PRESENTATION ON THE FINANCIAL MISCONDUCT CASES ( DSD) 28 FEBRUARY 2017

FINANCIAL MISCONDUCT CASES 2014/2015 TYPE OF EXPENDITURE NUMBER OF CASES RECEIVED AMOUNT R NUMBER OF CASES FINALISED CASES TOTAL CASES REMAINING IRREGULAR CASES DSD 86 5 643 122.80 77 *5 114 609.78 9 528.513.09 SASSA 6 1 634 014.76 *included in this amount is expenditure of R874 063.89 incorrectly classified as Irregular Expenditure and was regularized by the loss control committee. FRUITLESS AND WASTEFUL CASES 20 151 945.59 18 144 485.59 2 7 460.00

Breakdown of Financial Misconduct cases not finalized during 2014/2015 Irregular expenditure (R528 513.09) 1 case for R313 776.25 (prior approval not obtained from delegated official to travel business class abroad for 2 officials) 1 case for R14 696.84 ( prior approval not obtained to fly business class for local destination) 2 cases for R129 180.00 (prior approval for additional funds to host events not obtained) 5 case for R70860.00 (SCM process not followed to appoint catering services) Fruitless and Wasteful Expenditure (R7 460.00) 2 cases for R7 460.00 for no-show (training and accommodation).

FINANCIAL MISCONDUCT CASES 2015/2016 TYPE OF EXPENDITURE NUMBER OF CASES RECEIVED AMOUNT R NUMBER OF CASES FINALISED CASES TOTAL CASES REMAINING IRREGULAR CASES DSD 126 8 047 565.89 115 *3 631 118.64 11 4 416 447.25 SASSA 2 264 867.00 *included in this amount is expenditure of R2 802 525.98 incorrectly classified as Irregular Expenditure and was regularized by the Loss Control Committee. FRUITLESS AND WASTEFUL CASES 15 666 447.00 10 80 354.00 5 586 093.00

Breakdown of Financial Misconduct cases not finalized during 2015/2016 Irregular expenditure (R4 416 447.25) 1 case for R 1 696 008.47 for forklifts purchased. Case opened with SAPS for theft as Service provider removed the goods from the property 4 cases for R1 764 406.42 for accommodation. SCM process not followed. 1 case for R 830 973.36 for promotional material. SCM process not followed. 3 cases for R125 059.00 for catering. SCM process not followed. Fruitless and Wasteful Expenditure (R586 093.00) 1 case for R97 643.00 relating abuse of cell phone 1 case for R485 000.00 relating to possible cover quoting. 3 cases for R3 450.00 for Hotel no-show

Reasons for delays in finalizing outstanding cases Further investigation and advise were sought for the above cases from the following: South African Police Services Legal Services Labour Relations Internal Audit Engaging with the service providers to determine if cancellations were given in advance to avoid the charge for no-show.

Progress on Strategies to reduce Financial Misconduct cases Loss Control Committee has been reviewed and reconstituted with additional members to deal speedily with all cases. The Loss Control Committee met on 3 consecutive months (November, December and January 2017) to adjudicate cases and made recommendations to the DG for consideration. To-date 192 Cases of Irregular Expenditure totalling R8 745 728.42 have been considered and approved by the DG following the meetings. 28 cases of Fruitless and Wasteful Expenditure totalling R224 839.49 have also been and considered and finalised for the same period by the DG . Disciplinary action were taken against implicated employees (written and final written warnings)

Planned Actions Scheduled monthly Loss Control meeting to finalize all outstanding cases All financial (SCM included) policies and delegations will be revised taking in consideration latest Treasury circulars and transversal agreements With effect from 1 April 2017 All Governance structures (risk and audit committees; bid adjudication and evaluation committees; ethics) will be reconstituted Refresher training to be provided to all governance structures Code of Ethics and financial declarations will be made compulsory for all employees Regular testing and review of key internal controls to identify weaknesses and take corrective action where necessary

30 May 2018 THANK YOU Budget Committee