software consulting services would end.

Ms Mosupye replied that the end of the contract was in November/December 2015.

Mr Smith said it was clear that the Department would be paying the software consulting services a total of R56 million within the next six months. He wanted the Department to assure the Committee that it would, by the time the consultants left, have internal capacity in place, and commented that it would be a huge problem were it still to be using consultants after this time, as its priority should have been on developing internal capacity. The Integrated Justice Management System (IJMS) still needed to be completed, and this Committee wanted an assurance that the DCS would be able to operate that system independently from consultants. It would have to take a decision on whether to continue to use consultants, or to rely on internal capacity.

Ms Mosupye replied that the Department was building its internal capacity.

The Chairperson interrupted and wanted a specific response on whether there was any internal capacity. Six months was a short time to expect to do this.

Ms Mosupye replied that the Department would not be able to run the system fully independently, given the skills level at the moment. The Department could only maintain the system, but not change it.

Mr Modise added that the Department had a complete IT structure as a proposal and this would still need to be approved by the National Management Board to ensure that there would be capacity within the Department.

The Chairperson wanted to know if the system was then still at conceptualisation stage.

Mr Modise responded that there was still a draft needing approval and budget, before it could be rolled out in the Department.

Mr Smith said that the Department had spent R626 million from 2010 to 2014 on IT. He felt that the DCS should understand why the Committee was so concerned that this money must be fully accounted for, and its value assured. The Committee felt it necessary to get full details on all IT systems, because of the amount of spending over the last four years. It was particularly worrisome that use of IT consultancy had jumped from R5 million in 2013 to R24 million in 2014. Now it had been made clear that DCS would not be able to operate the system independently in the next six months.

Mr Smith added that the AG had indicated that the Department did not a have a disaster recovery plan and it was also important to know if this matter had been resolved, having been highlighted ten months ago.

Mr T Brauteseth (DA) mentioned that the National Commissioner had stated that the Department was currently embarking on a new process of developing and conceptualising the system. He asked if this meant that the Department was starting from scratch with the system.

Mr Modise responded that the Department was just building on the work that had been done by the software consulting services, and there had been a significant reduction in the number of consultant services used in the Department. There was now internal capacity, although this was still below the required level.

Ms N Khunou (ANC) wanted to ask a follow up question on the IT consultancy, and the R626 million spent on IT from 2010-2014. She asked if the National Commissioner had thought to set up an investigation into the matter and the person(s) to be held accountable.

Mr Modise said that a number of systems had been developed in that period of time, and some of them did not meet the required standard or expectations of the Department. It was important for the Department to know what had been delivered, and the amount that had been spent. The Department could do further investigation if provided with the facts on what the DCS had asked the service provider to do, what had been received and whether that gave value for money.

The Chairperson corrected that Ms Khunou had raised a suggestion, and the Committee would use the right channels if it wanted to pursue that line .The AG was asked to clear up whether value for money was achieved in the spending of the R626 million on IT consultancy. It was still not known at the moment what important information that that had been lost due to the failing IT system.

Mr Xola Lingani, Senior Manager: Information Systems Audit, Auditor-General South Africa, said that it was important that the Committee appreciate that the focus of the AG was mainly to determine the extent to which the IT system supported the information contained in the financial statements. There was thus no particular focus on systems still under development, and it was difficult for the AG to offer any opinion on these. The Committee was correct in looking at the relationship between the money spent and what had been achieved or the service that had been provided. Although the AG could not give an opinion on the value at the moment, it was important to establish the link between the RDOMS and the performance information.

The Chairperson said it would have been useful to invite the National Treasury (NT) to provide an opinion on the matter.

Mr Modise added that the Department also paid for other matters that did not necessarily fall under RDOMS.

The Chairperson interjected that the Committee's concern was not only with RDOMS, but with IT as a whole, including ensuring that telephones, e-mails, servers and computers were fully operational in the Department.

Mr Modise apologised and admitted that he may have misunderstood the question. He confirmed that the stability of the systems of the Department was still a major concern as the systems would go down from time to time.

The Chairperson emphasised that if the systems of the Department were still going down, despite the money that had been spent on the conceptualisation and maintenance of the system, this was a serious problem, which seemed to indicate that there was no value for money achieved from the conceptualisation of the whole IT system. It was important for the Committee to get clarity on whether this was caused by lack of internal capacity within the Department. The sad reality was that the contract of the software consulting services would have to be extended.

Mr E Kekana (ANC) also expressed a concern on the over-reliance on consultancy, the value for money and the transfer of skills to ensure that there would be internal capacity to continue with the operation of the system independently. It was indicated that the Department was currently using interns to assist with operating the system. There would clearly be a vacuum in the next six months when the contract of the software consulting services firm came to an end.

The Chairperson reiterated that Mr Smith had made the point that the IT unit and its systems were likely to make or break the Department, and presently it was a Department that was not delivering at all. The responses provided painted a picture of a Department that had limited capacity on IT, and it was possible that the service provider could not be totally to blame for the failure in the operation of these systems.

Mr Thabang Makwetla, Deputy Minister responsible for Correctional Services, conceded that the Department had immense challenges with its IT systems. Problems would always exist, but if the Department understood them and made a clear commitment to resolve them, this was not necessarily a serious problem. It was of concern that some of the information emerging in the exchange with the Committee around the IT environment was not consistent with the information shared in the meeting on 22 June 2015, and this made it difficult to know exactly what were the issues to be dealt with. He supported the suggestion that the Department should conduct an inquiry on this IT environment to know exactly what issues had to be tackled.

He also conceded that indeed some serious contradictions in information given by officials of the DCS on the IT environment had emerged, and he understood that this was giving rise to some bad feeling in the Committee. The DCS should not ignore the fact that R626 million was spent on conceptualisation and maintenance of the IT system, when that system was still not fully operational.

The Chairperson indicated again that the Committee would communicate through the right channels on the process of conducting an investigation into the IT system in the Department.

Disaster recovery plan

Mr Smith reminded the Members that there were different views from the Department on whether the disaster recovery plan needed to be centralised or decentralised, and it was important for the Committee to get a clear position on this from the DCS. Decentralisation of the disaster recovery plan would mean having a plan in about 241 correctional centres in the country. The AG had noted that there were "internal control deficiencies in the Department” and this essentially meant the Department did not have a disaster recovery plan. The AG went further and noted that the internal control deficiencies that had been identified were categorised as leadership deficiencies and could be ascribed to the establishment of the central database that is currently in progress.

Mr Smith also expressed a concern that the Committee had been provided with three different figures of the total inmates in the country. The 2013/14 Annual Report, on pages 9-15, gave a figure of 157  170 but on page 27 stated that the total lockdown in the country was 148 210, with yet another different figure on page 42, where the total lockdown was given as 157 969. This problem emanated from the fact that the Department did not have the IT systems in place to provide the accurate figures on the total inmate population in the country. The main danger was that it was then difficult to measure the number of escapees.

Ms Mosupye responded that the plan was to have a centralised disaster recovery plan, and in the meantime the Department was just doing backups in each correctional centres.

The Chairperson wanted to get a clear response on whether there was a disaster recovery plan in the Department, or not.

Ms Mosupye responded that there was a plan, but not a disaster recovery plan.

The Chairperson asked if there was a specific reason why the Department did not have a disaster recovery plan.

Ms Mosupye replied that the Department only had a "paper plan", but that was still to be tested and then implemented.

Mr Brauteseth asked who was involved in the drawing of the disaster recovery plan.

Ms Mosupye replied that there was a team responsible for drafting of the disaster recovery plan, and this mainly included those in the ICT directorates within the Department.

Mr Smith said that the running of correctional services was akin to running a hotel, bank and school, or any other important institutions, and it would be impossible for any of those institutions not to have a disaster recovery plan. It was quite clear that there was a serious threat that most of the important documents could be completely lost if there was, for instance, a fire in the DCS national office. The Committee could not accept that, 20 years down the line, the country was still faced with the risk of such security breaches, particularly after "a whopping R626 million was spent" on IT systems. The AG had raised the need for the DCS to have a disaster recovery plan twelve months ago, and he wanted to know what interactions there had been with the AG in the meantime. Surely, by now, the Department should have had a plan in place, and timelines for full implementation of a disaster recovery plan. He pointed out that SCOPA wanted to ensure that the DCS would have such a plan in place. The intention of this Committee was not to judge or denigrate anyone, but to ensure that there was proper accountability within the Department. The SCOPA was not a watchdog as such. However, it was very concerned that DCS, in 21 years of its existence, had never received anything but a qualified audit opinion. The Committee had to put pressure on the executives to deliver. There appeared to be intentions for the DCS to put its house in order, but a lack of will from some executive members.

Mr Modise admitted that the points raised by the Committee had to be taken into consideration. There was a concerted effort to work earnestly to having a disaster recovery plan. The Department had a backup system that was decentralised, with correct operational systems.

The Chairperson said that the AG had indicated that DCS would only have a disaster recovery plan in the 2016/17 financial year. It was strange that none of the executives in the Department had mentioned this time frame. He wondered if this was a promise made to get out of trouble at the time.

Mr Lingani said that the AG would find it very difficult to give any view or to make any assessment on disaster recovery plans in the absence of tested documents, particularly on what would happen were there to be a disaster, what actions would be taken and the cost implications. The AG was given a date of 2016/17 for the implementation of the disaster recovery plan, but the AG believed that in the meantime there should already have been an action plan, with timelines stipulated, on what action would be taken in case of a disaster.

Mr Makwetla reiterated that the importance of having a disaster recovery plan could not be overemphasised, and the Department was aware of this. The Department had a backup plan in place for the 241 correctional centres in the country. Disaster recovery planning would be done at central level, to ensure that all 241 centres were connected centrally. There was a need to share the detail with the Ministry, although no actual work to date could be translated into a disaster recovery plan.

The Chairperson wanted to know if it was possible to roll out a disaster recovery plan, given the unreliable IT systems in the Department, which were described as frequently being down.

Department of Public Works input on facilities
The Chairperson asked that the Department of Public Works (DPW) now give input on matters with which it was linked with the DCS.


Mr Smith referred to page 43 of the Annual Report, dealing with the sub-programmes of facilities. He started with "Achievements in the previous year" of 2012/13, which noted that in Tzaneen, 89% of the refurbishments had been done. However, looking at the whole paragraph, this indicated that “Tzaneen was delayed due to slow progress of construction” for a whole year, and in fact, this facility was not finished. The reason was that the contract for Tzaneen had been given to a company which did not the required financial capacity in 2012. It had been said that the challenge of overcrowding needed to be addressed, but yet Tzaneen had not been completed. .Another column in the Annual Report stated that “C Max was delayed due to slow progress”. That had also commenced in 2012. From 2012 to 2015, work had still not been done. Contractors who were awarded contracts were totally incompetent. It was a serious concern that contracts had been given to contractors without the relevant vetting, with DCS itself having admitted that “these contractors were not financially capable”.

Mr Nkosi Vilakazi, Acting Deputy Director-General: Projects, Department of Public Works, stated that the risk management process was not rigorous enough at the time that these contractors were awarded contracts, and there was no assessment done in order to make an informed decision about their financial capability and inherent capacity to deliver. The DPW was now working very closely with the National Treasury on Supply Chain Management (SCM) to check the capability of contractors to do work with the DPW. Previously, DPW had also not looked at the possible risk of over-extension in commitment of the companies, and how this might affect their ability to deliver. Some of those whom the DPW had contracted with had been liquidated because they lacked cash flow. It was often difficult to recover from them.

The sad fact was that there were often delays in providing services to the people, because if there were very rigorous processes for awards of contracts, the DPW would be challenged on terminations. The DPW was working closely now with the State Law Advisors to ensure that any litigation was expedited.

Mr Smith said that the contractor who was supposed to refurbish the facilities in Tzaneen was liquidated. The liquidator then identified a new service provider to complete the work, but that raised a further challenge because the DCS was supposed to have a direct contract with the identified service provider. DCS was waiting for a legal opinion on this point, which should be delivered on 3 July. He asked if the refurbishment of the facilities had not been completed because of some misunderstanding between the DPW and the DCS, and whether the work would not be concluded until after 3 July 2015.

Mr Vilakazi responded that the liquidator was from the private sector, and had wanted to appoint a certain service provider, which would have been contrary to the procurement process of government, so the DPW needed to ensure that the process followed the procurement prescripts of government.

Mr Smith said he understood that Independent Development Trust (IDT) and DPW were entities in the public works stable, and could collaborate to do the work with the DCS. On page 43 of the Annual Report, it was stated that actual expenditure was R1.8 billion. However, the concern was what it had been paid for, because in 2013/14, it was stated that “no bed spaces had been created” - despite the target of creating 471, and the fact remained that C Max, Tzaneen and Matatiele Correctional Centres had not been completed. Contractors had basically been asked to leave, yet R1.8 billion had been paid. He asked if DCS paid these contractors only later to find out that they did not have capacity If so, he asked what were the chances of recouping the money. This was especially serious in the case of the same contractor who was given two contracts.

Mr Modise responded that the target of 471 bed spaces was never achieved because the construction at Tzaneen and C Max had not been concluded. It was true that the same contractor got the contracts for Tzaneen and C Max. When a project was "99% completed" this meant that it had not been handed over to the DCS. Once a contractor completed the work, he must hand to DPW, who would eventually hand to DCS.

Mr Smith asked whether that meant the 471 bed spaces had been handed over to the DPW.

The Chairperson also asked for clarity on whether the "99% completion" referred to the physical contract being performed, or the bed spaces created, as this was not clear from the responses that had been provided.

Mr Vilakazi assumed that this should refer to the physical construction. This was in the 2013/14 financial year. The project was completed in April 2015, and the DPW was in a process of handing it over to the DCS. DPW was fully cognisant that this whole project had taken too long to be completed.

Mr Smith expressed a concern that the DCS had allocated an amount of R3 billion (30% of the budget for correctional services) to one contractor, saying that this was very risky.

Mr Modise responded that there was a period where some line function departments went straight to IDT, asking it to implement projects on DCS's behalf without the involvement of the DPW. The DCS and IDT were now about to conclude a protocol. DPW had been required to intervene many times when there had been problems with the projects where IDT, one of the DPW entities, was involved.

Mr Vilakazi responded that the DPW had no record in the DPW books of the R3 billion for DCS, only of an access control programme that was still at planning stage, that was worth far less. The tender for this planned programme had not yet gone out, and was to be implemented in the 2016/17 financial year, at a cost of R1.3 billion.

Mr Smith apologised if the question was wrongly directed to the DPW. He had wanted an answer from the DCS as to why R3 billion was allocated to one contractor.

Mr Vilakazi added that the consultants were contracted by the DCS, and not IDT or DPW.

Mr Smith clarified and corrected that the R3 billion to a single contractor was an estimated cost. The Committee had not been provided with a clear response on the progress in this particular project, nor the timeline for its completion. He asked if there was a Service Level Agreement (SLA) between the two Departments.

Mr Freddie Mocheko, Director: Building and Maintenance, DCS, responded that the intention was to start the planning and budgeting for the maintenance of the correctional facilities.

Mr Smith wanted to know about the amount that had been paid for the planning for the refurbishment of these correctional facilities.

Mr Mocheko responded that the DCS had already paid R158 million for the planning for the refurbishment of the three correctional facilities.

Mr Smith asked if the Department had paid an amount of R158 million for the planning and the assessment of the damages in three correctional facilities. He wanted the Department to clearly explain the meaning of "doing a feasibility study", commenting that it was totally unacceptable to spend an amount of R158 million solely on a feasibility study.

Mr Mocheko responded that the feasibility study entailed observing the three correctional centres and telling the Department everything that would be required for the maintenance of the centres. There were also plans for the utilisation of the additional space that was required.

Mr Smith expressed dismay that the Department had hired a consultant, for an amount of R158 million, just to do a feasibility study. He suggested that this Committee needed to take a resolution on that point, depending on what the DCS would respond.

Mr Modise added that the feasibility studies on various correctional centres were done as a result of an observation that the maintenance was not up to standard, that ablution facilities were almost below a repairable state, and electrical connections were often a major problem. The Department needed to have an understanding of the whole problem, so as to budget for the overall maintenance of these facilities.

Mr Jeremy Cronin, Deputy Minister of Public Works, suggested that the purpose of this hearing was not finger-pointing, but to ascertain and learn from the mistakes of the past. The DPW needed to take responsibility for some of the delays in infrastructure construction, and this pointed to the issue of efficient risk management, which was an area that the DPW was working on. The problem in appointing construction companies that were in liquidation or financial difficulty could be addressed by an efficient risk management process that also provided for remedial actions to avoid doing business with those companies in the future. The DPW was working very closely with the Central Procurement Office as some of the procurement requirements were sometimes not useful to the infrastructure construction environment space. This Office had understanding that the DPW needed to develop SCM procurement procedures.

Mr Cronin noted that a Service Level Agreement was signed between the DPW and the DCS on 09 December 2012, and part of that was intended to address the issues when some client departments had gone directly to IDT. The Deputy Ministers of Correctional Services and Public Works had a meeting to discuss all the delays in the construction and maintenance of correctional facilities. The DPW was insisting on regular meetings to resolve these matters, and monthly reports on the progress on infrastructure programmes. The DPW accepted some level of responsibility for the major delays in the construction and maintenance of correctional facilities, but there were attempts to resolve these matters.

Mr Kekana wanted to know about the amount of R638 million that had been spent on development in the DCS, and asked who Mr Mocheko was, and what position he held, as there were investigations into what had been done.

Mr Modise said that DCS was renting offices for community corrections, which related to people placed on parole and probation. The DCS did not own buildings or land, and all construction and refurbishment of facilities should be done though the DPW. A total amount of R638 million was set aside for all the programmes being attended by offenders, which included mainstream education and Further Education and Training (FET) colleges. Mr Mocheko was the Director of Building and Maintenance in the DCS. Indeed there were many pending investigations, because of the capacity challenges in the past in relation to investigations. The DCS had now established a task team to investigate all these pending cases that were not investigated for lack of capacity. The DCS had a Legal Desk and a Departmental Investigation Unit that was to investigate cases of corruption and fraud.

The Chairperson indicated that he had requested the Legal Desk team and the departmental Investigation Unit to be present in the Committee, as there were many pending cases of corruption and fraud in the Department. The Committee would need to do a follow up on these pending investigations and ensure that these cases reached some conclusion.

Mr Booi admitted that capacity needed to be taken into consideration, but most of these cases dated back to 2010 and he would have thought that the Department should have the capacity by now, as the Committee had clearly pointed out. The AG had stated that the DCS had not been cooperating with it by putting systems in place to prevent corruption and fraud in the Department. Mr Mocheko had thus been failing in his duties to the Department, but he continued to be employed, at a large salary, and was regarded as one of the people dragging the Department down.

Mr Modise responded that there were two directorates within the Legal Services that had been established in terms of the Correctional Service Act in 2008.

Mr Booi interrupted and raised a point of order. He wanted Mr Modise not to read out what the law said about corruption and fraud, but to answer precisely why DCS had taken so long to investigate these cases. Members of Parliament were law makers and therefore did not need to be schooled on the Correctional Service Act.

Mr Modise said that the reason he had cited the law was that he wanted to establish the mandate to investigate the cases of irregular and wasteful expenditure.

Mr Booi interrupted and raised a point of order again. The Committee needed a clear response on what the Department had done to ensure that the pending cases of corruption and fraud were resolved, as these cases dated back to 2010. He expressed dismay that the Department was "telling stories" regarding these pending investigations and Members could not be treated "like small children".

Mr Modise indicated that the Department had not exercised its management and control system effectively, to immediately investigate and conclude any instances of irregular and fruitless expenditure. However, now the DCS had established a task team to investigate these cases that had been identified by the AG.

Mr Smith said that a reference to "pending cases" suggested to him that they were "pending action" being taken. However, Mr Modise had not said what action, if any, was taken. The Committee was under the impression that the investigation of these cases was under way.

Mr Booi added that the Department had been paying officials bonuses for doing nothing, and this was totally unacceptable and action should be taken against these "unaccountable" officials.

Mr Smith proposed that the 2013/14 Annual Report should be presented to Parliament by September 2015, to give a clear indication of what had been happening in this Department. He suggested that every angle of the DCS had to be investigated through a "360 degree microscope" to ensure that every move it made was clearly monitored. He further proposed that the first hearing by SCOPA in relation to the 2014/15 Annual Reports should be on the DCS. He said that this was effectively taking a middle road, allowing the DCS and the executive authority time to sort out their issues and be prepared for the hearing in September.

Ms Khunou agreed with the proposal of Mr Smith. However, she insisted that the DCS needed to produce a report prior to the commencement of that hearing, detailing the action to be taken against "unaccountable officials". Over R1billion had not been accounted for and this matter could not just be postponed until September. She also wanted to see a specific report on what action had been taken to resolve skills shortages, in order to do away with over-reliance on consultancy.

Mr Booi agreed with the proposal of Ms Khunou, and indicated that the Committee was harping on this matter because the country was a Constitutional state. This was not something personal, but the Committee was demanding that all members of the public service must be accountable for their actions. He disagreed with Mr Smith's proposal, saying that he thought it was unacceptable for the Department to be given until September to respond on matters that dated back to 2010. He suggested that the Committee should rather pause and not make any rash decision at the moment.

Mr Kekana added that it would be helpful to combine the two proposals, by getting the monthly reports on the action to be taken to resolve these pending cases from the DCS first, and then to meet with the DCS in the first hearing on the 2014/15 Annual Report.

The Chairperson agreed with the suggestion to consider in tandem the two proposals that had been made by Ms Khunou and Mr Smith, as they were complementary. He did caution that the Committee would be dealing with numerous reports in September.

Mr Makwetla, responding to the Chairperson's request for a closing statement, said that the DCS had taken note of the concerns of the Members These issues needed to be taken forward and resolved. The Department was dealing with issues that appeared intractable, and patience and tolerance of Members had been tested. The Ministry and DCS management would do their best to correct these major challenges that had been identified by Members. The audit and the human resource functions within the Department needed to be taken into consideration, as there were clearly problems that had to be resolved.

The meeting was adjourned. 

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