CARA Select Committee on Security and Constitutional Development Criminal Assets Recovery Account 16 February 2011

Criminal Assets Recovery Account (CARA). CARA Introduction The Prevention of Organised Crime Act, Act 121 of 1998, provides inter alia for the depositing of all confiscated and forfeited monies and properties into a Criminal Asset Recovery Account (CARA) as well as regulations on the utilisation of the funds and property so deposited. CARU The Account is managed by the CARU (Criminal Asset Recovery Unit)  Location to Justice from NPA (January 2010) The Unit has relocated from the NPA where it has operated from since inception and is now a directorate in the office of the CFO at DoJ&CD National Office CARA project The CARA 2009 Project was initiated to address the persistent challenges within the CARA environment and infuse financial expertise and know how into the AFU/CARA environment to enable: The preparation of Financial Statements that comply with all the needs of stakeholders. Management of confiscated/ forfeited assets in a transparent cost effective and easily verifiable manner. The contract of the task team involved in the project ended on 31 July

Criminal Assets Recovery Account (CARA). SCOPA  Status on Previous Resolutions Previous Resolutions were made on the need to implement an Electronic system to manage the CARA and the need to implement Policies and Procedures for the UNIT. Progress on previous SCOPA resolutions The Electronic Case Management System (ECMS) is being utiilised by the Asset Forfeiture Unit in the NPA. The ECMS is being further enhanced to incorporate the needs of CARA. Access and use of the ECMS by CARU personnel will be finalised by 28 February Draft policies and procedures have been developed. The Ministerial Criminal Assets Recovery Committee made recommendations on the draft policies and procedures at the meeting held on 17 February 2009, a follow up meeting is currently being organised to induct new ministers and attend to the finalisation of the approval of the policies and procedures. The final approval by the new Ministerial Criminal Assets Recovery Committee of the policies and procedures will be finalised in the 20010/11 financial year. 3

Criminal Assets Recovery Account (CARA). Current issues  Accrual Accounting Transition from Modified Cash basis to Accrual Accounting 2010/11 The Dispensation from National Treasury for the CARA to prepare Financial Statements on the Modified Cash Basis expired with the 2009/10 Financial Year. 2010/11 Financial Year requires that CARA financial statements be prepared on the Accrual Basis. Impact on the Current Finance capacity : The system requirements for an Accrual Basis scenario will call for a custom made accounting system or off-the-shelf package like Pastel or Great Plains. The proposals from the software suppliers are being evaluated at present with other units (Guardians Fund and Third Part y Funds) in the department. The final decision to acquire the software will be made before the 31 March Entities that interface with CARU e.g. the AFU and its enforcement officers and the Master’s office will be required to collect and avail more detailed case information to enable the preparation of the requisite disclosure notes for CARA financials. 4

Current CARA developments /2011 Discussions were held with the current chairperson (Minister of Justice and Constitutional Development ) of the Criminal Assets Recovery Committee in September The chairperson provided guidance and recommended that DEVCOM (JCPS cluster ) be engaged with regarding the priority projects that may be funded by CARA subject to final ratification and approval by the Cabinet. Presentations were made to the DEVCOM and the DG forum in October The list of priorities that require funding were submitted to CARU on 30 November 2010.The final detailed submissions will be presented to DEVCOM in February The DEVCOM recommendations will then be presented to the Criminal Assets Recovery Committee for deliberation and final recommendations to the Cabinet (March 2011). An amount of R240 million is in CARA at 31 December 2010 and available for allocation to law enforcement agencies and organisations rendering assistance to victims of crime in terms of section 69A of the POC act. 5

Criminal Assets Recovery Account (CARA). Annual Financial Statements 2009/2010 The 2009/10 Annual Financial Statements were submitted and audited by the Auditor General. An unqualified audit opinion was obtained from the Auditor General. Please refer to the Annual Report of the CARA for detailed information. The following tables highlights the key figures in CARA. The statement of Financial Performance at 31 March 2010 is shown below: 2009/102008/9 RevenueR”000 Net proceeds from forfeited assets Surplus for the year

Criminal Assets Recovery Account (CARA). The Statement of Financial Position at 31 March 2010 is shown below: 2009/102008/9 ASSETSR”000 Cash and cash equivalents Total Assets LIABILITIES Trade and other payables Accumulated Surplus Total net assets and liabilities

Criminal Assets Recovery Account (CARA). Contingent Assets and Liabilities at 31 March 2010 Total assets (including cash) forfeited to the state in pursuance of court orders pending realisation and deposit into CARA account were valued at R114 million as at 31 March 2010 (R59 million in 2009/9). Contingent asset and liabilities 2009/10 R” /9 R”000 Value of assets114,059 Less: estimated curator fees and expenses Estimated net proceeds

Criminal Assets Recovery Account (CARA). Annual Financial Statements 2010/2011 The 2010/11 Draft Financial Statements are shown below: The following tables highlights the key figures in CARA for the 9 months ended 31 December The statement of Financial Performance at 31 December is shown below: 20010/11 At 31 December 2010At 31 March 2010 RevenueR”000 Net proceeds from forfeited assets Surplus for the year

Criminal Assets Recovery Account (CARA). The Statement of Financial Position at 31 December 2010 is shown below: 2010/112009/10 ASSETSR”000 Cash and cash equivalents Total Assets LIABILITIES Trade and other payables Accumulated Surplus Total net assets and liabilities

Cara –contingent asset register at 31 December 2010 Summary Value at 31 December 2010 R”000 Cash and confiscation –previous year 81.6 Cash and confiscation –previous year 16.7 Assets previous years7.9 Assets Current year3.8 Total

CARA Thank You 12