SIU presentation - 3 May 20071 Presentation to Portfolio Committee on Justice and Constitutional...
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Transcript of SIU presentation - 3 May 20071 Presentation to Portfolio Committee on Justice and Constitutional...
SIU presentation - 3 May 2007 1
Presentation toPresentation toPortfolio Portfolio
Committee on Committee on Justice and Justice and
Constitutional Constitutional DevelopmentDevelopment
3 May 20073 May 2007
SIU presentation - 3 May 2007 2
Summary▪ SIU mandate and legal scope▪ Threat of corruption to Departments▪ Building capacity▪ Budget growth▪ Project profile and update▪ Performance review▪ Good Governance▪ Building SIU and OD process▪ Key challenges
SIU presentation - 3 May 2007 3
SIU mandate and legal scope▪ The major functions of the SIU are to:
• Investigate corruption and maladministration• Institute civil legal action to correct any wrongdoing
▪ The primary purpose of the SIU is to enable the state to recover money that it has lost as a result of unlawful or corrupt action
▪ But Act also lists other purposes, eg investigating maladministration • may not result in recoveries but often lead to prevention
of huge losses • or the need to facilitate systemic improvements
SIU presentation - 3 May 2007 4
Threat of corruption to Departments▪ Departments facing combined threats of fraud, corruption and
maladministration▪ Also challenge to protect integrity of systems and processes,
eg social grants, service delivery, issuing driving licenses, procurement, tax collection
▪ Either opportunistic or more organised exploitation of system gaps
▪ Initial detection usually through an escalating loss▪ Difficulty to deal with all aspects of corruption due to multitude
of role players
SIU presentation - 3 May 2007 5
Dealing effectively with corruption▪ Dealing effectively with corruption and maladministration
requires integrated solutions:• Forensic investigations• Litigation (both criminal and civil)• Systemic improvements• Removing corrupt officials from office
▪ SIU mandate allows it to provide integrated forensic solutions and facilitate actions falling outside its mandate
▪ “Uniqueness of the SIU is that it operates in a criminal environment using civil legal remedies… also working closely with other LEA where it comes across criminal activity” (Adv Johnny de Lange, Deputy Minister DOJ&CD)
SIU presentation - 3 May 2007 6
Building capacity▪ Key challenge is to build sufficient capacity to deal with fraud,
corruption and maladministration ▪ Still massive outsourcing of investigations to private sector
due to lack of capacity ▪ Increased recognition that SIU
• ensures effective action against corruption through integrated solutions
• delivers excellent value for money to the state • has a vital role to play in dealing with corruption
▪ Reflected in significant increase in budget from Treasury
SIU presentation - 3 May 2007 7
Budget Increases Past years
EstimateOutcome
MTEF period
Audit Audit Audit Estim Estim Estim
03/04 04/05 05/06 06/07 07/08 08/09 09/10R'000 R'000 R'000 R'000 R'000 R'000 R'000
Total Income 40,2 59,5 101,5 139,7 203,7 231,9 270,4
Government grant 25,5 37,2 48,9 55,6 93,1 116,2 149,5
Projects income 14,7 22,3 52,6 84,2 110,7 115,6 120,9
SIU presentation - 3 May 2007 8
Funding growth▪ Over past 4 years most of SIU growth funded innovatively
through contributions from Departments • An additional R84m over past 4 years (R0.5m to R84m)• Treasury budget increase of R33m (R23m to R56m)
▪ Will be significant reversal of this over next 3 years: • Dept funding will level off: increase by est R36m• NT budget will increase by R94m:
• R 56m in 05/06 to R149m by 09/10▪ This is important as SIU should not be too reliant on
funding from Departments
SIU presentation - 3 May 2007 9
Increased investigative capacity
67123
166 194 207
394
550
710
820
1,000
0
200
400
600
800
1000
1200
Apr01
Apr02
Apr03
Apr04
Apr05
Apr06
Apr07
Apr08
Apr09
Apr10
Total staff
Budget increases enabled▪ Rapid increase
capacity• 67 in 2001• 550 currently• 1 000 by 09/10
▪ Creation of effective national presence• 1 office in ECP to • 7 provincial offices
SIU presentation - 3 May 2007 10
Project profile▪ Current projects include:
• Social grants• Special pension grants• Driving licenses• Procurement• Municipality related forensic matters• Provincial government departments• Housing fraud• Medical Aid Fraud• Tax fraud
SIU presentation - 3 May 2007 11
Ongoing projects
▪ 14 proclaimed investigations • Incl 4 new in past FY
▪ 74 pre-investigations
▪ 5 nationally based investigations▪ 40 regionally based investigations▪ 19 Departments involved
SIU presentation - 3 May 2007 12
Key Client Departments ▪ Current:
• Dept of Social Development• Dept of Correctional Services• Dept of Transport• Dept of Justice• National Treasury: Special Pensions Fund• Dept of Housing (proclamation recently published)• Municipalities: EC, WC, FS, Gauteng• Provincial Governments: EC, NWP, WC
▪ Pending:• Mpumalanga Economic Growth Agency (MEGA)
SIU presentation - 3 May 2007 13
North West Province SLA
▪ Recently concluded SLA with NWP ▪ Steering Committee established to screen all
proposed forensic investigations• Refer relevant matters to SIU for investigation
▪ SIU will assist with internal investigations or facilitating LEA involvement on other matters
▪ Ensure redress of fraud, corruption and maladministration
SIU presentation - 3 May 2007 14
Projects UpdateDepartment of Social Development
▪ Start investigation in April 2005 into: • Corrupt SD officials• Beneficiaries unlawfully receiving benefits
▪ Start with 43 705 public servants• 21 588 irregular public servant beneficiaries identified
• Recommended to be removed▪ Extended to private beneficiaries
• 566 542 private beneficiaries being assessed• 60 060 irregular beneficiaries confirmed
SIU presentation - 3 May 2007 15
Projects Update – DSD (cont) Achievements
Performance Measure 2006/07Target
2006/07Achieved
Achieved from inception to
DateCash recoveries R 24 million R 26 million R 39 millionActual Savings R 40 million R 213 million R 493 millionPreventative savings R 1 billion R 1,8 billion R 4,9 billionRemovals from SocPen 64 221 81 648Lapsed grants 7 347 102 882Disciplinaries prepared 7 000 4 677 6 797Prosecutions 2 400 2 675 3 307Convictions 1 800 2 215 2 570
SIU presentation - 3 May 2007 16
Projects Update – DSD (cont) Impact and challenges
▪ Raised awareness of DSD efforts tackling grant fraud▪ Lead to strong deterrence factor▪ Removed huge numbers of disentitled beneficiaries▪ Improved processes▪ Result in improved public rating▪ Major challenges:
• Recovering illegal benefits• Accessing data from different databases• Cumbersome process of removing disentitled
beneficiaries
SIU presentation - 3 May 2007 17
Projects Update Department of Transport
▪ Project started on 1 March 2005 ▪ 3 year project recently extended for another 3 years▪ Currently focusing on:
• Irregular issuing of driving licences• Conversion of forged driving licences
▪ Key Challenges:• Cumbersome process of cancellations• Systems and process gaps at DLTCs• Accessing information on foreign driving licenses
SIU presentation - 3 May 2007 18
Projects Update DOT: Achievements to date
Performance Measure Targets2006/7
Achieved2006/7
Achieved to date
Files uplifted from DLTCs 318 708 1 145 645
Files audited 716 144 784 816
Non-compliant licenses found 17 550 30 553 42 229
Disciplinaries prepared 150 180 242
Criminal investigations 1 182 1 341 2 366
Arrests 700 606 1 014
Prosecutions instituted 431 621
Convictions 383 548
SIU presentation - 3 May 2007 19
Project Update – DoT (cont)
▪ 55 DLTCs audited▪ 9% of 784 816 audited driving licenses issued irregularly ▪ 23 216 non-compliant licences identified and referred DoT
▪ 30 officials arrested – mainly for selling licences ▪ 495 arrests for forged foreign conversions ▪ 251 SA citizens submitted forged foreign conversions
SIU presentation - 3 May 2007 20
Projects Update Special Pensions Fund
▪ Investigation started 7 December 2006 with focus on:• The unlawful payment of special pensions to disentitled
beneficiaries• Conduct of Board members that may contributed to
irregular payments▪ SIU will also look at systemic gaps in the processing,
authorising and payment of special pensions▪ SPF budget R320 million▪ Currently auditing all 16 000 beneficiaries
• Running applications through other databases• Verifying beneficiaries biographies
SIU presentation - 3 May 2007 21
Projects Update - SPF (cont) ▪ Focus areas:
• Identifying fraud typologies• Concentrating on clear frauds• Major impact to remove disentitled beneficiaries from
database▪ SPF addressing process gaps▪ Major challenges:
• Lack of compliance with provisions of SP Act• Political sensitivity • Another 12 000 new applications to deal with• Concern over integrity of some officials
SIU presentation - 3 May 2007 22
Projects Update Dept of Correctional Services
▪ Investigation started August 2002 for initial 3 years▪ Project extended for further 3 years▪ Current focus on:
• Procurement matters – 17 under investigation • Pharmacy procurement• Asset management
▪ Medical Aid investigation yielded R3.4 billion prevention of future losses in medical aid
SIU presentation - 3 May 2007 23
Projects Update – DCS (cont) ▪ Procurement
• Range of investigations - cover-quoting, fronting, breach of contract, and corruption
• 17 current investigations (3 corruption)• Achievements
• Recovery of R 6,9 million in 1 matter • 5 criminal referrals for collusion with contractors• 13 systemic recommendations
SIU presentation - 3 May 2007 24
Projects Update – DCS (cont) ▪ Pharmacies
• 516 disciplinary recommendations • 64 global systemic recommendations
▪ Asset Management • 5 disciplinary recommendations• R 362 000 recovered
▪ Other recoveries • Medical Aid – R 1,1 million
SIU presentation - 3 May 2007 25
Projects Update – DCS (cont)▪ Challenges
• New, wider proclamation required• Procurement investigations complex and time
consuming• Delays in obtaining FMS / BAS payment information
from DCS
SIU presentation - 3 May 2007 26
Projects Update Dept of Housing
▪ Previous, ongoing investigations: ▪ irregular awarding of housing subsidies, housing fraud in
relation to low cost housing schemes and maladministraton of funds in 6 provinces
▪ Investigate widespread corruption in housing subsidy scheme in KZN
▪ Fraud committed by contracted conveyance attorneys in partnership with criminal syndicates
▪ Pre-investigations have identified over 1 500 government officials who have irregularly received a housing subsidy
SIU presentation - 3 May 2007 27
Projects update (cont) - DoH▪ New national proclamation 25 April 2007▪ Focus areas of new investigation:
• Abuse of the housing subsidy system• Non-delivery on contracts• Conveyancing fraud• Conduct by officials in the administration of schemes
and payment of housing funds▪ DoH funds 50 staff, SIU 20
SIU presentation - 3 May 2007 28
SIU AchievementsENE targets and achievements for 06/07
Performance
Measures 2005/06 2006/07
Target Actual Target Actual
▪ Evidence prepared for use in civil litigation▪ Evidence prepared for use in criminal prosecutions ▪Evidence prepared for use in disciplinary proceedings▪Evidence prepared for use in other remedial action
40
800
660
50 000
2 133
1 263
666
27 758
5 025
2 000
2 300
45 000
4 829
3 302
7 551
95 846
SIU presentation - 3 May 2007 29
ENE Targets and achievementsPerformance
Measures 2005/06 2006/07
Target Actual(Audited)
Target Actual (est)
▪ Savings
▪ Preventions
▪ Cash recoveries
R 150m
R 850m
R 40m
R 299m
R 3 270m
R 13m
R 80m
R 1 250m
R 20m
R 231m
R1 759m
R 34m
Totals R1 040m R3 582m R1 350m R2 024m
2007/08
Target
R 40m
R 2 000m
R 160m
R2 200m
SIU presentation - 3 May 2007 30
Good Governance
▪ Good governance structures mean increased accountability – to President, Parliament and clients
▪ Integrity of investigations and staff is vigorously maintained – Internal Integrity Unit
▪ First completely clean AG report for 2005/6 • with no emphases of matter
▪ A strong management chain ensures SIU’s strategic objectives work towards fulfilling mandate
SIU presentation - 3 May 2007 31
Building SIU & OD
▪ OD process started late 2006▪ Despite increasing success want to perform better▪ Also bigger demand for services in different forensic
markets▪ OD finalised design of new structure and operating
model▪ Implementation to start in June 2007
SIU presentation - 3 May 2007 32
Overall Challenges▪ Rapid growth ▪ Some key investigations present unique challenges▪ Lack of movement on proposed legislative changes ▪ Proclamation process cumbersome
SIU presentation - 3 May 2007 33
▪ SIU had an excellent year in very demanding circumstances • Delivered outstanding results on existing projects• Effective implementation of ambitious new projects
▪ While coping with challenges of growing rapidly▪ Completed ambitious OD process to cater for future growth
• Laid foundation for a much bigger and more effective organisation in the future
Conclusion