DPWI progress update on the Ethics, Compliance, Infrastructure, and Consequence Management Unit, with Minister

Meeting report

The Chairperson greeted Members of the Committee, the Minister, officials from the Department of Public Works and Infrastructure (DPWI), and members of the public. She declared that the meeting may begin.

The Chairperson indicated to the Committee that this meeting was a continuation of the Committee’s previous meeting held on 24 August 2022. The purpose of those two meetings was to check whether consequence management processes or procedures had been in place to prevent corruption in the Department’s national and regional offices. She expressed the Committee’s concern that the DPWI remained one of the most corrupt departments across the government. She highlighted that, if the Governance, Risk and Compliance branch is ineffective, then all efforts to stop corruption would be fruitless.

The Chairperson emphasised that one of the objectives of the Department was to fight corruption. It was also highlighted by the President, in his very first State of Nation Address (SONA). Hence, she found the establishment of the unit an encouraging step to move forward. She highlighted the importance of maintaining the functionality of the unit.

The Committee noted the apologies submitted by the Department’s Acting Director-General, Mr Alec Moemi, as well as Members, Ms M Hicklin (DA) and Ms L Mjobo (ANC). Ms Mjobo had reported that she would only be landing in Cape Town at 10:30AM. The Deputy Minister Noxolo Kiviet had submitted an apology due to her visit to Cuba.

Minister’s Opening Remarks

Ms Patricia De Lille, Minister of Public Works and Infrastructure, informed the Committee that the Department had made some progress in recovering the over-charging of leases, which amounted to R273 million. The Department has recovered another R60 million and is investigating with the Special Investigating Unit (SIU) on the matter.  

Ms De Lille also informed the Committee that the Department has launched its operation of dealing with the buildings that had been invaded illegally. The Department discovered that there were title deeds from the deeds’ office, which pointed to corruption. For instance, the building that housed the PAN African Parliament had been illegally sold. The Department is working closely with the SIU to monitor those matters.

Ms De Lille pointed out that the Department needed a system in place to detect and prevent corruption. In this case, the Governance, Risk, and Compliance Unit would be playing a critical role. Ms De Lille remarked that it was unfortunate that the unit had not been established since the proposal of its establishment in 2016. Under her leadership, the Department would make sure of the available budget for the unit. She informed the Committee that the Department would present, to the Committee, its current organigram as well as its funded and unfunded posts.

Briefing by the DPWI: Progress regarding efforts to get the Ethics, Compliance, Infrastructure and Consequence Management Unit fully operationalised

Ms Sasa Subban, Deputy Director-General: Real Estate Investment Services, DPWI, could not deliver the presentation due to poor internet connectivity.

Mr Lwazi Mahlangu-Mthembu, Acting DDG: Governance, Risk, and Compliance, DPWI, took the Committee through the Department’s progress as well as the challenges in establishing the Ethics, Compliance & Consequence Management Unit.

The establishment of this unit was included in the DPWI’s 2022/23 Implementation Charter, developed by the Minister and signed by all SMS members. Funding for these posts to enable the functions has been applied for and is under consideration. In the interim, the GRC (Governance Risk and Compliance) branch has been attempting to implement key Ethics Functions through available internal capacity, contract employees, and working in conjunction with other branches and the SIU.

(See Presentation)

Discussion

The Chairperson thanked Mr Mahlangu-Mthembu for the presentation and opened the floor to Members.

Ms S Van Schalkwyk (ANC) asked the Department about the impact of the vacant unfunded positions on service delivery currently despite the organisational structure having been approved by the Department of Public Service and Administration (DPSA). She also wanted to know if the Department had any plan in place to ensure that those positions are filled.

Ms Van Schalkwyk was fully aware that governance, risk, and compliance skills were very much sought after by all governmental departments and the private sector – which is similar to the conundrum which the Department faced in the built environment industry. Professionals with such skills are very sought after with the private sector offering very competitive benefits. Considering that, she wanted to know if there were strategies and resources in place to ensure that the Department could retain those employees. She further asked what the Committee could assist with in terms of the retention of employees.

Ms Van Schalkwyk suggested that practitioners in governance, risk, and compliance branches across all government departments must be coordinated in order to effectively bring consequence management to officials and ensure that officials adhere to their conduct. For those officials who are not toeing the line, consequence management measures must be instigated against them. The coordination role should be done across all three spheres of government with the assistance of the SIU and the National Prosecuting Authority. She asked whether the Department has ensured such coordination with the governance, risk, and compliance units of other departments as well as the Department’s regional offices.

Ms A. Siwisa (EFF) expressed her concern about the fact that already over 50 percent of the budget in the Department is being spent on salaries, though this does not translate into service delivery. She thus wanted to know where the budget for this branch would come from.

Ms Siwisa asked the Department who would be monitoring this unit for consequence management. Furthermore, she complained that lifestyle audits were usually only conducted on junior officials but not on officials at the senior management level.

Out of the 60 officials who had been subjected to lifestyle audit, she wanted to know whether those employees were selected from the Department’s national or regional offices, and from which period they were subjected to the audit. She wanted to know more details about the recommendations for those twelve employees who would be subjected to disciplinary action.

Ms Siwisa questioned if it showed that the Department’s monitoring unit was not as effective as expected since the issue has been brought to the Committee’s attention.

Ms Siwisa wanted the Department to elaborate on the findings of those 12 officials. She was concerned that the Department would take too long to instigate disciplinary action. In her observation, those ones tended to resign before they could be brought to the book. Then the Department would be left with wasteful expenditures. And it usually is a lengthy process to get those people to recover wasteful expenditures. She was expecting something more fruitful and substantial from the Department.

Ms S Graham-Mare was concerned that the Department’s presented plan sounds more like a wish list devoid of reality and viability. Given that almost the entire unit seems to be unfunded, she was unconvinced of its effectiveness.

Ms Graham asked the Department where the position of ethics officer would be positioned in the diagram. Would that be an independent position, or would the position not be created but rather the relevant additional responsibilities would be assigned to someone? If the position was to be created, she wanted to know when and where the position had been advertised, whether it is a permanent or a contract post, and when the Department foresaw that the position would be filled. She also wanted to know to whom the Office would be reported, the actual role of the position, the autonomy, and independence of the position, as well as the vetting steps for the officer.

Ms Graham was aware that the head of the governance, risk, and compliance branch in eThekwini is currently facing charges related to fraud. She thus emphasised the importance of the vetting process. She also asked the Department how it would deal with those employees that ended up resigning during the Department’s thorough vetting process.

Ms Graham wanted to know more about the standardised ethics code for the Office of the Ethics Officer.

Ms Graham was disturbed to hear that 20 percent of the Department’s employees did not comply with the lifestyle audit. It is a very high percentage. She asked the Department whether those who did not comply were implicated in any potential fraud related to tender projects, amongst other things.

Ms Graham pointed out that the branch must be empowered to take action against people who committed fraud and instigate disciplinary processes. This process must be faster in the future.

Mr W Thring (ACDP) endorsed Ms Siwisa’s and Ms Graham-Mare’s views on the lifestyle audits that need to be conducted on the Department’s senior managers.  

Mr Thring asked the Department whether actions had been taken against those who had deliberately inflated leases. He also wanted to know more details about the leases for those offices that were leased for the South African Police Service (SAPS) whilst waiting to occupy the buildings at Telkom towers.

Mr Thring pointed out the one official at eThekwini municipality who was recently arrested for committing fraud. He wondered what vetting measures had been in place before the employment of this official.

The Chairperson shared Members’ concerns about the level of corruption in the Department, and she emphasised the crucial importance of the unit in ensuring good governance. She spoke about the horror that they had heard about how an official – who was in charge of the governance, risk, and compliance unit – had been caught committing fraud himself in eThekwini. She thus wanted to know what the vetting processes were in ensuring that the candidate had the right moral integrity.

The Chairperson also wanted to know what measures were in place to retain those professionals. She also indicated that the Department should also be aware of and try to prevent them from colluding with corrupt officials.

Minister De Lille assured Ms Siwisa that the Department always refers to those meeting recordings for officials to remind themselves of what Members had requested the Department to do.

Ms De Lille responded to the question about the Department’s funded vacant posts. Together with the Director-General’s intervention, she reported that the Department was able to bring the vacancy rate from 11% to 10% from April 2022 to 31 October 2022, during which 244 employees were appointed. The 10% vacancy in the Department translates into 551 vacancies. The Department ensured that 357 vacancies had been advertised, of which some recruitment processes had already been completed, whilst some were still in the process. The Department has also hired human resource specialists for a period of 12 months to help build its capacity and address the 10% backlog. The Department’s target is to have all the positions filled by 31 March 2023. She estimated that the remaining 194 vacancies would be advertised by the end of February 2023. She assured the Committee that the Department would be continuously monitoring this process and would get regular reports every second week. She was confident that, since there are so many professionals who were unemployed and are looking for work, those funded posts should be filled in due course without much difficulty.

Ms De Lille responded to Ms Graham’s question on the vetting process. In the 2021/22 financial year, the Department identified 253 officials who needed to be vetted. However, she reported to the Committee that the State Security Agency (SSA) had been very slow in the processing of security clearance and had only received 23 clearances so far. She assured the Committee that the Department had made follow-up enquiries on the remaining clearance outcomes. She highlighted that the backlog in getting security clearance timeously is a challenge that cuts across many other governmental departments.

Ms De Lille assured Mr Thring that the Department could provide all the lease information regarding the SAPS offices. She acknowledged that there were a couple of months in which the rent was quite high. But the Department was able to bring down those high month-to-month leases from 2000 to 130.

Ms De Lille admitted that the delay in the establishment and operation of this unit was unacceptable. The Department should have done this back in 2016 as soon as the organisational chart had been approved by the DPSA. What the Department now does is to ensure that there is sufficient funding to fill all the posts. She promised that the Department will get the unit operational.

Mr Mthembu informed the Committee about the actual process of the lifestyle audit. The process was conducted independently by the SIU, from 11 January 2022. The selected persons to be audited under phase one were those employees on salary levels 14 and 15, which included all the Chief Directors in the national department as well as all the regional managers. He explained that Level 15 were Deputy Director-Generals. The first phase requires those persons to submit all the documentation, including their bank statements, assets as well as any directorships or shareholder-ship that they might hold. The second phase was the voice layout analysis where the Department would verify the information that it had received. The third step concludes the reports based on the documentation that the Department had received, as well as the voice layout analysis. He informed the Committee that those reports for the first phase were currently with the head of the SIU, which would then be signed off by the Minister. He further assured the Committee that phase two would be faster due to the lessons that were learned from phase one.

Mr Mthembu responded to the question of whether officials within the Governance, Risk, and Compliance Branch would be vetted. He explained that the vetting process normally would be determined by the SSA in terms of a candidate’s personal history or any areas of concern of any incumbents. He assured the Committee that the vetting system is robust and would go as far as the personal history of over 20 years to ensure that the right person is being employed. The entire vetting process is a top secret.

Mr Mthembu responded to the question on the linkages of corruption across the entire organisation. He informed the Committee that, as the ethics committee was formulated, the Department was also undertaking a process that reviewed all the components of the organisation that had elements of and had been exposed to corruption and unethical conduct. The Department also had labour relation experts that dealt with the conduct of officials and then consequence management measures would be determined – whether it was punitive or corrective measures. Secondly, the Department also reviewed the information clearance provided by the Security Services. Thirdly, the Department also reviews its supply chain management practice and guidelines in terms of the Public Finance Management Act (PFMA) and relevant procurement policy. Officials are being vetted and trained to understand the consequence of breaching those protocols. Fourthly, from the HR’s point of view, the Department also requires its employees to disclose their financial statements, ownership of assets, etc. Fifthly, the Department also reviews the recommendations made by the SIU as well as the findings of its internal investigations to correct and address systemic issues.  

Ms De Lille reported to the Committee that she had instructed the Department to provide a list of the 12 employees who refused to be audited. Her instruction to the Department officials was that the employees must willingly subject themselves to the lifestyle audit because it is the term of their employment and is a national instruction. If officials refuse to comply, consequence management measures should and would be implemented immediately.

The Chairperson indicated to the Department that the Committee would continuously ask Committee Members those questions. Given the critical role this unit would play in good governance, she emphasised that it cannot be allowed to fail. The Chairperson also expressed her appreciation to the Minister, for the steps that she had taken against the 12 employees who are not willingly subjecting themselves to a lifestyle audit.

Ms Graham reminded the Department that her question on the position of the ethics officer had not been responded to.

Ms Siwisa said that, due to poor internet connectivity, she could not hear the Department’s response about the 12 people who refused to subject themselves to a lifestyle audit. She also wanted to know why only 23 people out of the 253 officials had gotten clearance from the State Security Agency, and what was causing the delay.

Ms Van Schalkwyk indicated that her questions on the impact of service delivery, the retainment of professionals with expertise in governance, risk, and compliance, and the coordination of consequence management across different levels of the department had all not been responded to.

Ms De Lille indicated to the Committee that the Department would submit the information about the role and functions of the ethics officer in writing. She would also provide information on the autonomous status of the post, and indicated to the Committee that the position must be permanent.

Ms De Lille indicated to the Committee that she will not accept any unfunded posts and will make sure that all posts in the branch are funded and filled. She acknowledged that the organisational chart approved by the DPSA was there for operational purposes and that the responsibility now fell on the Department to fund all those posts. It is the Department’s responsibility to ensure that there must always be funding in the budget.

Ms De Lille acknowledged that some vacant posts do have an impact on service delivery and, to an extent, the performance of the Committee. She pointed out that is why the Department is not performing at its optimal level. The Department must fill all its vacancies as soon as possible. She promised the Committee that, when the Department reported again, it would be able to demonstrate the complete funding structure of the Governance, Risk, and Compliance branch, which had been approved by the DPSA in 2016.

On the issue of vetting, Ms De Lille said that, since the SSA was the only agency with a legal mandate to do the vetting, the Department was entirely at its mercy for the processing of security clearance. She told the Committee that the Department had faced a similar conundrum in obtaining clearance timeously when SCOPA (Standing Committee on Public Accounts) had requested all senior managers to go for screening and vetting in 2020.

The Chairperson appreciated the Minister’s response and indicated to Members that, should they have more questions, they could get the Committee Secretariat to forward them to the Department. The Chairperson appreciated the Department’s willingness to fight corruption in the Department and its regional offices.

The Chairperson informed the Members that the Committee was supposed to deal with a petition in today’s meeting as well. However, due to the petitioner writing an exam, the item would thus not be part of the meeting. The Committee would only be able to deal with this petition next year.

Consideration and Adoption of Minutes

Committee Minutes for 19 October 2022 and 09 November 2022 were considered and adopted.

Since the Committee Minutes for 02 November 2022 had not been sent to Members prior to the meeting, the Committee agreed to adopt it tomorrow.

Ms Siwisa requested that the Department send a detailed response to her questions in writing. She had been struggling to hear the responses due to poor internet connectivity.

Mr Thring said that the Committee had amended its programmes in the fourth quarter, and he wanted to know if the scheduled oversight visit was still to take place, being mindful that Parliament would go into recess the following week and that the Committee still had to deal with the Section 89 report.

The Chairperson replied that, with the new amended programmes, the Committee cannot do the oversight anymore and that the oversight had to be postponed to earlier next year.

The Chairperson thanked everyone for attending the meeting.

The meeting was adjourned.