DFFE Portfolio Audits, SANParks, SA Weather Service, Isimangaliso WPA 2022/23 Annual Reports; with Deputy Minister

Meeting report

DFFE 2022/23 audit outcomes: Auditor General South Africa briefing
Mr Jacob Rakosa, Audit Manager, AGSA, stated that SAWS, iSimangaliso and Marine Living Resources Fund (MLRF) received a clean audit. DFFE received an unqualified opinion with findings on legislation compliance and performance information. SANBI and SANParks remained stagnant with unqualified audits with findings.

Key issues to note was waste management which was a critical core function of Department to protect health and the environment by providing reasonable measures for the prevention of pollution. AGSA had selected tyre depots as a specific focus area to be audited for service delivery. Of 27 tyre waste depot sites inspected by the audit team, seven (26%) were in contravention of the operational plan approved by the chief fire officers. There were also air quality management issues due to lack of fully operational monitoring stations and the impact of load shedding. AGSA recommended implementation of adequate maintenance and safeguarding of the monitoring stations used to monitor climate and pollution. There should be back-up plans to address the risk of load shedding.

Another key issue of note was the provincial departments have managed to inspect only 331 (61%) of 543 landfill sites in six years, which was indicative of the inadequate capacity of Environmental Management Inspectors (EMIs) across the country. Northern Cape and Free State had 100% non-compliance. Only Gauteng achieved a high compliance rate.

Common areas of non-compliance for DFFE, SANBI and SANParks were procurement management, prevention of irregular unauthorised and fruitless expenditure and consequence management. the DFFE and SANParks were the top contributors of irregular expenditure. Of the 2021/22 AGSA recommendations, only MLRF, SAWS and iSimangaliso had implemented them. Together the auditees incurred R700 million irregular expenditure which was disclosed in the financial statements.

SANParks management did not monitor the implementation of recommendations to address internal control deficiencies. Investigations were not conducted into all allegations of financial misconduct by officials, as required by Treasury regulations. Analysis shows that irregular expenditure decreased by 39% compared to the previous year.

There were a number of material irregularities: Working on Fire disposal of state motor vehicles through transfer to service provider employees not in line with National Treasury requirements and payments for waste disposal project deliverables not received.

Mr Rakosa recommended that the Department continue regular monitoring of the progress made in implementation of audit action plans to ensure that all audit findings are addressed and are not repeated. For SANParks it recommends that it should have a proper succession plan, institute reviews of the implementation of compliance monitoring controls to reduce material non-compliance and resultant irregular expenditure. DFFE should institute reviews of this implementation.

To the Committee, AGSA recommended that it review progress reports on the tracking and identification of emerging risks in the portfolio, and how the Department is mitigating the risks identified that could prevent the achievement of key objectives in its mandate.

Discussion
Mr D Bryant (DA) thanked AGSA saying while it was it was enlightening and heartening to see a gradual increase to an unqualified audit over the past four years, to see some of the challenges that still exist has dealt a huge blow.

It was sad to see the Department itself as the worst performer with failure to achieve 23% of its targets. SANParks missing out on 15%. Some key issues in the audit report were things that the Committee had spoken about for a long time but remained ongoing challenges. The first was tyre waste and the seeming inability of DFFE to properly recycle and manage tyres across the country. There had been a lot of dragging of feet and going forward that really needed to be taken up again. The Committee would need an update on the tyre plan and strategy that they have spoken about previously but does not seem to have materialised into real action. It was also sad to see that the Department was not compliant in climate change and air quality goals but hopefully they can start to tighten up going forward with increased oversight from the Committee and with the new regulations that come from the Climate Change Bill.

Mr Bryant said that what really stood out for him was the implementation of the EPMS systems by ICT and it is hard to believe that no meetings had taken place since 2019. He asked for a Department representative on that committee to give feedback on why that was. There was a huge disparity between provinces that had had great success in landfill site inspections and other provinces that have been really poor. Why was there such disparity for inspections conducted? Eastern Cape gets more budget in the provincial equitable share than Western Cape but has a fraction of the number of inspections. What exactly was the issue?

He asked for an indication of what the SANBI irregular expenditure was comprised of. Was it widespread or just one unit within SANBI? He asked if AGSA had picked up any red flags about SANParks corruption or fraud.

Mr N Singh (IFP) appreciated the thorough audit by AGSA. They might need to engage the Department on some of the AGSA findings. It was quite alarming to see that in some areas nothing seemed to be happening. He congratulated the Department for the progress getting to an unqualified audit but there was still a lot of work to be done from the Department’s side.

Ms A Weber (DA) asked how much money was spent on disciplinary cases and why some of those cases are lasting too long.

The Chairperson said the report was predictable as some of the content is not news to the Committee. As much as they appreciate the movement of the Department to an unqualified audit. On the Working on Fire Vehicles, who gave these cars and what has been the consequence management? The Committee is still waiting for a progress report on recovery of the initial 42 vehicles.

The Chairperson said the AGSA report mentioned progress but at what stage exactly. The cause for SANParks audit outcome is attributed to key finance personnel that had left which negatively impacted on its financial statements. What exactly did that mean?

The Chairperson said that at some point the Committee will have to meet the Department on the AGSA findings so that they get a response on behalf of the people of South Africa.

AGSA response
Mr Andries Sekgetho, AGSA executive manager, explained that the departure of key finance personnel that had skills and understood the preparation of financial statements, created a skills vacuum. They stressed the importance of ensuring there was proper succession planning and that the people remaining should at least produce credible financial reporting.

Should the Committee still require a workshop in unpacking some of the findings in more detail, AGSA was able and willing to assist the Committee in any way.

On conflicting information, he said the Committee decided to take a certain direction on the basis of information provided by entity management and then the AGSA audit report comes in and seemed to create questions on some of the decisions taken by the Committee. These engagements were therefore important and so was independent assurance on the information that is used. This would strengthen the recommendation to ensure when entities report to Parliament, the Portfolio Committee asks how the entity has verified the information as the entity has an internal audit function and an audit committee.

Mr Rakosa said that the reason the Department was not doing so well around tyre waste was that there were legacy issues that need to be dealt with like the waste management plan that was still a draft and has not been approved. DFFE was still in communication with stakeholders in the tyre waste industry. It was AGSA's opinion that some oversight from the Committee would assist in speeding up the process. However part of the reason the process is taking this long was in certain regions particularly those close to where tyres are manufactured, one finds a lot of rejects which was contributing to the piling up of waste tyres.

Mr Rakosa said the majority of Mr Bryant's questions require a response from the Department. It is not only the national but also the provincial departments that assisted in monitoring the landfill sites. NEMA was not only at national level but also in the local space. This would obviously require the three spheres of government through the assistance of the NCOP for intervention in that space because the Department was implementing a number of interventions in that area and same provinces that are doing quite well while others are not doing so well. They were highlighting the issue so that the oversight can also assist in speeding up landfill sites.

SANBI irregular expenditure was mostly in two programmes: Administration and the National Zoological Service. It was mostly legal services exceeding the contract value and the online ticketing system for admission.

As auditors they had not picked up fraud at SANParks but the Department was following up on fraudulent related matters particularly in the Kruger National Park. By the time of preparing this presentation, AGSA had not received any feedback from the Department.

On the expenditure on disciplinary cases, the Department would be the one to respond.

Working on Fire disposed of six vehicles in 2022/23. In the previous year when 42 cars were disposed of, the Department contacted Working on Fire to discourage this from happening but Working on Fire still proceeded to dispose of six vehicles. It has referred the matter to the State Attorney for assistance. His understanding was that the Department had already sent a letter of intent to have the vehicles transferred back to DFFE about two weeks ago on 29 September 2023.

Further questions
Ms Weber said that her question was unanswered which was how much money was spent on disciplinary committees, from where it came and how can it can minimize these costs

Mr Bryant said the level of landfill site inspections was more about the degree of competence that may be lacking in some provinces which needed to be addressed. Where did the bulk of the irregular expenditure in the SANBI two programmes sit? He asked for the reasons for not highlighting the fraud in SANParks and where will it be included going forward.

AGSA response
Mr Sekgetho replied that audits are done on a sample basis so overall expenditure on disciplinary costs might not be encompassed in the testing of expenditure. What AGSA can commit to do is to come back with the amount. On what could be done to curb spending on disciplinary cases, unfortunately the way the PMFA is structured where there are transgression allegations or non-compliance, the Department has to investigate but it must also ensure that the process is run efficiently as possible so these matters are not prolonged. What would help is having information readily available which could fast track the process. They also did not want the Department running foul of the disciplinary process and being the subject of litigation.

Mr Rakosa replied that 80% of the SANBI irregular expenditure was under Administration in exceeding the value for legal services and 20% was under the National Zoological Service.

Mr Rakosa added that the six vehicles disposed were not disposed according to what DFFE and Working on Fire had agreed on. A vehicle disposal committee was supposed to be established and include DFFE officials. Working on Fire did not follow the process and failed to get DFFE permission even after DFFE had communicated that it must cease to dispose.

The Chairperson said that the Committee might need a separate meeting with the Department to deal with the AGSA findings.

Mr Bryant said that he was yet to receive a response on SANParks. He agreed to the Chairperson's suggestion.

Mr Rakosa replied that by the end of the financial year SANParks was still following up on the fraud matter that was picked up. The reason AGSA had not included it was because when it came to fraud, it normally allow the process that should be taken by the entity to run before AGSA can pronounce on it. AGSA was however aware and had spoken with the internal audit and through their internal processes to follow up about investigation of the fraud. In future, AGSA could perhaps submit progress by the entity on the fraud matter.

Ms Nomfundo Tshabalala, DFFE Director General, said that the Department was ready to respond to the AGSA findings and matters raised by Committee members in a breakaway session. They just needed to notify the Minister's Office.

South Africa Weather Service (SAWS) 2022/23 Annual Report
Ms Feziwe Renqu, SAWS Board Chairperson, said the year under review covered a period in which the work of SAWS came into sharp focus following the extreme weather events particularly Kwazulu Natal and Eastern Cape. The loss of life, displacement of people and damage to property as well as infrastructure ruin in the wake of the storm underscored the mammoth task that rests with SAWS as the authority on severe weather warnings in South Africa. The South African Weather Service exists to safeguard life and property against harmful weather and climate events. As the board they are alive to the challenges that have so far hamstrung SAWS.

Chief among these has been the resource squeeze brought about by the COVID 19 loss of revenue particularly from the aviation sector which had over the years proved its contribution to sustaining these services. There have been problems with the sustainability of SAWS radar infrastructure which was primarily the result of frequent power outages including load shedding, cable theft, insufficient fuel for backup generators and prolonged power outages. The board worked with management to make the few resources SAWS had at its disposal go a long way while recovering from the pandemic effects and paying attention to the available and aging infrastructure to prevent collapse of the system.

Despite the challenges faced by SAWS, the annual performance results of 78.75% achievement was welcomed with the aim to improve and remedy areas of concern. To that end the board had established an infrastructure sustainability plan ad hoc board committee as one intervention measures to assist management in ensuring that the desired turnaround plan for radar performance is achieved. Further, the board is committed to continue focusing their effort on the provision of weather climate and environmental solutions rooted in improved scientific competence, accessible meteorogical products and services and dissemination of easy to digest information.

She congratulated SAWS management and staff for achieving a level 6BBB rating an improvement from the 8BBB rating obtained the previous year. She also applauded the clean audit outcome which marks a significant improvement from the previous year. It was the board's hope that this feat will be maintained going forward. The Board expressed its gratitude to the Minister, Deputy and the Department in assisting SAWS in executing its mandate.

Mr Ishaam Abader, SAWS CEO, noted the overall 78.57% achievement of set targets. Among the targets not achieved was 81% and not 85% for availability of automatic weather stations infrastructure. The reason for deviation was increased load shedding affected the availability of sensors and the Global System for Mobile Communications (GSM) was weak in certain areas. To remedy this, there was replacement of AC power with solar panels and also it procured LTE modeMs The other target not achieved was only 78% availability of Global Atmospheric Watch (GAW) Infrastructure due to load shedding that exceeded power backup generators which impacted the data recovery of the Greenhouse Gases (GHG) instrumentation. They are in the process of procuring Nitrous Oxide and Ultraviolet Biometer instrumentation. They are also investigating the improvement of its uninterruptible power supply (UPS) system for the GAW laboratory.

SAWS was also unable to achieve the set target for the availability of the Lightning Detection Network (LDN) Infrastructure and radar infrastructure as well. This was due to load shedding challenges with peripheral infrastructure that is critical for optimal radar operation. To remedy this, there was continuous monitoring of the peripheral equipment and increase of diesel fuel levels for backup generators. The entire SAWS Lightning Detection Network is now under a contract which will ensure the complete upgrade of the network within a three-year period. Another set target not achieved was the Growth in Unregulated Commercial Revenue because revenue from commercial partners was below budget due to the loss of key clients, as well as forecast products linked to the uptime of the radars, which were impacted by load shedding.

Mr Norman Mzizi, SAWS CFO, reported that SAWS achieved a clean audit and no material findings. There were material losses of R13.1 million as a result of write-off of irrecoverable trade debtors. There was no irregular, fruitless and wasteful expenditure.

Discussion
Ms Winkler said she had concerns because the core business of SAWS was being grossly impaired by power outages and the lack of power back up. She asked the Department to speak to how it is unable to meet many of its targets in GSM, air quality and infrastructure. What was its strategy as all these targets have been severely impaired. How was it going to make up for lost commercial revenue post COVID given the number of challenges the Department is facing.

Mr Bryant said SAWS must be commended on achieving a clean audit but there was a common thread between a high degree of spending but not achieving targets and addressing core challenges. That was where an improvement should be seen from SAWS in future.


SAWS response
Mr Abader replied that it was true that SAWS was not optimally functioning on some of its infrastructure but in terms of the services he gave a commitment that it has been providing the necessary services which was borne out by the warnings issued throughout the year on bad weather. The services were not as impacted and it had almost a cross functionality when it came to provision of services as SAWS does not rely solely on one set of instruments to do forecasting and weather predictions. The radar may not be optimally functional but that did not necessarily mean that they are unable to use other means such as satellites and other instruments to provide the services.

The GSM network was run by service providers so SAWS did not have much control on how it is impacted by their ability to provide services.

SAWS is working tirelessly to bring up to speed the radar systeMs The revenue loss was going to hurt the company but they were heartened by the fact that SAWS revenue was on the rise and it was at R97.7 million as per a recent report. That was not to say that they should not focus on improving their radar and air quality services as well. The board was quite involved and was keeping a close watch on the deliverables in their areas of work and had established sub committees that specifically focus on that and they are assisting management to ensure an improvement in statistics specifically on radar and air quality because those are the targets that they have missed out substantially.

Dr Jonas Mphepya, Executive of Weather and Climate Services, said that the Global Atmospheric Watch over the reporting period did experience challenge with one of the instruments that measures nitrous oxide. They had since started the process in April 2022 and in January 2023 placed an order. The instrument had since been delivered in July 2023 and the site is operating and they are getting 100% from that instrument. The other challenge they have since addressed was the backup battery which could previously work only up to four hours. They had increased the number of batteries and that intervention is assisting in getting more data from the GAW.

Mr Mnikeli Ndabambi. Executive: Infrastructure and Information Systems, replied that the infrastructure they had was never designed for these longer periods. They have developed a radar infrastructure sustainability plan that the board approved earlier in 2023. That plan that also had to get budget which it will be working on for the next three to five years, will be quite useful. What was critical was that the plan was well informed. They had work shopped expertise and leveraged on their network being members of world meteorological organisations and also other countries having a radar network. They believe that the plan once implemented will be able to address all the challenges.

They are engaging with the GSM providers about load shedding, backup systems and theft. The Chief Financial Officer was assisting monitoring weekly progress as the plan is reliant on the procurement process. They are identifying the gaps in SAWS managers' understanding the SCM process so that they operate within the confines of the PMFA and Treasury regulations.

Ms Winkler asked for more clarity on strategy. She asked for the timelines for stabilising power supply. On commercial viability and the number of clients lost, were there reasons why the clients no longer purchased the products?

Mr Abader replied that SAWS had lost about R4.2 million in commercial viability. In terms of corrective action they have gone out and called for additional partnerships. SAWS has signed on five different partners in the hope that they can make up the lost revenue. He wondered if it would be more prudent to submit the timelines in writing to the Committee to give details.

Mr Ndabambi replied that the timelines information was available and that they have quite a detailed plan that talks to the timelines to source alternative power but there are other peripheries around that. He would provide the details on the timelines of the strategy in writing because it was not just an overall solution.

The CEO asked that SAWS be allowed to submit that report in writing and the Chairperson indicated the 16 October 2023.

iSimangaliso 2022/23 Annual Report
iNkosi Mabhudu Tembe, iSimangaliso Board Chairperson, said that they had seen a change in the community relationship over the last five years which had improved through the support received from the Minister and the Department. Its performance had since improved from 87% in 2019/20 to 100% organisational performance from 2020/21 to date.

On implementing phase one of the commercialisation strategy, they had concluded the small capital project for product offerings and activities. They had started to realise the revenue from this as of August 2023. Key highlights of the capital commercialisation project was that 32% has been allocated to previously disadvantaged groups. Progress to date was that they are 98% complete in submitting the small capital list to National Treasury. They had also completed visibility studies for the large capital project.

On the St Lucia update, they were on par in implementing recommendations from the panel of experts’ recommendation report and had received a positive buy in from the farmers and the larger community. The latest meeting of August 2023 was positive with community members welcoming the key milestone achieved in implementing the action plan. During the meeting an update on the progress on the basic assessment report was provided to the community as well as the status of the specialist studies in accordance with the institutional charter in the next two or three weeks. The next part will involve a thirty-day participation process following the submission of the basic assessment report.

A stakeholder subcommittee was proposed at the St Lucia meeting and they have received nominations that include the small scale farmers, St Lucia association of cooperative sugar cane planters, fisheries, community business operators and private farmers. The intention was to hold the first subcommittee meeting with the next two weeks and community involvement will form an integral part of the basic assessment going forward. The purpose of the basic assessment was to request authorisation for dredging the Msunduzi River.

It was noted that funding for St Lucia had been secured of about R20 million which will support their efforts to implement and intensify the environmental monitoring program in the iSimangaliso as recommended by the panel of experts' report.

Mr Sibusiso Bukhosini, iSimangaliso CEO, said that the Annual Report that was audited reflects 100% achievement on all planned 53 targets. They obtained an unqualified audit with no matters of emphasis which meant that organisational governance has improved. They had also scooped a platinum award in the green standards exhibition awards for the small stand category.

Ms Qhamu Mntambo, iSimangaliso CFO, said that its financial position increased in 2022/23, with increased current and non-current assets by R84 million. Revenue to the Park increased by 10%. There was no over expenditure of our budget. The audit outcome is unqualified without findings (clean audit). This was an improvement from the previous year.

Discussion
Ms Winkler asked where it stood at the moment on estuary management because she was aware that a lot of the stakeholders had issues about the estuary not being dredged and that its mouth had to be mechanically opened.

She asked if there had been any allegations of sewage leakages coming from the adjacent towns into iSimangaliso and the estuary. If there have been allegations, had there been investigation into those allegations. Was there any other big game poaching taking place?

iSmangaliso response
Mr Bukhosini replied that they were dealing with the estuary. The current status was that the scientists assigned to conduct specialist studies such as on sediment, the marine specialist in particular and the social scientist have concluded their reports. They were now at the phase where they are going to the public consultation process to await responses. Their aim was to make way for them to be able to remove the sediment manually in the estuary because it was clear that there were challenges and it was not going to operate naturally due to gross human interference many years before. The sediment was still there but their sedimentologist said that there was flow but it would not be to a level of the challenges they are currently facing. On the water moving from the ocean to the estuary, their resident scientist had said to him that there was now the injection of salt water into the estuary and the salinity is gradually improving. They would get a report from a scientist with credible data once that is finalised.

On sewage leakages, Mr Bukhosini replied that this was a grossly worrying issue which involved the district municipality which had been alerted to this. They have now engaged with the Department of Water and Sanitation in particular, as well as the municipality to see how that can be best resolved.

Mr Bukhosini replied that they do not have any big game poaching taking place aside from the rhinos. The only area where they still have a glimpse of these challenges was in (3:19.09 name unclear) which they were discussing with (name unclear). They were obviously using the same model of ensuring that people are given an opportunity to be able to work or get in the business so they have food on the table. There are some issues with poaching but they are not as significant as they used to be. This has been possible through the assistance of the same communities who are now alerting them and they are able to deal with this before it becomes a bigger issue.

Further questions
Ms Winkler asked if they could provide instances where they have found sewage leakages and what investigations had taken place and to what extent the leakages are entering the estuary. Had it seen an increase in the number of snares in the park?

iSmangaliso response
The CEO replied that the main sewage leakages were in the St Lucia area and they currently have scientists checking the e-coli aspect in the estuary and the many other issues that could cause problems as a result of that sewage. The Committee might have to wait until the report is finalised because they must identify exactly what was the magnitude of the sewage, its impact as well the state of readiness of the municipality because one would expect that the Municipality Infrastructure Grant (MIG) would come in handy to assist in that case. They are also expecting assistance from the Department of Water and Sanitation.

On poaching, there were not as many snares as there used to be for the same reason he had highlighted. The only area that they are looking at in the main is the Mkhuze game reserve where they had probleMs The help they are getting from the community there is giving a sense of future elimination of the problem going forward.

SANParks 2022/23 Annual Report
Ms Pam Yako, SANParks Board Chairperson, said that this was a year that demonstrated promising signs of recovery for the organization following two difficult years. In overall performance, it achieved 87% of its planned targets. Under the guidance of the leadership of the Minister and the Department, SANParks continues to improve performance and also reporting. She spoke of tourism recovery where they have adopted a tourism recovery plan. As part of the board quarterly meetings they have an item on organizational performance monitoring to improve efficiency and this includes filling critical leadership positions. On the financial side, they had also seen an improvement.

Total revenue was about R3.2 billion which is 5% better than what they had anticipated when they presented their budget the previous and 3% better than the previous year. This was all still in recovery but they were starting to see signs of improvement and a lot of their efforts goes to improving this. They are continuing to engage in containing costs on the expenditure side so they do not live beyond their means after the difficult COVID period affected tourism. They have realized a surplus of R126 million this year from a deficit in the previous year of R253 million. They continue to look at improvements in that area because it contributed to achievement of organizational outcomes.

Whilst the audit outcome was still an unqualified audit opinion as in previous years, they had noted the movement from five matters in 2021/22 to three matters in 2022/23. Obviously they needed to work towards a clean audit which they would like to do at a faster pace than it had been going and they were still challenged around the quality of the financial statements and slow implementation of consequence management. They acknowledge that it needed to be faster but they were still experiencing challenges in procurement and contract management as well as the prevention and management of irregular expenditure. These were priority issues.

Ms Yako said during the AGSA presentation, concern was raised about fraud at Kruger National Park. They checked with their internal audit if they were aware of this who said that they were aware but no such investigation internally was happening. Obviously now that the board is aware, the audit and risk committee will have to look at it.

They continue to see some improvement in park expansion. They have contributed over 5 544 ha of land to the national park system in the last year. They know that they have to up their game on this hence the need for additional revenue and partnering with other organizations in the stewardship programme including partnership with communities that will ensure that they progress towards the 30 by 30 target. They are continuing to implement policy matters the Department was championing notably playing their role in the White Paper work and the work of the High Level Panel as well as issues related to their cultural heritage mandate where they do need to up their game.

One key issue was stakeholder management as it was critical to their work. They had worked very hard on the Table Mountain National Park area working with the City of Cape Town and Cape Nature. They were working on improving their relations which was high priority. They were also doing the same around Kruger National Park with stakeholders.

On infrastructure maintenance they were continuing to improve their facilities. They had improved their efficiency and ability to implement the infrastructure management and maintenance programme particularly in the Kruger National Park where there had been issues.

On the climate change side they had adopted at the board level a climate change strategy that they are continuing to implement because they are starting an increase in extreme weather events. She thanked the Committee for holding them accountable and keeping them on their toes on items in the public domain or the media space that the board was not aware of or not responding to.

Ms Hapiloe Sello, SANParks CEO, reported that for 2022/23 they had managed to achieve 87% of targets. They had increased the number of visitors to the National Parks by 42% from 2021/22. There was also a 49% decrease in the number of rhinos poached. There were 8 out of 61 targets they had been unable to achieve. These included the rehabilitation of degraded acres of land initially set at 31 500 ha but they managed to rehabilitate only 77% of it. The reason for the deviation included the heavy rains at Kruger. To rectify this they had included the initial acreage in the 2023/24 plan. Another target unachieved was the annual increase in rhino population in identified core rhino areas in Kruger National Park where they had planned to increase by 0.5% per annum. The reason for deviation was due to drought but they were continuing to implement the rhino management plan. Another target unachieved was the implementation of the human capital management plan which was only 72% implemented due to EXCO delaying the approval. They had included the remaining 19% in the 2023/24 plan.

Another unachieved target was the Enterprise Resource Planning (ERP) implementation as they were unable to appoint a service provider due to bid evaluation delays which would be completed in 2023/24.

The SANParks CFO said that tourism related revenue was still below pre-Covid levels but they expect to reach those revenue levels by 2025. Total revenue amounted to R3.210 billion against a budget of R3.059 billion resulting in a positive variance of R151 million. Total expenditure was R3.082 billion and reflected a negative variance of R23,8 million which is due to cost of sales for fuel. Total expenditure had increased by 8%. Employee-related costs increased by 2% compared to the previous financial year mainly due to annual salary increments. Operating costs increased by 11% due to rising costs of fuel and other committed expenditure.

The CFO said SANParks had received an unqualified audit opinion with findings on non-compliance with regulatory prescripts resulting in irregular expenditure of R202 357 000, misstatements in the financial statements, lack of consequence management as well as control weaknesses in procurement and contract management. SANParks management had developed an audit action plan to address the audit findings including those that did not affect the audit report. Progress on implementation of this was monitored monthly at EXCO and quarterly board meetings.

Discussion
Ms Winkler asked that the AGSA finding on SANPark lack of compliance on consequence management be unpacked.

Mr Bryant said that there seemed to be a little uncertainty about fraud and corruption within SANParks in particular at Kruger National Park that had been uncovered or brought to light. The Committee had received a presentation from Julian Rademeyer on his report, Landscapes of Fear, which found internal corruption, breakdown of trust and staff cohesion plus worsening organised crime to be of greater threat to the future of the park than poaching. He referred to a Daily Maverick article which stated that the Rademeyer report noted that in one section in the south of Kruger Park 14 of the 20 rangers had been linked to poaching networks: "Investigations by private auditing firms KPMG and the Hawks focusing on the Intense Protection Zone (IPZ), home to most of Kruger's rhinos, have uncovered evidence of payments from syndicates to at least 50 staff from all walks of life and those numbers are likely to increase.” To him that was a clear link to fraud, corruption and criminal activity taking place. None of that seemed to have come out in the audit report. He wondered if the linkages to staff were being investigated because from what is being reported it was a huge challenge.

Mr Bryant said it was good to see that there were fewer rhinos being poached. Unfortunately that was going hand in hand with an overall decrease in the rhino population. The decrease in the rhino population was being attributed almost exclusively to drought and low birth rate and there was no mention of poaching even though the number has dropped. Surely 98 poached rhinos must have contributed to the population’s inability to grow. It was important to mention that as one of the reasons.

The Chairperson said that it was common cause that there must be consequence management if the findings of the AG dictate that there was wrong doing. The Committee had always been told that there was consequence management in many cases that related to Rhino Poaching, SCM and others. But the Committee hardly ever received statistics. There are never any details on how far they are in so far as consequence management was concerned in terms of how many had been found guilty, suspended or expelled. Going forward SANParks will need to change how they do things because they cannot always be reporting that corrective action was being taken and not stating how far it was being implemented or how effective it was to help the institution to avoid repetitive offenders.

On Enterprise Resource Planning which is in the main a SCM matter, it seemed that in most of entities there were SCM problems but again there seemed to be no concrete plan presented to the Committee so it could follow up on progress of the SCM corrective action. The same would apply to human capital management where EXCO decided not to approve the HCM plan. He asked if EXCO was aware that not approving the human capital management plan would result in an audit finding and affect the audit outcomes. He did not feel the corrective actions. He asked that the Committee be taken through their corrective actions.

SANParks response
On the Rademeyer report, Ms Hapiloe Sello, SANParks CEO, replied that SANParks had always played open cards in admitting when its employees were involved in rhino poaching when arrests have been made and their dismissals. What they could not do is then to use the Rademeyer report which was an independent research report as a metric as to if they are succeeding or failing with regards to controlling the extent to which their employees are involved or not. Currently they did not have an internal investigation with regards to how many staff or any staff members that may be involved in poaching. That said, the Committee was aware that the law enforcement agencies that work with them sometimes carry out investigations against their staff members but nothing internally. They of course acknowledge the Rademeyer report and have read it thoroughly but they do not necessarily use the statistics reported in that report to dictate how SANParks does things. They had said in the past that they have an integrity management programme that they are introducing across the organisation and at the heart of that programme was a polygraph testing policy that had been approved and an SOP has been approved. Therefore something was being done in ensuring that they are working with particularly rangers even though rhino poaching has not always just been linked to the rangers internally. They are ensuring they are working with colleagues who have the highest level of integrity.

On consequence management, they added a slide stating the extent to which they had gone in investigations and determinations. In the past financial year they had 119 cases of irregular expenditure and the vast majority had to do with local content production. They had even broken the number down indicating cases finalised and cases outstanding to enhance information already provided on consequence management. She assured the Committee that going forward they would enhance reporting on consequence management in this manner.

The CEO noted the AGSA report said that the loss control committee had some dysfunctionality when it came to its operations. This was new territory for them. The whole creation of a loss control committee, its terms of reference and cascading the work of the loss control committee down to operations which included ensuring that their disciplinary policy is aligned to this. This meant that even as they do manage consequences they need to ensure that they adhere to labour laws and there is fairness and transparency as well as a balanced sanction. They had since ironed out their disciplinary policy which had been reviewed and approved by the board. The policy has a specific section that concentrates on irregular expenditure.

She noted the Chairperson’s request on SCM and they would respond in writing following the meeting. They do have a plan that they are happy to share. On EXCO delaying the HCM strategy, that was a difficult one because they did not believe that the refusal was malicious. They were perhaps being over-diligent because EXCO also had the option of ticking a box and saying this has been delivered and knowing perhaps that the quality of the strategy was not satisfactory. They did not look at it as an issue that would affect the audit outcome; rather they recognised that what was needed was a strategy that was going to be central to how they managed people. It should not only be central but it should be a feasible and implementable strategy. Therefore in a bid to avoid tick boxing, they then went to the other extreme.

They noted the Chairperson was unhappy with the corrective actions and perhaps they can break that down more to understand how best to enhance their definition of corrective actions.

Dr Howard Hendricks, Manager Conservation Services, replied that Mr Bryant’s statement was a valid one on poaching and dwindling rhino numbers. Going forward he will ensure that when they do talk about rhino population, specifically around white rhino, that they include poaching in that statement. It could not be true that population dynamics are just dependent on birth rates. Populations must be explained in terms of total loss rate relatively compared to recruitment rates. The loss rate was made up of natural mortalities and also poaching.

Further questions
Mr Bryant returned to the Rademeyer report which was presented to the Committee and it had extensive engagements with Mr Rademeyer. There was a commitment at that meeting from SANParks to look into the report and those allegations. Had SANParks made contact with Mr Rademeyer or anybody involved in making that report to get information on the allegations so that they can be followed up in the public interest because the allegations contained in the report were quite serious.. Where an entity was accused of having high levels of fraud and corruption, surely it should be investigated internally at least. It was worrying to find out that no internal investigations were taking place.

SANParks response
Ms Sello replied that they were in contact with Mr Rademeyer and subsequent to his appearance in Parliament they had a follow up workshop in the Kruger Park with a number of their colleagues. So they do have an open relationship and Mr Rademeyer had a lot of contribution to make to a lot of their efforts. He was therefore within the circle. She emphasized that as much as the Rademeyer report was a major expose, for the organisation internally there was very little that was new that they did not know about. They had been aware of the issues raised in that report for a while and it was an issue they had been tackling in a variety of ways.

Where there was a strong and clear suspicion that an individual is involved in poaching, SANParks has never been shy about taking on an investigation and in many instances doing so with law enforcement. It was not that they are sitting and not responding to the report. They are implementing what they call a holistic integrity management system into the parks. Some of the key things they are undertaking as part of the integrity management programme includes developing ranger resilience as a way of mitigating corruption and stress. By mitigating corruption that means ensuring that the rangers are less susceptible to being co-opted into criminal gangs. They assist by ensuring that financial management skills are up to scratch and their debt is managed. A lot of what they were doing was around behavioural change as opposed to investigating within a vacuum.

At the moment they do not have any hard-core internal allegation that they can investigate but their Environmental & Corporate Investigations (ECI) which was their internal law enforcement was working closely with SAPS and the Hawks who at any given time could be having their own investigations that do not necessarily make it into an EXCO report because that was the way it should be. They are being proactive and aware. They have done their own surveys amongst the ranger corps to understand where the trust issues are and where there has been a decimation of cohesion within the team and have gotten to understand attitudes.

Mr Bryant thanked the CEO for the explanation which was clear. It was good to hear of some of the other steps being taken to improve the operational capacity of the rangers. One of the fundamental issues was trying to prevent people from falling into the trap of poaching. It was good to hear that Mr Rademeyer had been approached and he hoped that information passed on by him was further investigated by SANParks.

The SANParks CFO replied that the enterprise resource planning (ERP) evaluation process had been completed. Following that due to the value and complexity of the project, they referred it to a property audit which unfortunately had taken longer than anticipated but this was now complete. They are considering the report from the property audit which they will report on next time.

The Chairperson thanked AGSA and the CEOs, CFOs and Board Chairpersons of the entities that presented in the meeting.

The Deputy Minister said that the day had been long. If there is some dissatisfaction about the responses from the entities, the Department was always pleased to respond by way of written responses. She was happy that the SANParks CEO responded to the Rademeyer report and that Mr Bryant was satisfied with the response. She had not been involved in the report but she was aware of it. She thanked the SANParks leadership for their responses.

The Chairperson thanked everyone and adjourned the meeting.