Private Security Industry Regulatory Authority on its 2016 Annual Performance Plan

Meeting report

PSIRA 2016/17 Budget

Ms Nicolette van Zyl-Gous, Committee Researcher, provided an initial briefing on the 2016/17 PSIRA budget. She said the Private Security Industry Regulatory Authority (PSIRA) had been established in terms of Section Two of the Private Security Industry Regulation Act, 2001 (Act No. 56 of 2001). The entity’s mandate was to regulate the private security industry and to exercise effective control over the practice of the security service providers in the public and national interest, and in the interest of the private security industry itself. The Authority generated its own revenue through the collection of annual levies and through money received from any legitimate sources. For over three years, the Authority had been involved in a protracted court case over the increases made to its annual registration fees, which had been successfully challenged by the Security Industry Alliance (SIA). As a result, the Authority had embarked on an annual fees refund drive, in terms of which a total of R81 million had to be refunded to Security Service Providers (SSPs) over a period of three years.

In terms of expenditure estimates for the 2016/17 financial year, the overall revenue of PSIRA was expected to increase from R199.6 million in 2015/16 to R236.6 million in 2016/17, which was a nominal increase of 18.5%.The Administration Programme received the largest increase of 21.9% in 2016/17 compared to the previous financial year (FY). Proportionally, it also received the bulk of the total budget at 42.4%

Looking at the overall financial position of the Authority in 2016/17, the following aspects should be noted:

• The account for other non-tax revenue was expected to increase from R26.3 million in 2015/16 to R37.7 million in 2016/17, which was a real increase of 34%. The Authority should delineate the revenue received in this account.
• All line items within the expense account of the Authority showed above inflation increases, which should be explained.
• In terms of the carrying value of assets, the 2016/17 cash and cash equivalents account had decreased significantly from R35.4 million in 2015/16 to R1.5 million in 2016/17, which was a 96.02% decrease in real terms. The Authority should explain this significant decrease. 
• The accumulated surplus of R50.5 million accrued in 2015/16 was expected to decrease to a deficit of R6 million in 2016/17.
• Overall, the total equity and liability position decreased in real terms by 6.09% in 2016/17, compared to the previous financial year.

Ms Van Zyl-Gous then turned her attention to the PSIRA programmes beginning with programme one: administration, which received the bulk of the total budget for 2016/17, at 42.43%. Overall, the budget allocation to the administration programme had increased from R82.3 million in 2015/16, to R100.4 million in 2016/17, which was a nominal increase of 21.9%. The proportional allocation had increased year-on-year, while the allocation to the core legislative mandate (programme two) was decreasing proportionally. The budget allocation made towards the repairs and maintenance account had increased significantly in 2016/17 from an allocation of R754 000 in 2015/16, to an allocation of R2.9 million in 2016/17, which was a real increase of 264.7% - the Committee should request the Authority to explain this significant increase, as repair and maintenance costs were presumably included in their rental contract/agreement.

The performance indicators for the finance and administration sub-programme had been halved in 2016/17, compared to the previous financial year. Three critical indicators pertaining to effective revenue management (annual adjustment of administrative feed and review of annual fees) and a sustainable funding model (annual review of funding model), had been removed from the 2016/17 annual performance plan (APP), and should be explained by the Authority. The annual target for the new performance indicator measuring the percentage of revenue collected should be increased, as an increase in revenue collection would greatly improve the liquidity of the Authority and also decrease the amount of bad debt written off. Bad debt had been a challenge for the Authority over the past years.

Ms Van Zyl-Gous then outlined programme two: law enforcement. She said the overall budget allocation of the law enforcement programme had increased from R73.1 million in 2015/16, to R87.6 million in 2016/17, which was a nominal increase of 19.85%. The programme received 37% of the total budget of the Authority in 2016/17 (second largest allocation). The increased allocation of 103.5% in real terms towards lease payments should be clarified by the Authority. The decreased allocation of 22.2% made towards the travel and subsistence account should be questioned, as this was directly in line with the core mandate of the Authority -- to conduct compliance inspections at security businesses, as well as on security officers. This should be seen in contrast to the significant increased allocation to the travel and subsistence account of the Communications, Registration (CRM) and Training Programme which had increased by 44% in real terms. Although cost containment measures were in line with National Treasury requirements, it should not impact negatively on core performance. The Deputy Minister of Police had also raised compliance challenges during her budget debate speech, specifically regarding equal pay scales and conditions of employment. The number of performance indicators for the Law Enforcement Programme had been reduced from 14 performance indicators in 2015/16, to six performance indicators in 2016/17. Of specific concern was the removal of performance indicators for site inspections in specific sectors which had been introduced in the previous FY. These sectors included the retail sector, health services sector, educational facilities, industrial and corporate facilities and residential areas.

In programme three: communication, registration and training, the R48.5 million allocation in 2016/17 represented an increased allocation of 3.19% in real terms, compared to the R44.1 million allocation in 2015/16 (20.5% of the total budget). In terms of expenditure estimates:

• The travel and subsistence budget had grown significantly from R1.6 million in 2015/16, to R2.4 million in 2016/17, which was a real increase of 44.63%.
• The personnel expenditure budget had also increased from R10.7 million in 2015/16, to R15.1 million in 2016/17, which was an increase of 32.16%
• The most substantial increase was in the consultancy and professional services budget, which had increased by 175.36% in real terms, from R650 000 in 2015/16 to an estimated R1.9 million in 2016/17 – not in-line with Treasury’s cost containment measures.
• The lease payments budget had decreased by 100% in 2016/17 as no funds had been allocated to this item in the current financial year.

The Communication, Registration (CRM) and Training Programme had identified a total of four performance indicators for the 2016/17 financial year. Of concern was the fact that the targets remained static over most of the medium-term. The performance indicators for the Communications and Stakeholder Management sub-programme had been reduced significantly, from 11 to one performance indicator. Presumably all campaigns had been combined into the one remaining target. However, the separate focus areas of campaigns within the industry were important and might require a different approach.

With the capital infrastructure and capital asset plan, the original 2014/15 capital asset budget of R6.6 million had been significantly increased over the medium-term due to the plan to implement a new Enterprise Resource Planning (ERP) system. The total capital expenditure budget for 2016/17 had been increased by 16.53% in real terms, from R22.8 million in 2015/16 to R28.3 million in 2016/17. The most significant increases within the capital asset budget were on the following items:

• The allocation towards computer hardware had increased from R750 000 in 2015/17 to R2.1 million in 2016/17, which was a real increase of 162.6%.
• The allocation towards office furniture had increased from R500 000 in 2015/16 to R755 000 in 2016/17, which was an increase of 41.65% in real terms compared to the previous financial year.
• The allocation towards motor vehicles had amounted to R5.4 million in 2016/17, against no allocation made in the previous financial year.

PSIRA Strategic Plan and Annual Performance Plan 2016/17 – 2020/21

Mr Sam Chauke, PSIRA Director, began by alluding to some key highlights in terms of areas of improvement and outcomes. These included:

• 85% of planned targets had been achieved;
• revenue was up by 66%;
• annual fees had increased by 7%;
• course reports income had increased by 14%;
• the sale of goods had increased by 484%, mainly due to the roll out of new certificates;
• interest received was up by 55%;
• the research grant was up by 226% - large parts of grant funding had been received toward the end of the year;
• fines were up by 55%;
• cash at hand was up by 67%;
• the current cash reserve stood at R78 million;
• over 89% of new fees had been collected.

On the issue of the refund of fees, the position of liquidity had been almost reversed within the first months of the financial year. The situation had improved so much that the three year projection had been revised. It had been said that there would not be a blanket refund of fees, and companies would have to make applications for refunds. Since then, more fees had been collected and there had been such a low turnover of people applying for refunds that PSIRA sat with a credit of R81 million which had not been paid because people were not coming forward. A decision had now been taken to refund/credit everyone, and audits would then be done afterwards. This would begin from Monday, and the industry would then be billed the new fees.

The Chairperson asked if this was a blanket refund, with no requirements attached.

Mr Chauke responded that the original position was for companies to apply for a refund, but they had not been forthcoming because of the conditions in place. Now they were not being refunding in cash, but their accounts were being credited instead. PSIRA still maintained the prerogative to do audits afterwards to close the books properly.

The Chairperson asked if this meant all companies who were owed money had been paid back.

Mr Chauke affirmed this. This had been possible because the payment of fees had been good and other annual fees had been raised.

Key highlights in terms of PSIRA financial performance for 2015/16 included:

• expenditure up by 25%;
• staff costs up by 7%, as more staff had been hired;
• office rental escalation was up by 30%;
• finger printing costs were up by 30%, as certificates had been issued;
• advertising costs had been contained at 69% due to awareness campaigns;
• consultant fees had decreased by 21%;
• bad debts had dropped by 294%;
• the current cash reserve stood at R78 million.

Looking at strategic goals, the results of the situation analysis conducted necessitated the retention of all of the planned strategic overview for the five years to 2021, which showed that the achievement of the following goals remained relevant:

• excellent service delivery (effective regulation);
• effective financial management;
• industrial stewardship, stakeholder and customer relationship management – PSIRA was meeting every second week with key stakeholders to keep each other abreast of developments in the industry;
• an enabling an environment, with a competent and skilled workforce;
• efficient and effective processes and systems.

Mr Chauke said that the goals continued to be guided by the three programmes of PSIRA: administration, law enforcement and communications, registration and training.

Ms Mmatlou Sebogodi, PSIRA Deputy Director: Finance and Administration, presented programme one: administration, beginning with the finance and administration sub-programme, where the key performance indicators (KPIs) included:

• an unqualified audit opinion with reduced audit findings;
• the percentage of revenue collected.

Under the business information systems sub-programme, the KPI was related to critical information technology (IT) infrastructure being restored within 36 hours. Under the human capital sub-programme, KPIs included the percentage of planned targets achieved and the percentage of employees achieving an average rating of less than three on the performance score, receiving intervention programmes.

Mr Chauke then turned to programme two: law enforcement, where KPIs included:

• the number of security businesses inspected to enforce compliance with the applicable legislation;
• the number of security officers inspected to enforce compliance with the applicable legislation’
• the percentage of investigations finalised against non-compliant Security Service Providers (SSPs);
• the percentage of criminal cases opened against non-compliant SSPs;
• the number of security businesses licensed to possess firearms inspected;
• the percentage of cases of non-compliant SSPs prosecuted per year.

On the issue of violence at universities, PSIRA had engaged with a number of universities when the issue of in-sourcing had been raised. Security companies contracted to universities had been urged to exercise caution. While he knew some companies carried out some public order training, he was not sure if it was equivalent to what the police did, but industry would be engaged on how best to deal with this aspect.

The Chairperson, noting that PSIRA was the regulator and an oversight body, asked if the Authority knew how many companies employed those units, and the detail of the training.

Mr Chauke said he did not have the exact number with him currently, and he would have to check on the training.

The Chairperson asked that the information be provided in the next ten days for the Committee to understand the environment and know the exact current situation. He asked if PSIRA had received any complaints about incidents at the universities.

Mr Chauke said there had been no complaints so far, even though PSIRA had called for complaints to be lodged.

Looking at programme three: communications, registration and training, sub-programmes, communications and stakeholder management, KPIs included:

• the number of public awareness programmes on PSIRA’s role and functions;
• the number of capacity building workshops per year (to run parallel with compliance programmes);
• the percentage increase in the number of training security service providers registered with PSIRA and properly accredited, as stipulated in the training policy;
• the average turnaround time (working days) of applications for registration meeting all the requirements for security businesses;
• the average turnaround time (working days) of applications for registration meeting all the requirements for security officers;
• the percentage of new registration certificates rolled out (on active security officers);
• the percentage of new registration certificates rolled out (on active security businesses);
• the number of completed research topics;
• the number of completed surveys;
• the number of policy documents completed per year.

Ms Sebogodi then took the Committee through the budget overview for PSIRA for 2016/17, noting that the Medium Term Expenditure Framework (MTEF) had set out the planned expenditure and performance at the time of tabling of the budget. The PSIRA budget was aligned to the National Development Plan (NDP) 2030. She outlined PSIRA’s contribution to government’s Outcome 12, and the key service delivery goals. Performance, personnel and finances were discussed in each programme in respect of the impact they had on plans for each of the programmes. The budget was also aligned to the current approved budget programme structure of PSIRA.

A summary of the budget revenue and expenditure for 2016/17 was then presented. An overview of the revenue showed the growth in revenue was expected to increase in line with the increase in the number of security officers and SSPs registered, including increases in annual and administrative fees. The rollout of new certificates was expected over the next three years, and was expected to increase revenue. With regard to expenditure, compensation of employees constituted the bulk of spending, as the Authority planned to increase its capacity to 311 employees in 2018/19. Looking at the budget growth over the MTEF period, the revenue budget increased from R199.6 million in 2015/16 to R270.5 million by 2018/19, at an average growth rate of 10% per annum. The expenditure budget was expected to grow to R270.5 million at an average growth rate of 10% per annum.

Ms Sebogodi outlined the MTEF revenue budget allocations, noting that main revenue drivers of PSIRA included annual fees, registration fees, course reports and other income. Input was also provided on the METF budget expenditure and budget allocations per programme for 2016/17, including the capital investment programme.

Discussion

The Chairperson asked if the internal governance charter had been finalised, or where the process currently was. Noting that it was the prerogative of the Ministry, he asked what measures were in place regarding the end of the current Board. He also requested a status update on the PSIRA Amendment Bill (2012). It was known that the private security industry was a huge employment driver in SA, but Mr Chauke had alluded to the huge impact of technology – how would this affect the PSIRA funding model? Would a dramatic change in the nature of employment figures in the industry be seen, given the increased use of technology?

Prof Fikile Mazibuko, PSIRA Council Chairperson, said that the current Council had been appointed on 6 September 2013, and in March this year a reminder had been sent to the Minister that its term ended in August 2016. His directive was awaited, but the Minister was aware that the term of the Board was ending. The Amendment Bill was still in the office of the President, and the Deputy Chairperson of the Council was communicating with the Minister on the matter. The internal governance framework/charter was almost complete – it was currently being refined, and the final copy was being finalised. A copy could be provided to the Committee at its next meeting with PSIRA.

Mr Chauke responded on the issue of increased use of technology, saying he did not think there would be a significant decrease in numbers or revenue because large areas still required patrolling by security guards. Technology was also quite expensive, but more companies working in technology/electronics were being registered so PSIRA was watching this sector closely to ensure they knew they had to register and be compliant. PSIRA did take into account turnover and had recently been looking into international benchmarking studies, where fees were based on turnover and not only on the number of guards employed. The challenge with the security guards was that companies did not disclose the right numbers to make up for their profit, but this would be checked. In the near future, PSIRA was looking at establishing a guarantee fund to allow for a more sustainable and permanent funding model for the operations of the Authority. This would also mean less reliance on fees, although this was a project for the next two or three years.

Ms M Molebatsi (ANC) commended the financial status of PSIRA, but wanted to know about the problem of funds paid into the PSIRA account which could not be traced – what was the status of this situation currently? The “Fees Must Fall” protests had shown that security guards were not up to standard – was there a chance of some additional training to address this challenge? She also sought more information on cyber crime training.

Mr Chauke replied that the situation with the issue of unallocated fees had been turned around significantly and had been brought well under control. On the issue of the Fees Must Fall protest, there were no current training standards as yet, but this was being investigated as the trend was growing for security officers to be used for crowd control. On the issue of cyber crime training, there were no standards currently for cyber crime training in the curriculum, but it would definitely be looked at. The Authority was also looking into the new legislation on cyber crime to ensure it was not left behind in this environment.

Mr Z Mbhele (DA) found that the targets for the human capital sub-programme did not speak to the KPI in his reading – there was some disjuncture between the two which needed to be looked at. In dealing with the fallout from the court case in terms of refunds, he requested clearer information on what the ERP was about – he assumed it was about improving the electronic system for managing registration and fees collection. Because the ERP was not online yet, he asked if there were adequate systems currently to prevent mistaken double crediting or crediting a company that had already received its cash refund. He sought clarity on the reasons for the increased revenue – he sensed it was due to a higher compliance rate by industry players which therefore meant a higher rate of fees collection, or was it because there were more SSPs or guards coming on stream? He asked for an update on the Bloemfontein office since PSIRA had last discussed the issue with the Committee.

Mr Chauke clarified how the target related to the KPI, but agreed that it would be amended to read as such. It had been thoroughly explained in the technical explanations put together for the Auditor-General. The Enterprise Resource Planning (ERP) tool was a system which enabled the management of registrations, inspections, etc. The tool was broader than a system and allowed for integration with other tools and technology. There were adequate systems in place to ensure that there were no duplications or incorrect crediting, and reconciliations were also carried out before companies were credited. Companies not affected by the fees then were also not credited/refunded, so the risk was well taken care of. Increased revenue came from increased fees, with PSIRA pressuring companies to disclose the correct numbers. More people were now paying the Authority supposedly because they were happy with the management and delivery of services.

Ms Sebogodi added that with the property in Bloemfontein, there had been re-advertisement and the tender had been closed in March 2016. PSIRA was currently evaluating and anticipated finalising the process in the second quarter of the financial year.

Mr J Maake (ANC) questioned the sanctions on universities for using security guards in the manner in which they handled crowd control.

Mr Chauke reiterated that there were no current standards. Security companies had to restrict themselves to the protection of assets, and this might translate in some way to crowd control. PSIRA would, however, be investigating whether any protection was within the bounds of the law, to be in line with the PSIRA mandate

The Chairperson noted the reference made to regular engagement with the industry, and asked if this applied only to the big companies, or new entrants to the market as well. What were the current drivers of non-compliance and fines in the environment? Cost containment was a major focus of government in general – what was the main motivator for the office refurbishment? Could it not wait? He questioned the discrepancy of figures for capital assets between the presentation and PSIRA's APP.

Mr Chauke answered that there was engagement with all stakeholders, with nine compliance forums around the country meeting quarterly and a national compliance forum in Gauteng, where all could attend. Regarding non-compliance, the industry had a history of exploitation. There was also the issue of pricing -- many companies were pricing below the pricing guideline, which was aligned to sectoral determinations of the statutory wages of security guards. Companies were also not honest about the number of guards they employed to make up for profit. Many of the cases of non-compliance which PSIRA dealt with were around non-compliance with statutory wages in terms of labour laws, and less so on non-registration or training. On the issue of cost cutting measures, PSIRA was very aggressive with these measures and there had been a decrease in a number of costs such as consultancy, telephone costs, insurance, audit fees, cleaning material and legal services. The issue of refurbishment referred to PSIRA adopting a new corporate identity with a new corporate logo and the need to standardise/brand its offices accordingly.

Ms Sebogodi added that with capital expenditure, the allocation for the motor vehicle had been moved to another critical component.

Ms Molebatsi said the issue of non-compliance was a thorny one, but she wanted to know if there had been significant progress in addressing it. How many motor vehicles did PSIRA have? She questioned the impact of the use of technology on security guards. The presentation spoke to capacity building workshops – what did these workshops address, who addressed them and who attended them?

Ms Sebogdi said that there was only one motor vehicle.

On the issue of capacity building, Mr Chauke explained that the workshops assisted with enforcement of the laws by those who deliberately did not want to comply, although they knew they had to. It also taught the means through which compliance could be achieved for those companies which did not know. The workshops were attended by SSPs and some guards. With regard to monitoring, all the workshops were extensively audited by the AG, with PSIRA even requested to provide attendance registers, invitations issued, publications made and footage as proof.

Mr Mbhele said the presentation had made reference to plans to increase capacity to 311 employees in 2018/19, and asked if that number was the full establishment of the Authority, or if the ceiling was higher than that. He questioned the decreased allocation to travel and subsistence in programme two, especially when contrasting it to the increased allocation for the CRM and Training Programme – one would think PSIRA would want to extend the footprint of compliance inspections and monitoring, balanced against education and awareness.

Ms Sebogodi explained that more inspectors would be appointed under programme two and funds for travel would be moved there, because with more inspectors in certain places, there was less need for travel. The 311 PSIRA organisational structure had been approved a long time ago. Every year, critical positions were identified and prioritised for the allocation of funds.

Mr Maake understood the use of technology spoke to closed circuit television (CCTV) and so on, but said that the security industry was a labour intensive one. What strategy could be used for the industry not to decrease employment? Who had approved the staff increases for PSIRA? At the last engagement with the Committee, PSIRA had made reference to the Pan-African Conference, but he was unsure of how such a conference would work or function, and how it was linked to SA.

Mr Chauke said that the establishment had been approved a long time ago by the Council. On the issue of technology, PSIRA did not have a strategy on the decrease in employment. It was important to remember that guards could not be totally eliminated – there were some areas which would always require monitoring by actual bodies where cameras could not reach, so that part of the guarding industry would always be there. As technology was growing, more security officers were being trained to manage the technology. With regard to the Pan African Conference, one of the functions of PSIRA was to liaise and cooperate with the private security industries in other countries, so participating in the Conference was part of this mandate. Cooperating in this way benefited PSIRA in a number of ways by looking at how countries approached matters differently. PSIRA learnt a lot through this and also assisted other countries.

The Chairperson wanted an indication of the proactive steps taken by PSIRA to ensure all role-players in the industry complied with human rights obligations, and that they acted in terms of the Constitution. He was also interested in the functional liaison/relationship between PSIRA and SAPS especially when it came to events of national significance, or where state institutions/buildings were guarded by companies registered with PSIRA.

Mr Chauke said extensive work was done between PSIRA and SAPS. For example, the Authority sat on the executive of the Counter-Intelligence Coordinating Forum which was one of the highest counter-intelligence forums within the State Security Agency (SSA). PSIRA participated in forums at the provincial and regional level, which assembled all the security managers who were guarding state entities and department buildings. The forums conscientised agencies on the safety and protection of state buildings. PSIRA was also involved in the Government Security Regulator, which was spearheaded by the SAPS. This forum was focused more on the state entities to coordinate issues of counter-intelligence, protection of national key points etc. From time to time, the Authority also conducted capacity-building workshops and presentations to conscientise those involved in this space. PSIRA played a strategic role with SAPS, and the two recently signed a Memorandum of Understanding to liaise with Visible Policing and Detective Services around the investigation and reporting of cases. A list of stakeholders with which the Authority interacted was also published in the PSIRA Annual Report. PSIRA also played a role in a number of SAPS forums and clusters.

The Chairperson asked about the quality of training of security guards, given the increase of violence at universities -- for example, where entire auditoriums were gutted -- and wanted to get a sense of how members would respond if there was a change in the environment. Was PSIRA of the view that sufficient training was given to security guards in the light of a change in environment?

Mr Chauke did not think all the security companies had the necessary capacity to deal with those sorts of threats as they came. A few of the bigger companies were advanced. Perhaps PSIRA should investigate what standards it could develop for the training, looking at the future. CCTV also assisted – at the University of the Vaal, there had been many complaints around theft, with security officers accused of being in collusion. The security company had then been requested to install cameras which had resulted in the arrest of students. It had been a catch 22 situation, because then the security companies had been accused of being “out to get” the students. He agreed the quality of training and standards needed deeper inspection, given these challenges.

Ms Molebatsi wanted to know about the leases of the old and new PSIRA buildings. Last week, the Committee had heard from the Central Firearm Registry (CFR) that people were being made aware of the status of competency certificates and licences via SMS. In the case of the security industry, did the individual guards or the owner of the company receive an SMS?

Mr Chauke responded that PSIRA had just renewed three leases (in Johannesburg, Umtata and Port Elizabeth). The head office lease (in Centurion) had also recently been renewed. PSIRA was engaged with National Treasury on a feasibility study in terms of building. This was also for the Arcadia Office, which was still being used inappropriately as a satellite office.

Ms Molebatsi was concerned that the unsafe Arcadia office was still being used as a satellite.

Mr Chauke clarified that the building itself was not being used – the two adjoining houses next to the building were being used for services. On the CFR SMSs, the arrangement with firearms usually began with the company applying for a competency certificate for their guards. Depending on how the forms were filled in terms of who should be notified, the number on the form would receive an SMS which, in most cases, would be the responsible person. If an individual guard applied for a competency certificate, that individual would be notified.

Mr Mbhele was curious about whether there was a Broad-based Black Economic Empowerment (BBBEE) sector charter for the private security industry and if so, what the current status was between where the industry currently was and what the target intended, given that one of the objectives of PSIRA was to broadly promote representation in the sector. He expected this to be on the radar when interacting with stakeholders. With the ERP system, from the committee researcher’s presentation, he had noted an increased allocation for computer hardware procurement -- did PSIRA have to work through the State Information Technology Agency (SITA) in terms of ICT procurement and management and if so, how was this cooperation going?

Mr Chauke replied that there was currently no BEE charter in the industry. The past few years had been focused on getting the Regulator back on its feet financially, along with developing regulations and reputation. It was a goal to look at transformation in the industry – all stakeholders should come together to develop a transformation charter and this was on the agenda for the next two to three years, in line with PSIRA's mandate. On the ERP, there were certain technology items the Authority could not procure without checking first with SITA – the Authority did not procure directly from SITA, but sought assistance.

Mr Maake was interested in PSIRA's role in counter-intelligence structures and who participated in these structures – were they intelligence officers, or simply laymen? He did not understand why the Authority had only one vehicle.

Mr Chauke said people participating in the forums were not necessary intelligence people, but were those government employees who were conscious of aspects of intelligence. There was a standard in the environment that all government security managers had to undergo certain training given by the State Security Agency (SSA), and this training provided a full background. Regarding the vehicles, inspectors used their own cars and were given car allowances, so the Authority did not have vehicles of its own – the one PSIRA vehicle was used for the delivery of documents etc.

The Chairperson wanted to know how many security officers and firms were registered with PSIRA. With the crediting/refunding issue, after the process was complete, would this result in a zero balance in the account? He sought an update on the unidentified payments made to PSIRA, and asked if the matter was now fully sorted out. Was PSIRA satisfied with its current provincial spread to ensure that there was compliance?

Mr Chauke replied that there were roughly 2.1 million security officers in the entire database. This number fluctuated, depending on which numbers were disclosed by the companies. In terms of security companies, there were roughly 27 000 in the database and 9 500 were active. This number also fluctuated in terms of new registrations/deregistration on a monthly basis. Untraced fees were inherent in an industry such as private security, and was a challenge which could not be eradicated completely, although the Authority was working towards it. The number of untraced fees had been reduced significantly, as PSIRA worked with the banks and did a monthly reconciliation.

Ms Sebogodi added as at year end, allocated deposits amounted to R152 000. There were weekly reconciliations, where there was merging to ensure the funds were allocated to the correct PSIRA number and security provider. This amount was very minimal.

The Chairperson understood that the amount would decrease further because, as the Committee had been informed at an earlier engagement, the Authority did not use this system anymore for direct deposits. Was this correct?

Mr Chauke clarified that the system was still being used, but its use was discouraged extensively. The challenge was that PSIRA was not represented in all the provinces, like in the North West Province, Free State and Northern Cape. In the future, as the environment was modernised and technology was used, the problem would go away. This would come with the implementation of the new ERP going forward.

In closing, the Chairperson remarked that another engagement would be had with PSIRA in September/October to track progress on the issues discussed today. PSIRA was making progress, although it was an environment where a lot of new reforms were still needed. The Committee looked forward to the appointment of the new Board going forward.

The Committee would be meeting tomorrow at 09h00 in the same venue with SAPS management on four key issues where updates were required.

The meeting was adjourned.