Prohibition on Public Servants doing business with State & Anti-Corruption Hotline; with Minister & Deputy

Public Service and Administration, Performance Monitoring and Evaluation

21 November 2018
Chairperson: Mr J Maswangayi (ANC)
Share this page:

Meeting Summary

The Department of Public Service and Administration briefed the Committee with a progress report on the prohibition of public servants from doing business with the state. The Public Service Commission also presented a report on the anti-corruption hotline (NACH). The Minister of Public Services and Administration was in attendance.

The Department reported that:

  • In February 2017, National Treasury found 8 495 public service employees to be registered on the CSD: 5 366 from provinces and 3 129 from national departments.  From the 8 495 public service employees listed, 580 employees were actually conducting business with an organ of state. 
  • At the end of March 2018, National Treasury found 15 070 public service employees to be registered on the CSD: 10 315 from provinces and 4 755 from national departments.  From the 15 070 public service employees listed, 679 employees were actually conducting business with an organ of state (183 from national departments and 496 from provincial departments).

As a way forward, the issue of access to PERSAL will be addressed. Once the new information is obtained from National Treasury, letters identifying employees who are conducting business with an organ of state will be forwarded to departments.  National Treasury indicated they would be ready by end of December 2018 to provide the DPSA with the needed information.  Departments will be requested to provide feedback to the DPSA by the end of March 2019.  This will allow for the interpretation and analysis of data over a set period of time: end of March 2017, end March 2018 and end March 2019. National Treasury will be requested to remove all public service employees from the Central Supplier database, as required in terms of the Directive on Conducting Business with an organ of state (January 2017).

The Minister asserted that the Department could try obtaining the information through utilising its legislative instruments but the Committee needs to take the bull by its horns and call the Ministers to account. The DPSA does assist various other departments but only from a disciplinary perspective. The DPSA can provide the Committee with letters that have been written and other relevant documents with this respect.

Members asked questions about why the number of public servants increased in 2018; whether the CSD was monitored by Treasury or an external company; the State Law Advisor’s perspective in terms of the Act; whether there were any public servants that have been penalized for continuing to do business with the State; whether there are any punitive measures in place to mitigate the matter; the mood that prevailed in the meeting between DPSA and Treasury that culminated the date which was set by Treasury and the unilateral decision that it took.

The Public Service Commission reported that:

  • Between 01 September 2004 and 31 October 2018 the PSC generated a total of 20726 cases from the calls that were received through the NACH.
  • These cases were referred to the relevant government departments and public bodies/entities for investigation.
  • Feedback was received in respect of 18 898 of these cases. The PSC has as at the 31 October 2018, managed to close 18 582 of the cases upon receipt of satisfactory feedback on how the cases were dealt with.
  • In total, 2144 cases referred to national departments and provincial departments are still pending as at 31 October 2018 due to lack of investigative capacity.
  • National departments that have the highest number of outstanding cases are SAPS (156), Correctional Services (219) and Home Affairs (133) and provinces with the highest number of outstanding cases are Gauteng (233), Eastern Cape (161), KwaZulu-Natal (175), Limpopo (123) and Mpumalanga with 35.
  • In this respect, the PSC has conducted in-loco inspection in departments to fast- track the investigation of these cases.

Members asked questions about who made that unilateral decision regarding funding; whether the PSC interrogated why the progress of departments providing feedback declined; whether the PSC provided any kind of support to ensure that the departments had investigative capacity; what the Treasury and PSC are doing about the fraud on the social grant; clarity on how NACH was different from the hotline managed by the Presidency; how the PSC related to the shifting of the task which was not followed by the budget, and how the Act was implemented if there was significant failure to adhere to it; whether the PSC gets any feedback on the cases that the NACH referred;

Meeting report

Opening Remarks
The Chairperson welcomed everyone present and declared the meeting in-session. He acknowledged the presence of Minister and Deputy Minister. He announced the apologies and handed over to the Department of Public Service and Administration (DPSA) to take the Members through the progress made in relation to prohibition of public servants from conducting business with the State.
 
Briefing by the Department on progress made on prohibition of public servants from conducting business with the State
Professor Richard Levin, Director-General, DPSA, highlighted that in September 2018, the DPSA presented to the Committee the following statistics:
-In February 2017, National Treasury found 8 495 public service employees to be registered on the Central Supplier Database (CSD): 5 366 from provinces and 3 129 from national departments.  From the 8 495 public service employees listed, 580 employees were actually conducting business with an organ of state. 
-At the end of March 2018, National Treasury found 15 070 public service employees to be registered on the CSD: 10 315 from provinces and 4 755 from national departments.  From the 15 070 public service employees listed, 679 employees were actually conducting business with an organ of state (183 from national departments and 496 from provincial departments).
 
DPSA also indicated that it adopted two directives to support the implementation of regulation 13(c) of the Public Service Regulations, 2016, and the steps taken to inform departments of employees suspected of conducting business with an organ of state (Letters in Jan 2017, Feb 2017, Circular June 2017, extension on 31 July 2017, report to Cabinet in Nov 2017, letter in Feb 2018).  The DPSA also amended the PERSAL system to capture applications for other remunerative work and together with National Treasury monitored new registrations on the CSD.
The DPSA reported that 20 departments provided progress reports to it (10 provincial departments and 10 national departments) by end of August 2018.
 
With regards to the progress report, towards the end of September 2018, two more departments provided the DPSA with updates, namely the Department of Trade and Industry and the Western Cape Department of Agriculture. At the end of September 2018, National Treasury unilaterally stopped providing the DPSA with identification numbers of public service employees to give expression to the Protection of Personal Information Act, 2013 (POPIA).  As a result, the DPSA could not monitor progress of departments in implementing regulation 13(c), as identification numbers are required to monitor registration on the CSD.  Meetings were held with National Treasury which indicated that in future data will be provided directly to the CSD after new business rules are drafted to apply in the extraction of data. This will only take effect at the end of December 2018. To obtain clarity on POPIA, the DPSA wrote to the State Law Advisors for a legal opinion.  If needed, a request will also be made to the Information Regulator to allow the DPSA access to relevant PERSAL information. To assist departments with the implementation of regulation 13(c), the DPSA conducted a workshop with all provincial Offices of the Premier (30 October to 2 November 2018).

Finally, in terms of the way forward, the issue of access to PERSAL will be addressed. Once the new information is obtained from National Treasury, letters identifying employees who are conducting business with an organ of state will be forwarded to departments.  National Treasury indicated it would be ready by end of December 2018 to provide the DPSA with the needed information.  Departments will be requested to provide feedback to the DPSA by the end of March 2019.  This will allow for the interpretation and analysis of data over a set period of time: end of March 2017, end March 2018 and end March 2019. National Treasury will be requested to remove all public service employees from the Central Supplier database, as required in terms of the Directive on Conducting Business with an organ of state (January 2017).

Discussion
Ms W Newhoudt-Druchem (ANC) said that public servants know that they are not supposed to do business with the State and in 2018 that number increased to 679. She said “I would have thought the number would decrease, so what was the reason for the increase?” The central supplier database – is it monitored by the National Treasury or an external company. Lastly, what was the State Law Advisor’s perspective in terms of this law?
 
Mr S Motau (DA) said that the impression one gets about this thing is that the public servants do not think it is wrong to do business with the State and it seems that they are aware that the departments are not going to do anything about it. The lack of consequences is worrisome. He wanted to know whether there were any public servants that have been penalized for continuing to do business with the State.
 
Mr M Ntombela (ANC) said perhaps the increase in the number may have something to do with the lack of punitive measures; so he wanted to know whether there are any punitive measures in place to mitigate the matter. Secondly, what is the mood that prevailed in the meeting between DPSA and Treasury that culminated in the date which was set by Treasury and the unilateral decision that it took?
 
The Minister replied that the 2018 December date did not make sense. If you read the Constitution and the Public Service Act the departments have a responsibility to provide this information. The DPSA could try obtaining the information through utilising its legislative instruments but the Committee needs to take the bull by its horns and call the Ministers to account. The DPSA does assist various other departments but only from a disciplinary perspective. Sometimes it’s difficult to get cooperation from the departments. DPSA can provide the Committee with letters that have been written and other relevant documents with this respect.
 
The Minister said she requested the Deputy Minister to look at the number of disciplinary cases to determine the backlog so that it can be cleared, and there are people who have been suspended. She is awaiting the process to be finalised and she will report back the progress to the Committee. She asked the Committee to assist the Department and she would be happy to provide aspects in which the committee can assist.
 
Professor Levin said the engagement with the State Law Advisor has been in a form of the letter at this stage and they are still waiting for a response. At the moment the departments that have taken action have simply compelled the DPSA to issue warnings to those companies and individuals, but once the Public Administration Management Act (PAMA) and the mandate has been promulgated that will criminalise the transgressions. In terms of section 6 of the Public Service Act – when we request information it must be provided as per the legislation and we need to also show the teeth that we do have instead of complaining about not having teeth, so the circular is the first step.
 
The Chairperson added that there must be serious consequences for this even though we are not aware of the monetary value of the 5 000 employees that are doing business with the State. It appears that people are deliberately ignoring the rules, and point was taken from the Minister that all other Ministers must also be held to account to this effect. We have to go to that extent because there are many people out there who would like to do business with the State especially SMMEs and Cooperatives but these public servants are hindering the State from empowering those SMMEs. This is very serious in an era where businesses are closing down. He lamented that he has seen businesses close down due to the lack of resources and support from government. The State is the biggest consumer of services and holding Ministers accountable also would be a good step and the names of the employees or officials must be provided so that when the Committee writes to the relevant Ministers we provide all the details and give the Minister time frames and how the matters must be dealt with. He asked Prof. Levin to provide the names and a break down information of those public servants that are still doing business with the State.
 
The Secretary of the Committee will liaise with the Department to obtain the information and this need to be done as soon as possible, before Parliament rises so the letters can be sent to the relevant departments in December.
 
The Chairperson thanked the Department and submitted that it would assist if the Department expedited the provision of this information. He then handed over to the NACH for its briefing.
 
Briefing by the Public Service Commission (PSC) on the National Anti-Corruption Hotline
Ms Sellinah Sitane Nkosi, Commissioner, PSC, took the Members through the presentation and highlighted that the PSC was mandated by Cabinet to manage the National Anti-Corruption Hotline (NACH). The NACH came into effect on 1 September 2004 under the management of the PSC, and it provides a “one-stop” mechanism for members of the public to report acts of corruption anonymously. The aim for the establishment of the NACH was to create a central data base for the reporting and monitoring of alleged cases of corruption in the Public Service to avoid “forum shopping” by complainants which leads to the duplication of investigation and resources.

With regards to the management of NACH cases, the cases are captured on the Case Management System (CMS) and forwarded to relevant national and provincial departments, and public entities for investigation in accordance with agreed protocols. These departments and public entities are required to provide feedback to the PSC on progress made within 40 days on progress. Feedback on the cases investigated is updated on the CMS of the NACH on a regular basis in order to provide information to complainants. A full investigation report by departments is submitted to the PSC when the matter is concluded and signed off by the relevant authority.

The statistics reported that:
-Between 01 September 2004 and 31 October 2018 the PSC generated a total of 20726 cases from the calls that were received through the NACH.
-These cases were referred to the relevant government departments and public bodies/entities for investigation.
-Feedback was received in respect of 18 898 of these cases. The PSC has as at 31 October 2018, managed to close 18 582 of the cases upon receipt of satisfactory feedback on how the cases were dealt with.
-In total, 2144 cases referred to national departments and provincial departments are still pending as at 31 October 2018 due to lack of investigative capacity.
-National departments that have the highest number of outstanding cases are SAPS (156), Correctional Services (219) and Home Affairs (133) and provinces with the highest number of outstanding cases are Gauteng (233), Eastern Cape (161), Kwa-Zulu Natal (175), Limpopo (123) and Mpumalanga with 35.
-In this respect, the PSC has conducted in-loco inspection in departments to fast- track the investigation of these cases.
 
As for the in-house management, the NACH was outsourced in 2004 to a third party due to lack of adequate equipment and resources to manage it. The PSC was given R3.8 million for the management of the hotline system including personnel costs. In 2015, the cost of the NACH was R4.738 million per annum including personnel costs. At that point in time, the PSC required additional five employees to manage the call centre, the case management system, referrals, marketing and monitoring. National Treasury indicated that due to the economic outlook of the country funds could not be made available to the PSC for the management of the NACH. Therefore, adequate funds were not allocated to the PSC to manage the NACH. Considering the above imperatives, the PSC took a decision in May 2016 to manage the NACH in-house in order to reduce costs as well as to focus on quality and accountability. The NACH is available for 8 (eight) hours a day manned by the Early Resolution Officers and after hours there is a recording device where complainants can leave messages.
The top six categories of alleged corruption reported through the NACH during 2017/2018 financial year were:
-Social grant fraud (594) (Medical doctors authorizing grants unlawfully)
-Unethical behavior (69) (taking annual leave without authorization)
-Fraud and bribery (34) (such as traffic officials receiving bribes from motorists and officials receiving kickbacks from members of the public in order to obtain Government tenders etc.),
-Appointment irregularities (26) (fraudulent qualification and not following appointment procedures)
-Procurement irregularities (24) (collusion between a person involved in the awarding of a tender and an associate who is often a family member or friend seeking to win the tender)
-Abuse of government resources (18) (government-owned vehicles were being used as taxis for personal benefit)
 
The pertinent challenges experienced by the Commission included the finalisation of cases by departments and protection of whistleblowers and investigators.
 
In conclusion, the NACH remains a vital tool which helps government departments to combat corruption in the Public Service. In terms of the country’s vision for 2030 as contained in the National Development Plan, the NACH contributes towards “A South Africa in which an empowered citizenry have the confidence and knowledge to hold public and private officials to account and in which leaders hold themselves to high ethical standards and act with integrity. This South Africa has a resilient anti-corruption system in which anti-corruption agencies have the resources, credibility and powers to investigate corruption and their investigations are acted upon”.
The PSC has noted a significant improvement on the reporting of cases of alleged corruption to the NACH in the 2017/2018 financial year by members of the public. The state of readiness by whistleblowers to report allegations of corruption to the NACH could be attributed to the level of commitment by the PSC to improve the reporting mechanism and the message of zero tolerance to corruption. 
 
Discussion
Ms Newhoudt-Druchem said at the beginning of the presentation it was mentioned that it was a cabinet memo that set up the NACH and in 2015 it was moved in-house; she wanted to know whether it was the cabinet memo to cut off the funding. Who made that unilateral decision regarding funding because we can see that there is a need for the NACH?
 
There is good feedback from the department but on slide 5, only 5 provinces gave feedback and did the PSC interrogate why the progress declined? Did the PSC provide any kind of support to ensure that they have investigative capacity?
 
There is a huge concern about the social grant fraud, what is Treasury and PSC doing about the fraud relating to this? The number of fraud cases in this area is very high.
 
Ms Z Dlamini-Dubazana (ANC) sought clarity on how NACH was different from the hotline managed by the Presidency. How do you relate to the shifting of the task which was not followed by the budget, and how was the Act implemented if there was significant failure to adhere to it?
 
Mr Motau said that there is a need for capacity to conduct investigations and the stats speak for themselves, and an urgent need to look at the notion that prevention is better than cure. People need to be informed that they will be arrested if they mess with the law. He asked whether the PSC gets any feedback on the cases that the NACH refers.
 
Mr Ntombela referred to slide 8 and said national departments that have the highest numbers of pending cases should be summoned and the Committee should be informed about these cases in detail. On slide 13, why was unethical behaviour a type of corruption case on its own?
 
Commissioner Nkosi said the function came through as a cabinet memo, and the R3.5 million was then received and that was this was the only time it received funding. Thereafter, it utilised its budget until Treasury decided to give the PSC a budget cut. So instead of killing it, the Commission decided to manage it in-house and tried to engage with Treasury to obtain additional funding but that engagement did not yield fruits. It seems as though the PSC is perceived to have nothing to do with the hotline – Treasury took a unilateral decision not to fund NACH.
 
With the cumulative stats where five provinces did not provide stats, the officers engage with the Office of the Premiers which in turn refers those cases to the relevant departments. The departments have complained that they receive the cases very late so now we ‘CC’ the departments when we send the information in our e-mail communications.
 
The general information we got from quarterly meetings is that they do engage with the departments but the departments are slow-paced in concluding their functions in this regard. It is no secret that we have human resource constraints, and we do not handle the irregular appointments because we do not have the capacity.
 
With social grants, in 2014, SASSA had its own hotline and in 2014 they requested that their hotline be merged with NACH and NACH does refer them to SASSA and they do send reports to NACH to update it on progress made on those cases.
NACH is different from the Presidency’s Hotline: the latter was established very late and it was established as a service delivery hotline. The PSC did meet the officials from DPME (Department of Planning, Monitoring and Evaluation) and assisted them with some of the cases. The NACH receives all types of allegations and it would refer those to departments and investigate some of them.
 
There is a need for capacity to investigate – when the NACH was established it was mandated that each department must establish an anti-corruption unit. The PSC conducted a study where it found that most departments did not have the capacity or even the unit.
 
On unethical behaviour, it is correct that some of the other categories also do entail unethical conduct but the category deals with specific conducts of officials where you find that they are rude towards complainants and because there are many examples of the occurrence of these instances, the Commission undertook to come up with a category.
 
The PSC had no control over the DPME hotline establishment but there is now a partnership between the Commission and the DPME to work together.
 
Ms Newhoudt-Druchem said she was worried because the establishment of the PSC came from Cabinet, and it is not the mandate of the National Treasury to cut off funding when the Cabinet gave a memo for this service. It is the responsibility of the DPSA to check whether each department has the people with investigative capacity to follow up on the work.
 
Ms Dlamini-Dubazana shared the same sentiments, and highlighted that there is so much duplication and it all wastes resources. When the DPME hotline was established there should have been a re-validation to the initial Cabinet Memo.
 
The Minister said sometimes we tend to put in the back burner what was agreed to before a particular Minister is appointed, and when she was appointed as deputy minister a long time ago; the then Minister launched initiatives that are no longer functioning, and subsequent to that when she came back to the department there has been no movement in terms of an effective anti-corruption service.
 
We tend to ignore empowering legislation. The Public Service Act empowers us to deal with some of these issues. She asked the Department to look at loopholes in business processes, systems, and regulation and legislations that make it easy for corruption to take place because that would make it easier for us to prevent instead of gunning for a cure. The Department needs to be a bit circumspect and it is not doing everything within its power to deal with these matters; from an administrative level there is so much we can do but it is just a matter of applying the instruments. We can be compelling in discharging these matters because we are empowered by legislation, and departments need to understand that.
 
It is indeed true that some of the hotlines can be consolidated to one hotline instead of the proliferation. If SASSA moved its hotline to the NACH, why is it complaining about resources because that move should have occurred with the resources?
 
Commissioner Nkosi added that the PSC only investigates aspects where it has a mandate to do so, otherwise it would not investigate.
 
The Chairperson suggested that the provinces that have not yet provided the information must be invited to the Committee regarding the cases that have been referred to them
 
Consideration of the Portfolio Committee Legacy Report of Fifth Parliament
The Chairperson suggested that the Report should be considered in the next meeting instead of ambushing the Members without having the opportunity to go through and contribute to the content.
 
The meeting was adjourned.

Share this page: