National Commissioner’s briefing on personnel in Department of Correctional Services

Meeting report

Chairperson’s opening remarks
The Chairperson began the meeting with the announcement of apologies. He noted that the Minister of Correctional Services was due to attend, but had apologised for his inability to attend as he had not been well.  He welcomed the National Commissioner, Mr Vernon Petersen.

The Chairperson noted that this meeting was called to discuss concerns about instability in the Department of Correctional Services (DCS). This instability had arisen as a result of the suspension or resignation of senior personnel from the DCS. Firstly, in June 2008, the Chief Financial Officer (CFO) had resigned after tendering only 24 hours notice. She had been recruited by senior Ministers in government, and she had resigned on the eve of the budget vote. The Annual Report of the Department had seemed to indicate that there had been a vast improvement in the financial management of the Department. Secondly, two Regional Commissioners had been suspended three weeks previously. The Committee needed to understand the circumstances and what was happening in the DCS. Furthermore, the Regional Commissioner of KwaZulu-Natal had also resigned two weeks previously, which had exacerbated concerns that there could be something wrong in the Department. Quite apart from these senior personnel, many others were leaving, and the reasons for the exodus must be interrogated. There were disturbing press reports, and although the Committee would not deal with these, it would raise any matters that caused concern. These were not junior employees in the Department and there were many other people who were leaving. Hundreds of people were leaving the Department. The Chairperson as well as the Committee wanted to understand what was going on in the Department to cause this exodus, especially where senior staff were concerned.

Briefing by the National Commissioner of the DCS
Comm Vernon Petersen, National Commissioner, DCS, noted that he would brief the Committee. He regretted the absence of the Minister, who was the Executive authority, as he would find it difficult to be the only one to reflect upon what had happened.

Comm Petersen noted that any movement in Executive Management positions in any organisation could raise eyebrows. However, the question whether that could be construed as an indication of instability within the Department was debatable. He was not saying this out of defensiveness, but for the sake of Senior Managers, many of whom were working under difficult circumstances and yet continued to render work of exceptional quality. In this regard, he submitted that the Department was operating optimally, though this was not on the same level as the previous year. This was by reason of the fact that the Department had been focused on Executive Leadership Training of senior managers at the Wits University Business School, which had involved taking them out of the Department and therefore in a way impacting on the work.

The issue of senior managers leaving the Department was of concern. But, he wished to clarify a misperception as to the Department’s staff turnover rate, He pointed out that, contrary to perceptions; the staff turn-over rate was not very high when compared to other Departments. Statistics showed that staff in the DSC retained their jobs for longer than other Departments, which in itself could be seen as needing to be monitored, because of the danger of corruption and the possibility that ideas would become stagnated because of the absence of organisational renewal.

Comm Petersen reported briefly on the circumstances surrounding the resignation of the Department’s CFO. On her appointment, for the first time, DCS had the benefit of an experienced Chartered Accountant who came with particular strengths, especially in the area of auditing, and her departure had indeed been a serious loss. She had provided a renewing perspective to the organisation in terms of questioning its systems and operations, and ensuring that the DCS was led out of its history of sustained negative audit findings. He had conducted an exit interview with the CFO. The nature of these interviews was confidential, and he was disinclined to share that information, lest this not honour that confidentiality. He would not, therefore, inform the Committee as to her stated reasons for leaving the organisation. She had still been on probation, but nonetheless found it expedient to leave before the confirmation of her employment, as she would, once confirmed, have been required to serve a longer notice period. On the basis of what she had told him, he had decided to consult with the Accountant-General and the Chairperson of the Audit Committee on a different way of dealing with the appointment of CFOs into the Department. It had been decided after these consultations that the position of CFO should be outsourced. This was not something new in the public service. National Treasury had confirmed that there were other Departments that had recently outsourced this function. This process of outsourcing was currently under way. Since then, other members of the financial branch had since been transferred to other components.  Other actions that he had taken in respect of the Finance branch included the appointment of an Acting CFO.

One of the issues that had frustrated the CFO had been an investigation by the Special Investigating Unit (SIU) into some of the Department’s procurement processes. Whilst the SIU had not given its final report, a preliminary report was made available in the first week of September. Concerns had been expressed in previous Committee meetings around the number of contracts within the DCS. Some of these currently formed the subject of investigations by the SIU.  Apart from allegations of fraud, it seemed that some of the more recent procurement procedures had been implemented without proper budgeting, planning, or feasibility studies that would determine their sustainability. A particular example was the nutrition contract. This gave rise to a number of unforeseen and unintended consequences relating to the own-production of farm products. There had been no account taken of how this contract would impact upon the DCS’s farming activities or the number of meaningful activities that inmates should be involved in. More specifically, no proper costing had been undertaken prior to embarking upon the contract. No feasibility studies had been done on whether there would be value for money, whether it was better to outsource or retain the function in the Department, whether risk could be transferred to an outside service provider, and whether it was affordable. He could quite understand that the impact of this could be a nightmare for any CFO. 

Comm Petersen said that there were also issues around the procurement of television sets for correctional centres as part of advancing rehabilitation outcomes. When the Department had come before the Committee on the issue of inmate privileges, they had reflected on the value of televisions. The Committee had raised concerns about this and asked the Department to ensure that the televisions were indeed to be used only for rehabilitation outcomes, and not primarily as a source of entertainment. This initiative had also suffered from poor planning and budgeting. This too had frustrated the former CFO. Because of poor budgeting, the DCS was left with an outstanding amount owing to the service providers, which had had to be found from other areas. The Department had been faced with a debt of R48 million both for the maintenance part and for the portion owing to the service provider. About R30 million of this had been paid thus far.

There were other areas such as the outsourcing of control rooms, where the Department was struggling financially. There was a need to distinguish between the value of some innovations which clearly had taken the organisation forward, and the enthusiasm with which DCS had tried to achieve some of the matters raised in the White Paper, but which may have led to shortcuts that later came back to haunt the Department.

Comm Petersen said that the problem mainly lay in trying to operate in an environment of mismanagement that had been created by others. This was a challenge. He was not saying that the CFO had resigned because she found the environment challenging, but there were a number of contributing factors to the difficulties.

Comm Petersen noted that the more recent resignation of the Regional Commissioner of KwaZulu Natal was unfortunate in its timing, thereby adding to the perception that things were not in order. This Regional Commissioner had left for reasons that were personal and not related to any other issues in the Department.

In respect of the other suspensions of the other two Regional Commissioner, it was very difficult to comment on processes that were still underway. There were disciplinary processes pending, and there could even be legal processes emanating from the suspensions. He could not deal with matters that were still sub judice in investigations or court processes. He could, however, confirm that there was an investigation under way in respect of the Regional Commissioner for Limpopo, Mpumalanga and the Northwest. Certain allegations were based on the interim report received from the SIU. In respect of the Regional Commissioner for Free State and Northern Cape, who had also been suspended on 10 September, he could confirm that the suspension followed a report by Nkonke Forensic Investigators and was related to allegations of serious maladministration and corruption. Findings of misrepresentation and serious maladministration were made not only against the Regional Commissioner, but also other senior managers in the Free State and Northern Cape.

Comm Petersen commented that in the past year there had been heightened activity in the work of the DCS, sometimes as a result of this Committee’s work. He had a difficult role but he could not shy away from his responsibilities as Accounting Officer, irrespective of the cost to even his own security and well-being, particularly where the cases involved people who would fight back. The Committee might be aware of some strange circumstances, including anonymous e-mails that had been circulated in the Department, making allegations against himself that were very painful to himself and his immediate family. Nonetheless, he had a policy not to take anonymous e-mails and cellphone text messages seriously, since they could never be tested against a person putting a name to them. The Committee had to be aware that in dealing with matters of this nature, the first victim was the truth. There had been a proliferation of rumours and different interpretations of events, until it was difficult to know what to believe. This was simply a deliberate ploy by those who had something to hide by causing confusion. 

However, he wanted to assure the Committee that although there were indeed some people who did not want to face up to the costs of their behaviour, there were many people of integrity working in the DCS, despite working in an environment that brought them in contact with the worst in society.

He said that there was a need to institutionalise some of the recommendations made. There was a need for fraud-prevention committees and strategies that would continue to deliver integrity. The Department had an unfortunate history of being investigated, from as far back as 1997, when there had been an investigation by the Public Service Commission into HR practices that made findings of nepotism and other irregularities. A further investigation compiled a list of allegations for the Department to investigate and take up. Then the Jali Commission had investigated issues of procurement, treatment of inmates, dishonest practices and non-adherence to policy. The South African Police Service (SAPS) had prioritised DCS issues of corruption, national procurement and medical aid fraud. There were also a few other bodies that were looking into issues of corruption, such as forensic consultants working with the University of Pretoria. More recently, there had been a second extension of the SIU contract effective from March 2007, and the Nkonke Forensic Investigation. There was a tendency that several successive investigations would come up with the same findings. The pertinent and legitimate question was therefore whether the findings were taken seriously. He said that he had observed that indeed this was taken seriously, especially during his own tenureship.  Some of these positive practices must institutionalised, because it was not in the interest of government or South African people or the Department for the DCS to have such a negative image. He wanted to dispel any perception that there was disorderliness in the DCS.

The Commissioner noted that one of the first actions he had taken was to take action against six officials after ‘Special Assignment’ showed that DCS staff received bribes and had smuggled drugs and alcohol into the correctional centres. He had personally undertaken to summon the workers concerned and confronted them with two options, to resign immediately or to have their employment terminated forthwith, regardless of what was stated in legislation. Their actions had been captured clearly on film and the Department had indisputable proof. Therefore, three had resigned and three were immediately fired. This was done to send a clear message to deter any would-be offenders. There could be no laxity when confronted with such blatant corruption.

There were also many other examples where the Department had been compelled to take action. The Department continued in its dedication to detect and combat fraud and corruption within the Department through a specialised unit. It also took pride in the existence of an anti-corruption policy, and more recently had finalised a fraud-prevention plan and the appointment of a fraud-prevention committee. These were initiatives that ensured that the Department was no longer just reactive to situations but would build up integrity. The fraud prevention committee had been evaluating the impact of organised crime within the organisation, and proposed to accelerate an anti-gang strategy that would be implemented in correctional facilities.

Letter from the Minister
The Chairperson announced that a letter had just been received from the Minister. He read it out to the Committee. This letter acknowledged the receipt of the invitation by the Committee to attend a briefing by the Department on this day. The Minister had stated that: “Regarding the instability within the Department, I must submit that it is not an oversight matter for the Portfolio Committee.” The letter also stated that the Minister had discussed the matter with the party chief and the Leader of Government Business, and they would in due course provide feedback to the Committee.

The Chairperson reminded Members that initially he had received a letter apologising for the absence of the Minister on the basis that he was sick. Now he had received this second letter had been received stating that this matter was not within the Portfolio Committee’s competency. The Chairperson felt insulted by the letter, considering that the Portfolio Committee was responsible for approving the Department’s budget. If there was something wrong in the Department, the Committee had every right to question it.

Ms M Ngwenya (ANC) suggested that it would be difficult to deal with certain things in the absence of other parties. She proposed that ANC members should discuss the letter before they came out with a response, considering the seriousness of the matter.

The Chairperson accepted her proposal, and suggested that political parties could discuss this matter in their study groups.

Mr M Rafeek (DA) responded to the Minister’s letter. He expressed his concerns and articulated his sentiments that Parliament and the people of the Republic mandated this Committee. The Department, as a State entity, relied on taxpayers’ money for its functioning, and the Minister himself was paid from those same funds. The Committee deserved to get answers. It was, in his view, highly deplorable and regrettable that a person of the Minister’s standing, who was mandated with such a high responsibility and office, could be treating the Committee with such disdain. The Committee had a responsibility to perform oversight over the DCS, and there was nothing in that Department that should be kept secret from the Committee. Every activity of the DCS fell within the area of the Committee’s concern, could be investigated by the Committee and could be questioned, including the issue of resignations. This letter was unfortunate and he condemned it in the strongest terms, considering it to be an insult to the members of the Committee.

Ms L Chikunga (ANC) thanked the National Commissioner for the information he had provided. She asked whether the outsourcing of the function of the CFO, based on the exit interview with the former CFO, had been the only option and if it was the best thing for the DCS.

Mr S Mahote (ANC) commented that there was always a problem when there were pending investigations. He asked if the SIU were on contract to the DCS.

Mr Petersen responded that the SIU worked on the basis of a contract. The first contract had been signed in March 2002 up to 2005, and the former Commissioner had then extended the contract and the terms of reference.

Mr Rafeek thanked the Commissioner for his tenacity and dedication in working under such difficult circumstances and for his efforts to turn-around this critical Department. He assured him that his efforts were not going unnoticed by the DA, as well as the Committee as a whole. He asked if there was there a long-term plan to deal, operationally and strategically, with the vacuum arising from the staff exit, considering that their mitigating measures had a short-term effect. He too asked if outsourcing was the only plan that the Department had, or whether it was considering anything else. He also asked if the Department had initiated an investigation into the anonymous text messages and e-mails.
 
Comm Petersen responded that the DCS was a labour intensive organisation, and good models were required to do costing and projections. Expert advice was required. The outsourcing contract would remain open to evaluation.

Regarding the investigation of the anonymously sent e-mails and cell-phone text messages, a request had been made to the NIA to address it, and the messages had also been reported to the SAPS.

Mr L Tolo (ANC) expressed his concern about the amount of money being spent on television sets. It was not right for criminals to be provided with the luxury of TV sets when DCS employees were complaining of low wages. This could send the wrong message about prison life, as providing TV and other luxuries amounted to an incentive for people to go into prison.  He asked what kind of message could be sent to communities and society as whole to make them understand that the TV in prison was intended only for rehabilitation and not entertainment.

Mr Petersen admitted that the Department may not have seriously addressed how to communicate messages to citizens, particularly young people, since previous communication strategies were focused on showing improvements within the DCS. The communication function had been approached in an ad hoc way under the pressure to show what government was doing, as opposed to focusing on grounded realities. This communication stance had to be taken seriously.

Mr M Cele (ANC) asked who had approved and authorised the acquisition of TV sets and what action that had been taken if this had not been budgeted for. He further asked whether there were plans for junior staff to receive training, since the Committee had only been informed about the training of the senior management.

Comm Petersen responded that some of the decisions had been taken prior to his becoming Accounting Officer. He submitted that he was uneasy to speak in the absence of the Minister, who would have helped to answer some of the questions that had been raised.  On the outsourcing of the CFO, there were a number of considerations and consultations had been made with the Accountant-General and the Chairperson of the DCS Audit Committee. It was difficult to obtain a qualified Chartered Accountant with the appropriate level of skills and experience to successfully steer the organisation out of its financial difficulties. There were limitations in the market in relation to the availability of suitably qualified and experienced individuals. In regard to the training, he said that in the past Executive leadership training had been given less priority than junior and middle-level training, which had created a need to prioritise this training now.

Comm Petersen commented again on the issue of inmate privileges, and correctional and development work. He said that the State, once people were imprisoned, had an obligation to ensure that certain basic rights were respected. Although the poverty in SA accentuated some of these issues, privileges were nonetheless an important part of their treatment processes.

Comm Petersen responded, in respect of the budgeting process for the TVs, that the maintenance portion and outstanding payments to service providers were unexpected, as a result of poor budgeting. As the Accounting Officer he had taken a decision to find monies to offset these unplanned costs. Some of his decisions had to find the most expedient way to deal with exigent expenses, under the constraints of a tight budget and following a history of financial mismanagement.

Ms Ngwenya followed up on the issue of poor planning in terms of contracts. She asked how he was accounting for the money that had been used on the basis of improper planning. She asked what had been causing the Department to keep extending the procurement contracts. She asked when the Committee would be provided with a report on these procurement contracts.

Comm Petersen responded that a report would be provided on the investigation of process regarding the nutrition contract.

The Chairperson cited a R32 million contract that had been awarded to a certain company following a tender for the provision of security gates and access control equipment. When this matter had been investigated, it had turned out that the company address was an empty house in Johannesburg. This was a clear case of corruption.

He also commented that the money for the acquisition of television sets may have been re-channelled from a project to build four prisons. At a previous meeting the Committee had questioned the building of those four prisons, but had been told that the money had been used to buy television sets. He was concerned about the lack of budgeting for specific projects, with the money then being used for something different. He suspected that such diversion of funds could be abused by corrupt officials who sought to enrich themselves under the guise that the money was serving a good purpose.

Ms S Rajbally (MF) asked about conditions in prison. She noted that these had been deplorable, and wanted to know what improvements had been made to ensure that essential toilet facilities, for instance, had been made available.

The Chairperson commented that the problem was that there were people who were busy plotting ways of making money instead of improving prisoners’ lives.

He raised concern over the long outstanding overhaul of the security situation at Johannesburg Prison.

Comm Petersen undertook to prioritise this matter in the near future and indicated that it was a matter that he too believed did require urgent attention.

The Chairperson concluded by remarking on the need for a closed meeting to hear the report from the SIU. He encouraged the Commissioner not to feel intimated and assured him of the Committees fullest support.

The meeting was adjourned.