Special Investigating Unit

Presention to Parliament 10 June 2003

Willie Hofmeyr Head

LEGAL STATUSLEGAL STATUS

The SIU is a Schedule 3 Public EntityReports to Parliament and the President

VISION & MISSIONVISION & MISSION

To be a world-class anti-corruption agency

An anti-corruption agency that performs high quality investigations of corruption and takes legal action to prevent and recover losses of state assets in the public interest

Advantages of SIUAdvantages of SIU Unique role in that only institution that uses the

civil law to recover money Can do whole process – from investigation to final

litigation Added advantage that need not prove case beyond

a reasonable doubt, but only on a balance of probabilities

Also, unlike criminal fraud where state has to prove subjective intent

In civil law a negligent or even innocent misrepresentation is sufficient

Effective and economic Effective and economic investigationsinvestigations

The SIU provides forensic investigation services at no additional cost to government

Can match almost all private sector services at about a third of the cost

Can also provide a proper completed investigation since it has investigative powers, members can take proper affidavits

After private investigations the report usually need to be backed by proper evidence leading to delays

(Continued)(Continued)

Also assist with the investigation and prosecution of the criminal matter alleviating the resource constraints in the criminal justice system

The Special Tribunal ensures that litigation proceedings are swift as opposed to the lengthy delays that may occur in other courts.

Building PartnershipsBuilding PartnershipsIt is vital to work with government to fight

corruption effectivelyFocus on building good working

relationships with those state institutions that need ongoing investigations

Sensible to spend some of the funds going to the private sector on working with the SIU and building its capacity

i.e. build capacity in the state that will be permanently available to fight corruption

OVERVIEWOVERVIEW 2002/2003 2002/2003

In last year’s annual report reference was made to a 10 point strategy to put the SIU “back in business” as one of the premier corruption fighting institutions in our country. Significant progress has been made in implementing this strategy.

1. Creating certainty about 1. Creating certainty about the future of the SIUthe future of the SIU

It is no longer affecting staff morale in the SIU

Although there is not long term certainty

2. New cases for SIU2. New cases for SIU

There is now a steady flow of work to the SIU, esp through DCS

8 new investigations received during the year

Still undue delays in receiving proclamations

3. Increasing Capacity 3. Increasing Capacity Investigative capacity has been

substantially increased : Permanent staff 40% increase - 74 to 103Total staff 58% increase - 85 to 133

Filled old vacanciesBut mainly because of additional funding

received from other state institutions

Important way of building capacity has been to build to develop an effective training program

Increase skills of own staffBut also take responsibility for training own

recruits rather than “poaching”

4. Improving representivity 4. Improving representivity Employment equity plan is in place plus

employment equity forum   A major focus in recruitment is to improve

representivity, especially at a management level Challenge in financial investigations, but achieved

good progress 67% of all permanent staff are from designated

groups - 43% are black If contract workers are included, 48% of unit

members are black

5. Ensuring competitive 5. Ensuring competitive salariessalaries

Salary grading performed by external consultants to align SIU salaries with equivalent structures in the public sector 

Likely to be implemented during 2003/2004Confident that this will allow us retain our

present staff by offering them a proper career path

And allow us to continue to recruit skilled new staff

6. Promoting greater 6. Promoting greater efficiencyefficiency

A true project management approach adopted

Successful in introducing clearer time frames and greater accountability

Comparison done with best practice in the market with the aim of optimising productivity

7. Legal changes to 7. Legal changes to improve effectivenessimprove effectiveness

Effectiveness of SIU severely affected by a number of judgements

In addition, the present referral and litigation processes are ineffective

Adv Wim Trengove SC briefed for advice on possible amendments, as well as on related constitutional issues

Legislative amendments to be tabled in Parliament

8. Establishing a national 8. Establishing a national presencepresence

Previously SIU based in East London with teams focussed on each province and a satellite office in Umtata

Decided that it would be more effective to establish a national presence

Pretoria office now fully established Durban office experienced significant growth Satellite offices in Mpumalanga and Cape Town

to be established during 2003/2004

9. Improved cooperation 9. Improved cooperation with law enforcementwith law enforcement

A special effort has been made to improve cooperation with other law enforcement agencies to ensure effective criminal action where evidence is available indicating a criminal offence

With resource constraints in the criminal justice system, not sufficient simply to refer matters to the police or NPA since there may not always be the capacity to deal with them adequately

Made investigators available to assist the police in compiling dockets that are court-ready – eg Nontenja

Cooperated closely with other law enforcement agencies, eg in JACT, DCS investigation, housing investigation

Handed several matters to AFU where their powers more effective – Magistrates case, Nontenja, Maropeng

NDPP is prepared to give delegations to experienced lawyers in the SIU to do the prosecution in cases investigated by the SIU

10. Building partnerships 10. Building partnerships with governmentwith government

An effective partnership has been established with DCS – 25 dedicated SIU members

Limpopo Dept TransportKZN Department of Housing

Notable casesNotable casesNontenja – Umtata attorney who defrauded

state of R19m - Accused sentenced to 20 years imprisonment and asset forfeiture order granted

Witness Protection Program (KZN) - all staff removed - investigation of widespread corruption by officials of the WPP in conjunction with NPS, DSO and SAPS – secret funds were abused, own houses let

Notable Cases (cont.)Notable Cases (cont.) KZN Tare Weight investigation of fraudulently

reduced licence weights of vehicles resulting in losses of millions – a lot of progress made and more than R1 million recovered

Limpopo investigation of all drivers licences issued since 1994 in cooperation with provincial Dept of Transport

Found nearly 10 000 licences issued irregularly and 1 400 already physically cancelled

Working with DoT

DCS investigationDCS investigation Full-time project team of 25 members R17m from 6 doctors, incl R7.6 m from Dr Bham Problems with prison and private pharmacies,

petrol cards Assaults, drugs, Booking prisoners out Selling of jobs Promotions and appointments – nepotism Agriculture False qualifications Irregular parole, remission

Housing investigationHousing investigationHousing Massive investigations of all state

subsidies granted in Gauteng, KZN and N Cape – valuable lessons learnt

Included are several conveyances entrusted with housing money, incl TR Mfeka, Mlaba Mkaya Inc, T Mvelase, HVB Makhanya

Discussing a permanent national project with Minister of Housing

Univ Natal Law Clinic to assist small victims

42 866 sites inspected27 projects completed

Agri-Eco investigationAgri-Eco investigationFinal report about to be issuedMajor asset verification done for the State –

R75 million of assets secured

JACT investigation in JACT investigation in Eastern Cape Eastern Cape

Joint Anti Corruption Task Team in Eastern Cape – with SAPS, NPA

Instrumental in setting up infrastructureSeconded members to assist in criminal

investigationsHave applied for mandate to investigate in

terms of Act 74/1996

Umanyano investigationUmanyano investigationRecovery of assets of the former Transkei

Road Transportation Corporation liquidated in 1996

A number of fixed assets already identified and being recovered

ACHIEVEMENTSACHIEVEMENTS

Outputs

Performance

Measures

2002/2003 Target

2002/2003

Actual

(Unaudited)

2003/2004 Target

Investigation of corruption and prevention of losses to the State

Savings (incl preventions)

Cash

recoveries

R60m

R40m

R90,5m

R37,5m

R70m

R50m

Totals R100m R128m R120m

Savings and Preventions

2002/2003

Actual

(Unaudited)

Total

Notatable cases: Agri-Eco asset verification Namaqualand Housing Project

R90,5m

R75,4m

R14,0m

ACHIEVEMENTSACHIEVEMENTS

Cash Recoveries

(incl. cash recovered by third parties)

2002/2003

Actual

(Unaudited)

Total

Notatable cases: Department of Correctional Services Ghost Workers – pension funds

R37,5m

R17,0m

R14,0m

ACHIEVEMENTSACHIEVEMENTS

Description

2002/2003

Actual number of

cases

2003/2004

Target number of

cases

Criminal prosecutions initiated

Criminal prosecutions concluded

Disciplinary proceedings initiated

Disciplinary proceedings concluded

Other remedial action initiated

Other remedial action concluded

13

1

125

unknown

3000

1400

200

300

3000

ACHIEVEMENTSACHIEVEMENTS

Notable cases:Department of Correctional ServicesLimpopo Department of Transport KZN Housing conveyancers

Not always possible to quantify impact of SIU

ACHIEVEMENTSACHIEVEMENTS

BUDGET - INCOMEBUDGET - INCOME

Details

2002/2003

Unaudited

2001/2002

Audited

Income

- Government Grants

- Department of Correctional Services

- Limpopo Department of Transport

R25,5m

R22,9m

R 2,5m

R 0,4m

R21,9m

R21,5m

R 0,0m

R 0,4m

BUDGET – EXPENDITURE BUDGET – EXPENDITURE

Details

2002/2003

Unaudited

2001/2002

Audited

Expenditure

- Operational salary expenses

- Operating expenses

- Non-operational salary expenses

- Overhead expenses

(incl. Depreciation)

R30,2m

R16,2m

R 8,3m

R 3,1m

R 2,6m

R19,6m

R 9,6m

R 5,1m

R 2,8m

R 2,1m

Excellent administration and financial controls

PFMA compliantGood use of information technologySerious about training – eg Computer Based

Training

Thank you