The Standing Committee on Public Accounts, having considered the Report of the Auditor-General on the Findings arising from a Special Investigation into Alleged Irregularities among Senior Officials at the Department of Correctional Services [RP 123-99], reports as follows:
The report of the Auditor-General on the special investigation was tabled in Parliament on 7 September 1999. It was referred to the Committee by the Speaker for consideration and report.
On 8 September 1999 the Committee held a public hearing with the Commissioner of Correctional Services, Dr K Sitole, and certain senior officials of the Department. Additional information was thereafter requested from the Commissioner and two sets of addit ional questions were submitted to him, to which replies were received. Additional information was sought from other sources, such as the Premier Soccer League (PSL), which was put to the Commissioner for response.
The Committee evaluated the responses and re-examined the evidence, especially with regard to allegations in respect of the soccer club, overseas trips, merit awards, and several miscellaneous matters.
Paragraph 3.4 of the report considers the allegation that the Commissioner privately owns a soccer club in the PSL. This is deemed problematic because of suggestions of possible conflicts of interest relating to his dual capacity as employer of some of the players and as soccer boss, possible personal material gain from sponsorship to the club from a company linked to the Department, and because participation in professional sports codes is a time-consuming and expensive exercise, especially with respect to senior staff spending a lot of time preparing for competition, both as players and patrons.
The Committee has established that the Commissioner received permission from the former Minister of Correctional Services to manage an amateur soccer team, Spartak FC. The Commissioner gave evidence that the team was amateur and had no professional players .
The Committee has established in writing from the Chief Executive Officer of the PSL that Spartak FC, by virtue of being a member of a professional league, "can be classified as a professional club though some of its players are not full-time but are emplo yed elsewhere". The PSL confirms that "all the players are registered as professionals or contract players" and do receive earnings for 10 months of the year. The financial arrangements of the players make them professional by definition.
Therefore, it can be concluded that the club is professional.
Dr Sitole had permission to manage and run an amateur club, while, in fact, this club was professional. The Commissioner misled the former Minister and the Committee on this matter.
The Commissioner, when requested by the Committee in writing to comment on the contents of the letter from the PSL, refused to do so.
In addition, Dr Sitole bought into the club in October 1996, while he only received permission to be involved in an amateur club on 27 October 1997. He, therefore, managed and ran the affairs of the club without authorisation for one year.
The club received grants and allowances from the PSL, and may also have received prize money from the PSL and transfer fees from the sale of players. The PSL values the club at between R600á000 and R1 million. It can thus be concluded that Dr Sitole had a significant financial interest in the enterprise.
Notwithstanding the contradictions in the Commissioner's testimony as to whether he still owns the club or not, the Committee has established that during the period that Dr Sitole definitely owned Spartak FC, a company which had a contract with the Departm ent, had also sponsored the club. This is an unacceptable practice, as it could lead to a situation where relationships between a government department and a company are driven by issues unrelated to the best interests of the State and serve the interests of an individual.
The former Minister of Correctional Services gave Dr Sitole permission to retain the sponsorship from the company concerned, but on the basis of false information. Firstly, the Minister was told by the Commissioner that the club was amateur and, secondly, the Accounting Officer (the Commissioner) should have informed the Minister that such authorisation was contrary to Public Service Regulations.
Twenty-four members of the playing staff of Spartak FC are employed by the Department of Correctional Services. The Commissioner suggested to the Committee that he was simply fortunate to find so many good players in the Department. However, it seems more than a coincidence that four of the employees/players joined the Department on 8 August 1997, three others joined the Department on 25 February 1998, and all seven of them joined the soccer team on the same day. All in all, 10 Correctional Services members joined the team on one day and 11 joined the team within one to seven months after joining the Department - during the soccer season immediately following their appointment to the Department.
There is, therefore, the suggestion that the employment practices of the Department might have been linked to the personnel needs of the soccer club.
In addition, the Commissioner started recruiting players for the club from the Department before he had the permission of the Minister to manage and run the club.
Furthermore, the Commissioner may have caused the State employees involved in the club to contravene Public Service Regulations, as they received additional income from the club without written authorisation from the Head of Department (or at least the Com mittee was unable to confirm whether such authorisation had been obtained). Even if the Commissioner had given such authorisation, it would have constituted a conflict of interest, as he was the owner of the club.
Due to the inadequate attendance and leave records in the Department, it was not possible for the Committee to come to a conclusion with regard to the issue of the players and the Commissioner spending departmental time training, playing or travelling on b ehalf of the soccer team.
Paragraph 3.3 of the report considers the allegation that the Commissioner travelled extensively overseas at cost of both money and time to the State and did not adequately report back what he had learnt, as he was required to do. It was found that the Com missioner had spent 131 days abroad during a 20-month period.
The Committee is of the view that to spend more than 20% of his time out of the country in a 20-month period detracts from the role and function of the Head of Department.
This is especially so in the case of Correctional Services, which was experiencing significant financial management problems during the period under review, as confirmed by the Auditor-General's reports for that period and the fact that the Head of Departm ent was called before the Public Accounts Committee during that period.
The Committee was gravely concerned at the nature and purpose of some of the trips. For instance, the Committee questions whether the World Police and Fire Games were sufficiently important to warrant the Commissioner spending 10 days out of the country, a t the Games. This is especially so as he had spent 11 days out of the country in the month preceding the Games, and immediately after the Games spent a further 15 days in three different countries.
Similar concerns exist with respect to the Commissioner spending 10 days abroad, researching prison doors, five days investigating uniforms, five days hearing about the use of technology in training, and eight days examining prisoner transport bus specific ations.
The Committee felt that the objectives of these trips could have been achieved by the staff members directly responsible for these matters undertaking the investigations and reporting back to the Commissioner.
The trips cost the State R528 889 and significant amounts of the Commissioner's time.
In addition, and of concern to the Committee, is that on almost every trip more money was spent than had been budgeted for. Overall it would appear that for the 1997-98 financial year the Department overspent its international travel budget by approximatel y R150 000.
The Committee requested the Commissioner to justify the trips. His inability to furnish detailed departmental motivations and schedules, made it impossible for the Committee to assess whether the State gained value for money. Where motivations for the trip s are given, they are vague and general. In addition, some of the reports on the trips comprise only one or two broad paragraphs. In respect of some of the trips, such as the one to Hungary from 14 to 22 June 1998, no departmental itinerary, schedule, moti vation or subsequent notes on the trip could be furnished.
In his evidence before the Committee, the Commissioner was unable to show that the State had received value for money. For instance, he listed a few projects which the Department had undertaken as justification for the trips. This was rejected by the Commi ttee, as there were no clear linkages between the projects and the trips.
For the visit to the World Police and Fire Games, three days' allowance was paid to the Commissioner, his wife and officials, when in fact the records show that there was only one working day on the trip. This is questionable use of public funds.
On the same trip, the Commissioner applied for four days of G122 leave (leave credit in lieu of overtime) when only one day of work had been undertaken. During all of the travel undertaken in the reporting period, he applied for 14 days of such leave. The Committee also noted that, since joining the Department, according to the Persal system, the Commissioner has taken no normal leave and only five days of G122 leave.
In addition, the Commissioner's evidence to the Committee on the trips contained inconsistencies. For instance, he suggested in his oral evidence that a trip in the USA had to be extended by 16 days because the Minister fell ill, while in his written repli es the period was seven days and he made no mention of the illness in his motivation for the extension, citing instead the cost-effectiveness of him joining the Minister for a conference. Similarly, with respect to a trip to Israel that was converted from official to private, the Commissioner claimed in oral evidence that he took 10 days off, while his subsequent written reply stated that he took five days off. With respect to this latter trip which became a private visit, the Committee could find no eviden ce that the Commissioner had applied for leave for this period.
On the basis of the above, it is the view of the Committee that a significant proportion of the Commissioner's international travel did not provide the State with value for money. The supposed purposes of the trips could have been achieved at a fraction of the cost and without the Commissioner spending more than 20% of his time abroad.
Paragraph 3.1 of the report considers the allegation that the Commissioner received a merit award of 18%, and he merits himself. It was further found that he had in fact received two merit awards during 1997, amounting to R54 646 in each instance. It would appear that no other Head of Department received such merit awards during this period.
The granting of the merit awards left much to be desired. Candidates were evaluated by their subordinates or their colleagues and the appraisal forms seriously lacked evaluatory content, leading in most instances to perfect scores.
On the only occasion that the Commissioner was evaluated for an award, the appraisal was conducted by his two deputies, who awarded him the maximum possible score. The Committee noted that these two officials were also recipients of merit awards.
During a two-year period, 11 out of a possible 18 members of the Correctional Services Management Board received merit awards. In two instances, awards were given to members who had been on the board for just over a year, a short time in which to assess th em for such material bonuses.
The laid-down criteria for the merit awards specifically excluded any member who had applied for a voluntary severance package. There is the suggestion that in the case of two members of the board, the merit awards may have been arranged in such a way as t o enable them to receive their awards and within a few months to also receive voluntary severance packages.
The Commissioner's evidence on the merit awards contained a number of contradictions, especially with regard to the role of the Minister in the granting of his own award.
It must, however, be stated that the night before the Committee hearing of 8 September 1999, the Commissioner instructed his legal representative to pay back the awards, as the Treasury had determined that they constituted unauthorised expenditure due to t he unprocedural granting of the awards. Nevertheless, he reportedly still owes the taxed portion of the awards to the Department.
Paragraph 3.2 of the report considers the allegations that the awarding and administering of VSPs contradicted the guidelines for doing so. Due to confusion as to which guidelines applied at various times, the Committee was unable to make a definitive find ing on this issue.
There were, however, a small number of VSPs that, in terms of all the guidelines supplied, were inappropriate.
It must be noted that the Committee's investigation focused on those matters about which the Auditor-General expressed grave concern. The Committee was unable to investigate other matters raised in the report due to time and capacity constraints.
However, the Committee noted that various other shortcomings in management measures were also revealed by the special investigation. Some of these issues will be addressed as part of the regularity audit of the Department.
Since the report of the Auditor-General was tabled, a number of additional allegations with regard to the Commissioner have come to light in media reports and in a document drafted by the Correctional Services Staff Forum. The Committee did not investigate these allegations, as they fall outside its present remit.
The Commissioner obstructed the work of the Committee in that -
He may intentionally have misled the Committee on the status of the soccer club. He stated unequivocally that it was an amateur club. The letter from the CEO of the PSL makes it clear that it is professional. The Commissioner's refusal to comment on the co ntents of the letter is unacceptable to the Committee, as it hindered our investigation.
The Commissioner's general behaviour and attitude is inconsistent with aspects of the Constitution, Public Service Regulations, the Public Service Code of Conduct and Treasury Instructions.
The information before the Committee suggests that the Commissioner -
On the basis only of the matters investigated by the Committee, we thus believe there is prima facie evidence to suggest that the Commissioner should not hold high office in the Public Service.
The Committee therefore recommends that the relevant Executing Authority urgently reconsider the Commissioner's position and, should it deem it necessary, enquire further into the above matters and any other relevant matters pertaining to the Commissioner' s behaviour and performance in office.
The Committee recommends accordingly.
Report to be considered.