SIU investigation reports submitted to the Presidency; with Minister

Public Accounts (SCOPA)

20 February 2024
Chairperson: Mr M Hlengwa (IFP)
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Meeting Summary

The Standing Committee on Public Accounts met in Parliament to receive an update from the Presidency on the investigation reports submitted by the Special Investigating Unit (SIU).

The update by the Presidency indicated that since 2001, 245 Presidential Proclamations authorising SIU investigations had been issued. 42% of which has been issued by President Cyril Ramaphosa. The Presidency had created a tracking system to strengthen oversight and accountability for the implementation of recommendations made by the SIU. In the last decade, SIU recovered R3.35 billion.

The Committee was concerned that the amount recovered was significantly less than the amount lost due to corruption. It was indicated that more recoveries would be made as ongoing investigations were concluded. Members were concerned that dismissed employees would be employed elsewhere in state institutions and departments. SIU and the Presidency assured the Committee that National Treasury’s Database of Restricted Suppliers and the Companies and Intellectual Property Commission database was being further developed to prevent this. The Committee requested that the list of employees dismissed and marked as delinquent be made available.

There were concerns about the inconsistency in disciplinary measures and sentencing. There were also allegations that only white or multi-national companies were allowed to settle, whereas black-owned and Small and Medium Enterprises were not granted the same opportunity. It was indicated that any entity that wanted to settle had to approach the National Prosecuting Authority. It was further indicated that efforts would be made to enforce guidelines on the outcomes of disciplinary actions and that the disciplinary action or sentence should be in line with the size of the offence.

The Committee noted that there were outstanding payments due to SIU and was concerned that if entities failed to pay SIU, SIU may not be able to continue their work. A suggestion was made that following a potential directive that recovered funds be given to National Treasury instead of the entity affected, that Treasury should pay SIU’s fees.

Meeting report

Opening Remarks

The Chairperson welcomed Members, the Presidency, and the Special Investigating Unit (SIU) to the meeting.

The purpose of the meeting was to receive an update on the processing of the SIU investigation reports and the development of the matrix. The matter had to reach a logical conclusion of implementation and processing. At the matter’s inception, there had been concern that when SIU completed reports after a proclamation, the report was sent to the Presidency, as the originator of the proclamation, after which there was no follow-through. There were reports with the Presidency from 2001-2002, without proper implementation plans. 

The Chairperson felt that the Committee had been very patient and that reaching a conclusion should not be difficult.

It was indicated that the Minister was delayed but would arrive shortly. The presentation would continue in her absence, followed by questions and responses.

Ms V Mente (EFF) asked if the officials present were empowered to present the update in the absence of the executive authority. She did not want to be faced with a situation where the officials present did not have the power to respond to questions effectively.

The Chairperson reiterated that the Minister was en route.

Ms Matsietsi Mokholo, Deputy Director-General (DDG) in the Presidency, said she was responsible for corporate management and processing SIU reports once the reports were handed over to the Presidency. The officials present were delegated to engage with the Committee.

Ms Mokholo said the Presidency was meant to brief the Committee in November 2023, but the Committee had requested that the session be postponed. This meant there were some changes to the original presentation to include information that had occurred since November. She was hopeful that the update would provide information on what had been accomplished to date, the progress being made and what was envisioned for the future in the fight against corruption.

Update on SIU Investigation Reports
Mr Jonathan Timm presented the Presidency’s update on the SIU investigation reports.

Since 2001, 245 Presidential Proclamations authorising SIU investigations have been issued. Since 2018, President Cyril Ramaphosa has issued 104 proclamations – 42% of all SIU proclamations. KwaZulu-Natal has the greatest number of SIU investigations since 2001 (34). Currently, Gauteng has ten active investigations and KwaZulu-Natal has eight.

On monitoring implementation of recommendations, the Presidency receives reports when the SIU concludes an investigation and thereafter issues the report to the affected organs of state and communicates the recommendations made by the SIU. The Presidency had implemented a tracking system to strengthen oversight and accountability for implementing recommendations.

In the past decade, SIU had recovered R3.35 billion. The Special Tribunal established by President Ramaphosa was intended to fast-track the recovery of public funds by SIU. A breakdown of civil recoveries was provided on Slide 7.

Currently, 385 disciplinary recommendations are being monitored by the Presidency.

The Presidency provided information regarding the status of outcomes of finalised cases (slide 9).

The SIU referred 304 recommendations for criminal prosecutions regarding the Covid-19 investigation. 70 guilty convictions have been handed down since July 2021. Concerning the Covid-19 procurement investigation, it was recommended that 91 Directors and 297 companies be restricted from business with government. As of January 2024, none of the companies or Directors appear on National Treasury’s Database of Restricted Suppliers. Eskom and Transnet reported that they had restricted suppliers implicated in SIU investigations on their suppliers’ databases.

The Presidency was committed to strengthening oversight and accountability for the implementation of SIU recommendations. Efforts have been made to strengthen cooperation between SIU, the Presidency, the Department of Public Service and Administration (DPSA), the Department of Cooperative Governance and Traditional Affairs (COGTA), National Treasury and the affected departments on the management of disciplinary cases. The poor response to recommendations for restricting suppliers highlighted the need for reform. Legislative changes regarding the debarment of implicated suppliers as part of the Public Procurement Bill were expected to result in improvements.

The operationalisation of the integrated cloud-based coordination and monitoring system was in its third phase.

See attached for full presentation

Minister’s Remarks
Ms Khumbudzo Ntshavheni, Minister in the Presidency, expressed her apologies for arriving late and thanked the Committee for allowing the presentation to proceed.

There were 74 active investigations. She had engaged with the Head of SIU and the DDG in the Presidency regarding the development of a timeframe for the completion of the investigations. The sixth administration was ending, and it was important to complete the outstanding investigations. The results of these investigations would need to be included in professional reports of the sixth administration.

On administrative referrals, of the 297 companies and 91 directors that National Treasury had not disbarred in the National Treasury’s Database of Restricted Suppliers. She had engaged with the Minister of Finance to indicate that National Treasury needed to comply until the Procurement Bill came into effect. Regarding the outstanding and provisional reports, there was an indication that there were more recommendations for disbarring companies and directors to avoid recurring issues.

When the Minister had previously engaged with the Committee and SIU, the issue of vetting was raised. There was a decision by Cabinet in 2014 to vet everybody. The Presidency committed to introducing a process to improve the vetting process. This had been shared with the Joint Standing Committee on Intelligence. The Presidency had started to ensure that all Director-Generals and Heads of Departments across government and state-owned entities (SOEs) were vetted. Recently, most appointments of Chief Executive Officers (CEOs) and DGs were not finalised before security clearance had been completed.

SIU Remarks
Adv Andy Mothibi, Head of SIU, said SIU interacted with the Presidency to follow up on SIUs reports, when the President decided to release the reports to the state institutions. The reports were released, and letters regarding the follow-up and what state institutions did to implement the SIU referrals were sent. It was important to ensure that there was consequence management.

The SIU highlighted various outcomes, which were captured in the presentation. SIU felt that they were capable of following up and executing civil recoveries. In terms of civil recoveries, SIU had full legal power to execute and enforce recovery. The appointment of the Special Tribunal further enabled SIU to perform this duty. It was important to ensure that the Special Tribunal delivered speedy recovery. SIU’s civil litigation team was ensuring that cases were resolved to speed up and ensure recoveries.

SIU’s powers did not extend to disciplinary actions. In the case that officials had to be disciplined, SIU would prepare the evidence and hand it over to the accounting authority. By law, the accounting authority was empowered to act based on the evidence presented.

If state institutions were not enforcing SIU’s recommendations regarding disciplinary actions, SIU could take legal action to compel state institutions to act on the recommendations. Accounting officers were beginning to enforce these recommendations.

On National Prosecuting Authority (NPA) referrals, the Personal Protection Equipment (PPE) scenario was a good example of good results. As the system progresses, the wider potential of other referrals would be shown.

On administrative referrals, the SIU welcomed the Department of Trade, Industry and Competition (DTIC) dealing with Directors and the blacklisting of Directors in their individual capacities. It was possible that where only the company was blacklisted, the Directors had the potential to resurface in another capacity or company.

On state institutions, SIU was pleased by the outcome of the High Court relating to South African Broadcasting Corporation (SABC) matters, where the Directors had also been cited. There was a process to ensure that where there was wrongdoing by the Director, action would be taken. There was a need to progress further in blacklisting.

Where SIU did systemic investigations of the state institutions, it would show that the systemic recommendations were meant to improve the administration and contribute to the prevention of future incidents. Based on the systemic recommendations, institutions develop plans to implement the recommendations to ensure progress is made.

He confirmed that the Minister had engaged with him regarding the timeframe of investigations. Previously, SIU had highlighted the prioritisation of the turnaround time of investigations. Regarding the ongoing investigations, SIU would ensure that the reports that were ready be submitted. For those still ongoing, SIU would provide the rationale for why the investigations were still ongoing.

The Chairperson thanked the Minister and delegation for the presentation. He opened the floor for questions.

Mr A Lees (DA) referred to the R3.35 billion recoveries. In his understanding, these recoveries had taken place over a 23-year period. In the big picture, this was a small amount of money, given the extent of the Zondo Report. R510 024 was recovered from the Department of Public Works, but this was not the value of the contracts. The recoveries from Beitbridge were estimated to be R14 million, which was considerably more than the R510 024 recovered under the whole Department of Public Works. He expressed his concern regarding Eskom’s R2,060,606,751. The extent of the losses due to corruption at Eskom was greater than the recovered amount. On the Road Accident Fund (RAF), only R11,313,244 had been recovered. Only R9,987,729 was recovered from the Unemployment Insurance Fund (TERS Funding). He was concerned that the losses due to corruption in the entities were significantly more than what had been recovered.

On the ongoing investigations, the proclamations had increased greatly over the last five years. Given the resources SIU had access to, he was concerned about how SIU handled the number of proclamations over the past five years. What was outstanding, in terms of fee payments, that clients had not paid? Did this non-payment restrict SIU’s ability to pursue and conclude investigations? There had previously been discussion about changing the structure of payment; should the Committee recommend this in its legacy report?

Mr Lees highlighted the issue of vetting and lifestyle audits. Were these two the same thing? He felt that one referred to security vetting and the other to lifestyle auditing. Had all of Eskom’s relevant senior personnel been vetted? This would be a significant achievement, as it had been an ongoing issue for many years.

He referred to the blacklisting on National Treasury’s Database of Restricted Suppliers. He emphasised the importance of blacklisting companies and Directors. Ms Dudu Myeni, former SAA Chairperson, had been declared a delinquent Director after a lengthy court process. Was the blacklisting being replicated as delinquent Directors in the Companies and Intellectual Property Commission (CIPC)? If this was the case, could the Committee be provided with a list of people and companies that were meant to be included in National Treasury’s Database, and the list dealt with by the CIPC? Based on the example of Dudu Myeni, the process was very long and was not only an administrative issue.

On internal outcomes, including dismissals and resignations, were these officials on the blacklist? Had they been referred to the CIPC? He agreed that external parties should face the consequences, and so should the internal employees. Delinquent employees need not be able to jump to different jobs within the state. He had a strong suspicion that when looking at the list of delinquent officials, it was likely that they would be found to be employed elsewhere within state departments and SOEs – this had occurred in the past. Although slow, he felt that the work being done was good and had to be appreciated.

Ms Mente suggested that the officials respond to each member’s questions individually rather than all questions at one time. It would allow for better engagement.

Responses by SIU
Adv Mothibi responded to the question of the R3.35 billion that had been recovered. He agreed that the scheme of contracts at the High Court and Special Tribunal amounted to approximately R103 Billion. These cases needed to be processed so that more recoveries could be made. The High Court had a slow pace in executing matters. Progress was being made. For example, progress was being made in the water and sanitation space. There was currently a lawsuit for over R3 billion in the Limpopo High Court – the matter had been on the court role for a while. In order to ensure that the case management system is efficient, SIU met with the judge president. It was confirmed that SIU matters would receive appropriate attention and that the case management system would be handled. This would enable SIU to speed up the cases and recoveries and improve numbers going forward. Most of the recoveries were done at the Special Tribunal. SIU was happy that the Special Tribunal had become a very important platform for recovery. For the cases in the High Court and Special Tribunal, SIU was committed to ensuring that every effort was made to ensure that cases could proceed and be concluded. It was noted that third parties often did whatever was necessary to delay the conclusion of cases and extend the process. The judges were quite strict within the parameters of the law and the case management system had worked. The SIU civil litigation team and the state attorney's office were briefed to ensure these matters were speedily executed.

On ongoing Investigations and outstanding payments, the law provided that where SIU investigated, they had to charge. To date, outstanding payments amounted to approximately R1 million from state institutions. A process was underway to ensure that SIU could recover this debt. SIU would submit the project plan that had been put in place to ensure payment was made. Failure of state institutions to pay would result in an escalation to the Minister. SIU was financially sound and based on the current budget constraints, SIU did have some resources and was able to contract in where resources were lacking. If state institutions did not make payments, there was potential for the work of SIU to be constrained.

On dismissals and designations, he noted that there were cases where employees were Directors of companies. In instances where there was wrongdoing in these companies, the Directors should face the same consequences as any other Director.

On blacklisting of employees who had been dismissed, the project between DPSA, SIU and other departments was to ensure that as part of the deliverables, there would be a platform where dismissed employees were listed to mitigate the phenomenon of dismissed employees being employed in other departments or state institutions. The system would show that an employee had been dismissed from a state institution and mitigate their being re-employed within the state. This project was implemented based on the findings of SIU and the Zondo Commission to ensure Directors were blacklisted.

Ms Mokholo said the system was being developed. The register would not only track dismissals. For example, if someone resigned due to disciplinary action and then moved to a different state institution, the register would flag this on the employee’s personnel file. The system would integrate various departments, including Treasury, for the blacklisting and recruitment and employment.

On the vetting process, new employees would undergo a vetting process and through which a lifestyle audit would also be done. This meant that when approval was given, an individual would have passed the vetting process and lifestyle audit.

On cross-referencing the blacklisting by National Treasury and the CIPC database, some companies did not register on the database. Cross-referencing the two databases would allow for the fight against corruption in the public and private sectors. The CIPC would track both the private and public sector concurrently, while National Treasury database would ensure that dismissed employees would not be able to work in government again.

Minister Ntshavheni said the system would ensure that if an individual was blacklisted, they would not be able to be uploaded to the system.

The process of vetting at Eskom was underway. The incoming CEO was going through the vetting process. Vetting at Eskom was being fast-tracked.

Ms Mente referred to the question on the joint system being developed to block people from being re-employed in the system. It was good to have a clear indication that things were being progressed. She was concerned that while the Committee had been given the number of the officials on the list, the Committee had not been given their names. This meant there was no way for the Committee to be certain that dismissed employees were not employed elsewhere in the system. She requested that a list, including the names of the blacklisted, be made available to the Committee.

On recoveries, she noted the explanation regarding the slow pace in the high court. SIU was part of a Fusion Centre where all the stakeholders met. She recommended that the Fusion Centre prioritise matters that had been outstanding for a long time. For example, R11 of 2018 had been enhanced twice in Proclamation 3 of 2020 and 97 of 2022. It could not be that between 2018 and 2023, no recommendations were made and implemented, yet the Fusion Centre met regularly. Previously, there had been a discussion of a matrix that followed up and tracked cases. She was frustrated that there had not been any recoveries since 2018. For example, in the case of Asea Brown Boveri (ABB), SIU had welcomed the R2.5 billion settlement in 2022. This had not been included in the presentation as recoveries received by Eskom. Did the report include all information? If ABB’s settlement was included in the presentation, Eskom recoveries only included the ABB settlement.

The same issue existed in water and sanitation and in the Department of Public Works with the Beitbridge. If the numbers reported could not be broken down, then the quality of reporting was very poor. The matter could not be concluded unless the Committee had specific information. The Committee could not conclude the matter and tell the public that there had been progress, if the Committee was unclear on what had been reported. ABB went to NPA and settled, but black companies did not get the privilege of settling. After settling, companies were allowed to proceed. With enough money, justice could be bought. She emphasised the issue of buying and evading justice. There was no consistency in the application of the law. Many black companies were being prosecuted because they could not reach a compromise or settlement. Certain people should not be allowed to evade the law. She recommended that a case-by-case report be provided to the Committee so that Members could fully understand the report.

She noted the statement that the issue lay largely within middle management. There were different consequences in different municipalities. For example, the same transgression in different municipalities did not have the same repercussions. How must this be balanced out? Once SIU made its recommendation, the implementation was up to the authority or institution. If certain individuals were going to be allowed to get away with their wrongdoings, where others would suffer the consequences, this showed how big of a problem corruption was. This highlighted that there were issues with the implementation of SIU recommendations.

On blacklisting companies and employees, the Committee went on a study tour to India, where Members observed a system where if the company had any issues with the state, individuals could not even access the system. If it was necessary to change the law to improve the system, then this had to be done. There needed to be a law restricting anyone involved in delinquent behaviour. There could not be an SIU investigation, using state resources, and making recommendations that would not be properly implemented.

Adv Mothibi responded to the question on the list of dismissals. The system should give government the capability that when the recruitment process is concluded, and even before an offer was made and accepted, certain individuals should be recognised as delinquent and be excluded from the recruitment process. These implementation issues needed to be resolved.

On recoveries and settlements, he agreed that the recoveries should be specifically mentioned.

The Fusion Centre was created as a platform for collaboration between various stakeholders. Regarding civil recoveries, the Fusion Centre records indicated high recoveries amongst the stakeholders. Regarding handing over investigations and prosecutions, the Fusion Centre had to ensure that these steps were carried out and enabled.

Adv Mothibi said that the questions regarding circumstances for settlements regarding criminal process had to be responded to by the NPA.

The SIU was responsible for civil recoveries. For example, in the case of ABB, when SIU had investigated and found irregularities in Eskom, there was a civil recovery process and approximately R1.6 billion was recovered. This was a quantification of the damages committed by ABB during that period. Having quantified the losses suffered by Eskom as a result of ABB irregularities, there was negotiation, and an agreement was reached over the losses suffered. It was agreed that ABB would pay back the money. The contract and agreement had to be made through an order of court, which was a civil litigation process.

The circumstances that led to settlements included the case where the person being litigated against acknowledged the damages and was willing to pay. It was ensured that the state institutions involved agreed to the settlement. In this process, the fact that the entity settled civilly did not exonerate them from criminal prosecution. SIU made recommendations for criminal prosecutions and investigations. In the case of criminal investigations, he was certain that NPA had their own processes. The circumstances in the civil litigation and criminal prosecution cases are different. In the civil litigation space, if there was no agreement between the SIU and the entity to pay the damages, the matter was taken to the Special Tribunal.

Adv Mothibi agreed that there were inconsistencies across outcomes of disciplinaries, where acts of corruption were the same or similar. What could be done about this? These inconsistencies had to be noted, any legislative implications had to be identified, and appropriate recommendations had to be made. For example, there were different sentences for similar criminal acts in criminal cases. Was there a way for the judiciary to be engaged to ensure that sentencing was consistent? He agreed that something had to be done about the inconsistencies.

He agreed with the Indian model. As part of the blacklisting process, it was important to ensure that the system remove delinquent, blacklisted, or dismissed employees or companies when wanting to do business with the state.

Ms Mokholo acknowledged the need for details regarding the recoveries. She clarified that the joint system had not been abandoned. A lot of work had gone into the system, and it would carry over into developing an integrated system.

Minister Ntshavheni responded to the concern that NPA only settled with white-owned and multi-national companies and did not want to settle with black-owned companies and Small, Medium and Micro Enterprises (SMMEs). She had engaged with the Minister of Justice, and any company that wanted to settle with NPA could approach NPA directly and co-pay the Minister of Justice if they felt that the case would not be treated fairly. Given that ABB matter was being challenged in court, NPA was considering publishing the guidelines used to consider settlements. If these guidelines are published, it would go a long way in creating consistency. This lack of consistency was brought up before. If companies wanted to settle, they had to approach the NPA directly and allow the NPA time and space to consider the case.

She responded to the question of inconsistent sentencing. For example, an individual could be involved in a cash-in-transit heist, get R2000, R5000 or R10 000 bail, or a R30 000 fine, and be free within an hour. How must the minimum and maximum sentencing and application be dealt with as part of the integrated justice system? The Department of Justice and Constitutional Development were currently working on amendment bills that were submitted to Parliament to deal with the legislation. This would allow for interventions instead of penalties. Part of the Public Service modernisation initiative includes not only prescribing what is minimum and maximum. For example, in one of the SIU cases referred to a department, as it was a first-time offender, the offender had to be taken for counselling, despite the size of the offence. The sentencing should be weighted according to the significance of the proclamation. Guidelines must be given to the chairpersons of the disciplinary committees.

Mr S Somyo (ANC) said that when the SIU process started, there was no matrix, no way of following proclamations and investigations, and no guidelines to follow in the decision-making process. The Committee raised these issues, resulting in the Presidency establishing the current system. Focus was now shifting to the quality of the matrix. In the executive directives, one would find that there was resistance to the SIU. In some instances, people chose to make use of other investigators and these private investigators also lacked in terms of enforcement of recommendations.

He highlighted the issue of consistency. For example, in one department there were issues emanating from the Auditor-General’s report for potential loss of R5.2 billion and then some individuals paid approximately R2000 and were re-employed. This process gave rise to doubt regarding the usefulness of the instrument. How should such available instruments and outcomes of the SIU be consolidated? It would become a problem if several instruments gave rise to shaky outcomes. Such acts might circumvent some critical areas. The quality of these systems was important to deepen the fight against corruption and instil ethical conduct.

On SIU’s indebted customers, companies were willing to pay private investigators, but when it came to SIU, they were reluctant to pay for work done. In some cases, money was recovered from a department or entity, but they still do not pay SIU for the work. An SIU investigation often looked at a period that had passed rather than the current financial year. When SIU recovered money, it was returned to the department or entity. Why was there no directive that National Treasury receive the money that had been recovered, knowing that the period under investigation had passed, rather than the money being returned to the department or entity concerned? When money was returned to the department or entity, the risk was that the department or entity was receiving an additional amount that was not part of the vote for the current year. This risk became exposure in so far as the availability of the funds could not be accounted for as part of the accountability framework. Why could SIU not receive its fees and payments from the money that had been recovered?

He referred to slide 9, which indicated that the damage was often concentrated in the middle (Middle and senior management). He highlighted an example of the practicality of supply chain management processes: at the entrance gate of any institution, the behaviour of those in the middle management (including what they drive, wear, etc) was clear. What would be done about this kind of scenario? Something had to be done. People often had the perception that corruption was occurring at high levels such as with the director-general, the CEO, etc, whereas in actual fact, it is occurring at the middle level. How could management processes be created to deal with this? The matrix needed to be improved, so that the outcomes could improve.

Ms Mokholo responded that it was a process of what needed to be done. It was an issue of how and when it would be done. The professionalisation of the public service framework would strengthen what had been identified as control gaps in the financial disclosures. Officials were required to provide financial disclosures and declare any gifts received. There were gaps in the controls, but the system should incorporate all of this and work to close the gaps through competency assessments, vetting and screening, lifestyle audits, and a probationary period. The control gaps were noted, and work was being done to address this.

Adv Mothibi responded to the question on outstanding payments to SIU. He confirmed that SIU would pursue the debt that the state institutions owed to SIU. SIU took a dim view of write-offs. There were instances where Finance Ministers would indicate a debt that had been on the record for an extended period. If all the necessary steps had been taken without a payment being received and it seemed as if payment would not be received, there had to be a consideration of writing off the debt. There were instances where departments, state institutions, and municipalities said that they would not pay as they had not initiated the investigation. Most of the instances where payment was not received were due to this. In the municipal space, the ability to pay and the funds available were constrained. Most unpaid debts were found in the municipal sphere. The funding model needed to be reviewed. As part of the legislative amendments that would be taken through, the issue of the funding model had to be addressed. SIU had engaged with the Department of Justice and National Treasury so that appropriate provisions could be included in the legislation. 

On whether a directive could be made that the recovered funds be paid back to National Treasury, he said it was a point for further engagement. SIU would welcome this. Further, SIU welcomed that if this was the case, Treasury could deduct SIU’s fees or payment from the recovered funds.

On questions regarding slide 9 of the presentation, he acknowledged that the Committee played a key role in the establishment of the current mechanism. It was becoming clear that state institutions would be monitored in terms of how they implement referrals. Regarding disciplinary actions, those who resigned before the disciplinary processes were concluded or implemented, were sometimes not captured in the data. A check was necessary to pick up on trends on those who resigned before the disciplinary process was concluded. If this data was included would the information on where the damage was change? Including this data would also allow for a more comprehensive understanding of the information presented.

On investigating companies, SIU was on record, acknowledging that state institutions often defaulted to appointing private forensic investigators. SIU was as capable as private investigators, and state institutions should bring matters of forensic investigations to the SIU. When SIU was called in to investigate, and private investigators had already investigated, SIU found that the reports were not conclusive and that further investigations were required. The SIU was able to see matters from beginning to end, from investigation to recoveries, and to recommend further actions. State institutions should see value in using the SIU, but for this to happen, the SIU needs to show results. This would encourage accounting authorities to refer investigations to the SIU.

Minister Ntshavheni thanked Mr Somyo for acknowledging the progress made in the current system and reiterated the continuous drive to improve the system. Part of the issue was that there were “serial resigners”, who resigned for the same or similar reasons from various jobs but were never charged as they resigned as soon as they were notified of an investigation against them and therefore never identified as guilty or not. There were some instances where employers delayed hearings until the employee had the opportunity to resign.

The Committee needed to consider inviting National Treasury to ask why Treasury could not deduct the debt owed to the SIU from the money recovered. The issue of non-payments to SIU was not SIU’s problem alone. Municipalities and SMMEs struggled to make payments. SMMEs had an issue where government failed to pay SMMEs. Where SMMEs were meant to be paid by government within 30 days, often as the 30 days were about to expire, an invoice would be queried to extend the 30-day period. SCOPA should consider making this recommendation to National Treasury to address these challenges.

The Chairperson said the Committee would consider the various options available for SIU funding. He noted the proposal that the recoveries should be directed to the National Revenue Fund. He acknowledged the Minister’s suggestion and indicated that the Committee would include it in its recommendations. The SIU funding model had to be relooked at.

Ms A Beukes (ANC) asked about the impact of the Special Tribunal. She referred to the meeting of 13 June 2023, where the Presidency reported that they were in the process of issuing follow-ups to some of the departments and organs of state who did not respond to the reports. What was the status of this? If the reports were issued to them, what was the turnaround time attached? Are there any mechanisms to follow up on this?

Some reports were dated back to 2001-2002. She noted that this would be one of the Committee’s last engagements with the Presidency and SIU on this matter, and it was important to resolve matters. Are there still outstanding reports from this time? What were the challenges in concluding these reports and investigations?

There were some departments that appointed service providers to provide an explanation for why they should not be blacklisted. This was a duplication because there were already reports from the SIU. Was this addressed? Doing this incurred extra costs and allowed departments to delay the process. Were there specific departments or organs of state who were guilty of this?

Slide 5 talked of “completed prior to 6th administration” and the description stated, “investigations completed prior to 2019. The Presidency is investigating the status of the implementation of the recommendations”. During the presentation, it was indicated that the matter was being followed up on. She felt that this was too broad. Specifics were needed. What measures were being taken and how effective were they?

The Chairperson requested a list of the departments and entities who owed money to SIU, so the Committee could follow up with the departments and entities.

Mr Timm said that responsiveness was being tracked by the implementing agency. 25 entities or departments were highlighted as “oversight pending” which meant that a satisfactory response to indicate that the recommendations had been dealt with, had not been received. The Presidency followed up through letters, phone calls and emails. Sometimes, the challenges faced were administrative, where potentially incorrect contact details were being used. In other cases, there was evidence that the recommendations were not taken seriously, and then the Presidency had to respond in a different way. Each case had a different set of challenges. There was a set parameter of 30 days, in which implementing agencies had to respond to correspondence from the Presidency. He noted that this system had not previously existed but had been developed. The system enabled the Presidency to track progress, such as when correspondence was due and the follow up that had been done. This capability would continue to grow and progress. The cloud-based system that was being developed with the State Information Technology Agency (SITA) and SIU to implement. This system would allow for a much greater benefit, in terms of information and communication technology capabilities. The integration of other systems would enhance the ability to focus on getting results. An ecosystem of systems was needed to be able to ask more questions. For example, if an individual was identified for a lifestyle audit, it could be cross-referenced against different data sets.

On specific offenders, he said the Presidency did track organisations that were non-responsive in terms of prioritisation. For example, organs of state that were subject to a number of recommendations were prioritised.

The Chairperson emphasised the importance of specificity.

Minister Ntshavheni felt that Mr Timm’s response was not satisfactory to the Committee. She reiterated the question regarding cases from 2001-02. The presentation was very clear about cases since 2018, but progress on cases from before the sixth administration was unclear. Were the entities responsive or not. Progress was being requested on the cases that had been ongoing for several years.

Mr Timm offered to send the data available but was unsure if he was ready to present it without proper preparation. He offered to submit a written report to the Committee on the matter.

The Chairperson said a written report could be sent. Ms Beukes had been asking for specificity regarding the stumbling block and who the serial offenders were. He considered it to be a dereliction of duty of the accounting officer, not to act even when reminded by the Presidency. These investigations had to be taken as far as possible, for example, to the Auditor-General, and placing the burden of responsibility on an individual. If the SIU investigations were not taken to this extent and were not acted upon, they became wasteful and fruitless expenditure. The fact that there were still open investigations from 2001 was concerning. Was progress being made with the backlog? He was concerned that the matter would be dealt with on an ad hoc basis.

Ms Mokholo said the level and executive services unit processed all the reports. The reason it had been centralised in the Legal Services Unit was that this was the unit that worked on the Presidential minutes once the proclamation came from the Department of Justice. The unit formed part of the structure working on the system. Mr Timm had indicated the follow-up mechanisms used by the Presidency and when these mechanisms yielded no results, the matter was escalated. Mr Timm had referenced the escalation process.

The Minister said that the DDG, Ms Mokholo, was responsible.

The Chairperson said the written report should be shared with the Committee by the close of business on 28 February. The Committee would include it its legacy report.

The Chairperson asked if the Fusion Centre was functional and if meetings were occurring. He was concerned about the Fusion Centre.

He referred to the centralised unit and municipal systems. Was integration taking place? There had been a case where a Chief Financial Officer (CFO) had left the municipal demarcation board and had resurfaced as the CFO of correctional services. A Section 139 administrator had a disciplinary matter previously at the municipality but was re-employed as an administrator. There was a need for wide integration in government departments and other entities. A system being used in the Eastern Cape was very progressive in terms of integration. He suggested that it be useful to consider this system.

On vetting, he requested a progress report on the status of this process. The Committee met with entities like the Road Accident Fund and learned that no one had been vetted. Entities who meet with the Committee tended to indicate that they had completed their portion of the vetting process but that the process had not been concluded.

He noted that a pilot project was being run and was currently in its third phase. He requested a comprehensive report on this phase and indicated that the report on Phase Two had been very elaborate.

Ms Mokholo responded to the concerns regarding system integration at the municipal level. She stated that slide three showed an analysis of the proclamations at the municipal level. The system would enable a breakdown of this information into specific details and allow for greater integration.

Ms Mokholo said an update on Phase Three would be provided.

On vetting, she responded that due to the backlog, authority had been given to the departments to establish in-house vetting teams and processes. This would assist the external vetting system and ensure that the system was not overwhelmed. The blame could not be placed on the Presidency. The Committee should ask the departments what they had done to aid the vetting progress.

The Chairperson referred to the R3.35 billion recoveries. What were the estimated potential recoveries? How did the R3.35 billion compare to the estimated potential recoveries?

Adv Mothibi said the Fusion Centre was functional and met regularly. The bulk of the work of the Fusion Centre revolved around PPE investigations. Currently, the Fusion Centre is tracking, monitoring, and reporting on the progress of the investigation and the outcome of the cases that have been on the system at the Fusion Centre. The report was available. The Fusion Centre’s focus was on monitoring the outcomes of investigations.

Regarding the total potential recoveries, there were matters in the High Court and Special Tribunal, which, combined, worked out to approximately R123-4 billion. This was based on the value of contracts. Following this, the courts would decide on actual orders for recoveries. The R3.35 billion did appear small when compared to this total contract value. He reiterated that there were cases in the High Court and Special Tribunal where recoveries were to be made and should be sped up.

Minister Ntshavheni said the integration of systems would not only be to Local Government, but also to other government entities. To Local Government, the Public Service Management Bill would be considered by the National Assembly. This would allow integration across Local Government. If there were delays, the Presidency would work on a transitional mechanism.

An update on the vetting process will be sent to the Committee. In the cases where entities indicated that they had been waiting for the State Security Agency (SSA) to complete the vetting – this was not the case. Employees and officials were not submitting the required financial statements, and officials were hopeful that they could submit financial statements that would create a positive image by delaying the process. SSA should not carry the burden of collecting statements that were not provided. The current policy states that if critical information was not submitted, SSA would decline the security clearance for incomplete submission. 

Ms Mente reiterated the request for the list of dismissed and blacklisted employees.

Closing Remarks
The Chairperson thanked the Minister for her attendance. This was indicative of the seriousness of the matter at hand. The Chairperson thanked the SIU and commended them for the work that they have done. The work of SIU continued to be a source of hope and was an inspiration to other law enforcement agencies within the system. He commended SIU’s strides against corruption and the dedication SIU had demonstrated in their work. He expressed appreciation for the support SIU provided to the Committee. He thanked the DDG and the delegation from the Presidency for their work. He commended the Presidency on their work towards oversight and accountability.

The Chairperson reminded the Presidency that the requested reports and updates should be submitted by end of business on Wednesday, 28 February.

Minister’s concluding remarks
Minister Ntshavheni thanked the Committee for their cooperation and guidance. She acknowledged that it had not been an easy process, but that great progress had been made in fighting corruption at all levels. She expressed that the work in the Committee was work for the country, not work for a political party. Great progress could be made when everyone worked together toward a mutual goal.

The meeting was adjourned.

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