Department of Correctional Services Quarter 4 performance: hearing, with Minister

Standing Committee on Appropriations

29 August 2017
Chairperson: Ms P Phoswa (ANC)
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Meeting Summary

The Department of Correctional Services (DCS) presented its performance report for the fourth quarter of 2016/17, and informed the Portfolio Committee that it had achieved 25 of the 40 targets (63%) of its predetermined objectives. Only programme 2 (Incarceration) had received a qualified audit opinion -- the rest had all been unqualified. The appropriation statement submitted with the annual financial statements on 31 May 2017 indicated an under-expenditure of R38 million, and as a result, the Department had spent R21.5 billion against its adjusted budget of R21.6 billion. The main reason for under-expenditure was in the compensation of employees, as there were 2 735 vacant funded posts.

The Department described measures it was taking to keep costs under control, but pointed out that the number of offenders was increasing. It ascribed this to the socio-economic impact of poverty and unemployment. It incarcerated about 161 000 offenders a year, and there were more than 70 000 people who were on parole or probation. Sadly, this was the reality that the Department was faced with, as given its budgetary constraints, as it could take in only so many offenders.

Members asked how the Department was coping with overcrowding in correctional facilities, and how cost effective the public/private facilities were. What progress had been made with using large portions of state-owned land for skills development programmes for inmates? They expressed concern over the non-payment of suppliers and the increase in accruals. There was criticism of management for not ensuring that funded vacancies were filled. Allegations of corruption, such as applicants for posts in KwaZulu-Natal being asked to pay money in order to be considered, were raised. The Department was also asked to provide details on the extent of support it was giving through its procurement activities to small, medium and micro enterprises (SMMEs) and cooperatives. The recently terminated electronic tagging contract also came up for discussion.

Report of the meeting to follow.

Meeting report

Department of Correctional Services: Q4 performance report

Mr James Smalberger, Acting National Commissioner, Department of Correctional Services (DCS), said that due to the vastness of the information that the Department brought before the Committee, the presentation would be based on the Executive Summary. However, Members could ask questions of clarity about any information contained in the rest of the documents. This was the first time the Department was appearing before the Committee, so it had brought as much information as was deemed necessary.

Mr James Katenga, Chief Deputy Commissioner (CDC): Strategic Management, DCS, commenced the presentation with details of the performance information for 2016/17 and the Department’s progress on Medium-Term Strategic Framework (MTSF) indicators. It had achieved 25 out of 40 targets (63%) of its predetermined objectives for 2016/17.

In the summary of findings on the reliability and usefulness of audited programmes in the 2016/17 financial year, only programme 2 (Incarceration) had received a qualified audit opinion. The rest of the programmes had received unqualified audit opinions. The reliability of the financial statements had improved, as previously programmes 2, 3 and 4 had received adverse audit opinions. As for the usefulness of the annual financial statement (AFS), the audit had recorded a disclaimer for programme 2, a qualified audit opinion for programme 3, an adverse opinion for programme 4, and programme 5 had not been audited.

Mr Nic Ligege, Chief Financial Officer, reporting on the Department’s financial management, said the preliminary in-year monitoring (IYM) report had been submitted on or before 15 April, and the final report after audit by AGSA. The report indicated a preliminary over-expenditure of R5.4 million while the Department was concluding year-end closure processes, such as clearing exceptions, misallocations and year-end adjustments. This had been brought to the attention of Treasury in a letter dated 13 April, encompassing the preliminary report.

For the 2016/17 financial year, the Basic Accounting System (BAS) was closed on 23 April  and final adjustments processed prior to submission of pre-audited annual statements to both Treasury and the Auditor General of South Africa (AGSA). The appropriation statement, submitted together with the AFS on 31 May, indicated an under-expenditure of R38 million, and this figure was not adjusted in the final audit outcome. As a result of the under-expenditure, the Department had spent R21.5 billion against its adjusted budget of R21.6 billion. (See annexure B for a detailed analysis).

The main reason for the under-expenditure was the compensation of employees, which amounted to R14.4 billion against the final appropriation of R14.8 billion. The under-expenditure of R404 million was due to funded vacant posts. The Personnel Administration System (PERSAL) reported a funded permanent establishment of 41 994, of which 39 259 were funded filled posts, leaving 2 735 vacant funded posts. However, this had improved in the previous year through learnership programmes which had resulted in permanent employment for the learners.

Over-expenditure was attributable to goods and services, where the actual spending was R6.1 billion against the final appropriation of R5.7 billion -- an overspending of R384 million. This was mainly due to payments for municipal services, under Programme Incarceration, where invoices amounting to R193.3 million received in the 2015/16 financial year had been paid in 2016/17. The other items that contributed to the overspending were agency and support/outsourced services, and food and food supplies as a result of food price increases, which were above the MTEF budget baseline inflation adjustments under Programme Care.

In the current financial year and over the MTEF period, the goods and services budget continued to be constrained. On average, 65% of the Departmental budget allocation for goods and services was allocated to food for inmates, operating leases, property payments and public/private correctional facilities. Other contributing factors were the significant accruals and payables for the 2015/16 financial year which had been defrayed against the 2016/17 budget. R494 million for 2015/16 had been paid in the current financial year.

The Department had implemented cost containment measures in response to the growing pressures on the goods and services budget. These included:

  • Cuts on the management of official events and functions;
  • Negotiation of contract prices prior to the awarding of bids, which would yield savings that would benefit the Department for a period of over three years;
  • Participating in transversal contracts which had been concluded by National Treasury;
  • Demand management and benchmarking of prices for perishable food supplies; and
  • Exploring renewable energy and water saving technology, amongst others.

Mr Katenge referred to the Department’s Supply Chain Management (SCM), which was centralised to six regions based on the applicable delegation of authority. The procurement of goods and services up to the value of R10 million was administered at the regional level, whereas above R10 million was administered centrally. Some key efficiency measures where the Department implemented negotiation of contract prices with bidders as a measure to contain costs. Through negotiations, the Department would realise savings of R34 million over the next three years. There was also the participation in 35 transversal contracts arranged by National Treasury to an estimated value of R730 million over a period of up to three years.

Additional measures to improve SCM internal controls included:

  • Bid reviews prior to award;
  • Standardisation of special conditions of contract for perishable and non-perishable food items;
  • Reviewing terms of reference for consistency;
  • Standardisation of bid evaluation committee reports;
  • Centralisation of signing of contracts exceeding R3 million;
  • Internal audit reviews of bids exceeding R20 million prior to awarding of contracts;
  • Monitoring and evaluating bidding processes; and
  • Conducting due diligence on outcomes of bid evaluation processes and issuing a compulsory compliance certificate to the respective bid adjudication committees prior to the awarding of contracts.

Under SCM or procurement functionality -- the major deviation during Q2 of 2016/17 -- the Department had extended the outsourced nutritional services contracts for a period of six months, pending the finalisation of the bidding processes for current nutritional services contracts estimated at R388 million.

Discussion

Mr B Topham (DA) said that the number of people incarcerated seemed to have increased over the years. It also appeared that the country would continue on an upward trend for people getting incarcerated. This could be attributed to the adverse economic conditions in the country, such as lack of employment, poverty and the lack of economic freedom, among other things. With that being said, he asked how effective the public/private correctional facility partnerships were, and how much the private facilities cost per inmate in comparison to the public facilities. Was the skills programme for inmates an option that had been considered yet in relation to making use of the large portions of land that was owned by the state, focussing on agricultural activities seeing that food prices would continue increasing, as this would address the issue of lack of interest among young people in participating in agriculture. He believed that this would assist in mitigating the issue of food security in the country.

Ms D Senokoanyane (ANC) commended the Department for the improvement in compliance. However, the payment of suppliers seemed a consistent issue across various government departments, so what was the Department planning to do about it? She shared her concern about the accruals and payables, saying that if the Department continued along this trajectory it would be a serious problem, and therefore something needed to be done to stop it.

Mr A McLoughlin (DA) shared his concern about the expenditure performance, saying that although incarceration had absorbed the biggest portion of the budget, only 38% of the targets had been achieved. He asked for more details about the targets that were achieved, which targets were not achieved and why they were not achieved. Secondly, on slide 4, it was stated that the Department of Performance Monitoring and Evaluation (DPME) had ‘verified Management Performance Assessment Tool (MPAT) 2016 Scores and Remedial Actions’, and surely it was a case of either the Department had complied or had not complied? Therefore, it was not clear how the information was presented on that slide, and perhaps the Department could share some more light on it.

He asked how the over-expenditure on goods and services was funded, because the Department had accruals from the previous financial year and continued to have financial constraints in this area. Furthermore, the percentage of the budgets for each programme and how the budget was utilised on each item, was not clear. He suggested that it was very easy to hide things when the expenditure was not broken down properly, and perhaps the Department could provide an analysis of the expenditure that was broken down per programme to clarify matters.

Mr N Gcwabaza (ANC) shared the same concerns as Mr McLoughlin with regard to overspending, and the accrual of invoices of over R100 million in the 2014/15 financial year being paid only in the previous financial year (2015/16) was very concerning. He asked how this had affected the 2016/17 financial year and how it had been paid. Why had the funded vacant posts not been filled, and how had that affected the performance of the Department? It had been alleged that posts were sold in KwaZulu-Natal (KZN), and perhaps other provinces as well. Instead of the normal qualifications that made one eligible to be appointed, there was allegedly now an additional amount one had to pay in order to get the job in Correctional Services. What steps were being taken by the Department to put an end on that improper conduct?

The Chairperson expressed serious concern over the failure of the Department to make space for beds in correctional facilities. No bed spaces had been created in 2015/16, and there were serious reservations about the achievement of the target of 925 additional bed spaces in the current year, and the planned 492 in 2017/18. The delays in the completion of the infrastructure projects remained a huge concern. She asked the Department to explain how it conducted its contract management, because if there was proper supervision there would not be any delay in the completion of infrastructure projects. How did the Department aim to mitigate this issue?  

If a programme overlapped into the following financial year, it created problems in the current year’s budget, so most importantly, accruals were a definite “no-no” for the Committee. It was a reflection of fiscal ill-discipline by management. Programmes were going to be impacted negatively in the current and following year, so targets would not be achieved.

The Department had fallen short of the norms and standards required in the Correctional Services Act regarding cleanliness, food provision, accommodation facilities and infrastructure. How was this going to be reversed and addressed? Where a gap had been identified, the leadership needed to plan on how to close that gap within the parameters of the law. To remedy the situation at Pollsmoor, the Department had been ordered by the court to produce monthly reports on the progress it was making to reduce the over-crowding. Could the Department update the Committee on this, as it had budget implications?

Department’s response

Commissioner Smalberger responded it seemed that additional work needed to be done by the Department to inform Members about what was really going on in Correctional Services. It appeared as the information presented did not convey the entire picture.

The number of offenders had been increasing. The Department incarcerates about 161 000 offenders a year, and there were more than 70 000 people who were on parole or probation. Sadly, this was the reality that the Department was faced with, as given its budgetary constraints, the Department could take in only so many offenders. He had taken note that the current economic conditions may influence the increasing number of offenders that were incarcerated.

The comparison between the private and public correctional facilities was not easy to make on face value. The contract entered into recently with private facilities meant that only a specific number of offenders could be taken, and those numbers were determined during the negotiations, and could not be amended during the tenure of the contractual agreement. One was taking over 2 000 beds, and the other private facilities over 3 000. Those numbers were very small in relation to the number that the public facilities had to absorb. In the public facilities there was over-crowding, with 190 134 inmates occupying the beds. This translated to 36% more inmates than beds available.

With regard to skills transfer, there were a number of correctional farms where inmates worked and acquired agricultural skills. In addition, there were 96 smaller farms that were also utilised. A lot of produce came from those farms. In the 2014/15 financial year, the farms had produced 8.8 million kgs of vegetables, 704 kgs of fruit, 1.4 million kgs of pork and chicken products, 1.3 million dozens of eggs, and 567 000 kgs of red meat. This produce was produced by offenders. Currently at the production workshops, there were about 1 500 inmates who were working to acquire and transfer skills in textile and steel manufacturing,. The DoC had 14 schools that were registered with the Department of Education to assist inmates who were incarcerated to complete their basic education. There were skills development programme within correctional facilities, but more could be shared on this in detail, encompassing information on partnerships with numerous institutions. The Department had adopted a number of schools in rural areas to ensure that the parolees and offenders were taking care of those schools and making sure they were clean. This programme had been set up to give them an opportunity to give back to the community. Good reports had been submitted by the schools about how helpful this initiative is.

With regard to the escapes, in the previous year only 50 offenders had been involved in escapes. The Department had not met the target of 38, which had been based on a projection of an offender population of 158 000. This could not be blamed on cost containment, because based on the Department’s investigations the majority of these escapes were due to a dereliction of duty.  In the early 1990’s, the figure was sitting at more than a 1 000 escapes in a single year, but that figure had declined significantly over the years.

As for the money spent on programme two, where the Department achieved only 38% of the targets, there were eight targets under this programme.  In the current annual performance plan (APP), the targets had been revisited based on the projected offender population in order for the Department to improve its target achievement rate under this programme.

The next failure was the number of assaults and injuries, where the over-spending stemmed from an increase in gang activities in the facilities. The Department had developed and implemented a gang management strategy within the institutions, and a back-to-basics principle. It was the number of injuries due to those assaults where the targets had not been achieved. There were 243 correctional facilities, and the fact that there was over-crowding in those facilities did not assist the Department in achieving its targets. The other indicator was unnatural deaths, and the target of 52 had been achieved.

With regard to the bed situation, the first indicator was to create new bed spaces by erecting new facilities, while the second included creating new facilities to make more space for beds, and upgrading the facilities to make this happen. The facility that had been built was in Tzaneen. The Department had not been managing the contracts -- it was the Department of Public Works (DPW) that procured the major contracts on the DoC’s behalf. This dated back to the signing of an MOU between the two departments, but the Department had insisted that some of its people sit on that committee so that it could have an input and not rely solely on the DPW to make all the decisions for it. The contractor building the facility was liquidated on 14 December 2014, and the facility was only 93% completed at the time. Construction stopped there and had not been resumed until a new contractor was appointed and started work in January 2017. It may be completed early in 2018.

The other indicator, which speaks to the creation of bed space through renovations, involved another facility located in Estcourt in KZN, which would provide over 309 bed spaces. The same thing with the previous contractor in Tzaneen had happened in Estcourt -- the contractor had also been liquidated. However, since August last year a new contractor had been on site and the project was not far behind schedule

The indicators in the presentations were not linked directly to the budget. The targets may not have been achieved, but the Department could provide legitimate reasons for this.

Another indicator referred to over-crowding. The Department had to deal with about 37% over-crowding overall, which puts more pressure on the resources. Budget pressures and staff complements were not in alignment. The staff complement numbers were going down, while the number of offenders was increasing. To mitigate this issue, the Department had a multi-prolonged over-crowding strategy which was being applied, and if it were not for those measures the numbers would have been much higher and would continue increasing.

Ten years ago, the number of offenders serving short sentences was much higher than now, but those serving longer sentences were up by 400%. Those sentenced to life in 1994 were 435, but now it was 14 000. About 10 000 offenders had been sentenced to life in prison after 1 October 2004, and in terms of legislation need to serve at least 25 years before they could be considered for parole. This meant that those with longer sentences were now going to be in the facilities for much longer.

As for the Pollsmoor admission centre, it was about 220% over-crowded -- it could accommodate only 1 600, and there were more than 4 000 offenders. Part of the strategy to address this was to distribute the offenders across different facilities. The Department had given instructions to transfer inmates to inland facilities so that the over-crowding could be managed. For instance, over 1 000 offenders had been transferred to the Free State region, because the numbers there were much less. However, there had been unintended consequences as result, such as people being away from their families. The Department was complying with that judgment, and when it produced its report in court it would reflect a lower percentage of over-crowding. 150% had been agreed upon as the benchmark, even though that was not even at the international standard. The Department had developed a strategy to ensure that nationally it did does not wait for the court to make an order. This system would help to monitor over-crowding and the transfer of inmates nationally. The Deputy Minister had stated in his budget speech that the Department was aware of the issues and the requirements of the Correctional Services Act.

Mr Michael Masutha, Minister of Justice and Correctional Services, said that the drivers of high levels of crime in the country needed to be confronted, as well as the heightened levels of violence against women. The underlying soci-economic factors that influenced this needed to be interrogated. One could not have a functional economy in an insecure environment.

When he took office three years ago, he had been informed that the levels of compliance with parole conditions was between 85% and 86%, but now compliance was sitting at 99%. This was compliance with all manner of conditions under which people were released. Of the 1 300 applicants for parole, he had thus far granted only 300, and of those no person released had committed an offence except for one – a case of rape -- where the Acting Minister had revoked the parole. He had then asked for more details of the circumstances and what had gone wrong.

The Minister said that he gets taken to court about 10 times on average a week by inmates who were not happy with parole decisions. The ultimate mandate was to create conditions that promoted non-offending behaviour in society. Therefore, the parole conditions have been stringent with such a commendable success rate.

The judiciary had the ultimate responsibility for the management of courts, and for ensuring that the system in overall performed optimally. This was supposed to help reduce the turn-around times in which cases get finalised, and stringent disciplinary measures had been put in place by the judiciary. The reality was that due to the underlying socio-economic drivers, the country faced high numbers of violent crimes.  The Department faced the reality of a lack of bed space available to accommodate the people in its 243 facilities. There had been a reduction in the number of detainees, but the targets had not yet been achieved. The Free State was the lowest offending province in the country, so the Department was moving some inmates there due to the extra available spaces, and was continuing to manage down the numbers in the bigger urban centres. The Minister had been to Tzaneen recently, where the facility was almost complete, but at an additional cost unfortunately.

As for infrastructure, the Department had decided to resuscitate offender labour beyond agriculture and the manufacture of furniture. It had appointed directors for facility management in all the regions to make it developed the necessary capacity to do a number of things. Previously the DPW would send the DoC a bill, and it would pay the bill without interrogating it, and in some instances the DCS would be taken for a ride, which was why the numbers had decreased drastically. The Department was now going to use offender labour to introduce in-sourced maintenance of its facilities. The inmates had adopted over 300 schools, and they went to the schools and cleaned up the yards, painted the schools, fixed the leaking roofs, etc. This was part of the training offered to the offenders, and changing their social attitudes.

The total staff complement was sitting at 42 000, but it was going down, although the Department had held interviews recently for key positions. It was losing 100 experienced employees a month, and such a situation had a direct impact on capacity. The reduced budget had affected the Department’s ability to absorb young people. When it was assessed on its structure, it was reported that it required about 60 000 personnel in order to deliver the service that it was mandated to deliver.

Furthermore, the public/private correctional facility partnerships seemed more of a policy question which would have to go back Cabinet. The two that the Department had in the Free State and Limpopo, provided the ideal system of incarceration, where all the norms and standards were maintained. However, the rest of the correctional system could not turn away people, and it was suggested that perhaps those with minor offences, such as theft in retail stores because of poverty should be released. The reality was that the greater percentage of the inmates at the facilities were there for serious offences, and the minor offences were a relatively small percentage. The Minister’s stringent measures in granting parole were also not really helping, but he did not want people offending on his head. One murder -- one committed by someone he had released on parole -- was one too many.

Commissioner Smalberger said that the capacity of the facilities had been strengthened to make sure that there were people in all regions. The Department had been granted 100 positions to have personnel in all regions in order to strengthen the capacity. It was aiming to take over the municipal services functions -- currently the DPW was doing this, but it was not doing it for free.

The Department had an investigative departmental unit that investigated all maladministration within the Department and its regions, and allegations about recruitment. He assured the Committee that the team was busy looking into these allegations, and he was receiving feedback frequently on these activities. It would take the necessary steps to mitigate this issue.

Mr Katenga said that the standards were determined by the DPME, and were intended to measure the progressive improvement in terms of the management practices in government. Regarding the payment of suppliers, the MPAT process indicated it had been non-compliant due to the issues of invoice tracking and the submission of reports, but the action plan was going to address those issues for the following financial year.

Mr Ligege said that the accruals were an indication of illegitimate financial management. However, cost drivers such as the increasing number of inmates and inflationary increases in those particular items far exceeded the budgeted amount. There were constraints to dealing with inflationary adjustments, but a strategic plan had been implemented to address the accruals and reduce the bill. The Department was taking over the management of the municipal accounts, which would result in savings of about R60 million annually. The Department had its own personnel that could do the meter readings and pay the accounts. The impact of efficiency and cost containment measures in first quarter of the current financial year had resulted in a 32% reduction in some of the targeted expenditures under goods and services, and those gains would be utilised to ensure that the budget was prioritised to deal with all those items that were already in distress. In the medium term, the DoC was already in discussions looking at the possibility of renewable energy to reduce the electricity costs and water usage.

Some of the items in the budget were year-marked, so the Department had to do a lot of shift-funding. For instance, the expenditure for water had amounted to R1 billion, and the Department had budgeted for only R800 million. It then had to try to shift some money from other budgetary items, and it was difficult to do so.

The Minister responded to the allegations of the sale of posts, saying that when he came into office he had made it clear that he did not negotiate contracts or tenders in favour of people he knew. Any member of the Department who did so would therefore be held accountable, and the Department’s stance on corruption was very firm. He always checked with the National Prosecuting Authority (NPA) and Special Investigating Unit (SIU) as to whether there were any cases on their desks that had not yet been looked into, and no cases of such allegations had come forward yet.

The Chairperson commended the Minister for being exemplary in not interfering with the administration as a politician.

Discussion

Mr Khoza referred again to the allegations of corruption in the recruitment and sale of posts. Those allegations had indeed been made, but when the Department followed up on them, people had not come forward to assist in identifying the perpetrators, or to apply the remedial processes. Therefore,  the Department battled to investigate further. However, it had taken steps such as rotating the people in those positions to minimise that sort of corruption. In a single year, the Department had had about 1 300 resignations. The majority of the staff complement was ageing, and people were going on to their retirement. Although, some staff members had been dismissed, the majority had resigned of their own accord.

Mr Gcwabaza said that the SCM department was quite active, but not much had been said about the audit committee structure. It seemed that there was no alignment between the targets and the money spent by the Department. It had had reported on the opportunities for small, medium and micro enterprises (SMMEs) and cooperativesbut he wanted to know how many SMMEs and cooperatives it had done business with and the monetary value emanating from those business partnerships.

Mr Topham said that the agricultural outputs sounded very impressive, and it would be interesting if those figures could be benchmarked with the Departments of Agriculture and Rural Development and Land Reform in order to ascertain the efficiency of these prison farms. He also requested that when the Department compiled its reports for future engagements, it should present the information prior to the official engagement with the Committee so that it could interrogate the issues appropriately.  

Ms Senokoanyane asked how unauthorised expenditure impacted on the over-expenditure on goods and services.

Mr McLoughlin asked whether the Department knew how much it cost to keep an inmate in prison per day. Low long on average did an inmate currently on trial normally have to await the decision? What was the average sentence for an inmate who was serving a light sentence?

The Chairperson said that the Department had highlighted that resignations were a challenge, but to outline that as a challenge was problematic because when people resigned, they were supposed give notice, of which allowed the human resources (HR) department to plan on how those posts could be re-filled. It was an indication of incompetence to describe that as a challenge. The Committee’s main concern and mandate was to see value for money, so the targets set by the Department needed to be aligned to the budget because if the money ended up in wasteful and unauthorised expenditure it was the taxpayer’s money being wasted, and the Department needed to be sensitive to that.

As for the internal audit unit, everybody that was employed should be gainfully employed as they were getting paid for their services. The MPAT had alluded to non-compliance -- how was this possible, when there was a qualified internal unit which was supposed to report to the audit committee on a monthly basis?

Was there any consequence management for people who did not perform their duties? It seemed that the Department was not effective and efficient in respect of consequence management. Why were there problems when there was a fully functional audit committee to which the internal auditor reported every month? The internal audit unit was there to eliminate these problems -- in fact, to ensure that the issues the Department was experiencing did not arise. Did it have a monitoring and evaluation unit? If so, why were there issues that should not be there in the first place?

Electronic tagging of parolees formed part of the monitoring process, but there had been concerns raised about the contracts for the tagging. Could the Department indicate any unauthorised expenditure? This was not a crime, but indicated that someone was just not complying. However, although it may not be a crime, people needed to be held accountable. This spoke to consequence management, so if the Acting Commissioner did not act sternly and firmly on this, he was the one who would be held accountable.

National Treasury had also shared its concerns about the processes and procedures of the Department in terms of the payment of suppliers, procurement services, over-expenditure and under-expenditure.

Department’s response

The Minister responded that since democracy, the Department had managed to get an unqualified audit outcome, but in the current financial year it had not been able to account for the issue of the bed spaces properly, which had affected the audit outcome. If it had not been for that, the Department would again have registered an unqualified audit outcome. It had decided that it would not insist on the National Commissioner staying any longer, given the fact that he had acquired about 38 years of experience in the Department, and under his leadership the Department had had an unqualified audit opinion.

Where action could be taken swiftly and cheaply, the Department was taking it, although there had been instances of malicious prosecutions where the Department had had no real basis to pursue an employee

Acting Commissioner Smalberger said that the Department was ready to fix its problems. On the electronic tagging, it needed to be confirmed that on 15 April 2016, the President had promulgated an investigation to look into the procurement of electronic monitoring. The SIU was looking into that, and they had shared some information. A decision had been taken in the meantime that there were sufficient reasons to terminate the contract, and the service provider had been given notice during March this year that the Department was cancelling the contract with effect from 30 June 2017. The service provider had taken the Department to court, and it had been set down for 18 July. The SIU had stated that they wanted to join as a secondary respondent, and this had been allowed. The urgent matter had not been pursued by the service provider, but by the Department.  It had approached the Deputy Judge President in the North Gauteng high court to put it on a semi-urgent basis on the reasons provided by the Department. This was the stage of the process that the Department was at currently. He did not want go into the finer details now in terms of the contract.

He confirmed that from HR, they had indicated the number of people dismissed in the previous financial year, and the question was whether enough had been done in terms of consequence management.

He confirmed that all the targets in the APP were linked to the budget, and he apologised if by any chance the Committee got the impression that this was not the case. As for the suspension of the officials, he highlighted that the Chairperson’s advice had been noted and well received.

The Department would respond to questions requiring detailed information with regard to numbers in writing, such as the average time for people who were awaiting trial. As for the cost per day per inmate, there were two measures of cost -- the direct costs and the cost per capita, but the CFO would go into the details.

The Department had a good relationship with the Department of Agriculture, Forestry and Fisheries (DAFF). The farms were not directly linked, or the same as farms that were managed by people who were actual farmers. The Department was not at the same level of sophistication with those types of farms because the main purpose was to transfer skills to inmates, and utilising them as they served their sentences.

Regarding the filling of critical posts, the Department would be conducting interviews today and tomorrow for three Deputy Director General (DDG) posts. The Minister would be chairing the interviews, and at a later stage the Department would report back to the Committee on the progress.

The cost containment measures included kilometre capping. This was not to stop managers and middle managers from doing their work, but to manage the kilometres. This had saved millions of rands. If there were reasons for people to travel greater distances, this could be organised. It was a good initiative to ensure that costs were measured, and it had yielded positive results.

As for SMMEs and cooperatives, the Department requested again to have this information provided to the Committee in writing.

The internal auditor responded that the internal audit the unit had capacity challenges, but in the previous year it had appointed a total of 18 internal auditors. Some were based in regional offices, others as financial auditors, and the rest as members of the audit committee. As a result of these appointments, the audit team had now better visibility in the Department, where most of the work happened. Previously the Department had relied largely on consultants, but with these appointments it had improved greatly and had benefited through the retention of institutional knowledge.

As for risk management, the Department provided assurance through its risk management processes. However, in the current financial year the audit committee had not performed a risk management audit, but in the following year this would be prioritised.

Regarding the work performed by the internal audit unit, the recommendations had been discussed with management and quarterly reports had been furnished to management. The audit committee had had a number of training workshops to train the internal auditors on being effective with the work that it needed to do.

The Chairperson of the audit committee said that the committee met with management once a quarter, and there had been an improvement. This was the second year that the committee had been in operation. The committee engaged management on most of the issues that had been discussed today with the Portfolio Committee. Every quarter after the engagement, the audit committee writes a report to the National Commissioner and discusses it with the national commissioner. In the report, the committee indicates its concerns as well as its recommendations, and there was an annual report that was included in the annual report of the Department.

The audit committee had raised the issue of suspensions with pay, irregular, wasteful and fruitless expenditure, general controls over information technology and the implementation of the information technology (IT) projects, the increase in the accruals and payables, the effectiveness of asset management and the implementation of risk management. It had recommended that the risk management committee gets an independent chairperson. There were vacancies in the internal audit committee -- there had been five members, but two had resigned for personal reasons. It provided the unit with comfort to see the improvement in the Department, and would continue to support it to achieve its objectives.

Mr Ligege said that there was a risk management committee which consisted of internal members, but it was now looking at appointing an independent chairperson. The Department was moving in the direction where it had a fully effective risk management committee.  In the previous and current financial years, the committee had conducted strategic risk assessments.

With regard to reviewing plans for infrastructure, the Department had looked at developing a proper infrastructure programme that would have fewer projects, but would have a high impact on over-crowding. However, the projects that were currently in construction were not being stopped but they were reviewing projects that were currently at the design stage.

The Chairperson said that the Department needed to ensure that it provided all the outstanding information to be furnished to the Committee. She thanked the Members and the delegation from the Department.

The meeting was adjourned. 

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