ATC121024: The Budgetary Review and Recommendation Report of the Portfolio Committee on Police on the Independent Police Investigative Directorate, dated 24 October 2012

The Budgetary Review and Recommendation Report of the Portfolio Committee on Police on the Independent Police Investigative Directorate, dated 24 October 2012

The Portfolio Committee on Police, having considered the performance and submission to National Treasury for the medium term period of the Independent Police Investigative Directorate (formerly known as the Independent Complaints Directorate), reports as follows:

1. Introduction

Structure of the Report: This Report comprises nine sections:

· Section 1: Introduction- sets out the mandate of the Committee, the purpose of this report (Budgetary Review and Recommendation Report) and the process to develop this report.

· Section 2: Provides an overview of the Directorate’s Vote and spending for 2011/12 as well as for part of 2012/13 and sets out the Directorates MTEF submission to National Treasury for 2013/14.

· Section 3: Summarises the 2011/12 report of the Auditor General for the Directorate.

· Section 4: Provides a broad overview of the changing strategic and operational environment of the Directorate for 2011/12 and 2012/13.

· Section 5: Summarises performance information per Programme for 2011/12.

· Section 6: Highlights key observations of the Committee with respect to financial and performance information for 2011/12, as well as 2012/13.

· Section 7: Summarises additional information requested from the Directorate in deliberations and other reporting requirements.

· Section 8: Summarises recommendations of the Committee with a focus on funding for 2012/13 and 2013/14, in light of the above.

· Section 9: Conclusion.

Committee mandate: The Committee is guided by its interest to promote effectiveness, efficiency and professional policing in South Africa . It has a desire to see a reduction in crime. The mission of the Committee therefore is to fulfil its constitutional function to:

· Pass legislation.

· Scrutinise and oversee executive action and the organs of state including the Department of the Police, the Civilian Secretariat for Police, the Independent Police Investigative Directorate (the Directorate) and the Private Security Industry Regulatory Authority.

· Facilitate public participation and involvement in the legislative and other processes.

· Engage, participate and oversee international treaties and protocols.

The Directorate: Each year, as part of its oversight function, the Committee considers and reports on the annual reports of the Independent Police Investigative Directorate (IPID). It is noted at the outset that the 2011/12 Annual Report is the last report tabled by the Independent Complaints Directorate. The Independent Police Investigative Directorate, with a transformed mandate, became effective in terms of the Independent Police Investigative Directorate Act, No 1 of 2011 on 1 April 2012.

BRRR process: In addition, the Money Bills Procedures and Related Matters Amendment Act, (Act 9 of 2009), sets out the process that allows Parliament to make recommendations to the Minister of Finance to amend the budget of a national department. As part of this process, Portfolio Committees should compile Budgetary Review and Recommendation Reports (BRRR) in October of each year, containing recommendations relating to funding allocations for departments and other institutions that account to them. The BRRR are also source documents for the Standing Committee on Finance when it makes recommendations to the House on the Medium-Term Budget Policy Statement (MTBPS). The annual review and analysis of performance (entailing both financial and non-financial performance indicators) also forms part of this process.

This is the first year that the Committee is undertaking the BRRR process for the Directorate, though it has completed two prior BRRR reports for the Department of Police. The Committee has overseen the performance of the Directorate though regular oversight meetings during 2011/12 and 2012/13 and has also received reports on its quarterly expenditure for 2011/12 and for the first quarter of the 2012/13 financial year. The Committee visited the Upington satellite office of the Directorate on 27 July 2012.

Meetings: The Committee was briefed on the annual performance for 2011/12 of the Directorate on 8-9 October 2012. The Committee also met with the Auditor-General on the audit outcomes on 9 October 2011. Copies of the presentations are available from the committee secretary. The Committee has already considered and reported on the respective strategic plans and budget proposals of the Directorate for 2012/13.

2. Overview of Directorate Vote and Spending

2.1. Financial performance for 2011/12

Vote: The Directorate received a final appropriation of R153 ,534 million in 2011/12 which was a 19 per cent increase on the R131,435 million received in 2010/11.

Adjusted appropriation 2011/12: The main appropriation (R151 ,600 million) was increased by R1,934 million during the adjustment period. This included a rollover of R1 ,424 million in Programme 3 to pay for late invoices for software licences and specialised services. An additional R510 thousand was allocated for higher personnel remuneration increases that provided for in the main budget. Funds totalling R204 thousand were moved out of Programme 1 and 2, mainly from the Goods and services allocation, to Programme 1 and 2 (Machinery and equipment) for the procurement of furniture and equipment.

Virement (2011/12 ): Virement was applied and funds to the amount of R1.276 million (1.7%) were moved out of Programme 2: Complaints Processing, Monitoring and Investigation (Goods and Services). R924 thousand of that money was moved to Programme 1: Administration (Compensation of Employees: 1.5%) and R352 thousand was moved to Programme 3: Information Management and Research (Compensation of Employees: 1.8%).

2011/12 Quarterly Expenditure: The expenditure patterns of the Directorate over a two year period show a disturbing pattern of low third quarter expenditure, followed (at least in the case of 2011/12) by relatively high fourth quarter. Only 61.17% was spent at the end of the third quarter of 2011/12 (in comparison to 71.2% in 2010/11).

2011/12 Final expenditure: The Directorate spent 100% per cent of its budget in the 2011/12 financial year (only R2 thousand remaining). This is an improvement on previous years where there was under-spending at the end of the fourth quarter i.e. 97.7% in 2010/11 and 91.2% in 2009/10.

However, despite almost 100% expenditure overall for 2011/12 it is important to note that Compensation of employees spent 99.5% of the final appropriation (slightly low spending is due to the delay in filling certain funded positions). Note that this is a percentage calculation after funds have been moved and that as stated above, funds were moved out of Goods and services to address the projected shortfall in Compensation of employees.

Unauthorised, Fruitless and wasteful and Irregular expenditure: There was no Unauthorised expenditure recorded for 2011/12. There was an amount of R1 thousand incurred for Fruitless and wasteful expenditure. The Irregular expenditure for 2011/12 totalled R83 thousand of which R20 thousand has been condoned. The actual irregular expenditure for 2011/12 that was not yet condoned thus amounts to R63 thousand (in addition to the R184 thousand which was brought forward from previous years). Irregular expenditure was incurred for a number of reasons including approval of overtime exceeding 30% of basic salary and overtime worked without prior approval; and performance bonuses paid without a performance agreement (see also summary of report of the Auditor General).

2.2. Financial performance for 2012/13

Budget allocation for 2012/13: The budget allocation for 2012/13 increased from an adjusted budget of R153,534 million in 2011/12 to R196,961 million i.e. an increase of 28% (R43 million). However, it is important to note that, despite the priority to increase the staffing of the Directorate, Compensation of employees received only 21% (in comparison to Goods and services, which received 37%) of the R43 million. In addition, Programme 1: Administration received 53% in comparison to Programme 2: Investigation and Information Management (the core business of the Directorate) which received a smaller 35% of the R43 million.

In addition, trends over three years reflect a relatively low growth in Compensation of employees (10% in 2010/11; 14% in 2011/12 and 17% in 2012/13) in comparison to higher growth in Goods and services (46% in 2010/11; 27% in 2011/12 and 41% in 2012/13).

The allocation of the 2012/13 budget is almost equally divided into Compensation of employees (48%) and Goods and services (49%).

Spending for first quarter 2012/13: During the first quarter of 2012/13, the Directorate spent 17% (R32.873 million against R196.961 million) of its allocated budget, far below the 25% benchmark. The pattern of low first quarter spending continues as in previous years (i.e. 19% in 2011/12 and 17% in 2010/11).

According to the Directorate a number of measures have been taken to reduce under-spending including: capturing of payments at SITA; monthly expenditure reports per responsible manager which includes spending, reasons for under and over expenditure and details on 30 day compliance (see AG report); monthly Budget Control Committee meetings; and biannual review of budget needs.

Spending pressures: The Directorate provided the Committee, for the first time, with a comprehensive analysis of problems faced in spending during 2012/13, and it is clear that these same systemic problems were in existence in the previous financial year (i.e. 2011/12). In essence, the Directorate has identified the following key concerns and has highlighted measures that can be taken to address these concerns:

· Misalignment of the budget with the organisational structure and priorities of the Directorate has meant that the Directorate does not have the funds to pay for all filled posts (291 as at end August 2012) or to fill vacant posts (58 as at the end of August 2012). Filling of vacant posts (especially for investigators) is a key priority in terms of delivery on the transformed mandate of the Directorate. Currently, the budget is configured so that only about 48% of funds are directed toward Compensation of employees. A shortfall of R7 ,315 will occur to fund filled posts (R2,58 million needed) and to fill the 58 vacant posts for three months (R5,056 million).

· Analysis of the Goods and services budget (including the 28% of that budget that is allocated to contractual obligations) reflects that the allocation to Goods and services is too high. In addition, the Directorate has noted in particular that spending of this Goods and services budget in the provinces is low and thus the allocation too high for its needs.

· Cost cutting/control measures can be put in place and funds can be shifted from the Goods and services budget to cover the shortfall of funds for Compensation of employees thus allowing these posts to be filled. Key areas which have been identified for cost cutting (through tightening of policy, improved management and other measures) include Government Garage (GG) fleet services- (the Directorate wants to reduce the contracts for GG vehicles which are projected to cost R7 million for the year) and increase the use of subsidised vehicles which are more cost effective; reduce other contractual obligations where possible – (allocations for these contractual obligations are apparently too high); reduce overtime claims (by putting a moratorium on claims for overtime in Programmes 1 and 3 – non-core; and controlling overtime claims in Programme 2- core); cap payment of performance bonuses (at 1.5%); and ensure use existing equipment and procure only what is essential. Other measures that will be taken are consideration of centralisation of payments for key contractual obligations (including leases); introduction of controls for Subsistence and Travel (S&T) expenditure and other non-core items, and negotiate reasonable office rental in line with CPI. The Directorate will communicate the cost cutting measures and realignment at all levels.

2.3. Financial needs for 2013/14

Budget baseline: According to the indicative medium term baseline allocations, a total of R215 ,342 million is allocated to the Directorate for 2013/14 (growing to R232,630 million in 2014/15 and R243,331 million for 2015/16). Of this R215 ,342 million, R105,750 million is allocated to Compensation of employees and R105,459 million to Goods and services. In terms of Programme structure, R100 ,300 million is allocated to Programme 1: Administration; R109,418 million to Programme 2: Investigation and Information Management; and R5,624 million to Programme 3: Legal Services.

Relationship to 2012/13 analysis of misalignment of budget: In the light of misalignment of the budget to the priorities and organisational structure, the Directorate has stated that they will need to correct the MTEF baselines (shift funds from Goods and services to Compensation of employees), and also review the 13/14 proposed organisational structure to ensure alignment with the available budget.

Submission to National Treasury: The Directorate submitted to National Treasury that it would not be able to implement 1%, 2% or 3% reductions in its current baseline for the MTEF. However, from a perusal of the submission, the Directorate has not requested any additional funding either. The submission document does not seem to accurately reflect the analysis on spending pressures identified in 2012/13. The Directorate has noted that they would need to reconsider their MTEF submission to National Treasury based on a realignment of the baselines.

3. Audit findings for 2011/12

The Directorate received an unqualified report from Auditor-General for 2011/12 with findings. Key findings included:

· Predetermined objectives : (1) Lack of a written system of reporting performance against predetermined objectives- In this case it referred to the inability of the AG to ascertain the reliability of the information with regard to the indicator on the registration and allocation of new cases within 48 hours of receipt. There were no Department records to support whether this had occurred or not. (2) Evidence supporting achievement on strategic objectives was not obtained. (3) Compliance monitoring controls were not able to detect and prevent non-compliance with Standard Operating Procedures resulting in irregular expenditure. (4) 31% of targets not achieved due to capacity constraints.

· Compliance with laws and regulations: (1) A human resource plan was not in place. (2) Accruals: Money owed by the Directorate was not settled within 30 days. (3) Senior management did not submit their annual interest declarations before the legislated date.

· Internal control deficiency: Interim financial statements were not submitted.

· Compensative/circumstantial – overtime: No approval of overtime payment exceeding 30% of basic salary.

· Employee costs: Performance agreement not pre-approved.

· Investigations: Public Protector is currently investigating the lease arrangement of the City Forum building.

The Directorate reported the following steps taken to address adverse audit findings:

· Compilation of a consolidated written document for reporting performance against objectives.

· Collection of evidence supporting performance.

· Engaged with senior management to ensure agreement on standard operating procedures and development of guidelines.

· Human resource plan has been compiled and submitted.

· Still need to improve to ensure are payments settled within 30 days. Annual interest declarations were submitted late in 2011/12 and were submitted timeously in 2012/13.

· Red flag on overtime when nearing limit.

4. Overview of the Strategic and Operational environment of the Directorate

Outcome-based approach: The strategic outcome-oriented goals of the Directorate are linked directly to Outcomes 3 ‘All people in South Africa are and feel safe and secure’ as identified by the Department of Performance Monitoring and Evaluation in the Presidency.

The activities of the Directorate focus specifically on Output 3 (of Outcome 3) which is to combat corruption in the Justice Crime Prevention and Security (JCPS) cluster and thereby enhance its effectiveness and its ability to serve as a crime deterrent. More specifically the Directorate focuses on combating corruption within the police.

Overview of the Strategic Plan (2011-2016): Four key areas for improved service delivery are:

· Effectively investigate criminal offences committed by members of the SAPS and Municipal Police Services (MPS).

· Report and monitor recommendations that were made in respect of members of the SAPS and MPS resulting from investigations conducted by the Directorate.

· Improve reporting and accountability practices.

· Develop policy, reporting frameworks and standard operating procedures to regulate investigations.

Overview of Strategic Plan (2012-2017): The Directorate revised its Strategic Plan in line with the National Treasury Framework for Strategic and Annual Plans which focuses on outcomes-based planning. The targets and outcomes of the 2012-2017 Strategic Plan focuses on the new mandate of the IPID, due to the promulgation of the IPID Act 1 of 2011 on the 1 April 2012. In addition to strategic outcome-oriented goals of the IPID, the Plan deals with the three high level outcomes:

· High level strategic outcome-oriented goal 1: A police service that is trusted by the community and operates in line with the spirit of the Constitution.

· Intermediate outcomes: High level strategic outcome-oriented goal 2.1: The IPID is strong independent oversight body; and High level strategic outcome-oriented goal 2.2: The police service is responsive IPID recommendations.

· Immediate outcomes: Strategic outcome-oriented goal 3.1: The IPID is accessible to the public; Strategic outcome-oriented goal 3.2: The performance management system operates optimally; and Strategic outcome-oriented goal 3.3: The IPID processes cases efficiency.

The mandate of the Directorate has been transformed in line with the IPID Act. In essence, the Directorate is evolving from a complaints-driven organisation to an investigative-driven organisation. In addition, the Act tightens the mandate of the Directorate to focus on more serious and priority crimes committed by members of the police services; and places strict reporting requirements on the police services on matters that should be reported to the Directorate for investigation and for the implementation of disciplinary recommendations.

In terms of the Act, in addition to the requirement to investigate deaths in police custody and as a result of police action, the Directorate should also investigate: complaints on discharge of an official firearm by a police member; rape (on or off duty) by a police member; rape of any person in custody; complaints of torture or assault by a police member; corruption matters; and other matter referred from various sources.

Key operational achievements for 2011/12 were reported as:

· New legislation : The legislation that transformed the ICD to IPID was signed into law by the President on the 12 May 2011.

· Serious Cases : The Directorate’s strategic decision to prioritise serious cases (deaths that occur in police custody or as a result of police action) resulted in 90% of these cases being in 2011/12. The target was 65%.

· Backlog and Carry over cases : In 2011/12 the Directorate reduced the backlog on carry over dockets which should be limited to 10% each year. The Directorate carried over 550 cases at the end of 2011/12 in comparison to the previous year (2010/11) where there were 1 103 carried over cases.

· Community awareness programmes : The Directorate held 279 outreach events in 2011/12 exceeding the target of 260. The Directorate issued 60 media statements on cases.

· Investigation of Criminal Behaviour : The Directorate finalised 86% of investigations into complaints of criminal behaviour laid against the SAPS and MPS in the year under review. The target was 55%.

· Register and allocation of cases : The Directorate achieved 91% in registering and allocation within 48 hours of the received 4 923 complaints in 2011/12. The 9% of the shortfall in meeting the 100% target was contributed by Western Cape and Gauteng provincial offices.

· Misconduct cases : The Directorate completed 98% of investigations into complaints of misconduct lodged against SAPS members in 2011/12 against the set target of 55%.

· Recommendations to the SAPS : The Directorate made 1 276 recommendations to SAPS management in respect of disciplinary action.

5. Performance Information for each Programme in 2011/12

5.1. Programme 1: Administration

This Programme is responsible for the overall management of the Directorate and its support services. It consists of internal audit unit, auxiliary services, human resources management, financial management, supply chain management, asset management, risk and ethics management, labour relations, employee wellness management and security services.

The following table indicates the budget allocated for Programme 1 in 2011/12:

Administration
Adjusted Appropriation (R’000)	Virement (R’000)	Final Appropriation (R’000)	Actual Expenditure (R’000)	Variance (R’000) between final appropriation and expenditure
R59 949	R924	R60 873	R60 872	1

An amount of R924 thousand was moved to this Programme to cover a shortfall in Compensation of employees. The final appropriation for this Programme in 2011/12 was R60.8 million with an actual expenditure of R60.8 million and a variance of R1000 which is equal to 100% expenditure. The Programme spent 99.4% of the allocated budget of R50.837 million in 2010/11 and 89.1% in 2009/10.

The following table highlights only performance on selective targets for 2011/12:

Strategic Objective	Target	Actual
Evaluate the effectiveness of internal controls and ensure compliance with applicable prescripts	· 16 audit review	32 (audit of provinces and 8 follow up audits)
Timely identification and effective mitigation of risks	· 16 risk management reports	· 16
Reduce vacancy rate by effectively administrating the recruitment, selection and appointment of employees and develop and implement a retention policy	· Vacancy rate below 10%	· 7.9% but no retention policy in place Due to be adopted by end 3 rd quarter 2012.
Promote discipline in the organisation	· 70% disciplinary hearings finalised in 90 days · 70% grievances finalised in 60 days	· 29% Not met · 0% Not met

Reported challenges for 2011/12 included:

· Capacity in the wellness section was low which resulted in not meeting the target for HIV and AIDS awareness campaigns.

· Capacity constraints in labour relations section meant that grievance procedures were delayed.

· Low number of female applicants for senior management posts and low number of applicants with disabilities received resulted in not meeting the equity targets. The Directorate is engaging with role-players in the sector to head hunt for disabled applicants.

· Corporate Governance component established under IPID (April 2012).

· Delays/non-filling of vacant posts. Have put in place process in 2012/13 to ensure all vacant posts are filled by an identified date with weekly follow up meetings to monitor progress.

· A total of 24 posts were vacant (279 filled out of 303 posts). The majority of these unfilled posts (14) were in Programme 2 (core business of the Directorate). Eight posts were vacant in Programme 1 and two posts were vacant in Programme 3.

5.2. Programme 2: Complaints Processing, Monitoring and Investigation

This Programme had two components in 2011/12, namely, Complaints processing, monitoring and investigation; and Legal services.

The strategic objective of this Programme in 2011/12 was to promote proper police conduct. This objective is measured by four outputs:

· Finalising investigations of death in custody or as a result of police conduct.

· Finalising investigations of complaints of criminality against members of the SAPS and MPS.

· Conducting police station audits for compliance with the Domestic Violence Act.

· Processing applications for exemption in cases of non-compliance with DVA.

The following table indicates budget and spending allocated for Programme 2 in 2011/12:

Complaints Processing, Monitoring and Investigation
Adjusted Appropriation (R’000)	Virement (R’000)	Final Appropriation (R’000)	Actual Expenditure (R’000)	Variance (R’000) between final appropriation and expenditure
R74 522	(1 276)	R73 246	R73 245	1

An amount of R1.276 million was shifted from Goods and Services in this Programme to Programme 1 (R924 000) and Programme 3 (R352 000) to defray anticipated Compensation of employees in these Programmes. The Programme spent 99.9% of its final appropriation of R73.2 million. There was a variance of R1000 under-spending in 2011/12. It spent 98.6% of its final appropriation (R65.9 million) in 2010/11 and the expenditure in 2009/10 was 100%.

The Directorate met four out of its six targets in Programme 2 as depicted in the following table:

Strategic Objective	Target	Actual
Register and allocate all new cases within 48 hours of receipt	100% (5 450)	· 91% Not met
Investigate deaths in custody or as a result of police action	65% (470)	· 90%
Investigate and/or monitor complaints of criminality and misconduct	· 55% of the investigations of criminality completed · 55% of the investigations of misconduct completed	· 86% · 98%
Monitor the implementation of DVA	· 108 the number of police stations audited for compliance · 100% of applications for exemption in terms of the DVA	· 222 · 99% Not met

The following statistics highlight performance issues for 2011/12 in terms of notifications and complaints:

· Fewer complaints and notifications were received in 2011/12 (4 923) in comparison to 5 869 in 2010/11. The total case load for 2011/12 was 6 026 cases due to the backlog cases carried over from 2010/11 (1 103 cases).

· Most complaints and notifications were received in Gauteng (19%) followed by the Western Cape (18%).The majority of complaints/notifications were for criminal offences (2 320), followed by misconduct (1 795), deaths (720) and Domestic Violence Act (88).

· Despite the fact that the most cases were received by Gauteng and the Western Cape , KZN had by far the highest workload for death cases (268), followed by Gauteng (217), Eastern Cape (120) and Western Cape (98).

· Poorest performance for completion of cases during 2011/12 was in Gauteng (76%), followed by KZN (88%). Free State completed 100% of its workload. Poor performance in Gauteng is noted in terms of all categories of cases – death (76%); criminal (65%); misconduct (93%).

· A total of 545 recommendations were made to courts/Director of Public Prosecutions (DPP) on criminal and death cases. The highest number of recommendations to court/DPP were made in KZN (112); followed by Northern Cape (110). The lowest number of recommendations to court/DPP was made by the provinces with the highest case loads: Gauteng (13); and Western Cape (26).

· Out of the total of 36 convictions in 2011/12, most were attained in the North West (11). There were 38 acquittals in 2011/12, the majority in the Eastern Cape (13).

· The Directorate made 1 276 recommendations to SAPS in 2011/12 with regard to all cases.

5.3. Programme 3: Information Management and Research

The strategic objectives for this Programme in 2011/12 were to:

· Analyse information in relation to the Domestic Violence Act.

· Increase the number of community-awareness programmes.

· Strengthen the ICD’s information and communication technology by developing and implementing an action plan.

The following table indicates budget allocated for Programme 3 in 2011/12:

Information Management and Research
Adjusted Appropriation (R’000)	Virement (R’000)	Final Appropriation (R’000)	Actual Expenditure (R’000)	Variance (R’000) between final appropriation and expenditure
R19 063	352	R19 415	R19 415	0

The Programme recorded 100% expenditure of its final appropriation of R19.4 million in 2011/12. In 2010/11 the Programme spent 88.1% of its budget appropriation of R14.8 million and 66% in 2009/10 of its appropriation budget of R15.9 million.

The following table indicates performance of Programme 3 in 2011/12:

Strategic Objective	Target	Actual
Promote public awareness of the ICD role and services	· Number of community awareness and outreach programmes launched Target: 260 · Number of updates to departmental website Target: Ongoing	· 279 · 62
Conduct proactive research	3	· 2 Not met
Establish efficient information systems to support strategic business objectives	Revised and approved ICT operational plan. Implement 15% of ICT operation plan	ICT operational plan revised and approved. 15% of ICT operational plan was implemented

Reported challenges for 2011/12 included:

· Two vacant posts in research section which were not filled due to decision to downgrade capacity in relation to changed mandate of IPID.

· Problems in the ICT environment were acknowledged.

6. Committee Observations

The following are key observations of the Committee with regard to the Directorate’s financial performance and service delivery performance for 2011/12 and 2012/13:

Relationship between financial and programme performance: Over the years, the Committee has questioned whether the budget of the Directorate has been correctly allocated to ensure achievement of key performance priorities of the Directorate, i.e. investigations. The skewed allocation of the budget to the National Office, and the increased centralisation of functions at National Office has been an ongoing concern. However, the Directorate has stood firm in its position that this was the correct approach.

The Directorate has now acknowledged that:

· there is no alignment between the budget of the Directorate and its organisational structure;

· there is no alignment between performance reporting and financial reporting; and

· the budget is not aligned to priorities

This admission is welcomed by the Committee as it supports the suspicions that the Committee has had for a number of years, and can now result in a process of realignment and reprioritisation. All measures that will result in proper alignment of the budget to structure and priorities, and aligned performance and financial reporting are supported and encouraged by the Committee.

6.1. Financial performance

Quarterly expenditure, adjustments and virement: While acknowledging the fact that the Directorate spent 99.9% of its 2011/12 adjusted appropriation, the Committee noted that there is a trend of poor spending by the Directorate. This is reflected in low spending by the end of the 3 ^rd quarter (61% for 2011/12 and low spending for the previous two financial years) and almost 100% expenditure in 2011/12 at the end of the 4th quarter. This raises a concern of possible ‘fiscal dumping’ to ensure full expenditure of funds. The Committee also raised concerns around the virement of R1 ,2 million that was moved from the Goods and services budget (in Programme 2) to the Compensation of employee budget in Programme 1 and 3.

In response to these concerns the Directorate stated that while there was not ‘fiscal dumping’ there were problem areas with regard to spending, largely due to misalignment of the budget with priorities and organisational structure, as highlighted above. The key problem with the 2011/12 budget was that there seems to have been poor planning and thus the misallocation of funds. The allocation to Goods and services was almost equal to the allocation to Compensation of employees. Thus despite the priority to increase staffing, especially of investigators and to fill existing vacant posts, this could not be done, because there were insufficient funds in the budget for Compensation of employees.

The pattern of virement for 2011/12 illustrates this problem as the R1.276 million was moved from the Goods and Services budget in Programme 2 to Compensation of employees in Programme 1 and 3 to cover employee costs. The Directorate stated that they face the identical problem in 2012/13 and will need to approach National Treasury to move significant funds from their high Goods and services budget to Compensation of employees to cover existing employee costs and to ensure that they can fill the 58 posts that are vacant as at end August 2012.

Spending on Goods and services: A number of concerns were noted with regard to spending on line items in Goods and services. These included:

· Increase in domestic travel costs to R15 ,7 million (from R10,6 million in 2010/11).

· An increase in Computer services expenditure to R7 ,0 million in 2011/12 (from R5 million in 2010/11) with a decrease in payments to SITA and increase in payments to External computer service providers.

The Directorate acknowledged the problem with high domestic travel costs in 2011/12 and ascribed the problem to poor management and control over vehicles and travel claims at provincial level, mainly due to the centralisation of functions at the National Office. The key problem has been the underutilisation of subsidised vehicles (whereby the employee pays 30% of the repayment costs and the Directorate pays the remainder) and the over-utilisation of Government Garage (GG) vehicles (where all costs are carried by the Directorate). Loopholes in the policy have allowed use of a GG vehicle in certain instances even when the employee has a subsidised vehicle. In addition, employees who qualify for subsidised vehicles are choosing rather to use a GG vehicle as there are no payments required.

Action that will be taken in 2012/13 includes the following: The policy will be amended to close the loopholes and to promote use of subsidised vehicles by employees that qualify for these. Interim guidelines will be drafted, and the leases for underutilised GG vehicles will be cancelled. In addition, the management over vehicles will be decentralised to provincial level to ensure proper control by management. The Directorate hopes that cost savings through better management of vehicles can be used in 2012/13 to cover a projected shortfall in Compensation of employees.

The Directorate stated that another reason for high domestic travel costs related to high claims submitted by investigators. The policy on travel claims is being reviewed to increase cost-effectiveness.

It was a concern to the Committee that the Directorate was unable to address the question of the increase in Computer expenditure, especially decreased expenditure to SITA and increased expenditure to external consultants, despite the fact that this information resides within the Annual Report.

Overtime payments: The Committee was concerned with high expenditure on overtime (a total of R1 ,3 million) and in particular the fact that of this amount a total of R607 thousand was paid for overtime in Programme 1: Administration and a lesser amount, R517 thousand for overtime in Programme 2 which is the core business of the Directorate.

The Directorate acknowledged the concern and stated that a number of measures will be introduced to ensure cost-savings in overtime payments and effect better control. These include a moratorium of overtime for Programme 1 and 3, and measures to reduce overtime payments in Programme 2. Compliance measures including alerts before excessive overtime (over 30% of salary) occurs, will be implemented. Better planning and monitoring at provincial level will assist.

Decentralisation of responsibility: Over the years, financial and management responsibility has incrementally been shifted away from the Provincial Heads and to the National Office. The Committee has consistently stated that this is a problem and has questioned the high allocation of resources to National Office, as well as the centralisation of functions.

For the first time, the Directorate admitted that this centralisation is a problem and the lack of accountability of Provincial Heads for expenditure costs, has resulted in poor spending trends and high expenditure in areas where this could have been better managed. The Directorate has stated that they want to provide Provincial Heads with more responsibility and accountability over their budgets and that the Budget Coordinating Committee (at National Office) will assist the Provincial Heads to ensure that they are capacitated to fulfil these functions effectively and will monitor and evaluate spending continuously to ensure improved and consistent spending patterns throughout the year.

Irregular expenditure: The Auditor General has noted that lack of compliance with certain standard operating procedures (including in relation to overtime payments) has resulted in irregular expenditure. The Committee notes the compliance monitoring procedures that will be taken to ensure better compliance but also recommended that disciplinary action is taken when non-compliance occurs (‘consequences’). The decentralisation of management responsibilities should play an important part in ensuring better monitoring, compliance and consequential action.

6.2. Programme performance

The Committee raised a number of fundamental concerns with the performance reporting of the Directorate. These concerns fall across Programmes and include:

· Lack of analysis by management of relationships between Programme performance- working in silos .

· Inadequate targets to measure quality of performance- targets measure outputs (quantity) rather than outcomes (quality).

· Inadequate linking of performance to financial performance and budget allocations.

In addition, the Committee has noted the concerns of the Auditor General with regard to the lack of a written system of reporting performance against predetermined objectives (especially with respect to the indicator measuring registration and allocation of cases within 48 hours of receipt: Programme 2) which raises doubt as to the reliability of the performance information provided in the Annual Report. The fact that the performance information presented in the Report may not be reliable is therefore a serious concern. The Directorate has stated that they are compiling a consolidated document/written system to provide written evidence on performance reporting.

Programme 1: Administration

Despite the fact that the Directorate stated that they had achieved most of their targets (and were thus satisfied with their performance in this Programme a number of serious concerns were raised by the Committee with regard to performance in this Programme. The Committee raised a fundamental problem with the fact that indicators and targets do not measure the outcome/effect of the initiative. As a result, while performance may look ‘good’ on paper, in practice there are in fact serious problems.

Indicators and targets: The Committee raised a concern in 2011/12 during their oversight over the strategic plan and proposed budget of the Directorate for that financial year, with the manner in which the targets, particularly for Programme 1 had been set. The Directorate at the time had argued against the interpretation by the Committee and had thus decided not to consider amending their targets. The Committee highlighted some of the consequences of this decision. For example, the target set for identification and mitigation of risks is that 16 risk management reports should have been submitted. And they were and therefore the target was achieved. But the question is whether risk was effectively identified and the appropriate steps taken in 2011/12. The problem of the Head Office, currently under investigation by the Public Protector, and poor performance of the Western Cape and Gauteng offices was identified as an example of just some of the risks that were not correctly identified or addressed.

The Committee thus reiterates that proper assessment of performance of this Programme is not possible without adapting the indicators and targets. Key targets which measure ‘quantity’ performance and not ‘quality’ performance and which should be reconceptualised include the target for number of ethics and integrity workshops held; number of internal audit reviews conducted; number of risk management reports submitted; number of expenditure reports submitted, to mention a few. The Directorate agreed, in the meeting that the existing targets were an inadequate measure of performance in this Programme.

Vacant posts: The Directorate reported that it had met its target with regard to a vacancy rate of below 10% - its vacancy rate was 7.9%. However, in response to questions the Directorate acknowledged that vacancies are in fact a serious problem, and that they do not have a retention policy in place. This policy is planned to be adopted by the end of the 3 ^rd quarter of the 2012/13 financial year. Highest vacancies in 2011/12 were in fact in Programme 2 which is the core business of the Directorate.

Even more seriously, it was identified by the Directorate that misinformation on vacancies for 2012/13 had been provided to the Committee in its meeting with the Directorate on the budget and strategic plan for 2012/13 in March 2012. During this meeting it was stated that there were 34 newly funded posts for 2012/13, but in fact the number of posts funded was higher. As at end of August 2012/13 as highlighted in section 2.2. of this report there were 58 vacant posts. At no time in this meeting in March was it stated that these vacant posts (whether 34 or 58) would not be filled due to budget constraints.

Clear misalignment of budget planning is apparent in that the Directorate has now stated that in terms of its current funds for Compensation of employees (R95 million of which R36.8 million has already been used) not only will it not be able to fill these posts, neither will it be able to fund all filled posts until the end of the financial year. The shortfall for filled posts is R2.5 million and the shortfall for filling vacant posts is an additional R5 million.

The Committee is deeply concerned that the Directorate did not provide accurate information to the Committee at the beginning of the 2012/13 financial year. Also, it is clear that there has been severe misalignment of the budget to organisational structure and performance priorities. The fact that this problem has not been identified earlier is an indictment of the management of the Directorate.

The Committee also noted that the Auditor General had identified lack of compliance with Public Service Regulations due to the absence of a Human Resource Plan in place for the MTEF period. The Directorate stated that the Human Resource Plan has now been compiled and submitted in terms of the relevant regulation.

Head Office lease: The Directorate acknowledged, in response to concerns raised by the Committee that poor management (including poor contract management) and a total misjudgement of the seriousness of the matter by management, had resulted in problems with the lease of the City Forum building. The Committee reiterated that this was one of the issues that it had attempted to bring to the attention of the management of the Directorate, and it had been ignored.

The Directorate has and will be taking action to ensure better contract management in future including strengthening the Legal Service unit; increasing management involvement in overseeing and directing the procurement by the Department of Public Works to ensure compliance with all prescripts; consideration of centralisation of payments for all key contractual obligations (leases, Government Garage, cleaning services etc) to ensure proper controls; and negotiating reasonable office rental with landlord in line with the CPI.

The Committee was also very aggrieved that incorrect information had been sent, in writing to the Committee with regard to this lease. The Committee had been told, in writing that the revised needs assessment had been sent off to DPW. Yet in this meeting, the Committee was told that the revised needs assessment was only sent off to DPW ‘yesterday’ i.e. on 8 October 2012. The Directorate acknowledged that the incorrect information had been reported to the Committee in its written report.

Management of discipline, grievances and leave: The Committee raised a number of concerns with regard to the management of disciplinary cases, grievances and leave within the Directorate. The long period of time taken to resolve disciplinary and grievances cases was not acceptable, especially as the number of cases were relatively few. In addition, the Committee requested that the Department analyse their leave patterns, in particular to identify cases of abuse of sick leave, which has financial implications for the Directorate.

Programme 2: Complaints Processing, Monitoring and Investigation

The core business of the Directorate resides in Programme 2, and this Programme is thus key to measuring performance of the Directorate. An ongoing concern of the Committee, which has not been taken on board by the Directorate, despite the recommendation of the Committee, is that the targets in this Programme are set much too low. Thus the Committee reiterates, again, that while four out of the six targets were met (and in fact in many cases exceeded by a large margin), these are not an accurate measure of performance.

Low targets: The fact that targets for investigations were set at 55% and 65% and performance was between 86% and 98% means that the targets are too low. Even the poorest performing offices ( Western Cape and Gauteng ) managed to reach these low targets, even though it is acknowledged that there were serious problems in these offices.

The Directorate has argued previously that they did not want to increase the targets as they were not sure how the caseloads would change in line with the revised mandate of the IPID.

Linkages in terms of the statistics: A central concern of the Committee was that there was no attempt made by management to link the information contained in the statistics provided for the different stages of a case (i.e. from number of complaints and notifications received, number of investigations completed, number of recommendations made to courts/DPP, number of recommendations made to SAPS, number of withdrawals and number of convictions/no conviction). It is only by linking the information, that trends and problems can be uncovered, and an accurate picture of the performance of the Directorate ascertained.

For example, only 36 convictions were attained during 2011/12 and there were a total of 38 acquittals, yet 545 recommendations were made to the courts (DPP) for criminal action. While clearly the convictions and acquittals pertained to recommendations made in earlier years, the number of recommendations made to the courts was probably more the less the same. So the question has to be asked as to why so few convictions are achieved and whether this may relate to the quality of the investigations completed.

Performance of Western Cape and Gauteng offices: The statistics for 2011/12 reflect that the two provinces with the highest overall cases loads were Western Cape and Gauteng . The highest death cases were in KwaZulu-Natal followed by Gauteng and the highest number of criminal cases were dealt with by Gauteng , followed by Western Cape . Even a cursory overview of the statistics reveals relatively poor performance in Gauteng with regard to percentage of cases completed (76%), recommendations made to court/DPP (only 13), and number of convictions (1). Performance in all these areas is far below that of all the other provinces. The performance of the Western Cape office was only slightly better. The Annual Report also notes ‘capacity constraints’ in the Western Cape and Gauteng offices as a reason for not meeting the target for registration and allocation of complaints. The Committee raised problems that they had experienced, particularly with regard to poor performance in the Western Cape office. The Committee noted that the crisis management approach of the Directorate to problems in provinces (such as sending out intervention teams to bring down the caseloads) is not a long term, strategic approach to ongoing problems.

Relationship with SAPS: A number of concerns were raised with regard to the relationship of the Directorate with the SAPS including:

· Number of complaints/notifications referred to SAPS immediately for investigation: the report contains no information on this.

· Outcome of criminal case investigations referred to SAPS: the report contains no information on this (and in fact the Directorate acknowledged that they have never tracked this information)

· Outcome of recommendations made to SAPS: report contains limited information though the Committee acknowledges that this tracking process has now become the mandate of the Civilian Secretariat of Police (who will be expected to report on this)

The Committee acknowledges that the IPID Act is an attempt to address some of these relationship and reporting problems but reiterates that a consolidated approach to track complaints/notifications against the police is essential in order to address the problems in the longer term.

Programme 3: Information Management and Research

While three out of the four targets were reported as met, a number of key problems were noted by the Committee with regard to performance in this Programme during 2011/12 including lack of analysis of trends and the lack of effective research/analytical support.

Link between awareness programmes and complaints: While the number of community awareness and outreach programmes increased (and thus the target was met), the fact that the number of complaints and notifications decreased, means that it is possible that the effectiveness of these outreach programmes is limited. The fact that the Directorate has not considered this possibility is a concern. The Committee has concerns that the Directorate does not seem to make the correct analytical linkages between programmes or targets, in terms of performance. Isolated analysis of the performance in individual targets is not useful.

Limited research: The fact that only two out of a targeted three research reports were completed cannot be excused by the fact that there were limited staff. Even within these constraints it should have been possible to complete this small number of reports.

The Directorate noted that in terms of the revised mandate and structure of IPID, all members of the research component have been moved to the Knowledge Management unit reporting to Programme 2.

Information Systems to support strategic business objectives: The Committee’s oversight visit to the IPID satellite office in Upington revealed serious problems with the Information Technology systems in the Directorate. The office could not report on the number of cases before it, and stated that this information was captured at the Kimberley office and not accessible to the Upington office. Email access to the Directorate is also problematic. Thus, while the target may have been achieved (15% revision and implementation of ICT operational plan), performance in terms of ICT support to strategic objectives was less than satisfactory. It was a concern that the Directorate could not provide information on reasons for the increase in expenditure for Computer systems or for the decreased expenditure for SITA and increased expenditure for External computer service providers. These figures are included in the 2011/12 Annual Report and again point toward the inability of management to make the correct linkages between performance in their specific programmes/areas of responsibility and other related areas (e.g. the finances).

7. Summary of Directorate’s reporting requirements

The following table provides a summary of the additional information requested from the Directorate during the hearings and other reporting requirements.

Reporting matter	Action required	Timeframe
Financials and Programme 1
Copy of the 2013/14 budget submission made to National Treasury	Written report	Received 12 October 2012
Revised slides detailing budget per programme and details of AG findings	Revised slides	Received 10 October 2012
Detailed report on consultants, contractors and agency services reflected in Note 4.3 of the Annual Report	Written report	Received 12 October 2012
Detailed list of payments which exceeded 30 days.	Written report	Received 10 October 2012
Details on disposals reflected in Note 27.2 of Annual Report	Written report	Received 10 October 2012
Copy of report completed on problems with the use of vehicles and revised policy on vehicles/transport	Copy of policy and report	Received 10 October 2012 Policy-electronically
Breakdown of misconduct/grievances	Written report	Received 10 October 2012
Breakdown of training skills courses offered in 2011/12 and attendance	Written report	Received 10 October 2012
Details on performance rewards/bonuses for 2011/12	Written report	Received 10 October 2012
Report on why overtime payments higher in Programme 1 rather than Programme 2 and why managers are paid overtime allowances	Written report	Guidelines Received 10 October 2012
Copy of leave policy	Copy of policy	Received 10 October 2012- electronically
Recruitment plan for all vacant positions	Written report	Due 26 October 2012
Report on expenditure for computers (case management system and operating system) and computer services (SITA/external providers)	Written report	Due 26 October 2012
Programme 2
Report on Sea Point case	Written report	Received 19 October 2012
Progress report on McGregor CAS 38/06/2012: CCN 2011070113	Written report	Received 19 October 2012
Progress report on alleged misconduct/criminal cases against SAPS members in Umbel precinct	Written report	Received 19 October 2012
Breakdown of all recommendations made to SAPS and DPP, and the outcome thereof, per province	Written report	Due 26 October 2012
Breakdown of all cases referred to SAPS for investigation and the outcome thereof, per province	Written report	Due 26 October 2012
Breakdown of investigators per provincial office	Written report	Received 12 October 2012
Programme 3
A list of community awareness/outreach events and dates on which they were held	Written report	Received 12 October 2012
A breakdown of the 44 posts in Programme 3 for 2011/12	Written report	Received 10 October 2012
A breakdown of expenditure in respect of Programme 3 for 2011/12	Written report	Received 10 October 2012
Copies of research reports completed 2011/12 and ensure that copies of all reports are submitted in future to the Committee on completion.	Copy of research reports	Due 26 October 2012

8. Summary of recommendations relating to requests for movement of funds (virement) for 2012/13, funding for the MTEF and additional issues

Meeting: The Committee will call the Directorate to a meeting, within the current parliamentary session to discuss in more detail, some of the key issues that have arisen in the hearings on 8 and 9 October 2012. These include the acknowledgement by the Directorate that the Directorate budget is fundamentally misaligned, and that this will have implications to their submission to National Treasury for 2013/14. The Internal Audit Committee will also be invited, along with the acting Executive Director, the Chief Financial Officer and the Manager of Programme 1: Administration.

Incorrect information provided to the Committee: In addition, the Committee reiterates its concern that misinformation may have been provided to the Committee during the 2012/13 budget process and the Committee’s budget report may have to be corrected, to reflect this.

Movement of funds and cost- saving measures for 2012/13: The analysis of the challenges in spending trends presented to the Committee is long overdue and the Committee welcomes the initiative taken to identify and address these fundamental problems. The key tenet- that the budget is skewed toward Goods and services rather than Compensation of employees and thus out of kilter with both the organisational structure and strategic priories of the Directorate seems accurate.

The Committee thus would recommend that National Treasury supports the movement of funds from Goods and services, to Compensation of employees in order to cover existing staff costs as well as to fill the 58 vacant posts.

In addition, the Committee supports the cost-saving measures identified in the report of the Directorate including the savings in overtime allowances, performance bonuses, procurement of equipment, S&T allowances, vehicle leases/allowances and office rentals.

Decentralisation of budget planning, spending and monitoring: The Committee supports the acknowledgement by the Directorate that increased centralisation of these functions at the National Office has resulted in poor spending patterns; and ineffective controls and supports initiatives to address this situation by decentralising functions and responsibilities.

Ensuring effective leadership, in the form of provincial heads (these are all currently in acting positions) is crucial and should be considered when these posts are filled. Effective support in the provincial offices and by the National Office should also be prioritised.

2013/14 reductions to baselines: Compensation of employees; Goods and services; Payments for Capital Assets: The Committee supports the submission by the Directorate that a 1% (2013/14); 2% (2014/15) and 3% (2015/16) reduction of the baseline for Compensation of employees is undesirable and will result in the inability of the Directorate to achieve its transformed mandate.

However, it is clear that according to the analysis of challenges in spending trends presented to the Committee by the Directorate, that too much money has been allocated to Goods and services, and in addition, that there are cost-savings to Goods and services that can be implemented to ensure additional savings.

In addition, expenditure in Capital assets was also low in 2011/12, though it may be possible that if the vacant posts are filled, that additional capital expenditure will be required to capacitate these employees.

2013/14 realignment of budget to organisational structure and strategic priorities: The Committee recommends that baselines for Compensation of employees and Goods and services the 2013/14 budget are reconfigured to ensure:

· Alignment of budget with operational structure

· Alignment of budget with priorities

This would require a re-alignment of the ratio of Compensations of employees: Goods and services to ensure an increased allocation to Compensation of employees, thus allowing for the hiring of additional staff (especially investigators) to the Directorate, in line with needs projected for the MTEF. The current 50:50 ratio is undesirable and unsustainable.

Organisational structure: The Directorate has stated that a review of the projected organisational structure is required, in the light of problems identified with the budget. While a proposed MTEF organisational structure has been approved by the Minister, this has not been presented to the Committee (despite requests for this information, on approval of the Minister). In addition, it is clear from the analysis of problems in spending presented to the Committee that additional responsibilities need to be provided to Provincial Heads, and decentralised from National Office. This may have implications for the organisational structure, especially in terms of reducing capacity at National Office.

It is recommended that a review of the existing and projected organisational structure is completed and that a revised plan is developed - supported by clear motivations and with clear alignment to the budget as well as the strategic priorities of the Directorate. This report should be submitted to the Committee on completion.

2013/14 additional funding: The submission of the Directorate to National Treasury does not include a request for additional funding for 2013/14 or the MTEF. In addition, the Directorate has stated to the Committee that cost-savings and virement will be able to cover costs of expanding personnel for 2012/13, though this only covers filling the vacant posts for the remaining three month period.

The 2013/14 budget should be scrutinised to ensure that all these posts (total of 349 posts) can be funded, once the budget is realigned and cost-savings implemented. If there are shortfalls, then additional funds should be allocated to ensure that these posts can all be funded.

The budget should also make provision to ensure that the additional posts identified for 2013/14 can be filled. However, this recommendation should be considered in conjunction with the recommendation that the envisaged organisational structure and posts going forward, is properly motivated in line with strategic priorities.

The following additional recommendations are made by the Committee:

Support to recommendations of the Auditor General: The Committee supports the recommendations of the AG including: Continuous monitoring of compliance with procurement processes; senior management takes responsibility to ensure that performance information reported on is reliable; and that they are held accountable for reporting unreliable information; the Directorate identifies and fills critical vacant posts timeously; senior management should monitor and review day to day financial activities to ensure monthly financial information is accurate and reliable; and the Directorate approves and implements an IT governance framework and monitors the effectiveness of the new OAPO IT system.

Programme 1 indicators and targets: The Directorate should review and reconceptualise Programme 1 indicators and targets to enable effective and useful oversight over performance in this Programme.

Programme 2 targets: Performance targets for the indicators for deaths, and criminal investigations should be increased to the baseline achievement for 2011/12.

Western Cape and Gauteng offices: The Directorate should investigate and report on problems in the Western Cape and Gauteng offices and provide a plan for addressing these problems.

Analysis of trends: While the research function no longer exists in terms of the new mandate and organisational structure of IPID, it is essential that a statistician supported by at least one or two researchers is included in the new organisational structure to ensure ongoing analysis of the statistics of IPID in terms of notifications, complaints and recommendations. These persons should be analysing trends on a continuous basis to inform recommendations to both the Directorate’s management and the SAPS on strategic shifts/interventions that need to be put in place to address problems. Ongoing analysis of the statistics and the identification of trends, will allow for immediate interventions as well as systemic solutions which can be suggested to the SAPS, to problems identified. This function should be situated in either the Administration or the Investigation programme.

9. Conclusion

While very serious problems were identified in this oversight process, the Committee is pleased that these problems have at least been identified so that corrective steps can be taken.

However, these problems do raise the concern as to whether the Directorate has the ability and commitment to take on its additional responsibilities in terms of the IPID Act. A completely new approach is needed, both in terms of the budget (realignment), management responsibilities and accountability (decentralised), collaborative and interactive planning and strategising between programmes (stop working in silos), and a re-commitment by all manager and employees to the human rights orientation and central purpose of the Directorate.

The Directorate is still young (in terms of its transformed mandate) and it is thus not yet too late to ensure the internal transformation that is required in order to ensure that it can fulfil its mandate effectively and efficiently.

*The Minister of Police is requested to ensure the implementation of all the above recommendations contained in the report.

Report to be considered.