SIU 2020/21 Annual Report

Meeting report

Opening Remarks
The Chairperson provided brief opening remarks and introduced the briefing by the Special Investigating Unit (SIU).

Presentation by SIU on 2020/21 Annual Report
Adv Andy Mothibi, Head of the SIU, briefly introduced the members of the SIU in attendance as well as the presentation.

Adv Mothibi, Ms Nandi Madiba, Chairperson of the Audit Committee of the SIU and Mr Andre Gernandt, Chief Financial Officer (CFO) at the SIU, presented to the Committee.

Performance
The SIU achieved 75 percent of its targets for the 2020/21 financial year. The entity managed to uphold a clean audit opinion for the fifth consecutive year.

Top Strategic Risks
The presentation outlined a number of top strategic risks which included the inability of the SIU to financially sustain operations in the short to medium term due to the shortcoming in the funding model. It further included the inability to timeously commence investigations due to protracted approval processes for proclamations, the failure by State Institutions to implement SIU’s legal recommendations and the inability to pro-actively assist public institutions to prevent corruption and maladministration practices. The insufficient preparedness to respond to physical threats to investigators and security breaches was highlighted as well as the inability to achieve forensic investigation's legal outcomes. The inability to attract an adequate and high performing workforce that was suitably skilled and properly managed was highlighted as a risk. The ineffective collaboration with external and internal stakeholders, the failure to process and finalise civil matters enrolled in the Special Tribunal Court and the inability to provide appropriate ICT services across SIU business were outlined as part of the SIU’s top strategic risks.

Internal Audit
The 2020/21 approved Audit Plan comprised of 11 Audit engagements, of which 10 were finalised and one was in an execution phase. Four audits, relating to Investigation Management, Fleet Management, Information Technology (IT) Disaster Recovery Management and IT Security Vulnerability Assessment were deferred to the 2021/22 financial year, at management request and the Audit Committee approval. Based on the audits completed within the 2020/21 Financial year, the overall conclusion on the status of internal controls to mitigate risks, is that controls are adequate but some were not wholly effective in achieving their purpose and ensuring that the Unit’s objectives were achieved.

SIU’s Financial State of Affairs
Generally, the SIU’s financial state of affairs was positive, despite challenges in the recovery of its debt that it has invoiced for investigation and related services performed. As at 31 March 2021, the SIU had a R836 million accumulated surplus in the Statement of Financial Position that it managed to build over the last number of years. A material amount of this surplus was reflected in the SIU’s positive bank balance of R742 million as at 31 March 2021.

The SIU’s Current ratio (Current assets: Current liabilities) as at 31 March 2021 is 4,6. The SIU’s current ratio was more than double what is considered to be a strong current ratio.
For the year ended 31 March 2021, the SIU reflected a surplus of R68 million (2020: R193 million in the Statement of Financial Performance. Despite debt recovery challenges, the SIU still managed to reflect a positive “Net cash flow from operating activities” of R13 million for the year ended 31 March 2021 (2020: R194 million).

(See presentation)

Discussion
Mr R Dyantyi (ANC) stated that the Annual Report seemed to demonstrate what the institution could do for the country. He noted the 75 percent achievement of targets but stated that 25 percent was a big gap in achievement. The SIU could up its game with recoveries. He emphasised that COVID-19 should not be used as an excuse; it was a tempting excuse that everyone used.

The SIU had explained the over-achievement of some of its targets, such as the Personal Protective Equipment (PPE) and Free State issue. He suggested that the SIU did not have a capacity problem. If one looked at the cumulative achievements slide, where what was targeted was compared with what was achieved, for example, if R60 million had been targeted, the SIU went on to achieve R1.6 billion. Based on that it seemed as if the issue was not capacity. He suggested there was an issue with how the targets were set and planned for. The SIU had in some cases massively over-achieved on its targets. The SIU had demonstrated in its ‘COVID-19 Annual Report,’ that it achieved more than it did in previous years. This would have implications for baselines going forward, he asked that the SIU elaborate on the ‘issue of capacity,’ the setting of targets and the significant over-achievement on its targets, which suggested there to be no capacity issues.

He suggested that the SIU would have achieved so much, even without the Special Tribunal. He asked that a comment be given on that. The Committee was upping its game as an oversight body. One of the issues that the Committee was prioritising, was the credibility of SIU’s risk management and how issues were mitigated for. He suggested that Adv Mothibi and the Capital Risk Manager appear before the Committee at another time to share the SIU’s successes in detail, particularly around risk management. Many other institutions were not on top of this. There was opportunity for the SIU’s successes to be replicated in other entities/departments. He asked how interns were transitioned to becoming permanent staff, emphasising that great work had been done in this area.

Adv S Swart (ACDP) commended the SIU on its Annual Report, clean audit and exceeding its core targets significantly. The SIU had gone beyond the call of duty. The high levels of collections showed the extent of fraud and corruption in the country - this was a great concern. The central question was if the SIU could do more, with more funding. Mr Dyantyi had suggested that the SIU had sufficient capacity, and the successes seemed to indicate that. If the SIU received more funding, it could possibly collect more. This was what he had suggested in the past, that law enforcement agencies needed to be given sufficient funding to be able to freeze assets, investigate, prosecute and collect assets.

It was understood that there were proposed legislative amendments to deal with the funding model. The Minister should possibly be asked about where/when those amendments were. He suggested the SIU be brought back to the Committee to deal with the funding model and implementation of revenue recommendations and referrals.

He was concerned about the possibility of the SIU having to write off part of the R619 million that was owed to it, by departments that had not paid. Many municipalities were dysfunctional and required a lot of investigations; that was a concern. It seemed as if it was setting up a precedent where those fees had to be written off. He noted the surplus of R836 million which was incredible. This indicated good management of finances, when one considered the ratio of current assets to current liabilities it was commendable. Under what circumstances would the SIU be obliged to draw on that surplus, given that there was talk about a possible budget reduction? The year before there had been a R10 million reduction. The Committee was concerned about the SIU’s funding model and would support the SIU in its legislative amendments to deal with it.

He supported the suggestion to have a separate briefing on the different enquiries. He appreciated that some of the achievements were unique, such as the PPE investigations which resulted in many court actions and recoveries. This had pushed up the SIU’s achievements but might not be sustainable, given that the SIU might not have such vast enquiries in future. Given the situation with load shedding and the Eskom issues, was there any aspect of the Eskom enquiry that was ongoing? There were allegations of R100 million per month oil fraud at the Tutuka power station. The day before the Chief Executive Officer (CEO) had indicated the strange incidents happening at power stations. This affected the entire economy – it was a matter of great concern.

He noted that Adv Mothibi had mentioned blacklisting of private sector companies. The Committee had passed the Prevention and Combating of Corrupt Activities Act 12 of 2004 many years before as well as setting up the register for tender defaulters. Sadly, to date there was not one private company on the database of tender defaulters. That was a great concern. There was a separate database for restricted suppliers, which was under-utilised. Parliament had set that up for the blacklisting of private sector companies that were found to be involved in corruption of State procurement tenders. What could the SIU do to ensure that companies that were investigated, found guilty and money was recovered, were placed on those registers. One of the answers lay with the draft Public Procurement Bill, which needed to come forward – it would make it mandatory that names were added. To date it was a great concern that names had not been added.

The issue of whistle-blowers and witnesses had been presented. This was a great concern to the Committee, given the murder of Ms Babita Deokaran. She had been a key SIU witness and was murdered. He asked if SIU was engaging further with the protection of witnesses, it was well-known that whistle-blowers were not protected. Would the SIU consider looking at a review of the Protected Disclosures Act 26 of 2000, to ensure that whistle-blowers and witnesses were protected.

Ms N Maseko-Jele (ANC) stated that the achievement of 75 percent was applauded, however the 25 percent not achieved was disappointing, particularly in light of the vacancies and lack of women represented. She noted that the SIU had a new structure, which added new positions. She noted the delay in discussions however; the issue needed be addressed urgently. She asked that the SIU provide more information about the difficulties it experienced. Vacancies impacted on the wider situation of unemployment in the country. If the issue of vacancies was not taken seriously, it impacted the Department and country. In the Annual Report it was highlighted that there was a vacancy rate of 15 percent at the senior level. She asked that the SIU indicate what progress had taken place to address that.

She highlighted the low representation of women employed at the senior and top-management level. It highlighted the SIU’s commitment to the matter. It seemed as if there was a serious problem. The vacancies impacted on the matter of women in the Unit. She asked why the SIU was not able to reach at least a 50/50 split, or above that in favour of women. What would the SIU do to address that?

She queried the number of referrals that had been made for disciplinary action against officials. This was a critical issue when it came to corruption taking place in departments and institutions. Was there an adequate response when it came to this issue? The Committee had listened to presentations from other departments – the issue of fruitless and irregular expenditure seemed to be very difficult to deal with. It had been suggested that the officials created the atmosphere of ‘fruitless expenditure’ and ‘irregular expenditure’ to be able to steal. As long as reports were received to the effect of fruitless and irregular expenditure it meant there was an area where oversight bodies had not been able to reach, where the ‘officials were comfortable.’ There was a lot of money being lost when it came to the officials that were ‘stealing’ and comfortably doing so. It had been suggested that even in the Department of Justice there was corruption. She asked if the SIU got ‘joy’ when it came to the reports about the referrals that had been made.

What was not clear about the anti-corruption forums was how the SIU was measuring the success of these forums. She asked about the investigations taking place into the organised crime groups, specifically what the challenges and successes were.

Mr W Horn (DA) congratulated the SIU on its clean audit and over-performance on their key performance targets. He stated that the issues that would be highlighted were not to belittle the performance but to assist and forewarn about matters that needed to be addressed. He highlighted the vacancy rate at senior management level –why had the Deputy Head position not been filled since the departure of the former Deputy Head in the year 2019/20? What plans were in place for the recruitment of that position going forward?

He noted that Adv Swart had asked a number of questions about the funding model. In addition, he wanted to ask about engaging with National Treasury to address the issue of government departments or entities not paying for services rendered. It had previously been suggested that a certain percentage of the respective government departments or entities appropriation be paid over to the SIU in order to enable debt recovery, in the absence of payment. Had there been progress on that idea?

He highlighted the capacity issue. Due to the higher rate of inflow of referrals, the amount paid to consultants had increased dramatically from R35.9 million to R63.9 million. He asked for clarity on that, particularly given the high vacancy rate at a senior level. What type of consultants were used by the SIU, did this apply to all fields? If it was limited to specific fields, what was the plan going forward to perform those functions in-house?

He suggested that the Committee needed to emphasise the need for a massive improvement of the of ICT plan. It would not be ‘scaremongering’ to state that the Committee did not want the SIU to fall fowl of the same type of hacking and data breaches that had happened at the Department of Justice. At the Department of Justice, for many years, it was quite clear that the ICT infrastructure was one of the key risks. What were the plans to expedite the development of the ICT plan, specifically if one considered that the explanation for the failure to develop data analytics capacity in the SIU was ascribed to the fact that the ICT environment was not susceptible to such development? When the Annual Performance Plan (APP) was presented to the Committee, the development of data analytics in-house was put on the table as a key component of success for the SIU going forward. If one went back to the SIU’s own analysis, the importance of in-house data analytic capacity had been emphasised. Why had nothing been done to deal with the ICT infrastructure and the data analytics capacity?

Dr W Newhoudt-Druchen (ANC) similarly congratulated the SIU on its clean audit and Report. Slide five of the presentation stated the ‘Rand value for potential cash and/or assets to be recovered.’ In the columns it only showed up to 2019/20, she was interested in 2020/21. When it said ‘to be recovered’ for 2019/20, how much of that was recovered during 2020/21?
 
43 interns had been successfully appointed - out of how many interns?
 
The 15 percent vacancy was higher than the Department of Public Service and Administration’s (DPSA) 10 percent threshold. How many positions did the 15 percent equate to?

She noted that one of the whistle-blowers for the Zondo Commission had gone to another country, as he feared for his life. What did the SIU do to assist the National Prosecuting Authority (NPA) and the South African Police Services (SAPS) in ensuring that the whistle-blowers were safe? What more needed to be done to avoid a situation where people were leaving the country?

She asked what the impact of COVID-19 had been on the unit. During the level five hard-lockdown – could the SIU not work at all? Were there no online alternatives? How much funding was given to convert to online working? The disciplinary actions against officials had been outlined in the presentation. Did the SIU simply hand it over to the different departments? Did the SIU follow-up with the departments to find out if disciplinary hearings had taken place or not? Did the SIU have the capacity to monitor if the State institutions had implemented consequence management?

She noted the increase in organised crime, especially during the COVID-19 period. She asked that more information be given about that and the SIU’s assistance of SAPS and the NPA, in checking-up, monitoring and preventing organised crime. It was stated that the ICT target was not met, especially during the COVID-19 period. The ICT was needed, especially as everything moved over to online work. She asked that the SIU provide more information about that.

Adv G Breytenbach (DA) asked if, without compromising their investigations, more information could be provided about the progress being made on the investigations into the Master’s Office, Office of State Attorney and ‘Court buildings’ issues. She noted that R1.57 billion was recovered from the Kusile power station and ABB contract, which was an impressive number. She asked if it had been referred to the NPA, would someone be prosecuted? It was fine to recover that amount of money but what were the associated consequences of the matter? She noted that there were two referrals for disciplinary action of the members of the Office of the State Attorney and one from the Master’s Office, had there been any progress there? She requested an update about that. There were five referrals from the State Attorney and eight from the Master’s Office to the NPA – was there progress there? Was there a way of monitoring the progress of those referrals? She requested more information on matters that got referred to the NPA; were the matters being prosecuted or were they just joining the ‘never-ending pile’ of very serious matters that appeared to not be making much progress? She asked why the Deputy Head position had not been filled. She realised that whistle blowers did not fall within the witness protection ambit – what were the SIU’s views on how to go about ensuring the safety of whistle blowers? It was becoming a more common phenomenon that whistle- blowers were being killed. She highlighted the issue of the whistle blower who left the Country and others who had been killed – this could have a dampening effect on criminal prosecutions and other people coming forward – both of which was needed. What could be done to assist the security of whistle-blowers?

The Chairperson highlighted that the programme indicated that the SIU, Hawks and the NPA would present on the issues of the Master’s Office, State Attorneys and court buildings in a joint briefing early the following year. An update would be given then on those issues. He asked if Adv Breytenbach would still insist on wanting answers on those issues in the meeting or if she was happy to wait for that briefing.

Adv Breytenbach responded that she was happy to wait for that briefing, despite regarding the matter as serious.

The Chairperson stated that the last time the institutions were before the Committee, it had expressed that it was not happy with the update provided. The meeting the following year would be the fourth briefing from the institutions on those issues.

Adv Mothibi stated that the challenge would be to ensure that the SIU kept up the good work, as highlighted by the Members of the Committee. He responded to the question raised by Mr Dyantyi, the 25 percent that had not been achieved was noted. It reflected non-performance on that score. The SIU would make sure that measures were put in place, as was done for the vacancy rate, the signing of performance agreements, ICT and the implementation of the stakeholder survey. Those would support SIU’s core functions, the SIU viewed them as critical. He conceded that the 25 percent lack of achievement on the target needed to be addressed.

The SIU was on record that it would make sure to be well-capacitated, as indicated in the Human Capital Report. In view of the increase in proclamations over the previous five years, the SIU needed to capacitate itself appropriately. There was an ongoing assessment of that to ensure that from an organisational perspective the capacity reflected in the head count, in the equipment and tools of work that were in place to meet their obligations. The results presented in the Annual Report had been the result of various measures that were put in place to ensure that the SIU turned around investigations quickly. Turnaround times were monitored. The SIU had implemented review mechanisms for investigations. The SIU meticulously checked how investigators were doing and how investigators could be supported. The SIU was not immune to the problem, and could do more if it was capacitated as planned.

The planned head count was about 600 employees. Due to the recruitment process getting delayed, the SIU ended up with a 15 percent vacancy rate which translated to about 90 vacancies. The Chief Human Capital Officer had submitted the revised resourcing plan in the past week. The resourcing plan addressed the head count requirements of the SIU. The SIU would continue to monitor the resourcing plan against the increase in ‘business,’ being the inflow of allegations and increase in proclamations. This would be done in conjunction with the operating managers, the provincial heads and the Head of National Investigations – who identified the kind of resources needed. The SIU would continue to watch the increase in ‘business’ and the resourcing plan. This was based on a few assumptions, the assumption that the budget stayed the same, that no cuts were incurred and that the SIU succeeded in recovering the debt owed to it.

The PPE investigations hit the SIU at a time when the SIU was busy with the resourcing model and had to ensure that resources were moved. The PPE investigations attracted a lot of public interest, the SIU had to ensure it met the requirements, particularly on the six weekly reporting, that was required by the President. While the SIU could make do with what they had, the organisation would continue with the resourcing plan that they were implementing. The SIU would continuously report back to the Committee on how successful the capacitation was.

He responded to the question about National Treasury allowing the SIU to use the surplus. There were financial rules around that. The CFO was ensuring that the SIU complied with such rules in conjunction with Treasury. The trick of ensuring that the SIU could perform, was to ensure that management lifted the bar across the organisation. This included monitoring the performance process and projects that were underway as well as improving turnaround times, outcomes and ensuring that there was proper consequence management. Performance was monitored at all levels of management. The employees were generally aware that the performance was monitored appropriately. The Special Tribunal had proved to be an important forum for the SIU to speed up their civil proceedings. At the moment there were about 40 cases that had been issued to the Special Tribunal with a contract value of R5 billion. Those cases still needed to be adjudicated, recovery would need to take place as well as the implementation of orders imposed by the Special Tribunal. Given the delays that the SIU had observed in taking matters to the High Court, the SIU would not have been able to achieve as much without the Special Tribunal.

He responded to the questions about risk management. The SIU had developed a comprehensive enterprise risk management framework. That framework had various requirements of the senior managers and managers. There was a process of risk assessment, which was monitored regularly by the Risk Department, which was led by the Chief Risk Officer. For every risk that had been identified, there needed to be set core controls that were identified for mitigation, and as a risk management process the SIU would ensure that those controls were implemented and that the internal audit, led by the Chief Audit Executive, was monitored on an ongoing basis. In the audit plan, the adequacy of those controls was checked. The SIU would welcome the opportunity to go into detail on how risk management was implemented in the organisation. Best practice was implemented, which included the learnings from the public and corporate sectors. Such a session with the Committee would be welcomed.

The conversion of interns into permanent staff had been successful. This was a programme run by Human Capital. There was a programme that they were subjected to and there were assessments that the interns had to go through. Of the 43 people, 21 were ‘external,’ such as Bachelor of Law (LLB) graduates. Internally, there were about 22 people, who were mostly administrators in the Department or the SIU. The SIU trained them and took them through the assessment and project, which was run by Learning and Development. The SIU was satisfied that those individuals could be absorbed into junior forensic investigator positions. The SIU was delighted that it was able to convert many of the interns of the Graduate Intern Programme into permanent staff members – and not turn them away onto ‘the streets.’

In response to the question about doing more with more funding, the SIU could indeed do more. The SIU would like to do more. From a finance perspective, the SIU wanted to maintain the surplus and manage it with the deficit issue. The SIU was glad that the Committee would support the legislative changes that were underway. The engagements with Treasury would contribute to the kind of funding model that the SIU would require. Some benchmarks had been made to international peers.

The Eskom investigation was ongoing. Mr Lekgetho would respond to this further. The SIU continued to receive allegations of irregularities and corruption in Eskom. The latest example, was the allegation received about one of the senior managers at ESKOM, Mr Mazibuko. His funds were frozen, about R10-R15 million in his accounts. The SIU was on the way to argue that the money should be forfeited to the State. Those allegations were received two to three months earlier and was producing progress reports on that. The SIU would be interested in the allegations about the R100 million per month fraud and if those matters could be looked into further.

He responded to the matter of blacklisting of private companies, where private companies were involved in irregularities, the SIU made recommendations to the State institutions, about that. Those recommendations would be contained in a document that set out the irregularities and SIU’s findings. It would state that the accounting officer or authority would have to implement administrative processes to blacklist the companies, so that the companies got blacklisted by National Treasury. The SIU did follow-up on that.

He responded to the issue of the whistle-blowers and witnesses. The SIU was mindful that this was serious, particularly the threats and deaths. He was aware that the Department of Justice had started a process to ensure that this area was looked at and at this stage the SIU was cooperating with the Department of Justice. The SIU met with the whistle blowers who reported concerns to them and assessed the threats. The SIU would engage with crime intelligence who carried out assessments. In some case where witnesses were investigators they were put into the protection framework. When current matters were referred to the SIU, the SIU did collaborate with peers in other law enforcement agencies, including the NPA, which managed the witness protection programme. With the Beitbridge investigation, where the fence was investigated, the witnesses had felt unsafe to testify. This report was received by the SIU’s Chief of Legal. It was now with the Special Tribunal for arguments. There were processes in place where witnesses could testify in a safe environment, in the courts or commission. Measures could be put in place to ensure that when witnesses testified, they testified in a safe environment. This had been done.

The issue of gender equity was taken very seriously, over and above employment equity. The resourcing plan, that the Chief Human Capital Officer submitted, took into account the need to ensure that women received attention when it came to appointments. The plan could be submitted in writing to the Committee. The SIU took into account the comment that the ratio should be 60/40 percent in favour of women.

He responded to the question about referrals on disciplinary action. As part of the SIU’s new strategy they had implemented a function in SIU to ensure that they followed up on the disciplinary referrals. From the Presidency’s side, there was a decision taken to release the SIU reports to the State institutions. As part of the enquiry into releasing the reports, the SIU looked into what had been done with the referrals that were made. The speed at which consequence management was done required improvement – although it was happening it was happening slowly, which contributed to the issue. The SIU wanted to contribute to dealing with the ‘culture of impunity’ in the system – this could only be done when consequence management was implemented. There was not much ‘joy’, when consequence management was implemented. The SIU was aware that due process needed to be followed. With the disciplinary hearings, the SIU found that some of the officials appointed lawyers to represent them as the Rule of Law needed to be complied with.

The Health Sector Anti-Corruption Forum was the first forum that was setup. The SIU would do a pilot there. The SIU would approach one of the government agencies to do that – likely the Human Sciences Research Council (HSRC). The SIU was also engaging with the Department of Planning, Monitoring and Evaluation (DPME), where there were measures of the success rates. The SIU believed that it added value in the sense that it brought together all the sectors and parties. It was a sectoral approach to fighting corruption. Value had been seen in the health sector one, there was now an infrastructure one and a local government one had been established. The SIU wanted to perfect the sectoral approaches so that it added value to the sectors.

The SIU had queried how it could ensure that the organised crime environment was improved – particularly in fighting corruption. There was corruption amongst syndicates which leant itself to organised crime. The SIU was contributing to the organised crime framework.

As part of the recruitment process and resourcing plan, the SIU would ensure that the vacancy rate received attention. The vacancy of the Deputy Head was advertised about a month or two before; this point came up at the last appearance the SIU had before the Committee. It had been advertised, the SIU had received applicants Curriculum Vitae’s (CVs), Human Capital had put together a file of all the CVs and had done some shortlisting which needed to be given attention and be driven forward to completion. At the next appearance before the Committee, the SIU could provide an update about where it was in that process.

The SIU would welcome the suggestion about the funding model. This had been seen in some other jurisdictions, where there were recoveries, a percentage got paid to the agency that recovered the funds – this was still a subject of discussion. Mr Horn’s observation was accurate about the amount paid to the consultants. While there had been an increase in proclamations, the assessment made by the SIU was that capacity was needed and the capacity that there was internally would not meet the increase. The SIU had put together a panel of experts, including forensic investigators, forensic accountants, engineers and quantity surveyors. Up to this point, the SIU had seen a decrease in its reliance on external capacity and would like to see a further decrease and increase in internal capacity. The internal capacity was increasing and less reliance would be on the expert panels, which were necessary at the time but unsustainable. The SIU would not have met its obligations without those experts at the time. The SIU had since increased its internal capacity.

The SIU was ensuring that measures were in place to prevent hacking – this was in the ICT space. There were measures that looked at firewalls and similar measures. There was a project in the ICT space that was monitored by the ICT Committee, he was also monitoring it to ensure that the various aspects of the ICT plan were implemented.

He noted the question by Dr Newhoudt-Druchen – the recoveries were shown for the various years on that slide, on the extreme right it showed recoveries for the 2020/21 financial year. The actual recovery for the 2020/21 financial year was R1.8 billion. He hoped that the SIU would stay within the benchmark vacancy rate. He reiterated that whistle blowers needed to be given the protection they needed. During the hard lockdown the SIU had worked, despite SIU having not been listed as one of the services that could work at the time. The members of the SIU had shown commitment to ensure that work was executed as required. Disciplinary actions were referred to State institutions. The SIU did followed-up on these issues, including the follow-ups with the provinces, such as the provincial heads and their teams. Feedback was received on an ongoing basis. This could be elaborated on when the SIU was next before the Committee, in the joint briefing by the NPA and the SIU. Capacity to monitor consequence management was part of ensuring that the SIU followed up on the referrals.

The SIU would prepare to give an update on the Masters Investigation, State Attorney and Court buildings when called upon to do that. Referrals had been made to the NPA and there was good communication between the SIU and NPA on the Memorandum of Understanding (MoU) that was put in place. The NPA had suggested that SAPS be added as a third-party onto the MoU so that referrals could be coordinated and attended to speedily.

When the SIU identified anyone as a potential witness, the extra-mile needed to be taken in outlining the framework of protection and any concern needed to be reported to the SIU or SAPS so that those witnesses could be protected.

Mr Gernandt reflected on the funding model. The SIU had, over the past six months, two to three engagements with National Treasury and the new Minister of Finance on ways to address the funding model. The SIU had engaged with the officials and come up with various options of how it could be changed. It was now at the stage when Treasury would present to the Director General (DG) and Minister. After which, Treasury would engage again with SIU in order to take it further for legislative changes, if need be.

He responded to the questions about the surplus and utilisation of surplus. On an annual basis, before the end of September, the SIU submitted a motivation to National Treasury that set out how the surplus funds would be used, in accordance with the Public Finance Management Act (PFMA). Over the last 20 years this had been approved. This had been approved again for this year. The SIU had set out its motivation, there were three main high level spending areas. The first was the increase in human resources and the second a figure of between R150 to R200 million being set aside for the Head Office that the SIU wanted to procure. However, the SIU had joined up with the Department of Justice on the idea and initiative to have a justice precinct with the Minister. R150 million had been set aside for the ICT expansion of capex, new tools for data analytics, related hardware, software and resources. On that basis Treasury had approved the retention of the surplus.

Mr Leonard Lekgetho, Chief National Investigating Officer, SIU, confirmed that the investigation into Eskom was ongoing, recently the SIU had engaged Eskom, where the utility wanted to increase the mandate of the investigation, in light of other contracts that had been discovered, particularly long-term contracts. Eskom wanted the SIU to focus on diesel procurement which seemed to be an issue. The SIU was looking into some of the power stations that were not covered by the current proclamation and were scoping some of those allegations. New proclamations would be applied for or extended to deal with some of those allegations. Quite a lot had been done on the ongoing investigations and corruption that had been seen amongst the officials that had done business with Eskom. Close to 102 officials were doing business with Eskom, which amounted to approximately R5 billion. Those investigations were ongoing. There were close to 22 contract packages that were at different stages of investigation. Some of those matters were at the Special Tribunal where the SIU wanted to cancel contracts and recover the money. Some of them were with the High Court. 67 Referrals had taken place to the NPA, and 66 to the Asset Forfeiture Unit, during the previous financial year R1.7 billion had been recovered.

The Chairperson thanked the SIU. At school and university, 75 percent was a distinction, but as Mr Dyantyi and Ms Maseko-Jele had pointed out, a good student would want to go beyond 75 percent. That was the spirit in which the Committee welcomed the Report. He hoped that the good work was sustainable. In the last financial year, the SIU achieved 69 percent performance, now it was 75 percent performance with a clean audit.

He highlighted the need for the SIU to share its risk strategies with the Committee at a later date. The Committee should look at having a meeting or workshop, where all the departments or entities under the Portfolio Committee could be in attendance and the risk strategies could be shared. The SIU was doing well in those areas, there were departments and entities that were not doing so well. It was important to share strategies, tactics and experiences. The Committee had been asking for that for some time from the relevant CEOs and it had not happened, therefore it would be important that the Committee convene such an engagement. This would address the disparities.

The issue that both Adv Swart and Mr Dyantyi raised about the need to ensure law enforcement agencies fought crime and corruption to ensure that there was economic growth in the country was noted. There needed to be a more detailed and scientific approach to the issue of setting targets. It might need to include the Department of Planning, Monitoring and Evaluation. If one set a target of 150 and achieved 800 to 850, it meant that there was vast over-achievement. The targets needed to be re-looked at. The Country was at the beginning of its fight against crime and corruption – there was still a long way to go. It would be important to have realistic targets.

The SIU needed to be appropriately equipped, financially and otherwise to recover to the extent and magnitude of what had been lost. Earlier that week the Committee had said to the NPA that as long as the issue of crime and corruption was not tackled, the country would not succeed in growing its economy. The issue of capacitating law enforcement agencies was urgent. There was no group of investors that could be attracted if the law enforcement agencies of the country were not up to scratch. When he was previously at the Department of Trade and Industry, there was a Chinese Company that manufactured blankets that was given a loan of R187 million by the Industrial Development Corporation (IDC). The Company started manufacturing, due to problems of piracy and porous borders, the Company had to close. People were manufacturing counterfeit goods, at a quarter of the price and the Company could not compete. The money, the business and jobs were lost because the issues of crime were not dealt with. One could not achieve economic growth outside of fighting crime and corruption as well as capacitating the law enforcement agencies.

After the State of the Nation Address the following year, the Minister needed to talk to the Amendment Bill to deal with the issues of how the SIU could be able to recover money owed to it. This amounted to R619 million. There could not be a situation where entities and different levels of government did not pay what needed to be paid. ‘Begging’ those departments and entities would not take the SIU very far. In many instances these departments had no interest or were reluctant to be investigated – thus there was no incentive to cooperate with the SIU. He suggested that the law be tightened to ensure that all levels of government and entities paid their dues.

The more successful the SIU became and the more referrals that took place to the NPA and Hawks, the more likely it would be that there would be serious dangers to the SIU’s investigators and witnesses. This issue could not only be dealt with by the SIU; it was a government problem. Everyone concerned, including the NPA should be involved in ensuring that push-backs were not allowed in the fight against crime and corruption, by people who intimidated witnesses and investigators.

The meeting was adjourned.