Update by Presidency on all reports referred by the SIU, with Minister in attendance

Meeting report

The Chairperson welcomed the Members of the Committee, the Minister in the Presidency and officials in the Presidency and the SIU. This was a follow-up meeting on the reports submitted by the SIU to the Presidency. There was the issue of developing a matrix for reporting. There were reports that had been gathering dust since 2002. The Committee’s contention was that the proclamation flowed from the President and went back to the President. There had to be a framework which guided the implementation of those reports.

The Chairperson raised the issue of vetting. The Minister had sent a response and a legal opinion, which Parliament was currently looking at. The Committee had a legal opinion. Subsequently, the Presidency/SSA legal opinion arrived. The matter was receiving attention. Parliamentary Legal Services (PLS) was preparing a report for the Committee. The Committee would look at it. The Committee would find a special day next week to consider the submission. It would be circulated to Members. The matter remained with the Committee. It had finally received a submission from the Minister on the vetting matters. There was a long road ahead on that matter. The Committee would have to look at it very carefully. Adv Jenkins had assured the Chairperson that by the end of this week, the Committee would have received his submission on that legal opinion. He noted that PLS was swamped, but the Committee would receive that submission soon. The Committee would receive the presentation on the SIU reports and then the Members would ask questions. The Chairperson handed over to the Minister and his team.

Update briefing by Presidency regarding all reports submitted by the SIU

Mr Mondli Gungubele, Minister in the Presidency, made introductory remarks. He discussed the issue of vetting. He wished that the matter could find a resolution. He believed in accountability. The Presidency was here for the second time. The Presidency had thought that it would appear before the Committee on a monthly basis. He appreciated that the Committee allowed the Presidency the space to improve its work. He was joined by the Deputy Director-General, Ms Matsietsi Mokholo, and Mr Jonathan Timm, who would be dealing with the digitisation of the system. Today’s report was on the progress. The challenge was what role was the Presidency playing in ensuring that the SIU recommendations were implemented. It was a journey that had been very exciting. It was not easy, but it was revealing. All of the interventions that dealt with the cleaning of the state, it hoped its system was going to take care of that. There had been an analysis of all the components that deal with information about corruption. Mr Timm would speak about that. There were a number of role players but there was poor coordination and poor processing of information. The Presidency was looking at how to align those in a digital way. There needed to be clarity on the role of each player. There needed to be seamlessness regarding how the role players worked. The Presidency was at a stage where it was on course. The Presidency came to the Committee for counselling. If during the presentation, the Committee picked up weaknesses in what the Presidency was trying to do then the Presidency was open to criticism. Today’s report was a progress report on the implementation of the SIU’s findings. At the end of the presentation, Mr Timm would present on the technology that would ensure the seamlessness. The report would deal with the proclamations issued since 2001, the proclamations issue of this current financial year. It also dealt with reports submitted to the Presidency since 2001. The presentation also dealt with the reports received since the Presidency’s last SCOPA appearance. The presentation also dealt with the three categories of referrals. The presentation would analyse all those referrals and provide progress on them. The presentation would also highlight the process of digitising the system.

Adv Andy Mothibi, Head and Chief Executive, SIU, introduced his team. He was joined by Mr Leonard Lekgetho, Chief National Investigations Officer, and Mr Pranesh Maharaj, Chief Programme Portfolio Officer.

Minister Gungubele said that between the Presidency and the SIU, it was a cooperative candid relationship. The SIU was independent. It needed to do its work.

Ms Matsietsi Mokholo, Deputy Director-General (DDG): Corporate Management, Presidency, provided an update to the Committee on the implementation of investigation reports submitted by the SIU to the President. The presentation discussed the Proclamations issued since 2001 and the Proclamations issued in the current financial year. 234 Proclamations authorising SIU investigations had been issued since 2001. There were currently 67 Proclamations categorised as ‘active’ by the SIU. The presentation went on to discuss the progress on disciplinary, administrative and criminal referrals. The presentation noted that an MOU on the handling of criminal referrals was signed between SIU, NPA and SAPS, including both DPCI and Detective Services, in January 2023. The process was facilitated by the Presidency and DPME. This would result in joint planning between SIU, NPA and SAPS at the early stages of the investigation. There would be a standardised referral reporting template and data protocols to ensure the tracking of matters across the different organisations. There would be a sharing of information and improved cooperation with regard to sharing specialised skills and resources. The project to establish the SIU Referrals Coordination and Monitoring Mechanism (CMM) was now in its second phase. The focus for the next six months will be on developing a working data and technology platform for a first-generation CMM. This is expected to enable a step-change in the ability to monitor and report on the progress of the implementation of SIU referrals. This piloting will be done in tandem with continued stakeholder engagements to address identified blockages with the implementation of the SIU referrals.

Reports submitted to President since 2001

The SIU has issued a total of 162 reports to the President since 2001. Of these, 132 are final reports and 28 are interim reports.

The Presidency issues correspondence to all affected Ministers and Departments, detailing actions that are recommended by the SIU.

14 reports have been submitted by the SIU to the President since the previous report to SCOPA.

PPE-related disciplinary referrals as at December 2022

The SIU investigation into Covid-19 procurement (R23 of 2020) has to date resulted in 456 referrals to accounting officers for disciplinary action. These referrals affect 253 individuals. The disciplinary actions arising from these referrals have so far resulted in 65 officials being found guilty. Of these, nine officials have been dismissed; one demoted; five suspended without pay for various lengths of time; 23 issued with written warnings; one sent for corrective counselling. A further 26 officials have been found guilty, but sanction is still awaited.

Criminal referrals and civil recoveries from the PPE Investigation (R23 of 2020) as at December 2022

The SIU has to date made 476 referrals to the NPA for possible criminal investigation and prosecution. The bulk of these are currently under investigation. The referrals have so far resulted in two verdicts, and 12 arrests, with eight more arrests currently outstanding.

There are eight matters currently in court and a further three matters awaiting court dates. In addition, a total of 59 matters have been enrolled in the Special Tribunal as a result of the Covid-19 investigations.

These actions have resulted in the recovery of R36 334 567 in cash or assets and contracts set aside to the value of R729 029 063.

Progress on establishing the Coordination and Monitoring Mechanism for SIU Referrals

Mr Timm briefed the Committee on the progress of establishing the CMM for SIU Referrals. The desired outcomes included:

• Effective implementation of referrals stemming from across the ecosystem.
• Seamless capability to report on referrals from a central location.
• Visible and positive impact as a result of rigorous implementation and monitoring of referrals.
• A reliable and consistent source of information regarding referrals and results.
• Effective utilisation of systems/data for decision-making.

The ultimate objective was to develop a digital coordination and monitoring collaboration platform through a phased deployment approach that would allow for effective referral management and data integration, enabling comprehensive and ecosystem-wide reporting.

Minister Gungubele made closing remarks. He discussed the digital design processes, data connection and multi-stakeholder interface. The attempt here was to say that the minimum that the State should be able to do was lay bare incidents of criminality. So that no institution could have an excuse for not dealing with criminality. The Presidency hoped that this would be society integrated. It should not just be intragovernmental. The people who ran away from disciplinary processes got involved in other institutions. An ideal situation would be that when a person ran away from the State, if they were prosecuted for something somewhere else, then the information of all their offences should be automatically downloaded. The entire information of individuals needed to be laid bare, both positive and negative. Criminals needed certainty that they would be found, they would be arrested and that there would be sanctions.

Discussion

Ms B Van Minnen (DA) said that there were some answers towards the end regarding the task team that was being put together. She asked the Presidency to expand on the central register for dismissals and resignations during disciplinary processes. This had been discussed several times over the years. It was a huge problem, particularly for people who resigned and then popped up somewhere else. She did understand that a database ecosystem was being built and that it was in process. The Committee had a presentation on this before. How much progress had actually been taken since that and now? It was a very pertinent issue. She discussed the referrals for internal disciplinaries. She saw the numbers that were presented. What was happening around the percentages that were being seen from those referrals actually becoming disciplinaries? It was good and well to have a referral for a disciplinary but in terms of the departmental breakdowns, what was the percentage in those Departments? Was there a Department that did better than others in that regard? She discussed blacklisting. Was the blacklisting across the board and not just for the entity that blacklists? For example, when Eskom blacklisted did that then pop up when another entity was looking at the same service provider? She discussed the criminal referrals and the Fusion Centre. She did some calculations. It appeared that of the referrals to date, it looked like only 13-14% were actually at this point having finality. A lot more were in progress, but that did seem like a very low number. There seemed to be some kind of disconnect or miscommunication between the role players. There was now an MOU. However, it still seemed as if there was no smooth flow of information between the entities. She asked if the Presidency could talk to that. It was something that needed to be gotten out of the way. Given the cost of time and money of the Fusion Centre, one would want to see a more seamless interaction.

Minister Gungubele said that the system was in the process of being made. The biggest thing now was that the Presidency was not happy with that percentage of performance. The MOU was at its early stage. Phase one had been achieved. However, the early stage exposed the weaknesses that Ms Van Minnen mentioned.

Mr Timm said that the single register project was one of the actions committed to by the President in his response to the State Capture Commission findings. As the report indicated, a task team had been established. It was made up of the key departments. The aim was to – by April - have established the central register and to leverage the legislation under the PAMA Act for the Minister of Public Service and Administration to issue directives with regard to using that information in terms of appointment processes. There were two focus areas of the task team. The first was creating the central register. It was looking at all of the legalities of publishing the list. There was an existing system in the DPSA environment which allowed one to check whether a public servant was a public servant using an ID number or a postal number. That system was going to be leveraged. PERSAL already collected information regarding dismissals. However, there were challenges in certain Departments. PERSAL was primarily a payroll system, as it existed in Government. It did have additional capabilities, as old as it was. That required the HR functions, as opposed to the finance functions, to engage with PERSAL. Some of those required administrative rejigging within Departments. PERSAL was a very good source of this data. It flagged anyone who had been dismissed. The fundamentals were in place, particularly for the national and provincial spheres of government. The local government was a more complex environment. COGTA was on board. It did maintain a register of officials dismissed from local government, similarly with SOCs. Between National Treasury’s ability to access all SOCs, the Presidency was looking at the modalities of how to ensure that, for example, if someone resigned from a SOC the Government would be aware of that. The easy part was making all organs of state aware of dismissals from national and provincial. The hard part was gathering information from the very distributed parts of the system. That would be less easily achieved. By April it would have a central register of everyone who had been dismissed. It was also looking at the question of resignations. What it had seen from its analysis of the PPE-R23 of 2020, is there were 17 officials who resigned during disciplinary processes. The ability existed in law and policy that when an official resigned and joined a new department, that new department could reinstate that disciplinary process. That required the issuing of instructions and regulations, and monitoring. Those were the kinds of interventions that it was working to have in place early in the next financial year.  

Ms Mokholo discussed the register. The register spoke to dismissals but there was also one fundamental weakness that it wanted to deal with. This was a matter of tenure for suspensions because sometimes officials were suspended for long. That was something that the system would be assisting with tracking and cleaning. In the current report, as the presentation indicated, there were a number of officials that were suspended but for different tenures. For example, the Presidency wanted to understand why an accounting officer would allow an official to be suspended for two years or more. That was one part of the challenge and was part of the intervention that the system would deal with. She expanded on the issue of blacklisting. The ideal state was that the decision would need to be communicated once the supplier was on the register. There needed to be communication. The blacklisting should not happen in a corner. It must be communicated publicly so that those entities were now aware that there was a blacklisted service provider. Proper public and private partnerships needed to be developed. It was not only the responsibility of the Government to deter such suppliers. The whole of society, including the private sector, needed to be aware that this was the supplier involved in malfeasance and that a company should not do business with that supplier. That was how the Presidency wanted the system to assist it.

Minister Gungubele said that once the whole of society was integrated, there would be an agile society. It was also beneficial when South Africa interacted with other countries to stay apace. South Africa could not fall behind because of the static nature in which it managed information.

Ms V Mente (EFF) asked if there is still M & E (Monitoring and Evaluation) in provinces?

Minister Gungubele responded yes, although coordination and integration were still a challenge.

Ms Mente discussed the blacklisting of companies. There was an explanation given to the Committee that there was some form of communication between the entities and the service providers to check if the service providers could be blacklisted. When the SIU investigated people and built a case, which ultimately convinced the SIU that that supplier had stolen the money of the State then they were in full interaction with that particular supplier. This was through investigations and the provision of documentation. When the outcome was communicated then everyone knew that this was where the service provider stood in terms of the service provider to the State. Thus, when the service provider was not happy with the outcome then there was a provision in the law to challenge it. Why were the Departments asking the service provider to explain if it should be blacklisted or not? There was law enforcement, the SIU report, which was providing facts. Otherwise, the Government was rendering the SIU useless. That was what was happening. Once the SIU was convinced and gave an outcome, the Government could not then go back to the very same entity that the SIU said had stolen the money of the State. According to the investigation, the facts and proof the SIU came to a determination that that entity was not fit to do business with the State anymore. However, then a Department still went back to the service provider to ask if it could blacklist it. It was wrong and it should not be that way. That service provider had a provision in law if it wanted to challenge the outcome of the SIU. It was up to them. There could not be a process that was initiated by the very same State. There was no mechanism to check that service providers would be blacklisted diligently and honestly. The SIU was the only mechanism the Government had to investigate the people who it thought were not doing well in the supply of a service. She discussed the blocking and the restriction. She did not understand it properly. That one was problematic. She reminded the Committee of the case of Eskom. Eskom had blocked some. However, when the Committee dealt with Eskom in terms of blacklisting companies, there were companies that Eskom refused to remove. Yet, the very same companies were paying back the monies that were paid to them. Those companies had unduly benefited. However, Eskom was still keeping them. The question became, who got blocked? Who got restricted? Who got blacklisted? Some of the companies were still on the database. It meant that Eskom was going to continue paying, but the very same Eskom was agreeing that these people had connived with some of the officials. Prices had been fixed. Some prices had been inflated. Now the company was paying back the money. However, Eskom was still keeping them in the system. The blocking and restricting was a grey area. There needed to be a mechanism that assessed the levels of corruption and that it was non-negotiable that certain service providers must go. That same mechanism could say that there was a fault with certain companies but that they could still be worked with. However, there were cases like with Eskom where there were four companies that received money when they were not supposed to receive them. The others had been removed but one remained. She discussed the resignation and transfer of officials. That was why she asked if there were still M&Es in provinces. Some people were suspended for too long. This was the tendency for those who were in contracts with the State. They would be on suspension, but their contract was finished and then left anyway. Even though there was no system in place, she could not accept an explanation that even the province did not keep a diary because work needed to be followed up. This meant that in provinces there was no keeping in check with the work that they were disseminating to the other spheres of Government in terms of the cases. There should not be the case of a person being suspended for a period of six months to a year without being checked. Then at a later stage, the system was blamed. Yet, there were people that were supposed to be feeding the national office with such information. It was only picked up when Parliament called and there needed to be accountability. That was not acceptable. What was the duty of the M&Es in provinces if they could miss such information? On a daily basis, with a number of municipalities, one could not miss checking all municipalities in a period of a week on all the work that each municipality needed to be doing. She discussed the law governing staff members of the State, that if a staff member resigned from one Department and joined another that their disciplinary hearing could be reinstated. She noted that the Members had a good study tour where they learnt that some officials were not even allowed to resign during an investigation. Departments should not allow them to resign. She noted that there was no provision in the legislation that did not allow people to resign during an investigation. She knew that the SIU could target the pension and freeze it until the case was finalised. All these tools should be made available, and all these tools should be utilised. The main reason everyone resigned was to get access to the pension and leave the State. By the time the case was concluded, there was nothing that could be taken from that person. In terms of the law, had the Presidency identified all the areas that needed to be fixed in order for the system to be watertight? The pension needed to be there in the system. Every time there was an attempt to withdraw the pension, it needed to indicate on the system through GEPF that there was an attempt to get the pension. The pension needed to be frozen until the case was concluded. It could not be a matter of the disciplinary cases following the official. The disciplinary process was nothing. She discussed the outcomes of the disciplinary cases. Was there a tool used to monitor the outcome of the disciplinary cases? When the SIU investigated a person, it did not investigate the person as a group. The SIU investigated individuals. The SIU made a referral because there was solid proof that that person had transgressed. For a person to get a written warning, why would the SIU waste the money of the State for a person to get a written warning? The SIU followed certain people because the investigation was worth being followed. It could cripple the systems of the State if it was not dealt with. Why did some people get written warnings while some were dismissed? How did some get suspended without pay? Getting a written warning from a SIU referral was a problem.

Mr B Hadebe (ANC) said that the purpose of the meeting was for the Committee to ascertain how these reports were being processed and the progress to date. Some of the slides fell short in helping the Members understand what was exactly happening. He discussed slide nine, the reports that had been received since the last SCOPA engagement. There were 14 of those reports. Out of that, there were reports that had already been issued as final. There was a report that had been finalised on 9 June 2022. It was now eight months down the line. What happened to that report? The Committee was interested in understanding the progress. The Committee needed the relevant information in order for it to follow up on these reports. What was concerning was that there was non-action in terms of reports issued. He noted that the report did not assist the Committee. The Committee appreciated the new monitoring multi-committee that had been established. However, things ought to happen now. The Committee could not wait for the finalisation of that committee for Members to see the action take place. He would be interested to know what happened eight months down the line about these reports. There were issues when it came to the referrals for blacklisting. 387 had been referred for blacklisting. The report did not say to date how many had been blacklisted. This was the same report that had been issued to the Members in June. Out of the 387, how many had been blacklisted? He raised concern about the amount of time it took to finally arrive at the decision to blacklist. He had previously raised concerns that this was a duplication of what the SIU had done. The SIU had performed an investigation and came to the conclusion that these companies should be blacklisted. Now another process was created for the various bodies to also conduct another investigation. He was mindful of the rules of natural justice affording an opportunity, but there was substantive proof. He wanted to know the turnaround time for those bodies who were charged with blacklisting. How much time were they given? Eight months later, the Presidency was still not providing the number of companies that had been blacklisted. The Presidency was providing the number of referrals. Clearly, something was not right. The Committee needed an update on that aspect. He discussed slide 12, the analysis of referrals for disciplinary action. The report provided the number and eThekwini Metropolitan Municipality was leading with 75. That was all the Committee was given. The Committee did not know how many referrals were executed out of 75. These related back to reports that were concluded six to eight months ago. How was it ensured that there was movement from that 75? Out of the 75, how many had been finalised? For example, there was one referral for disciplinary action in the North West. The Presidency should be in a position to tell the Committee whether that case had been concluded. The Committee would not know whether there had been significant movement on these matters. The presentation provided the number of things that had been referred to, but the Committee was interested in the outcomes. In the presentation, it was noted that there had been accounting officers giving the Presidency challenges, but the Presidency was not telling the Committee who those accounting officers were. The Committee wanted to name and shame. The Committee wanted those accounting officers to appear before it. Why had the accounting officers sat with the report for eight months and not acted? The SIU had done its work. The President had been given a report and had written to the accounting officer. The report said, the Presidency issues correspondence to all affected Ministers and Departments, detailing the recommendations by the SIU. The Presidency issues correspondence but what was lacking were the culprits. The Committee wanted to see who were these Departments and accounting officers that were failing to act. There’s a political party that declared this year as a year of decisive action. The Committee wanted to see that decisive action. The Committee wanted to name and shame. It wanted to call those who were failing to act. The presentation told the Committee the same number as eight months ago, but it was not saying who was blacklisted. That was not decisive. There needed to be decisive action. Perhaps if the accounting officers and Departments were named and shamed then they would act. The reports could not sit and gather dust. He noted a slide where the numbers did not add up. It was slide 13. He noted that if one added 118 and 65, it added to 183. That was out of 253 individuals. There was a remainder of 70. He had a concern with the breakdown of the 253 individuals who had been referred for disciplinary action.

The Chairperson said that Mr Hadebe may need to re-read that slide because the issue may be with how the information was presented on the page. The categories of the numbers were different. The Presidency would clarify it. It was the layout that might cause an issue. The Chairperson asked for the responses.

Minister Gungubele said that there had been a huge move from how the Presidency had been doing things in the past. Mr Hadebe was asking a question about how effective the referrals are. That was a question that needed to be dealt with. Slide 13 was trying to deal with that, but not as comprehensively as Mr Hadebe was raising the issue. The point was that when the Presidency came back it needed to be detailed on the stage of each referral. He noted that the officials were going to respond to that. He discussed the organisation of the information in the manner in which it had been done. It laid bare a lot of things. Whether it was inconsistencies between institutions, whether it was illegal discretions that institutions were exercising or whether there was an application of the law. The first stage was exposing that so that it could come to a point where it could identify where it was failing in terms of consistency and in terms of the law. The SIU made findings. Once those findings were there, they were categorised. The SIU, most of the time, dealt with the systemic failures. It depended on the nature of the finding. It gave the Presidency the ability to analyse policy consistency. Ms Mente’s concern was that once a certain work had been done then it should be easy to take certain decisions. The Committee was calling for the Presidency to move in applying the consistency of the law. He noted the issue of due diligence by individuals. There needed to be consistency in the process and consistency in the policy application. The system needed reviewable capabilities. He noted the 13% performance. The Presidency was organising itself to manage information properly so that it could do follow-ups. One of the reasons why the Presidency presented here was for the Committee to identify those holes.

Mr Timm responded to the question by Ms Mente that the SIU would make a finding against a supplier and then there was a process that needed to be followed. This was the legal framework under which the blacklisting happened. There were two pathways. There were two registers. The default tender list, where there was a court order made to place a particular supplier. That was one area where the Presidency was looking at how it could engage with the National Prosecuting Authority to make sure that prosecutors were aware that in the judgements that they sought, they should get a court to order that a supplier was put on the tender defaulters list. Although the requirements were very narrow, there was also a restricted suppliers’ list. Treasury ran both of these lists, the default tender list and the restricted suppliers’ list. The restricted suppliers’ list was an administrative process. That gave the authority to the accounting officer to make a recommendation. It was a very tedious process whereby SIU makes a referral to an accounting officer and provides the evidence for blacklisting, the accounting officer then embarked on a process and had to take into account natural justice. The accounting officer had to get feedback from the supplier as to why the supplier should not be restricted. The accounting officer, based on that, would then make a recommendation to Treasury. Treasury would then review that recommendation and make a final decision to place the supplier on the restricted suppliers’ list. The restricted suppliers’ list applied to all Government Departments. If a company was on the restricted suppliers’ list for a case with Eskom then that company could not do business with other Departments. The company would be restricted from doing business with Government. He discussed the review of the PFMA. Treasury was looking for an authority to be able to blacklist where accounting officers had not acted. One could see the risk if there was collusion between suppliers and accounting officers. It required accounting officers to act with integrity. What was emerging from the Presidency’s findings was that certain institutions were dragging their feet. That raised additional questions. The role of the Committee was critical to this mechanism, based on the evidence that the Presidency provided, to call accounting officers to explain. He discussed the analysis in terms of the suspensions and the sanctions versus the charge of disciplinary. That was a useful and important piece of analysis which the Presidency needed to do. It needed to look at what the charge was compared to the sanction. Then the analysis needed to be done of where there were discrepancies. As the Presidency built the system, that capability would become available. It was a really critical piece of analysis.

Minister Gungubele said that it was the reviewal capability of the system. He noted that there needed to be set standards on how to deal with certain things. For instance, if the standards were clear in the system then one would know that once the SIU made a finding, it would be tested against the system. The system should automatically indicate that the company should be blacklisted. Discretions by individuals to prolong executing those recommendations also needed to be limited. Those were the deeper issues that the Presidency needed to get close to as it dealt with the system.

Adv Mothibi said that the Minister made a valid point. The recommendations made by the SIU were made on a specific finding. The finding was based on the investigations collated. If anybody was not happy with this finding, then they should challenge the SIU in court. These findings were used to make recommendations for blacklisting. He agreed with the Minister and the SIU had observed it as well. There was a whole lot of dragging of feet in the system. This was because it was not closely monitored. The SIU had raised it with Treasury. Mr Hadebe made the point about what was the turnaround time. It was something that the Government needed to go back to. What was the reasonable time to ensure that an entity was blacklisted? He noted the issue of companies versus directors. If companies were blacklisted, then the directors had a tendency of forming another entity. The SIU would have to make findings against the company and findings against the directors, and then make recommendations against both company and directors. Ms Mente was right. If the company was not happy with the finding, then the SIU expected the company to challenge it. To date there had not been any. So, the issue was with the referral to the accounting authority. Ultimately to Treasury, it required tightening and monitoring. The Minister made a point about illegal discretion. He noted slide 13. There was a point around the number of disciplinary matters that had been dismissed. He had never heard of that kind of thing in a disciplinary process. These were probably instances where the accounting officers had looked at the referral and said that they were not going to discipline. There had been a view of those in some of the municipalities. The system needed to evolve to an extent where the SIU was able to go back to the State institutions and ask on what basis had the institution not disciplined. The SIU had seen cases being disposed of without SIU members being called to testify. The SIU was surprised. How could a case be finalised when witnesses had not been called? The system should evolve to an extent where if there were these results, then the system needed to interrogate. The system needed to interrogate these results. Similarly, to the referrals for prosecution. He noted slide 19, where there had been about 272 decisions not to prosecute. The same principle applied. The SIU respected the NPA’s responsibility to decide. The SIU had engaged with the NPA, and this would be part of the MOU. The SIU would ask what would be the basis for not prosecuting from the side of the NPA so that the gaps were closed. The system needed to evolve to that extent.

The Chairperson said that Mr Hadebe needed to receive clarity on slide 13. On reading it against the previous report of last year, there was a discrepancy on that slide. He asked for the Presidency to provide a response.

Mr Timm responded that the elements in the slide were referrals. There were the 456 referrals to accounting officers. There can be more than one referral against an individual. There was a total of 253 individuals that were implicated by the referrals from this particular investigation report. This was from the December report. Of those 253 individuals facing disciplinary referrals, by December there had been 118 finalised cases. The number 118 was not a sum of any other number. It was just saying that there were 456 referrals, and these were affecting 253 individuals. Of those referrals, there were 118 finalised cases against individuals. Cases would match individuals but it was not going to add up to 253 because only 118 had been finalised. The tables below were only looking at finalised cases. If one took 253 and subtracted 118 then those would be the number of cases not finalised. He noted the progress made in the breakdown of finalised cases between June and December. When the Presidency came in June, only 48 cases had been finalised. By December, 118 cases had been finalised. On the right hand side was a table that described that out of those 65 guilty verdicts, what were the sanctions issued. There were five officials dismissed due to disciplinary action, in June. In December, there were nine. It was not apples and apples. The numbers could not be added.

The Chairperson said that maybe it should be apples and apples for the purposes of clarity.

Minister Gungubele said that there needed to be a re-organisation of information in a manner that addresses this question going forward. The questions needed to be easily answered upfront. The question was not about the wrongness of what was presented. It was about clarity.

Ms Mokholo responded to the question about the difference between blocking and restricting. The accounting officers or Treasury would block while there was still some investigation going on. The government did not want a Department to continue doing business with an entity when it knew that there was something being investigated. She noted the NPA deciding not to take 272 cases any further. The NPA’s argument was that those were not prosecutable and did not see the prospect of success in court. The discussion did not end there. The Presidency needed to understand from what point they were saying that. What happened to those cases once the NPA said that it was not prosecutable? Could those cases be referred for further investigation if the NPA said that the evidence was weak? Could those investigations be reopened with the SIU on the part of the evidence that was deemed not prosecutable or weak? Or could it be referred to the Hawks for further investigation? There was still a lot that needed to be done. As it unpacked the problem, it wanted to build a proper solution. She noted the issue of withholding pension pay-out. It was something that needed to be further strengthened. The gaps in various legislation needed to be looked at, reviewed and strengthened. Having conversations with suppliers sometimes raised the issue of seriousness, but also one could not run the risk of losing the court case because the process faltered. The points made by Members would be taken forward.    

Minister Gungubele said that the system’s vulnerability needed to be tested for consistency, illegal discretions and abuse. The system needed to help take away from the current crisis that the Government found itself in. There needed to be consistency. The system needed reviewal capabilities in terms of the people who abused it. The Presidency was looking into the vulnerabilities.

Mr Hadebe said that the information given was not aligned with any report. For example, there were 14 reports that had been finalised, but when the cases were given to the Committee it was difficult to track.

The Chairperson said that the Committee would come back to that matter. He had noted it.

Mr Hadebe said it needed to include those accounting officers who were also failing.

Ms B Swarts (ANC) discussed the final and interim reports. If a report was interim, what were the reasons? How did it get to final? The Committee needed to be on the same page with the reports that were final and interim. There needed to be reasons as to how the reports reached those stages. She discussed slide 12, cases that had been referred for disciplinary action. How did the Presidency ensure that action had been taken? Did the Presidency follow up if consequence management had been taken after referrals? It was also concerning that the SIU issued recommendations only. What happened after those recommendations had been made? How was it ensured that the disciplinary action taken was the appropriate one for that misconduct? In most cases that SCOPA had dealt with, there had been malicious compliance. The Committee had been talking for a while about Treasury actually publishing blacklisted companies. The SIU did its work. It recommends. It would say that a certain company was blacklisted. However, one could not go onto Treasury’s website and pinpoint whether a company had been blacklisted. With the new digitisation system coming in, how was DTI going to come on board? Adv Mothibi said that the interest of the SIU was not only in the company but in the directors as well so the directors did not register another company. How was DTI going to come on board? That was where the whole issue started, where individuals registered companies. Were their IDs and names going to be blacklisted at DTI so that they could not register companies, the government confiscated houses and cars to recoup the money back? That did not become enough because those individuals were still part of control systems which were wrong everywhere else they were doing business. She noted that there were accounting officers who were not vetted. These were the practical things that had been seen in SCOPA. There were people running big SOEs who had not been vetted, but as an accounting officer, they were handling huge amounts of money and running a huge institution. As long as accounting officers and senior managers were not vetted, this thing would not end. The control systems were what was being dealt with here. It was the control systems and the people inside the SOEs that needed to be dealt with. She agreed that if officials were not committed and were not going to follow proper systems of procurement then corruption was going to happen. Equally so, as long as there were senior managers and people in high positions not vetted in time. These people did what they wanted to do and when they saw that trouble was looming then they could just easily leave. What they left behind was a big mess. She discussed the digitisation project that was presented. The presentation said that it was in phase two. How much was the digitation system going to cost? The presentation noted that phase two was coming up in the new financial year. SOEs had come to the Committee and said that after doing everything that they had done, all the designs in a particular institution were defective and they were going to start from scratch. She had an interest in this digitisation programme. It was in phase two. How was the Presidency going to pilot it? How was the Presidency going to test it, so that it was not implemented with all that money being spent and then the whole system needed to be redone because of an IT mistake? The Members needed to have the comfort that what was being implemented would not have any defects. Who were the people helping the Presidency set up this? Did they have a track record? Had it been done before?  

The Chairperson said that the Committee’s discomfort came from IFMS (Integrated Financial Management System) saga. There was an unresolved history concerning IFMS.

Mr S Somyo (ANC) said that the Minister and his team had come up with was useful. The Presidency was building a matrix for accountability regarding the investigations. This was something very critical that needed to be carried through. Though the matrix lacked in certain instances. He discussed the nature and growth of investigations from 2010 onwards. He noted the Competition Commission’s driven investigations and those that were in the SOEs and municipalities. He noted the investigations that were emanating from the PPE. He noted the quantum and values that were driven out of those investigations. Looking into these investigations, there was a necessity to grow the accountability and the qualitative nature of such. This was something that needed to be highlighted for the value drive in as far as the investigations were concerned. There needed to be qualities and values in investigations. There were outcomes out of those Competition Commission investigations that certain amounts had to be given back to the State. Where was that money? Who was responsible for such? Did the State receive the monies that had been directed to those companies? What was happening currently with those findings? The SIU had presented to the Committee in a number of forms on the Proclamations which were issued. He noted the Proclamation regarding the Eastern Cape Provincial Department of Health. He wanted more information to be provided on the matter. He noted the DG’s responsibility when these matters were referred to the Presidency. With bureaucracy, at times there was an emphasis on the lack of efficacy. The mode of reporting and more of harnessing peers to act in a particular way was important. The system was bureaucratic. Working through that bureaucratic system, needed to be harmonised. Persuasion depended on the accounting officers being able to follow that through in a successful instance. He discussed the impediments to monitoring and evaluation in the system. The system needed to move towards efficacy and to ensure that the drive for value for money began to permeate the accountability ecosystem. There needed to be value in terms of the DG tracking the movement of such. He noted the role of SITA. In the audit of PPE, the Auditor-General emphasised the point that the failure of the State at times was caused by the absence of connectedness. If the connectedness was addressed, then other things would not fall through the cracks. That was what Minister Motsoaledi was doing through the thousands of data capturers. Would that data be permeated throughout the system? The State needed to act as one and needed to address these failures. He noted the limited use of PERSAL in this regard. He discussed the purpose of this meeting. The SIU would say that there were findings in a particular province and had referred it to that province. The SIU would then note that there was a failure to act on that matter. There were matters of referrals which were not acted upon in provinces. That was why the Committee decided to convene this kind of session, to see how the Presidency could coordinate these forms of outcomes of investigations. That was one of the driving factors to having this kind of meeting. The second point was that the SIU had a myriad of cases finalised, but there was a failure to act on the NPA side. He had the idea of a funnel, where the SIU and other investigative organs would be pouring into that funnel. The narrowness of the endpoint would make it difficult to solidify those finalised outcomes to get through the funnel. A minute number of such instances would be found in the courts. The monitoring and evaluation unit needed to be substantive in providing a report on those matters. There were more than 700 instances of those investigations which had been made and less than 50 had gone through to the courts. Unfortunately, the courts were not in the purview of the Committee to look into and ask them why things were happening in this way. The NPA should drive the quality of work that goes to the courts. The balance between those became very critical. The matrix needed to inform the Committee as to what was happening at that level. He noted that in arithmetic there was a unit and a set format. In a union set, there were several numbers which were collated. The State had created an entity which had taken into consideration all those who were contributing to that. The value substance of that collation ought to be brought into realisation. How best was it to affect the efficacy of the State in dealing with these matters? The value of the investigation needed to pour into the outcome and such outcomes needed to be celebrated one way or the other. The matrix should address those things.

The Chairperson said that the Committee continued to have a headache with the judiciary, in terms of court management. He was not sure how it was possible to get around that one. The NPA had raised that challenge as well. The Committee needed to find a way, whether through the Office of the Chief Justice or the Department of Justice. That ends up with what could only be called cosmetic prosecutions. A matter would sit on the roll for five or six years and what was gained from it? A conviction must be good, but it was a conviction based solely on compliance. It started there and ended there. It was an area to look into.

Mr A Lees (DA) said that there were issues in the courts that were beyond the Committee’s purview. It was the Special Tribunal which was an important tool in this respect. The emphasis of this meeting was to look at the progress of these referrals. The Committee had heard a lot about new systems and changes. It was all the important stuff, but the Committee had not heard much about progress. He discussed slide 19 and the 272 referrals declined by the NPA. That was 79% of the referrals being declined by the NPA. He assumed that was after the Hawks had been involved as well. That was a distressingly high number to not be prosecuted. Who was not doing their job here? Or was there a wasting of resources? In something so grossly inefficient, what had the Presidency done to follow up on these 272 cases that were never going to be prosecuted? He noted that the terms blacklisting and restricting were being used as two different processes, where it seemed to him that it was just one process. He was not sure why two different names were being used for the same thing. It was either blacklisting or restricting. Why were two different names being used? He was sure that the people on the street would be quite confused. The lack of action b accounting officers was concerning. Was there a mechanism to follow up on that? It was not a big job to follow up on these referrals. There were some quick wins to show. People needed to see decisiveness. The SIU did the work in terms of Proclamations from the President. Was every single report of the SIU put on to the website and accessible to every South African citizen? He hoped it was, but he was not sure about it.  

The Chairperson asked for the Presidency to provide responses to that. Thereafter, there would be follow-ups where necessary. He imagined that at a particular level, the major stumbling block to the finalisation of cases was the rigidity of the labour laws. It was a major policy area that needed to be looked at. It might be a hornet’s nest for the unions. Were the labour laws conducive to effective and efficient consequence management for the State to be able to move? He noted people on suspension for two years. Why? It was because there were elements in the labour laws which were continuously allowing for these layers and tiers of appeals. There needed to be a way to address this, while at the same time protecting the collective rights of the workers there was a national interest for the State machinery to continue. There were monies involved here. There were losses involved here. There were unfilled vacancies. There were people acting. There was a headache that came with acting. People tend to be very ‘hamba kahle’ in what they did and did not do because they were not in the positions full-time. How much impact did this have on bringing these matters to a logical and legal conclusion? He raised the matter of future reporting against a report. That was basic stuff that had to actually happen. He discussed the MOU. In the main, it was supposed to foster the pooling and sharing of resources. It was intended to create a conveyor belt which led to a successful prosecution and preservation order. That was the intention of the Fusion Centre and the Anti-Corruption Task Team. How did the situation arrive of the NPA not prosecuting? The whole idea was that the SIU came in to empower the investigation to make sure that when the case reaches the prosecution level, all the details had been taken care of. Why was there a high rate of non-prosecutions? It added discomfort in terms of the will of the NPA to deal with these things. That was where his confusion was because the Committee had heard a lot of things. There was the Anti-Corruption Task Team, Fusion Centre and now there was an MOU. This was supposed to strengthen the investigation process to a successful prosecution, and then the prosecution did not happen. It amounted to fruitless and wasteful expenditure insofar as the efforts and resources, financial and human, that the SIU put into these investigations if these investigations did not arrive at successful prosecutions. He was probably venturing outside of the President’s scope, but there needed to be creditability and legitimacy to the process. In the Committee’s opinion, if there was an investigation and a report then it needed to be implemented. Part of the implementation was the prosecution and the Committee was not seeing it happening. It raised a certain level of suspicion. Things were not moving at the pace they should move. He noted that there were historic investigations, on slide five. The Committee knew now that there was no matrix and reporting format, and that was why it was now being developed. How far back was the Presidency going with this matrix to assess what happened to those reports? There were the 2010 infrastructure-related projects, it was riddled with corruption on a number of levels. How far back was the Presidency going? The Presidency needed to take the Committee into its confidence about that matter. He discussed the difference between final and interim. It needed to be clarified. Final and interim for who? Was it final for the SIU having brought a report to the Presidency? Was it final for the Presidency in terms of implementation? When did it begin and end being interim? When did it begin and end being final? When the SIU handed the report over to the Presidency then there was still a process. The Presidency needed to make a distinction on the report being final, at what level was the report final?

Minister Gungubele said that Ms Swarts spoke about the loopholes of people registering different companies and the system being potentially defective. The officials respond to the technical questions. Ms Swarts also spoke about the State recouping funds and whether it was enough. Ms Swarts spoke about the cost of the system. He noted the issues that were strongly coming out of the Committee. The value of the Presidency was not how much information it knew, it was the qualitative aspect of the intervention. Qualitatively, how was the Presidency moving forward? What the matrix helped the Presidency to do was to put bare facts on every issue. The system identified whether it was administrative, criminal or disciplinary referrals. The system laid out all those facts so that even if the Presidency did not do what they were supposed to do, the Committee would then have access to that information. The Committee could then ask if it was the failure of the Presidency to make a follow-up on this specific referral. The facts would be there. Everyone knew the matters that were referred to the NPA, but the Presidency could not tell the NPA what to do. However, the Presidency had a right to analyse why the NPA was not going further on certain matters. The outcome of that analysis may lead to the Presidency saying that an amendment was needed. If not, was it the ineffectiveness? Was it the lack of capacity? There needed to be an analysis of why the NPA had not prosecuted. The MOU offered an opportunity for the Presidency to engage with the NPA and to offer its own views. The strongest question the Committee was asking was that the Presidency needed to give account on non-disciplinary action, non-prosecution, and non-blacklisting. The Chairperson asked what value was spent on the SIU’s work versus what the NPA did. It was asked, was it worth the value of the millions spent? He noted that if R7 billion was returned to the State then that was a significant amount. He noted that the Presidency was called to account for and explain its work. He discussed the difference between interim and final reports. The SIU would say that they were giving an interim report to the President and that then it would come with a final report. The SIU would explain it in more detail.

Mr Timm responded to the question about how the Presidency followed up on disciplinary referrals. It would closely with the Technical Assistance Unit within DPSA which had a legislative mandate to monitor and intervene. They had the legislative power to intervene where accounting officers were not acting. The Presidency was working closely with that unit in terms of tracking referrals as well as following up with consequence management and trying to ensure that there were results. He discussed blacklisted companies not being published. They were published on Treasury’s website. There was a useful resource called ‘vulekamali.gov.za’. It was an interface between Treasury’s data and makes it more accessible. The list was available there and updated as and when there were new companies added. He discussed blacklisted versus restricted suppliers. On Treasury’s website, it spoke about blacklisted suppliers in reference to the restricted suppliers register. It had just crept into the parlance. He noted the point about directors and DTI. The Presidency was starting with something that was rudimentary and small. The vision for the future was that this information should not necessarily be mediated by the Presidency. A Committee like SCOPA should have direct access to this information. Once there was credible data then its utility should be available unmediated once the Presidency was sure that the data was robust and the processes around the data were credible. The point raised about failed IT systems in Government was so important. An evaluation had not been done on the State spending on ICT projects. That would be a very important exercise. There was a lot around the procurement process that was inefficient in terms of digitising. There was a term called ‘vendor vultures’. There was a lot of investment in the ICT business in sales. One could end up buying systems that could not be implemented because the necessary groundwork was not done in terms of being able to implement. There were state-of-the-art IT systems, but one could not implement them in the current environment. The Presidency had taken a different approach. It was trying to understand what the problems it was trying to solve were and not what the solution was. If one started asking for a solution, then there would be very sophisticated systems being sold to them. The Presidency was looking at what the problems were. The government moved too quickly to automation when it needed to understand processes that were not digital yet. He discussed investments. One of the challenges in the procurement system around ICT was that one needed to know in quite a developed way what solution was needed before understanding the problem. Things were put out to tender and then there were solutions that did not solve the problem. The Presidency had taken a different approach. It was using donor funding for these inception phases. No public funds had been used on this. The conceptual phase was R500 000. The phase two budget was R3 million. It did not have a budget for this. A lot of the solutions could be delivered in a cost-effective way in the early phases. Once the Presidency had a clear understanding of the problem it was trying to solve, that was when it needed money. Money early on would create unnecessary complexities in this effort.

The Chairperson said that Ms Swarts question needed to be responded to. It is related to individuals as directors of companies. The company was blacklisted and then the individual came back through the back door. The Committee had raised the issue before. The Committee understood that companies were legal entities that were liable. However, companies were legal entities driven by people. Blacklisting people was something that the Committee had been looking at.

Ms Swarts asked that out of the cases that had been prosecuted, and had even reclaimed money back, could the Presidency, SIU and NPA comfortably tell the Committee that the list of people blacklisted tallied with the records they had? How did the Presidency check on Treasury, that it was blacklisting whoever had been found guilty and was not supposed to do business?

Ms Mokholo said that the Presidency was cleaning up part of the system of what had already started happening. The Department of Public Enterprises, working with the CIPC, had already started the process. A director could actually be disqualified from serving as a director on the basis of a breach of fiduciary duty. That went to the CIPC. The Presidency went further than the director being disqualified. It wanted to make sure that their names would be flagged immediately when they registered another company. It would also flag the professional bodies as well. The Presidency wanted the law societies, health professional councils and SAICA to be part of the value chain. The name should be flagged from all areas from registering a company, from practising as a lawyer or even being a member of an NPO. It was the future of the State and the work had already begun. She discussed the budget. The government always tended to think that solving a problem was throwing money at it. The Presidency was looking at phase one and phase two from its baseline. Only once the work was done and part of the implementation was seen then it could identify if funding would still need to be required. She noted that there was a question relating to holding executives in SOCs as well as DGs in Departments accountable. The DG in the Presidency was the Head of Public Administration. The Presidency was starting to use that role. The Presidency wanted the DG to use her role as Head of Public Administration to bring discipline to the performance agreements of the DGs. Consequence management needed to cascade down from the DGs to the junior officials. Junior officials were always the ones being targeted for maleficence. The Presidency hoped that the DG being the Head of Public Administration would bring in accountability and address the issue of bureaucracy as well.

The Chairperson said that at another time the Presidency needed to explain what it meant by the DG is the Head of Public Administration. At what level was she the Head of Public Administration? The Committee needed clarity.

Minister Gungubele said that policy had been adopted and pronounced. The DG in the Presidency was now the Head of Public Administration. It meant that the DG supervised and coordinates. The Presidency would present all of the policies before the Committee.

The Chairperson flagged the matter. The Presidency needed to provide clarity on the matter because it affected the lines of accountability.

Ms Mokholo said that at the right time, the Presidency could engage on that matter. She discussed the rigidity of the existing labour laws. She noted the issue of looking at which aspects of the laws needed to be amended and needed to be coordinated.

Minister Gungubele said that it was a very important point. He noted the challenges of labour relations. Instead of efficacy in the law, there were a lot of inefficiencies. The South African labour dispensation was very progressive. The labour laws were hitting Government very hard. There were a lot of cases that ended up in court, which could have been dealt with internally. There were a lot of cases that were prolonged. One of the interventions made was the 60-day suspension. It was an attempt to deal with the inefficiencies of applying the law. The Presidency had a huge task to deal with that. The Presidency needed to analyse the efficiencies of applying the Labour Relations Act. The Presidency may need to come to the Committee at some stage to analyse what are the weaknesses. In his opinion, a huge percentage was the inefficient application of the law. 

Ms Mokholo responded to the question of how far back the Presidency wanted to go with the implementation of the Proclamations and the investigations. The Presidency wanted to go all the way back. Once the system was intact it would be easier to clean backwards because the system would ensure that the mistakes were not repeated. The intent was for the investigations to go all the way back. 

Adv Mothibi responded to the observation of Ms Mente. He noted accounting officers refusing resignations. At some point, it might need to be tested. It would be tested against the labour laws. The observation in India was that it worked and worked very well. He discussed the final and interim reports. The legislation regulating the work of the SIU said that once the President issued the Proclamation and the investigation started. There was a provision there that the President, at any point, could call on a progress report. That was the rationale behind an interim report. The contents of the interim report gave finality to finding that would have been made at that stage. It did not mean that nothing tangible was reported. Management knew that it needed to execute investigations as speedily as expected. The SIU had taken a decision internally and checked with the Presidency whether it would be acceptable, that any investigations that went beyond a year, and now it had been reduced to six months, it would be necessary to issue interim reports. At any point, the SIU was able to indicate to the President where it was and what findings had been reached at that stage which could be actioned. Those findings would be final in their own right. The interim report was meant for that.

Minister Gungubele said that with the issue of the right to resign, there were a lot of legalities. The State had certain obligations. It could not subject people to disciplinary proceedings indefinitely. There were some instances where people’s disciplinary actions were not executed for flimsy reasons. The law did intervene to protect those who were subject of such. The law stated that the prolongation needed to be legally justified. There was a lot of balancing. The question was, how could the State be protected from unfair losses of its resources and against individuals who disappeared?

Ms Swarts asked that after the Presidency received referrals of disciplinary action, who did the follow-ups? How many people were in the team? How often did it talk to all the relevant bodies after referral? How many actions of consequence management had taken place? The Committee needed an idea if it was efficient. It was all well and good that the SIU gave the President quarterly reports. For SCOPA, its gripe is: was consequence management taking place and was it being implemented? Was consequence management taking place? How long did consequence management take in terms of turnaround times?

Ms Mente asked the Minister and the Presidency what laws needed to be amended. The Presidency was developing a system and trying to curb something that had been perpetuated and cushioned by the law. The law needed to be corrected. The Presidency could not simply use court outcomes. Court outcomes spoke to the weaknesses of the existing legislation. Those laws need to be changed. In the next meeting, the Minister needed to provide a list of the laws which the Presidency wanted to be amended. Before this Parliament ends, it needed to pass those laws.

The Chairperson said that as of November 2022, there were 305 officials sitting at home on suspension with full pay of R131 million. That did not include Defence or the State Security Agency Officials. The Committee requested that the Presidency provide monthly reports on progress on these issues. The Committee wanted the first report by the end of March. Then there would be quarterly appearances. There would be monthly reports in writing and then the Presidency would appear once per quarter for the Committee to have an engagement on these matters. Unless there were drastic decisions taken about SITA, none of the dreams, hopes and aspirations for the future of being a technologically capable State would ever come to light. The IFMS was one case. There was a major issue with the Post Office. Unless the Government was bold and decisive about SITA at this moment of reckoning concerning science, technology and innovation, this country would be in trouble. It was opening up doors to major corruption. SITA was going to collapse the country. There was no coherence in the operations of SITA. The digitisation project of the Presidency should be a basic SITA function. The list was endless of the deficiencies of SITA. It also related to the case management of these disciplinary processes. Some of this hinged on the fact that there was no capability in terms of technology. The first monthly report was due at the end of March. Thereafter, the Committee would meet with the Presidency in the second quarter.

Minister Gungubele said that the Presidency would comply.

The Chairperson said that once the Committee received feedback from PLS, it would see the Minister in his other capacity. The draft report on the India study tour would reach Members by the end of the week. The Chairperson thanked the Presidency and the SIU.

The meeting was adjourned.