Special Investigating Unit on its 2015/16 Annual Report & 1 and 2 Quarters 2016/17

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Justice and Correctional Services

18 October 2016
Chairperson: Dr M Motshekga (ANC)
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Meeting Summary

Annual Reports 2016/15

The Special Investigating Unit noted its key performance highlights:
- 20 final investigations reports submitted to the Presidency
- Five proclamations published.
- Potential value of money recovered for the State is R73 million
- Actual value of money or assets recovered for the State is R52 million.
- Value of the five civil matters instituted by SIU is R583 million
- Value of matters referred to NPA for prosecution and Asset Forfeiture Unit for forfeiture is R6.8 billion.
- Value of three contracts set aside as a result of the SIU’s intervention is R717 million.
- Value of payments not made in two matters as result of SIU’s intervention is R310 million.

The annual performance information for 2015/16 was presented:

Key Performance Indicator

Actuals

 Target

Number of Proclamations Issued

5

12

Percentage of Issued Proclamations Finalised

0%

60%

Potential Value of Cash and/or Assets Recoverable

 R73 m

 R220 m

Actual Value of Cash and/or Assets Recovered

 R52 m

 R120m

Number of Civil Matters Instituted in Court or the Special Tribunal

5

15

Number of Referrals made to the National Prosecuting Authority

307

45

Disciplinary matters referred to relevant State Institution

68

60


The unique selling point of SIU is that SIU does have powers to institute civil proceedings and recover monies for itself and on behalf of state institution. There has been an engagement with the Office of the Chief Justice with a view to reestablishing the Special Tribunal provided for in the SIU legislation. The main intention is that SIU has infrastructure to hear matters that cannot be taken on by the already busy courts. If it does materialize, it will impact positively on the matters that SIU takes through that court and the perception would be that government is acting speedily on corruption matters.

Key challenges were identified
- Non-achievements of targets in Annual Performance Plan
- Low proclamation inflow: Low Proclamation Inflow – measures have been considered to improve business development initiatives and stakeholder relations.  These include an MoU with the National Treasury (Office of the Chief Procurement Officer), DoJ and the Presidency, legislative changes and a centralised approach to expedite the motivations. 
- Poor turnaround time of implementation of remedial actions by the NPA. We have engaged the NDPP and we have drafted an MoU which includes a monitoring structure.
- Feedback from State Institutions regarding the implementation of referred disciplinary actions and systemic recommendations. SIU will receive feedback from the Presidency.
- Non-payment by State Institutions who are under investigation. Solution includes engagement with National Treasury, and more regular updates to State Institutions on the progress of the investigations.
- Shortage in specialist resources such as senior forensic lawyers. Recruitment has been finalised.
- Ineffective collaboration with other law enforcement entities - measures include targeted meetings with relevant stakeholders to ensure practical co-operation and protocols to regulate relationships.
- Current legislation does not provide for pre-proclamation phase investigations which are often required to develop new opportunities. Draft amendments to the SIU Act have been prepared to address this matter

Principles to improve turnaround times include a new strategy to obtain proclamations as focused and specific as possible, where matters will only be investigated that relate directly to the allegations; for multi-year proclamations (investigations) interim reports will be submitted to the Presidency; SIU has introduced project reviews to fast tracking the finalisation of investigations.

The Committee were mostly very supportive of the work of the SIU. Members questions looked at the low proclamation flow; inter-agency cooperation; its funding model, reestablishing the Special Tribunal, how SIU chooses matters to investigate, prescription on civil cases, pre-proclamation work, the Afrobarometer corruption survey; turnaround times of investigations; if SIU has adopted a mole rather than a scorpion approach; how does SIU ensure that the Presidency cooperates; leadership attrition in the SIU; the imperative of having a clean audit as an integrity agency.
 

Meeting report

The Special Investigating Unit delegation included Adv Jan Mothibi Head of Special Investigating Unit, Miseria Nyathi Head Business Support, Mr Leonard Lekgetho Project Director, Mr Gerhard Visagie Corporate Legal Counsel, Ms Sefura Mongala, Acting Communications Manager, Mr Jerome Wells Corporate Lawyer, Michael Leaser, Regional Head, Western Cape, Andre Gernandt, Chief Financial Officer, Mogale Maloma Finance Manager.

Adv Mothibi noted the key performance highlights:
- 20 final investigations reports submitted to the Presidency and five proclamations published.
- Potential value of money recovered for the State is R73 million such as the Preservation Orders or Acknowledgement of Debts that could lead to actual recovery in a future reporting period.
- Actual value of money or assets recovered for the State is R52 million such as final forfeiture orders or cash paid into the trust account following acknowledgement of debt.
- Value of the five civil matters instituted by the SIU amounted to R583 million. One of the matters to the value of R139.4 million has since been finalised.
- Value of the matters referred to the NPA for prosecution and the Asset Forfeiture Unit (AFU) for forfeiture is R6.8 billion.
- Value of three contracts set aside as a result of the SIU’s intervention is R717 million.
- Value of payments not made in two matters as result of SIU’s intervention is R310 million.

Key Performance Indicators:
The annual performance information for 2015/16 was as follows -
- Actual numbers of proclamations issued was five and the target was 12. The percentage of proclamations finalised in this particular year is 0%. The outcomes of those proclamations under investigation will be discussed later.
- Potential value of cash/assets recoverable had a target of R220 million. The actual value of cash/assets recovered was R52 million.
- Civil matters instituted in court or special tribunal, since finalised was five against a target of 15.
- Referrals to the NPA was 307 against a target of 45
- Potential disciplinary matters brought to the attention of the a state institution was 68 against a target of 60.

Referrals to NPA:
In terms of the referrals made to the NPA, as part of the methodology of SIU investigation, when the Unit comes across an indication or evidence that points to the commission of a crime, SIU will put together the evidence and do a referral to the NPA and the decision to prosecute lies with the NPA. SIU has the knowledge and understanding of what it takes to put together a case for prosecution but more often SIU goes to the prosecution with evidence that could prima facie point to the commission of an offence but as stated the NPA has the decision to prosecute.

In 2014/15 there were 178 referrals and 2015/16 we referred about 307 matters to the NPA. This is a number that points to the results that the SIU team is delivering. There are a number of matters that the NPA has acted on. Some of them needed further investigations. Some have been referred to the AFU. The main indication is that there are a number of matters that have been referred for prosecution. The view of the Unit is that the matters investigated make the necessary impact. The Unit has to see the prosecution of those matters and those who are guilty of corruption offences prosecuted and sentenced were appropriate.

Measures have been put in place to monitor the matters that have been referred to them. It is the Unit’s observation, that there are still some matters that the prosecution has not prosecuted as yet and it proposed in agreement with them that SIU and NPA come together in an MOU format and we create a monitoring structure to ensure that we monitor all these cases.

Disciplinary referrals update:
These are referrals where the investigation teams picked up evidence of state officials that have made themselves guilty of disciplinary matters. In such instances the Unit puts together a file with evidence, on a similar basis that would be done for the NPA. A package is created with evidence and presented to the state institution and recommended disciplinary processes are presented. In both instances concerning the NPA and the state institutions, the Unit does make its members available to testify in those matters to enable the state institutions to prosecute or present the disciplinary hearings with success. With reference to those matters, as stated on page 48 of the Annual Report, one can see that state institutions rely and use SIU recommendations. Year on year comparison between 2014/15 and 2015/16, the bigger number has been out of the Eskom investigation and more than 3 000 recommendations were made.

However, there are some instances where SIU has to follow up with the state institutions to ensure that they are actioning the recommendations and that SIU is satisfied as to how they are actioned. To date the Unit has engaged with the Presidency to ensure that when the report is issued, the Office of the Presidency does pick up on the recommendations and they also specifically follow up with these state institutions.

Number of proclamations issued:
There are five proclamations and all of them have already kick started their investigation and later an indication will be given when some of those reports could be due.

Many of the proclamations in 2015/16 were done in the latter part of the financial year and hence the target of 60 was not met. This is a function of SIU to make recommendations and motivations to the Department of Justice through the Presidency. The President then has to apply his mind on whether to issue a proclamation or not. What needs to be indicated is that in view of the pipeline of the proclamations, SIU has indicated that in 2016/17 SIU will report on finalised evidence on a particular criminal investigation, and report on that as a closed investigation. The investigations which are closed out fall under a published proclamation. A proclamation will have focus areas, thus this obviates waiting and reporting on the one proclamation,

Potential value of cash/assets recoverable:
A total of 38 Acknowledgements of Debt were signed to the value of R2.8 million with reference to particular proclamations. The National and all Provincial Departments of Social Development, the National Department of Rural Development and Land Reform and the Department of Public Works were all under investigation in relation to the leases they were in. There were quite a number of Acknowledgments of Debt signed in that space.

On Asset Forfeiture Unit Preservation Orders, there is specific reference to the National Department of Rural Development and Land Reform. About four preservation orders have been effected amounting to R68m.

Other Potential Recoveries, this slide refers to other findings that the investigations made. For example, if SIU investigates a lease agreement one could find that the department is being billed for space such as parking bays never allocated by the landlord. The team goes into detail in the investigations and it may seem minute but cumulatively it can result in a huge recoverable for that department.

Actual value of cash/assets recovered:
The SIU Acknowledgement of Debt (AOD) Enforcement Department follows up the acknowledgements of debt and collected R16.4 million in payments from debtors in 2015/16. He gave the example of a final payment made by the Polokwane Housing Association to the National Department of Housing for 492 units that were not constructed at the Ga Rena Rental Village Project. The value of the payment was R29.2 million. A further example was the Department of Public Works in KZN had a final AFU order obtained against Masakhane Properties CC to the value of R2 million. The Specialised Commercial Crime Court in KZN found that the defendants had benefitted from their criminal activities and a confiscation order was issued to ensure that the monies were recovered. Another proclamation involved the Department of Public Works where R2 million was recovered where a lessor was not registered as a VAT vendor and was therefore not entitled to charge the department VAT on the lease payments.

Five civil matters instituted by SIU
• Department of Public Works and SIU acting together were pursuing an action for the recovery of fees. The summons was issued and SIU is still quantifying the amount recoverable.
• Department of Public Works: legal proceedings have been instituted for recovery of payments of R82 million on the grounds that the payments were illegal because it was contrary to the Public Finance Management Act (PFMA).
• Department of Public Works: application was lodged with the High Court to set aside a lease agreement for non-compliance with SCM procedures and the fraudulent award of a tender. In the investigations of SIU, wherever it is determined that an agreement has been entered into contrary to SCM provisions, this is really the unique selling point of SIU to the state institution showing that SIU does have powers to institute civil proceedings and recover in SIU’s name on behalf of the state institution and in some instances state institutions act together with SIU as plaintiffs to recover the monies.
• National Limpopo intervention. The SIU acts together with a state institution, either to support the state institution, or in some cases intervene in any of the settlements that the state institution would propose or seek to settle. Especially in cases where it would not be in the best interest of the state. In such matters SIU does make it know to the state institution that the settlement that they are proposing would not be in the interest of the public or the state and more often the state institution would take advice.
• State Information Technology Agency: SIU instituted an action to have a R265m contract awarded to iFirm set aside. Again this was as result of non-compliance with SITA’s procurement system as well as non-compliance with s217 of the Constitution.

NPA referrals: proposed measures to improve follow-up
Based on the sit down conversations with the NPA in creating a mechanism to monitor the cases that have been referred to them, the SIU and NPA will put together a structure. It is to be agreed on whether the structure sits monthly, two monthly or quarterly to ensure that all points are addressed adequately, giving the NPA an opportunity to indicate to SIU why and where they have declined to prosecute.

If there is a need for further investigation, they would need to indicate which process has to be followed. More often they would approach the Hawks for further investigation and that would need to be tracked. There has been a positive reaction on this from the NPA and a MOU will be signed soon.

A draft MOU has been discussed on measures to improve the follow-up with the National Directorate of Public Prosecutions and the Directorate for Priority Crime Investigations. The tripartite MOU will include the creation of a monitoring and reporting committee constituted by SIU, NDPP and DPCI members to track progress of cases.

Disciplinary Recommendations
If during investigations evidence is found that points to non-compliance by any state officials, the SIU will not wait until the completion of the investigation. An evidentiary material pack will be put together which will be submitted to the state institution for them to take a step against the officials implicated.

SIU has applied its mind and proposed measures to ensure that follow up takes place by the relevant state institution. Similar to how it was done with NPA, it is the view of SIU that if the Internal Audit Departments can include this in their audit plans. Similarly the external auditors’ AG in particular could also include this in their scope to ensure that they audit the state and make appropriate findings. The SIU has also proposed to the Presidency that the Monitoring and Evaluation Department could include this in their M&E plan. Similar to where state institutions have internal monitoring and evaluation departments the latter could also be included in their M&E plan. The SIU intends to send copies of this referral to the Department of Public Service and Administration because it is the custodian of ensuring that the disciplinary matters are properly processed and they could also follow up. Since 2015 SIU has also been sending the disciplinary referrals to the Presidency so that they are also cited and be followed up on.

Proclamations: final reports submitted
This is reflected on pages 23 up to 36 of the Annual Report. The number of final reports submitted in 2015/16 is 20. This indicates the various state institutions that would have been submitted to and the President and at that level there would be appropriate follow ups and actions.

Investigations update
The SIU was requested to depict quarter on quarter performance indication. The SIU performance as against the targets relating to quarter one and quarter two is about 800. This 800 does not necessarily refer to completed proclamations. These are the investigations that have been closed out within the proclamations. The SIU does prepare closed out reports and then we report them out appropriately on the Unit systems.

Quarter on quarter refers to the annual target and there are still some targets that SIU has to perform. The number of reports submitted to the Presidency in Quarter 1 has been none.

Slides 29 and 30 reflect the final reports that are in the process of being prepared. The Unit has reviewed our processes in terms of reviewing this final report. Where duplication of processes were found, the Unit fought to cut down on those duplications so as to speed up the finalisation of the reports without compromising on the quality. The proclamations to be submitted by the end of this financial year have been clustered into National Government Investigations, Provincial Government Investigations and Local Government Investigations.

Slides 31 and 32 indicate the number of active investigations and it too is clustered in terms of National, Provincial and Local Government Investigations. As a team, the Unit have sat down and reviewed the turnaround times. The perception is that the Unit’s investigations take long. However, some of the investigations are very complex in nature, and one cannot compromise the quality of the investigation. The SIU has taken a decision that in multi-year investigations, where the outcomes have been received, interim reports will be produced with specific outcomes and by doing so indicate the kind of focus areas that we have closed per investigation.

Civil matters update
The SIU represents state institutions under the SIU and also in the name of the institutions. There has been an engagement with the Office of the Chief Justice with a view to establishing the Special Tribunal provided for in the SIU legislation. The main intention of re-establishing that institution is it has infrastructure to hear matters that cannot be taken on by the already busy courts. The SIU can happily report that the process has been started and if it does materialize, it will impact positively on the matters that SIU takes through that court and the perception would be that government is acting speedily on corruption matters.

Most of the matters discussed are still in court, some of them have made progress. Some of them the pleadings have closed and the Unit is awaiting court dates. However as mentioned before if the Special Tribunal were to be re-established, SIU would be able to speed up the attention to these matters.

Human resources
The fourth aspect of our presentation, which is also the most important aspect of the Unit the human capital. This indicates the staffing level which is the head count as of the 31 March 2016 of 534. The number of permanent members are 528 and the number of fixed term contract employees are 6 and the operation staff 419 and 115 business support staff.

The skills level in the Unit varies from senior management down to unskilled. We continue to monitor the racial profile to ensure that the Unit does not fall foul of the employment equity levels. As the Unit sits today there are no material issues to raise in this regard.

Financial overview
The SIU receives grant income. What needs to be highlighted is the project income, there is downward trend from R 226 912 to R 174 044 as the Unit engaged with the team there is a clear indication that the fees that the Unit should earn in terms of legislation from the state departments are not being paid.

The SIU has on successive years obtained an unqualified report audit report. For 2015/16, there has been no emphasis of matters which is a good picture, although AGSA has pointed out material misstatements in the financial statements. The Unit has developed an audit action plan to ensure that the Unit clear the audit findings raised by AGSA during the audit. Currently SIU is gearing to ensure it obtains a clean audit.

On irregular expenditure of R2.5m (down from R5.5m in 2014/15), the Unit continues to put in place and impress on staff to follow the process. SIU will ensure that appropriate measures are taken with those who continually do not follow process.

In terms of fruitless wasteful expenditure of R8 708, it is a picture which is not pleasing, however insignificant it may be it still remains fruitless and wasteful expenditure. The reasons for the finding are for interest paid to SARS for late payment of Pay As You Earn and payment of traffic fines incurred by employees. In terms of the traffic fines, SIU recovers the costs from employees.

On debtors, they are still seeing instances where state institutions are not paying for investigations that have been done. SIU has engaged with these institutions, in some instances the reason given is that they have not budgeted for these investigations. The SIU has appealed to National Treasury to find mechanisms to impress it upon the state institutions that it is important for them to pay. The project income forms an important aspect of our funding model so the Unit will continue to drive that. What we will do as a result of our meeting with Treasury, the Unit will write to the state institutions in terms of asking them to honour their obligation to pay, and failing that the Unit will engage with Treasury to see if they could be of an assistance.

Part of the complaint by state institutions is that an investigation is done but they do not get a report. SIU has since taken a decision that when a statement is issued, an update as opposed to a report will be given too. This update will state where the investigation is, what the issues are. If there are any issues the Unit will raise it with the board of the state institution. It has been experienced that when the Unit raises issues with the state institution, cooperation is given.

Key Operational Challenges
- Non-achievements of targets as per the APP remains the challenge faced. However, there has been an improvement on performance targets and the KPIs are being refined.
- Low proclamation inflow: SIU is of the view that the Unit can barely contribute in terms of the business development initiatives to ensure that the Unit picks up on the allegations of corruption where the Unit puts together allegations and motivates for proclamations. However, in this regard there is also a process of processing the proclamations between SIU and DOJ, The SIU has engaged with the DOJ to ensure that the processing of proclamations is reviewed and where there are bottlenecks to ensure that they are addressed so that there is an improved turnaround time for processing these proclamations.
- Relating to the poor turnaround time implementation SIU has engaged the NDPP and a MOU has been drafted, which includes monitoring structures and feedback from state institutions.
- Shortage in specialist resources such as Senior Forensic Lawyers. The recruitment process has been finalised.
- Ineffective collaboration with other law enforcement entities - Measures include targeted meetings with relevant stakeholders to ensure practical co-operation and protocols to regulate relationships. The SIU is a key member of the Anti-Corruption Task Team (ACTT) and refers some matters to the NPA and Hawks. These matters are referred in terms of a criteria set under the ACTT and also monitored by ACTT. This mechanism ensures that there is effective collaboration with other law enforcement without delays.
- Current legislative framework does not provide for pre-proclamation phase investigations which are often required to develop new opportunities. What this means is that SIU will get allegations from the whistle blower that requires an assessment. The Unit was informed that the costs the Unit incurs doing those assessments before the proclamation is signed off, are at times attracting findings of irregular expenditure by AGSA. In this regard there has been as engagement with the DOJ and the Unit is in the process of proposing draft amendments with the purpose of improving the efficiency of those investigations. It will ensure that SIU is able to do an effective assessment of the allegations as speedily as possible and to ensure that the Unit is not caught up in irregular and wasteful expenditure in the view of the AGSA.

Principles to improve turnaround times
- One of the improvements of the proclamation includes structuring it from a previously generic and wide in ambit proclamation which involved lots of investigative outcomes. What has been sought in the new strategy is that when motivating for proclamations, it should be as focused and specific as possible which would result in good structure for the investigations and resulting in them being closed out.
- The next principle that has been adopted is that for multiyear proclamations, the Unit will submit interim reports to the Presidency and they will indicate the outcomes looked at.
- The introduction of project reviews to fast-track the finalisation of investigations. Each team has to explain where they are according to the project plan of the investigation. Where there are delays, action will be taken to support the team.

The presentation concluded by looking at measures to combat corruption, the Afrobarometer survey on corruption, the PSC Diagnostic Report and the AG's Report on overall tends in municipalities in 2014/15 and in departments in 2015/16.

Discussion
Dr M Motshekga (ANC) applauded SIU on their professional and systematic report, stating that it will make it easy for the Committee to work with SIU because the Committee will know what it is they are overseeing. However, as a Committee there are matters the Committee wants to bring closure to. There are many stories about the Department of Public Works and one of those related to what had happened with Nkandla where it was said that certain officials of Public Works were being sued or charged. A matter like that is not something that is to be dealt with under a cluster, it would be important to brief this Committee to say where the Unit has gone with some of those matters so the Committee knows when these matters can be brought to a close.

Mr S Swarts (ACDP) congratulated Adv Mothibi on his appointment, and on a very comprehensive report that highlights the achievements, challenges and where the Unit has not met targets. He pointed out that the last slide indicates R14.75 billion in irregular and wasteful expenditure and that is only the municipalities.

He said he has concern on two issues. First, the low proclamation of only five in 12 months of which three were extensions of existing proclamations meaning that only two new proclamations came into existence for the maiden year under review. This is regrettable and calls for the full support of the pre-proclamation investigations and he urged the Committee and SIU to expedite that.

Secondly, the funding model is a concern, especially when departments are telling SIU that they do not have the budget for the Unit to do its work, that is unacceptable. The legislation was amended, so that SIU can approach National Treasury to assist to recover funds.

Mr Swart said his concern about the Special Tribunals is they are taking too long to reestablish. The issue had been raised over a long period of time and it is a concern that the engagement with the Chief Justice is still ongoing. Mr Swart asked how SIU chose matters to investigate. If you look at the PRASA investigation of R 600 million allegedly wasted on unsuitable locomotives, to what degree does SIU look to other agencies where there has already been some preliminary investigation finding, and where SIU can quickly come in and institute civil recovery.

On prescription, how often is it that by the time the investigation is completed, the matter has already prescribed? Around the relationship with the NPA, why has there has not been one prosecution under the PFMA except of course the Minister of Finance who is now being charged?

Mr Swart asked in terms of disciplinary case referrals, to what degree is there cooperation from the state institution? To what degree is there feedback whether those disciplinary actions are instituted? He concluded that the Unit has tremendous potential if given the capacity needed.

Ms M Mothapo stated that when one looks at the employment equity slide, one will see that most females are unskilled, semi-skilled and it is mostly the males who are in senior positions. Secondly, SIU like the Public Protector is an integrity institution thus perfection is expected from these institutions. There is irregular expenditure and non-compliance with legislation in terms of procurement. Then who cracks the whip on SIU, because it cracks the whip on others when they do not comply? In relation to your Human Resources and the advertisement of positions, how far are you with filling those vacancies and what is the status of employment equity? The position of permanent facility head has been vacant since 2013, what is happening with it? The rollover of funds of R120 million, what does SIU intend on using it for?

Mr L Mpumlwana (ANC) pointed out that South Africa has the worst performance on the Afrobarometer survey in terms of the country with the highest percentage saying corruption has increased over the past 12 months. She wanted to know how accurate the Afrobarometer was.

Mr M Malia (ANC) expressed his agreement with Mr Swart, in saying that the Special Tribunal needs to be brought back to life and also agreed on the recommendations that SIU should do pre-proclamation investigations. He asked what the percentage of employment of people with disabilities was and whether the two percent had been reached. Does the Unit have an internship programme and does the Unit have a staff retention strategy in place? Lastly, how does the Unit protect whistle blowers?

Mr B Bongo (ANC) asked how if the Anti-Corruption Task Team (ACTT) was effective.

Mr N Matiase (EFF) stated that he was equally concerned about the corruption perception as reported by the Transparency International. He was concerned about the independence of state institutions designed to fight and combat corruption. Once the independence is compromised, it has multiple effects on the public’s perception on the state’s ability to fight and combat organised crime and that has dire consequences on the economic side of the country. Going throw the report, he does not see an institution that is poised to strike but a Unit that reports as any other Unit as business as usual. He stated that SIU is structured in a manner that conducts investigations without the powers to prosecute or to pursue criminal chargers. He stated that SIU acts alongside multiple other units such as the Directorate of Priority Crimes, the AFU and alongside many other SAPS units bind to find organised crime and corruption. He hopes there will come a time where the duplicity will be cleared. Mainly because all these units act in competition with one another, there is no integration of efforts.

The Scorpions as they were know were phased out on the basis of allegations that they adopted a “Hollywood” method of investigation and which promoted itself as if it was above any other institutions. That method worked well for the country rather than what SIU have adopted lately. He was not sure of the method adopted, maybe it is a blind mole method.

The SIU is established by the President and reports to the President. If SIU reports to the President and it is investigating the wasteland of Nkandla, assuming that this has been concluded, how does SIU ensure that the President cooperates with the investigation including your findings and recommendations without delay?

Further on the question on the wasteland of Nkandla, does SIU want the contract to be declared null and void and if the investigation report has been handed over to the President, how soon does SIU expect actual measures taken in recovering whatever was lost? What actions are to be taken against or considered to be taken against the officials implicated?

Mr W Horn (DA) referred to the SIU KPIs which show underperformance which must be a worry to us. In terms of the report to assist the Committee further, he asked for the Committee to be provided, if not verbally then in writing, with an update on the progress of the civil litigation matters.

In previous reports to the Committee, it was contemplated that SIU engage Treasury to see if payment could not be effected from the budget allocation from these departments or institutions that were guilty of nonpayment. Has that engagement taken place and what progress if any was there?

When you go to the FIC website, you will see that SIU is listed as one of their enforcement agencies, if you have a look at the website they talk about criminalisation and prosecution and punishment, they talk about a need for forensic analysis and for seizure, confiscation in relation to the losses suffered. Does SIU receive referrals or potential proclamations from them?

Ms C Pilane-Majake (ANC) stated that it was encouraging to see the amount of work that SIU has been doing in terms of the NPA referrals and the disciplinary recommendations. The large amount of money that SIU managed to recover as well, means the Unit is working.

As part of the Anti Corruption Task Team, when reviewing the Transparency International barometer, is SIU part of this study because the information available on South Africa, is something South Africa must own?

She expressed concern about the high vacancy rate and felt that it had a negative impact on the work of SIU. She asked whether there were development programmes in place to up skill the semi-skilled and unskilled African women in the Unit. On the Departments demanding reports, are they demanding these reports to comply with their own audits so that payment can be made? The SIU Internal Audit Committee is worried about the internal audit. What is the impression of SIU on the Internal Audit processes?

Response
Adv Mothibi addressed the question on the low proclamation flow and the five proclamations indicated in the key performance highlights. He stated that it was worthwhile to note that SIU acknowledges that it is not the target by themselves. However, in the last part of the financial year, there were quite a number of proclamations. Of importance here is to address the issues around the process of processing the proclamations. That is what in many instances contributes to the proclamations taking a while to be issued. In the engagements with DOJ, and including the Presidency, to understand where could the inefficiencies lie, it seems to be in the travel of the document. For example there are a number of days that it spends at DOJ where it is sent to the state law advisors and then from there to the Ministry of Justice. There are processes for signoffs, and it goes through these internal processes before it is signed off.

A follow up has been arranged to finalise the MOU. What has been agreed upon is the turnaround times, within the process of considering a proclamation. Those times will be included in the MOU which states what the numbers of days are that can be expected for the motivation to be processed and at what point can a follow up with the Department of Justice happen. The same applies to the Presidency.  Improvement is expected once this process has been signed off, and the expectation is that this MOU will be signed off by both DOJ and The Presidency accounting authorities. A monitoring structure has also been put in place which would then monitor the progress on a regular basis.

On the funding model, it has an element of a grant and also the project fees. Of importance here is to note the projects fees that the departments have not been paying. The causes have been identified as some of the departments saying that they are not getting any reports, however they have to pay for them. From their respective internal processes, they need to substantiate that. SIU has since proactively taken the decision that even though a full report would not be given, updates of where the investigations are will be given. So that these departments can substantiate to the internal auditors if need be and to their accounting authority.

In terms of the capacity question, SIU has since advertised positions and the EXCO members have been engaged to say where there are critical positions there is a need to go out and ensure that the positions are advertised and that the organisation is capacitated appropriately. When the organisational review was done, part of the findings were not fully implemented. The SIU acknowledges that and the EXCO had already taken a decision to do a refresher organisational review. That work is expected to commence in November 2016. It is the view of SIU, that the organisation never geared itself to deliver on civil litigation. Part of the organisation review, will seek to capacitate the organisation in such a way that it delivers effectively on the mandate, and also on this unique selling point which is civil litigation and that will effectively see the recoveries of corrupt, illicit gains.

On the Special Tribunal, SIU respectfully acknowledges and appreciates the view of Committee members.  The Unit is of the view that the Special Tribunal will result in a positive impact if its reborn.

On how SIU chooses matters to investigate, the legislation empowers the President in various instances where the state interest is potentially prejudiced by corrupt activities, to issue a proclamation which authorizes SIU to investigate. How that occurs, is that the Presidency could have received allegations from a citizen of the country and they could then issue a proclamation which authorizes the Unit to investigate.

The SIU also rigorously follow up on some the matters referred to it. The allegations are received and the motivations for proclamations are put together. It has been mentioned that as a country there is a multi agency approach and this is an approach that is effective and SIU has indicated that it participates effectively. Some of those institutions refer matters to SIU, to the Directorate for Priority Crimes, to the Public Protector and they get investigated. The legislation states that once an allegation is received, if SIU is of the view that it could more appropriately be handled by the Public Protector, then it should be referred to the Public Protector and the other way around.

The PRASA matters been referred to some of the agencies, such as the Hawks. The SIU does accept that as part of the multi agency approach, the Unit has to collaborate effectively and while the Unit is able to pick up and close up the gaps, it should engage with institutions.

On the prescription of cases, as indicated SIU has the legislative enablement to institute civil litigation where there is an opportunity to recover. The Unit does take into account whether the matter has prescribed. In many instances, the Unit would have advised the state institution to take action to ensure that prescription is preempted.

On the surplus, SIU has approached National Treasury to retain the funds which would in the main be used for operational requirements. There is a need to itemize those operational focus areas.

In terms of employment equity, SIU does ensure that it complies and it is a business imperative. The Unit has noted from a gender perspective, that women are concentrated at the bottom and the Unit will take that into account. Once the organisational review has been done, HR will ensure that the plans the Unit rolls out to execute the strategy comply with employment equity expectations.

On the comment about promotion of good governance and the expectation of SIU audit perfection, the Unit will take that into account and will put effort to ensure that those areas of irregular expenditure and wasteful expenditure are really addressed. It does not please SIU to be reporting on those aspects.

The filling of positions that were advertised, notably the Chief Financial Officer, the CFO was appointed with effect from 17 October 2016 and is on a fixed term contract. The Unit will then review and fill it on a permanent basis. On the other positions, the interview for Project Director, the Unit had a person acting in that position for almost three years. The position of the Deputy Head has also been advertised and interviews scheduled.

On Afrobarometer, the survey was included as part of SIU's situational analysis, part of what SIU does is to scan the environment and ensure that the Unit positions itself, firstly by understanding what informs the environment. Transparency International partnered with Afrobarometer to produce the People and Corruption: Africa Survey 2015. Research ensures that the Unit demonstrates going forward that it understands the drivers behind such surveys as this survey is perception based. There is a role the Unit can play to ensure that within the multi role approach, the Unit impacts positively on the perception.

On pre-proclamation work done by our Unit, in these investigations the Unit tries its best to analyse the allegations appropriately. However, because legislation does not allow for pre-proclamation activities, there is always kept in mind that any costs incurred could attract irregular expenditure. However, as indicated, SIU has already drafted proposed amendments to the legislation which we will hand to the DOJ to introduce.

The Unit has had learnership programmes and it has produced good outcomes of senior forensic lawyers and SIU would like to continue with such programmes. In terms of protecting whistleblowers, SIU does interact with whistleblowers in cases where there is a need to protect a whistleblower. We do engage with the NPA to ensure that appropriate protection is provided. The Unit does approach state employees for actions but in terms of the specific contingent liability.

Turnaround times of investigations, this is also a concern to SIU and the principles to improve this have been included. From a performance perspective, once there are the project plans, the deadlines of the project plan have to be adhered to around civil litigation. Yes, indeed none of the other organisations have the capability that SIU has on civil litigation. SIU is poised to strike and the results that SIU is presenting indicate that it can deliver on its mandate. The SIU might not have prosecution powers and that belongs to the NPA but where appropriate and in particular instances, it is useful to have the prosecution delegation. That would be dedicated by the NPA for specific projects.

Has SIU adopted a mole method? No, it has not. We are of the view that the Units’ methodology is effective.

How does SIU ensure that the President cooperates? The Unit has indicated that where there are inefficiencies, the parties involved have come together and ensured that the inefficiencies are identified and mitigated.

On leadership attrition, Adv Mothibi stated that his observation is that there has been attrition that has not assisted the organisation and part of the organisational review is to ensure that we have stability and the appointments are to ensure that we bring stability.

Dr Motshekga thanked the delegation and adjourned the meeting.

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