OF THE

AUDITOR-GENERAL

ON

FINDINGS ARISING FROM A SPECIAL INVESTIGATION INTO ALLEGED IRREGULARITIES AMONG SENIOR OFFICIALS OF THE DEPARTMENT OF CORRECTIONAL SERVICES

TABLE OF CONTENTS

1. Purpose and content f the report
2. Allegations and detailed findings arising from the special investigation
3. Response of the Minister
4. Council
5. Appreciation

REPORT OF THE AUDITOR-GENERAL ON THE FINDINGS ARISING FROM A SPECIAL INVESTIGATION INTO ALLEGED IRREGULARITIES AMONG SENIOR OFFICIALS OF THE DEPARTMENT OF CORRECTIONAL SERVICES

1.1 The purpose of this Report is to facilitate public accountability by bringing to the attention of Parliament the findings arising from a special investigation into alleged irregularities among senior officials of the Department of Correctional Services (Department). The content of the Report is based mainly on the requirements of sections 3 and 5 of the Auditor-General Act, 1995 (Act No. 12 of 1995).

1.2 Sufficient audit tests were performed to provide adequate evidence for the findings contained in the Report. These findings should, however, not be regarded as comprehensive as tests were performed only on a sample basis to determine if a factual basis for the allegations exists.

2.1 On 21 December 1998 the Minister of Correctional Services (Minister) approached the Office of the Auditor-General (Office) with regard to a possible investigation into alleged irregularities among senior officials of the Department. On 11 February 1999 a steering committee meeting was held comprising senior staff of the Department and the audit team. During this meeting consensus was reached on the special investigation and the scope and modus operandi to be followed.

2.2 During the second meeting of the steering committee held on 8 June 1999, consensus could not be reached on all the findings and conclusions flowing from the special investigation. However, during subsequent meetings with senior officials of the Department, consensus was ultimately reached on the factual correctness of all the findings and these were brought to the attention of the Commissioner of the Department (Commissioner) and the Minister by means of a management report on 14 July 1999 and 29 July 1999, respectively. Their formal comments were received on 27 July and 12 August 1999. Pursuant to discussions between the Office, the Minister and the Commissioner on 25 August 1999, a more comprehensive reply was received from the Commissioner on 26 August 1999.

3.1 ALLEGATION: The Commissioner received a merit award of 18 per cent and he merits himself. It was further queried whether another Director-General received a bonus of 18 per cent of his annual salary during the 1997-98 financial year.

FINDING: Upon enquiry at 16 state departments, including the South African Police Service and the National Defence Force, it was indicated that their heads of department had not received any bonuses in terms of section 37(2)(c) of the Public Service Act, Proclamation No. 103 of 1994 (Act) or any other section in their acts, other than normal annual bonuses of 93% of one month's salary, during the 1997-98 and the 1998-99 financial years. The Commissioner received awards during March 1997 and December 1997. His awards, amounting to R54 646 in each instance, were based on 18 per cent of his annual salary and were authorised by the former Minister. An opinion obtained from the Chief State Law Adviser on 23 August 1999 stated that both these awards should be regarded as unauthorised.

COMMENTS OF THE COMMISSIONER AND CORRECTIVE STEPS ENVISAGED BY HIM: Although the payments were authorised by the Minister who, according to the legal advisers of the Department, had the authority to do so, the Treasury will be approached in terms of section 31 (i)(a)(iii) of the Act, read with section (31)(i)(a) as amended, to consider condonation of the authorisation given by the Minister.

3.2 ALLEGATION: (a) The Department has used severance packages as a tool to get rid of unwanted staff, several of whom are black, and has immediately replaced them with other black staff.

(b) The cost escalation is complicated by the fact that the Department's non contributing medical aid scheme is a lifetime benefit. Relatively young staff and their families are costing the Department a fortune in medical costs whilst the expenses of new members and their families have been added to the medical costs.

FINDING: (a) The criteria for the consideration of a voluntary severance package (VSP), as approved by the Minister or former Minister, were not always applied consistently. According to Circular 10/12/26, dated 22 May 1996, from the Department of Public Service and Administration, employer-initiated retrenchments that require the application of section 12(4)(b) or (c) of the Correctional Services Act, 1959 (Act No. 8 of 1959), were frozen from the date of the circular. The Department could therefore not retrench redundant members who did not want to resign. At that stage there were 149 members who had applied for the termination of their services in terms of VSPs and who were not redundant. A number of them, including 44 members of the previously disadvantaged groups, did not meet the set criteria. The former Minister granted these members VSPs on 26 March 1997 to accommodate the redundant staff. Further statistics furnished by the Department indicated that of the 987 members who were granted VSPs up to 12 February 1999, 229 were black (23 per cent).

(b) The awarding of VSPs contributed to an increase in the number of pensioners and dependants, which had an impact on the medical costs. This escalation will place a liability on the Department in future. The extent thereof could, however, not be determined due to a lack of information.

COMMENTS OF THE COMMISSIONER AND CORRECTIVE STEPS ENVISAGED BY HIM: The granting of VSPs was not specifically intended for whites only. Furthermore, the Minister gave final approval for VSPs as delegated to him. In terms of the prescripts of the Department of Public Service and Administration, within the context of the cancellation of Section 12(4)(b) and (c) of the Correctional Service Act, 1959, members in the former TBVC states who were redundant could not be dealt with in any other way, except by the granting of VSPs, and coincidentally most of them were black employees. All relevant particulars were submitted to the Minister as he had the delegated competency to take the decision, to enable him to apply his mind in terms of the approval of the mentioned VSPs.

3.3 ALLEGATION: The Commissioner undertook several trips from May 1997 to December 1998, amounting to approximately 70 days. The cost of these trips is estimated at approximately R 176 484. On his return, the Commissioner did not plough back what he had learnt.

FINDING: From 1 May 1997 to 31 December 1998 the Commissioner spent 131 days overseas, 123 of which were for official and 8 for private purposes. The total cost of the Commissioner's overseas trips amounted to R528 889. According to the Public Service Staff Code, an official should submit a complete report within a month of returning from a foreign country. The Commissioner provided some feedback in all instances. However, in some instances the feedback was given in the form of minutes or by means of the papers presented and did not always address the specific brief for the specific trips.

COMMENTS OF THE COMMISSIONER AND CORRECTIVE STEPS ENVISAGED BY HIM: The Minister approved all trips, as well as the brief of the specific trips. In all instances reports were submitted on the feedback of the trips. In some instances the most effective way of reporting back was the furnishing of complete papers of the relevant conference or the minutes of meetings that were attended. The said reports, papers and minutes of meetings were also explained to members by means of a verbal presentation to contextualise the content of the said documents.

The documents which were utilised for reporting back on the content of the trips were sometimes different from the original brief, as it is impossible to determine beforehand what exact information will be gathered during the visit, and therefore he could only report back on what information he accumulated on the trips itself.

3.4 ALLEGATION: (a) The Commissioner privately owns a soccer club in the Premier Soccer League. There have been suggestions of conflict of interest in his capacity as employer.

(b) Participation in sport codes is a time-consuming and an expensive exercise, especially concerning senior staff spending a lot of time preparing for competitions both as players and patrons.

FINDING: (a) The Office has already investigated and reported on the Commissioner's interest in a soccer club in the Report of the Auditor-General on the Financial Statements of Vote 10 - Department of Correctional Services for the year ended 31 March 1998 and the Performance Audit on the Management of Prisons (RP181/1998). The Commissioner's involvement in an amateur soccer club was, however, approved by the former minister on 27 October 1997. The Commissioner confirmed verbally that the soccer club was sold, but that 50 per cent of the selling price was still outstanding as at 8 October 1998. The Office, however, does not have access to the personal affairs of the Commissioner and the correctness of the statement could therefore not be confirmed. According to information obtained from the Premier Soccer League and the Department, the Department employed 24 soccer players out of 70 registered players at the specific soccer club. Of the 24 players employed by the Department, 17 players were employed while the Commissioner still had an interest in the club. None of the 17 players had, however, been registered with the soccer club prior to their appointment at the Department.

(b) The Correctional Services Regulations (Regulations) do not require the submission of leave forms for the absence from work for sport activities but only the recording of such absence in an absence register. As the registers were not regularly updated in some instances, the extent of time taken off for Sporting activities could not be established.

COMMENTS OF THE COMMISSIONER AND CORRECTIVE STEPS ENVISAGED BY HIM: To contexualise his involvement within the framework of the regulations of the Government Service, the Commissioner stated that he did apply to the Minister for the prescribed approval, which was subsequently granted by the former Minister on 27 October 1997, within the context of the regulations.

The Department is currently also assessing the whole procedure in terms of the attendance register and recording of leave in the said register to ensure proper control over of the utilisation of human resources.

The Commissioner, Chief Deputy Commissioner Operational Support and Deputy Commissioner Finances are also personally visiting all provinces to address Provincial Commissioners and Area Managers on the issue of internal control with specific reference to management of the attendance register.

AUDIT COMMENTS: On 27 October 1997 the Minister gave approval to the Commissioner for the ownership and management of the amateur soccer club, Sparktak. According to information received from the Premier Soccer League, Spartak is registered as a professional soccer club.

3.5 ALLEGATION: The Department was officially demilitarised in 1996. The Department decided to introduce new corporate wear, the consultation for which has taken a year.

FINDING: The issue of corporate wear was addressed by 2 task teams at costs of R69 007 and R113 236 respectively, excluding salary costs relating to members serving on the task teams. The first task team finalised its activities over a period of approximately 2 years. At a management board meeting held in October 1998, the proposed corporate wear was rejected. The second task team visited the United States of America at the end of 1998. The Department did complete the specifications for the new uniform during May 1999, and the said specifications were forwarded to the South African Bureau of Standards for the amendment of the specifications on 24 May 1999.

COMMENTS OF THE COMMISSIONER AND CORRECTIVE STEPS ENVISAGED BY HIM: The Management Board adopted a resolution on the new uniform on 24 May 1999, which was consulted in the Departmental Bargaining Council on 30 June 1999. The tender was advertised in the Government Tender Bulletin of 9 July 1999 with a closing date of 6 August 1999.

3.6 ALLEGATION: During 1996 the Department of Public Service and Administration decentralised all staff appointments. The Commissioner has centralised all appointments of Assistant Director upwards, which affords his office much power to reward loyalty and renders Provincial Commissioners ineffective.

FINDING: Twelve appointments approved by the Commissioner were scrutinised and, except for one, the applicants were either not recommended by the panel or he or she was recommended with reservation, for example, candidates were appointed who were not recommended by the panel, but approved by the Commissioner in terms of section 9G of the Correctional Services Act, 1959 (Act No. 8 of 1959). However, the reasons for appointing these candidates were not documented, and the merit of the decisions could therefore not be evaluated. The documentation of reasons, however, is not required in terms of the departmental policy.

COMMENTS OF THE COMMISSIONER AND CORRECTIVE STEPS ENVISAGED BY HIM: The Department registered an Equity Plan with the Department of Public Service and Administration during 1997, which has specific targets in terms of representativeness and it was open necessary to align appointments in terms of the said plan to ensure representativeness throughout the different regions of the country.

The Department has in the meantime amended the format of appointment memorandums to make provision for the furnishing of reasons by the decision maker if he/she deviates from the recommendations of the panel.

3.7 ALLEGATION: Transfers of staff are viewed negatively in the Department as they are seen as another power-wielding tool of the Commissioner. Indeed staff transfers are costly to the Department. Settlement costs and the cost of the absence of the individuals visiting home bases do not warrant such expenses to the taxpayer.

FINDING: Expenditure on the transfer of officials for the 1997-98 and the 1998-99 financial years amounted to R3 111 659 and R1 542 753, respectively. During the 1997-98 financial year the Department transferred 73 officials from the rank of Assistant Director and upwards, 17 of which did not involve promotion. During the 1998-99 financial year, 53 officials from the rank of Assistant Director and upwards were transferred, 44 of which did not involve promotion. According to the Department, it was not necessary to advertise non-promotional posts. Furthermore, evidence could not be found in files that officials that were transferred without promotion had requested to be transferred. However, according to the Department, the transfers were verbally consulted with the transferees and not one of them was dissatisfied about their transfer. According to Chapter B VI/IV of the Public Service Staff Code, all transfers initiated by the Department ought to be based on a Human Resources Plan. Such plan, based on the stipulations of the Collective Agreement and the Affirmative Action Plan, was registered in 1997 at the Public Service Commission. All transfers of the management echelon were done according to the registered plan and authorised by the Commissioner in terms of section 9G of the Act.

COMMENTS OF THE COMMISSIONER AND CORRECTIVE STEPS ENVISAGED BY HIM: The collective agreements and the Affirmative Action Plan of the Department, which was registered with the Department of Public Service and Administration, by its nature, were endorsed in the Departmental Bargaining Council and therefore the relevant correct procedures were applied in effective staff positioning.

The principle of transformation requires the reshuffling and suitable placement of staff and based on the aforementioned the Department assigned members to specific positions.

The application by members for more senior positions cannot be controlled by the Department and, as the principle of application for more senior positions is in line with the new philosophy of human resource practices in the Government Service, the said principle in itself is the reason for most of the horisontal relocation of members in the Department.

The Department is currently in the process of establishing a procedure to ensure that written consent for transfers are documented on file.

3.8 ALLEGATION: Members of the policy board took excessive leave.

FINDING: No evidence could be found that excessive special, study or sick leave was taken by the members of the policy board. However, in terms of Departmental policy, staff, including senior managerial staff, were granted time off for overtime worked during weekends or public holidays. Furthermore, the system controlling the accumulation of such time and which provides proper authorization for such leave, was inadequate. in contravention of said policy, some staff members of the management echelon were granted leave for overtime worked during the week.

COMMENTS OF THE COMMISSIONER AND CORRECTIVE STEPS ENVISAGED BY HIM: The leave records of the members who are still in the employ of the Department were rectified. The Department is in the process of recovering the leave from the other two members, who have in the meantime terminated their services with the Department. Furthermore, a circular was sent to all managers to reiterate the content of the policy.

The Department is currently also assessing the procedures that are applicable to this policy to ensure internal control and accountability. The new procedures will be implemented once they have been finalised.

3.9 ALLEGATION: (a) A former Chief Deputy Commissioner offended a course in the United Kingdom that she did not complete. She did not reimburse the subsistence and travailing advance of R112 000 to the Department.

(b) She hired two minibuses at departmental cost for the attendance of her daughter's funeral in Botswana, the costs of which were not recovered.

FINDING: (a) The former Chief Deputy Commissioner was granted a subsistence and travailing advance of R102 820 to attend an advanced prison management course in the United Kingdom from 7 September to 6 November 1998. She did not complete the course and returned to South Africa on 26 September 1998. Although an amount of R60 199 was refunded to the Department, the balance was not claimed from her as the costs were actually incurred.

(b) Only one minibus was rented for 18 days by the Department at a cost of R9 029. Although the minibus was utilised for 3 days for the attendance of the funeral the costs involved were recovered from the responsible person.

COMMENTS OF THE COMMISSIONER AND CORRECTIVE STEPS ENVISAGED BY HIM: A departmental investigation revealed that the hiring of the minibus was unauthorized and therefore the Provincial Commissioner at the time, paid back an amount of R3 660 for the hiring of the vehicle for the purpose of the funeral.

3.10 ALLEGATION: The Goodwood Prison was built as an awaiting trial facility near the courts with parking bays for court vehicles and individual consulting rooms for legal representatives. However, to date, Goodwood Prison is being utilised for sentenced prisoners and was therefore not used for its intended purpose.

FINDING: The occupancy level and the type of prisoners incarcerated at the prison since October 1997 reveal that mostly sentenced prisoners were incarcerated. However, although it was built to accommodate 1 232 unsentenced and 460 sentenced prisoners, the Commissioner may, in terms of section 21 of the Correctional Services Act, 1959 1Act No. 8 of 1959), decide to utilise Goodwood Prison for the accommodation of sentenced prisoners based on the specific needs at the specific time.

3.11 ALLEGATION: Emthonjeni is a state of the art youth rehabilitation centre with a capacity to hold 640 sentenced youths. The building was handed over by the national Department of Public Works on 8 May 1998. To date, it holds only 100 youths as a test for the utilization of the building. Poor planning has led to a fully equipped expensive institution being grossly underutilized.

FINDING: The prison was built at a cost of R123 million and officially opened on 25 August 1998 with enough facilities to accommodate 640 youths. The prison was in operation from August 1998 to December 1998, during which time it was run with a manageable group of prisoners and members to test the security and operational efficiencies. The occupancy level during the said period varied between 163 and 200 youths, or 25 to 30 per cent of its capacity. The prison was not used during January 1999. From 1 February 1999 to 1 July 1999 the prison was used as a basic training facility. The costs involved in not having utilised the facility to its full extent since its completion and the additional costs or the possible saving of costs by using it as a training facility, could not be established.

COMMENTS OF THE COMMISSIONER AND CORRECTIVE STEPS ENVISAGED BY HIM: The Department assessed the total procedure for the planning and opening of new prisons, and a new procedure has been approved by the Commissioner on 3 December 1998. The Department will now ensure compliance with the said policy document to ensure the effectiveness of the utilization of new prisons.

In his reply, the Minister indicated that he had studied the management report and looked at the response of the Commissioner. He further indicated that he hoped that the response of the Commissioner would help facilitate this Report which, among other things, he still needed to discuss with the President.