FINANCIAL MISCONDUCT Presented by Cox Mokgoro – Finance Stabilisation 01 August 2013

IRREGULAR EXPENDITURE DPWPMTETOTAL 2012/13 R’000 Opening balance Add: Irregular expenditure – relating to prior year Add: Irregular expenditure – relating to current year Less: Amounts condoned Less: Amounts recoverable (not condoned) -- - Less: Amounts not recoverable (not condoned) -- - Irregular expenditure awaiting condonation DPW & PMTE IRREGULAR EXPENDITURE – 31 MARCH 2013

DPW & PMTE FRUITLESS AND WASTEFUL EXPENDITURE – 31 MARCH 2013 FRUITLESS AND WASTEFUL EXPENDITURE DPWPMTETOTAL 2012/13 R’000 Opening balance Fruitless and wasteful expenditure – relating to prior year Fruitless and wasteful expenditure – relating to current year Less: Amounts condoned --14 Less: Amounts transferred to receivables for recovery - - TOTAL FRUITLESS AND WASTEFUL EXPENDITURE – 31 MARCH

4 PMTE CLASSIFICATION AND ANALYSIS OF FRUITLESS EXPENDITURE PER AMOUNT AS AT 31 MARCH 2013 Threshold Amount % Number of Trans R0 - R R R R R R R R > TOTAL AT 31 MARCH

5 DPW CLASSIFICATION AND ANALYSIS OF FRUITLESS EXPENDITURE PER AMOUNT AS AT 31 MARCH 2013 Threshold Amount % Number of Transactions R0 - R R R R R R > TOTAL AT 31 MARCH

6 PMTE CLASSIFICATION AND ANALYSIS OF IRREGULAR EXPENDITURE PER AMOUNT AS AT 31 MARCH 2013 Threshold Amount % Number of Transactions R0 - R R R R R R R R > TOTAL AT 31 MARCH

7 DPW CLASSIFICATION AND ANALYSIS OF IRREGULAR EXPENDITURE PER AMOUNT AS AT 31 MARCH 2013 Threshold Amount% Number of Trans R0 - R R R R R R R R > TOTAL 31 March

ANALYSIS OF IE PER INCIDENT AS AT 31 MARCH 2012 & 13 - DPW INCIDENTAMOUNT% NO OF TRANSACTIONS DELEGATIONS NOT FOLLOWED %2 FINANCE LEASE EXTENDED WITHOUT NATIONAL TREASURY'S APPROVAL %30 OVERTIME - APPROVAL GRANTED AFTER WORK COMMENCED %41 PETTY CASH IN EXCESS OF R %6 SCM PROCESSES NOT FOLLOWED % SITA - TRANSACTION NO IN LINE WITH SITA ENGAGEMENT MODEL %88 SIU INVESTIGATION %424 TAX CLEARANCE CERTIFICATE NOT ON FILE %207 TRANSFER PAYMENT NOT APPROVED BY NATIONAL TREASURY %2 TRANSFER PAYMENT NOT INTO PRIMARY BANK ACCOUNT %38 31 March

Row LabelsTOTAL F&WE NO OF TRANS FOR DC NO OF TRANS UNDER INVESTIGATION NO OF TRANS FOR RECEIVABLE AMOUNT IN EXCESS OF APPROVED/AUTHORISED BID AMOUNT Departmental asset used by an Official who resigned721 IMPLEMENTATION OF SAAS IT SYSTEM INTEREST PAID ON OVERDUE ACCOUNT NO SHOW FEE8891 OVERPAYMENT ON STIPEND TRAINING NOT ATTENDED EXPENSIVE ITEM PROCURED LEVY FEE ON CANCELLED ARBITRATION PROCUREMENT OUTSIDE RT CONTRACT - DIFFERENCE IN AMOUNT SIU - CANCELLATION OF CONTRACT - SKILPADHEK BOARDER POST LEGAL COSTS FOR LATE PAYMENT DEPARTMENTAL ASSET USED BY OFFICIAL WHO RESIGNED1813 DPW - ANALYSIS OF FRUITLESS & WASTEFUL EXPENDITURE AS AT 31 MARCH 2013

DPW - ANALYSIS OF FRUITLESS & WASTEFUL EXPENDITURE AS AT 31 MARCH 2013 CONT… Row LabelsTOTAL F&WE NO OF TRANS FOR DC NO OF TRANS UNDER INVESTIGATION NO OF TRANS FOR RECEIVABLE CATERING FOR PEOPLE WHO DID NOT ATTEND ADDITIONAL AMOUNT INCURRED IN PRINTING ANNUAL REPORT NO STAMP ON INVOICE CERTIFYING THAT GOODS/SERVICES WERE DELIVERED AS PER CONTRACT VALIDITY OF QUOTES EXPIRED AND ORDER PLACED AGAINST EXPENSIVE QUOTE VAT CHARGED BY A NON-VAT VENDOR TRAVEL COSTS ON PEOPLE WHO DID NOT TRAVEL SIU - PROCUREMENT OUSTIDE MINISTERIAL HANDBOOK PROCUREMENT ON LOST PETROL CARD SIU - PROCUREMENT FROM MIDDLEMEN SIU - DIFFERENCE BETWEEN APPOINTED BIDDER AND ONE THAT SHOULD HAVE BEEN APPOINTED SIU - AMOUNT IN EXCESS OF APPROVED/AUTHORISED BID AMOUNT PURCHASE OUTSIDE THE MINISTERIAL HANDBOOK Grand Total

11 PMTE – ANALYSIS OF IE PER CATEGORY AS AT 31 MARCH 2013 Incident Description Amount % Number of Transactions DELEGATIONS NOT FOLLOWED % FACILITY MANAGEMENT FOUND TO BE IRREGULAR % 518 INTEREST NOT DECLARED BY EMPLOYEE % 17 LEASING % LIMITATION OF SCOPE % 23 MAINTENANCE CONTRACT - INVESTIGATION % 1 ROOSTER CONSULTANT APPOINTMENT % 36 SCM PROCESSES NOT FOLLOWED % SIU - LEASE TRANSACTIONS % 39 TCC NOT ATTACHED % 209 Total 31 March

12 PMTE FRUITLESS & WASTEFUL EXPENDITURE AS AT 31 MARCH 2013 Incident Description Amount % Number of Transactions Interest paid on overdue account Rental on Unoccupied buildings VAT by non-VAT vendors Settlement of contract and legal fees Overpayment to Suppliers Excess markup charged Other avoidable expenses Total 31 March %1 432

Level of Financial Misconduct Transactions DPWPMTETOTAL Financial YearNo of transactions AmountNo of transactions AmountTotal No of trans Total Amount 2009/ / / / TOTAL Trans Irregular Exp No. of trans. F & W E No. of trans. TOTAL

Action plan on Irregular Expenditure ACTION PLAN ON IRREGULAR EXPNDITURE /2013 No.ActionTarget DateProgress 1Review all transactions for financial year 2012/ May 2013Done 2Issue circular on immediate cut of IE01 April 2013Done 3New SCM database to be operational Sept 2013In progress 4Approval of Policy on Financial Misconduct30 Aug 2013Served before DBC & EXCO 5Review all disclosed IE in line with guide from National TreasuryFrom Sept 2013In progress 6Complete the analysis of IEMarch Allocate irregular expenditure to responsible officialFrom April Establish the Investigative capacity to investigate cases reported30 Apr 2014In progress

Action plan on Irregular Expenditure cont.… ACTION PLAN ON IRREGULAR EXPNDITURE /2013 No.ActionTarget DateProgress 9 Establish a Condonment CommitteeSept 2013Once policy is approved 10Formulate a combined condonment frameworkOct 2013In progress 11Request approval to condone investigated and finalised cases/transactions From Apr 2014Once policy is approved ACTION PLAN ON NEW CASES REPORTED/IDENTIFIED FROM FINANCIAL YEAR 2013/14 1Validate all new reported cases/transactions of IEMonthly30 days after reported 2Investigate all new reported cases within 30 days of validatedMonthlyCases to be finalised within three (3) months 3Intensify training on IE in the DepartmentFrom Sept 2013Will resume once policy approved

All reported and validated cases of IE are reported to National Treasury monthly; Analysis of all reported cases and valid if indeed IE; Refer cases/transactions for investigate all reported to Branch Heads/Regional Managers; Accountability lies with Branch Heads and Regional Managers; Investigated cases/transactions referred to Condonment Committee for approval and condonment; Refer case to Financial Accounting to open debt account against officials, if liable in law; Take disciplinary actions against officials found liable; New transactions of IE must be finalised within 3 months; Condonment is not a given – compelling reasons should exist for it to be granted; Process of Clearing Irregular Expenditure reported

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