Questions and Replies

Reply:

(1) (a) (i) and (ii) The Department of Public Works has a total of 9653 land parcels across the 9 Provinces of the country that are vacant and currently not in use.

(b) (i) and (ii) Specific property details for each of the 9653 properties are captured in the departments’ Immovable Asset Register (IAR).

(2) (a) The number of immovable assets leased out for private use is approximately 1 060. The number is not static due to the expiry of leases, as well as renewals and new leases.

(b) (i) and (ii) (aa) and (bb) Please refer to the attached Annexure A in order to see the number of properties leased out, the annual cost and income derived from these properties.

 

Information in respect the Four Public Entities reporting to the Minister of Public Works

Agrément South Africa (ASA)

1. (a) (i) and (ii) Does not own any land

(b) (i) and (ii) Falls away.

(2) (a) and (b) (i) and (ii) (aa) and (bb) Not applicable.

Council for the Built Environment (CBE)

(1) (a) (i) and (ii) Does not own any land.

(b) (i) and (ii) Falls away.

(2) (a) and (b) (i) and (ii) (aa) and (bb) Not applicable.

Construction Industry Development Board

(1) (a) (i) and (ii) Does not own any land.

(b) (i) and (ii) Falls away.

(2) (a) and (b) (i) and (ii) (aa) and (bb) Not applicable.

Independent Development Trust (IDT)

(1) (a) (i) and (ii) Does not own any land.

(b) (i) and (ii) Falls away.

(2) (a) and (b) (i) and (ii) (aa) and (bb) Not applicable.

Reply:

(1) (a) The property in the Bloubergstrand area has been requested and earmarked for human settlements by the Housing Development Agency.

(b) The property is an unregistered portion of Erf 268, Blaauwbergstrand, known as Erf 1117, Blaauwbergstrand. Erf 268 and Erf 1117 share the title deed number: T1606/1953.1117

(c) The property measures 277.6009 Hectares in extent.

(2) No, the property is not required for restitution purposes. As indicated in (1) above, the property has been requested by the Housing Development Agency for human settlement purposes.

(3) Yes, the Department of Public Works has got other properties designated to be released for purposes of land reform.

(a) and (b) See attached hereto the list (Annexure A) with names of each property and extent.

Reply:

According to the information received from Eskom

(a)

Eskom Group, which includes Eskom Rotek Industries (ERI), as at the end of September 2018 had a headcount of 47 972.

(b)

Annexure A provides each person’s position.

Reply:

According to the information received from Eskom

(1)(b) Eskom has never had a contract with Bosasa (now known as Africa Global Operations) for the period in question.

(2) Due to Eskom not having a contract with said company no verification is

Reply:

(1) (a) (i) From 2014 to 2018

(b) the companies are, namely: Technology Corporate Management; Nambithi Technologies; EOH Mthombo; Odirile IT Holdings; Business Connexion; State Information Technology Agency; and Vodacom.

(c) Technology Corporate Management = R19 990 876.57

Nambithi Technologies = R13 626 624.77

EOH Mthombo = R12 131 776.84

Odirile IT Holdings = R20 459 128.48

Business Connexion = R127 418 715.24

State Information Technology Agency = R9 089 726.36

Vodacom = R5 539 284.36

(d) IT systems that were upgrade are as follows:

Name of the System	Service	Company	Value
1. Backup Infrastructure	Backup and recovery solution (2014-2017)	Technology Corporate Management	R19 990 876.57
2. Server Infrastructure	Regional servers (2014-17)	Nambithi Technologies	R13 626 624.77
	V-Block replacement @ SITA (2017-18)	Odirile IT Holdings	R12 642 360.34
3.Data centres Infrastructure	Uninterrupted power supply and cooling (Head Office and Regions) (2017-18)	EOH Mthombo	R12 131 776.84
		Odirile IT Holdings	R7 816 768.14
4. Network and Audio-visual Infrastructure	Procurement, installation and care pack service for the network equipment (2014)	Business Connexion	R127 418 715.24
	Virtual Private Network (VPN) upgrade (2018)	State Information Technology Agency (per annum)	R9 089 726.36
	Unified Communications (least cost routing and other related services): National Treasury Contract RT15 (2018)	Vodacom (per annum)	R5 539 284.36
	Access Point Network Solution (User Mobile Data Services): National Treasury Contract RT15 (2018)	Vodacom per annum – Paid per utilisation @ R0,1550 /MB	R325 560.00

(2) (a) (i)

State Information Technology Agency

Vodacom (Unified Communications (least cost routing and other related services): National Treasury Contract RT15)

Vodacom (Access Point Network Solution (User Mobile Data Services): National Treasury Contract RT15)

(b) (i)

State Information Technology Agency = R9 089 726.36 (per annum)

Vodacom (Vodacom (Unified Communications (least cost routing and other related services): National Treasury Contract RT15) = R5 539 284.36 (per annum)

Vodacom (Access Point Network Solution (User Mobile Data Services): National Treasury Contract RT15) = R325 560.00 (per annum)

Information pertaining to Public Entities reporting to the Minister of Public Works

Agrément South Africa (ASA)

(1)(a)(ii) Not applicable

Thus (b)(c)(d) as well as (2)(a)(ii) and (b) fall away.

Council for the Built Environment (CBE)

(1) (a) (ii) Last Upgrade Date	(1) (b) Service Provider	(1) (c) Contract Value	(1) (d) Details of the Upgraded Service	Contract Period	Service Type	Maintenance (2)(a)(ii)(b)
September 2017	Data Centrix	R573 189.00	2 X Servers – HPE DL 380’s , supply and Setup for Virtual Environment	Once-Off	Infrastructure	N/A
April 2017	E-Novative Technologies Africa	R1 053 538.00	Network and Telephone Setup New Offices, supply of Cisco Equipment, Wifi and Cabling	Once-Off	Infrastructure	N/A
1. September 2017 2. October 2018	Sage Computers Technologies	1. R281 786.00 2. R263 580.00	Laptop Refresh	Once-Off	Infrastructure	3yrs Warranty OEM (Original Equipment Manufacturer)
May 2018	IEE (Intelligence Everywhere Enterprise)	R498 000.00	Disaster Recovery as-a-service (DRAAS) - the service procured includes (Hardware, Server Space, Disaster Recovery Team, Monitoring, Backup, Replication and 10 Seats Office Space, Support and Maintenance)	12 Months (Mar 2018 –Mar 2019)	Infrastructure	Included in the contract
Feb 2018	E-Novative Technologies Africa	R299 221.00	Firewall Security Service – Security as-a-service = 24/7/365 Supply, Implement, Support and Maintenance – Fortigate Solution	36 Months ( Feb 2018 – Feb 2021)	Infrastructure - Security	Included in the contract
Nov 2017	Nashua Kopano	R379 612.00	2 X Big Photo Copier/ Printer Rental and 4 x Printers Outright Purchase	24 Months (Nov 2017 – Oct 2019)	Infrastructure	Included in the contract
May 2018	Pulego Communications	R385 000.00	Website and intranet Development, Support and Maintenance	24 Months (March 2018 – March 2020)	IT System	Included in the contract

Construction Industry Development Board (CIDB)

(1)(a)(ii)

The system was upgraded to latest version on the 29th of March 2017.

(b) The company contracted to upgrade the system is nVisionIT as they were awarded a contract to maintain and support the system.

(c) The total amount of the contract was R656 600.00

(d) The name of the system upgraded is Microsoft Dynamics CRM and it was upgraded to a latest version (2016)

(2)(a)(ii)

The name of the service provider currently responsible for the maintenance of the IT systems is nVisionIT

(b) The total value of the contract is R4 912 110.00 for a period of 12 months.

Independent Development Trust (IDT) conducted several IT systems upgrades outlined as follows:

Wide Area Network Infrastructure upgrade:

The IT core network Infrastructure (Wide Area Network Infrastructure) for the IDT was last updated in March 2015. The name of the company contracted to do the upgrade was Telkom/BCX.

The contract value of the upgrade over three years (2015-2018) was R10 150 358.40.

The company currently doing the maintenance on the system is Telkom/BCX. Telkom provides the band width and maintains the network infrastructure for three years’ contract value.

The IDT also had a Financial Systems upgrade:

The financial systems were last upgraded in December 2013. The name of the company contracted to do the upgrade was Praxis. The contract value of the upgrade was R5 000 000. The IT system upgraded was Great Plains.

The company currently doing the maintenance of the financial system is Sethewo Pty Ltd. The contracted support rate is R 940.00 per hour. This includes support and general bugs fixing. The licence fee for Great Pains is R578 998.38 per annum.

IDT also conducted a Human Resources & Payroll Systems upgrade:

The Human Resources and Payroll systems were last upgraded in July 2017. The name of the company contracted to do the upgrade was Sage VIP. The contract value of the upgrade was R1 153 165.00. The IT System upgraded was Sage 300 Peope. The company currently doing the maintenance of the system is Sage VIP. The contracted support rate is R1 020.00 per hour. This includes support and general bugs fixing. The licence fee for Sage 300 People is R266 964.00.

Reply:

The Department of Public Works has implemented the Public Service Coordinating Bargaining Council (PSCBC) Resolution 1 of 2012, which amended PSCBC Resolution 3 of 2009 regarding the grading of posts on salary levels 9/10 and 11/12.

All the affected employees were identified and consolidated submissions were approved and the affected employees were upgraded accordingly.

Reply:

1. The budget tabled in February provides for a contingency reserve for the three years of the medium term expenditure framework period. The contingency reserve is set aside, but not allocated in advance, to accommodate changes to the economic environment and to meet unforeseeable spending pressures. The contingency reserve for the outer years of the medium term expenditure framework period may also contain funds to effect policy priorities identified in subsequent budget processes which may include support for state-owned companies if the need arises.

In the middle of each fiscal year, the adjustments process provides an opportunity to make permissible revisions to the budget, in response to changes that have affected the planned government spending for that year. The adjusted budget may allocate unused funds, mainly from the contingency reserve, declared unspent funds, provisional allocation for contingencies not assigned to votes and projected underspending to offset additions to spending in form of roll-overs, unforeseeable and unavoidable expenditure, self-financing expenditure as well as any announcements made by the Minister of Finance in the budget speech for which allocations are to be made in the adjustments budget and additional amounts that have been approved for particular types of spending, if that be the case.

2. Yes. The following adjustments were tabled for the 2018/19 financial year:

Adjustments to vote appropriations amount to an increase of R12 063.2 million, of which:

unforeseeable and unavoidable expenditure	R 668.6 million
expenditure earmarked in the 2018 Budget speech for future allocation	R 9 687.9 million
roll-overs	R 258.0 million
self-financing expenditure	R 1 777.5 million
declared unspent funds (reductions to vote allocations)	R-328.8 million

Adjustments to estimates of direct charges against the National Revenue Fund amount to R1 372.7 million more than anticipated at the time of the budget, of which:

debt-service costs National Revenue Fund payments	R 975.0 million R 14.9 million
skills levy and sector education and training authorities	R 382.8 million

The adjustments to vote appropriations (R12.1 billion increase) and estimates of direct charges (R1.4 billion increase) are offset against the R6 billion provisional allocation for contingencies not assigned to votes and R8 billion contingency reserve set aside in the budget. In addition, the revised budget framework makes provision for approximately R2.7 billion in projected underspending at national government level, and R500 million in the local government repayment to the National Revenue Fund. The total estimated adjustments spending for 2018/19 thus decreases by R3.8 billion, from a budgeted R1 512.2 billion to a revised R1 508.4 billion.

The 2018 Adjusted Estimates of National Expenditure publication can be consulted for further information on each of the above adjustments.

3. (a) Over the 2019 MTEF R27billion has been set aside for the contingency reserve as follows

• 2019/20: R7 billion
• 2020/21: R8 billion
• 2021/22: R12 billion

b) The contingency reserve is part of the main budget fiscal framework

Reply:

This information is being individually sourced from the 50 Technical and Vocational Education and Training (TVET) colleges as they are separate juristic entities and given that colleges will be closing for the festive season, the Department will be able to provide this information on or before 31 January 2019.

Reply:

1. (a) Department

Contracted the service of Bosasa (African Global Operations) since 2008?

The Department of Tourism since its existence (01 April 2010) has never contracted the services of Bosasa (African Global Operations).

(i) – (v) Not applicable.

2.(a) Was there any irregular spending related to the contracts or condoned in each case? – Not applicable

 

(1)(b) South African Tourism

South African Tourism has not contracted Bosasa (African Global Operations) for any services for the period in question nor during any period earlier.

(i) – (v) Not applicable

(2)(b) Was there any irregular spending related to the contracts or condoned in each case?

Not applicable

 

Reply:

a)  National Treasury submitted the draft reports to PRASA on 25 April 2017. The PRASA Board requested time to consider the reports until 31 October 2017. The National Treasury was informed that PRASA had discovered additional documentation that must also be subjected to investigation. However, feedback is still awaited from PRASA on the draft reports that were submitted during April 2017.

b)  The total amount spent on the 13 companies was R24 174 529.

Reply:

1 a) Yes, SARS replaced Oracle with BBD through a deviation process;

This was due to the fact that Oracle UK initially offered to review the offering against SARS’ requirements. Alternative proposals were put forward, but it quickly became apparent that SARS’ functional needs as agreed with Siebel, far exceeded what Oracle intended to deliver regarding scope, cost and implementation timelines.

b) The replacement was justified as follows:

Extensive discussions were conducted with Oracle in an attempt to rescue the transaction and bring it back in line with SARS’ original understanding, namely that it:

• be a turnkey solution including all required infrastructure, hardware/networks and integrated costs. The contractor would manage, for a fixed price and delivery timeline, the solution “end to end” and guarantee its performance when in production;

• be capped within the cost limit;

• Includes all the functionalities which formed part of Exco’s original understanding.

• Notwithstanding the fact that it was telephonically confirmed to SARS’ representatives by Oracle, Oracle was not willing to provide SARS with an undertaking in line with the above.

c) Accenture – came into SARS through a tender process in 2005 to appoint a strategic partner to assist SARS with the Modernisation Programme

The 2006 SARS records that have been reviewed by the current procurement leadership team reflects that the selection of the three entities (i.e. IBM, Accenture and BB&D) was based on the industry knowledge of the then Strategy, Modernisation and Technology senior staff. In circumstances relating to the replacement of the Oracle transaction BB&D was then chosen from the listed primarily because of price consideration.

2 a) The reason for not inviting competitive bids and instead extending the service providers’ contracts (i.e. Accenture, BB&D and others) was considered to be due to exceptional reasons which mainly centred on the need for natural continuation of the projects where previous work was carried out by the same service providers, thus presenting a clear advantage over competition. SARS wanted to also ensure consistent engagement with the same service providers in order to avoid a risk of information being disclosed to the public as the project was linked to taxpayer and SARS employee’ information.

b) The extensions of both Accenture and BBD were legal and compliant with the relevant legislation and regulations.

c) Accenture was selected through a tender process. BB&D was appointed through a deviation.

Reply:

(a) The current total amount outstanding in terms of rental income for Ministerial residences is R1 214 064.23.

(b) In our analysis of how the Ministers ended up being in arrears, we found that there were a number of systemic flaws. The building up of arrears is largely not through faults of or negligence by the Ministers. It would therefore be unfair to name which Ministers are in arrears, save to mention that the problem is being addressed with the departments concerned.

(c) (i) and (ii) For security reasons we cannot disclose the location and description of each residence with outstanding rental income.

(d) The monthly rental cost for Ministerial residences ranges between R988.90 and R1 200.82.

(e) The challenge with collecting rental income for Ministerial residences is a systemic one. Once Ministerial residences have been allocated, the Department of Public Works submits the documents indicating the amounts payable monthly to the client departments, whose responsibility it is to action the stop orders from Ministers and Deputy Ministers’ monthly income. Despite numerous reminders some departments fail to action the stop orders leading to escalating debt. In the past I have engaged with Members of the Executive on the debt owed to the Department of Public Works and this was done with relative success. However, the challenge persists. Ministers are always willing to cooperate in terms of paying their monthly rentals. The challenge that we must resolve is a systemic one to ensure that the monthly rentals are collected without fail on an on-going basis.

Reply:

1. A certain person (name furnished) was recruited through the utilization of services of an employment agency; she commenced her duties as a Chief Officer - DIST at SARS on May 1, 2017. As per the recruitment policy of SARS in July 2016, prior her appointment a due diligence on her qualifications as indicated on her CV was conducted. A due diligence was conducted on the following qualifications prior her appointment and were Verified:

1. Diploma in Practical Accounting, Damelin, 1996
2. Diploma in Bookkeeping, Damelin, 1996
3. Diploma in Business Organization & Management, Damelin, 1997
4. Diploma in Personnel Training and Management, Damelin, 1997
5. Masters of Business Administration, University of North West, 2004

A due diligence was not conducted on the following foreign qualifications prior her appointment:

6. General Certificate of Education. University of Cambridge, 1985

7. Diploma in Information Technology, Square one, Data processing College, 1987.

SARS places responsibility for verification of Foreign Qualifications on the applicant through the South African Qualifications Authority and employment is conditional to these verifications.

2. Whether SARS found any inaccuracies; if so, what (a) are the relevant details and (b) action was taken to correct the person’s qualifications for the specified position?

• The General Certificate of Education issued by the University of Cambridge has been evaluated to be equivalent to NQF level 3 Intermediate Certificate by the South African Qualifications Authority. For ease of understanding the NQF level 3 Intermediate Certificate is equivalent to Grade 11 in the South African context. (Reference, SAQA National Qualifications Framework).

• With regards to the Diploma in Information Technology issued by Square one, Data processing College, the employee has not provided SARS with an evaluation result by SAQA of this qualification.

• The matter of the Employee’s qualifications has not yet been concluded as the employee is currently on an extended sick leave.

__

Reply:

a) SARS did not purchase a certain company (name furnished). A certain company (name furnished) was created and registered by SARS as a wholly owned State Owned Company (SOC) for the purpose of purchasing the business of Tatis Africa (Pty) Ltd and to employ the skilled staff of Tatis. Tatis Africa (Pty) Ltd subsequently changed its name to Tatis International (Pty) Ltd (Tatis), which comprised mainly of the intellectual property in the Tatis customs management solution software and its processes. A certain company (name furnished) also had to provide support and maintenance services to ADA (Luxembourg Customs), which at the time already had the software in operation. It was also intended to market the core customs solution through value-added resellers.

b) The Minister of Finance and Treasury approved the purchase of the business and assets of Tatis.

c) A certain company (name furnished) delivered the first phase of the modernisation programme to SARS in 2013, which is referred to as the iCBS (Interfront Customs and Border Management Solutions). It continued to support and maintain the iCBS, whilst at the same time adopting and modifying it by developing software for the new Customs Acts Programme.

Reply:

NATIONAL TREASURY

No contract was awarded since 1 January 2009.

GTAC

	PARI contracts awarded and payments made up to October 2018
	Contract Description	Duration		Amount paid
1	Provision of technical advisory services to the Eastern Cape Department of Education with the schools rationalisation project: knowledge management specialist	Nov 16 - Apr 19		999,798.61
2	The provision of action learning support to the Eastern Cape Department of Education turnaround project, focusing on supply chain improvement and culture change	Feb 14 - Feb 15		829,246.51
3	City Support Programme –Longitudinal studies, Case studies	Nov 14 - Nov 17		2,204,000.00
4	Expenditure and Performance Review of National Language Services - PanSALB, CRL and language services in the Dept of Arts & Culture	Nov 13- May 14		548,700.00
	Total payments made			4,581,746.12

SARS

a) SARS awarded a contract to PUBLIC AFFAIRS RESEARCH INSTITUTE on 02 February 2011. This was for services to conduct a SARS Corruption study at a National level on a once off basis.

b) An amount of R799 755.00 was paid once off in 2011 for the services rendered.

Reply:

1. I am not aware of an alleged payment of R150 million that was allegedly given to the members of the so called Rogue Unit.
2. The Acting Commissioner has consulted with his Finance Team and they have confirmed that there is no record of the alleged R150 million payment flowing through the SARS Bank Accounts.
3. The Acting-Commissioner furthermore informs me that to his knowledge, no installation of this nature occurred in the course of SARS operations and that no authority for the alleged installation was, as a result, requested from SARS or granted by SARS.

Reply:

A certain person (name furnished) was appointed as Chief Officer Strategy, Enforcement and Enablement (SEE) on the 1/02/2011. The appointment was based on his extensive experience in enforcement within the Security Cluster. When he commenced his employment at SARS in 1999 he was appointed at a Chief Director level.

It is understood that the SARS qualification framework at that time made provision for either minimum qualifications and/or a number of years relevant experience as requirements for appointment. A certain person (name furnished) was then appointed on the basis of his experience.

In the 2009 Financial year three Senior SARS staff were designated as Deputy Commissioners of which Mr Ivan Pillay was one. He was never appointed as Commissioner but only Acted in that role.

According to SARS records, a certain person (name furnished) holds a grade 12 qualification.

Date	Job Title	Department	Grade
1999/04/01	Chief Director	Investigation Administration	DPSA Level 14
2000/06/01	Chief Director	Comp Si  Head Office	DPSA Level 14
2000/07/01	GM: COMPLIANCE	Comp Si  Head Office	9
2004/01/24	GM:ENFORCEMENT & RISK	Cmd: Compliance	9
2005/04/01	GM:ENFORCEMENT & RISK	Enforcement	9
2011/01/01	Chief Officer: Enforcement & Compl Risk	Enforcement & Compliance Risk	9
2011/02/01	Deputy Commissioner / Chief Officer: SEE	Office of the Commissioner	9
2012/05/01	CO: Strategy Enablement & Enforcement	Office of the Commissioner	9
2013/10/01	CO: Strategy Enablement & Communication	Office of the Commissioner	9

Reply:

The National Department of Public Works (NDPW) has taken a stance that all projects implemented by the department need to contribute towards the Expanded Public Works Programme (EPWP). The NDPW will consider the use of EPWP methodology in the erection of lighting and fencing at truck stops at the precincts of Government buildings and State-owned entities, when such projects are implemented by the Department and its entities.

Reply:

The Acting Commissioner of SARS has informed me that SARS has no evidence of any such incident(s).

Reply:

Tourism is a competency shared between national, provincial, and local government – and in this case, with the harbour authorities (i.e. Department of Public Enterprises - Transnet). The infrastructure developments and strategies that are part of the Coastal and Marine Tourism implementation plan are thus primarily owned by the two provinces/cities in question, together with Transnet. The objectives in these infrastructure developments were, inter alia, to offer new and modernised terminals that will provide an ideal gateway to a unique South African experience through the Ports of Durban and Cape Town in support of the tourism industry. In addition, this infrastructure served to provide modern reception facilities with safe, reliable and efficient marine services to enhance the visitor experience ensuring that cruise terminals in South Africa have:-

• Sufficient tourist facilities, namely, integration of the creative industry (arts and crafts), retailers, restaurants, suppliers of fresh food, waste disposal facilities, luggage handling;
• Tourist, family and child friendly facilities;
• Sufficient and easy to access parking facilities for various modes of transport such as, metre taxis, shuttle service, tour operators, bus service etc.;
• Safe and free walk ways for tourists / public to walk to the city and back to the terminal (tourist safety), (including city police / SAPS); and
• Fast track the processing of tourist arrivals and departures at the cruise terminals (including Home Affairs).

• Going forward, the Department intends to coordinate the development of a Cruise Tourism Maximisation Strategy, which will include all relevant stakeholders – (all) port cities, provinces, harbour authorities, local tourism authorities and tourism associations. The aim of this strategy will be to collate information, share views and insights and to develop tourism beyond cruise infrastructure. The intended outcomes include: -
  • More cruise liners docking for longer periods in South Africa;
  • Leverage economic spinoffs for tour operators, hotels, game reserves, lodges and attractions and related industries
  • Increased development of tourism and related products such as wine outlets, jewellery, arts and craft in close proximity of arrival facilities;
  • Opportunities to support trained chefs through the incubator programme to establish and run their own restaurants); and
  • Collaboration with neighbouring destinations along South Africa’s two coasts.

Reply:

The Department of Tourism has implemented the Public Service Co-ordinating Bargaining Council (PSCBC) Resolution 1 of 2012 as per Department of Public Service Administration (DPSA) circular 4 of 2014. The implementation of Resolution 1 of 2012 was not an automatic upgrade for all persons employed on salary levels 9 and 11, however only those employees whose posts were job evaluated and graded at salary level 10 and 12 but placed at salary level 9 and 11 due to PSCBC Resolution 3 of 2009. All employees who qualified in terms of the PSCBC Resolution 1 of 2012 were upgraded. The total number of thirty-seven (37) employees, twenty (20) Deputy Directors and Seventeen (17) Assistant Directors were upgraded according to the Job Evaluation records.

The above resolution was not applicable to South African Tourism as the entity does not fall under the Public Service Act 103 of 1994.

Reply:

NATIONAL TREASURY

(1)(a)(i) 21 December 2016

(1)(a)(i)(b) Storage Technology Services (Pty) Ltd (StorTech)

(1)(a)(i)(c) R13,574,635.87

National Treasury shares infrastructure with Government Technical Advisory Centre and Co-operative Banks Development Agency.

(1)(a)(i)(d) Underlying IT Infrastructure that supports all applications and services, was upgraded.

(2)(a)(i) Maintenance of the IT systems is done within National Treasury.

(2)(a)(i)(b) N/a

ASB

1. The Accounting Standards Board uses off-the-shelf software without any amendments or modifications. All the computers were upgraded to Windows 10 on 26 October 2018. The upgrades were done by ITWindows CC and the cost of the upgrade was R10 062.50.

2. All IT maintenance is outsourced to ITWindows CC and the monthly fee is R5 500. The contract is for a twelve-month period, but can be cancelled with a 30-day notice period.

CBDA

CBDA uses National Treasury IT infrastructure at no cost. Please see information below provided by the National Treasury.

Date when the information technology (IT) infrastructure procurement	21-Dec-16
Name of Service Provider	Stortech
Value of Requisition	R 13,574,635.87
Nature of goods	Underlying IT Infrastructure that supports all applications and services was upgraded
Maintenance	In-house
Note:	CBDA shares infrastructure with GTAC and National Treasury hence costs are shared

DBSA

1. (a) (ii), (b) (c) (d)

DBSA applies the Supply Chain Management (SCM) processes of reviewing and inviting bidders for ICT services every three years (3 years). Provisions are in place to also re-evaluate sole source vendors on a minimum annual basis. The core ICT systems and ICT infrastructure purchases done is shown on Section 1 of the below table.

Section 1. Update / Term Contracts
Core Infrastructure	Vendor	Update Date	Contract End Date	Value	Comments
Servers and Storage	Puleng Technologies	Jul-14	N/A	R7,452,017.29	Capex purchase of IBM Server/Storage equipment.
Local Area Network	Bytes Technologies	Jul-14	N/A	R11,519,640.00	Capex purchase of Cisco Network equipment.
Wi-Fi Network	Bytes Technologies	Sep-17	N/A	R7,582,621.38	Capex purchase of Cisco Wi-Fi equipment.
Telephone System	Gijima	Jan-16	N/A	R4,211,373.77	Capex purchase of NEC Telephone system
Multifunction Printers	Dido	May-18	Apr-21	R6,874,929.00	3 year agreement for the provision of multi-function printers
Backup and DR Services	Global Continuity SA	Apr-18	Mar-21	R3,705,300.00	3 year agreement for the provision of data backup and disaster recovery services
Internet Bandwidth and related services	Internet Solutions	May-18	Apr-21	R9,564,256.68	3 year agreement for the provision of Internet Bandwidth, hosting, APN, video conference bridge and web content filtering
Core Systems	Vendor	Update Date	Contract End Date	Value	Comments
SAP	SAP	Jul-16	N/A	R5,133,120.25	Last major update on Human Capital, Financials, Loans, Procurement
Quantum (Treasury System)	FIS Global	Apr-18	N/A	R3,090,675.00	Last major upgrade due to IFRS 9

1. (a) (ii) (b)

The SCM processes are applied for ICT services for maintenance and support contracts. Section 2 and 3 covers the core ICT systems and ICT Infrastructure maintenance & support and licencing.

Section 2.Licenses
Software	Vendor	Contract Start Date	Contract End Date	Value	Update Frequency	Last Update	Comments
Microsoft Productivity Tools - DBSA	Microsoft	Jul-16	Jun-19	$597,296.79	Monthly	Oct-18	3 year agreement for Microsoft Windows, Office, SharePoint, Skype for Business, Data Centre and Client Access Licenses
Microsoft Productivity Tools - IDD	First Technologies	Oct-17	Sep-20	R1,705,089.39	Monthly	Oct-18	3 year agreement for Microsoft Windows, Office and Client access licenses. Subscription licenses procured to allow for flexibility
Microsoft Server licenses	Microsoft	Jul-17	Jun-20	$344,355.48	Monthly	Oct-18	3 year agreement for Microsoft SQL licenses
SAP Licenses (ERP)	SAP	Feb-09	N/A	R3,653,043.00	Annually	Aug-18	Country Legislative Changes (e.g. Tax, Budget, etc.) Vendor review conducted annually
Quantum (Treasury System) licenses	FIS Global	Dec-04	N/A	R1,900,000.00	OEM release schedule	Sep-18	OEM release schedule and Legislative (IFRS9) Vendor review conducted annually

Section 3. Maintenance and Support
Core Infrastructure	Vendor	Contract Start Date	Contract End Date	Value	Update Frequency	Last Update	Comments
Servers and Storage	IBM	May-17	May-19	R1,560,888.60	As per OEM release schedule	Jul-18	2 year maintenance contract for hardware and software support
Local Area Network	Datacentrix	Mar-18	Feb-21	R6,392,728.00	As per OEM release schedule	Aug-18	3 year maintenance for hardware and software support, combined into one contract including both Wi-Fi and LAN
Wi-Fi Network	Datacentrix	Mar-18	Feb-21		As per OEM release schedule	Jul-18
Core Systems	Vendor	Contract Start Date	Contract End Date	Value			Comments
SAP	Gijima	May-17	Apr-20	R14,645,493.55	Monthly	Oct-18	3-year support and maintenance of SAP system
Quantum (Treasury System)	FIS Global	Apr-17	N/A	R312,500.00		Apr-18	Annual support and maintenance fee

FAIS OMBUD

1. No upgrades being done.
2. (a) Hubtech Investment is currently responsible for the maintenance of the IT System

(b) R263 547.00

FIC

(1) The Financial Intelligence Centre’s information is as below:

(a)(ii) Year	(b) Supplier	(c) Value	(d) Description of  Infrastructure Hardware – Last 3 years
02/11/2015	Datacentrix	R 2 782 641.00	Cisco IPS
23/09/2015	Nambiti	R   169 269.20	Dell Server – Extra SQL host
04/12/2015	Sizwe	R   285 504.04	Cisco Routers
24/11/2015	Sithabile	R    315 903.39	Quantum Tape library
20/11/2015	Sizwe	R 1 534 947.64	Cisco Routers and Switches
24/03/2016	DEP Technologies	R    278 423.81	SAN storage upgrades
30/11/2016	Sizwe	R 2 607 191.95	Cisco Routers and Switches
16/10/2016	First Technology	R   187 567.85	VMWare Site recovery Manager
09/09/2016	DEP Technologies	R    225 818.82	VEEAM Backup software
02/12/2016	Edzenel Construction	R    160 611.06	Sophos firewalls
16/01/2017	JOS Electronics	R    142 249.18	Sophos Firewalls
16/02/2017	Dell	R    457 183.96	Dell Server Memory
23/03/2017	Sizwe	R 1 140 279.44	Video Conferencing equipment
27/08/2018	Data Science	R 6 556 109.01	Pure SAN storage

(2)(ii) The Financial Intelligence Centre’s information is as below:

(a) Supplier	(b) Value
Business Connexion	R 1 188 482.28
Tendai Group	R  124 200.00
DEP	R 166 200.00
SITA	R 522 105.46
Sizwe	R 109 997.00
Dell	R1 419 449.08

FSCA

There were several information technology (IT) infrastructures upgrades over the past 3-4 years and this upgrade was driven by the need to refresh the aging technology that was about to reach end of useful and support life and were becoming uneconomical to maintain.

1. (a) The Information Technology (IT) infrastructure at the FSCA was upgraded as follows:

• The server and storage infrastructure in the production and in the disaster recovery environments were upgraded in March 2016 and March 2017;

• The server and storage infrastructure in the development and User Acceptance testing environments were upgraded in March 2018;

• The security and network optimisation and load balancing infrastructure (F5) was upgraded in September 2017 and in February 2018;

• The first phase of the audio visual equipment took place in June 2017 and the second phase of the upgrade is in progress. It is anticipated to be completed in February 2019;

• The network infrastructure is in the process of being upgraded with the anticipated project completion date March 2019.

(b) and (c) The infrastructure upgrades were conducted by different companies and the names of the companies contracted to do so as well as the monetary values are as follows:

 

		( b )	( c )
IT infrastructure Upgrade	Date Completed	Contracted Company	Contract Value
Server infrastructure upgrade for the Production and DR environments	March 2016	Ubuntu Technologies	R 1 322 706.03
	March 2016	Bytes Systems Integration	R 697  766.43
	March 2017	Nambiti  Technologies	R 2 392 429.09
Server and storage infrastructure upgrade in the Non production environments. Additional servers for the Production and DR environments	March 2018	Aptronics (Pty) Ltd	R 13 586 783.61
Storage infrastructure for the production and DR environments	March 2016	Dell SA	R 7 930 160.00
Implementation of the wireless network at the FSCA head office	March 2017	Business Connexions	R 832 778.37
Server  and storage infrastructure for the new FSCA organization in the production and DR environments	March 2018	Aptronics (Pty) Ltd	R 7 959 089.16
Network virtualisation infrastructure (XSIGO) was replaced in the production environment	March 2018	Eclipse (Pty) Ltd	R 992 618.27
Security and network optimisation and load balancing infrastructure (F5 appliance ) in the production and DR environment	September 2017	XON (Pty) Ltd	R 3 907 780.18
	March 2018	XON (Pty) Ltd	R 8 181 600.01
Audio visual equipment in the process of being upgraded in the production environment	June 2017	VOX Telecoms	R 564 106.18
	March 2019	AE Solutions	R 2 372 507.50
Installation of server racks and network cabinets – Project in progress	March 2019	IT Master	R 2 005 954.60
Network infrastructure is in the process of being upgraded in the Non production, Production and DR environments	March 2019	Sizwe IT Group	R 4 661 860.89
Microsoft Skype for business is in the process of being upgraded pending approval	March 2019	Omega Solution	R 1 928 943.43

2. (a) The company contracted to maintain the IT systems, in particular the provision of desktop and infrastructure support services, is Aptronics (Pty) Ltd and the contract value is R30 million over a period of five years, which commenced on 09 December 2015.

GEPF

The Government Pensions Administration Agency provides ICT services to the GEPF.

GPAA

System	Last Upgraded	Name of company	Monetary Value of contract	Company currently responsible	Value of contract for current contract
1.CIVPEN	June 2014 (will be phased out/replaced by 2021)	Accenture	R 17 538 555	IBM (hardware is currently under a maintenance and support agreement with IBM until 30 September 2021)	R 4 812 506
2.ORACLE Infrastructure	March 2014 (Refresh planned for 2020)	Accenture	R 23 651 835	ORACLE (Currently under Oracle Premier Support until 31 March 2019 through SITA)	R 2 307 132
3.HP Infrastructure	April 2014 (Refresh planned for 2020)	EOH	R 23 995 085 Plus R 3 369 116	EOH (currently the equipment is still under a maintenance and Support contract with HP until 31 March 2020)	R 6 093 514 for all HP infrastructure

IRBA

Hardware

(1) (a) (ii) All significant hardware components are subject to the warranties from the manufacturer.

The Warranties still active no upgrades are required.

(b) Manufacturers are Dell and HP.

(c) Due to the warranty in place all defective parts are replaced at the cost of the manufacturer.

(d) Dell servers and HP switch.

(2) (a) (ii) Bytes Systems Integration a division of Altron TMT (Pty) Ltd.

(b) R4, 824 963.00 (Tender value from June 2017 to June 2022, a five year contract)

Software (Significant Systems)

(1) (a) (ii) Windows Server Updates - This is done weekly - 2 November 2018

FlowCentric - When updates are available - January 2016

AccPac - This is done annually - March 2018

(b) Windows Server Updates - Bytes Systems Integration

FlowCentric - FlowCentric (Pty) Ltd

AccPac - Lorge Consulting (Pty) Ltd

(c & d) Windows Server Updates - Included under 2 (b) under hardware

FlowCentric - R131 426.04 (2016)

AccPac - R30 245 (2018/19)

(2) (a) Windows Server Updates - Bytes Systems Integration

FlowCentric - FlowCentric (Pty) Ltd

AccPac - Lorge Consulting (Pty) Ltd

(b) Windows Server Updates - Included under 2 (b) under hardware

FlowCentric - R374 834 (Year to date)

AccPac - R8 115 (Previous financial year)

LAND BANK

Response to questions as follows:

• Question (1) – see link Annexure “A’
• Question (2) – see link Annexure “B”

http://pmg-assets.s3-website-eu-west-1.amazonaws.com/RNW3311_AnnexureB.pdf

http://pmg-assets.s3-website-eu-west-1.amazonaws.com/RNW3311_AnnexureB.pdf

 

PFA

(1) (a) July 2018

(b) Nambiti Technologies Pty (Ltd),

(c) Contract value amounts to R 983 040

(d) Provision of ICT equipment, installation and support for the data centre.

(2) (a)(ii) The Office of the Pension Funds Adjudicator has a service level agreement with the Financial Sector Conduct Authority for ICT support and maintenance. The following companies are used for ICT security management support:

• Computer Security and Forensic Solutions Pty (Ltd) – Network protection and events monitoring and management
• Check Point Software Technologies Ltd – Firewall management
• Securicom Ltd – Email security management

PIC

(1)

(2) Other than the companies mentioned above, the PIC does not have any company that is responsible for the maintenance of IT systems.

SARS

Question 1 response

The SARS ICT Infrastructure is used to provide both support functions as well as enabling core business functions (processes). It is a heterogeneous infrastructure landscape consisting of various technology architectures sourced through formal procurement vehicles.

The SARS strategy for ICT infrastructure renewal is based on a rolling upgrade cycle in terms of infrastructure that reaches end of life in a fiscal year. This is used to request budget but actual implementation is subject to final budget approval that is not guaranteed.

Renewal of infrastructure and providing infrastructure support is categorised and handled in the following ways:

SARS follows formal procurement process to establish ICT service provider towers for a minimum of 3 years. Each tower has a formally appointed vendor for the provisioning of ICT services within that category:

Tower	Scope	Service Provider
D	Data Carrier Services	IS
V	Voice Carrier Services	IS
I	Internet and Hosting Services	Vodacom
SMS	SMS Carrier Services	MTN & Telkom
N	Network Support Services	Sizwe
S	Server Support Services	Gijima
E	End-user Device Support Services	Sizwe

From an infrastructure refresh perspective, SARS uses the appointed vendors listed above in combination with formal procurement tenders established by the State Information Technology Agency (SITA Transversals), SARS administered tenders as well as formally approved National Treasury tenders and exemptions to refresh ICT infrastructure that has reached replacement status for each fiscal year.

In terms of question 1) above the following ICT Infrastructure was updated/upgraded.

2015/16 financial year:

ICT Infrastructure CAPITAL Expenditure	Cost	Supplier
Security infrastructure	R43 593 554,00	IBM
Infrastructure licensing	R 8 964 259,00	Microsoft
Enterprise data storage	R 8 160 694,00	IBM
Transport network infrastructure	R 6 725 590,00	Cisco
IT facility infrastructure	R9 173 409,00	BTS, Merque Communications
End User Devices	R 2 342 702,00	Dell, Lenovo
Voice networking infrastructure	R 7 966 854,00	Cisco
Midrange servers capacity upgrades	R 3 361 006,00	IBM
Audio visual equipment	R 517 803,00	Other
Total	R90 805 871,00

2016/17 Financial year:

ICT Infrastructure CAPITAL Expenditure	Cost	Supplier
* IBM Software renewal	R97 616 255,00	IBM
*Midrange Servers	R52 728 191,00	IBM
*Enterprise  data storage	R81 829 559,00	IBM & Ubuntu
*Mainframe replacement	R18 936 395,00	IBM
Commodity class servers	R17 754 055,00	Microsoft
Digital signage solution	R13 693 901,00	Bytes
End User Devices	R12 335 494,00	Dell, Lenovo
Transport network infrastructure	R 4 017 513,00	Cisco
Contact Centres data storage refresh	R 3 380 873,00	IBM
Microsoft software licences	R 2 599 525,00	Microsoft
Total	R304 891 761,00

* These items reflect the 3 year IBM Enterprise Agreement and are the reason for the big escalation in capital expenditure

2017/18 financial year:

ICT Infrastructure CAPITAL Expenditure	Cost	Supplier
Refresh of end of life commodity class servers	R24 133 311,57	Dell
Backup storage capacity upgrade	R 4 116 941,60	EMC
IT Facilities and Offices, Generators	R 4 968 616,30	BTS, Merque Communications
IBM WebSphere renewal	R 3 955 745,58	IBM
Personal Computers - Monitors, Laptops and Desktops refresh	R 3 304 820,64	Dell, Lenovo
SAP Licenses	R32 904 235,00	SAP
Casewise Enterprise Architecture tool	R5 999 757,00	Casewise
VMWARE software capacity	R2 675 570,00	VMware
Total	R 82 058 997,69

2018/19 financial year:

ICT Infrastructure CAPITAL Expenditure	Cost	Supplier
Personal Computers - Monitors, Laptops and Desktops refresh	R15 841 566,00	Dell, Lenovo
Refresh of end of life commodity class servers	R14 851 195,84	Dell
Renewal of Enterprise Content Management Maintenance Services	R12 036 532,50	OpenText
Network Infrastructure Refresh	R10 441 869,38	Cisco
Contact Centre Media Servers Renewal	R 7 230 810,25	Radisys
Casewise Enterprise Architecture tool	R 996 511,00	Casewise
IT Facilities and Offices, Generators	R 4 140 644,32	BTS, Merque Communications
Total	R65 539 129,29

The 2018/19 infrastructure expenditure does not show current projects in execution as this is only shown upon project completion. One such example is the renewal of the eFiling infrastructure and migration to the new data centre with a total estimated value of R 197 m. Another example is the equipment for the Disaster Recovery Facilities with a total estimated value of R54m. Both these projects are expected to be completed in April 2019.

Question 2 response

As per question 2 above and in addition to the infrastructure hardware and software that enables and support the SARS business, the following Business Systems are also maintained and supported by external vendors.

Period covered	Business System	Description	Supplier	2018/19 Average Annual Maintenance and Support Value	3 Yrs Contracts values
					BAU (Maintenance & Support)	Project and Capex	Procurement vehicle Total
01.01.2017 - 31.12.2019	eFiling	SARS premier digital channel for the submission of a variety of tax returns including VAT, PAYE, SDL, UIF, Income Tax, STC and Provisional Tax through the eFiling website.	Shandon Business Solutions	R 10 713 000	R 35 000 000	R 140 000 000	R 175 000 000
01.01.2017 - 31.12.2019	e@syFile™	SARS offline capability that assists the taxpayer to manage engagement with SARS and validate declarations in offline mode before sending them to SARS.	Ionize	R 15 659 000	R 50 000 000	R 45 000 000	R 95 000 000
01.01.2017 - 31.12.2019	ATP/Service Manager/IVR/Telephony/U3TM	A collective of integrated systems that offer Case Management, Workflows, Interactive Voice Response (IVR), Telephony for Contact Centres and Master Entity capabilities.	BBD	R 45 651 000	R 128 000 000	R 355 000 000	R 483 000 000
01.01.2016 - 31.12.2020	SAP (ERP, SRM, Sourcing, HR)	A collective of SAP modules that provide both revenue collection accounting functionality as well as corporate ERP (internal) capability.	SAP	R 35 196 000	R 129 796 838	R 160 554 000	R 290 350 838
01.01.2017 - 31.12.2019	iCBS (DPS, CPS)	The Customs ecosystem of capabilities to ensure processing of Customs declarations and other supporting functions	Interfront (SOC)	R 24 763 000	R 85 000 000	R 400 000 000	R 485 000 000
TOTALS **				R 131 982 000	R 427 796 838	R 1 100 554 000	R 1 528 350 838

** The above list does not include any SARS internally developed and maintained systems

** These totals are 3year procurement vehicle value

SASRIA

1. Please refer below, at Table 1 for a reply.

Date last updated	Company responsible for upgrades	Monetary value	IT system
2018/08/01	Darktrace and Antegina	R 500 000	New security monitoring system to enhance our security
2016/09/01	AlienVault SIEM	R 500 000	New security management tool for internal and external vulnerability
2018/10/01	Data Guardian	R 150 000	Windows Server Upgrade Project and Commvault Disaster Recovery Live Sync
2016 -2018	Internet Solution	R 1 200 000	Management of comprehensive internet solution. External firewall management
2017/04/01	Metrofile	R 141 072	Backup Storage
2019/06/	Dimension Data	R 350 000	Expansion of the Wi-Fi including new WiFiless devices, WI-FI Expansion Cisco ASA Firewall & VPN
2017/04/01	Ilanga	R 823 755	Annual IMS Services, Licenses and Maintenance
2018/04/01	DCX- Hewlett Packard/ESS Disaster Recovery/ DCX	R 225 014	Disaster Recovery Services and Hosting
2016/04/01	IDI Technology Solutions	R 23 000	GP- Great Plains Micro Dynamic Support and licenses
2018/04/01	Great Soft(Pty) Ltd	R 378 000	Subscription and Support to BoardPad Software
2017/06/30	GX Diesel	R 16 850	Generator Maintenance Services and Power generation
2014/05/26	Software AG South Africa (Pty)Ltd	R 498 000	ARIS Software Licenses, Support, Maintenance
2017/03/01	Seventynine Digital	R 41 400	Website Maintenance & Support
2016/10/06	Fraxion (Pty)Ltd	R 28 000	Fraxion Software License
2014/05/26	Software AG South Africa (Pty)Ltd	R 490 637	Renewal ARIS Software Licenses, Support, Maintenance
2018/02/01	Isometrix	R 94 000	Isometrix Upgrade & Annual Licenses
2018/04/01	Cortell Management Solutions	R 264 175	IBM Cognos Licenses renewals
2018/04/01	Intervate Solutions	R 980 000	Web Rates Calculator
2018/05/01	Dimension Data	R 110 000	WI-FI Expansion
2018/08/01	Dimension Data	R 150 000	Cisco ASA new Firewall & VPN upgrade
2018/08/01	Microsoft	R 1 100 000	New Office 365
2018/11/01	EOH	R 100 000	Cisco 3850 Catalyst Switches for network connectivity
2018/11/01	Bytes Technology	R 300 000	2x Brocade Fibre Switches to enhance storage capability
2018/11/01	Interconnect Systems	R 300 000	Setting up new office space: 34 Fricker Road, Cisco 3850 Catalyst Switches & WI-FI devices

 

TAX OMBUD

1. The Office of the Tax Ombud utilizes the SARS IT infrastructure. All updates or upgrades are done by SARS.
2. Maintenance of the IT systems is done by SARS.

Reply:

1. SARS is not able to accurately trace the number of declaration pertaining to capital progits on cryptocurrency

The existing income tax return forms currently do not make provision for taxpayers to specifically declare capital profits regarding cryptocurrency trades, however work is underway within SARS to consider the amendment of the tax forms for the 2019 tax season in order to cater for the description of other assets (which will include cryptocurrencies) by means of a specific description field on the form.

Taxpayers who have made some form of declarations regarding cryptocurrency trades, have captured such trade as a form of “other trade income” or “other trade loss”, and have made reference to a description of digital/crypto currency trading (e.g. Bitcoin Cash, Litecoin (LTC), Ethereum (ETH), Zcash (ZEC) to name a few).

2. The South African Revenue Service (SARS) issued a media release on 6 April 2018 clarifying that it would apply normal income tax rules to cryptocurrencies.

In line with the announcement made in Annexure C of the 2018 Budget Review, the Taxation Laws Amendment Bill, 2018, proposes amendments with respect to the treatment of cryptocurrencies for income tax and value-added tax purposes.

These amendments ensure that that losses on cryptocurrencies may only be set off against profits from cryptocurrencies (otherwise known as ring-fencing), clarify that cryptocurrencies cannot be classed as personal use assets for capital gains tax purposes and treat cryptocurrencies as financial services for value-added tax purposes. Further, National

Treasury does not wish to pre-empt the work of the Intergovernmental Crypto Assets Regulatory Working Group (CAR WG). The CAR WG is looking into all aspects of cryptocurrencies, related blockchain concepts and use cases. This is being done with a view towards developing a cohesive governmental understanding and response to cryptocurrencies.

In keeping with the development of a unified intergovernmental regulatory framework, the CAR WG has broad intergovernmental representation and includes representatives from the Financial Intelligence Centre, Financial Sector Conduct Authority, National Treasury, SA Reserve Bank and SARS. It is anticipated that, following broad industry comment and participation, the CAR WG will be ready to release a final research paper on the subject during the course of 2019. The OECD/G20’s Inclusive Framework on BEPS is also working on the tax challenges arising from digitalisation, which include the issue of cryptocurrencies. An interim report was issued earlier this year (https://www.oecd-ilibrary.org/taxation/tax-challenges-arising-from-digitalisation-interim-report_9789264293083-en) with a view to issuing a final report in 2020.

3. N/A

Reply:

The department has an infrastructure programme dedicated for repairs, renovations and maintenance (Planned Maintenance) for facilities under its custodianship. There is also have a dedicated sub-programme for repair and maintenance (RAMP) of land ports of entries (LPOE) across the country. The main objective of RAMP is to address the backlog of repair and maintenance required to provide User Clients with effective and efficient facilities. The table below illustrates the expenditure in the past five financial years for both RAMP and the Planned Maintenance programme. It is quite apparent that there is a funding gap as the expenditure has been exceeding the allocations since the 2016/17 financial year, which attests to improved performance by the Department and the Property Mnagement trading Entity (PMTE).

EXPENDITURE OVER THE LAST FIVE YEARS:

Financial Year	Planned Maintenance	LPOE RAMP
	Allocation	Expenditure	Allocation	Expenditure
2013/14	2 360 072 804	1 970 927 995	202 206 000	196 266 797
2014/15	2 126 616 045	2 100 393 417	142 000 000	137 163 660
2015/16	1 984 008 482	1 984 008 482	222 350 000	167 907 487
2016/17	1 947 939 201	2 000 192 365	169 193 000	203 529 542
2017/18	1 978 058 499	1 985 447 290	200 664 000	340 587 682
Total	10 396 695 031	10 040 969 549	936 413 000	1 045 455 168

Reply:

(1)(a)(i) The Minister of Finance appointed Dr Monde Tom, as the Accounting Officer for Provincial Treasury in terms of section 36(3) of the Public Finance Management Act, 1999 (Act No. 01 of 1999). This Head official of Provincial Treasury [Accounting Officer] was also the lead coordinator [Chief Administrator] of the overall intervention team. In turn, Dr Tom, as the lead administrator, was supported by a team of treasury officials who were seconded to the Limpopo Provincial Treasury to lead line function programmes. These officials are, Mr Khaya Ntimbela [Sustainable Resource Management]; Mr Ndoda Biyela [Assets, Liability and Transversal SCM]; Mr Mbuyi Dondashe [Financial Governance]; Ms Venita Haupt [Corporate Services]; and Mr Siphiwe Ndlovu [Intervention Secretariat and Liaison Head Official], but later seconded to lead Corporate Services. .Other officials appointed in terms of section 36(3) as Accounting Officers, included the administrators in Education, Roads and Transport, as well as Public Works departments, with the exception of the Health administrator, whose appointment did not include the replacement, but to support the then Head of Department [Accounting Officer], who had recently been appointed.

The South African Revenue Services (SARS) was working with Office of the Chief Procurement Officer in the National Treasury to support procurement reforms.

(1)(b)(i) The Director-General of the National Treasury appointed consultants such as Deloitte, ESP Consulting, Price Waterhouse Cooper (PwC), Edward Nathan Sonnenbergs and Sizwe Ntsaluba Gobodo Auditors.

(1)(b)(ii) The timeframes for the appointments of the administrators and the secondment of support teams, as well as consultants, ranged from immediate to different intervals.

(1)(b)(iii) The treasury officials listed in paragraph (1)(a)(i) above were tasked to lead line function programmes in provincial treasury at Deputy Director-General level.

(1)(b)(iv) The positions of these officials ranged from lead administrator – heading the intervention and Accounting Officer, supported by the heads of programmes [DDGs] to execute treasury functions in terms of section 18 of the PFMA. These functions ranged from provincial budget preparation and oversight; revenue and cash management, transversal Supply Chain Management; overseeing of financial governance issues, dealing with audit issues; corporate services, to day-to-day treasury operations [HR/M, legal services etc.]; as well as providing secretariat services and liaison with stakeholders supporting the intervention. Each administrator had a team of support staff for effective implementation of the section 100(1)(b) intervention in each of the five provincial departments in Limpopo that were placed under administration.

The consultancy [Deloitte, ESP Consulting, PwC, ENSafrica and Sizwe Ntsaluba Gobodo], were appointed by National Treasury to support the intervention for verification of contracts and invoices, contract management and document review, and conducting forensic audits as well as forensic investigations where necessary.

The other appointments by the Minister of Finance, were those of administrators as Accounting Officers as requested by the Ministers responsible for those departments, namely, for the Department of Education – Mr Mzwandile Matthews; for the Department of Roads and Transport – Mr Mathabatha Mokonyama; and for the Department of Public Works – Mr B. Matutle, but later replaced by Mr Mbuyi Dondashe. Ms Valerie Rennie was appointed by the Minister of Health as an administrator, but was not recommended to the Minister of Finance for appointment as the Accounting Officer of the Department of Health in Limpopo.

(2) No, the Public Affairs Research Institute did not work with the administrators and National Treasury as part of the team, when the Limpopo provincial Department of Health was placed under administration.

Reply:

The following information has been reported in the monthly section 71 report for the quarter ended 30 June 2018. This information was verified and signed on by the Municipal Manager and Chief Financial Officer of the Maruleng Local Municipality:

(1)(a) Debtors

• The Debtors Age analysis shows the municipality is owed an amount of R82.7 million by customers (households, business and government); of which 81.6 per cent or R67 million is due for over 90 days.

(1)(b) Collection Rates

• The Municipality reported a Collection Rate of 74.7 per cent against billed revenue of R75.1 million for the 2017/18 financial year. The billed revenue comprises of property rates being levied on ratable properties and service charges for provision of waste management service (refuse removal).

(1)(c) Creditors

• The municipality owes suppliers and contractors a total of R223 thousands; of which R203 thousands or 91.2 per cent is due by the municipality within 30 days.

(2)(a)(i)(ii) (2)(b)(i)(ii)

• The municipality is not an Electricity Licensee and only accounts for own electricity consumption, therefore it does not owe money for bulk supplier (ESKOM and Lepelle Northern Water)

(3) The billing system used by the municipality is functional and residents are billed accurately for property rates and waste refuse removal

Reply:

SARS cannot disclose taxpayer specific information. In terms of the applicable legislation administered by SARS during the period of 2009 /2010 SARS could identify a taxpayer based on a specific risk identified or alternatively on a random basis. As per SARS’ compliance approach taxpayers would be encouraged to regularize their affairs. Continued non-compliance by taxpayers would then inform the most appropriate SARS Enforcement response.

Legally the Minister of Finance cannot instruct SARS to investigate a taxpayer. SARS is further not aware of such an instruction given to SARS as alluded to in the parliamentary question.

Reply:

1 a) BB&D was contracted from 01 February 2007.

Oracle (Siebel which changed its name to Oracle) was contracted from December 2005.

b) BB&D have been contracted for 12 years from 01 February 2007 to 31 December 2019 through multiple deviations.

Oracle was contracted for 2 years from December 2005 to December 2007.

c) BB&D spend from 2007 to date is R1 275 550 118.99

Oracle spend from 2005 to 2007 is R 18 773 278.23

2 a) BBD was appointed through a deviation process and not a tender process

In consultation with long serving SARS employees and in the absence of the records to verify the assertions made (due to the time lapses), it was established that Siebel had a long standing contract with government from when SARS was still Inland Revenue Service as such their engagement was on the basis of systems already deployed through that government wide commercial arrangement.

b) The 2006 SARS records that have been reviewed by the current procurement leadership team reflects that the selection of the three entities (i.e. IBM, Accenture and BB&D) was based on the industry knowledge of the then Strategy, Modernisation and Technology senior staff. In circumstances relating to the replacement of the Oracle transaction BB&D was then chosen from the listed primarily because of price consideration.

In as far as Siebel/Oracle is concerned refer to 2a) above.

c) BBD - The then Commissioner of SARS approved the appointment of BBD through a deviation as per Treasury Regulation 16A6.4

In relation to Siebel/Oracle no record of approval could be established in line with 2a).

3 a) BB&D – original approval was from 01 February 2007 to 31 March 2012(5years)

1st extension from 01 April 2012 to 31 March 2016

2nd extension from 01 April 2016 to 31 December 2016

3rd extension from 01 January 2017 to 31 December 2019

Oracle was not extended beyond 31 December 2007 and they were replaced by BBD in the work they were doing for SARS

b) BBD - The contract value for BB&D from February 2007 to date is R1 275 550 118.99

Oracle - The spend from 2005 to 2007 is R 18 773 278.23

c) BBD – Refer to 3a above

Oracle - The Oracle contract was from December 2005 to December 2007 and was not extended further.

d) BBD – The extensions relating to the BB&D contract complied with the applicable regulations

Oracle - There were no extensions on the Oracle contract as it ran from December 2005 to December 2007 and was not extended further.

e) BB&D – the extensions were approved by the relevant Commissioner in terms of the applicable DOA at the time.

Oracle - There were no extensions on the Oracle contract as it ran from December 2005 to December 2007 and was not extended further.

Reply:

(1) Refer to Annexure A for the current water levels of the dams that supply water to the Mangaung Metropolitan Municipality.

(2) The Mangaung Metropolitan Municipality has lost 13 334 248 000 litres of water during the 2017-18 financial year as a result of leakages.

(3) The Caledon-Modder Water Supply System that supply water for the Mangaung Metropolitan Municipality experienced significant drought conditions from around 2015 until 2017 seasons. Although the situation has improved a bit, drought conditions are still lingering into this 2018 season.  Hence, some good inflows came into the dams of the system, easing the critical state of total dams’ storage from about 44% in May 2017 to about 57% in May 2018. May is the decision month for the system. Therefore, following the 2018 Annual Operating Analysis, the new system storage level justified changing water restrictions from 20% to 15% level.

(4) The Department held a Stakeholders Operation Forum (SOF) meeting, which involve water users from the system, in Mangaung on 4 October 2018, where results of the annual operation analysis, including the new restriction levels, were presented. Publication of a gazette notice for the new restriction levels is being processed.

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Reply:

(1)(a) The Department prioritizes sewerage plants that were found to be critical in terms of their operation and monitors them quarterly.

(1)(b) The latest inspections were done in the previous quarter.

(1)(c) Refer to Annexure A for the list of plants that failed to meet the minimum standards in the last quarter (July-September 2018).

(1)(d) Refer to Annexure B for the Non-Compliance letter issued by Northern Cape Provincial operations for Siyathemba LM associated with the following WWTW refer to:

• Prieska WWTW
• Marydale WWTW
• Niekerkshoop WWTW

 

2. The Department is aware of these media reports; and, is dealing with this non-compliance through routine inspections of these wastewater treatment works and through administrative action where non-compliance occurs.

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Annexure A

List of Plants which failed to meet the minimum standards in the last quarter (July-September 2018):

• Tugela Ferry WWTW
• Rosendaal (Mautse)WWTW
• Winburg WWTW
• Steynsrus WWTW
• Wesselsbron WWTW
• Heilbron WWTW
• Ekangala WWTW
• Rooiwal East WWTW
• Rooiwal North WWTw
• Flip Human WWTW
• Zongesien WWTW
• Senwamokgope WWTw
• Elandskraal WWTW
• Groblersdal WWTW
• Jane Furse WWTW
• Moroke Mecklenberg WWTW
• Motetema WWTW
• Tubatse WWTW
• Musina Singelela WWTW
• Thohoyandou WWTW
• Balfour WWTW
• Grootvlei Eskom WWTW
• Grootvlei Mine WWTW
• Siyabuswa WWTW
• Ferrobank WWTW
• Riverview WWTW
• Kriel WWTW
• Ruitspruit WWTW
• Delmas WWTW
• Botleng WWTW
• Waterval Boven WWTW
• Belfast WWTW
• Kwazamokuhle WWTW
• Blinkpan WWTW
• Brits WWTW
• Lethlabile WWTW
• Delareyville WWTW
• Atamelang WWTW
• Wolmaranstad WWTW
• Leeudoringstad WWTW
• Rulaganyang WWTW
• Warrenton WWTW
• Jankempsdorp WWTW
• Douglas WWTW
• Griekwastad WWTW
• Hopetown New WWTW

Reply:

1. In terms of section 38(1)(a)(f) of the PFMA, the accounting officer of a department, trading entity of constitutional institution must settle all contractual obligations and pay all money owing including intergovernmental claims within the prescribed or agreed period.

Treasury Regulation 8.2.3 also requires accounting officers of departments to settle all payments due to creditors within 30 days from receipt of an invoice, unless determined otherwise in a contract or other agreement.

To this end, National Treasury issued SCM Instruction Note 5 of 2016/17 to address outstanding payments due to suppliers/creditors exceeding 30 days after submission of valid invoices for all PFMA complying institutions.

In terms of section 65(2)(e) of the MFMA, the accounting officer must take all reasonable steps to ensure that all money owing by the municipality be paid within 30 days of receiving the relevant invoice or statement unless prescribed otherwise for certain categories of expenditure. To effect this provision, National Treasury issued MFMA Circular 49 of 2009 applicable to all municipalities.

National Treasury continues to support Department of Monitoring, Planning and Evaluation (DPME) in monitoring payment of suppliers.

2. (a) Yes

    (b) Yes

(b)(i) 26 March 2018

(b)(ii) departments, constitutional institutions, public entities, municipalities and municipal entities.

3. (a) We do not have this information.

(b) We do not have this information.

(i) (aa) We do not have this information.

(i) (bb) We do not have this information.

(ii) We do not have this information. The DPME is responsible for coordination of this information.

 

Reply:

Information relating to members of the State Security Agency (SSA) forms part of the broader operational framework of the SSA and therefore remains classified and privileged.

It should however be observed that the SSA is held accountable on such matters by the Joint Standing Committee on Intelligence (JSCI) and the Inspector-General.

Reply:

The Department is in the process of compiling the summary of all the Annual Reports since 1994/1995 to date, where the challenges and achievements are outlined. As soon as this information is ready the information will be made available.

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Reply:

I have consulted with the Acting Commissioner of SARS who informs me that:

• The sharing of such taxpayer information would have been a breach of the then provisions of the Income Tax Act (and other legislation administered by the Commissioner) relating to secrecy; and

• Every SARS employee at the time was, and still is, required to take an oath or affirmation of secrecy in respect of all SARS and taxpayer information.

He has no evidence indicating that any such information was shared by the said SARS Officials with the said persons in that period.

Reply:

1. Around 2007 SARS established a unit that provided support to tax and customs investigations of the illicit economy and organized crime. At various times the unit was called the Special Projects Unit, National Resource Group and the High Risk Investigation Unit.

The formation and functioning of the unit has been considered and commented on by the Sikhakhane Panel, KPMG and the SARS Advisory Board. On 28 September 2018 retired Judge Kroon testified before the Commission of Inquiry, headed by retired Judge Nugent, that the establishment of such a unit was not unlawful.

2. SARS is not aware of any equipment procured by the unit that did not comply with the procurement policy.

Reply:

a) 55 Chief Directors are in the employment of the National Treasury.

b) See below: (i) names furnished to the Member.

DIVISION (vi)	GENDER (ii)	RACE (iii)	EXPERIENCE IN YEARS (iv)	SALARY LEVEL (v)
			TENURE IN GOVERNMENT (YEARS)	TENURE IN CD POST (YEARS)	OTHER NON- GOVERNMENT (FOR LESS THAN 5 YEARS’ CASES)
Office of the Director-General	MALE	COLOURED	19	14		14
	FEMALE	AFRICAN	16	10		15
	FEMALE	WHITE	24	13		15
	MALE	AFRICAN	7	4	5	14
	MALE	AFRICAN	16	5		14
Asset & Liability Management	FEMALE	AFRICAN	0	0	6	14
	FEMALE	AFRICAN	8	3		14
	MALE	WHITE	44	16		14
	MALE	AFRICAN	27	0		14
	MALE	INDIAN	17	0		14
	FEMALE	WHITE	11	9		14
Budget Office	FEMALE	WHITE	11	0		14
	FEMALE	AFRICAN	18	4		14
	MALE	INDIAN	14	9		14
	MALE	WHITE	12	3		14
	MALE	INDIAN	15	11		14
	MALE	AFRICAN	15	7		14
Public Finance	MALE	AFRICAN	12	3		14
	MALE	WHITE	10	4		14
	FEMALE	COLOURED	9	9		14
	FEMALE	COLOURED	16	16		14
	MALE	WHITE	26	8		14
	FEMALE	COLOURED	12	2		14
Economic Policy	MALE	WHITE	21	16		15
	MALE	COLOURED	5	1	7	14
	FEMALE	WHITE	8	4		14
Intergov Relations	FEMALE	WHITE	31	9		14
	FEMALE	AFRICAN	17	2		14
	MALE	AFRICAN	11	6		14
	MALE	AFRICAN	1	1	12	14
	MALE	WHITE	28	16		14
Tax & Financial Sector Policy	MALE	INDIAN	9	9		15
	FEMALE	AFRICAN	0	0	13	14
	MALE	WHITE	9	6		14
	FEMALE	AFRICAN	4	4	8	15
International & Regional Economic Policy (IREP)	FEMALE	WHITE	13	6		14
	FEMALE	AFRICAN	17	2		14
	MALE	AFRICAN	16	3		14
DIVISION (VI)	GENDER (ii)	RACE (iii)	EXPERIENCE IN YEARS (IV)	SALARY LEVEL (V)
			TENURE IN GOVERNMENT (YEARS)	TENURE IN CD POST (YEARS)	OTHER NON- GOVERNMENT (FOR LESS THAN 8 YRS CASES)
IREP	MALE	COLOURED	21	4		14
	MALE	AFRICAN	4	0	6	14
Chief Procurement Office	MALE	AFRICAN	16	16		14
	FEMALE	WHITE	15	5		14
	FEMALE	AFRICAN	14	2		14
	MALE	AFRICAN	18	5		14
Corporate Services	FEMALE	AFRICAN	1	1	11	14
	FEMALE	AFRICAN	2	2	6	14
	MALE	AFRICAN	7	2	3	15
	FEMALE	WHITE	2	2	10	14
Office of the Accountant General	MALE	INDIAN	23	17		14
	FEMALE	WHITE	7	7		14
	MALE	INDIAN	14	14		14
	FEMALE	WHITE	15	11		15
	MALE	INDIAN	35	9		14
	FEMALE	AFRICAN	19	15		14
	MALE	AFRICAN	16	9		15

Reply:

1. No.

2. Falls away.

3. Yes, compliance with the PFMA is encouraged by the Accounting Officer.

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Reply:

Refer to the table below:

The Department	None
The Entities	Amatola Water	None
	Bloem Water	None
	Lepelle Northern Water	None
	Magalies Water	None
	Mhlathuze Water	None
	Overberg Water	None
	Sedibeng Water	None
	Umgeni Water	None
	Trans Caledon Tunnel Authority (TCTA)	None
	Rand Water	Yes, Refer below for the response
	Water Research Commission (WRC)	Yes, Refer below for the response

 

Rand Water:

Rand Water awarded work to 1 of the 13 companies provided in the list, namely Vox Telecommunications. The work was awarded from 07 March 2013 up to 26 July 2018. The awards were made in accordance with the applicable SCM practices.

-2-

The table below provides the details required for (i) to (iv):

Doc. Date	Purch.Doc.	Description	Net Value	Duration	Approver
26.07.2018	4500205144	Request for Room Booking Panel	156,113.66	Once-off	Supply Chain
19.06.2018	4500204614	Off Premise Contact Centre 201805	278,650.74	6 months	Supply Chain
30.04.2018	4500203783	Email Filtering & Security Services	431,728.00	10 months	Supply Chain
10.04.2018	4500203488	Supply & Delivery of Internet Service	335,738.73	10 months	Supply Chain
31.01.2018	4500202608	Internet service for 3 months	438,129.63	3 months	Supply Chain
30.01.2018	4500202579	Internet service	400,000.00	Once-off	Supply Chain
01.11.2017	4500201570	Internet Services for 3 months	437,481.57	3 months	Supply Chain
20.10.2017	4500201336	Call Centre Systems 6 months	430,701.12	6 months	Supply Chain
26.07.2017	4500199366	Internet Services for a period of three months	306,473.46	3 months	Supply Chain
31.05.2017	4500197701	Off Premise Contact Centre for WOL 6mnth	400,080.05	6 months	Supply Chain
29.06.2016	4500184884	WOL-Installation& Configuration Contact c	486,651.78		Supply Chain
12.05.2015	4500164350	Vox tender cost routing	2,151,160.88	24 months	BAC
14.04.2015	4500163033	Cost Routing Service	149,658.72	6 months	Supply Chain
17.03.2015	4500161587	cost routing telephone	116,823.68
25.02.2015	4500160456	Cost routing for telephones	127,285.11
09.02.2015	4500159599	Cost routing telephone	127,285.11
23.01.2015	4500158801	Cost Routing Telephone	766,743.82	Once-off	BAC
06.03.2014	4500143226	RFP00237/13A Internet service 3yrs	5,196,449.72	36 months	BAC
19.06.2013	4500131227	Audio / Video Conferencing	204,949.20	Once-off	Supply Chain
07.03.2013	4500126223	Cost routing telephones	2,996,290.64	24 moths	BAC
TOTAL	15,938,395.62

Water Research Commission (WRC)

b) Water Research Commission

(i) Provision of Cloud Hosting Services to the Water Research Commission (WRC) for a period of twelve (12) months

(ii) (aa) The Contract value amounted to R 493 085.50 (Inclusive of Vat)

(bb) Contract period of twelve (12) months, Contract award date: 10 September 2018

(iii) The contract was evaluated by the Bid Evaluation Committee and approved by the Bid Adjudication Committee in line with their approval delegation

(iv) The approved tender and contract award processes followed was in line with all National Treasury and the WRC procurement policies and procedures.

The contract awarded to Vox Telecommunications (Pty) Ltd (Company registration number: 2011/000797/07) was cancelled on the 22 November 2018 due to the company failing to commence with the contract as per the agreed contract terms and conditions. The contract start date was 01 October 2018, the company failed to commence on that date and the start date was extended to 01 November 2018 and was unable to migrate the WRC data and thus again failed to commence with delivering the contracted services. The company provided the technical reasons why they were unable to provide the services and estimated that the data transfer would take three months this was not acceptable to the WRC. The WRC then served VOX Telecommunications (Pty) Ltd with a contract termination letter on the 22 November 2018, which they accepted and agreed to reimburse the WRC an amount of R 7 509.23 which incurred as a result of the delays during the month of November 2018.

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Reply:

1. PARI was awarded a contract to complete an Expenditure and Performance review of the duplication of language services in Pan South Africa Language Board (PanSALB), Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities (CRL) and The Language Services in the Department of Arts and Culture.

a) The tender was awarded on 7 October 2013 by a panel of five officials, of which a certain person (name furnished) was part.

b) The tender was a composite tender across a number of sectoral topics and 47 bids were received. For the topic of language services duplication, PARI was the only bidder.

c) PARI was the only bidder and their bid price was R548 700.

d) PARI’s bid price was R548 700.

2. A certain person (name furnished) did not have a relationship with PARI at the time of the awarding of the contract. Three years after this body of consulting work was completed, she became a Research Fellow at PARI in May 2017. Apart from the Expenditure and Performance Review on language services duplication, she has had no involvement in any other work between PARI and GTAC.

Reply:

(1)(a) No.

(1)(b) No.

(2) Falls away.

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Reply:

The National Credit Act, 35 of 2005 does not fall under the mandate of the National Treasury.

The question should rather be directed to the National Credit Regulator and the Department of Trade and Industry.

Reply:

 

1.

(a) SARS did not purchase Interfront SOC Ltd. The said company was formed by SARS with the required consent/approvals from the Minister and Treasury as required by the PFMA. SARS purchased the business and assets of Tatis International (Pty) Ltd (Tatis) which consisted mainly of the intellectual property (IP) in the customs solution software called TATIScms and employed Tatis’s skilled IT staff using Interfront as the legal entity as a wholly owned subsidiary of SARS. The total purchase consideration for the IP and assets of Tatis was not R27m but valued at R98m of which Accenture and Tatis Africa contributed R14m each for reseller rights. Accenture’s contribution was in the form of cash paid to Interfront (CLIDET at the time) and Tatis Africa a discount to the IP value. SARS is not aware of the allegation that the value of Tatis was R2m. Revenue collected by Interfront from Luxembourg for support and maintenance on the system for the period 2011-2018 amounted to R77m. A further R11m per annual is forecasted for the next 3 years.

(b) This question is answered under (a). Interfront firstly, modernised the Customs system to an electronic IT system which was implemented in SARS in 2013 and secondly has been building a new more modern electronic customs solution system to implement the new Customs Act.

(2) following the purchase of the specified company, (a) what amount did SARS spend on information and technology (IT) services and (b) why were the IT services of the specified company needed in view of SARS’ purchase?

a) SARS spent to date (31 Oct 2018-accruals included) a total amount of R784m, of which R669m is for software development, on all information technology and related services.

b) The Customs transaction volumes (Important and Exports) were doubling over the years while the staffing level remained static and minimal expenditure in information technology targeted at Customs, Customs was left in an untenable situation having to manage ever growing volumes with little capacity. Customs was utilising over 34 distinct systems to manage its business. Those systems were developed over a time as global trade was growing and evolving. The core system, CAPE, was commissioned in 1979 and was based on the first generation technology originally designed for batch data capture. The underlying conclusion was SARS Customs was not in a favourable position to deliver on its multifaceted mandate and effectively manage its many risks while providing the level of services required then in a competitive economy. After considerable analysis of the environment at the time, a number of options to resolve the technology issues and challenges were considered. The options investigated were as follows:

Option 1- Develop a new in-house custom-built solution utilising similar technology to that used for Tax Modernisation,

Option 2 – Create a SARS owned Development Company that would acquire the TATIS customs management solution.

Option 3 – Select and deploy a commercially-available customs software package such as Bull.

The key considerations, high-level time-lines and financial implications were discussed in the National Treasury submission and after applying the risk-adjusted public sector comparator; option 2 solution benefits considerably outweighed the risks. The submission was duly noted and signed by the Finance Minister at the time.

SARS continues to make use of the IT services of its subsidiary to modernise its Customs systems and achieve compliance with specific reference to the new Customs Act.

Reply:

1. For the exclusive knowledge of the State Security Minister and Deputy, the State Security Agency (SSA) has never contracted the services of Bosasa or African Global Operations, as it is know now.

2. Not applicable (N/A)

Reply:

1. China has not reintroduced a gold standard for the Chinese Yuan. This issue has not been discussed under the auspices of the BRICS Finance Ministers and Central Bank Governors’ meetings.

2. The New Development Bank has already approved US$680 million in project financing for South Africa. In addition, the NDB employs 18 South African professionals both at the Africa Regional Centre (Sandown, South Africa) and at the bank’s headquarters (Shanghai, China).

Reply:

The Acting Commissioner has no knowledge of the origin of the so-called “spy tapes” other than what has been reported on in certain media articles such as an article of April 2009 in which it was reported that the Inspector General of Intelligence had confirmed an investigation had been opened.

Herewith is link to the M&G Article:

https://mg.co.za/article/2009-04-09-the-spy-who-saved-zuma

News

The spy who saved Zuma

Pearlie Joubert, Adriaan Basson09 Apr 2009 07:10

Reply:

The Hounorable Member is requested to note that the Generally Recognised Accounting Practice 103 (GRAP 103) is applicable to Public Entities in the Arts and Culture sector that prescribes the uniform accounting for classifying and recording Heritage Assets and regulates related disclosure requirements. The Hounorable Member is requested to refer the question to the Minister of Arts and Culture.

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Reply:

No, it should be noted that not all the Assistant Director and Deputy Director posts in this Department are on level 10 and 12. There are some that have been originally graded on post levels 9 and 11. The Job Evaluation information (generated through the Job Evaluation system) has been used to determine the grading of these jobs. Subsequently, the Job Evaluation results are factored into the approved organizational structure of the Department. Hence, the Job Evaluation database is created to reflect all the jobs, inclusive of all the Assistant Directors and Deputy Directors which are on 9, 10, 11 and 12.

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Reply:

(1)

The percentage of tax returns that are selected for audit and the associated turnaround time of these audits are shown in the following tables: Commissioner please note that this point relates specific to cases that are routed for audit. You will see

For the current financial year (2018/19) to date 31 October 2018:

Tax Type	Taxpayer	Returns Received	Returns Selected for Audit	(a) %Audits	(b) avg. TAT for Audit(W Days)
Income Tax	i) Companies	650,051	42,416	6.5%	45d
	ii) Individuals	5,678,840	1,476,677	26.0%	28d
	Trusts	95,408	19,715	20.7%	30d
VAT	(i & ii)	2,151,221	270,670	12.6%	42d

For the previous financial year (2017/18) to date 31 March 2018:

Tax Type	Taxpayer	Returns Received	Returns Selected for Audit	(a) %Audits	(b) avg. TAT for Audit(W Days)
Income Tax	i) Companies	1,003,930	49,808	5.0%	69d
	ii) Individuals	6,474,838	1,594,302	24.6%	44d
	Trusts	168,081	43,206	25.7%	52d
VAT	(i & ii)	3,435,900	257,949	7.5%	44d

(2)

a) The turnaround times for refunds to taxpayers are shown in the following tables: This table includes non-audited cases hence the TAT is lower. It does however show audit as the bottleneck. You can give a view on planned work, reducing audit alerts, where possible delinking audit from refund process.

For the current financial year (2018/19) to date 31 October 2018:

Tax Type	Taxpayer	Number of Refunds Paid	Value of Refunds Paid	avg. TAT for Refund (W Days)
Income Tax	i) Companies	31,431	-11,656,141,104	14d
	ii) Individuals	2,111,140	-19,891,039,717	10d
VAT	(i & ii)	282,751	-122,105,382,787	29d

For the previous financial year (2017/18) to date 31 March 2018:

TaxType	TaxPayer	Number of Refunds Paid	Value of Refunds Paid	avg. TAT for Refund (W Days)
Income Tax	i) Companies	55,993	-13,587,950,231	16d
	ii) Individuals	2,693,371	-26,801,336,863	13d
VAT	(i & ii)	401,475	-191,070,644,045	23d

(b)

The SARS Credit Book for the applicable tax types as on 11 November 2018: It is important to note that the spike in 2018/19 PIT credit book is mainly as a result of the fact that filing season has just concluded and we are not comparing the same period. The increase in VAT credit book is as a result of the absolute 1% (7% relative terms) increase. With the increased VAT refund allocation of R20bn this will assist in reducing the VAT credit book.

Tax Type	Taxpayer	Credit Book at 11Nov'18
Income Tax	i) Companies	-16,267,274,457
	ii) Individuals	-11,796,073,880
VAT	(i & ii)	-36,092,087,307

The SARS Credit Book for the applicable tax types as at the end of the previous Financial year on 31 March 2018: This view is as at the 31 March 2018 and specifically on PIT there are no further influx of returns for this year (previous table) hence between now and then the book will reduce.

Tax Type	Taxpayer	Credit Book at 31Mar'18
Income Tax	i) Companies	-21,162,573,909
	ii) Individuals	-7,605,166,381
VAT	(i & ii)	-30,385,217,532

Reply:

a) The annual salary of the indicated person is R3 812 280.00.

b) The official was appointed by the Development Bank of Southern Africa on 31 March 2016 on a three year contract which ends on 28 February 2019. Prior to that she was seconded to the IPP office by the National Treasury.

Reply:

a) The 2006 SARS records that have been reviewed by the current procurement leadership team reflects that the selection of the three entities (i.e. IBM, Accenture and BB&D) was based on the industry knowledge of the then Strategy, Modernisation and Technology senior staff.

b) A Master Services Contract was concluded.