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Presentation to Portfolio Committee on Justice and Constitutional Development 3 May 2007

Presentation to Portfolio Committee on Justice and Constitutional Development 3 May 2007. 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

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Presentation to Portfolio Committee on Justice and Constitutional Development 3 May 2007

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  1. Presentation to Portfolio Committee on Justice and Constitutional Development 3 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. BudgetIncreases 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 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 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 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 SIU presentation - 3 May 2007

  29. ENE Targets and achievements 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. Conclusion • 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 SIU presentation - 3 May 2007

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