Presentation is loading. Please wait.

Presentation is loading. Please wait.

SIU Presentation to Portfolio Committee: Justice and Constitutional Development 12 October 2011 12 October 20111SIU presentation to PC on Justice and Constitutional.

Similar presentations


Presentation on theme: "SIU Presentation to Portfolio Committee: Justice and Constitutional Development 12 October 2011 12 October 20111SIU presentation to PC on Justice and Constitutional."— Presentation transcript:

1 SIU Presentation to Portfolio Committee: Justice and Constitutional Development 12 October 2011 12 October 20111SIU presentation to PC on Justice and Constitutional Development

2 Summary 1.Introduction to SIU, mandate and legal scope 2.Strategy Overview 3.Building capacity 4.Participation with other government initiatives 5.Overview of performance 6.Operational summary 7.Challenges in dealing with corruption 8.Budget growth and project income 9.Funding issues 10.Financial information, audit and MTEF 11.Conclusion Corruption hurts the poor disproportionately by diverting funds intended for development, undermining a government’s ability to provide basic services, feeding inequality and injustice, and discouraging foreign investment and aid Kofi Anan – previous Secretary-General of the United Nations 12 October 20112SIU presentation to PC on Justice and Constitutional Development

3 Started out: Heath Commission of Enquiry, 1995 Established: in terms of the Special Investigating Unit (SIU) Act 74 of 1996 – still function much like commission of enquiry – current SIU established by Proclamation R118 of 2001 Investigations mandated: by a Proclamation from President Powers: (similar to commission of enquiry) – subpoena, search and seizure, interrogate witnesses under oath – innovation: power to use institute civil litigation to recover monies lost – not power of arrest, prosecution – can assist and facilitate – not power to take disciplinary action – recommend and assist separate from law enforcement agencies but work closely together Major functions: – investigate corruption and maladministration (ie not just crime) – institute civil legal action to correct any wrongdoing 3 SIU mandate and legal scope

4 About the SIU Facilitate and assist with concrete legal outcomes to investigations – ie: – criminal (prosecutions) working with the Police (SAPS) and the National Prosecuting Authority (NPA) – civil litigation to recover losses – disciplinary action Capacity: massive expansion and development of multi-disciplinary forensic capability consisting of: – forensic investigators, lawyers and accountants – cyber forensic and data analysis experts and – project management capacity Mixed funding model: – baseline funding from National Treasury allocation - not sufficient – additional funding secured through partnerships with state institutions – goal is to build capacity in state and reduce reliance on the private sector 12 October 20114SIU presentation to PC on Justice and Constitutional Development

5 About the SIU cont... Cooperation: developed close working relationships with: – law enforcement: SAPS (especially the Hawks), NPA – Treasury bodies: Accountant-General, SARS, Financial Intelligence Centre – oversight bodies: Auditor-General, Public Service and Administration (DPSA) – Legislatures: Public Accounts Committees – national, provincial, municipal – chapter 9 institutions: esp Public Protector – individual departments, provinces and other state institutions Focus areas: – large scale fraud and corruption where multiple small cases social grants, housing subsidies, driving licences – increasing focus on procurement related fraud and corruption – assist with improving systems and processes to prevent corruption – use of data to indentify potential irregularities pro-actively 5 SIU presentation to PC on Justice and Constitutional Development 12 October 2011

6 Vision: Working together to rid society of corruption Mission: We are a state body that fights corruption through quality investigations and litigation Values: integrity, cooperation, professionalism, drive and effectiveness Strategic goal: To contribute to the reduction of corruption and the perceptions of corruption The SIU aims to make this contribution as part of the broader anti-corruption strategy of government 12 October 2011 SIU presentation to PC on Justice and Constitutional Development 6 SIU strategy framework

7 Outcome 3: All people in South Africa are and feel safe Output 3: Corruption eradicated, including bribery, by officials within the JCPS as one of the major contributors of ongoing criminal activity as well as lack of trust and confidence in the system by the community – Compile a baseline report with detailed data for the 2009/10 financial year Output 5: Investor perception trust and willingness to invest in South Africa is improved and by taking corruption related action in a defined number of highly visible cases – Successfully convict 100 people who have assets of more than R5 million obtained through illicit means Outcome 12: Efficient, effective and development oriented public service and an empowered, fair and inclusive citizenship Output 4 – Corruption tackled effectively. – An improvement in the TI corruption index from position 55 of 180 to 40 of 180. 12 October 2011 SIU presentation to PC on Justice and Constitutional Development 7 Links to government outcomes

8 Externally focused 1.To increase impact of the SIU’s forensic services in the public sector 2.To achieve optimum institutional form 3.To ensure excellent cooperation with our law enforcement partners and stakeholders Impact Strengthen our strategic partnerships Increase the scope of operations for the SIU Contribute directly to – Outcome 3: South Africans are and feel safe – Outcome 12: Efficient, effective and development oriented state 12 October 2011SIU presentation to PC on Justice and Constitutional Development8 Strategic objectives

9 Internally focused 1.To secure appropriate capacity and funding 2.To align and improve systems and processes 3.To invest in appropriate technology capacity 4.To build an engaged, diverse and competent SIU 5.To develop effective, accountable and engaging leadership Impact Enables the SIU to achieve its external objectives 12 October 2011SIU presentation to PC on Justice and Constitutional Development9 Strategic objectives

10 Strategic Overview – 3 years 2009/10 Environment uncertain with recession and large dependence on partner funding Concluded most of an intensive organisational assessment and design process to better capacitate the SIU Adopted a 3 to 5 year approach to strategic planning Key focus on positioning the SIU as the forensic service provider to the state – and increasing projects and funding 2010/11 SIU became part of new government initiatives on corruption – ACTT, MAWG, DPSA – significant increase in impact, workload and funding – focus of investigations shift to procurement Aligned strategic plan to the Results Based Management and Outcomes Management approach of government and developed a Logic Model linked to Outcome 3 (Outputs 3 & 5) and Outcome 12 (Output 4) 1012 October 2011SIU presentation to PC on Justice and Constitutional Development

11 Building capacity through partnerships The major focus of the SIU has been to build more capacity in the state to deal with corruption investigations: has grown from about 67 to 600 staff in 9 years trainee investigator program has addressed EE challenges in the forensic field The new operating model is designed for scalability – will allow for rapid increase investigator numbers in response to the increased demand To bolster capacity have sourced additional investigators from the private sector intended as short term intervention and skills transfer initiative allow time to recruit and develop staff cater for some of the uncertainty from our funding model Big recruitment drive and development initiatives to provide long term capacity that is sustainable and helps to bolster government’s overall capacity to ensure effective investigations 12 October 2011SIU presentation to PC on Justice and Constitutional Development11

12 Capacity summary Establishment is 668 funded posts – expect to grow to 706 in next 3 years – about 40% is dependent on project funding which make permanent employment risky – have tried to mitigate by using consultants, contract and temporary staff – recruitment drive is on going 441 full-time ops staff – 25 working full-time with ACTT – and 11 with Wasps Permanent posts filled decreased due to uncertainty about project funding – 594 in 2007/08 to 522 in 2010/11 Challenges due to cumbersome process of salary approval on which implementing the new organisational structure depends 12 October 201112SIU presentation to PC on Justice and Constitutional Development

13 Capacity summary To address capacity issues and demands for new investigations SIU has negotiated an innovative agreement with the private sector to in-source forensic investigators – at a discount of about 50% of AG rates – thanks to cooperation from private sector Currently using about 135 forensic investigators from over 20 forensic firms 12 October 201113SIU presentation to PC on Justice and Constitutional Development

14 Promoting EE Promoting employment equity has been a challenge in the forensic industry traditionally dominated by white males from SAPS commercial branch Difficult to compete with private sector salaries SIU started own trainee programme –nearly 300 new investigators over 6 years Also a leadership development programme Agreed on a new plan with EE committee setting ambitious targets Still a challenge at senior management level, but it is a focus of current recruitment and SIU has made good progress so far Exco: currently 3 white male, 2 African male – 1 African male soon as Portfolio Manager – headhunting 1 African female for Stakeholder Head Senior management in Operations and Business Support: – 6 African, 2 Coloured, 7 White 12 October 2011SIU presentation to PC on Justice and Constitutional Development 14

15 ACTT (Anti Corruption Task Team) in the Justice cluster Task team set to fast-track high priority corruption investigations and prosecutions, and to co- ordinate efforts with other bodies. Consists of the Hawks, SIU, and NPA (including prosecutors and the AFU) - supported by SARS, the FIC and the Accountant-General in Treasury SIU has committed considerable resources to this process MAWG (Multi Agency Working Group on procurement) in the Finance cluster Deals with irregularities in the gov’t procurement system, focusing on closing systems gaps as well as detecting and investigating irregularities Comprising the AG, SARS, FIC, DPSA and SIU – supported by Hawks and NPA SIU has played a significant part in the development of strategy and implementation Wasps (Special Anti-Corruption Unit in DPSA) in the Governance cluster Focus on the investigation and prosecution of disciplinary cases against senior public servants involved in corruption ensuring effective action is taken. It will work closely with departments The SIU has committed to provide investigative and legal support 1512 October 2011 Participation in other initiatives SIU presentation to PC on Justice and Constitutional Development

16 SIU performance overview 12 October 201116SIU presentation to PC on Justice and Constitutional Development

17 A significant change in focus in service delivery: – from multiple small cases – to fewer complex, long term investigations into procurement. Essentially it will mean the SIU deals with fewer but more important cases This coincides with the new focus of government on procurement irregularities – Social grants: shift from removals of grants to procurement issues There is still one significant removal possible but probably not this year – Housing : shift from illegal subsidies to housing contracts – Transport: agreement on driving licences has not been renewed 12 October 2011SIU presentation to PC on Justice and Constitutional Development17 Analysis of performance

18 Analysis of performance cont. Impact on performance as measured currently – Financial indicators will decrease in short term as it will take longer to deliver – Number indicators: will also decrease but not as significantly 2 new indicators to try to measure impact – contributing to completed investigations for JCPS output 5 – value of contracts where irregularities found Looking at internal indicators – value of contracts where potential irregularities identified – value of contracts under investigation – value of contracts where irregularities found – value of potential remedial action, eg cancellation of contracts 12 October 2011SIU presentation to PC on Justice and Constitutional Development 18

19 New Proclamations 2010/11 12 October 201119SIU presentation to PC on Justice and Constitutional Development 1.Department of Health: Gauteng Province 2.South African Social Security Agency 3.Extension to Housing Proclamation R.7 of 25 April 2007 4.Department of Arts and Culture 5.Department of Education: Eastern Cape Province 6.Department of Public Works 7.South African Police Service 8.Department of Public Works: KwaZulu- Natal Province 9.South African Broadcasting Corporation 10.Ikhala Further Education and Training College: Eastern Cape 11.Tshwane Metropolitan Municipality: Gauteng Province 12.Ekurhuleni Metropolitan Municipality: Gauteng Province 13.George Local Municipality: Western Cape Province 14.National Heritage Council (Department of Arts and Culture) 15.Stellenbosch Local Municipality: Western Cape Province 16.Amendment to Stellenbosch Proclamation 17.Oudtshoorn Local Municipality: Western Cape Province 18. Department of Rural Development and Land Reform

20 Operations summary 2 more since last FY: 1.Midvaal Local Municipality (20 May 2011) 2.Former Department of Roads and Transport Eastern Cape (20 May 2011) Numerous additional requests for investigations and motivations for proclamations in process 60 current investigations 22 active proclamations Investigation growth areas include: – Procurement – Public works – Rural development and land reform – Parastatals – Local government – Education and Health 12 October 201120SIU presentation to PC on Justice and Constitutional Development

21 Operations summary Procurement contracts under investigation: 588 to the value of R9.1 billion Conflict of interest matters under investigation: 360 to the value of R3.4 billion Procurement investigations were irregularities were found: 43 to the value of R1.4 billion (April to June 2011) Conflict of interest matters where irregularities were found: 45 to the value of R99 million (April to June 2011) 12 October 201121SIU presentation to PC on Justice and Constitutional Development

22 Operations SAPS Assistance to Public Protector in SAPS HO and Durban leases only part of a far wider investigation requested by the ICD and current National Commissioner A major concern was significant irregularities in the SAPS build programme with allegations of SCM irregularities in the building and/or renovation of 33 police stations exceeding R330 million : – lowest quotations not accepted – no quotations from the winning bidder – possible cover quoting and BEE fronting – possible conflicts of interest - SAPS officials appear to have interests in the suppliers awarded work for goods and services – actual payments exceeding budgeted costs Agreed priorities are the following building and/or renovation projects : – Pienaar, Hazyview, Brighton Beach, and eSikhawini police stations 12 October 2011SIU presentation to PC on Justice and Constitutional Development22

23 Operations Department of Public Works (DPW) Looking at entire DPW function - a core state entity with significant vulnerabilities At least R35m paid to entities where DPW staff have undeclared business interests Contract for construction of accommodation at border post: – value of contract is R374m – Investigating maladministration, financial misconduct and corruption on part of senior DPW officials and contractor – Looking to civil recovery of about R46m as well as other action Pretoria lease agreement for residential accommodation: – at approx R217 000 pm without relevant approval – payments to date exceeds R7m – contractor has been positively linked to DPW official Priority matters currently under investigation: leased accommodation, specific contracts, conflicts of interest and general SCM irregularities – total: R3.3 billion 12 October 2011SIU presentation to PC on Justice and Constitutional Development23

24 Arts and Culture Looking at misuse of funds ring-fenced for 2010 Soccer World Cup (SWC) Investigation revealed: – R26m shifted from earmarked SWC budget – unauthorised expenditure – R16m not used for SWC-related projects - also unauthorised expenditure Reviewed 39 Investment in Culture projects: – recommended R8.3 million savings 12 October 2011SIU presentation to PC on Justice and Constitutional Development24 Operations

25 SABC SABC approached SIU for assistance AG investigation which identified: – 20 employees whose business interests – received payments totaling R 3.4m from 1 Oct 07 – 30 June 09 – 13 disciplinary cases recommended SIU has identified another – 20 employees whose business interests received payments amounting to R 2.4 billion in period 1 Sep 07 – 31 Mar 10 – still under investigation Working jointly with the Brixton Commercial Crime Unit on 8 criminal matters – 5 matters have been finalised and are to be submitted to the NPA for a decision by SAPS 12 October 2011SIU presentation to PC on Justice and Constitutional Development25 Operations

26 Tshwane Metro Identified 65 officials who have interests in companies doing business with the Metro and receiving payments as active vendors – Total payments made to these businesses between 2007 and 2010 is R185m Total value of procurement under investigation in excess of R80m Irregularities include: – Deviation approvals of over R400m – Collusion between officials and service providers – Deviations from tender specifications without authorisation – Payments to service providers for work not complete or services not rendered 12 October 2011SIU presentation to PC on Justice and Constitutional Development26 Operations

27 Ekurhuleni Metro Waste management – Reviewing 10 tenders involving 19 contractors – total value of contracts in excess of R500m – In 1 contract, payments of R37.8m made to service provider without delivery notes – No-one at Metro can confirm whether goods were delivered ICT contracts – Contract to value of R32 million awarded to company with which Exec Director IT had an undisclosed relationship He has since resigned and is now employed full-time by the company – Director: Infrastructure admitted to signing off on invoices to value of R 12.4m for services that were not delivered 12 October 2011SIU presentation to PC on Justice and Constitutional Development27 Operations

28 Rural Development and Land Reform Proclamation, requested by the Minister, covers the following areas in the land reform programme : – Application for and award of grants and funds and the administration thereof in a manner that was contrary to legislation and guidelines, or fraudulent – Irregular expenditure; fruitless and wasteful expenditure; and/or expenditure not due, owing and/or payable to beneficiaries, consultants, and/or service providers SIU’s biggest ever data uplifting project, involving over 50 million printed documents being identified, catalogued, scanned and analysed Have already worked with Hawks and AFU to: – 3 officials and a KZN businessman, on fraud and corruption charges relating to the irregular awarding and administration of land reform grants totalling R50m – AFU has frozen several KZN farms and assets worth about R50m to date – Farms to the value of R36m already forfeited back to the state (this FY) 12 October 2011SIU presentation to PC on Justice and Constitutional Development28 Operations

29 Department of Human Settlements One of SIU’s longest running projects in cooperation with the National Department. New focus is on construction contracts A review of the Housing Subsidy System indicated at least 50% of all projects are problematic in some way. Contractors paid for building houses which may – Not exist at all – Be extensively incomplete – Be seriously defective – Not correspond to the numbers agreed to (paid for building more houses than was the case) Currently focus on 20 projects for 2010/11 drawn from all provinces, identified in cooperation with Department – 7 additional projects identified for 2011/2012 Total value of contracts under investigation is over R2 billion 12 October 2011SIU presentation to PC on Justice and Constitutional Development29

30 Operations Department of Social Development / SASSA One of SIU’s most consistently productive investigation Headline statistics from June 2005 – February 2011 Beneficiary files collected 85 315 Cases brought before court 17 729 Court cases finalised 16 623 Convictions obtained 15 281 Total AoDs signed 40 146 Total value of AoDs signed R244 million Savings on cancelled grants R898 million Will no longer continue in this form, as result of a request by and lack of funds from the Department and SASSA. 12 October 2011SIU presentation to PC on Justice and Constitutional Development30

31 Challenges in dealing better with corruption PFMA and powers of Accounting Officers – control over investigation, disciplinary action, civil litigation, referral for criminal action, recommendations not implemented Another is the need for better coordination of the many new initiatives Response to the Glenister judgement – Ensure SA compliance with the UN Convention Against Corruption including the establishment of dedicated agency with sufficient safeguards around independence – Need to locate appropriate over-all accountability for a consolidated assault against corruption including prevention and enforcement efforts Amendments to SIU Act – in Judicial Matters Amendment Act – Unable to use civil litigation effectively as envisaged in Act - deal with locus standi and other issues – Delays have restricted impact of SIU 12 October 2011SIU presentation to PC on Justice and Constitutional Development31

32 Budget growth and projects income 01/0202/0303/0404/0505/0606/0707/0808/0909/1010/11 R’m NT grant212326374956103116155171 Projects0015225383129132114142 Total21234060102138232248269312 Projects as % of Total 0% 37% 52%60%55%53%42%45% 12 October 2011SIU presentation to PC on Justice and Constitutional Development32 Huge overall growth in income from R21m in 2001/02 to R312m this year Massive increase in funding from projects to 60% of total income, then decline This year forecast to be about R240m (from R142 in 10/11) SIU vulnerable when there is decline as during recession as many staff employed

33 Funding Issues Background In past 7 years, SIU budget supplemented with project income through cooperation agreements with other state institutions For 2011/12, budgeted project income was R150 million Such income has enabled the SIU to take on many more investigations Possible legal problem Legal opinion received that SIU is not allowed to enter into such agreements – since SIU Act is silent on this issue Legal advice is that for this FY, SIU can continue to receive payments for work – provided that a proclamation exists and an agreement is already in place It can also renew such agreements that expire in current financial year However, this is on condition of there being a process to regularise the situation – through an amendment to the SIU ACT to allow for such funding 3312 October 2011SIU presentation to PC on Justice and Constitutional Development

34 Funding Issues Impact At present, SIU cannot to enter new cooperation agreements which involve funding Was expecting to invoice an additional R90m this year Possible solutions to situation Amendment to the SIU Act - a discussion has already taken place with the DOJ DG and amendments have been drafted for inclusion in Judicial Matters Amendment Bill NT with support from DOJ has agreed to additional funding of R97m for this FY – to compensate for loss of revenue and to take on additional work Additional funding for future years; SIU to request permanent increase in current budget to reduce reliance on funding from co-operation agreements SIU throughout this process has received excellent support and commitment from the Minister of Finance, NT, Minister of Justice and the DG of DOJ 3412 October 2011SIU presentation to PC on Justice and Constitutional Development

35 Financial Information 12 October 201135SIU presentation to PC on Justice and Constitutional Development R thousand Audited outcome Revised estimate Medium- term estimate (current baseline) Statement of Financial Performance 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 Revenue Non-tax revenue 141 314 121 853 142 586 151 697 152 328 152 468 152 452 Sale of goods and services 131 622 114 120 141 151 150 259 150 803 150 852 Transfers received 116 297 154 737 171 089 193 620 202 810 218 504 231 614 Total revenue 257 611 276 590 313 675 345 317 355 138 370 972 384 066 Expenses. Current expense 260 675 282 821 336 851 331 074 355 138 370 971 384 066 Compensation of employees 164 292 182 060 182 142 213 085 235 188 251 329 254 265 Goods and services 85 142 84 802 144 756 104 304 105 938 105 167 114 744 Depreciation 5 443 10 859 9 936 13 685 14 012 14 475 15 057 Other 5 799 5 099 17 – – – – Total expenses 260 675 282 821 336 851 331 074 355 138 370 971 384 066 Surplus / (Deficit) (3 064) (6 231) (23 176) 14 243 – – –

36 Audit and MTEF Audit outcomes Have received clean (unqualified) audits at all times since formed in 2001 SIU is particularly proud of the fact that its last 6 audits have been unqualified and without any emphases of matters Funding for the SIU Grant received as transfer from the Department of Justice and Constitutional Development Also revenue generated from charging institutions fees for some of its investigations MTEF requests Have requested an additional R150m in funding over the next 3 years To reduce reliance on projects funding And to increase capacity to take on unfunded investigations Some of the areas where SIU is most needed, at municipal level and some provinces – it is in fact doing very little work This will create an additional 200 positions over the MTEF period Initial indication from NT that they will support request but still to be processed 12 October 201136SIU presentation to PC on Justice and Constitutional Development

37 Analysis Growth Trends Total Revenue : up 10.6 % pa from R237m to R314m (07/08 to 10/11): – projected to increase by 5.6% pa to R384m by 14/15 before baseline increases – After proposed baseline increases, revenue should grow at 18.7% pa to R549m by 14/15 Total Expenditure (excl Capex) : – increased 23.2 % pa, from R199m to R337m (07/08 to 10/11) – projected to increase by 3.5% pa to R384m by 14/15 before baseline increases – After proposed baseline increases, expenditure should grow at 15.8% pa to R549m by 14/15 Savings In past 2 years, aggressive savings: reducing accommodation & car rentals costs, limit telephone use and recovering all private call costs 12 October 2011SIU presentation to PC on Justice and Constitutional Development 37

38 Conclusion SIU has made considerably more impact in past 2 years There is a massive increase in demand for assistance to address corruption from government and state institutions Capacity to deal effectively with investigations remain a challenge Partnerships with other government institutions through initiatives like ACTT, MAWG & Wasps have started to improve coordination 3812 October 2011SIU presentation to PC on Justice and Constitutional Development

39 Questions & Discussion 3912 October 2011SIU presentation to PC on Justice and Constitutional Development


Download ppt "SIU Presentation to Portfolio Committee: Justice and Constitutional Development 12 October 2011 12 October 20111SIU presentation to PC on Justice and Constitutional."

Similar presentations


Ads by Google