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SIU Presentation to Portfolio Committee: Justice and Constitutional Development 17 October 2013 Annual Report 2012/2013. Presentation Outline. Preface and Introduction Strategy Overview 3. SIU Investigations Performance over the FY Outcomes on key investigations

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  1. SIU Presentation toPortfolio Committee: Justice and Constitutional Development 17 October 2013Annual Report 2012/2013

  2. Presentation Outline Preface and Introduction Strategy Overview 3. SIU Investigations Performance over the FY Outcomes on key investigations Civil Litigation Matters Key Operational Challenges Human Resources Overview HR Statistics Employment Equity Status Financial Overview Audit Outcomes Irregular Expenditure MTEF Concluding remarks

  3. Preface and Introduction • Introducing the SIU Team • Introductory remarks by HoU on the need for a new vision for the SIU following the amendments to the SIU Act in October 2012 • Presentation on the SIU 2012/2013 FY performance • Strategy • Operations • Finance • Human Resources • Audit 2013 • Concluding remarks by HoU • Questions SIU presentation to PC on Justice and Constitutional Development

  4. Strategy Overview • The current SIU Strategy is outlined in two key strategy documents: • Five year Strategic Plan: 2011 – 2016 • Annual Performance Plan: 2012/2013 • This Strategy was signed off by the Minister as the Executive Authority • In line with its pre-amendment mandate, the Unit identified its strategic objective as: • To increase the impact of SIU’s forensic services in the public sector by completing investigations successfully • This strategic objective was to be supported by the following seven enablers/drivers: • To achieve optimum institutional form • To foster excellent cooperation with our law enforcement partners and stakeholders • To develop and effective, accountable and engaging leadership • To secure appropriate capacity and funding • To align and improve systems and processes • To invest in appropriate technological capacity • To build an engaged, diverse and competent SIU • The Unit’s strategic objective is aligned to Government’s Outcomes: • Outcomes3- All people in South Africa are and feel safe • Outcomes 12 - Efficient, effective and development oriented state

  5. SIU Investigations 25 active proclamations with seven extensions as per “Annexure A” SIU presentation to PC on Justice and Constitutional Development

  6. Performance over FY 2012/2013 SIU presentation to PC on Justice and Constitutional Development

  7. Performance FY 2012/2013 cont… “Value of procurement matters where irregularities were found” • Indicator measures the face value of the procurement contracts that are being investigated where an irregularity has been identified. • Indicator changed for 2013/2014 financial year to measure the “value of financial misconduct”. • accurately reflect the value of irregularities within procurement matters • Identified irregularities in contracts with an aggregated value of R 2.6 billion • Actual value of the irregularities in these contracts amounted to approximately R 1.4 billion SIU presentation to PC on Justice and Constitutional Development

  8. Outcomes on key investigations 1. NationalDepartment of Public Works Procurement processes, mismanagement of contracts & leases and financial misconduct • 12 Section 5(7) Reports handed to the Department • 35 Systemic Recommendations • 6 Disciplinaries against DPW officials recommended • 7 Criminal matters referred to National Prosecuting Authority (NPA) 2. Department of Public Works (KZN) Procurement processes, mismanagement and financial misconduct related to contracts awarded • 13 Criminal matters referred to NPA • The value of irregularities identified amounts to R542.5 million • Value of corrupt payments made to DPW official amounts to R134 000 • Non delivery on 37 projects amounting to R7.6 million SIU presentation to PC on Justice and Constitutional Development

  9. Outcomes on key investigations cont… 3. Tshwane Municipality Supply Chain Management, Service Delivery, Governance, Financial Misconduct, Waste Management and Recruitment irregularities • Identified collusion in the awarding of several contracts amounting to R 77.7m • Established that an official received gratification to the value of R 16m • Established that R 286m was paid for work partially completed on Soshanguve and Giant stadiums • Irregular Expenditure is R340m SIU presentation to PC on Justice and Constitutional Development

  10. Outcomes on key investigations cont… 4. SASSA (Social Development and ICT contracts) Procurement processes, mismanagement and irregular awarding of beneficiary grants • Identified irregularities in 4 contracts with a possible civil recovery of R 128m • Actual savings of R 47m following the cancellation of Phase 1 of ICT contract • Prevention of future losses of R 222m • Total cases analysed: 865 • Convictions: 855 • Removals from the Social Pensions System: 3 454 SIU presentation to PC on Justice and Constitutional Development

  11. Outcomes on key investigations • 5. National Treasury Limpopo Intervention: • 41 disciplinary and 5 arrests on the Roads and Transport (GAAL) amounting to R15 million • 6. Eastern Cape Department of Health • Procurement irregularities amounting to R2.9m • 39 cases of tax irregularities amounting to R10.8m referred to SARS for further investigation • 61 cases of fraud, forgery and uttering amounting to R5.1m referred to • 7. Ekurhuleni Municipality • Established payments amounting to R35m for partially or inferior work for the upgrading of 20 sporting fields during 2010 world cup SIU presentation to PC on Justice and Constitutional Development

  12. Civil Litigation Matters

  13. Reports submitted to the Presidency • 30 April 2013: - 20 Presidential Closure Reports submitted as per Annexure B • 3 June 2013: - 9 Presidential Closure Reports submitted as per Annexure C • 12 Reports currently being drafted as per Annexure D SIU presentation to PC on Justice and Constitutional Development

  14. Key Operational Challenges • Need more in-house specialist skills, such as forensic accountants • There is a greater need for specialised expertise on procurement investigations such as: • Quantity Surveyors • Engineers • Corporate Governance Experts • Business Analysts • Develop a stronger civil litigation capability to meet the growing demands on our procurement matters • Need to establish Special Tribunals in key centres • Need to develop a stronger technological infrastructure in Operations • Improve our operational processes and reporting mechanisms • Enhance the operational focus towards stronger civil legal outcomes • Increase the impact of our operations SIU presentation to PC on Justice and Constitutional Development

  15. Human Resources Overview • Prioritized the filling of long outstanding vacancies • 78 appointments and/or promotions • Converted 104 temporary workers to fixed term contract employees • Resulted in strengthening the operational and project administrative support • Senior management appointments on track for finalizing in this financial year • Employee relations continues to improve SIU presentation to PC on Justice and Constitutional Development

  16. HR Statistics Employment and vacancies Reasons for staff leaving Note: The resignations were primarily motivated by better opportunities elsewhere.

  17. Equity Target and Employment Equity Status

  18. Summary on EE Status • The delays in the 2010 recruitments led to a lag in achieving the EE Plan targets • In 2012/13 Unit made 78 appointments, which improved the EE picture in the middle management and professionally qualified categories. • Challenges remain at the Senior Management level, where positions remain vacant and previous recruitments could not yield appointments, e.g. for Head: Stakeholder Management, Head of Finance, Projects Director. • We need to improve senior managerial representativity • Female senior managerial representativity is at 15% SIU presentation to PC on Justice and Constitutional Development

  19. Financial Overview SIU presentation to PC on Justice and Constitutional Development

  20. Audit Outcomes • The emphasis of matter as a result of restating prior year errors, which were corrected in the current financial year. • Errors include: Employee costs; Rental paid; Intangible assets; Re-assessment of property, plant and equipment • Notwithstanding the reduction in the number of emphasis of matters structured risk interventions are in place to achieve no emphasis of matters in following financial years. • Progress on corrective action on 31 AG findings •  33% of findings addressed and confirmed by Internal Audit. • 24% of findings Work-in-Progress • Remainder of findings to be addressed before the end of the financial year SIU presentation to PC on Justice and Constitutional Development

  21. AG findings on Performance Information • In Audit 2011/12 the AG makes a finding that SIU should report on eight strategic objectives alternatively obtain express approval from Executive Authority for one strategic objective. • SIU applied in November 2012 for such express approval . • In the absence of such express approval the SIU advice to report on all eight strategic objectives • The implications of this is that SIU reports were not fully aligned to its the strategic plan. • However key performance indicators were in place to measure the strategic objectives and drivers • This gap resulted in a negative opinion on the performance information for Audit 2012/13. • The strategy objective (s) will be aligned to the October 2012 amendment of the SIU Act. SIU presentation to PC on Justice and Constitutional Development

  22. AG findings on Financial Information • Corrections made after submission on 31 May 2013 to the AG • Irregular Expenditure condonation being obtained • Wasteful and Fruitless: • Forensic report on Memex procurement matter being finalised • Rental over- payments of R2 million recovered • Introduced SCM compliance checklist to avoid recurrence

  23. Irregular Expenditure & Fruitless and Wasteful Irregular Expenditure: R 42 799 417 Fruitless and Wasteful: R 2 835 165

  24. Medium Term Expenditure Framework SIU presentation to PC on Justice and Constitutional Development

  25. Medium Term Expenditure Framework cont… Breakdown of Expenditure per budget Programme

  26. Concluding remarks by HoU HoU outlines some of the key next steps for the SIU SIU presentation to PC on Justice and Constitutional Development

  27. End Thank You SIU presentation to PC on Justice and Constitutional Development

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