SIU Presentation to Select Committee on Finance 21 August 2013 Justice and Constitutional Development(SIU)

Introduction The chairperson of the Select Committee on Finance has invited the Department of Public Service and Administration (DPSA) and the Special Investigating Unit (SIU) to report on progress made with regard to the 303 disciplinary cases that are being investigated in the Limpopo Province ; and The SIU shall deal with these cases in so far as the SIU’s mandate as determined by the relevant proclamation is concerned. Justice and Constitutional Development(SIU)

Structure of the presentation Introduction Structure of the presentation The SIU mandate and legal scope Background to the Limpopo Intervention Role players in respect of the Limpopo Intervention Mandate in respect of the SIU Proclamation Objectives of the investigation Background to Cases Investigated (Non disclosure of Business Interests) Results to date in respect of Non disclosure of Business Interest matters Objectives of the Proclaimed investigation Results to date in relation to Non disclosure of Business Interests Referrals of Ad-hoc matters to the SIU Investigation in respect of Ad hoc matters Procurement matters currently under investigation by the SIU Summary Constraints Justice and Constitutional Development(SIU)

The SIU Mandate And Legal Scope Established: in terms of the Special Investigating Units and Special Tribunals Act, Act 74 of 1996 current Special Investigating Unit (SIU) was established by Proclamation R118 of 2001 Investigations mandated: by a Proclamation from President Powers: Can subpoena, search and seize, interrogate witnesses under oath Can institute civil litigation to recover state funds lost due to acts of corruption and maladministration It does not have power of arrest or prosecution It does not have the power to take disciplinary actions It however, works closely with other relevant agencies where its powers fall short Functions: investigate corruption and maladministration institute civil legal action to correct any wrongdoing

Background to the Limpopo Intervention December 2011 – Cabinet invoked the powers of Section 100(1)(B) of the Constitution pertaining to the national intervention into the provincial administration of the Limpopo Province. The following departments were placed under Section 100 Administration: Department of Health and Social Development; Department of Roads and Transport; Department of Education; Department of Public Works, and Department of Treasury January 2012 - DG of National Treasury requested SIU to be involved in the intervention 23 March 2012 – Proclamation R21 was issued in respect of the Limpopo Intervention

Role players in respect of the Limpopo Intervention The following Agencies and Role- players form part of the intervention: The Anti-Corruption Task Team comprising: The Financial Intelligence Centre South African Revenue Services The South African Police Services National Treasury National Prosecuting Authority The Special Investigating Unit Department of Public Service and Administration The relevant administrators attached to the various Departments

Role players in respect of Limpopo the Intervention cont. The role of the various Agencies : The Anti-Corruption Task Team (Which includes various role players) The Financial Intelligence Centre (Provided financial probity information) South African Revenue Services (Provided financial information) The South African Police Services (Responsible for the criminal investigations) National Treasury (Facilitated the obtaining of documentation)

Role players in respect of the Limpopo Intervention cont. National Prosecuting Authority (Prosecution of matters referred) Department of Public Service and Administration (Co-ordinated and prosecuted the matters referred by, inter alia, the SIU for disciplinary action in respect of the 5 Departments) The relevant administrators attached to the various Departments (Co-ordinated the disciplinaries of the 5 Departments) The role of the Special Investigating Unit as part of the intervention was initially focused on data analytics with a view to identifying Government Officials who had business interests.

Mandate in respect of the SIU Proclamation The Special Investigating Unit subsequently motivated for and obtained a Proclamation to investigate the affairs of 5 Provincial Departments in Limpopo. The role of the Special Investigating Unit is determined by the Proclamation. The Schedule to Proclamation R21 dated 23 March 2012, includes inter alia: ‘... Maladministration of the affairs of the Departments in relation to their – a) cash management; b) supply chain management; c) contract management; and d) budget preparation and implementation, including the causes of such maladministration ’.

Mandate in respect of the SIU Proclamation The initial focus of the Special Investigating Units Proclaimed investigation was as follows: The preparation of disciplinary files relating to undisclosed business interests to be submitted to DPSA; To assist ACTT with the investigation of criminal matters in relation to the undisclosed business interests; To render testimony in the disciplinary matters in relation to the undisclosed business interests.

Background to the cases investigated relating to undisclosed business interests The SIU Forensic Data Analysis division obtained from various systems, electronic data pertaining to Limpopo Provincial Departments including, inter alia, information pertaining to the Basic Accounting System (BAS) and the Personnel Administration System (PERSAL); The SIU Forensic Data Analysis division performed data analyses in respect of the obtained electronic data, including data obtained in respect of, inter alia, BAS, PERSAL and Companies and Intellectual Property Commission (CIPC); The results from the data analyses highlighted, inter alia, possible undisclosed interests from the Limpopo Health -, Education -, Public Works -, Roads and Transport - and Provincial Treasury Departments. The SIU reviewed the information and identified actively employed officials who had business interests in businesses and prioritised 302 matters for investigation.

Background to the cases investigated relating to undisclosed business interests Process followed: Obtained the BAS data (Financial transactions concluded by the relevant departments) and PERSAL data (list of all Government employees in the relevant departments); Comparative analysis was performed by running PERSAL data against CIPC in order to identify whether the employees hold business interests; Exceptions were generated for further investigation; and 302 were identified for further investigation based on seniority. Senior Management Service -138 Middle Management Service - 164

Background to the cases investigated cont. The SIU investigated 216 of the 302 matters that were identified relating to non disclosed business interests; The SIU focus subsequently shifted to the investigation of 18 Procurement Contracts Investigations which emanated from the Schedule of the Proclamation as read with the motivation; The reason for the refocusing was for the SIU to make maximum impact by way of possible civil recovery and recommendations for possible disciplinary and/or criminal referrals in relation to possible misconduct and fraud and corruption.

Objectives of the Proclaimed investigation To facilitate or assist with the institution of disciplinary proceedings in appropriate cases and to render the necessary guidance (drafting charge sheets and assisting prosecutors) and testimony; To facilitate with the institution of criminal proceedings in appropriate cases by assisting the relevant Departments to register criminal cases and referral of the matters to ACTT; To render the necessary assistance to the National Prosecuting Authority regarding criminal matters referred; To assist in the recovery of losses either by way of referring matters to the State Attorney or to the SIU Civil Litigation Section. To identify systemic weaknesses that contributed to the losses allegedly suffered.

Background to the cases investigated cont. An additional 38 matters in respect of various irregularities were investigated by private forensic firms who were appointed by the National Treasury. These matters were to be handed to the SIU for preparation of the relevant disciplinary files; However, these matters were not received by the SIU notwithstanding repeated requests; These matters are at present being dealt with by the ACTT.

Results in relation to non disclosure of business interests Health Education Provincial Treasury Public Works Roads and Transport Total non disclosure of business interest investigations 91 92 40 49 30 Disciplinary Cases referred 14 7 16 3 Disciplinary Cases to be referred 5(7) 22 2 6 Investigation closed 33 43 8 27 DC previously completed 13 Disciplinary Cases matters not investigated 9 37

Results to date in relation to the non disclosure of business interests SIU Investigation Results Total potential non disclosure of business interest matters identified 302 Disciplinary Cases referred 41 Disciplinary Cases to be referred 5(7) 48 Investigation closed 114 Disciplinary Cases completed by Departments 13 Disciplinary Cases matters not investigated 86

Referral of Ad-hoc matters to the SIU In the course of the proclaimed investigation, the administrators of the various departments have referred certain matters to the SIU for investigation; The SIU has assessed these matters and has determined that some fall outside the scope of the Proclamation.

Investigation in respect of Ad hoc matters (Procurement, Fraud and Theft) Health Education Provincial Treasury Public Works Roads and Transport Investigation received 6 3 4 2 Preliminary investigation completed, to be referred back to Department (outside SIU Proclamation) 1 Investigation active Investigation completed, refer disciplinaries to department Investigation completed, to be referred to NPA Investigation completed Matters with ACTT

Procurement matters currently under investigation by the SIU 18 matters have been identified for investigation based on the AGSA reports underlying the proclamation; Each of these matters are covered by either an individual item or one or more items in the schedule to the Proclamation.

Procurement matters currently under investigation Department Number of cases Description Value Health 4 Procurement irregularities IRT contravention of the associated SCM legislation and policies R 986 472 374.00 Education 5 Possible VAT Fraud R15 035 156.00 Provincial Treasury 1 Not applicable Public Works R 61 436 568.00 Roads and Transport 3 R 4 763 169.00

Summary Summary 216 Non disclosure of business interest matters investigated 41 Disciplinary matters referred 18 Ad-hoc matters investigated 2 Disciplinary matters referred 2 Matters referred to the NPA 2 Matters being dealt with by the ACTT 1 Matter Pending 18 Procurement contracts presently being investigated to the value of R1 billion

Constraints Constraints Non co-operation from the custodians of information i.e. forensic firms Unavailability of documents Insufficient capacity Unclear role clarification Non payment of invoices