Private Security Regulatory Authority (PSIRA) on BRRR implementation plan

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08 February 2017
Chairperson: Mr F Beukman (ANC)
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Meeting Summary

The Committee received a briefing from PSIRA on their implementation plan for the Committee’s Budgetary Review and Recommendation Report (BRRR). Mr Nkosinathi Nhleko, Minister of Police introduced the chairperson of the PSIRA Council and all the new Council Members that had been elected.

PSIRA had achieved 84% of its objectives, and 61% of revenue had been collected. A forensic and investigation unit was tasked with the investigation of irregular and fruitless and wasteful expenditure. The outstanding amount that still needed to be recovered was R12 684.64. Majority of the fruitless and wasteful expenditure that was reported in the Auditor General’s (AG) report had been recovered and consequent management issued.

With regard to financial performance, there was a drop of 7% on annual fees because of new security officers employed. Expenditure was below budget. Staff costs were the highest cost driver, as well as advertising. Their debt ratios had improved from 198 days to 149.

Committee Members had raised issues with the use of acronyms without definitions or explanation during the presentation and had recommended that PSIRA prevented that in future presentations to the Committee. Members had also questioned the urgency with which PSIRA was implementing their directives.

Meeting report

Opening remarks

The Chairperson welcomed all in attendance and conveyed the apologies of Committee Members who were not present at the meeting. The Chairperson asked Mr Nkosinathi Nhleko, Minister of Police, to introduce the new Council Members of the Private SecurityRegulatory Authority (PSIRA). Mr Nhleko said that the South African Police Services (SAPS) were ready to conduct their duties following the upcoming State of the Nation Address (SONA) and they would be ready to handle any situation that would arise.

Mr Z Mbhele (DA) asked what measures or assurance Mr Nhleko would put in place to prevent delays of not complying with deadlines required by statutes to comply with such bodies as PSIRA.

Minister Nhleko said that any delays were regrettable and SAPS was committed to ensuring that such unforeseen circumstances were avoided in order to avoid unnecessary delays. Mr Nhleko was appreciative of the work done by the previous Council Members of PSIRA in laying the groundwork for the new Council so that they could carry on the work from where it was previously left off.

Minister Nhleko introduced the Chairperson and Council Members of PSIRA. Mr Z Zulu, Council Member, PSIRA had sent his apologies for not being able to attend the Committee meeting. All other Council members were present.

PSIRA Briefing to the Portfolio Committee: Committee Recommendations

Mr M Chauke, Director: PSIRA said the presentation would include the action plan as well as the third quarter performance report.

The achievements against strategic objectives were currently sitting at 84% achieved. 61% of revenue had been collected.  Expenditure was at 12% below the budget.  In terms of delays with the Enterprise Resource Planning (ERP), PSIRA anticipated that it would have a surplus of R26.6 million as compared to the year to date budget surplus of R23.9 million in the last financial year.

Short term recommendations included issuing security training for basic knowledge skills on matters pertaining to human rights, developing a programme that was aligned to the outcomes provided in the National Qualification Framework (NQF). The action plan was expected to be delivered no later than 31 March 2017.

There was a recommendation to strengthen private engagement with SAPS on issues relating to Fees Must Fall (FMF) in case the protests begin so that officials knew what their role involved. A meeting was scheduled with the Department of Higher Education and various Vice Chancellors of universities on issues of protests because security personnel were regularly required to perform various roles which were often not in line with their directive. PSIRA was looking at a draft Memorandum of Understanding (MOU) to reaffirm the role and responsibility of all parties involved.

From a long term perspective, PSIRA was looking at developing regulations in respect of the occupational conduct of the security industry in dealing with protest action in general. They worked greatly with SAPS when dealing with protest action and this was a relationship they hoped to continue.

A forensic and investigation unit was tasked with the investigation of irregular and fruitless and wasteful expenditure. Amounts that needed to be recovered were R998.84, amounts under investigation were R7 940.79, amounts that were recovered were R250, and amounts to be deducted from employees were R3 495.

With regard to compliance inspections, the Authority would focus on some of the primary root causes of exploitation of security officers such as, complacency by clients of security service providers in accepting or demanding lower than regulated prices including government, profit maximisation by security companies, illegal practices by unregistered security service providers, lack of awareness in relation to conditions of employment and the use of cheap labour in the form of undocumented foreign nationals.

To date the following progress was noted - 84% of all regulatory and routine inspections were conducted in the guarding sector in the third sector. There was a 58% increase from 2015/2016 in improper conduct charges relating to failure to pay prescribe wages as contemplated in the sectoral determination 6 published by the Minister of Labour. 438 dockets with minimum wage charges and 654 dockets with PSSPF dockets were pending prosecution. There was an increased focus on exploitative practices. A MOU with the Unemployment and Insurance Fund (UIF) would be finalised.

The complaints framework would be reviewed to address service level targets regarding resolutions of complaints such as turnaround times for resolution of complaints and service delivery complaints.

The Authority was establishing a panel of experts to advise on transformation imperatives. Transformation would reflect amongst others the following; gender, disabilities, Previously Disadvantaged Individuals (PDI), and social and economic aspects. The draft transformation charter would be completed by the second quarter of the 2017/2018 financial year.

A consultative forum was established between PSIRA and SAPS to develop standards on uniforms, logos, badges, insignia and vehicles in the Private Security Industry (PSI). Draft regulations were to be formulated in the new financial year for consideration by the Minister of Police.

With regard to the Arcadia office, the Authority was exploring Public Private Partnerships (PPP) or Build-Operate-Transfer (BOT) models in the premises targeting the following: provision for PSIRA training assessment centre for Small Service Provider (SSP) and a capital investment project for multipurpose centre for conferencing and banqueting etc.

With regard to progress on implementation of the Auditor General of South Africa (AGSA) action plan, there were 15 outstanding findings relating to compensating measures to enhance the quality of Annual Financial Statements (AFS) and internal controls.

Ms M Sebogodi, PSIRA Deputy Director: Finance and Administration, said that they were confident that they would raise 100% of the findings by the AG.

With regard to quarter three performance information, the year to date achievement was at 86%, which was 1% above the target of 85%.

In terms of financial performance, there was a drop of 7% on annual fees because of new security officers employed. In terms of expenditure, PSIRA was below budget. Staff costs were the highest cost driver, as well as advertising. PSIRA debt ratios had improved from 198 days to 149, which was a drop of 49 days.

Prof N Mazibuko, Chairperson of the PSIRA Council, said PSIRA was looking at long term engagements with various entities such as the Department of Higher Education and Training on improving security services offered and not just intervention in cases of crisis or need but on a more ongoing basis.


The Chairperson asked for a training curriculum on the training offered to security providers. He asked if there were disciplinary actions taken against non-compliant officials in cases of consequent management. Case management was an area of huge contestation – he asked if PSIRA would be going into a benchmarking process or what its planning was in that regard. What was the current system in place was with regard to the declaration of interests for board members and top management officials within PSIRA? Had this been done?

Ms M Mmola (ANC) asked what the date was for the meeting scheduled with the various entities. When would the panel of experts be established? She asked that for future presentations PSIRA write out terms in full instead of using acronyms because she did not understand what some of the acronyms meant. She then asked for clarity on slide 37, relating to “other”.

Mr J Maake (ANC) asked if there was a standing measure taken in the instance of cheap labour, or how PSiRA determined punitive measures to be given.

Mr L Ramatlankane (ANC) asked about directives dealing with private security when involved in protest management. He asked what would happen if a protest were to occur tomorrow and the directive had not been finalised yet. How long the process would take to finalise the directive and what was the process exactly? He asked if there was any agency in the matter of directives. He was also concerned about the directive relating to uniforms, insignia and security officers not being identifiable - he was concerned about the urgency of that directive.

Mr Z Mbhele (DA) said that one of the points made last year about the engagement of private security with universities was that there was a risk that if a university in-sourced security services there would be implications with not knowing what their role was. He asked if there were any other institutions that had also in-sourced private security.

Mr Chauke said that the directive dealing with institutions of higher learning could be given to the Committee after the meeting. He said that before deductions were implemented, there were investigations that occurred to determine whether the accused was guilty or not. The ERP systems were being replaced with a system that had many modules and included case management.

In terms of the board and top management, declaration of interests by members of Council and top executives were sent out by the company secretary and would be shared with the Chairperson. He confirmed a meeting was set for 17 February 2017 with TVETS council, and the venue would be confirmed. The panel would be finalised by no later than April.

Mr Chauke explained PPP was an acronym for ‘Private Public Partnerships’, and BOT was ‘Built Operate and Transfer’ model. Those security service providers exploiting people would be held to an enquiry and would be identified and penalised if found non-compliant or to be exploiting cheap labour.

PSIRA had already engaged with institutions of higher education with regards to some of the challenges encountered last year with security services not being easily identified, use of firearms, etc and the directive was to ensure that security companies knew what they were liable for and what was expected of them. The directive also covered security services gathering intelligence in order to plan much better when protests would occur and what acts of protest action would be taking place. Security officers were by law required to wear their uniform on campuses so that they were easily identifiable.

Mr Chauke explained there were various challenges with in-sourcing private security. The University of SA (UNISA) had also implemented private security on their campuses. Other institutions had in-sourced their own private security services but he did not have that list of institutions with him on hand.

Ms Sebogodi said that the list of revenue collected was from services rendered, sale of goods, annual fees, infrastructure reassessment, registration fees, fines and penalties.

The Chairperson asked for clarity on the ERP model that had been procured and what the development costs and add-ons were.

Mr Chauke said that the new system was built in such a way that complaints could be made online and integrated onto one central database. The system would cost R38 million and included a full package with no additional add on costs.

The Chairperson asked how PSIRA would facilitate the entrance of new employees in the field.

Mr Chauke replied those individuals were covered in the transformation charter. He said that he could not understand all the challenges of Small Medium and Micro Enterprises (SMMEs) but new entrants were included with regard to those with disabilities, facing social and economic factors, etc.

Mr Mbhele asked for clarity on why there was not a larger number of consequent management issued out to non-compliant security providers. There was previously R17 9322.00 of fruitless and wasteful expenditure from the AG’s report, but slide 10 of the PSIRA presentation showed that there was only a total figure of R12 684,63 that was been acted on in terms of recovery and investigation. He asked why there was not more action on the total figure of fruitless expenditure that was discovered by the AG since this was part of the consequent management action.

Mr Chauke said that at least over R100 000 from the AG’s findings in the report was not carried over into the new year because the matter had been resolved and most of the funding restored. Consequence management had been carried out.

Mr P Mhlongo (EFF) asked if PSIRA had incentives for local companies to compete in the security industry with foreign companies. Was a mechanism in place that would curb the usage of undocumented foreign nationals, unregistered companies, etc?

Mr Chauke said that there were currently no incentives in place for local companies to compete with foreign owned companies. PSIRA was however looking at ways to include them. One of the models been looked at for implementation were things that they could get for free in the new ERP such as changing the conditions under which they issued cards. Cards would now be issued only upon an individual proving their employment letter to PSIRA. This would not necessarily curb use of cheap labour but would ensure that everyone issued with a card was actually employed and was present on the system.

Mr Maake asked, in relation to the Arcadia office, if he would be right to understand the Arcadia office to be a project for revenue generation.

Mr Chauke responded banqueting was a capital investment method and not a norm of business.

Ms L Mabija (ANC) felt the use of abbreviations was not necessary for presentations to Parliament but were rather suited for presentations amongst PSIRA themselves. Many people who were not administrators would struggle to understand some of the abbreviations.

Mr Chauke assured the Members PSIRA would try to be more consistent with its presentations and not confuse Committee members with acronyms.

Ms Mmola asked if all the vacant posts were filled, and if not, when they would be filled.

Mr Chauke said that there were a number of individuals who had left PSIRA and that they would supply the number of vacancies present.

The Chairperson asked if there was better inspection on PSIRA’s side or if the Authority was taking a chance with regard to minimum wages and companies not been compliant.

Mr N Ngubane, Deputy Chairperson: PSIRA Council,  said that there were expectations by small companies with regard to the services that PSIRA offered and they would be embarking on stakeholder engagements across the country because there were many challenges such as many small companies being registered for many years with PSIRA but not getting any business. Engagements with stakeholders would be eye openers to some of the issues and challenges facing companies.

The Chairperson asked if PSIRA envisaged visiting relevant sites and inspecting issues of compliance.

Prof Mazibuko said that they would be engaging with sites and having stakeholder engagements - the Committee was invited to attend those engagements.

The Chairperson thanked the PSIRA Council and Executive for the presentation.

He said that it was important for the PSIRA board to be finalised so that the Committee could better engage with them and assist.

The meeting was adjourned. 

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