ATC130521: Report of the Portfolio Committee on Police on the 2013/14 Budget, Annual Performance Plan and 2013/14-2017/18 Strategic Plan of the Private Security Industry Regulatory Authority (PSIRA), dated 14 May 2013:
Police
Report
of the Portfolio Committee on Police on the 2013/14 Budget, Annual Performance
Plan and 2013/14-2017/18 Strategic Plan of the Private Security Industry
Regulatory Authority (PSIRA), dated 14 May 2013:
The Committee examined the Budget, Annual Performance Plan for the 2013/14
financial year and the 2013/14-2017/18 Strategic Plan of the Private Security
Industry Regulatory Authority (PSIRA). The Committee reports as follows:
1.
INTRODUCTION
The Private Security
Industry Regulatory Authority was established in terms of section 2 of the
Private Security Industry Regulation Act (2001). The entity is mandated to
regulate the private security industry and to exercise effective control over
the practice of the occupation of security service providers in the public and
national interest, and in the interest of the private security industry itself.
The Private Security Industry Regulatory Authority is currently being managed
in terms of the Private Security Industry Regulatory Authority Act (2001),
which replaced the Security Officers Act (1987).
1.1
Structure
The Report provides an overview of the 2013/14 Budget Hearings of the PSIRA
and is divided into the following sections:
·
Section 1: Introduction. This
section provides an introduction to this report as well as a summary of
meetings held during the hearings.
·
Section 2: Key concerns of the
Committee during the 2012/13 financial year. This section provides a summary of
the key concerns raised by the Committee during the previous financial year.
·
Section 3: Strategic Priorities
of the PSIRA for the 2013/14 financial year. This section provides a summary of
the strategic focus areas for the Authority for the year under review.
·
Section 4: PSIRA Budget and
Performance targets for 2013/14. This section provides an overall analysis of
the operating expenditure and revenue of the PSIRA for the 2013/14 financial
year. This section also provides a programme analysis of the Authority.
·
Section 5: Committee
observations. This section highlights selected observations made by the
Portfolio Committee on Police on the annual performance targets and programme
specific issues during the 2013/14 budget hearings and subsequent responses by
the Authority.
·
Section 6: Recommendations and
additional information. This section summarises the recommendations made by the
Portfolio Committee on Police, as well as the additional information requested
from the Authority.
·
Section 7: Conclusion. This
section provides a conclusion to this report.
1.2
Meetings held
The Portfolio Committee on Police interacted with the Authority for the
first time on its Budget, Annual Performance Plan and Strategic Plan of the
Authority for the 2013/14 financial year. In preparation for meetings with the Authority,
the Portfolio Committee on Police received an overview of the budget for the financial
year under review by the Research Unit of the Parliament of South Africa on 25
March 2013. The Committee received the following briefing from the Authority:
·
Briefing on the Strategic and
Annual Performance Plan and 2013/14 Budget, operating expenditure, revenue and
performance targets.
2.
Key concerns raised by the Committee during the 2012/13 financial year
The following section provides a summary of the
key observations/concerns raised by the Portfolio Committee on Police regarding
performance and financial issues identified during the 2011/12 and 2012/13
financial years:
Leadership and
capacity of Council:
The Committee raised concerns around the lack of leadership and the
inadequate capacity of the Council of the Authority, as the Council is mandated
with the governance of the Authority.
Determination
of Salaries for the Senior Management Structure (SMS):
The Committee raised a number of
serious concerns on issues pertaining to the appointment of the SMS as well as
the accompanying salary packages of the SMS members.
The Committee further stated that the decision taken by the Minister of
Police to request the Accountant-General of
The second issue of concern raised by the
Committee was the fact that the function of job grading was outsourced to a
private company, namely PricewaterhouseCoopers. The job grading was done on the
Patterson Grading system rather than the Equate Grading system used by the
Department of Public Service and Administration (DPSA) for government
employees. The use of private companies to grade jobs for public entities is
highly irregular
as the mechanism for oversight and
accountability is largely lost through the process chosen by PSIRA.
Allowances to
Council:
The
Committee questioned what allowances are paid to Council members in 2011/12 and
why this information is no longer included in the 2011/12 Annual Report as was
done in 2009/10. The Authority stated that the information should not have been
reported in 2009/10 and hence the reason for not including such in the
subsequent years.
Ethics Hotline:
Members of the
Committee raised concerns about the ethics hotline.
The Authority outsourced this function to a
private company (KPMG) for managing a complaints hotline pertaining to the
private security industry. The Committee questioned the amount of complaints received
through the hotline and whether the Authority considered the R47 000.00
spent on the hotline as value for money.
Research:
The Committee raised concern
regarding the lack of performance in the Strategic Priority 1:
Industry Stewardship (Knowledge and Advocacy), in which
priority research projects to be completed was prioritised and only topics were
identified.
Planning:
The Committee expressed concern
regarding the apparent lack of cohesion between the budget process and
established priorities of the Authority. The Committee further questioned the
apparent disjoint between the funding available and the priorities/performance
targets set by the Authority, which leads to priorities not being achieved as
various targets were not met due to budgetary constraints. The Council
indicated that the funding model on which the Authority operates is not ideal,
but that the budgeting process will be reviewed and will enjoy increased focus
in coming years.
New corporate
head office in Centurion:
The Committee raised concerns regarding the relocation of PSIRAs
corporate head office from
·
Lease agreement:
The Committee raised significant
concerns regarding the excessive cost incurred in entering into a new lease
agreement for the Authoritys corporate head office in Centurion to the cost of
R87 million over a five-year period. The Committee further stated that the fact
that the Authority specified an AAA-graded building was unacceptable for any
entity finding itself in financial difficulty.
·
Cost of relocation:
The Committee expressed further
concern regarding the R4,7 million spent on procurement of new furniture and the
high relocation costs incurred by the Authority in moving offices from
·
Disposal of building:
Concerns were further raised
regarding the disposal of the condemned (previous) corporate head office of
PSIRA in Arcadia (Pretoria), including the status of the sale, the fact that
the building has not been sold, whether approval from the Minister was received
to sell the building, the Round Robin Resolution taken by the Council and
Authority was flawed as it is in contravention of the Public Funds Management
Act (PFMA), and the legal requirements of dealing with a condemned building.
Contingent
liability:
The
Committee expressed concern regarding the fact that the Authority is not
budgeting for contingent liabilities and further stated that the Authority has
continuously ignored the recommendation made by the Committee to budget for
contingent liabilities.
Use of
Consultants:
The
Committee expressed concern pertaining to the excessive use of consultants and
questioned why these consultants are seemingly doing the work for which PSIRA
employees are being paid.
Difference
between satellite and regional offices:
The Committee questioned what the difference
between satellite offices and regional offices are and expressed concern
regarding possible labour brokering practices at these offices.
Personnel
expenditure:
The
Committee raised concerns about the information reported on page 50 of the
Annual Report regarding personnel expenditure for 2011/12.
Business
Applications:
The
Committee raised concerns with the incorrect information contained in the Authoritys
Annual Report regarding the mistake made in the number and status of business
applications in 2011/12. The Authority apologised for the mistake and indicated
that an erratum will be completed.
The following
recommendations were made by the Portfolio Committee on Police:
1)
Financial
statements:
The Portfolio Committee recommends
that the financial statements of the Authority must be further interrogated by
the Select Committee on Public Accounts (SCOPA).
2)
Consultants:
The Committee recommends that the Authority should rely
less on consultants and that the expenditure on consultancy fees should be
further reduced in the coming years.
3)
Annual
Performance Plan 2013/14:
The Committee
recommends that measurable outputs be identified for the events management
office and included in the Annual Performance Plan of the Authority for the
2013/14 financial year as well as all subsequent years.
The Committee
further recommends that specific attention must be given to the following
aspects of future Annual Reports:
·
Quality
control;
·
The correctness
of financial statements; and
·
Adhering to
Government resolutions in that all Departmental Reports (Annual Performance
Plans, Strategic Plans and Annual Reports) must be produced in a cost effective
manner.
3.
STRATEGIC PRIORITIES OF THE PSIRA FOR 2013/14
The Strategic objectives of PSIRA are as follows:
1)
To enable effective compliance and enforcement of PSIRA legislation in
order to achieve behavioural changes in the industry;
2)
Ensure effective communication with key stakeholders and provide excellent
standard of private security training;
3)
Ensure that PSIRA is a centre of excellence in private security research;
4)
To be financially stable, sustainable and be able to increase revenue and
decrease expenditure;
5)
Ensure that PSIRA has cutting edge technology; and
6)
Effective Organisational Structures with Skilled, Competent and Motivated
Workforce.
The PSIRA published an extensive list of twenty-seven (27) key external
and internal challenges which they are facing in their 2013/14 APP. These are
the following:
1)
Funding the operation of PSIRA to ensure effective service delivery;
2)
Rapid growth and expansion of the security industry requiring both a
broader regulatory geographical footprint as well as more resources to ensure effective
coverage and enforcement;
3)
Current limited number of Council members of PSIRA hinders progress on
strategic areas of PSIRA;
4)
Ever increasing risk to safety and security of
5)
Unregistered security companies and operators;
6)
Need to provide improved access to PSIRA whilst improving service delivery
to stakeholders in accordance with the principles of Batho Pele;
7)
Lack of monitoring of interception devices;
8)
Effective revenue management strategy to ensure correct billing and
optimal collection of the revenue;
9)
Review of business controls;
10)
Staff morale that has not improved to satisfaction;
11)
Lack of effective performance management tools;
12)
Lack of capacity in the Supply Chain environment;
13)
Lack of succession planning and staff retention strategies in key
leadership positions;
14)
Lack of monitoring of firearms;
15)
Lack of research and development in the industry;
16)
Participation of illegal foreign nationals in the private security
industry creating a risk to safety on consumers if providers are not security
vetted;
17)
South African security companies
operating outside of
18)
Exploitation of labour within the industry;
19)
Damaged reputation of PSIRA;
20)
Identify fraud by local and foreign nationals within the industry;
21)
Ignorance by end-users or customers;
22)
The broad mandate of PSIRA not realistic given the resources available;
23)
Legal challenges regarding the annual fees;
24)
The technology complex industry requires research and development to
enable specific industry sector regulatory policies;
25)
Staff turnover;
26)
Litigation; and
27)
Stakeholder buy-in.
4.
PSIRA BUDGET AND PERFORMANCE TARGETS FOR 2013/14
4.1
Overall analysis
The PSIRA is not funded by any government funding and its revenue streams
are annual fees, registration fees, fines issued in terms of Code of Conduct
enquiries, and other disbursement fees on a cost recovery basis. The table
below shows that the Authority has been posting deficits since 2006/07 with the
exception of 2007/08, when a surplus of R676 000 was made. These deficits
are mainly ascribed to rising expenditure while revenue remained stagnant, as a
result of the failure to review the annual fees on a regular basis. The
operating expenditure of PSIRA increased by more than 300 per cent over the
past decade and while their revenue has increased by 190.9 per cent over the
same period it is clear that there is a disjoint between their revenue and
expenses. PSIRA started to operate above their means a decade back as their
expenditure increased disproportional to their income.
Table 1: Historical Financial
Performance for the past decade (2003/04 2011/12)
R 000
|
2003/04
|
2004/05
|
2005/06
|
2006/07
|
2007/08
|
2008/09
|
2009/10
|
2010/11
|
2011/12
|
Revenue
|
44 409
|
48 888
|
53 840
|
58 533
|
95 017
|
84 420
|
95 914
|
97 927
|
129 199
|
Operating expenditure
|
32 636
|
41 361
|
50 302
|
60 492
|
94 341
|
96 804
|
98 167
|
121 679
|
138 479
|
Surplus/(deficit)
|
11 773
|
7 527
|
3 538
|
-1 959
|
676
|
-10 384
|
-2 253
|
-23 752
|
-9 281
|
Source: PSIRA
2013/14 and 2012/13 Strategic Plan, p. 33 and 25.
The table below shows the expected financial performance of PSIRA for the
2013/14 financial year and also over the MTEF. It is expected that a surplus
will be recorded for the first time in five years during the recently concluded
2012/13 financial year and that this surplus is expected to further increase in
2013/14 and decrease again slightly in 2014/15. The table further shows that
the surplus is expected to decrease significantly over the MTEF. It is expected
that in 2015/16, the surplus will be a mere R534 thousand and further decrease
to R284 thousand in 2016/17.
Table 2: Expected Financial
Performance for 2013/14 over the MTEF
|
Budget
|
Budget: Medium-term estimates
|
|||
R thousand
|
2012/13
|
2013/14
|
2014/15
|
2015/16
|
2016/17
|
Revenue
|
173
124
|
175
440
|
185
901
|
191
134
|
205
367
|
Operating Expenditure
|
169
341
|
166
038
|
176
800
|
190
600
|
205
082
|
Surplus/ (deficit)
|
3 783
|
9 402
|
9 101
|
534
|
284
|
Source: PSIRA
2013/14 Strategic Plan, p. 33
The table below shows the operating expenditure estimates (Compensation of
employees and Goods and Services) of PSIRA for the 2013/14 financial year
compared to the previous financial year per programme. The table shows that
only Programme 4: Corporate Services received an increased estimation for 2013/14
and the other three programmes received a decreased allocation in real terms.
Table 3: Operating Expenditure
per programme
Programme
|
Budget
|
Nominal
Increase / Decrease in 2013/14
|
Real
Increase / Decrease in 2013/14
|
Nominal
Percent change in 2013/14
|
Real
Percent change in 2013/14
|
|
R
Thousand
|
2012/13
|
2013/14
|
||||
|
|
|
|
|
|
|
Programme 1: Law Enforcement
|
66 029
573.0
|
68 388
540.0
|
2 358
967.0
|
-1 267
698.0
|
3.57
per cent
|
-1.92
per cent
|
Programme 2: Financial Management and Administration
|
56 451
627.0
|
47 002
052.0
|
-9 449
575.0
|
-11
942 108.1
|
-16.74
per cent
|
-21.15
per cent
|
Programme 3: Communication and Training
|
25 983
855.0
|
25 038
087.0
|
- 945
768.0
|
-2 273
545.3
|
-3.64
per cent
|
-8.75
per cent
|
Programme 4: Corporate Services
|
20 875
906.0
|
25 609
604.0
|
4 733
698.0
|
3 375
612.9
|
22.68
per cent
|
16.17
per cent
|
TOTAL
|
169
340 961.0
|
166
038 283.0
|
-3 302
678.0
|
-12
107 738.5
|
-2.0
per cent
|
-7.15
per cent
|
Source: PSIRA
2013/14 Strategic Plan
The Law Enforcement Programme received an estimated allocation of R68.3 million
in 2013/14 compared to the R66 million allocation in 2012/13. This is a real
decrease of 1.92 per cent. The Financial Management and Administration received
the largest decrease in both nominal and real terms. In 2012/13, this Programme
received R56.4 million compared to a R47 million allocation in 2013/14. This is
a real decrease of 21.15 per cent. It is a concern that this Programme received
a nominal decrease as the effective financial management of PSIRA has been a
longstanding challenge. The Communication and Training Programme also received
a real decrease of 8.75 per cent in 2013/14 compared to 2012/13. As mentioned
above, the Corporate Services Programme is the only Programme receiving an
increase in 2013/14. The Programme was allocated R20.8 million in 2012/13,
which increased to R25.6 million in 2013/14. This is a nominal increase of
22.68 per cent.
The 2013/14 Estimates of National Expenditure (ENE), for the first time, prescribed
that Departmental Votes must include a budget breakdown of all public entities
associated with the Department. As such, the Online ENE for Vote 25: Police
included a brief section on PSIRA as an entity accountable to the Minister of
Police. However, the information contained in the section does not correlate with
the information provided in the Annual Performance Plan and Strategic Plan of
PSIRA. The table presented on page 20 of the Online ENE pertaining to the
expenditure estimates of PSIRA per programme reports different figures to those
in the APP. The Programmes are not listed in numerical order, with Programme 3
listed first followed by Programme 1, Programme 2 and Programme 3. Most
concerning is the fact that the table shows a fifth allocation, which
presumably represents a fifth Programme, namely Research and Development with
an allocation of R896 thousand in the 2013/14 financial year, growing over the
MTEF. This is not reflected in the latest APP or Strategic Plan of PSIRA.
It is important to remember that PSIRA is not funded by the State and
relies on the generating their own revenue through taxes/levies. As such, the
revenue presented in the APP is estimated revenue, as their income cannot be
guaranteed.
The table below shows the revenue estimates for 2013/14 compared to the
2012/13 financial year. Several significant shifts in revenue are clearly
noticeable. The overall revenue is expected to decrease slightly in real terms.
The revenue from Annual Fees from Service Providers are expected to increase
from R38.2 million in 2012/13 to R76.4 million in 2013/14. This represents a
real percentage increase of 89.38 per cent. The estimates for 2013/14 show
Annual Fees being paid by Services Providers for Security Officers in their
employment for the first time to the value of R31.7 million. The revenue expected
from Annual Fees payable by individual Security Officers is expected to
decrease from R76.7 million in 2012/13 to R35.6 million in 2013/14. This
represents a real decrease of 56 per cent.
Table 4: Revenue estimates for
2013/14 compared to 2012/13
Revenue
|
Budget
|
Nominal
Increase / Decrease in 2013/14
|
Real
Increase / Decrease in 2013/14
|
Nominal
Percent change in 2013/14
|
Real
Percent change in 2013/14
|
|
2012/13
|
2013/14
|
|||||
Annual Fees Service Providers
Of which:
Business
fees
Security
Officers
|
38 208
750.0
38 208 750
0
|
76 410
502.0
44 631 375
31 779 132
|
38 201
752.0
|
34 149
679.9
|
99.98
per cent
|
89.38
per cent
|
Annual Fees Security Officers
|
76 734
168.0
|
35 636
832.0
|
-41
097 336.0
|
-42
987 168.0
|
-53.56
per cent
|
-56.02
per cent
|
Sundry Income
|
1 284
100.0
|
3 219
221.0
|
1 935
121.0
|
1 764
404.7
|
150.70
per cent
|
137.40
per cent
|
Training Income
|
17 544
828.0
|
20 700
000.0
|
3 155
172.0
|
2 057
444.7
|
17.98
per cent
|
11.73
per cent
|
Fine Income
|
13 020
000.0
|
11 535
802.0
|
-1 484
198.0
|
-2 095
945.1
|
-11.40
per cent
|
-16.10
per cent
|
Registration Fees (Security Officers)
|
14 400
000.0
|
15 450
840.0
|
1 050
840.0
|
231 477.3
|
7.30
per cent
|
1.61
per cent
|
Registration Fees (Security Providers)
|
4 500
000.0
|
4 743
000.0
|
243 000.0
|
- 8
522.7
|
5.40
per cent
|
-0.19
per cent
|
Penalties - Receivables
|
6 600
000.0
|
5 523
996.0
|
-1 076
004.0
|
-1 368
943.2
|
-16.30
per cent
|
-20.74
per cent
|
Investment income
|
472 020.0
|
1 320
000.0
|
847 980.0
|
777 980.0
|
179.65
per cent
|
164.82
per cent
|
Disposal of Assets
|
0.0
|
0.0
|
0.0
|
0.0
|
-
|
-
|
|
|
|
|
|
|
|
TOTAL
|
173
123 866.0
|
175
440 198.0
|
2 316
332.0
|
-6 987
314.9
|
1.3
per cent
|
-4.04
per cent
|
Source: PSIRA
2013/14APP
The table further shows that revenue collected from Sundry income is
expected to increase significantly by 137 per cent in real terms. It is
expected to increase from R1.284 million in 2012/13 to an expected R3.219
million in 2013/14. Revenue from Investment income is expected to increase
significantly in 2013/14 compared to the previous financial year. This
signifies the single largest increase within the expected income of the
Authority. The expected revenue from Investment Income in 2012/13 was R472
thousand and is expected to increase to R1.320 million in 2013/14, which is a
real increase of 164.82 per cent.
4.2
Programme Analysis
4.2.1
Programme 1: Law Enforcement
Strategic goal 1
|
To ensure excellent service delivery in the security industry
|
Strategic objective
|
To enable effective compliance and enforcement of PSIRA legislation in
order to achieve behavioural changes in the industry.
|
New targets:
·
Number of investigations
finalised in respect of security service providers (Target: 600);
·
Frequency for conducting review
of fines regulations (Target: Annually This target was previously under
Programme 2); and
·
Date for the establishment of
Firearm Regulation Committee (Target: September 2013).
Removed targets:
·
Number of additional law
enforcement inspectors recruited;
·
Percentage of inspectors trained
on the Firearms Control Act;
·
Number of publications;
·
Date of the completion of
firearms audits (Date Provided as Sept 2012);
·
Date for the completion of
PSIRA/SAPS Firearm Registry integration (Target set for Oct. 2013);
·
Frequency of reporting to NAT
JOINTS/ PROV JOINTS on private security related matters;
·
Frequency of reporting to SSA on
security breaches in the Security Industry;
·
Number of provincial industry
compliance forums established; and
·
Turnaround time for the
completion of registration.
Amended targets:
·
Number of enforcement criminal
cases opened against non-complaint security service providers
(Target:1 920), was previously the Percentage of criminal cases opened;
The table below shows that the Law Enforcement Programme received a
decreased allocation in real terms. In 2012/13 the allocation was R66 million
and increased to R68.3 million in 2013/14. This represents a real decrease of
1.92 per cent.
Table 5: Economic Classification
for Law Enforcement Programme
Programme 1:
Law Enforcement
|
Budget
|
Nominal
Increase / Decrease in 2013/14
|
Real
Increase / Decrease in 2013/14
|
Nominal
Percent change in 2013/14
|
Real
Percent change in 2013/14
|
|
2012/13
|
2013/14
|
|||||
Economic Classification
|
||||||
Compensation of Employees
|
42 667
364.0
|
45 382
407.0
|
2 715
043.0
|
308 400.2
|
6.36
per cent
|
0.72
per cent
|
Goods and Services
|
23 362
209.0
|
23 006
133.0
|
- 356
076.0
|
-1 576
098.2
|
-1.52
per cent
|
-6.75
per cent
|
TOTAL
|
66 029
573.0
|
68 388
540.0
|
2 358
967.0
|
-1 267
698.0
|
3.6
per cent
|
-1.92
per cent
|
Source:
2013/14 PSIRA APP
The table shows that the allocation for Goods and Services decreased in
real terms by 6.75 per cent in 2013/14 compared to 2012/13. In 2012/13, Goods
and Services received an allocation of R23.3 million and R23.0 million in
2013/14, which represents a nominal decrease of R356 thousand. Allocations
towards Compensation of Employees received a slight real increase of less than
one per cent.
4.2.2
Programme 2: Finance and Administration
Strategic goal 2
|
Ensure effective financial management and optimal revenue management.
|
Strategic objective
|
To be financially stable, sustainable and be able to increase revenue
and decrease expenditure.
|
New indicators:
·
Bi-annual (30 June 2013 and 31
March 2014) review on Bad debts;
Amended indicators:
·
Date for implementation of
Pay-a-bill service via SAPO (New indicator in 2012/13 with target set for 31
March 2013. Target now set for 31 October 2013);
·
Percentage of revenue collected
for billed accounts changed from 90% to 80% in 2013/14 compared to 2012/13.
Removed indicators:
·
Frequency of conducting
Liquidity Pan (cash flow);
·
Percentage of achievement of
PFMA checklist;
·
Percentage of Surplus/Deficit
Budget variance;
·
Average internal audit rating;
and
·
Date for go-live of an
integrated ERP system (online account payment facility) 31 March 2013.
Sub-programme: Business
Information Technology
Strategic goal 3
|
Efficient and Effective Processes and Systems.
|
Strategic objective
|
To ensure that PSIRA has cutting edge technology.
|
The creation of a sub-programme devoted to
Information Technology is welcomed and the new targets will hopefully address
the historic challenged PSIRA had (and still have) regarding the implementation
of IT Systems and the effectiveness of these systems.
New indicators:
·
Implementation date for
presentation of Business Continuity Plan (Disaster Recovery) on 01 February
2014;
·
Frequency of monitoring and
reviewing of IT Strategy Annually to be done in May each year;
·
01 November 2013 set for the
development and implementation of IT Policies: (1) Risk Management Policy; (2)
Software licensing Policy and (3) Architectural Policy; and
·
A turnaround time of four (4)
hours on the completion of online requests received through the Business Online
Services.
The table below shows the estimated operating expenditure for the Finance
and Administration Programme in 2013/14. The allocation towards operating
expenditure received a decreased allocation of 21.5 per cent in real terms from
R42 million in 2012/13 to R32 million in 2013/14. Both Compensation of
employees and Goods and Services received a decreased allocation in real terms
of 1.74 per cent and 27.83 per cent respectively.
Table 6: Economic Classification
for Programme 2: Finance and Administration
Programme 2: Finance and Administration
|
Budget
|
Nominal
Increase / Decrease in 2013/14
|
Real
Increase / Decrease in 2013/14
|
Nominal
Percent change in 2013/14
|
Real
Percent change in 2013/14
|
|
2012/13
|
2013/14
|
|||||
Economic classification
|
||||||
Compensation of Employees
|
14 443
742.0
|
14 987
345.0
|
543 603.0
|
- 251
180.4
|
3.76
per cent
|
-1.74
per cent
|
Goods and Services
|
42 007
885.0
|
32 014
707.0
|
-9 993
178.0
|
-11
690 927.6
|
-23.79
per cent
|
-27.83
per cent
|
TOTAL
|
56 451
627.0
|
47 002
052.0
|
-9 449
575.0
|
-11
942 108.1
|
-16.7
per cent
|
-21.15
per cent
|
Source:
2013/14 PSIRA APP
4.2.3
Programme 3: Communication and Training
Strategic goal 4
|
Stakeholder and Customer Relationship management.
|
Strategic objective
|
Ensure effective communication with key stakeholders and provide
excellent standard or private security training.
|
The Communication
and Training Programme is currently one Programme, but could be separated into
two sub-programmes, as it comprises two vastly different aspects of the
Authority. The 2012/13 APP listed six performance indicators with corresponding
targets, which has been replaced by twelve (12) entirely new indicators and
targets.
New indicators/targets:
·
Development and implementation
of Communications Policy in 2013/14;
·
A total of 12 public awareness
campaigns to be conducted in 2013/14;
·
The new website on the new
Corporate image of PSIRA to be launched on 30 May 2013;
·
The Internal Communication Strategy
to be developed and implemented on 30 June 2013;
·
A total of four annual events to
be profiled for participation, these are: (1) Workers Day, (2) Heritage Day,
(3) 16 Days of Activism Against Women and Children Abuse, and (4) Human Rights
Day;
·
A total of five research
workshops hosted;
·
To establish four Industry
Compliance Forums;
·
An average of 30 days turnaround
time for the conclusion of application registration meeting all the
requirements for Individual Security Officer;
·
Similarly, an average of 30 days
turnaround time for the conclusion of application registration meeting all the
requirements for Security businesses; and
·
The end of March 2014 set as
target for the development and implementation of the policy for new training.
Selected
removed targets:
·
The number of appropriate
training programmes for all classes of security service providers; and
·
PSIRA to be registered as a
Professional Body on terms of the NQF Act - target set for September 2012 in
2012/13 APP.
The table below shows that the Communication and Training Programme
received a real decrease of 8.75 per cent overall. The R25.9 million allocation
for operating expenditure in 2012/13 decreased to R25 million in 2013/14.
Similar to the previous Programmes, the Goods and Services accounts expects a
saving of 18.32 per cent.
Table 7: Economic classification
for the Communication and Training Programme in 2013/14
Programme 3:
Communication & Training
|
Budget
|
Nominal
Increase / Decrease in 2013/14
|
Real
Increase / Decrease in 2013/14
|
Nominal
Percent change in 2013/14
|
Real
Percent change in 2013/14
|
|
2012/13
|
2013/14
|
|||||
Economic Classification
|
||||||
Compensation of Employees
|
13 293
857.0
|
14 092
265.0
|
798 408.0
|
51 090.9
|
6.01
per cent
|
0.38
per cent
|
Goods and Services
|
12 689
998.0
|
10 945
822.0
|
-1 744
176.0
|
-2 324
636.3
|
-13.74
per cent
|
-18.32
per cent
|
TOTAL
|
25 983
855.0
|
25 038
087.0
|
- 945
768.0
|
-2 273
545.3
|
-3.6
per cent
|
-8.75
per cent
|
Source:
2013/14 PSIRA APP
4.2.4
Programme 4: Corporate Services
Strategic goal 6
|
To ensure that PSIRA has competent and skilled employees that is able to
execute their tasks effectively.
|
Strategic objective
|
To ensure that PSIRA has competent, ethical and skilled workforce.
|
New indicators:
·
Ten (10) courses implemented as
per the training and development plan;
·
Six (6) policies to be developed
in 2013/14 and then reviewed over the MTEF. These are:
o
Employment Equity Policy
o
Remuneration Policy
o
Training and Development Policy
o
Succession Policy
o
Dress Code Policy
·
Bi-annual employee performance
assessments to be conducted, where it was only applicable to the EXCO in the
previous year;
·
Annual submission of
recommendations and action plan to address employee concerns; and
·
One (1) person with a disability
to be appointed in 2013/14.
Removed targets:
·
The Approval of the HR Retention
Strategy by Council on 30 September 2012;
·
Thirty (30) days turnaround time
for the conclusion of Disciplinary Hearings; and
·
Seven (7) day turnaround time
for the conclusion of grievances.
The table below shows that the Corporate Services Programme received a
substantial increase in the expected expenditure for 2013/14. As mentioned
earlier, this is the only programme receiving an increased allocation. It is
very interesting to note that the allocation for Compensation for employees
declined by 7.67 per cent in real terms from R5.5 million in 2012/13 to R5.4
million in 2013/14. This is in stark contrast to the allocation for Goods and
Services which increased from R15.3 million in 2012/13 to R20.1 million in
2013/14. This is a nominal increase of almost R5 million and represents a
nominal increase of 31.8 per cent.
Table 8:
Economic Classification for the Corporate Services Programme according to the
2013/14 APP
Programme 4:
Corporate Services
|
Budget
|
Nominal
Increase / Decrease in 2013/14
|
Real
Increase / Decrease in 2013/14
|
Nominal
Percent change in 2013/14
|
Real
Percent change in 2013/14
|
|
2012/13
|
2013/14
|
|||||
Economic Classification
|
||||||
Compensation of Employees
|
5 550
915.0
|
5 412
029.0
|
- 138
886.0
|
- 425
887.5
|
-2.50
per cent
|
-7.67
per cent
|
Goods and Services
|
15 324
991.0
|
20 197
575.0
|
4 872
584.0
|
3 801
500.5
|
31.80
per cent
|
24.81
per cent
|
TOTAL
|
20 875
906.0
|
25 609
604.0
|
4 733
698.0
|
3 375
612.9
|
22.7
per cent
|
16.17
per cent
|
Source:
2013/14 PSIRA APP
5.
COMMITTEE OBSERVATIONS
5.1
General
The Committee made the following general observations during the budget
hearings:
·
Erratum on incorrect figures:
The
Committee was dissatisfied that the erratum on incorrect financial and
personnel figures reported in their 2011/12 Annual Report has not yet been sent
to the Minister to be tabled in Parliament. The Authority was unable to provide
an explanation for the non-compliance to guidelines regarding the reporting of
incorrect data in official documents. The Committee requested that the erratum
must be tabled in Parliament no later than Friday, 03 May 2013. At the date of
the adoption of this report, the requested erratum has not been received nor
tabled.
·
External and internal challenges:
The Committee
questioned the Authority on the inclusion of internal and external challenges,
as the majority of the challenges fall within the mandate and core business of
the Authority, thus within their control. The Committee specifically listed the
lack of succession planning, damaged reputation of PSIRA and ignorance by end-users/clients.
·
Estimates of National Expenditure:
The Committee
expressed concern regarding the discrepancies in financial figures reported in
the budget contained in the ENE and the budget included in the APP. The
Committee requested an explanation for this discrepancy. The Authority
explained that the figures reported in the ENE are rounded. However, the
Committee rejected the explanation of rounding as it did not make sense to the
Committee. For example, the estimates for the Communication and Training
Programme are reflected as R24.143 million in the ENE and as R25.038 million in
the APP and that this is not rounding of figures. The Authority acknowledged that
it was a mistake. The Authority submitted a report on the comparison of the
figures reported in the two documents, however the Authority did not provide
any narrative on the figures and thus remains uncertain which of the figures
are correct.
·
Additional programme - Research and Development:
The Committee further questioned the Authority on the allocation of R896
thousand towards Research and Development in the budget published in the ENE and
whether this is a new programme as it is not indicated in the APP. Following a
lengthy discussion, the Authority stated that it is a new programme of the
Authority (fifth programme) and could not provide a clear reason for it not
being reflected as such in the 2013/14 APP. The Authority further indicated
that the allocation is currently located in the Corporate Service Programme of
the Authority, but will be moved out in the coming year (2014/15).
·
Lack of economic classifications:
The Committee
expressed concern regarding the lack of a proper financial breakdown of the
Authoritys budget in terms of economic classifications. The Committee indicated
that the operating expenditure of the Authority must be presented per economic
classification. The Committee further expressed dissatisfaction towards the
inadequate budget information provided during the presentation of the Authority
to the Committee, as the presentation contained only one slide on the total allocations
per programme. The Authority took note of the dissatisfaction.
·
Staff establishment:
The Committee further expressed
dissatisfaction on the lack of information on the staff establishment of the
Authority in the APP. The Committee stated that this information must be
included for the entire organisation as well as per separate programme of the
Authority. This will allow the Committee to conduct proper oversight over the
allocations made to the compensation of personnel. The Authority took note of
the concern.
·
Decrease in Goods and Services account:
The
Committee asked the Authority to indicate which items within the Goods and
Services account the projected cost savings will be implemented during the
2013/14 financial year (all programmes except Corporate Services). The
Committee expressed concern that needed resources might be jeopardised through
these savings. The Authority was unable to provide an explanation and could not
indicate what the items are on which savings are projected.
·
Targets:
The Committee expressed concern regarding the removal
of several performance targets, notably those regarding firearms. The Committee
expressed further concern towards the large number of targets with percentage
measures, instead of specific numbers (preferred by Treasury), which increased
the effectiveness of performance measurement. The lack of SMART targets has
been raised by the Committee as well as the Auditor-General over the past
years.
5.2
Programme 1: Law Enforcement
·
Exploitation of workers:
The Committee asked
whether the Authority has any role to play in the investigation of workers
being exploited by security companies, in terms of extended working hours and
low salaries. The Authority indicated that they only investigate non-compliant
companies and can report exploitation, but that this issue is governed by the
Labour Relations Act.
·
Unregistered companies:
The Committee asked the
Authority to provide details on the number of unregistered companies
investigated in the previous financial year and what strategy the Authority is
employing to mitigate the challenge and risk these companies pose to security
in general. The Authority stated that they are not able to provide the number
of cases opened and taken to court on unregistered companies.
The Committee stated that this is an
important function of the Authority and that is should be a measurable
performance target in the Authoritys APP. The Committee requested that this
target must be developed and included in the 2014/15 APP and also reported on
in the Authoritys Annual Report.
·
Inspection capacity:
The Committee questioned whether
the Authority has adequate inspector capacity to effectively regulate and
conduct inspections on companies. The Authority stated that it does not have
sufficient capacity and currently has fifty-two (52) inspectors of which only
forty-eight (48) are operational. The Authority further stated that this
impacts negatively on the ability to investigate a large number of companies
within the private security environment. This is also the reason why the target
for inspections is set relatively low at 3000 inspections on security companies
and 18 000 security officers in 2013/14.
·
Low staff morale:
The Committee questioned the
Authority about the inclusion of low staff morale as an internal challenge to
the service delivery environment of the Authority and asked the Authority to
explain the reason for the low staff morale and what the Authority is doing to increase
staff morale. The Authority stated that surveys are continuously conducted to gauge
the morale of staff.
·
Firearms/Firearms Regulatory Committee:
The Committee
expressed concern that the Memorandum of Understanding (MOU) with the South
African Police Service (SAPS) on the regulation and management of firearms
within the private security environment is not yet signed, and that the
Firearms Control Act (FCA) came into operation in 2000. The Committee also
questioned why the target for training of inspectors on the FCA was removed
from the APP. The Authority stated that when the MOU is in place it will allow
the Authority to work in conjunction with the SAPS when firearms need to be
confiscated from a security company that is no longer in business. The
Authority further stated that the target for training on the FCA was removed
because Inspectors are now trained once they are appointed, making the target
unnecessary. The Authority stated that the Firearms Control Committee will be
established by September 2013 and will greatly assist in the monitoring of
firearms with the private security industry.
·
Consultants:
The Committee asked the
Authority to indicate their projected expenditure on consultant services for
the 2013/14 financial year and the items it will be spent on. The Authority
indicated that the allocation will be spent on Information Technology, Legal
Services, Recruitment, Payroll, Debt collection and review of financial
statements. However, the Authority was unable to provide the total amount
projected for the financial year under review. The Authority indicated that the
response will be provided in writing. The response was received in which the
Authority stated the following allocations regarding consultancy fees for the
2013/14 financial year compared to the actual spending of the previous
financial year (2012/13):
Description
|
2012/13 (Actual R spent)
|
2013/14 (Projected R)
|
CONSULTANCY FEES
|
7 769 448
|
3 090 270
|
Information Technology
|
-
|
1 486 004
|
Personnel Agencies
|
809 004
|
224 004
|
Personnel Agencies
|
-
|
-
|
Debt Collection fees
|
300 000
|
804 000
|
Other
|
6 660 440
|
1 044 000
|
Placement fees
|
-
|
-
|
LEGAL FEES
|
2 227 800
|
1 850 196
|
Legal fees general
|
1 341 600
|
1 269 600
|
Disciplinary hearings
|
120 000
|
24 000
|
Code of Conduct enquiries
|
745 200
|
549 996
|
Transcription fees
|
12 000
|
6 600
|
·
Contingency liability budget:
The
Committee expressed concern regarding the recurrent exclusion of a budget for
contingent liability, especially considering the fact that the Authority is
currently engaged in a major lawsuit regarding the increase of annual
registration fees. The Committee asked what the Authority will do if the court
rules against them in the case. The Authority indicated that they will have to
do a revised budget if the ruling is against the Authority. The Committee
expressed their dissatisfaction with this, as simply revising the Authoritys
budget is not the answer and that the Authority should budget for a contingent
liability as done by most other Departments and entities. The Authority further
stated that a Budget Committee was established to discuss the possible scenarios
of the outcome of the court case in order to plan for the event that the
outcome is against the Authority. In a written response subsequent to the
hearings, the Authority stated that if PSIRA does not win the SIA case, it will
mean a R57 million short fall in the 2012/13 budget (unclear whether they meant
to indicate the 2013/14 budget).
·
Investment income:
The Committee asked the
Authority to explain the large increase in Investment Income from
R472 020.00 in 2012/13 to R1.320 million in 2013/14. The Committee also
asked the Authority to indicate whether the income is from an investment and if
so, what the amount invested is. The Authority stated that it is income generated
from an investment at a Treasury authorised institution. The Committee was not
satisfied with the answer and requested the Authority to answer the question.
The Authority eventually stated that the investment amounted to R20 million at Nedbank.
·
·
Appointment of PSIRA Council:
The
Committee questioned the status of the Council of PSIRA, as the APP states that
the Council was reappointed for a second term. The Authority stated that the
Chairperson was appointed for a second term and that the contracts for the
Deputy-Chairperson and one Member were extended for six months.
5.3
Programme 2: Finances and Administration
·
Surplus/deficit:
The Committee questioned why the
Authority is planning for a R1 million deficit in 2013/14 in their
presentation, while according to the APP, the Authority is projecting a R9
million surplus. The Authority could not explain the discrepancy.
·
Appointment of CFO:
The Committee requested details
on the appointment of the new Chief Financial Officer (CFO) of the Authority.
The Authority stated that the previous CFO resigned in December 2012 and that
the post was advertised. Due to the fact that the Authority needed a CFO
immediately, as a result the current CFO, Mr. Mongwenyana was appointed on a
temporary basis. He also applied for the position and was appointed
permanently.
·
Pay-a-bill service:
The Committee asked why the
target for the Pay-a-Bill service was amended and whether this means that the
original target was missed. The Authority stated that the target set for 31
March 2013 was missed, hence the new target for 31 October 2013. This was due
to difficulties during negotiations with the South African Post Office on the
fees payable by the Authority. The Authority stated that the negotiations were
resumed and that the service will be available in October 2013.
·
ERP System:
The Committee questioned the
removal of the target for the go-live of an integrated ERP system (online account
payment facility) set for 31 March 2013 and whether the system was implemented.
The Authority indicated that the ERP system encompasses three phases and that
the first phase was concluded on 31 March 2013, but that the next two phases
must first be completed before the system will be active. The Committee
expressed their dissatisfaction towards the exclusion of the target when the
system is not fully implemented and stated that the performance target for the
remaining phases must be reinstated in the 2014/15 APP.
·
Software licensing policy:
The Committee requested
the Authority to provide the software licensing policy of the Authority, as the
Authority could not explain how the policy is applied. The Authority submitted
a software licensing schedule, but did not supply the policy as requested nor
an explanation on how the policy is applied.
5.4
Programme 3: Communication and Training
·
Awareness campaigns:
The Committee requested more
details on the twelve (12) awareness campaigns planned for the 2013/14
financial year, specifically the nature of these events as well as the cost
associated with the events. The Authority stated that the awareness campaigns
have no cost associated with it as it mainly consists of radio interviews,
however the Authority later stated that pamphlets will also be printed on the
planned awareness campaigns and that this will incur some costs. The Committee
requested that the Authority must provide a list of the twelve awareness
campaigns as well as a complete breakdown of the costs of these campaigns. The
Authority erroneously provided the Committee with a list of the four events,
which is already listed in the APP. The Committee will again request the
information on the awareness campaigns.
·
Communications policy:
The Committee expressed
dissatisfaction with the key performance indicators for the development and
implementation of a Communication Policy with a target to approve and implement
the policy over the course of the entire 2013/14 financial year. The Committee
indicated that it should not take a full financial year for the Authority to
develop and implement a communications policy.
·
Target for launch of website:
The
Committee indicated that the newly included key performance indicator for the
date of the launch of the website on the new corporate identity is strange as
it should not be a performance indicator.
·
Registration with the National Qualifications Framework (NQF):
The Committee raised concern regarding the exclusion of the target for
PSIRA to register as a Professional Body in terms of the NQF Act and asked an
explanation for this exclusion. The Authority stated that it is very difficult
to register as a professional body in terms of the NQF Act, as it requires the
Authority to employ specialist trainers and that the budget of the Authority
does not allow for the employment of specialist trainers.
·
Research:
The Committee expressed concern regarding the
proposal from the Authority that Research and Development will constitute a new
programme in the 2014/15 financial year, as the 2013/14 APP does not include
any performance targets for outputs/papers in terms of research. The Committee
also reiterated the lack of performance reported in the 2011/12 Annual Report. The
Committee requested the topics for research papers identified in the last
financial year. The Authority stated that two of the topics are: (1) Guarding and
electronic security, and (2) Crime prevention initiatives. The Committee
requested that the Authority must provide details on the proposed research
projects. In a written response, the Authority stated that the Research and
Development Unit was established in the 2012/13 financial year and that a
Senior Researcher was appointed on 01 September 2012. This person was entrusted
to fully establish the unit. During the 2012/13 financial year, the two above
mentioned research topics were identified and will be completed at the end of
the 2013/14 financial year. The Authority further reported that a researcher
was appointed on 01 April 2013.
·
Industry Compliance Forums:
The Committee welcomed
the inclusion of target for the establishment of four (4) Industry Compliance
Forums in the 2013/14 financial year.
5.5
Programme 4: Corporate Services
·
Lack of policies:
The Committee expressed concern
regarding a target set for six (6) policies to be developed and reviewed in the
2013/14 financial year. These include: (1) Employment Equity, (2) Remuneration,
(3) Training and Development, (4) Succession, (5) Staff Retention, and (6)
Dress Code. The Committee requested a reason why the Authority does not have
these policies yet, as the Authority has been in existence for a number of
years. The Authority indicated that some of the policies have been in
existence, like the Remuneration Policy and this it will only be reviewed. The
Committee stated that the Authority cannot conflate the development and review
of policies into one performance target and that the Authority should separate
these into two targets.
·
Targets on disciplinary procedures:
The Committee
questioned the removal of all performance targets relating the grievances and
disciplinary procedures, especially considering the reported low morale of
staff members. The Committee indicated that the targets for the conclusion of
disciplinary hearings as well as the turn-around time for the conclusion of
grievances should be reinstated in the 2014/15 Annual Performance Plan.
·
Employment equity:
The Committee questioned why the
Authority has set a target to employ only one person with a disability in the
2013/14 financial year and also to elaborate on what challenges the Authority experiences
in terms of employment equity. The Authority stated that the private security
environment is not conducive for persons with a disability and that it will
take a large capital expenditure to procure a vehicle appropriate for an
investigator with a disability. The Committee stated that the Authority does
not only employ investigators, but also other staff members.
6.
RECOMMENDATIONS AND ADDITION INFORMATION
This section provides a summary of the recommendation made by the Committee
and also a summary of the additional information requested during the 2013/14
budget hearings.
6.1
Recommendations
The Committee made several recommendations to the Authority during the
budget hearings. These included the following:
1)
The Authority must report on the complete economic classification of
expected operating expenditure in their Annual Performance Plan in coming
years;
2)
The Authority must report on the number of unregistered companies
investigated by the Authority, with the number of cases opened and the number
of cases that were tried in court in their Annual Report and also develop a
measurable target on this to be included in the 2014/15 Annual Performance
Plan;
3)
The Committee raised significant concern regarding the lack of planning
made for a contingent liability in their budget, especially in the light of the
fact that a court case is pending against them and their budget projected on
the increased annual registration fees. The Committee recommended that simply
providing a revised budget is not the answer and that the Authority must build
a contingent liability into their budget; and
4)
The Authority must include a measurable performance target for the
remaining implementation phases of the ERP system.
5)
The Committee recommends that all members of the Senior Management
Structure (SMS) of PSIRA, including Members of the Council, receive additional
training on the requirements set out in the Public Finances Management Act
(PFMA).
6)
The Committee recommends that all data and figures reported in official
documentation of the Authority must be quality controlled prior to these
submitted to Parliament.
7)
The Committee recommends that the Authority must increase their focus on
the core business of PSIRA and focus less on many peripheral issues currently
focussed on.
6.2
Additional information
The
Committee requested additional information through written responses and
reports to supplement the information gathered during hearings on the 2013/14
Annual Performance Plan, Strategic Plan and 2013/14 Budget of the PSIRA:
1)
The Committee recommended that the erratum on the incorrect financial and
personnel figures must be tabled before Parliament before the end of Friday 03
May 2013;
2)
The total expected expenditure on consultant fees for the 2013/14
financial year;
3)
The number of private security providing companies registered with the
Authority
;
4)
Comprehensive report on the software licensing policy of the Authority,
together with an explanation of the discrepancy in projected figures reported
in the 2012/13 and 2013/14 APPs;
5)
The Committee requested a complete
breakdown in terms of economic classifications of the operating expenditure of
the Authority;
6)
Comprehensive report on the savings projected within the Goods and
Services account of the Authority;
7)
Comprehensive report on events planned by the Authority in the 2013/14
financial year including the estimated expenditure for planned events, like:
promotional merchandising and full details on the role of PSIRA at these
planned events;
8)
The Authority must provide a dead-line for the implementation of its
Communications policy; and
9)
The number of training courses provide by PSIRA, together with the number
of members trained in 2012/13 and planned for 2013/14.
The information received by the Authority on 03 May 2013, is not
comprehensive or explanatory in nature. Some information requested by the Committee
during the 2013/14 budget hearing is still outstanding and will be taken up
with the Authority.
7.
CONCLUSION
The Portfolio Committee on Police concluded that the budget hearing
meeting was frustrating as answers were not forthcoming from the Authority. However,
the Committee indicated that it will continue to fulfil its Constitutional
mandate which is guided by the Parliamentary rules in conducting the oversight
on the functioning of state owned entities, including PSIRA, in order to ensure
the proper and effective functioning and compliance with the legislative
mandate and policy requirements of the Authority.
Report to be considered
Documents
No related documents