In a virtual meeting, the Auditor-General of South Africa (AGSA) presented the financial statements and audit outcomes of the policing portfolio. The SA Police Service (SAPS) presented its 2019/20 Annual Report, as did the Civilian Secretariat for Police Service (CSPS).
The AGSA said Material misstatements were identified on the reported performance information of SAPS and the Department was qualified on immovable tangible capital assets as the AGSA was unable to obtain appropriate and sufficient audit evidence to support the value of these assets. Material non-compliance with legislation was identified at CSPS and SAPS.
SAPS reported that it achieved 85 of the 131 targets set for the 2019/20 financial year resulting in 64.89% performance.
Members expressed extreme concern over the four consecutive qualified audit reports and the regression at SAPS. They asked about the corruption in supply chain management and how the Department continued to pay for expired contracts; the lack of proper record keeping which contributed to the loss of firearms; problems in SAPS’s leadership and senior management; irregular expenditure and inadequate consequence management; accountability for the Department’s asset management; expired contacts for suppliers to the Forensic Science Laboratories; toxicology reports which had been outstanding for ten years; over-expenditure on crime intelligence and VIP protection; SAPS’s slow response to AGSA’s recommendations; the criteria used for the promotion of Generals; how senior police management was being protected from arrests for misconduct; civil claims and unlawful arrests; the unavailability of uniforms and bullet-proof vests, and the School Safety programme in the provinces.
The Deputy Minister said the leadership of SAPS were not proud of what they had presented to the Committee, but that did not mean that they did not recognise that some progress had been made. The Department was committed to improve the situation.
The CSPS achieved a performance score of 86% against the set targets at the end of the 2019/20 financial year. The level of performance is higher than the 78% performance score recorded in the preceding year, an increase of 8%. The Department did not achieve all the set targets due to, among other things, vacant funded posts, which resulted in a low level of spending at the end of the financial year.
The Committee resolved to meet more regularly with both the Department and AGSA in order to ensure that the poor audit outcomes did not recur.
AGSA on audit outcomes of police portfolio 2019/20
Ms Mmule Thipe, Senior Manager, AGSA, led the presentation covering the financial statements and audit outcomes of the annual reports of the Department of Police (DoP), the Private Security Industry Regulatory Authority (PSIRA), the Independent Police Investigative Directorate (IPID) and the Civilian Secretariat for Police (CSP).
AGSA commended PSIRA for maintaining a clean audit. Material misstatements were identified in the reported performance information of the DOP. The DOP was qualified on immovable tangible capital assets, as it was unable to obtain appropriate and sufficient evidence to support the value of its assets. IPID’s audit outcomes did not improve due to findings on non-compliance. The CSP had regressed due to a finding on compliance. PSIRA’s current liabilities exceeded its current assets by R13.8 million, which highlighted the challenges it faced in meeting its obligations when they became due.
IPID’s creditor payment period of 31.3 days to 51.4 days was a result of budget constraints. There was fruitless and wasteful expenditure in the DoP because of incorrect payments being made to suppliers. In IPID, fruitless and wasteful expenditure was due to no value being derived from the procurement of rifles. Irregular expenditure had increased over two years. There was regression in supply chain management (SCM).
The AGSA recommended to the departments and entities that there should be urgency by management in responding to messages about addressing risks identified and improving internal controls. Vacancies in key positions at IPID should be filled. The Portfolio Committee should request Accounting Officers and the Minister to provide feedback on progress with the implementation of action plans, to ensure an improvement in the audit outcomes.
South African Police Service (SAPS) Annual Report 2019/20
The presentation covered the audit history and progress in qualification areas, and remedial action taken. In the audit outcomes, an issue remained in the valuation of assets amounting to R3.2 billion. An action plan had been developed to address the audit findings. The State Information Technology Agency (SITA) had appointed an asset management company, and the scope of work would be:
- Asset components and sub-components physical verification;
- Asset component and sub-component valuation (fair value of entire asset – not cost);
- Site inventory to be maintained by SITA, since they were obliged to perform the asset lifecycle management; and
- Asset register to be produced and presented with supporting evidence.
Programme 1: Administration: There had been under-spending of 1.43% as a result of decreased spending on compensation of employees, which had required funding reprioritisation towards compensation in other programmes.
Programme 2: Visible Policing: Under-spending was marginal at 0.24%. Net under-spending of R118.8 million was realised on the largest programme, which had been allocated more than 51%, or R49.9 billion, of the total budget.
Programme 3: Detective Services: Marginal net over-spending of 0.61% (R116.9 million) was realised on the programme.
Programme 4: Crime Intelligence: Net over-spending was R63.1 million (1.54%).
Programme 5: Protection and Security Services: Net over-spending of 7.31% on the total programme was mainly as a result of increased spending on the compensation of employees.
Overall, SAPS achieved 85 of 131 set targets for 2019/20 (64.89%).
Gen. Khehla Sitole, National Commissioner, SAPS, said a new internal audit committee had been appointed with effect from 1 November. He asked the Chairperson to allow the current chairperson of internal audit to comment on the AGSA report.
Mr Wally van Heerden, Outgoing Chairperson, SAPS Internal Audit Committee, thanked the National Commissioner for the announcement. He referred to the audit committee’s report, appearing from page 308 to 312 of the Department’s annual report. He said they agreed with the AG specifically in relation to the internal controls. AGSA had specifically mentioned performance information, risk management, combined insurance procurement and supply chain management, consequence management, contract management, asset management, information and communication technology. Those were the areas they had also highlighted in their report. The Department was well on its way to improving the financial controls and the internal control. Hopefully, in the following year, there should be a major improvement.
The internal audit committee report highlighted the audits that had been completed by the internal auditor during the year. He was happy to announce that with the approval of the audit committee, they had allowed the internal audit to assist the Department in certain audits like the irregular expenditure, asset management, and the COVID-19 audit. Their input was highly appreciated, and he recommended to the Committee that they take note of that part of the internal audit which they had assisted the Department to bring up the date. That was why there were certain parts of the audit plan that could not be completed, but had taken place with the approval of the internal audit committee.
He thanked fellow members of the internal audit committee for supporting him as chairperson of the audit committee function. He wished the incoming committee well with their endeavours. He thanked the Department for the assistance that the committee had received, especially the accounting officer. He thanked the Portfolio Committee for the briefings that they had been attending as part of the annual review process.
The Chairperson thanked the outgoing SAPS internal audit committee for an outstanding job and appreciated the work they had done. She asked about AGSA’s findings -- what was the audit committee’s action plan? What recommendations would they give for monitoring?
Mr Van Heerden responded that AGSA’s report and findings were top of the audit committee’s agenda, and they had had robust discussions with the AG. When the action plan of the Department was tabled to the audit committee, they would interrogate it to determine accountability and consequence management. It was a continuous process. They agreed with the findings of the AGSA to the extent that they had mentioned this in their audit committee report. They were happy that the action plans of the Department had specifically led to the qualification of irregular expenditure, which was removed from the AGSA’s report this financial year, with the assistance of the internal audit. They were happy that when they did the handover to the new internal audit committee the next day, they would mention these as areas that needed to be monitored on a continuous basis in order to get to the stage where the audit committee could also assist AGSA.
The Chairperson thanked the Audit Committee for its stunning work, by sacrificing their time, and time with their families. She respected the work that the internal audit committee had done over the years.
Mr Van Heerden responded that they would still be involved in certain areas, advising the new incoming committee on their reporting phases and evaluation.
The Chairperson appreciated that there would be a thorough handover process, and asked to receive a report of the handover.
General Sitole said the Department had decided to provide a response action plan, to undertake all the corrective areas that the AGSA had pointed out in the audit report. There were already measures that they had put in place for what had been pointed out. For instance, they had put risk management and relevant controls in place, and revised the enterprise strategy. They had experienced most of the irregular expenditure within supply chain management (SCM), and had introduced a corporate process for SCM. They had introduced a contract management strategy and a calendar of contracts so that they were checked. Where consequence management was supposed to be taken, they had taken action to address the issues. They were working with both AGSA and Treasury to improve on the other areas. They would focus on the new external service provider to assist. They had the cooperation of SITA.
Referring to the Annual Report, he said the performance was above average. However, there were some areas where they needed to put in efforts to improve. They would prioritise those areas. They would work on a strategic deployment of resources so that they were taken to where they belonged and provided the necessary responses. The focus in the annual report would be on recovery.
Deputy Minister input
Mr Cassel Mathale, Deputy Minister of Police, said he appreciated AGSA’s work in checking what was supposed to done, including the role of the internal audit committee. He commended the National Commissioner and the team from SAPS for responding the way they had. He agreed with the sentiments expressed by the Gen Sitole that SAPS was not doing that well, but it was not how they would wish to be doing. They would ensure that they improved even more in the next financial cycle, beyond the little improvement that had been displayed. They fully agreed with AGSA’s observations on the challenges. They had also identified these areas, as the leadership of SAPS, around SCM and the issues that the National Commissioner raised. There was a response in terms of how they wanted to deal with them. They were quite convinced that if they fully implement the identified actions, there would be a greater improvement than what had been presented in the meeting.
He apologised to the Chairperson for the delays in responding to requests to submit necessary documentation for the Committee to do their oversight role on time. He said they would make sure to improve on the interaction and flow of information between the Committee and the Department.
The Chairperson thanked the Deputy Minister for his presence at Committee meetings, and asked if he could ensure that Committee received the audit action plan that would respond to AGSA’s findings.
Mr E Maphatsoe (ANC) was worried that there had been four consecutive qualified reports and according to AGSA, there had been regression. This meant there had not been any consideration of the “red lights” indicated by AGSA. He hoped the internal audit committee and the senior management of SAPS would take the issues raised by AGSA seriously, otherwise the Department would continue having qualified reports. It looked bad, and it may appear as if the Portfolio Committee was not performing its oversight role. How could the Department continue paying for contracts that had expired? There was a problem in the SCM, and he hoped the leadership would take action. While appreciating the improvement in some parts, the four consecutive qualified reports did not look good for the Department.
Rev K Meshoe (ACDP) agreed with Mr Maphatsoe, emphasising the concern about the four consecutive qualified reports. One of the issues that AGSA had raised was that the Police Department were slow in responding to messages, and sometimes they did not respond at all. What was the reason? Were they ignoring the reports of the Auditor-General? Who were they ignoring? Not responding to these warning messages could be one of the reasons that led to the qualified reports. Were there consequences if the police ignored messages? If there were no consequences, they would continue ignoring, and the qualified reports would also continue.
Secondly, the lack of proper record keeping in the Department could be contributing to the loss of firearms. Was the problem with senior management? This should not be ignored. Innocent people lost their lives because of firearms that fell into the hands of robbers and criminals. This should be taken very seriously, and hopefully next year the Committee would not hear about poor record keeping, which among other things may lead to loss of firearms.
AGSA had recommended to the Committee that they must request frequent feedback from the Accounting Officer. How often did AGSA suggest that this feedback should be given? When dealing with audit outcomes, the Police Department had said several engagements had taken place with the auditors, but they could not agree on the outcome. Could both the Police Department and AGSA elaborate on this? If they had several engagements but could not agree, could this be contributing to the qualified reports? If there was no agreement, it meant nothing would be remedied, and what was wrong would not be corrected. What was being done about failing to agree about outcomes? Did they just leave the matter at that because they could not agree? What happened when the Police Department and AGSA did not agree on the outcomes?
Mr A Whitfield (DA) said that in their presentation, AGSA had indicated that they were comfortable with the leadership of the Department of Police. Could they explain the actual indicators used because the outcomes of the audit showed that the problem with SAPS resided in its leadership and its senior management. Four consecutive qualified reports over four financial years was an indictment, not only of the Department, but also the Committee, and the Committee that had been there previously. It may imply a failure of the Committee to hold the Department accountable.
SAPS had mentioned an action plan and steps that were being taken, but the reality was that the situation in SAPS was deteriorating at a rapid rate. The National Police Commissioner had been appointed in 2017, so he could not be held accountable for all four consecutive qualified audits. However, for two full financial years, 2017/18 and 2019/20, the National Commissioner had presided over these qualified audits, and the situation did not appear to be improving. In 2017/18, the opening balance on irregular expenditure was R20.7 million, and that amount had escalated dramatically to R1.27 billion in the period that the National Commissioner had been in office. The performance of SAPS had declined by 13%, to 63%. The trend was pointing in the wrong direction. Irregular expenditure was going up, performance was going down, and there were four consecutive qualified audit opinions. This showed that Department was not capable of getting its affairs into order.
He welcomed the arrest of corrupt senior police officials, and wished the National Commissioner well with his clean-up efforts. However, he was confused by how AGSA could be satisfied with the leadership of SAPS, when all the problems in the audit report and the Annual Report appeared to emanate from senior management. He had asked this question before, and the Committee was still awaiting responses to questions from its meeting two weeks ago. Another question he had asked then was about the Forensic Science Laboratories. Could the Committee have a list of the expired contacts and the plan going forward regarding the advertising and awarding. At what point in the process would these contracts be renewed or awarded to new prospective bidders?
At the heart of the problem with the Department was corruption in supply chain management. The Committee needed to get to the bottom of this. There were continuous findings on contraventions in the Department, and this should be a very serious concern to the Committee. It needed to take urgent steps so that the DOP would take it seriously and demonstrate remarkable improvements in their audit outcomes going forward, otherwise the Committee was going to be sitting for the full sixth Parliament, with further qualified audit opinions -- hopefully not worse. Either the Committee must go for an oversight visit to the SCM division of the Department, or it must receive regular reports on the contracts that had expired, and the process to ensure that contracts were seamlessly dealt with, without any disruption such as in the case of Forensic Science Laboratories, and which did not then necessitate deviations or variations within the budget.
He was extremely concerned with the contingent liabilities that the Department was faced with. This pointed to a deteriorating discipline within the Department, as was seen during the lockdown with escalating incidents of police abuse. He hoped the new IPID leadership would play its role to bring more discipline into the SAPS through accountability mechanisms.
The Committee had a lot of work to do. It had been required to cram a lot of work into four hours at this meeting. He appealed to the Chairperson that the Committee should demand more detailed reports specifically on contract management, and a response from the National Police Commissioner which would satisfy the Committee’s concerns about the situation within SAPS. Frankly, it did not appear that there was a sense of urgency around the extremely poor performance by SAPS regarding the audit report.
Dr P Groenewald (FF+) agreed that the Committee had enormous time constraints. In the past, for the Budgetary Review and Recommendations Report (BRRR), Members were given at least a week to gather information and go through the reports thoroughly. Because of time constraints and specific circumstances, he did not think the Committee had given real justice to dealing with the reports. Members could ask only a few questions, and would not even receive all the answers. He appealed to the Chairperson that for 2020/21, Members could have enough time to go thoroughly through all the reports, and even look at the previous BRRR reports and see the progress.
He asked for a more detailed explanation on the performance of the Detective branch. It was disturbing to see that there were long outstanding toxicology reports of between one and ten years. Ten years? What was the problem? He also referred to the involvement of SAPS in civil claims.
Mr O Terblanche (DA) said he agreed with the points raised by other Members. The Deputy Minister had apologised for the late submission of the information. The Committee had been buried under a lot of information, and therefore had not had enough time to prepare properly. In addition, it had only four hours to deal with all this important information, also making it an impossible task. If the Committee was serious about oversight, things could not continue in this fashion. He appealed to the Chairperson to ensure that in future it was done differently.
The National Commissioner and the Deputy Minister had indicated that the Department had not done too badly. He did not agree with that statement. With the information at hand, it should indicate that the Police was a Department in crisis. There had been four consecutive qualified audit opinions, and there was a regression in every section of the Police -- for example, the Detectives. At the previous meeting, the Committee had dealt with the issue of the laboratories. This was still not sorted out. The Committee must ensure that the Police were able to start performing.
On record keeping, if the records were not correct, was the information then correct? Did the information that was provided reflect the true situation? This was a very important issue that the Committee must look into. The National Commissioner and the Deputy Minister must attend to this issue, and report back to the Committee as to whether they were serious about rectifying this unsatisfactory situation. He did not know what to say about the SCM. He hoped the appointment of the new Deputy National Police Commissioner would help to bring some change. The root cause of the civil claims referred to by Dr Groenewald was unlawful arrest, detentions, general police action, shooting incidents, assault, unlawful search and seizure, defamation and negligence. These were training issues -- the police were apparently not properly trained anymore. He was concerned, and it could not be business as usual. The Committee needed to present this report to Parliament, and he was not sure what it would report at this point.
Mr H Shembeni (EFF) wanted to raise a point on the qualified audits of SAPS, but it had already been mentioned by other Members. The issue of civil claims had also been raised. He asked about the insufficient bulletproof vests, and whether this meant there were police officers who performed duties without them? If yes, how was this being done?
He asked about the shortage of uniforms for the past three years, although it was not mentioned in the presentation. Every year, all members in the Department were given an allowance of about R1 600. If they did not get a uniform because they were not available in the uniform shop, what happened to the allowance? For three years, members were not getting uniforms. Where was this money being used? What was it used for? When a uniform became available, were they going to get a uniform for the previous years when they had not get them? That money was allocated for uniforms for the members, but now they were a laughing stock with their dirty and torn uniforms.
He wanted to know why there was an over-expenditure of 101% on crime intelligence, despite the fact that currently the crime rate was going higher. There was unrest everywhere. The Committee had not received the information prior to this, so that something could be coming, and visible policing could be there in time. There were no arrests for illegal goods that were coming into South Africa every day -- illicit cigarettes, and firearms that were being used to kill their brothers in South Africa.
There was 107% overspending on VIP protection. What was happening? Was this due to the promotions that were taking place, because suddenly people were being promoted from nowhere? Newly recruited policemen were being promoted to sergeants and other ranks. What criteria were being used for the VIP protection, where people were treated as special, and they got promoted to the next levels without serving in SAPS for a long time? Most importantly, the Committee must look at the senior management of SAPS. People were appointed or promoted to the rank of General without being evaluated. Posts were not advertised, and the people did not apply. The Department just appoints somebody to the rank of General and give him or her the post that he/she did not qualify for. There was somebody who was qualified for that post, but would not be given it because of nepotism and corruption. These were the consequences. He had spoken before about this corruption in the SAPS senior management. Who appointed these people? Was it the National Commissioner? He was asking this question for a second time, because the Minister could not interfere and appoint people who he was not working with. All these people were reporting to National Commissioner, so he knew their capabilities. How could somebody appoint a person for the National Commissioner to work with, yet he did not know how capable that person was? It was good for the National Commissioner to have his team of people who were accountable to him, and he must account to the Committee. It would be better if the Committee could have an eye on the appointment of the senior management of SAPS Generals. The Committee should evaluate the people and vet them to see their qualifications, rather than have the nepotism and corruption of appointing people to high ranks which they did not deserve. There were capable people who had been working well in the ranks for more than 20 years, yet those who had been promoted could not even read and write, and they were failing. If there was a crime scene, they did not go. They would run away and switch off their phones, so that they could not be found to come and account.
This was what was happening in the SAPS. The wrong people were being appointed, and the job was being done by subordinates. When it came to arrests for corruption, these things were just seen on social media, talking about senior management and other political figures that had to appear in court. However, it was the constables and sergeants that were seen with handcuffs. Why was senior management protected? They must also be seen on TV and in all the media. They should not abuse the young ones, because they were being used. This had to stop in the SAPS. If there were factions in SAPS, the Committee must stop it and get a management that would perform its duties and make the country crime free, with no firearms being found. The Committee must fight for this. The SAPS must not be used for the functions of other political parties.
The Chairperson said she was very concerned with the situation at SAPS. The Committee could not continue as if it was business as usual. It would have two meetings per week from now on and must ensure that in the next financial year, there was an improvement, otherwise it would have failed in its task to oversee the work of SAPS. She expressed her displeasure and disappointment with the situation, but said she would elaborate later.
Ms Z Majozi (IFP) agreed with other Members that the state of affairs at SAPS was not satisfactory. The Committee had to do serious oversight. The findings showed that the records were not accurate, considering what AGSA required. Receiving a qualified audit for four years showed that the Department was not doing well. How did they explain the fact that they had not reached 90% of their targets, yet the budget had been exceeded by over 90%? Could they explain the irregular expenditure? Who would take accountability for that? What were the consequences for the irregular expenditure? It may not only mean that there were records which had not been filed, but that there were other things that had not been done according to procedure.
The Committee was not happy with the affairs of the SAPS. It was time for the Committee to play the oversight role and ensure that accountability was brought to SAPS officials and executives. It did not look good. The Portfolio Committee could not sit with a Department that received a qualified audit for more than four years. This was not due to the Covid-19 pandemic.
Ms L Moss (ANC) said she was very disappointed by the financial reports. It was a pity that the reports were received when Parliament was nearly closing for the year. It was a disgrace that the Department was receiving qualified reports for four years. Could AGSA explain what had made it get qualified reports for the last four years? Regarding the assets amounting to R3.2 billion, what kind of assets where these? Could they give a breakdown? She asked about the vacancies in the SAPS, and if they had not budgeted for the posts, if the situation was so serious. In which provinces had they rolled out the School Safety Programme, so that when doing its oversight, the Committee could visit those schools to find out if the programme was really happening?
Ms P Faku (ANC) said the Committee had probably failed because of the four qualified audit reports. This was very bad. Some of the issues that AGSA had raised were that there needed to be consequence management. The Minister and the Deputy Minister must prioritise investigation into irregular expenditure. The Committee could not sit while no one was held accountable. If there was an internal audit committee, what had been their role when they were receiving quarterly reports on such bad financial statements?
She congratulated PSIRA on the good work they had done in receiving a clean audit, and the Department for receiving a clean audit on the Centralised Firearms Register and Division of Operational Responses Services. These were the only two key performance areas where they had done well. Why had the Department under-spent on visible policing? People were complaining that the police were not visible. The Committee had emphasised this numerous times -- that visible policing must be a priority for the people of South Africa.
There was fruitless expenditure of R859 million. This was almost R1 billion. That money could have been invested in programmes focusing on gender-based violence (GBV). Who would account for this money?
AGSA’S recommendation had been that PSIRA were unable to carry out their debt collection. The issue had been raised over and over since she joined the Committee, yet it had not been dealt with. The Committee was disappointed with the results from AGSA’s report. PSIRA’s current liabilities exceeded their current assets. Perhaps the Committee was not doing its oversight.
SAPS always put the responsibility on SITA when it came to assets -- who else was responsible for the asset management? Why did SAPS not use their own asset management solution to manage their assets?
In Programme 1, they stated that they got delayed in appointing a consultant to fix police stations. They had underperformed by 11% in the past financial year, and this year the underperformance had increased to 17%. Most police stations were in a bad condition. She had visited some police stations in her constituency in Oxford Street, where detectives were dealing with GBV. Here SAPS had underspent and not reached their target. But what was the budget for if they did not spend the money?
The Minister and Deputy Minister must come to the Committee and explain what was happening in the Department. She did not understand why there were CFOs who were responsible for managing the finances of this Department, yet SAPS was in this situation. This could not be because of Covid-19 -- it was just people who did not know how to do their job. The Committee must be told if there were capacity issues, rather than for the Committee Members to embarrass themselves before the people of South Africa. There were also irregularities through non-compliance of contractual requirements. There were concerns over the quality of financial statements, lease and contract, amounting to R32 million for IPID. This was not acceptable. The Committee believed that both the Minister and Deputy Minister had the skills to do oversight over the Department. The Committee could not accept such a performance. She could not even talk, although she had her notes, because she was too shocked.
The Chairperson said the Committee was extremely dismayed with the situation at SAPS. The Committee would continue meeting twice a week upon return. She would take this very seriously. She asked what happened with Regulation 45 appointments made by NASCOM. In future, she asked that all Regulation 45 appointments by NASCOM that were made without being advertised must be announced to the Committee. She told the Deputy Minister that her concern was that senior managers were not working together. The way the Committee received reports was a clear indication that they were communication gaps between the Ministry and the NASCOM. The Committee had waited very long to receive the annual reports. The researchers had been given less than one full night to prepare the report for the Committee. Tomorrow morning, the Committee had to meet to approve reports. When would the Committee find time to read these reports? The researchers had to prepare the reports immediately after this meeting, and then send them back to Members in the evening, so that they could read them in the evening and approve them tomorrow. This was completely unacceptable. It meant the Department did not respect the Committee.
She had never felt as disappointed as she did today. This was a regression. There were four consecutive qualified reports, and internal control deficiencies. This could not be wished away -- no amount of ‘spin doctoring’ could take away these problems. The toxicology reports were outstanding for 10 years. How could a toxicology report be outstanding for 10 years if fighting crime was a priority?
Crime Intelligence remained seriously under-funded. She would be watching the budget of Crime Intelligence very carefully so that they had the capacity to do their work. There was a need for proactivity rather than just responding to problems. There was no way Crime Intelligence could be proactive if they did not have a budget.
The Committee’s oversight visit had not been approved, precisely because the Committee was still doing BRRR reports. The Committee had been compromised because of the failure of SAPS to submit reports on time. It was impossible for the Committee to accept the state of affairs in the Forensic Science Laboratories. She wanted the Central Firearms Registry to have a clean audit. Was this just malicious compliance? The situation at the Central Firearms Registry it just was not what it was supposed to be.
The Committee had been complaining about corruption in supply chain management. There would only be an improvement in audit outcomes if regular reports were given, and if the Committee could conduct the oversight visits. The situation in SAPS would not make fighting crime possible, nor addressing GBV and the scourge of drug abuse. She said she was extremely concerned.
Crime statistics were released on a quarterly basis. How could crime statistics be released when they had not been audited? The internal audit committee must audit the crime statistics before they were released, otherwise the audited statistic could be different to what was released to the public. She was dismayed at the situation.
An official from AGSA responded to comments on the regression. He said there was a slight misinterpretation. The regression was referring to a portfolio level by considering all four audits, and not specifically referring to the Department of Police. There had been two clean audits in the prior year, but in the current year there was now only one. This was what the regression related to. For the Department, where they had been two qualification areas in 2019, they had reduced this to one qualification for the network assets in the 2020 financial year. As such, there had been a slight improvement, as mentioned in the presentation by Ms Mmule.
On the slow response, he said that AGSA had also noted this as a root cause, and had constantly raised a non-compliance finding. This also appeared in the audit report. The issue was mainly that management did not implement the action plan they had put together to respond to the audit findings. They prepared an action plan to respond to the findings, but the problem was that implementation was sometimes not effective, as was the case for the network assets which were still qualified in the current year.
On the engagement and the disagreement on the audit opinion, he responded that there was a slide in the SAPS presentation, although they had not gone through it in detail. It had highlighted some of the issues around the asset management reporting framework interpretation which they were engaging on, and involving National Treasury. There were issues around whether the asset register of those network assets had been properly prepared, considering the reporting framework. The technical arguments had been resolved, but the issue was more on the audit side, where AGSA needed the supporting documents for the assets that were then selected for audit. Management had indicated that AGSA would find all the supporting documents, and if the information was not sufficient on the invoice, they would have the internal documents that they would prepare (the job cards, with all the details of what assets were purchased). However, for the sample that was selected, AGSA still did not find the detailed information to substantiate the appropriateness of the assets’ audit. This was because the invoices AGSA received did not have sufficient detail to confirm the actual assets being audited. Through these engagements, management had resubmitted the asset register to try and resolve the issue where they had earlier indicated the cost and fair value of assets, but there were issues where they had made some errors. The figures that were used as fair value did not agree to the quotations received from suppliers. That resolution had not resolved the issue. These were the engagements they had had, to see if the qualification could still be resolved in this financial year.
On AGSA’s assessment of the Department’s leadership, he responded that they were satisfied that the accounting officer had provided the tone at the top, and an action plan had been developed when the audit findings were raised in the prior year. The gap in implementation fell on the senior management, which had not implemented the plan adequately and resulted in the qualification on the assets remaining, and issues on the performance information which were not sufficiently resolved. As such, the accounting officer had discharged his/her duty in providing leadership to develop the action plan, but implementation by senior management had gaps in resolving the issues.
On the slide indicating “fruitless and wasteful” expenditure, he responded that there could have been a misinterpretation on the figure, as it was supposed to be R859 000, and not R859 million. There should be a correction.
On the reasons for the qualifications recurring for the four years and about the type of the assets that this qualification related to, he responded that the reason was what management had tried to articulate -- that there was a history of the four years, and there were different aspects of it. At one point it was a concern as to whether all the assets were recorded in the asset register, at a point when the Department did not record all the assets adequately. Action plans were developed for some of the concerns. They had gone past these issues, and in the last two years the concerns had been around the valuation, with challenges of invoice details not being available.
Management needed to resolve the qualification. The action plan had been presented today -- that they would try and add the value of the asset at fair value, to resolve the issue of not having the invoice or other documentation that sufficiently supported the asset. The type of assets referred to as network assets were the communication assets that were in the various police stations. These assets were managed in conjunction with SITA, because it was the ICT arm of government. SITA supported SAPS in the maintenance of those assets.
Ms Mmule responded on the slow response of management to the AGSA findings. She said that normally, after the qualification was issued, AGSA would request management to audit the qualification area during the interim audit. In this instance, unfortunately, AGSA was not able to do so because management was still in the process of compiling the process document on how they were going to move away from the qualification. This had disadvantaged the Department from dealing with the issues, because AGSA would have raised the findings, to which the Department could have then responded, and had another opportunity for AGSA to audit the qualification area in the final audit.
She said that the main issue at IPID seemed to be the leadership. When AGSA assessed the leadership, they also considered the stability of the senior management, the DG, and vacancies at the Department.
Referring to the increase in irregular expenditure over the financial years, she said that from the 2015/16 financial year, the Department had moved from R20 million to approximately R400 million in the current year. This was because of the action plans that management had put in place to ensure that irregular expenditure was investigated. When AGSA came to the Committee in the past financial years, there had been serious disagreements with management regarding the irregular expenditure reported. Management had brought in a firm to investigate this irregular expenditure. Hence, for the current year, the balance was over R1 billion. Looking further into irregular expenditure under investigation, there was an amount in the range of R1.4 billion which was still under investigation. From what AGSA had found, the bulk of the irregular expenditure was coming from the prior years. Irregular expenditure had also incurred in the current year, which AGSA was concerned about and it needed to be dealt with decisively. From their prior financial years, when AGSA recorded, the Department was not disclosing the nature of the non-compliance in the financial statements, and AGSA had raised this as a concern. For this year, the Department had included the nature of the non-compliance that they had in relation to the particular irregular expenditure. The qualification relating to the network assets had evolved over the different years.
On the question of having a difference between the reported achievements and the audited values, she responded that the audited values were factual values that AGSA had raised and communicated to management. Hence the findings in the audit report. Subsequently, ASGA had taken out the audit value from the final version of the submitted audit report. Those were the challenges which supported the findings in the audit report.
The record keeping of qualification and performance information remained a concern to AGSA, and needed to be addressed decisively.
AGSA was raising a concern that PSIRA’s liabilities exceeded their assets, and had highlighted the challenges they were facing in meeting their obligations. Since they were not receiving money as they were not able to collect, they could not pay their obligations on time.
Consequence management remained a concern in the SAPS environment since irregular expenditure remained a problem, although it was not qualified because they had disclosed it. However, it was still there and needed to be dealt with, together with consequence management for the officials who had permitted or incurred irregular expenditure. Investigations needed to be finalised, especially those coming from the prior financial years.
The Chairperson thanked AGSA for the report and the sterling work done. However, she requested AGSA to brief the Committee in the next three to four months to show any improvement made. She requested regular engagement with AGSA so that this situation did not occur again, and a year transpired with no significant improvements in the audit situation. She proposed that the Committee meet AGSA again within the next six months to receive an evaluation of the improvements or implementation of the action plans.
General Sitole thanked Members for their bold questions and direction. He apologised for the late submission of the SAPS reports. This would be corrected, and monitoring processes would be put in place. SAPS had taken note of the direction of the Chairperson regarding Regulation 45. The Department did not have pleasure in applying Regulation, 45, because it was applied on special occasions. However, SAPS would take the direction of the Committee that if for any reason they had to apply it, SAPS would keep the Committee informed.
Regarding vacancies, SAPS had put all its HR processes on hold, pending the R5 billion cut in the compensation budget.
The reason for not responding, or the slow response, was that there had been a directive that the whole audit process within SAPS had to be fully aligned with the Performance Management System (PMS). The PMS was then applied to enforce a process of dealing with audits in the organisation. This also applied to audit reports that were compiled and submitted by the internal audit inspectorate and all oversight bodies, including the Secretariat.
On the plan for frequent feedback to the Committee, he responded that SAPS would suggest that when they submitted their quarterly performance reports, they would include a full report on developments within the audit environment. The Department could also prepare monthly progress reports, as per the direction of the Committee. It would also align and comply to the appearance at meetings which the Committee had decided to hold frequently.
On SCM matters, there were two things that the Department could always avail to the Committee. Firstly, they had initiated the corporate renewal plan, which could be presented to the Committee, together with the progress report. In addition, SAPS had the contract management strategy, which could also be presented with a full update on the contracts, because that was where the bigger problem existed.
Legal Services would at a later stage respond to the issue of lawsuits. He had initiated a prevention plan for civil claims which was also linked to risk management, considering that what was happening within the legal environment was part of the risk. On the training required to deal with arrests and detention, he had ordered the Training and Development Division to conduct continuous research into training, so that the correct training was presented to the affected members. An instruction had also been given on having an integrated approach between Legal Services and Training, so that Training could provide responsive training on this matter.
On promotions, he responded that currently the focus was on appointing Generals through the use of adverts, so that assessments could be done correctly. As indicated, Regulation 45 would be put on hold, and would be applied only on special occasions.
On discipline, he said that SAPS had a value statement, a code of conduct, and a disciplinary code. All of these were equally and consistently applied to all members of SAPS who ventured into any form of misconduct, irrespective of the level. It was applied across all ranks.
To deal with irregular expenditure, SAPS continually applied Section 34 of the Public Finance Management Act (PFMA), complemented by the disciplinary regulations which were equally applied. On accountability, there were programme managers and spending agencies who were held fully accountable for what was happening in their environments.
On the concerning situation in SAPS, he responded that previously, when there was contamination in the organisation, it was always down at the low levels. However, currently this had escalated to the macro function. Given the situation, one could not complain about the situation, but should rather act. All the contaminated elements obviously needed to be removed from the organisation. As such, cleaning up should continue until the organisation was normalised. These actions would be seen continuously. Members of the SAPS would be continuously encouraged to do the right things, and all the necessary controls would be put in place.
He asked the Chairperson to give a chance to the Deputy National Commissioners and the Divisional Commissioner to respond to operational questions.
The Chairperson said the Committee had greatest respect for the National Commissioner and the work he was doing under very difficult circumstances. He had admitted that senior management needed improvement. He could not operate well without a strong support structure. She urged him build that support structure so that he would be more effective and successful, without the qualified AGSA reports repeating themselves. She wished him luck in the cleaning-up process, since it was not going to be an easy task. However, he had had a very good start. She asked that the Department respond to the rest of the Members’ questions in writing.
Deputy Minister Mathale said the leadership of SAPS were not proud of what they had presented to the Committee, but that did not mean that they did not recognise the progress made. Therefore, he and the National Commissioner had commented that there had been a little improvement. This did not suggest that everything was well -- it was not. They were committed to improve the situation. He commended the work of the National Commissioner and his team, particularly Lt Gen Puleng Dimpane, the CFO, who had been CFO since January 2019. The improvement being seen was because of her contribution, and Members should take that into consideration.
They would make themselves available to the Committee, as the Chairperson had suggested. They regretted what had happened regarding the flow of information to the Committee, and apologised. This should not be repeated because it puts the Committee in a difficult position. They would work on the recommendations of the internal audit committee and AGSA and ensure that next year there was a difference. They would discuss the suggestions made of meeting twice a week and take into consideration the National Commissioner’s suggestion of a monthly report and quarterly progress on the action to address the issues raised by AGSA.
He appreciated the platform of interaction with the Committee, because the issues raised were important, and they always left better informed. There must be an improvement because it was not a good thing to appear before the Committee and be told the same thing every time. They would respond accordingly.
The Chairperson thanked the Deputy Minister and said the Committee respected the progress made. She thanked the Deputy Minister for his cooperation with her office, and his office’s communication. He attended every meeting. She acknowledged his work of being central figure between the office of the Chairperson, the Minister and the National Commissioner. This allowed for a smooth flow of information. She acknowledged that she puts him under tremendous pressure, but thus far they had always been able to resolve the problems. She also acknowledged the Committee’s support staff, who had been working under tremendous difficulties. When the previous reports were done, they had worked over the weekend and given the Committee BRRR reports of a very high standard.
In future, the Committee would need to meet twice a week. There would be tremendous stress in engaging with the Office of the Chair of Chairpersons, because it was not easy to change meetings and arrange other slots. The Committee should respect the hard work of the staff. The personal assistants (PAs) of the Minister and the Deputy Minister had also been put under tremendous pressure to ensure that the Committee met its targets and deadlines. However, she does not believe in malicious compliance, where deadlines were met but the root cause of the problem was not addressed.
Civilian Secretariat for Police Service (CSPS)
The presentation by the Civilian Secretariat for Police Service covered their activities and performance in the past year. The Department had filled 142 of its 154 establishment posts, resulting in a vacancy rate of 7.79% at the end of the reporting period. Programme 4 on Civilian Oversight, Monitoring and Evaluation had achieved 100% of its planned targets at the end of the 2019/20 financial year. The programme had maintained the same level of performance compared with the same period of the preceding year.
Strategies for overcoming areas of underperformance were identified. The Department would prioritise and fill all vacant funded posts; they would continue to strive for the timeous implementation of internal audit recommendations; they would speed up the process of acquiring office space; and regular monitoring and implementation of risk action plans would also assist in mitigating against under-performance.
The Department had spent R137.4 million (96.1%) of its adjusted budget of R143.1 million. It had under-spent its budget by R5.617 million (3.9%), which was a 1.7% improvement compared to the previous year, when the under-spending was 5.6%. The under-spending was mainly due to incomplete ICT projects and the compensation of employees -- in particular, the non-filling of vacant funded posts. Finally, they had addressed corrective measures based on the 2019/20 audit outcomes.
Mr Shembeni asked the Department to provide clarity on the number of contract employees. Why had there been a turnover of 85% in contract employees? On the capacity constraints raised continuously by the Secretariat to explain its under-performance and under-spending, could they indicate whether they were experiencing any challenges with attracting employees to the CSPS?
Mr Terblanche noted that the Secretariat had performed well, with measurable output targets, but what impact had they made on crime prevention and police conduct? They had alluded to the under-expenditure on the DPCI judge, on the National Forensic Oversight and Ethics Board, and had spent only 76.3% of the budget allocation. This was a concern. Did they plan to put any emphasis on this?
Ms Moss asked what the time frame was for them to address vacancies and office space, which were mentioned every time. It could not be the same thing every year. Timeframes would make the Committee’s work better, and make people more accountable.
Ms Faku applauded the good work done by the Civilian Secretariat, as they had received an unqualified audit opinion, with no material findings on their performance. The Department must learn from the CSPS. However, with the material under-spending recorded at the end of the financial year, there must be more emphasis on internal control. This was important. She congratulated the Secretariat on spending 96.1 % of its final appropriation, and the under-spending of R5.6 million. Perhaps that had been because of the vacancy positions, since some operational matters were affected due to COVID-19. However, these matters should be resolved, especially the vacancies. She congratulated the Secretariat on achieving 86% of their targets in 2019, which was a great improvement from the previous year.
Could they develop better strategies to attract and retain employees? This was where they were lacking. There had been a slight under-spending in administration and the oversight and monitoring, of R2.9 million. This should be recorded. There was under-spending in the Office of the Director and the national forensic oversight. Why did they under-spend? When had the National Treasury issued new guidelines on how to deal with irregular expenditure? Could they also explain the process involved in the loss control function? Why did they not launch any investigation into the fruitless expenditure for 2019/20? It might be only R33 000, but if left unchecked, it might create problems. Investigation must be done so that there would be no fruitless expenditure at all. They had done a good work to ensure that most of the budget had been used. The Committee was very proud of the work, but there were areas for improvement.
The Chairperson said PSIRA and the Civilian Secretariat were performing the very well. She asked the Secretariat to go back to a clean audit, but added they were one of the better performing units.
Mr Alvin Rapea, Secretary of Police, CSPS, responded on the timeframes for the implementation of the strategies. He said they had already started, and the vacancy rate was currently at 6.5%. They had already started implementing the strategies, and by the end of this financial year, they planned to have implemented all the strategies put in place.
On the challenges in attracting the right skills, he said that it was not that they were unable to attract the right skills, but what they had identified was that they had become like a training ground for other government departments. Many departments were taking staff from the Secretariat. They had developed a retention strategy. Since it was new, they would monitor it as they implemented it.
The Chairperson congratulated the Secretariat, but said the Committee needed to see them back at the top.
Mr Tumelo Nkojoana, CFO, CSPS, responded on the under-spending in the administration and civilian oversight and monitoring operation. He said there was about R2 million under-spent in administration, which managed office administration. An amount of R6 million had been transferred from SAPS to the Secretariat to acquire new accommodation. They could not move to the new accommodation, however, and SAPS had charged R4 million to use their premises. This was where the under-spending came from.
For monitoring and evaluation (M & E), they had two sub-programmes, the DNA Board and the DPCI Judge. These two entities demanded that their structures be enhanced, but there was a delay in appointments. Two posts were created in the DPCI Judge, but could not be appointed from within. For the DNA Board, one post was created, but was appointed only towards the current financial year. For the DPCI Judge, the new posts were appointed only in the new financial year. That was the reason for the delay.
On the guidelines for governing the preparation of the financial statements, including issues of irregular expenditure, he responded that Treasury updated their guidelines every year. Those upgrades normally came between the December at the end of the financial year and January of the new financial year. By then, most processes would have already taken place. Therefore, it was a challenge to go back and correct matters based on the new guidelines.
Ms Precious Ledwaba-Moagi, Director: Strategic Management, CSPS, responded on the number of contract employees. She said there were three -- one from legislation and two in partnerships. Those were the only ones. On the vacancies, three people had left during the time of reporting, which had coincided with lockdown Level 5, with its travelling restrictions. Therefore, they could not quickly deal with the gap.
Mr Takalani Ramaru, Chief Director: Civilian Oversight (M&E), CSPS, responded on the impact of the Secretariat regarding police conduct and crime prevention. He said they monitored the implementation of IPID recommendations by the SAPS. They established monthly meetings in a forum where together with SAPS and IPID, they discuss the recommendations made by IPIDP to ensure that they were implemented correctly. There was the quarterly consultative forum, which was the executive of IPID and the Secretary for Police, which also ensured that new recommendations were implemented.
Mr Rapea responded on why there had been no investigation regarding the issues. In the presentation by the CFO, he had indicated that they would identify the person involved. For instance, if someone had driven a car and got a ticket, finance would go to the person and ask them to pay back without any investigation. Now they wanted to improve and have an investigation, so that they could show AGSA that an investigation was really done. They would bring this through the loss control committee, as it was a requirement in terms of the PFMA. They had tried to invite National Treasury to train the newly appointed loss control committee. Treasury had not come on board, but he and the CFO had conducted training for the new people last month, to ensure that they knew exactly what needed to be done. They believed that with these interventions, there would be proper application of the rules. He assured the Committee that they were doing everything in their power to make sure that they got back to a clean audit.
The Chairperson thanked the CSPS, and said the Committee expected them to have another clean audit in the next financial year.
The Deputy Minister thanked Members for their comments, and said they had been taken note of. They would work on improving. He appreciated the coordination between the Secretariat and SAPS.
The Chairperson said the Committee’s media statement should include a congratulatory message to PSIRA and the Civilian Secretariat for having clean audits. She thanked AGSA for staying for the four hours of the meeting. A letter of appreciation should be sent to the Auditor General's office. She asked the Deputy Minister to convey the Committee's gratitude for the good performance of PSIRA and the CSPS. She hoped that in the next financial year, all four Departments would do well.
The meeting was adjourned.
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