Special Investigating Unit Annual Performance Plan

Meeting report

Presentation of Annual Performance Plan and Budget for 2018/19 of the Special Investigating Unit (SIU)

Adv Andy Mothibi, Head, SIU, said that the Unit was building on the improvements of the previous year and would be turning allegations into proclamations. The Unit had seen an increase in the proclamation pipeline. Prevention of fraud and corruption would not just be through conviction, but also through public education, thereby pre-emptying fraud and corruption. The Unit planned to standardise the way in which cases were scoped in order to improve the quality and turnaround times of investigations. SIU would develop a central case registration system to monitor and evaluate case management and would also publish sector data intelligence. The strategic focus in past had been on producing reports and referring them to state institutions, but there had been no capacity to follow up. The intention was to follow-up as doing so would add value and ensure impact.

SIU wanted to be the entity of choice for state institutions rather than private investigators. In order to enable the core services of SIU to perform optimally, the entity would look to ensuring a compliant financial accounting service, a skilled workforce, appropriate ICT services and effective management.

Instead of focusing on investigating corruption and maladministration, SIU would be focused on achieving appropriate legal outcomes against perpetrators of maladministration and crime. In addition, the Unit intended taking a leading role in preventing fraud and corruption.

Cabinet had approved the allocation of R42 million from the Criminal Assets Recovery Account to fight corruption. R5 million would enable re-introduction of the Special Tribunal which would have a huge impact on speeding up cases. There would also be a focus on distinct functional demarcation and alignment in the National Anti-Corruption Sector Strategy. The strategy would be finalised in 2018/19 with the additional funding. Funds would also go to the communication strategy activities of that Strategy and to the training of government officials.

SIU had restructured so that the organogram would reflect the strategic goals and, in particular strengthen the provincial offices so that they would be able to manage cases at provincial level. Provincial managers would be appointed. Approval was being awaited from the Department of Public Service Administration. A national office would deal with cases that, by their nature, required a national approach. The value chain was presented to Members. There had been an extensive consultation with all staff and trade unions.

Mr Andre Gernandt, Chief Financial Officer, SIU, explained that 60% of the SIU funding came from a government grant. In 2018/19, that amount would be R357 million and would grow to R391 million in 2020/21. Invoicing for investigation services, as per the SIU Act, brought in approximately 40% of the income, which would amount to R244 million in 2018/19, growing to R305 million by 2020/21. The total budget for 2018/19 was R 624.8 million.

Compensation of Employees costs were higher as the SIU was building capacity, having been in a holding pattern during re-structuring. Currently there were 516 employees and 88 vacancies, but the SIU expected to be at its full capacity of 609 in 2010/21. Expenditure was split between the two main programmes: Investigations and Legal counsel, and Administration and support. R324 million went on Investigations and R300.5 million went to Administration in 2018/19.

Discussion

The Chairperson stated that the public did better oversight than the Committee. The public always followed up and nothing fell between the cracks. Regarding Nkandla, there were some investigations or monies that had to be recovered. Some disciplinary action had to be taken in government. What had been done? It was said that some people only talked about future, so that the past would be forgotten as it impacted negatively on their lives. The public was owed an explanation. So, what had been investigated? What were the outcomes? Were there prosecutions? Had the SIU recovered money? Were there people who had been disgruntled, which often happened in an organisation? The Committee was informed of all sorts of things. There had been an issue with a bidding process. What had happened? Was the matter resolved? The SIU had to be upfront so that the Committee meeting was not turned into an investigation.

Adv Mothibi explained that the Nkandla investigation had proceeded in the same way as any other investigation. There were civil referrals and also disciplinary referrals. The disciplinary actions had to be taken by the Department of Public Works (DPW). On the civil recovery side, in its previous appearance before the Committee, the SIU had indicated that civil processes had been instituted against the architects who were responsible. It had taken a long time and lately the architects’ lawyers had withdrawn, and new lawyers had been appointed. Hence the call by the SIU for a Special Tribunal to speed up cases. Adv Mothibi asked the official responsible for civil litigation to update the Committee on the matter.

Adv Gerhard Visagie, Corporate Legal Counsel, SIU, stated that the case had faced what could only be called numerous delaying tactics, but the case was currently at an advanced stage and pre-trial conferences were being held. The civil claim should be set down within a few months. The Deputy Chief Justice in KwaZulu-Natal was managing the case, so he hoped that the trial would be underway before the SIU next appeared before the Committee.

The Chairperson appreciated the update. He stated that the public should not think that government was using delaying tactics and they had to be told upfront the causes of the delays. Government owed the people an explanation.

Adv Mothibi said that he had not received an update from DPW regarding the disciplinary actions. He would have to follow-up and write to the Committee, giving the details of the disciplinary processes.

The Chairperson stated that the SIU should have followed up before it had appeared before the Committee so that the Committee could know whether SIU was failing or whether it was someone else.

Adv Mothibi responded to the question about disgruntled employees. Last October, around about the time that the SIU had previously appeared before the Committee, three articles had appeared in the Sunday Independent newspaper. The third article had indicated the name of the whistle blower, an employee of SIU who was undergoing disciplinary processes for other matters at the time. The SIU had responded to the newspaper because the allegations were malicious, without substance and unfounded. The Auditor-General had also looked into the issue. At the end of the financial year, the SIU had a received clean audit and those issues were addressed, in particular, during the audit. The editor of the Sunday Independent had given the SIU a whole page to set the record straight.

Mr W Horn (DA) said, in respect of the matter referred to, the Committee was in an awkward position as the aggrieved parties had written to Committee Members and had raised red flags regarding the deviations in the appointment of the consultants who had advised on the organogram. The Committee was awaiting the findings of the Auditor-General. He asked Adv Mothibi to unpack the issue.

Mr Horn stated that it would be helpful if Members could be informed about the special tribunal? Debt collection had been a problem in the past as parties were unwilling to pay for costs when results went against them. Was the SIU revisiting the funding model of the SIU?

Ms M Mothapo (ANC) stated that SIU was a unit of integrity and much was expected of it. She asked about Deloitte Consulting. National Treasury was also questioning the deviation from normal procurement processes. She asked the SIU to explain why it had deviated from normal tender procedures stating that the SIU had to live up to its values.

There had been serious allegations in the newspaper about a workshop held in August 2017. Could the Committee also be updated about those issues? That issue would keep surfacing, so she wanted an update.

Ms Mothapo referred to the Organogram presented for 2018/19 which showed that there were 516 warm bodies and 88 vacancies. In terms of the new organisational structure, would any jobs be lost and, if so, how did they relate to the structure? If there were to be job losses, it would deviate from promise made by the President that there would be no job losses in 2018. Could the SIU please comment? The APP indicated concerns that some employees in the Unit had not been vetted although they were dealing with confidential issues. She asked the SIU to take the Committee through that issue.

The new organogram had replaced the Business Support unit in the old organogram with an Information Technology unit and a Human Resources unit. Aligning that with her initial statement on human resources, how would that impact on the old establishment? Would the people who had held the positions remain with the SIU. The executive had consulted staff and trade unions, but would those people stay? Also, there were allegations that sangomas were discriminated against in the organisation because of their religion? She would be angry if it were true.

Mr T Mulaudzi (EFF) had a clarity-seeking questions. What was the strategy in terms of outreach programmes to municipalities where corruption was rife? Were there any plans to sensitise the risk management officials in the municipalities. Secondly, the SIU had a target for employment equity. How far were they from reaching that target? All vacancies were to be filled in 2018/19. How far was that process?

Had there been a surplus in the budget of 2017/18? If so, was it returned to Treasury or what had happened to it? At what stage was SIU in establishing the Special Tribunal?

Mr Mulaudzi noted that sometimes the SIU worked like auditors in looking into misconduct in government entities. What was the difference between SIU and the Auditor-General? Could the SIU update him on opportunities for youth, such as interns, and especially in IT in the organisation? How far was the legislation to facilitate gathering of data from various public sectors? Lastly, he wanted clarity about the duties of the SIU. Was the SIU specifically mandated to work with public entities or could it also work in the private sector? What was the SIU doing about the illicit flow of money out of the country from the private sector such as the mining companies?

The Chairperson asked if, when the President referred matters to the SIU, there was any law preventing the information from being made public, such as how many cases and how much progress was being made in a case. However much good work was done, if the public did not know, it was as good as not being done. So how many cases had been referred to the SIU and was the entity prevented by law from identifying the departments and persons against whom there were cases? He believed that the public had the right to know. It should not be necessary to wait until people had established organisations such as The Right2Know. SIU should just inform the people.

What measures was Adv Mothibi taking to ensure that he did not have corrupt members within his unit? The Chairperson added that he did not want to micromanage, nor did he have the right to micromanage, but if there were problems with staff, perhaps the executive should meet with the staff and allow the staff to raise issues. Otherwise, they would go to the media and discredit the SIU. The SIU then had to spend time explaining itself.

Response

Adv Mothibi referred to the case regarding the appointment of Deloitte, saying that hopefully it would be rested for keeps. An article had appeared in the Sunday Independent. The information had emanated from within the SIU, but it had referred to work done ten years earlier by Deloitte at SIU.

When Adv Mothibi had assumed his role, he had looked at what had been done in the organisation to understand process gaps. He approached National Treasury for a deviation as he viewed it as a step to save costs and speed up the process. Treasury did not approve but the manner in which they responded, they said that it was important to follow a process. Treasury had advised the Unit to follow a closed tender process and indicated which organisations to approach, including Deloitte, but, in the end, the SUI went out on an open tender and the tender was advertised appropriately. The supply chain process was followed, and Deloitte was appointed. The deviation had been considered, but they had decided not to go with a deviation or a closed tender.

The re-establishment of special tribunal was underway. The funds had been made available through  Criminal Assets Recovery Account (CARA). The SIU was working hard with DoJ&CD to get the Tribunal re-established. It was the view of the SIU that the Tribunal would help in fast-tracking litigation processes and deal with recoveries in a speedy manner.

The Chairperson stated that the view was that Deloitte was the preferred provider, despite the fact that 15 companies had responded to the tender. What was his comment?

Adv Mothibi replied that two committees had been involved in the process. The bid specification committee had advertised the tender on all acceptable platforms. Bids were received and went to the bid evaluation committee and then to the bid adjudication committee that had recommended an appointment. The bids had been considered by both those committees. His emphatic view was that it had been an open bid and there had been no special preference.

The Chairperson read from a document stating that there had been a special preference for that organisation. What was Adv Mothibi’s response?

Adv Mothibi reiterated that the work referred to in the media article had been done ten years ago. He firmly rejected the statement with contempt.

In respect of the Tribunal, Adv Mothibi referred to the funds provided from CARA. Legislation regulated the allocation of funds and Cabinet had approved. That was the R5 million allocated for the Special Tribunal, which meant that the SIU could work speedily towards establishing the Tribunal.

The Chairperson stated that a document in the public domain suggested that Adv Mothibi would not allow a document about Steinhoff to be released. Had the Steinhoff financial scandal had any impact on any members of the SIU?

Adv Mothibi said that he had never had anything to do with Steinhoff. Nothing about Steinhoff had ever crossed his desk. He had not applied his mind, but he had not received any indication of any involvement of staff in the Steinhoff debacle, although he was aware that the Steinhoff financial collapse had impacted severely on the Public Investment Corporation (PIC) which managed the pension funds of government employees. However, the SIU had not been approached to investigate.

The Chairperson had not wanted to ambush Adv Mothibi and promised to provide him with a copy of his document. He requested a formal response from the SIU.

Ms Mothapo asked about the appointment of the CFO at the SIU.

The Chairperson stated that the Committee had run out of time. The SIU was asked to sum up.

Adv Mothibi stated that the Auditor-General had been provided with details of the appointment of the CFO and had indicated complete satisfaction with the process of appointment. He would provide the Committee with the relevant documents.

The Chairperson thanked him and would await the responses in writing.

Adv Mothibi explained that a process would regulate how personnel would be allocated to the new structure at executive and non-executive level. It would be a case of best fit. Below the executive level, no loss of jobs was expected because no strategic changes of jobs had occurred. At executive level, there was a special need to focus on Information Technology, human resources and legal risks. Also, there would be a focus on investigations. Some roles were misdirected so the current job became redundant, in which case the incumbent would be considered for an alternative. People would be consulted. Jobs were to be advertised internally. If a person did not qualify, the normal processes would follow according to Labour Relations processes.

The Chairperson thanked Adv Mothibi and his team. He expected the responses within a reasonable amount of time.

The meeting was adjourned