SAPS irregular expenditure; Forensic Data Analysts contracts: hearing with SAPS, SITA, IPID

Meeting report

The Chairperson welcomed the new SAPS National Commissioner, General Khehla Sithole, and his team. The engagement was meant to help the new Commissioner understand areas of concern to Parliament and where the Standing Committee on Public Accounts (SCOPA) want attention to be paid. He noted that there had not been a stable Police Commissioner in a while, especially one who has finished his/her term. This had negative consequences for the police, as leadership is unstable without permanent heads. He expressed hope General Sithole would finish his term. The engagement was mostly about SAPS, and SITA and IPID were only enablers to the process. He asked SAPS to be direct in answering questions.

Hearing
Mr T Brauteseth (DA) welcomed the delegation from the South African Police Service (SAPS), State Information Technology Agency (SITA) and Independent Police Investigative Directorate (IPID). The Committee had received a chunky set of documents from SITA but when it asked SAPS for a response on its dealings with FDA and ROFIN Forensic Light Sources it only received a quarter of a page. A document received in a bundle shows that FDA charges R9.7 million rand per month to service 3 573 items yet when SCOPA asked SAPS to provide all documents relating to ROFIN or FDA it received only a quarter page. He asked where the procurement documents for these items were, noting that the Committee knew SITA did not procure so SAPS must have them. He asked where the documentation was and why it had not been provided to the Committee. The information requested was the details of the contracts and where the procurement documentation was. The Committee had asked for all documents related to the relationship between SAPS and FDA. The Committee knew about maintenance but wanted details on procurement.

Lieutenant-General Stefanus Schutte, SAPS Deputy National Commissioner: Asset and Legal Management, replied that he had interpreted the request differently but the procurement documents were available.

Mr Brauteseth criticized the submission from SAPS as ridiculous. He referred to a document from SITA which asks all suppliers to sign an integrity declaration. FDA has signed a document stating that it was not involved in bribery or corruption, anti-competitive behaviour or any other business practices which would be in violation of applicable laws.

He noted a trip to the UK/Europe in October 2011 to attend an Radio Frequency Identification (RFID) conference. He asked SAPS to provide background to the trip and its purpose.

There was no response from the SAPS delegation but Mr Mgwenya, SAPS Deputy National Commissioner: Human Resource Management, asked for an opportunity to verify.

Mr Brauteseth asked if SAPS engages in educational trips from time to time to law enforcement agencies and companies that might provide technology. He asked when SAPS members fly on these trips whether SAPS members fly business or economy class.

General Khehla Sithole replied that SAPS complies with government regulations on overseas trips.

Lt Gen Schutte replied that SAPS normally flies economy unless it is a threshold of over six to eight hours then it might be business but not first class.

Mr M Booi (ANC) asked if Schutte could provide answers instead of telling the Committee that he does not have the documentation. It was not for the Committee to provide details and the documents cannot be in his office if he is coming to Parliament .

Mr Brauteseth asked for general ideas on the behaviour on these trips and whether expenditure was related to business - staying in hotels, attending conferences then returning home. He asked if it was normal to include extravagant entertainment on these trips.

Gen Sithole replied that it was not normal.

Mr Brauteseth stated that a team had attended an RFID conference in England and travelled to Vienna to visit certain suppliers of documentation. He asked if SAPS still had no knowledge of this trip.

Commissioner Sithole replied that the SAPS delegation did not at that time but would get the details and provide a response.

Mr Brauteseth stated that he had something to illustrate about the trip. He showed a photo to the Committee and asked members to identify where and who the people were in the photo.

General Schutte replied that it might have been a soccer match, that one of them was from IT but he could not identify the other three people in the picture.

Mr Brauteseth clarified that the picture was of Colonel Arendt, Brigadier Masuku, Keith Keating of FDA and Jerenique Bayard of Unisys at the trophy room of Old Trafford, wearing specialized shirts that were made. The information he had showed that this was paid for by Keith Keating and he asked once again if extravagant expenditure was included in the package when SAPS go on trips. He asked if there was a reason Unisys and FDA members would be with SAPS officials on a trip to the UK.

Commissioner Sithole replied that there was no reason, if there was one it would be part of their authorization.

Mr Brauteseth stated that he had an invoice from FDA which procured SAPS order number AE154487 - another document which SAPS did not bring. This was part of a supply to SAPS from FDA and Unisys.

The Chairperson noted that the invoice was for Polyview 4 with Nikon camera accessories such as lenses, scan lights, solution, centre support and maintenance and was dated March 2011. He asked if the trip was a reward for this order. He felt that it was understandable that the Commissioner knew nothing about the trip but was concerned that other experienced and decorated SAPS members were claiming to know nothing about it.

The SAPS Commissioner clarified that a trip may have been undertaken but not authorised.

Mr Brauteseth cautioned that the trip was documented and was an official trip. He advised the Commissioner that he was in Parliament and therefore effectively under oath. He knew for a fact it was not a private trip and that misleading Parliament would result in serious consequences.

Commissioner Sithole clarified that he did not say it was a private trip but that he did not know about it. Whoever authorised it must still account to him on what basis it was authorised. SAPS would go back and look at the trip as it was not a normal practice.

Mr Brauteseth asked Dr Sethumo Mohapi, CEO of SITA, or Mr Graeme Victor, Audit, Risk and Compliance at SITA, if the photos make a mockery of the declaration signed by FDA.

Mr Graeme Victor, SITA Audit, Risk and Compliance, agreed that from an audit point of view the photos do.

Mr Brauteseth reminded everyone that he had just shown photos of people in SAPS supply chain management (SCM) posing with suppliers at Old Trafford. He read the declaration FDA signed that neither FDA nor its affiliates (Unisys), staff, agents or associated parties have or will engage in bribery or corruption to secure any mandate of providing products and/or services to SITA. He asked how the CEO of SITA can refuse to comment as he was embarrassing himself.

Dr Sethumo Mohapi, SITA CEO, stated that the suggestion of an improper relationship goes against what is stated in the letter and what the declaration suppliers are asked to sign.

Mr Brauteseth asked, since the Committee had established that the relationship with FDA was inappropriate, how FDA and ROFIN products were introduced into the SAPS/SITA environment, when it started and what procedure was followed.

Dr Mohapi referred to the submission SITA made which provides a chronology of the relationship. He referred to a maintenance contract dated 2006. SITA did not have documents before 2006, by then it was clear that ROFIN products were in the system.

Mr Brauteseth asked why SITA, as an advisory body, was doing procurement and asked who owns the items

Dr Mohapi replied that some of the items were owned by SITA, some by the department. His understanding was that items were owned by SAPS and SITA oversees maintenance.

Mr Brauteseth asked if he knows who owns ROFIN Australia.

Dr Mohapi replied that he had documents which showed that information.

Mr Brauteseth expressed concern that he had spent R919 million and did not know who owned the company.

Dr Mohapi replied that SITA does maintenance and services, that he did not know but could find out.

Mr Brauteseth stated that that was not good enough. He felt that SITA was dumping the Committee with papers in the hope that Committee would not read them. Some members of the Committee used to work in forensics. He asked how the CEO could tell him he has done due diligence if he does not know who the directors of the companies are.

Dr Mohapi replied that their relationship was with FDA not ROFIN Australia.

Mr Brauteseth stated that it was the same people. There was a possibility that ROFIN Australia was owned by a middleman who sold to SITA at an increased rate but SITA had not taken the time to find out if that was the case. He asked if Dr Mohapi was aware of allegations of improper activities between SITA, SAPS and FDA, and why he did not know who the directors of companies which provided them with products were.

Dr Mohapi replied that SITA knew its own suppliers. He thought Mr Brauteseth was adding the SAPS suppliers. He clarified that SITA facilitates the provision of maintenance services.

Mr Brauteseth asked the CEO, as well as the Commissioner and General Schutte how many other companies in South Africa or overseas provide forensic lighting or Nikon and Spheron products.

Lt Gen Schutte replied that he did not know but assumed there were a lot.

Gen Sithole replied that he did not know.

Dr Mohapi replied that there were more than one, possibly three.

Mr Brauteseth asked if Sithole, Schutte or Mohapi had heard of Arrowhead, West Technology or Fox Fury, stating that he had gone on the internet and found those names which all supply exactly what ROFIN supplied. Forensics people he had spoken to confirmed that the items were the same. He asked why FDA was the sole supplier for 3 573 items and asked Dr Mohapi why it was the only supplier.

Dr Mohapi replied that once a product is chosen, SITA does maintenance. ROFIN had told SITA that it was the only supplier.

Mr Brauteseth asked if he had accepted what ROFIN said. He asked how the sole supplier arrangement happened considering the Public Finance Management Act (PFMA) and Constitution state that there must be a fair and equitable process.

Graeme Victor stated that SITA had undertaken a detailed investigation into the SCM process and found irregularities, one of them being the ROFIN contract. 10 people had been suspended as a result. SITA believed the 2014 letter from ROFIN was irregular and was the reason SITA was undertaking internal disciplinary action.

Mr Brauteseth asked how FDA became the sole supplier for a contract worth R900 million on what is discussed today, rising to many billions when IT infrastructure and IT architecture is exposed. He stressed that if something happened under one's watch, criminality can be investigated. There were two issues, procurement and maintenance. He asked Dr Mohapi how FDA became the sole supplier for maintenance.

Dr Sethumo Mohapi referred to letters 483 and 484, Annexure P, in the bundle handed to SCOPA. He read the statement from the Certificate of Appointment where ROFIN appointed FDA their sole supplier.

Mr Brauteseth stated that he did not care about SITA’s internal relations but wanted to know how FDA became the sole supplier for the state and if Dr Mohapi knew the PFMA.

The Chairperson asked on what basis the decision was made.

Dr Mohapi replied a business case was created that accepted the claim that FDA was the sole supplier.

The Chairperson asked why the claim was accepted.

Dr Mohapi replied that he did not have the documents.

Mr Brauteseth stated that the PFMA is clear, there must be compelling reasons for having one supplier to the state – an emergency or if the person/company was the actual only supplier. The Committee had established that there was no emergency. He had listed three or four companies from a casual check on the internet. He asked what the motivating factor of the board was. The contract is for a period of five years at R9.7 million rand per month, equating to half a billion rand over a five-year period. He asked why the SITA board approved the contract.

Dr Mohapi replied that he did not have a record of decisions.

Mr Graeme Victor stated that there was a business case on 2 October 2014, section P on page 470. The business case was done by one of SITA’s employees on a maintenance contract. The employee had been terminated due to contract irregularities.

Mr Brauteseth asked who the individual was.

Mr Victor replied that the individual’s name was Barney Venter and he had been charged accordingly.

Mr Brauteseth asked what the procedure was and questioned how an appointment could be done by one person.

Mr Victor replied that it was meant to go through Treasury approval and there was no evidence that happened.

Mr Brauteseth asked what the procedure was without a competitive bidding process.

Mr Victor stated that no one on the current SITA board was around then and that today it would only go to the board with Treasury approval.

Mr M Hlengwa (IFP) stated that SCOPA would not accept deferring responsibility to a previous board.

Mr Brauteseth asked if SITA was familiar with the contract.

The Chairperson noted that Keith Keating was seated facing the SITA delegation and questioned whether he was having an intimidating effect on proceedings.

Mr M Booi (ANC) asked if he was invited to the meeting.

The Chairperson stated that as a member of the public he could be there.

Mr M Booi (ANC) expressed concerns about a possible conflict of interest and asked the Chairperson to make a ruling, stating that it was evident that the SITA delegation confirmed with each other before responding.

The Chairperson clarified that in terms of the rules he could not take anyone out of the meeting.

Mr Brauteseth stated that Mr Keating was welcome to attend but reminded him that in terms of the Powers and Privileges of Parliament Act anyone in the room was protected. SITA members were more than free to provide information and he could say whatever he wanted in the room without prosecution.

Mr Brauteseth referred to contract 433 which was held by Gijima, expired, and was converted into contract 769. At what point did FDA become the sole supplier? He asked SITA to admit it had not followed procedure.

Mr Brauteseth asked Dr Mohapi if he knew how long legislation had been around, stating that it was about laws, not SITA, that all tenders be done in a fair transparent manner. He asked if the CEO would take responsibility that it was not done.

Dr Mohapi stated that the way the relationship with FDA was established was that previously there had been procurement vehicle 433 which was created through a competitive process. The suppliers for services would be done through another competitive process. In July 2012, a motivation was made by Mr Barney to extend contract 769 held by Gijima and extracting out ROFIN products and establishing a direct relationship with FDA. His motivation recognised FDA as the sole supplier.

Dr Mohapi stated that SITA could have advised SAPS that it was going into a direct relationship with FDA for maintenance or gone into the market. In future SITA could go through competitive processes for products, advise SAPS to go through a competitive process or request ROFIN Australia to appoint more than one service provider due to non-compliance. In July 2012, the bid adjudication committee decided to pursue a direct relationship.

Mr Brauteseth asked SITA to name one other company which bidded.

Dr Mohapi replied that there was no competitive bidding.

Mr Brauteseth asked if there was no competitive bidding on anything.

Dr Mohapi replied that there was not any competitive bidding.

Mr Brauteseth asked Dr Mohapi to confirm that one company got a billion rand of work with no proper process. He asked if SITA was still doing business with FDA. He felt that the reason the matter had not gone to court was because there were no aggrieved parties, because of there being no bid. He asked Dr Mohapi to confirm that there was an ongoing contract for maintenance worth half a billion rand which ran up to 2019.

Dr Mohapi confirmed these details.

Mr Brauteseth noted that 3 573 items were procured, with R9.7 million being spent per month to maintain them. He asked how many qualified forensic people work in SAPS.

Lt Gen Schutte replied that the Criminal Records Centre staff was around 1 700 to 1 800 people, and 7 000 people work in forensics.

Mr Brauteseth stated that he was asking about people who used the listed products, as he did not believe it was 7 000 people.

Lt Gen Schutte confirmed that only a portion of the 7 000 people would be crime scene analysts but he did not want to speculate.

Mr Brauteseth expressed concern that SAPS top rank could not tell him how many crime scene analysts there were.

Gen Sithole replied that he would provide that information to the Committee.

Mr Brauteseth felt that that was not good enough considering he was in Parliament and asked for an answer.

Gen Sithole replied that he did not have an accurate number because SAPS had been changing structures but he could provide that number within five minutes.

Mr Brauteseth accepted this but expressed concern that there may be an oversupply of equipment.

Gen Sithole replied that there was a ratio which determines how much equipment SAPS provides but that SAPS would qualify this once it got the number.

Mr Brauteseth asked SITA if it was normal for maintenance to cost half a billion rand. He asked SITA to clarify if its role was to advise departments on how to get value for money.

Dr Mohapi replied that their role was advice and operations.

Mr Brauteseth asked how SITA’s technical employees established that it was necessary to spend R2 million a month maintaining Polyflair Plus torches and who these employees were.

Dr Mohapi replied that it was Barney Venter, who had left the company of his own accord but was now subject to a police investigation and procedures.

Mr Brauteseth noted that several websites had described the ROFIN Polilight Flare Plus torches as maintenance free.

Dr Mohapi noted the recent Constitutional Court judgement in the SITA v Gijima case provided SITA with a tool to challenge the legality of previous decisions and it intended to use this new tool to fix whatever went wrong.

Mr Brauteseth asked if SITA would use the new tool to recover funds as what had occurred is fraud.

Dr Mohapi responded that it would.

Mr Brauteseth asked if SITA was going to take steps against the FDA.

Dr Mohapi replied that once it was done with its investigation, if there were reasons to do so, it would.

Mr Brauteseth referred to the LETS, evidence management system (EMS) and PCHEM evidence management systems, and asked SITA and SAPS what FDA’s involvement was in supplying these systems and the yearly upgrades.

Lt Gen Schutte replied that he did not have the information.

Mr Brauteseth noted that SAPS and SITA were dealing with the procurement of a large amount of forensics equipment. He noted the Pistorius and Dewani cases where forensics had been ‘messed up’ by SAPS. He asked for a list of case numbers over the last five years where any of the equipment listed was used. He noted SAPS and SITA had not yet provided the cost of the equipment and the number of trained crime scene experts.

Gen Sithole replied that there were 3 200 trained crime scene experts.

Mr Brauteseth felt that that number needed further scrutiny and asked for the list of case numbers.

Gen Sithole replied that he would provide the list in writing.

Mr Brauteseth referred to contract 1221 for IT infrastructure. It was awarded to other suppliers but interdicted by Dimension Data to stop the payment because of unfair practice. He asked what happened to the planned expenditure.

Dr Mohapi replied that the contract expired in February 2017.

Mr Brauteseth asked if there was no more need for what expired. He clarified that the new contract was with a variety of service providers. SITA had an engagement with the Auditor-General (AG) which provided worrying information about the IT environment and where FDA and Unisys were involved, namely IT architecture and infrastructure. He expressed concern that IT architecture could be sold for any price and that SITA had bought IT architecture worth R5 billion. He asked why neither the AG, nor SITA could tell the Committee who owned this system. Why could General Schutte not say where these intangible assets were? He expressed concern that the SAPS asset register had been understated and asked why these systems do not reflect on the asset register.

Lt Gen Schutte replied that network assets were not included and all assets, including mainframes, were transferred to SITA to support the economising model. SAPS assumed SITA would record these assets. It was never incorporated because of SAPS interpretation of its business agreement with SITA. If SAPS took over certain assets, it would take over certain functions as well.

Mr Brauteseth asked if the 3 200 crime scene analysts were trained and out in the field. He asked for the SAPS 108s which refer to equipment issued to SAPS members and for the records of each of the 3 200 crime scene analysts.

SAPS Commissioner Sithole replied that there were 3 200 experts and analysts.

Mr Brauteseth asked him to break that number down.

Mr Booi referred to the asset register and asked SAPS why it said assets are with SITA and not SAPS. He asked what happened to the asset register after 25 years.

Lt Gen Schutte replied that it was just about network assets.

Mr Booi stated that he knew the policy and asked for an answer, asking what happened to the assets and why those assets were with SITA.

Lt Gen Schutte replied that it was because of an arrangement between SAPS and SITA.

Mr Booi asked why the Auditor General spoke to him and why he was running away from the asset register.

Lt Gen Schutte replied that it had been audited that way for years. The real reason was the interpretation of an arrangement. Some assets were bought subject to approval from SITA, others were bought from SITA.

Mr Booi asked if this could be reported to Treasury. He questioned the nature of the relationship and asked for correspondence with Treasury.

Lt Gen Schutte replied that the business agreement and service level agreements between SAPS and SITA called for a ruling.

Mr N. Khonou (ANC) asked how police interpret law enforcement and monitor criminal activity.

Gen Sithole replied that SAPS is guided by the Police Act and the Constitution and have developed policies and standard operating practices (SOPs) to ensure that when policing is done at grassroots level it is aligned to all the prescripts that are guiding policing.

Ms Khonou expressed concern that there was no law enforcement at the top, noting that the Committee had read all sorts of things in the media. Police should lead by example. SAPS was captured by Keating and why had SAPS not dealt with it. Why had SAPS not put the person responsible in jail if it knew procedures were not followed.

Gen Sithole replied that he was taking note of what the Committee has seen. SAPS would deal with anything that violates laws and it was in the process of correcting the organisation.

Ms Khonou hoped that Keating got a deserving sentence, as she felt that rich people and the officials they collude with do not get deserving sentences. She asked for timeframes on the SAPS full report to SCOPA. The Committee wanted to see consequences.

Gen Sithole replied that there were different investigation mandates and some of what had been discussed falls under IPID’s mandate while other matters were under the scope of the Hawks.

Mr Booi asked SAPS to give the Committee answers.

The Chairperson stated that this was why IPID was invited and it could address these issues.

Ms Khonou asked what the spread of the 3 200 crime scene analysts were.

Gen Sithole replied that it would be outlined in the report to the Committee.

Ms Khonou noted that it sometimes took more than 30 days to pay suppliers and there were accruals of over R1.1 billion. She asked how SAPS was going to fix this. She alleged that there was favouritism in payments of suppliers which was killing SMMEs. She asked how SAPS planned to deal with accruals.

Lt Gen Schutte replied that these issues were a priority of SAPS which maintains a percentage of 99.7% payment within 30 days. The biggest part not paid was non-renewable of deliveries which was why accruals had increased. He did not think that SAPS could have a 100 percent record with 1.6 million invoices a year. SAPS maintained an efficient level but must try and improve.

Ms Khonou stated that plans are important but expressed concern with the nonchalance about improper processes. SAPS was asked to name the relevant people involved, and outline what was going to happen. She asked how long it would take to ensure there were consequences.

Dr Mohapi apologised if he suggested through body language that there was nothing wrong. SITA was doing a lot to deal with this. SITA had made a submission on many SCM cases as well as dismissing eight people.

Ms Khonou asked who the eight people were and whether those people and FDA were blacklisted.

Dr Mohapi replied that around four companies had been blacklisted. SITA would provide a list of names which were submitted to SAPS and the Hawks.

Ms Khonou asked if FDA was blacklisted and if SITA was giving FDA any more contracts.

Dr Mohapi replied that they had not blacklisted FDA yet because they were in the middle of an investigation, but one person has been suspended who made confessions relevant to the investigation.

Mr Brauteseth asked if the investigation would continue for as long as necessary to root out all the problems.

Dr Mohapi replied that the first phase of investigation was SCM which begun earlier in 2017 which would be complete by December 2017. The intention is to continue if there is evidence that things are not right in the organisation.

Ms Khonou noted that a Hawks representative was not present in the meeting. It was important that some of the issues and parties be referred to the Hawks. It was important for the Hawks to be present at hearings so the Committee could follow up on cases being presented to the Hawks.

Mr M Hlengwa (IFP) congratulated SAPS Commissioner Sithole on his appointment and hoped he would pursue criminals within his own organisation. He referred to Annexure O in the SITA documents given to SCOPA. It was a letter requesting extension of a contract between SITA and FDA dated 14 November as an exclusive distributor of maintenance to South Africa for ROFIN, Spheron and Nikon equipment for a period of three months. What happened to the person who signed the letter?

The next letter requests a contract extension between SITA and FDA dated 26 February 2013. Another request was made on 26 June. He hoped the pattern was becoming clear to the Committee.

Mr Booi requested that Keith Keating be asked to sit on the other side, since he seems to be intimidating SITA.

Mr Hlengwa referred to the business case in Annexure P, Item 6.1, a request for a three-month contract extension, stating this was the first request for extension of the current contract. He felt that it was strange that the request for extension was made in 2014 considering the many other requests which were mentioned. There was a very laissez-faire approach to this agreement. Despite the contract being irregular, it was extended at a huge cost to the taxpayer. He asked who Mr JC Moshoeshoe was who signed all those letters. He requested a paper trail of all contract matters for all intervals. What had happened to all the people who were signing off on contracts and responding to the letters?

He expressed concern that people in power in government institutions where people did whatever they want without concern for consequences. He asked the Commissioner to take the Committee through an order on the 31 March 2015, the last day of the financial year. SAPS Information Technology Services generated an order, A00T4674 for the supply of 169 forensic light sources at a cost of R52 million. FDA submitted an invoice on that day which was paid immediately. Schutte had told the Committee that SAPS pays 1.1 million invoices a year with a 30-day rule for payments yet an order generated three minutes before the close of business for the year was concluded and paid within three minutes. He asked for confirmation that this happened.

Lt Gen Schutte confirmed that it had happened. It seemed as if that order had started the previous August. SAPS was still trying to see how it came about on the last day of business. He speculated that it may have been a deferred or delayed administrative action. This was part of their investigation of external bodies as well.

Mr Hlengwa asked for confirmation that it was received and paid on the same day.

Lt Gen Schutte replied that it was received and paid on that day. SAPS asked all its suppliers to submit invoices as soon as possible at the end of the financial year.

The Chairperson stated that that transaction was in March, and it was now November. He questioned why they have not decided on the transaction.

Mr Hlengwa expressed concern with the response, noting that a rush to settle invoices at the end of the financial year was fiscal dumping and would open the floodgates.

Lt Gen Schutte replied that he was not referring to procurement but payment on that day.

The Chairperson stated that the Committee was talking about a specific case which should have been picked up and that this could not be subject to an investigation over a year later.

Mr Hlengwa reiterated that a mad rush to pay at the end of the year was fiscal dumping, an attempt to ensure the books are clean. This was interesting because of Mr Keating’s involvement. The R53 million involved the former acting National Commissioner Phahlane. He asked if there was an investigation into the role of the former acting police commissioner around the R53 million. The allegation is that Mr Keating bought cars used by Phahlane and his wife who is head of SAPS Technology Management Services (TMS), a Colonel Potgieter and Phahlane’s sister. The hand of FDA was everywhere. He asked why FDA had not been blacklisted, stating that Keating walks in and does whatever he wants.

Gen Sithole replied that the matter was being investigated by IPID and by an internal SAPS investigation.

Mr Booi reminded the Commissioner that he was in Parliament and under oath, he should return and update the Committee.

Mr Hlengwa asked if IPID could confirm the allegations.

The Chairperson stated that he wanted to give IPID sufficient time.

Mr Hlengwa expressed shock at using state resources for jackets on their trip to London, and asked the SAPS leadership who was there in 2011. He asked about the vetting of people in supply chain management. He asked SITA for the names of the eight people who were dismissed in the forensic investigation of 2017 along with the 10 who resigned, the two on suspension and the three awaiting a disciplinary committee outcome. He asked for case numbers of criminal matters registered with SARS and the Hawks.

Maj Gen Leon Rabie: Head: Strategic Management, replied that all brigadiers and generals had been vetted, colonels had not been vetted yet nor have supply chain but all members of the Bid Adjudication Committee (BAC) had been vetted.

Gen Sithole replied that the main supply chain in SAPS was headed by himself and was widely spread in divisions including forensics, which had its own supply chain. Instructions given were that all of them must be vetted. As part of a new direction for SAPS, people are vetted before entering the organisation.

Mr Hlengwa stated that he was baffled that senior SAPS members are not vetted. He asked if generals had been vetted. Senior SAPS members were the ones signing off on important matters.

Gen Sithole replied that this was the case and it was dependent on available capacity. Supply Chain Management (SCM) submitted all the necessary information for all the supply chain practitioners to be vetted and they waited for crime intelligence to proceed. Crime intelligence had looked at brigadiers, generals and full colonels first. SAPS was pressurising senior officials to complete the vetting of supply chain people.

Mr Hlengwa asked when this started.

Gen Sithole replied that it started as far back as he could remember.

Mr Hlengwa expressed concern that this was a slippery slope, noting that Cabinet had said that SCM must be vetted. He asked when this list was submitted.

Mr Rabie stated that it was submitted two years ago.

Mr Hlengwa asked if a majority or minority of SAPS officials had been vetted.

Mr Rabie stated that most of middle management upwards had been vetted but from captain downwards the majority had not.

Commissioner Sithole replied that by the time SAPS return to the Committee all supply chain practitioners would have been vetted.

Mr Hlengwa noted that the list was submitted two years ago but was incomplete. He asked for the list of people who had been vetted against the other list to see how far it was in the vetting process.

Ms T Chiloane (ANC) asked the National Police Commissioner who the Chief Financial Officer (CFO) was in the department and how long they had been in the post.

Commissioner Sithole replied that Lieutenant-General Ramikosi was the CFO.

Lt Gen Phalaphala Ramikosi stated that he joined the department in 2015.

Ms Chiloane suggested that the Commissioner fire the CFO since he was not compliant with the PFMA. The report speaks about mismanagement of funds which have skyrocketed since 2010. She asked who was at the helm, noting that fiscal dumping had happened under the watch of the CFO. There was non-compliance – which clearly showed collusion, and she asked how many evergreen contracts SAPS has.

Maj Gen Rabie replied that he did not know.

The Chairperson clarified that the Committee was talking about contracts which were in perpetuity.

Maj Gen Rabie replied that the last contract he remembered was Autozone which expired the previous year and had lasted for 15 years.

SAPS National Commissioner Sithole asked if SAPS could provide this information to the Committee.

Ms Chiloane stated that SAPS had been involved in R6.1 billion worth of evergreen procurement and asked the CFO to shed some light on this. If Lieutenants-General were in the supply chain and dealing with contracts then he should know. She asked the Commissioner to talk about the current CFO and what he would do when he leaves the meeting, noting that what had occurred was unacceptable in terms of compliance.

Gen Sithole replied that the previous CFO was General Schutte. He had noted serious matters and after the meeting he expected accountability in all areas raised including matters SAPS did not believe were happening. He would hold the CFO accountable and would need an explanation and reports on how these matters happened.

Ms Chiloane expected the Commissioner to keep the Committee abreast on these matters. There were investigations done by the Hawks in 2012 commissioned by SAPS, besides the one on the SITA role. She asked for an update on the investigation into TMS.

Gen Sithole replied that dockets should be opened but the mandate lies with the Hawks and it should report on progress in these investigations, the same applies to IPID. IPID and the Hawks were not accountable to him and those organisations could shed more light on the process.

Ms Chiloane expressed concern that SAPS procures investigation but does not do follow ups. The investigation was procured five years ago. She asked how many investigations SAPS had issued instructions to be carried out on tenders and irregularities.

Gen Sithole replied that oversight bodies such as the Hawks and IPID would respond independently. He had avenues to engage with them and he followed cases to ensure the purpose the case was opened for was fulfilled. He had a list of investigations which could be provided only on internal matters and any further information pertaining to dockets could be provided to the Committee in writing.

Ms Chiloane asked IPID to respond to this when IPID speaks to the Committee. She asked if the contracts had provided value for money in forensic investigations.

Gen Sithole replied that forensics had improved, There were only issues around procurement.

Ms Chiloane felt that there was no value for money, citing the high number of murders despite all the money being spent on forensic equipment.

Gen Sithole agreed that the level of satisfaction was not where SAPS wanted it to be and stated that his direction was to treat all communities fairly.

Ms Chiloane asked the CFO to talk about the National Revenue Fund and the amount that was meant to be surrendered on page 382, note 12 in the Annual Report.

Mr Ramikosi asked to return to the question on the role of the CFO. He agreed that he would take a similar approach to what the Committee has been suggesting. He noted that the person who appointed him was suspended soon afterwards

Mr Booi asked Mr Ramikosi to focus on answering the questions.

Mr Ramikosi replied that the Department was involved in selling scrap metal, fines, licensing fees. All that revenue goes back to the National Revenue Fund and SAPS only uses appropriated funds for its activities.

Ms Chiloane asked if he saw how much SAPS had surrendered and how much it was meant to surrender.

Mr Ramikosi stated that this spoke to concerns Members raised and of the allocations to the department only R15 000 out of R80 billion rand was not utilised.

Chilaone stated that SAPS was meant to surrender R47 000.

Mr Ramikosi stated that the R47 000 would have been surrendered in the previous year, since the way the note is crafted compares the figures with those of the previous financial year.

Ms Chilaone referred to PPSIRA and asked if the National Police Commissioner’s oversight was enough.

Gen Sithole replied that SAPS has enough oversight and there were platforms it engaged in.

Ms Chilaone stated that there was uncertainty towards PSIRA with creditors not being paid on time, a decreasing surplus and a net current liabilities which exceeds its current assets. This was not something the Commissioner should brush off since concerns were highlighted by the Auditor General. This should be a concern for the CFO as well.

Gen Sithole replied that PSIRA was independent and reports directly to the Minister.

Ms Chilaone stated that she would raise the issue with the Minister.

Mr V Smith (ANC) suggested that the National Commissioner terminate the FDA contract. He noted the length of the contracts and asked what the rationale was for keeping the contracts.

Dr Mohapi replied that there was a 769 contract which, in a memo from July 2012, Mr Venter asks to be extended to the end of the year and for the ROFIN component to be contracted directly from FDA. The intention was to extend the 769 contract but it was only able to finally replace it in 2016. In that period there were extensions of the 769 contract.

Mr Smith noted that the contract is from the 1 December 2014 until 14 November 2019 at a cost of R117 million per annum. He requested it be cancelled, noting that there were two more years to run on the contract at a cost of R234 million. The PFMA says it is his responsibility to prevent irregular and fruitless and wasteful expenditure. He asked if it was possible for the CEO to cancel and, if not, why it was not possible since the contract was obviously irregular.

Dr Mohapi replied that two weeks ago SITA had gone to the Constitutional Court for a tool to review decisions and the instruction to the legal team was to use that tool.

Gen Sithole replied that it was not impossible to cancel the contract and he would give instructions to the head of legal services to work on compliance.

Mr Smith asked the Chairperson and his office to follow up, stating that the Committee was not asking but telling SITA to cancel the contract. If there was no legal impediment, the Committee would not be debating it. He referred to a R69 million firearm permit contract extension and asked if this fell into the same category.

Dr Mohapi replied that the instruction was to review this one and that it has not contracted on the basis that it is reviewing.

Mr Smith asked if it could review the contract.

Dr Mohapi replied that there was no contract and no money had changed hands.

Mr Smith asked the SITA CEO to explain why he sent a letter to Mr Keating informing him that his contract is being extended before saying ‘your company or its agents shall not make any news or press release concerning this letter…’. He asked what the purpose of saying not to tell South Africans what is happening with taxpayers’ money.

Dr Mohapi replied that the same thing had been happening over the years.

The Chairperson noted that this was the previous month under the CEO’s watch.

Mr Victor stated that it was a standard contract which would be amended.

Mr Smith replied that it was unconstitutional and asked why the SITA board should still be in their positions. He asked what SITA was going to do and what it expected the Committee to do as it was against PFMA prescripts.

Mr Victor replied that SITA have briefed IPID.

Mr Smith stated that he did not know how IPID worked and that a service level agreement would assist them, to provide a timeline to conclude the process. He asked if there was a way to make an agreement with IPID to follow up.

The Chairperson stated that he wanted IPID to address the Committee after Mr Kekana.

Mr E Kekana (ANC) congratulated the Commissioner on his appointment but stated that the Committee would put him under serious scrutiny. He felt that the Commissioner was not in charge and that was an indictment on his part.

Mr Kekana stated that the Committee wanted specifics and dates on vetting, asking the Commissioner to be specific on when he would return to the Committee with answers.

Gen Sithole replied that the vetting process was done according to structured plans with deadlines and that SAPS had a process in place. According to these plans he has deadlines, and those who are doing the vetting have targets. He started this vetting process plan himself because it is a threat to SAPS. He stated that he could issue a report to the Committee at any time.

Mr Kekana asked for clarity from SITA on the firearms permit system (FPS), noting that page 6 states that ‘SITA has extended the FPS system for 3 years’, it mentioned the contract being awarded but also that it has not yet been signed.

Dr Mohapi replied that between awarding and signing the contract, SITA picked up issues resulting in someone being suspended two weeks prior to this meeting. Investigations revealed and affected certain things. SITA was uneasy with signing the contract. SITA has a legal case and a legal tool will be used to argue that it does not have to honour the contract.

Mr Kekana asked for clarity on the status of the contract and whether it was in operation.

Mr Victor replied that awarding was the first step and signing the contract would have been the second but irregularities forced SITA not to sign. Legally there was no contract in place, the supplier could say that SITA have awarded the contract but no payment has or will be made.

Mr Kekana asked what regulates the communication between SITA and its service providers, noting the extensions mentioned.

Dr Mohapi replied that a service has been provided but it was not contracting and he had not had any discussion with the service provider on the contract. He was awaiting legal advice.

Mr E Kekana (ANC) asked for clarity, noting Dr Mohapi’s statement that service had been provided without a contract, asking what regulates that service.

Dr Mohapi stated that it would normally be a contract or service level agreement which it did not have. There was no means to enforce performance. SITA urgently wants to get a court order based on the Constitutional Court tool which allows them to continue with it because the service is critical. The problem was nothing regulates the service of the contractor.

Mr Kekana asked if Dr Mohapi realised it had a problem and who must give him that instruction, stating that he had expected this to have been resolved since the PFMA is very clear.

Dr Mohapi replied that he had already issued instructions to his legal team for certainty and court action.

Mr Kekana stated that the Committee would follow it and asked why this was done two weeks prior, feeling that SITA was trying to cover themselves since it knew it had to present to SCOPA. He mentioned the inability to trace payments to Visual Analysis (VA) in their document and asked Dr Mohapi to talk about that.

Dr Mohapi replied that in his understanding the information went back to the days of the information plan. SITA would try to find it but as of that time it could not, as this information went back to the days before SITA.

Mr Kekana asked what was so difficult, noting that if there are transactions, there must be records.

Mr Ramikosi stated that it could not find any payment to Visual Analysis from their accounting records.

Mr Kekana asked if there was payment to VA, if there was money owed to them or a contract.

Mr Ramikosi stated that it could not find any contract between VA and SITA.

Mr Kekana stated that according to the information SITA provided there was a contract since 2010.

Dr Mohapi replied that the investigation had not gone back that far when SITA was preparing to come to Parliament. He confirmed that the investigation was initiated without prodding but due to its own risk analysis.

Mr Booi asked SITA to stop talking about their journey and answer questions.

Dr Mohapi replied that SITA did not have enough information when it was preparing but that it was looking into it.

Mr Kekana asked if SITA was confirming that what the CFO said was not true.

Mr Victor replied that VA became ISS in 2009 and questioned whether there were payments to VA before 2009 but stated that there was a definite payment to ISS of R500 million.

Mr Kekana stated that if SITA was paying a service provider there should be a contract and asked what was so difficult in getting the payment history.

Dr Mohapi replied that it was hard to find the documentation but suggested there was a relationship between VA and FDA. He did not have the details but stated that there was enough information to suggest a history between FDA and others on software.

Mr Kekana reminded SITA that it was providing information to the country not the Committee. He decided to leave timelines to the Chairperson and asked the National Commissioner to deal with all these matters.

The Chairperson asked that IPID have an opportunity to speak. He expressed concern at the corruption in the Police Service which was were meant to be protecting the laws of the country.

The Chairperson said how brazen Keating was to sit in the meeting while Forensic Data Analysts is being discussed.

Mr Booi asked the IPID Head and the SAPS National Commissioner if they were still beholden to the old police. He felt that the old police service was putting black faces as a front and controlling things behind the scene. The counterrevolution was holding back the fight against crime. He asked Mr McBride if he was prepared to assist the old police in corrupting government.

The Chairperson asked Members to hear IPID before asking questions.

Mr Hlengwa noted that the SITA CEO had mentioned being harassed while sorting things out and asked the Committee not to lose sight of that. It spoke to the criminal syndicate sitting in the room. It was unfortunate that he did not finish, which highlights the extent of the problem.

The Chairperson asked the IPID MD to address the Committee. In the bundle of documents provided by SITA there was a letter from Mr McBride requesting information on this matter. He asked McBride to take the Committee into confidence about what is happening, what IPID is doing, where it is, what the observations are and what must happen.

Independent Police Investigative Directorate (IPID) briefing
Mr Robert McBride, IPID Head, stated that IPID was involved in interdepartmental investigations involving several entities. The investigation started with investigating houses and cars owned by the previous Police Commissioner and had gone regional and possibly international. IPID believed the appointment of Commissioner Sithole would expedite the investigation and be concluded quickly; however it kept getting broader and more complex.

Mr McBride stated that since inception, IPID members had been harassed, intimidated, distracted and attacked at every turn by SAPS members and crime intelligence, particularly General Phahlane and a unit in the North West being investigated for murder and torture among other offences, as well as being inundated with litigation. IPID had been fighting the battle alone. Cooperation had improved since the appointment of Commissioner Sithole. The investigation into FDA and General Phahlane is mirrored by another investigation into Crime Intelligence secret service accounts. The common denominator between FDA and crime intelligence was former Police Commissioner Phahlane. There were instances of emergency demand with invoices being paid.

Mr McBride stated that SITA was buying water and gloves on behalf of SAPS despite being involved with information technology. IPID wrote a letter recommending no further money be paid to FDA. Mr Sesoko would go into details.

Mr Matthews Sesoko, IPID Chief Director: Investigations and Information Management, noted that IPID arrived at this point through its initial investigation into General Phahlane on the allegation of a corrupt relationship with service providers Criminalistics and Crime Tech. As part of the investigation, IPID detected transactions that were happening between Criminalistics, Crime Tech and FDA. When it followed up it linked transactions to FDA with vehicles given to Phahlane and other police officials. IPID has established that some of these transactions happened in the SITA environment, which SITA was also investigating. He felt that it was a very difficult investigation as it keeps revealing other things to follow up on. The initial focus was on crime tech but it showed a corrupt relationship between Phahlane and a service provider. IPID had engaged with Treasury on all contracts awarded. Due to the nature of the contract IPID needed a forensic investigation firm to assist.

Mr Sesoko stated that IPID was then able to pick up transactions between different entities and the police. The vehicles and house procured by Phahlane could not have been done on his own salary. During the investigation FDA came up, and when IPID got information on FDA it picked up that the vehicles which were facilitated by a car dealer were procured on behalf of Phahlane and other police officials and that, from the information it had, these came from Keating. IPID found that there was an amount of R1 084 000 paid between January and March 2016 and in the same period vehicles worth R 1082 000 were procured by car dealer Durand Snyman on behalf of Phahlane and his wife. The same period saw the R53 million transaction which happened at the end of the financial year. Mr Sesoko said that he had never seen the procurement process happen in one day in the public service.

Mr Sesoko said that he alerted the then Acting Police Commissioner about the findings. TMS had facilitated transactions with FDA. He recommended these TMS members be suspended or removed from the environment so the investigation could continue and that payments to FDA be suspended. There was clear manipulation of the procurement system to bypass PFMA prescriptions. He noted collusion between SAPS members and SITA to favour FDA. SAPS would advertise a tender, withdraw it, then reissue it with the specifications adjusted to suit FDA, with many tenders happening in that fashion. All these are subject to investigation and from IPID’s point of view there is a corrupt relationship between SAPS and service providers.

Mr Sesoko noted that a few days before this hearing there was a tip off about forensic equipment procured in 2014 being kept in a construction warehouse on the orders of Phahlane. Some of the equipment had expiry dates and was being kept in containers outside the warehouse. There was continued procurement of similar equipment to that which was kept in the warehouse and statements clearly indicate overstocking and oversupply of this equipment.

Mr Sesoko addressed Crimetech and Criminalistics. He noted that the supply chain process had changed from a bottom up process, where field workers make requests and procurement happened based on need, to a top down process under Phahlane, where SAPS nationally decide what to procure. This resulted in a huge supply of unnecessary equipment. Police Officers’ statements speak of fingerprint brushes which are all useless. Some equipment is received having already expired with some instances of instructions being given to continue using them. The amount of contracts Crime Tech got from SAPS exponentially increased. People were sitting in the provinces with stuff which could not be used.

Mr Sesoko noted that there was a similar trend in FDA and there was clearly a problem in the supply chain environment within SAPS. Equipment was sitting without use and which cost SAPS a lot of money. There were other companies which can provide similar services but there was a concerted effort to favour FDA. There was clear collusion and people were benefitting. IPID was looking at large scale corruption and its investigation was very complex, dealing with many contracts which need to be analysed. The investigation is done in phases, the first which dealt with Criminalistics and Crime Tech was concluding. It was starting its second phase, looking at FDA contracts which were done directly through SAPS. IPID engaged with Treasury on contracts facilitated by SITA. It has engaged with the National Prosecuting Authority (NPA) and the head of the Specialised Commercial Crime Unit (SCCU) to ensure that it is prosecution driven. It had already requested to meet with Commissioner Sithole to get assistance in stamping out corrupt activities.

Due to time constraints, Members were asked to limit questions to two and direct the questions to IPID.

Mr Brauteseth noted that a lot of good work has revealed that this was a massive problem. He encouraged IPID to continue with the work it was doing, for SITA to continue with its investigation and for the National Commissioner to come back to SCOPA with all the information requested.

Mr Brauteseth reminded everyone that the Committee was just scratching the surface, that the big money was involved with the procurement of ICT. He encouraged members to walk this road and continue as it had done with SASSA, noting that while SCOPA may not send people to jail, it would limit space for people like Keating to operate.

Ms Khonou noted IPID’s high standards of integrity and hoped IPID tackle all investigations in this manner, and that it was acting in good faith. She hoped the supply chain people were listening to IPID carefully and how they had the information at their fingertips. She noted that the Auditor General’s report into IPID stated that it had not disclosed all goods and services.

The Chairperson clarified that IPID was only called to deal with SAPS issues.

Ms Khonou asked that IPID be brought back to answer questions. She asked IPID when it was going to put the criminal element in SAPS in jail.

Ms Chiloane thanked IPID and Mr McBride for the information they provided but asked that the Committee receive the information in writing, because the Committee was eager to find out more.

Mr Booi felt that IPID should find a way of working with the Hawks on this matter. He felt that the Committee should not be timid and that Keating should be arrested. Treasury should be involved and provide all the details. He welcomed the National Commissioner and stated that SCOPA would never allow a public servant to be harassed.

The Chairperson asked Mr McBride to expand on threats and harassment, noting that it needs to come out into the open.

Mr McBride stated that IPID would have further discussions with Keating in the following weeks to provide information and explanations. He stated that imprisonment was not their decision, it would have to go through the prosecuting authority and follow due process but that IPID were getting closer to that point. It would probably be broadened into other jurisdictions. He noted that there were other problems with procurement among senior police officers, stating that the majority wanted to do their work but key areas were being used as a conduit for corruption. IPID pledged to work side by side with Commissioner Sithole to assist in transforming SAPS from a pro-criminal to an anti-criminal organisation. DPCI was already assisting. the investigation into FDA, Phahlane, and senior officials would have reached a climax by Christmas and the assistance of the NPA would be needed.

Ms Khonou suggested an anti-corruption task team to escalate and deal with the criminal element.

Mr Kekana noted that while the investigation was about FDA, the head of FDA is a former policeman and asked IPID how it would deal with this.

Mr McBride stated that it did not matter whether he was a former or current police officer, he was firmly in their sights according to the IPID Act. There was a criminal element in the NPA which interfered with IPID and that police had been used to harass IPID.

Mr Brauteseth asked if budgetary constraints by Treasury were a challenge and what could be done to overcome that challenge.

Mr McBride stated that the AG had noted that the threat to IPID was underfunding and that if it was expected to make a dent into police corruption, it needed to be adequately funded. Key aspects of IPID’s existence had never been in place. He noted a study of the Independent Police Complaints Commission (IPCC) on a visit to the UK where it had 1000 investigators, limited to 600 complaints a year. The IPCC had its own intelligence unit which IPID did not have despite the Act making provisions for it. The shrinking fiscus made for difficult times.

Mr McBride noted that at the height of SAPS high tech ‘orgy’ of buying and overstocking, its motto was ‘Back to Basics’ and felt that that kind of mentality was a middle finger to everyone.

The Chairperson asked Dr Mohapi to expand upon the threats he had received.

Dr Mohapi stated that he had started investigations in February 2015 into the HR environment, which he described as weak, members of the SITA board started getting harassed, including himself. People left the company and continued making threats including death threats. He moved to looking at supply chain management in 2017 and the threats expanded to the CFO and the SCM Executive who had a break in at her house, with the suggestion that the break-in was not random. The SITA board had reported cases. Harassment has been coming in different ways, including threats to kill members of the board.

The Chairperson asked the Commissioner to respond.

Commissioner Sithole suggested that SAPS formalise a threat assessment.

The Chairperson asked the CFO why he had not investigated the transaction which went through three minutes before the end of the financial year, stating that it was reflective of people in the security cluster – that they were like a gang or close buddies. He noted that in other departments after the Director General the next in line in terms of responsibility was the CFO.

Commissioner Sithole felt that it was not something SAPS was going to correct.

The Chairperson asked why it had not been investigated.

Mr Ramikosi stated that he was in a difficult position and a number of things had happened before he arrived.

The Chairperson stated that he was not answering the question.

Mr Hlengwa asked for a schedule of all payments which were made on the last day of financial years. He proposed that the next meeting be closed to the public, stating that the right of access must not be abused by people who steal money. He worried that the investigation might be jeopardised if the next meeting is open.

Mr Hlengwa asked SITA about Annexure W which Keating signed and what the status of it was.

Mr Booi suggested suspending the meeting and looking at a meeting the following week so members of Parliament could round off, noting that the Chair of Committees was willing to give them time.

SAPS Legal stated that after sending this letter many things came to its attention. Once a letter of award is issued it constitutes an administrative action. Based on the information SAPS has, there is the clout to get the court to set the contract aside. By the following week SAPS would start with issuing a court application.

The Chairperson thanked the Commissioner and his team as well as IPID and the Auditor General. He asked Treasury what areas it would be able to assist with and requested case numbers from Dr Mohapi to communicate with the Hawks. He informed SITA that the Committee needed time to talk with them and asked the SAPS Commissioner for a schedule of payments done on the last week of the last three financial years.

The Chairperson told Dr Mohapi and the Commissioner that SAPS and SITA needed to take a proactive stance on the contracts which had been awarded and to write a letter informing Keating that they were revoking the award. He felt that SAPS and SITA were wasting money on legal opinions. He asked Treasury about blacklisting, what the process was and where FDA fit in.

Mr Kekana asked for detailed information about people who had been dismissed.

Gen Sithole replied that SAPS would comply with the request of the Committee but asked the Committee to consider how the matter is approached so that security awareness is attached to the process.

The Chairperson stated that SAPS as security people should deal with it and that criminals must run away from the public not the other way around. The objective and outcome could not be changed because of security concerns.

Mr Brauteseth reminded the delegation of his request for documents.

The meeting was adjourned.