ATC181024 :Budgetary Review and Recommendation Report of the Portfolio Committee on Justice and Correctional Services on the Department of Correctional Services and the Judicial Inspectorate of Correctional Services Performance in 2017/18, dated 24 October 2018

Justice and Correctional Services

BUDGETARY REVIEW AND RECOMMENDATION REPORT OF THE PORTFOLIO COMMITTEE ON JUSTICE AND CORRECTIONAL SERVICES ON THE DEPARTMENT OF CORRECTIONAL SERVICES AND THE JUDICIAL INSPECTORATE OF CORRECTIONAL SERVICES PERFORMANCE IN 2017/18, DATED 24 OCTOBER 2018
 

Having considered the annual reports of the Department of Correctional Services and the Judicial Inspectorate of Correctional Services for 2017/18 financial year, the Portfolio Committee on Justice and Correctional Services reports as follows;

1. INTRODUCTION

1.1.       Section 5(2) of the Money Bills Amendment Procedure and Related Matters Act, Act 9 of 2009, requires the National Assembly, through its committees, to submit budgetary review and recommendation reports (BRRR) on the performance of national departments accountable to Parliament. The BRR report is generally informed by a committee’s interrogation of, amongst others, national departments’ estimates of national expenditure, strategic priorities, measurable objectives and forward-funding needs; National Treasury-published expenditure reports; the relevant annual reports and financial statements; the Auditor General of South Africa’s (AGSA) audit findings; as well as observations made during all other oversight activities.

1.2        The Portfolio Committee on Justice and Correctional Services (the Committee) oversees the Department of Correctional Services (DCS) and the Judicial Inspectorate for Correctional Services (JICS) and their efforts to deliver on their respective mandates. To this end, the Committee monitors the implementation of, and adherence to policies such as the white papers on Corrections and Remand Detention; compliance with applicable legislation; adherence to principles of good governance, and sound financial management; and service delivery in line with their mandates, strategic objectives, and government policies and priorities.

1.3        The Committee drew on, amongst others, previous reports and recommendations related to the DCS’s service delivery and financial performance; the DCS’s and JICS’s 2017/18 Annual Reports and Financial Statements, the briefing by the Deputy Minister of Justice and Correctional Services responsible for Correctional Services, Mr Thabang Makwetla, the DCS Commissioner, Mr Arthur Fraser, the Inspecting Judge of JICS, Justice Johann van der Westhuizen, and the Office of the Auditor General of South Africa (AGSA).

1.4        This report should be read with the Committee’s reports on the DCS’s 2017/18 and 2018/19 Budget Votes and the Committee’s BRRR of 18 October 2017.

 

DEPARTMENT OF CORRECTIONAL SERVICES’ PERFORMANCE IN 2017/18

2.         STRATEGIC GOALS IN THE YEAR UNDER REVIEW

2.1        2017/18 Financial Year

1. According to its 2015/16 to 2019/20 strategic plan, the DCS’s mission is to contribute to a just, peaceful and safer South Africa through the effective and humane incarceration of inmates, and the rehabilitation and social reintegration of offenders. The DCS is expected to contribute to ensure that the MTSF and the NDP’s strategic outcomes are achieved. The overarching goal is to build a safer South Africa where all people are and feel safe.
2. Another key goal has been to ensure that offenders, parolees and probationers are successfully reintegrated back into their society as law-abiding citizens through provision of rehabilitation and social reintegration programmes. This goal is key to dealing with repeat offending.

 

3.         FINANCIAL PERFORMANCE

3.1        The DCS received a final appropriation of R22 814 billion in the 2017/18 and spent 99.9% (22 788 billion) of it, leading to an under-expenditure of R26 015 million.

3.2        The largest expenditure item was “Compensation of Employees”, which was appropriated R15, 776 billion but only spent R15, 613 billion, leading to an under expenditure of R163 million. The main reason for this under-expenditure 2,718 vacant funded posts which the DCS struggled to fill. A significant portion of these funded vacancies under-spending were under the Care (R 97 million) and the Rehabilitation (R56 million) programs.    

3.3        On “Goods and Services”, the DCS was appropriated R6, 234 billion and overspent by R97 million due mainly to increased food prices.   

3.4        On “Payment for Capital Assets”, the DCS was appropriated R675 million and only spent R620 million, resulting in an under-expenditure of R55, 331 million. 

3.5.       The DCS did not report any unauthorized expenditure in 2017/18. However irregular expenditure increased by more than 100 per cent from R836, 3 million in 2016/17 to R1, 897 billion in 2017/18.

3.6        Fruitless and wasteful expenditure increased from just less than R1 million in 2016/17 to R41 million in 2017/18. 

 

JUDICIAL INSPECTORATE OF CORRECTIONAL SERVICES’ FINANCIAL

PERFORMANCE: 2017/18

1. JICS’s Statutory Mandate and Mission
   1. JICS is established under section 85 of the Correctional Services Act, Act 111 of 1998, as an independent office under the control of the Inspecting Judge and its object is to facilitate the inspection of correctional centers and to report on the treatment of inmates and conditions of incarceration.
   2. Its mission includes the prevention of human rights violation through the monitoring of mandatory reporting systems on deaths, mechanical restraints and segregations (solitary confinement) in correctional centers. It also maintains the independent complaints system for inmates.  

 

1. JICS’s Financial Performance: 2017/18
   1. JICS was allocated a budget of R69, 6 million for 2017/18. At the end of the financial year, JICS had only spent R51, 4 million, leading to an under-expenditure of R18, 2 million.
   2. R43, 6 million was spent on Compensation of Employees, R7 million on Goods and Services and, R4, 6 million on travel and subsistence.

 

PERFORMANCE ACROSS PROGRAMMES

1. Overall Financial Performance per Programme
   1. The DCS has got five main programmes; Administration, Incarceration, Rehabilitation, Care and Social Reintegration.  Table 1 below shows that three programmes; Incarceration, Care and Social Reintegration spent 100% of their budgets. Only the Administration and Rehabilitation Programmes failed to spend all their allocations; underspending by R6, 7 million and 19, 2 million respectively. This resulted in the overall vote underspending by R26 million in 2017/18.

 

 

 

Table: 1: Financial performance

	2017/18 Financial year
Programme	Final Appropriation	Actual Expenditure	Variance in R	Expenditure as a % of Final Appropriation
	R’000	R’000	R’000	%
Administration	3 919 565	3 912 772	6 793	99.8%
Incarceration	13 949 901	13 949 901		100%
Rehabilitation	1 714 533	1 695 311	19 222	98.9%
Care	2 322 675	2 322 675		100%
Social Reintegration	907 919	907 919		100%
Total	22 814 593	22 788 578	26 015	99.9%

Source: Annual Report of the Department of Correctional Services 2017/18.

 

1. Overall Non-Financial Performance
   1.  There were 36 performance targets set for the 2017/18 financial year. Despite spending 99.9% of its budget, the DCS achieved only 81% (29) of its performance targets, as shown in table 2 below.

 

Table 2: Performance targets 2017/18

PERFORMANCE TARGETS	2017/18
Number of planned targets during the financial year	36
Number of targets achieved	29
Number of target not achieved	7
Percentage level of performance	81%

Sources: Annual Reports of the Department of Correctional Services 2017/18

 

1. Programme by Programme Performance
   1. Programme 1: Administration
      1. The Administration programme comprises the Management, Finance, Corporate Services/ Human Resources, Information Technology, JICS, Ministry, Internal Audit, Office and Residential Accommodation sub-programmes. Of the 11 targets under this programme, only two were not achieved. The DCS had challenges in achieving a zero audit qualification under the Finance sub-programme and in achieving its Integrated Inmate Management System (IIMS) target under the Information Technology sub-programme.
   2. Programme 2: Incarceration
      1. The Incarceration programme comprises of the Security Operations, Facilities, Remand Detention, and Offender Management sub-programmes. Of the 7 targets under this programme, only 2 were not achieved. This is a huge improvement compared to 2016/17 where only 38 percent of the targets were achieved. The challenges were in reducing the percentage of unnatural deaths and on creating new bed spaces in correctional and remand facilities. Of the 61 unnatural deaths reported, 27 are said to have been due to unknown causes, 25 due to suicides, eight due to inmate on inmate assault and 1 due to burn wounds. The unknown causes are said to be due to delays in the performance of autopsies.
      2. When it comes to new bed spaces, there DCS had planned to create 492 additional bed spaces but could not create any during the financial due to delays in construction. This was also the case in 2016/17 and the preceding years.
   3. Programme 3: Rehabilitation
      1. The Rehabilitation programme comprises of the Correctional Programmes, Offender Development, and the Psychological, Social and Spiritual Services sub-programmes. Of the nine targets under this programme, eight were achieved. The challenge was in achieving the number of offenders who participated in Adult Education and Training due to the discontinuation of the programme in one of the centres.
   4. Programme 4: Care
      1. The Care programme comprises of the Nutrition Services, Hygiene Services, and Health Services sub-programmes. Of the three targets under this programme, only one target was not achieved. The target that was not achieved was the percentage of inmates on Anti-Retroviral Therapy.
   5. Programme 5: Social Reintegration
      1. The Social Reintegration programme comprises of the Supervision, Community Reintegration, and Office Accommodation: Community Corrections sub-programmes. This programme had six targets and five of them were achieved in 2017/18 financial year.

 

JUDICIAL INSPECTORATE OF CORRECTIONAL SERVICES REPORT

9.Inspections, Investigations, Complaints and Mandatory Reporting

9.1.JICS’s (the Inspectorate) reported that there were 164 129 inmates in correctional centres as end of March 2018. Of this number, 117 870 were sentenced inmates and the remaining 46 259 were remand detainees. In comparison to the previous financial year, the number of inmates in correctional and remand detention centres has increased by 2 716 from 161 413 (in 2016/17).    

9.2.JICS conducted a total of 81 inspections in correctional centres across the country. The areas inspected included housing units, ablution areas, plumbing, electrical supply, kitchens, and medical areas. Out of 81 facilities inspected 54 of them required urgent maintenance. In Gauteng region, all 11 inspections required urgent maintenance.

9.3.JICS found that overcrowding in correctional facilities in South Africa remained unacceptably high. It is noted in the report that the legislative provisions introduced in 2011 (Correctional Matters Amendment Act 5, of 2011) has not produced the desired results in reducing the number of remand detainees in correctional facilities.

9.4.JICS further noted that in certain instances the Heads of Correctional Centres are reluctant to apply the provisions of s63(a), which authorises a Head of Centre to apply to court for the release  of detainees, under certain conditions.

9.5.JICS’s report found that in its inspections, a total of 1 200 inmates were identified as having been diagnosed with one or other form of mental illness. The majority of these inmates are treated at the prison and kept with the general population. JICS noted that the situation was chronic, especially at Free State/Northern Cape region, where 20 such inmates were found in Grootvlei Medium A. JICS recommended that the DCS must train its security officials on how to deal with mentally ill inmates, as they are currently not properly equipped.

9.6.For the year under review, a total of 22 (as compared to 17 in 2016/17) investigations were conducted and the majority (7) of these investigations related to sexual assaults. These cases of sexual assaults are perpetrated by inmates (or gangs) on other inmates. Five cases of assault were investigated during the year under review. These cases included assaults by inmates to other inmates, inmates to officials and officials to inmates. Other investigations related to complaints about conditions of detention and lack of medical assistance, death of inmates during gang fights, corruption and discrimination on religious grounds.   

9.7.There were 988 recorded complaints for the 2017/18 financial year. These complaints ranged from assaults by officials (231), transfers (165), parole (92), appeal (54), health care (48), reclassification (19), and rehabilitation programmes (17). 

9.8.The number of unnatural deaths in correctional centres increased from 52 (in 2016/17) to 82 (in 2017/18). The majority (45) of deaths were a result of ‘unnatural other’. This is followed by suicide (28), and assaults (8) by inmates on inmates. The number of suicides increased from 27 (in 2016/17) to 28 (in 2017/18). Of the number of suicides committed in correctional centres, the majority (21) were committed by hanging in the Gauteng region. The Gauteng region had the highest number of unnatural deaths (24) followed by the Western Cape (19) and the Free State and Northern Cape (14), Limpopo, Mpumalanga and North-West (10), Kwazulu-Natal (9) and the Eastern Cape (6).

9.9.For the 2017/18 financial year, the Inspectorate recorded eight (8) cases of homicide. All these cases were a result of inmate on inmate incidents.   

9.10.The Inspectorate recorded 487 natural deaths for 2017/18 financial year down from 497 recorded in the previous financial year. The region with the highest number of natural deaths was the Gauteng Region with 119, followed by KwaZulu-Natal with 100. Western Cape reported the lowest number of natural deaths with only 41. Some of the causes included HIV, cardiac diseases, tuberculosis, pneumonia, and sepsis.

9.11.On segregations, the Inspectorate received 9 947 (10 760 in 2016/17) cases of segregation and 41 appeals. For those segregation appeals that were successful, the Inspectorate made the following findings:

9.11.1.The grounds on which the inmates were segregated were irrelevant to the offence committed;

9.11.2.The conduct of the inmates did not involve violence and, therefore, all inmates were wrongfully segregated;

9.11.3.Inmates were wrongfully segregated and, therefore, the right procedures were not followed. After the inmates were found in possession of a cell phone, the procedure in terms of section 24 should have been followed;

9.11.4.Segregation is applicable as a punishment for the conduct of the inmates and the segregation must be in terms of section 30(1) (b) read with section 23(1)(m) and section 24. The Inspectorate recommended that inmates to be removed from segregation.

9.12.The Inspectorate reported that it received 120 reports of the use of mechanical restraints from Heads of Centres compared to 213 in 2016/17. These mechanical restraints were mostly as a result of damage to property, for the safety of inmates, to prevent self-harm, on suspicion of a planned escape, and one restraint was requested by the court.

9.13.The Inspectorate reported that it has seen an increase in reported cases related to the use of force from 724 (in 2016/17) to 995 (in 2017/18). The Correctional Services Act, 111 of 1998 allows officials to use force when it is for self-defence, the defence of another person, preventing an inmate from escaping or for the protection of property.

 

AUDIT COMMITTEE REPORT

1. Audit Committees Findings
   1. Audit Committees are established in accordance with provisions of the Public Finance Management Act and Treasury Regulations. As an oversight body they provide independent oversight of departmental governance, risk management and control processes.
   2. The Audit Committee indicated that it remained concerned about the overall status of key controls within the Department of Correctional Services. It said that there was a ‘need to improve the internal control environment in a number of areas, particularly management’s oversight responsibility, leadership and culture, record-keeping and compliance monitoring’. It further said that the DCS management needed to ‘improve the current performance management and reporting system to ensure quality reporting’. The Audit Committee expressed further concerns about the slow progress made in filling vacant positions at SMS level.  
   3. On performance audits, the Audit Committee identified the following concerns: disciplinary processes were inadequate and have resulted in prolonged suspensions with pay; long and outstanding investigations on irregular , fruitless and wasteful expenditure result in inadequate consequence management; the achievement of performance targets did not align with expenditure; inadequate implementation of the ICT Governance Framework; increases in accrual and payables as compared to the previous financial year; inadequate and ineffective controls regarding assets management and capital works in progress; inadequate capacity and risk management processes; challenges with reviewing of policies and compliance with laws and regulations; increased debtors book due to inadequate and ineffective controls on debtors’ management; poor conditions of incarceration on some facilities and; challenges in delivering rehabilitation and health care services.  
   4. The Audit Committee further said that the Internal Audit function did not complete the Annual Audit Plan as approved due to leadership instability, staff competencies and capacity constraints.
   5. It further said that while the DCS has been reporting on a monthly and quarterly basis to the National Treasury, it was still concerned about the quality and content of these reports.

 

AUDITOR GENERAL’S REPORT

1. Audit Findings
   1. The DCS received a qualified audit status on the basis of not maintaining an accurate and complete record of contractual information used to determine commitments. This resulted in commitments being understated by R329 704 671. The office of the AGSA indicated that it was unable to obtain sufficient audit evidence for the amount disclosed for the Department’s future commitments.
   2. During the 2017/18 financial, the DCS was audited on two of the five programmes; Incarceration and Social Reintegration. On the Incarceration programme, the department received a qualified audit opinion as the AGSA could not obtain sufficient appropriate audit evidence for the reported achievement of the target of 38% (45 406/118 723) rate of overcrowding and the availability of approved accommodation in correctional and remand detention centres. On the Social Reintegration programme, the AGSA expressed an unqualified audit opinion.  
   3. On expenditure management, the AGSA reported that effective steps were not taken to prevent irregular expenditure amounting to R1 897 186 000 at the DCS. According to the report, the majority of the irregular expenditure was caused by non-compliance with supply chain regulations.
   4. The AGSA also reported that some invoices were not paid within 30 days as required by Treasury regulation 8.2.3. Contractual obligations by the Department were also not settled within 30 days, as required by section 38(1)(f) of the PFMA and Treasury regulations. This effectively led to accruals and payables, which if they had been settled on time, would have led to unauthorised expenditure as payables exceeded the voted funds to be surrendered as per the statement of financial performance by R255,6 million.
   5. On contracts management and supply chain management, the report of the AGSA noted that some goods of a transaction value above R500 000 were procured without inviting competitive bids, as required by Treasury regulations 16A6.1 and 16A6.4.
   6. It also indicated that some persons in the service of the Department who had private or business interests in contracts awarded by the Department failed to disclose such interests, as required by Treasury regulation 16A8.4. The report further mentioned that similar non-compliance was reported in the previous financial year and disciplinary action was not taken against the officials involved.
   7. The report further notes that in some instances, persons in the service of the Department whose family members, partners or associates had private or business interests in contracts awarded by the Department failed to disclose such interests as required by Treasury regulation 16A8.4 and similar non-compliance was reported in the previous financial year and disciplinary action was not taken against the officials involved.  
   8. The AGSA found that consequence management is lacking as disciplinary steps were not taken against officials who had incurred and/or permitted irregular expenditure as required by section 38(1)(h)(iii) of the PFMA.
   9. The AGSA noted that the President has proclaimed the following four investigations which have been gazetted for the Special Investigation Unit:
      1. Proclamation R. 18 of 2016 to investigate irregularities in the procurement of an electronic monitoring system between 1 June 2011 and 15 April 2016;
      2. Proclamation R. 20 of 2016 to investigate the appointment of a service provider to render project management services and condition assessment in respect of correctional facilities between 10 May 2013 and 15 April 2016;
      3. Proclamation R.10 of 2018 to investigate the procurement of, or contracting for  goods and services, by or on behalf of the Department in respect of perishable provisions, food, toiletries, catering, marque hire and coal in respect of 20 tenders awarded between 2012 and 2015
      4. Proclamation R.28 of 2017 to investigate the procurement of, or contacting for goods, works or services by or on behalf of the State Institutions in terms of Bid Number DCSSF02 and payments made in respect thereof.   

 

1. COMMITTEE OBSERVATIONS AND RECOMMENDATIONS
   1. The Committee notes and commends the DCS for the overall improvement of its performance, particularly on service delivery targets, from 62% in 2016/17 to 81% in 2017/18.  The Committee believes there is still some room for improvement, especially in ensuring value-for-money for the services delivered. There continues to be a misalignment between the achievement of service delivery targets and financial expenditure, which stood at 99.9% of the total budget allocation in the year under review.  
   2. The Committee would like to acknowledge and highlight the following key successes, among others; the improved establishment and operation of Halfway Houses aimed at reintegrating parolees and probationers with society; the employment of 1494 parolees and probationers through the Department’s partnerships; the 211 parolees and probationers who have opened and are running their businesses—employing a further 652 parolees and probationers; the 77% pass rate for grade 12 learners with four schools maintaining a 100% pass rate; the increased participation of victims in Restorative Justice Programmes; the increase percentages of parolees and probationers without violations and; the increased percentage of sentenced offenders who participated and completed their correctional programmes. The Committee believes that these achievements contribute to the rehabilitation and reintegration of offenders into society and contribute to the achievement of Chapter 12 of the National Development Plan (NDP) directed at building safer communities.   
   3. The Committee notes that there key persistent service delivery targets that the Department has had challenges in managing adequately. These are issues of; the rate of overcrowding which increased to 38% in 2017/18, from 35% the previous year; the failure to create new bed spaces over consecutive years; the increasing number of unnatural deaths over the years. Over and above these issues, the JICS has highlighted the issue of the large number of mentally ill inmates—some of whom are not even supposed to be in correctional facilities. The Committee notes this with concern and believes that a solution should be found to keep mentally ill patients in mental institutions and, in the meantime, to train a sufficient number of its officials on how to manage mentally ill inmates. The Committee believes that the challenges highlighted here reflect the unacceptable conditions of incarceration in the country’s correctional and remand facilities.
   4. As the Committee has expressed in its previous reports, although the DCS cannot control the number of persons sentenced or remanded in custody, it has some measure of control over the speedy delivery of infrastructural projects, the handling of maintenance work, the application of the bail protocol at centre level, the implementation of section 49G of the Correctional Services Act, the use of EMS, and proactively ensuring the spread of the inmate across its centres. The Committee continues to encourage the Department to implement all the tools available to it to down-manage the inmate population and to work closely with its sister departments within the criminal justice cluster.
   5. The Committee notes that there are discrepancies between the number of unnatural deaths reported to JICS by the DCS in 2017/18. According to the DCS annual report, the number of unnatural deaths is 61, while the JICS annual report recorded 82 such deaths. Equally the DCS Annual report recorded 83 inspections of correctional and remand facilities by JICS, whereas JICS’s annual report recorded only 81. The Committee requires an explanation of these discrepancies in writing from the DCS and JICS within a month of the adoption and publication of this report by Parliament.  
   6. The Committee notes and commends JICS on its annual performance. The Committee notes that despite limited resources and budget, JICS managed to meet its targets on inspections and other statutory obligations in relation to inspections, investigations and complaints. The Committee is however very concerned that JICS underspent its budget by 26%, with the highest under-expenditure variance of 28% on the Compensation of Employees. In this regard, the Committee urges the Minister and the accounting officer to intervene to ensure that JICS is able to conclude its recruitment and selection processes.
   7. The Committee notes the challenge experienced by JICS with respect to mandatory reporting as a result of the neglect of the management information system and lack of enthusiasm by the Department to submit manual mandatory reports. The Committee urges the Minister to intervene to ensure that JICS is able to perform its statutory functions.
   8. The Committee notes the information about the Sonke litigation to enhance the independence of JICS. The Committee requires to be updated on the developments of this case in its quarterly reports, particularly its implications should Sonke win the case.    
   9. The Committee notes that the claims against the DCS have increased from R253, 8 million in 2016/17 to R253,9 million in 2017/18. These claims include, amongst others; bodily injury/assaults (R58 066 million); rape (R54 611 million) and damages (R26 310 million). The Committee is concerned that there are no provisions made for such contingent liabilities.   
   10. The Committee notes with concern the increased reports to JICS on the use of force by DCS officials on inmates over the years and from 724 in 2016/17 to 994 in 2017/18. The Committee further notes the complaints on assaults, including sexual assault, in correctional and remand detention centres. The Committee believes that there should be adequate training on the use of reasonable and minimum force where circumstances require such use of force.
   11. The Committee notes the report of the Audit Committee included in the Annual Report, particularly on the DCS’s internal control environment and performance audits.  The Committee is concerned that the internal audit function of the DCS did not complete the annual audit plan due to leadership instability, staff competencies and capacity constraints. The Committee urges the Minister and the accounting officer to intervene in ensuring that key funded and vacant SMS positions are filled immediately in order to improve and capacitate the internal audit and control environment.
   12. The Committee notes the Report of the AGSA included in the DCS’s annual report. The Committee notes that the Department has not improved on its audit outcomes and has, infact, deteriorated. The Committee is disappointed that, again, the department did not achieve a clean audit.
   13. The Committee further notes that financial statements and performance reports submitted to the AGSA for audits continue to require material adjustments. The Committee is concerned that the drivers of internal controls remain such as leadership, financial performance management and governance remain weak.  On leadership, the AGSA found that there was lack of adequate oversight responsibility regarding financial report and compliance and inadequate implementation of audit action plans to address prior year audit findings. On financial and performance management, it found that there was still inadequate implementation of proper record keeping to support financial and performance reporting, inadequate implementation of controls over daily and monthly processing and reconciling of transactions and, lack of regular, accurate and complete financial and performance report that are supported and evidenced by reliable information. On governance, it found that there was insufficient capacity in the internal audit function and lack of skills to review financial statements as well as information system audits. The Committee requires the Department to submit quarterly reports on the implementation of the audit action plan. The Committee has in the past recommended that ‘serious consideration should be given into making Internal Audit a fully-fledged sub-programme under the Administration Programme, with clear performance indicators and measurable quarterly and annual targets so that there can be more focused oversight on its work’. The Department has never responded to this recommendation which is contained in our previous two year BRRR and Budget Vote reports. 
   14. The Committee notes with concern that there was an increase by 100% on irregular expenditure from R836 million in 2016/17 to 2017/18 in R1, 897 billion. The Committee expects to be briefed quarterly on the investigations and consequences management on this irregular expenditure.  
   15. The Committee notes the findings of the AGSA on accruals and payables and the risk of unauthorized expenditure. The AGSA reported that had the Department paid its invoices within 30 days as required by the Treasury regulations, the Department would have incurred unauthorized expenditure of R255, 6 million. While the Committee is concerned of this non-compliance with Treasury regulations, it appreciates the assurance from the DCS that it does not affect small businesses. We also note that accruals and payables have decreased from R336 million in 2016/17. It is however of great concern to the Committee that accruals over 30 days are still material and have a negative impact on the 2018/19 financial year, therefore affecting the Department’s financial health.    
   16. The Committee notes the findings of the AGSA in relation to supply chain management (SCM) with great concern, particularly the; increase in the percentage of transactions where competitive bids were not invited; incidents where the preference point system was either incorrectly applied or not applied at all; incidents where the evaluation criteria differ from the specified criteria; incidents where there were inadequate contract performance measures and monitoring; incidents where no three written quotations were invited and; incidents where the disclosure of interests by employees or suppliers were not done or were falsified.
   17. The Committee notes that SCM violations were reported for investigations. The Committee notes also that some of the root causes of undesirable audit outcomes have been the slow response to improving key controls and addressing risk areas identified by the AGSA and, inadequate consequences for poor performance and transgressions of laws and regulations by management (accounting officers and senior management). The Committee urges the Minister to heighten his executive oversight over the Department. The Committee also expects to receive quarterly reports on the progress of SCM related investigations that were referred by the AGSA.  
   18. The Committee notes that recommendations of the AGSA to the Committee to monitor the; financial health of the Department, implementation of the integrated justice system in the DCS and, progress made on upgrading of facilities. The Committee will further monitor the implementation of the audit action plans and consequence management, as recommended by the AGSA.  
   19. The Committee recommends that JICS be consulted and given more say in the allocation of its budget so that its budget responds to its operational needs. 

 

To be considered.