1. Page 1 Entities that are connected with government employees and doing business with government departments Presentation to the Portfolio Committee on Education 25 August 2009

2. 2 Points of discussion 1. Background 2.Findings 3.Responses from department 4.Conclusions and recommendations

3. 3 1.Background Report to Parliament January 2006: - approval for government employees to perform other remunerative work - disclosure of financial interests by ministers, deputy ministers and senior managers Audit focus: - National departments - Provincial Departments of Health and Education

4. 4 1.Background continue… Management comments: - Department of Public Service and Administration - Public Service Commission - National Treasury: Accountant-General Briefed Minister of DPSA

5. 5 2.Findings 1473 employees from departments of Education did business with government departments 64% of all government officials were from the departments of Education (1473 of the 2 319) 1.56% of the employees had approval (23 of the 1 473) R321,7 million business with government departments during 2005-2007 financial years Approval to perform other remunerative work

6. 6 Summary of employees at Departments of Education doing business with government Province Number of employees Number of companies Amount paid R Number of employees with approval already verified by the departments Eastern Cape 165 11 145 9560 Free State 63614 469 8310 Gauteng 10710819 451 9490 Limpopo 638937164 546 4350 Mpumalanga 37838471 931 00623 National 2230 325 0630 Northern Cape 13 1 877 4610 North West 83 6 236 9500 Western Cape 24 11 776 9070 Total 1 4731 777321 761 55823

7. 7 Declaration of registrable interests At the National Department of Education one designated employee No declaration of interest on financial disclosure form Value: R30 million * AGSA audit at Provincial level: No focus on declaration of registrable interests. Only verified if employees had approval to perform other remunerative work.

8. 8 Specific findings at the National Department of Education Designated official No approval to conduct other remunerative work Did not disclose shares in a subsidiary or directorship of the holding company The subsidiary received a tender to the value of R30 303 249 from the department to supply foundation phase fiction books Company did not declare on the SBD 4 form (declaration of interest) that there is a person connected with the bidder that was employed by the department

9. 9 Specific findings at the National Department of Education Non-Designated official No approval to conduct other remunerative work One transaction with National Department of Education to the value of R17 900 and transactions with Department of Home Affairs to the value of R616 964 during 2005-06 Person resigned from the CC on 4 April 2006, but after the transactions took place

10. 10 Other findings Extensive business with government Collusive tendering by employees Conflict of interest Declaration of interest on standard bidding documentation Deviation from SCM process in the awarding of tenders and quotations

11. 11 3.Responses from departments Inconsistencies in actions taken existed at departments - some charged with misconduct and discharged the employees while other departments issued final warnings Disciplinary steps could not be taken - employees not aware that they should have obtained approval

12. 12 4.Conclusions and recommendations Many resignations as directors/members of companies/cc’s during 2005/06 and 2006/07 financial years - Possibly as result of the AG Audit Report covering the 2004/05 financial year Briefings and hearings were held Exception reports supplied to SARS Prosecuting actions are considered by the SIU

13. 13 4.Conclusions and recommendations PSC, DBPSA and NT - Legislation to be reviewed for shortcomings Misconduct according to Public Service Regulations - KZN case should be followed up Act on condoned actions Approval by Executive Authority and not delegated Re-application – approval on merit