Private Security Industry Regulatory Authority: 2013/14 Budget & Annual Performance Plan

Meeting report

Private Security Industry Regulatory Authority: 2013/14 Budget & Annual Performance Plan
Mr Sam Chauke, Director, Private Security Industry Regulatory Authority, began by summarising the Authority (PSIRA or the Authority) mandate, which was to promote a legitimate security industry consistent with the Constitution. PSIRA had to ensure that the industry acted in the public and national interest, that a minimum occupational standard of conduct was enforced amongst service providers, that the registration process was transparent and fair, that there was compliance through active monitoring and investigation, and finally that services that were responsive to the need of users were promoted.

Key external challenges faced by PSIRA included unregistered security operators, increasing risks posed to citizens by the criminal element, exploitation of labour by the security industry, the need to improve access to PSIRA without compromising quality, the rapid growth of the security industry, ignorance of the law, and various legal challenges. Internal challenges were summed up as relating to funding, poor staff morale, resulting in high turnover, and a general lack of resources. In light of these there was a strategic focus on effective regulation of the industry, revenue capacity or collection, and expanding PSIRA’s footprint.

Strategic Objective 1 was to ensure excellent service delivery. This meant enabling effective compliance with and enforcement of PSIRA legislation. Objective 2 was to ensure effective financial management, so as to achieve financial stability. Objective 3 was to have efficient and effective processes, relating specifically to the use of cutting edge technology. Objective 4 dealt with Stakeholder and customer relationship management and sought to ensure effective communication between all parties. Objective 5 was industry stewardship to make PSIRA a centre of excellence in private security research. Objective 6 sought to ensure that PSIRA had competent and skilled employees who were able to execute their task effectively, and in this there was a focus on competent and ethics.

Programme 1: Law Enforcement
Mr Philani Mthethwa, Deputy Director: Law Enforcement, PSIRA noted that the purpose of Programme 1 was to enable effective compliance with and enforcement of PSIRA legislation. Specific objectives in this programme were to make PSIRA accessible to all, to have an industry characterised by professionalism and trustworthiness, to have full account of all firearms in the industry and to process cases efficiently.

Indicators were shown for the strategic goals (see attached presentation) and it was noted that the number of enforcement criminal cases opened against non-compliant security service providers was targeted to increase from 1 800 in 2012/13, to 1 920 in 2013/14, with further smaller increases in the following two years. The target for number of investigation finalised in respect of security service providers was also set to increase from 500 to 600, and thereafter by 50 per year. The number of inspections to be conducted at businesses was set to increase from 2 800 to 3 000 and thereafter by 250 per year. The number of inspections conducted on security officers was also set to increase, from 16 000 to 18 000, and thereafter by 500 per year. The target for frequency for conducting review of fines regulations was a new indicator and was to be set annually. The date for the establishment of the Firearm Regulation Committee was also a new indicator, but was hoped this would be done by September 2013, and thereafter would be monitored.

Mr Peter Mongwenyana, Deputy Director: Finance, PSIRA, explained that the budget allocation to Programme 1 would be R68.38 million for 2013/14, increasing over the next two years to total R222.061 million over all three years. This comprised 42% of the total expenditure estimates.

Discussion
The Chairperson noted that these figures were not the same as earlier published figures and said that this was not the first time PSIRA had displayed that problem.

Mr V Ndlovu (IFP) asked for clarity on the comment about the increased risk posed to citizens. He also wanted to know if PSIRA was admitting that employees in the industry were being exploited.

Mr Chauke said that there were occasionally incidents of criminal activity by security officials and that this was something to be avoided as much as possible. He said that PSIRA was aware that the industry exploited officers but did not condone this.

Mr M George (COPE) expressed concern over the external challenges. He said that these were natural challenges in the course of PSIRA’s mandate and asked for specific policies that were targeting these challenges.

Mr Chauke said that unregistered companies were a constant challenge and formed part of PSIRA’s mandate.

Mr George also complained that the Firearms Committee had taken far too long to be set up, and that there was a lack of firearms control in the environment.

Mr Chauke responded that although the Firearms Committee had been deferred to September there had still been activity, notably cooperation with the Firearms Registry. By the time the committee was functional, all the necessary channels would already be up and running.

Mr Mthethwa added that the firearms licences were not issued by PSIRA and that the Central Firearms Licence Register only had two categories. All businesses involving firearms were included in the register, which made it difficult for the registry to be able to establish how many security businesses there were. In the past, many security agents acted as sole members, and when they retired or died this was not adequately reflected in the Register.

Ms D Kohler-Barnard (DA) said that there was no indication of achievement, as all the targets had been increased, but without correlating success rates.

Mr Chauke responded that PSIRA did not want to set targets that could not be achieved. Not all targets were included but that did not mean that they were not still being pursued.

Ms D Sibiya (ANC) asked for clarity on staff turnover rates.

Mr Chauke referred back to the issue of low morale, and revealed that staff satisfaction surveys were showing a number of problems. Morale appeared to be improving but there remained concerns over salaries and internal communication levels.

Ms M Molebatsi (ANC) asked about the fluctuations in operating expenditure between 2012/13 and 2013/14.

The Chairperson again pointed out some contradictions between other published documents, such as programme numbers being different, and changed expenditure amounts for various matters, including research and development. The document given to Members was also paginated incorrectly and she was concerned about the lack of attention being paid to such matters.

Mr Mongwenyana said that expenditure figures took into account inflation and changes in the number of individual events that would require different resources. He said that the contrasts in figures could be explained away by rounding up or down of numbers. He said that in total there were very small differences and that this was due to rounding up.

The Chairperson said that she was not satisfied with the explanation for the discrepancies in the Estimates of National Expenditure. She did not agree with the point that the figures were merely “rounded up”, and said that there were numbers that were so different that this explanation could not apply. Some had been increased, some had decreased, and others had been left out altogether.

Mr D Stubbe (DA) asked if there was a plan to finalise backlogs.

Mr Mthethwa noted that PSIRA, after opening the case, would hand it over to detectives for prosecution. All PSIRA could do thereafter was monitor the issue. In relation to the inspections, he said that the baseline figure of 16 000 related to individual officers rather than businesses. This had been over-achieved in the last year, hence the increase to 18 000 for the year 2013/14.

Mr G Lekgetho (ANC) asked for the number of security operators registered at PSIRA.

Mr Chauke noted that there were over 6 000 companies active in the industry.

Mr Ndlovu said that the core purpose of PSIRA was to ensure that all security companies were registered and their employees behaved appropriately. He asked how many employees were engaging in criminal activity and also what sanction was taken against their employers.

Mr Chauke responded that there were indeed members of the industry with criminal records and he said that certain categories were permitted under the PSIRA Act. Not all offences excluded an individual from participating in the industry. In addition, there were people who were cleared for registration without criminal records, but acquired them once in the industry.

Mr Ndlovu asked what happened to the cases which were not successfully investigated.

Mr George added to this, saying that if prosecution was out of the hands of PSIRA, it should not be using this as a target.

Ms Kohler-Barnard expressed concern that PSIRA admitted not setting targets that it would not achieve. In addition, there were so many targets named in the previous year, but excluded in this, that this logic painted a picture of systemic failure. She said that targets were not being set in terms of the core mandate but only in terms of showing artificial success.

Mr Chauke confirmed that the September target for the Firearms Committee would be met.

Mr Stubbe asked why numbers of enforcement criminal cases opened against non-compliant security service providers could be projected to increase. He said that there was no basis for predicting a set figure of how many instances there would be.

The Chairperson said there was also a difference in the total expenditure figure given, compared to the Estimates of National Expenditure (ENE), of approximately R300 000. She said that the Committee could not possibly defend the budget being allocated to the PSIRA environment when there were such obvious discrepancies. She said that the Firearms Act had been passed 13 years previously, so questioned why only now was PSIRA intending to enter into a Memorandum of Understanding (MOU) with SAPS, despite apparently being a target area. Furthermore, there were no longer any specific targets related to firearms.

The Chairperson asked the delegation to give consideration to the concerns of the Committee, saying that this was a normal oversight process with direct budgetary implications. She said that where mistakes were being made, they needed to be acknowledged, so that progress could be made.

Mr Chauke said that Firearms Control Act required joint inspections between PSIRA and SAPS, which was why the outcomes had been held back pending the establishment of the Memorandum of Understanding. Where firearms went unused for three years or more, they were confiscated. The firearms training had been removed because every new inspector was automatically trained. The 1 920 expected cases of non-compliance was based on previous figures and the number of employees. It was assumed that the increase in capacity would lead to more inspections and therefore more instances of non-compliance being discovered.

Mr Mthethwa said that the ENE allocation by National Treasury allocated more than what was shown in the Budget Plan and that the two would be reconciled. He acknowledged the differences and apologised for giving the incorrect figures. The correct figures would be tabled by the following morning.

Ms Kohler-Barnard asked for more details on the Private Securities Industry Levies Act and at what stage of implementation it was.

The Chairperson asked if there was an assumption that the pending court case would go in PSIRA’s favour. She asked what contingency existed, in the event that this did not happen.

Mr Chauke said that there were anticipated changes on the latest Levies Act. He said that these would be tracked so as to have all policies align with legislation.

Ms Kohler-Barnard asked about the large allocation towards Research and Development, and what the money was used for.

Mr Mongwenyana said that the alignment of R900 000 for Research and Development was within the Communications programme. He admitted that it should have been shown separately in the APP.

The Chairperson said that it was either a sub-programme or a new programme and that PSIRA needed to be clear on this. She said that there were serious implications for a programme not being reflected in an APP.

Mr Mongwenyana discussed the use of consultants, saying that this included legal services and IT costs. Legal fees had cost approximately R1.9 million.

Ms Molebatsi asked for a breakdown of budget allocations per programme in terms of the current index. She asked what the turnaround time was for completion of registration.

Mr Chauke discussed turnaround time, saying that it took approximately 30 days to register individuals or companies. Mr Ndlovu asked what steps were being taken to ensure that PSIRA used cutting edge technology and what this entailed.

Mr Chauke elaborated on cutting edge technology, saying that this referred to areas such as the database, which was outdated and costly to maintain. It was hoped to be able to use SMS technology to inform applicants of the status of their registration processes.

Mr Ndlovu also asked about identified incidents of exploitation and what steps were taken against the responsible parties.

Mr Chauke responded to the question of exploitation, saying that in the previous year there had been 362 finalised cases of prosecution. Although PSIRA’s mandate was regulatory, there was some overlap with the Department of Labour. PSIRA did not give restitution powers, and could not order a company to compensate a security guard. In a number of cases, complaints would result in action and individual complainants would be kept informed and were encouraged to approach the Department of Labour for restitution. He said that there were about 52 inspectors, and they were tasked with monitoring many thousands of security officers, which posed a problem.

Mr George asked how funding could be an internal challenge, and wanted to know specifically what PSIRA meant by this. He also asked what the extent of “lack of resources” was.

Mr Lekgetho said that morale could be improved by improving communication and keeping employees aware of obligations. He asked if employees were being kept up with their targets.

The Chairperson said that this had already been partially dealt with.

Mr Mongwenyana said that VIP system support, the review of financial statements, IT support, recruitment fees and debt collection all came under consultant costs. The growth in sundry income was made up of several amounts. Annual fees for court cases were budgeted, with contested fees taken into account. A budget committee had been formed to review scenarios of litigation costs.

Mr Stubbe asked about revenue estimated for 2013/14, specifically whether it was interest or investment.

Mr Mongwenyana said that the estimated revenue amounted to interest on investments, and that this was considered in the budget. The institutions where these funds were invested were all Treasury-approved, with the main one being Nedbank. This was reported on during the year end reporting. The balance of the investment was fluctuating but he was not able to give an approximation of the value of the investment.

Mr Mongwenyana clarified that there was approximately R20 million invested by PSIRA. He said that the investment was essentially the bank balance and that if PSIRA were to close down that would be subject to subtraction of debts.

Ms Kohler-Barnard asked about the Levies Act, saying that there had been high increases in fees for members of PSIRA. She asked what the legal challenges were for this.

The Chairperson asked for clarity on fee income, saying that the income generated was subject to legality and efficient collection. Pending court approval, many companies were withholding payment but the budget had not accommodated for this and was presuming that there would in fact be payment.

Mr Chauke dealt with the comments on the levies being charged to members. He said that the court date was in the following week and he was reluctant to discuss the details. He said that there were two main cases before court, one regarding fees and the other an allegation of an individual being refused registration.

Ms Kohler-Barnard asked why a budget committee had only just been established.

Mr Chauke responded that the budget committee had been established so as to take into account more factors than were previously used in monitoring expenditure. There had been financial control in the past but not in as focussed a manner. The budget committee met monthly.

The Chairperson asked if the old building had been sold, and, if so, for how much. She asked if the sale had been signed off on by National Treasury. She asked if the building had been condemned and if this had been made public for safety reasons.

Mr Chauke answered that the sale had not yet been concluded and the matter remained at Ministerial level. Approval was pending, after which a report would be submitted to the Committee.

Mr Stubbe wanted to know if the building was abandoned or being leased.

Mr Chauke revealed that the building had been abandoned.

The Chairperson wanted to know why a new strategic plan had been developed, saying that this should only happen on rare occasions. It had been stated that there were even strategic objectives developed, but only six were spoken for in target indicators.

The Chairperson asked for details around the appointment of the Council, as the APP stated that the council had been appointed.

Mr Thula Bopela, Chairman, PSIRA Council, revealed that the council consisted of five members. Two of them had resigned. The remaining members were himself, the Deputy-Chairperson and General Anwar Dramat. At that stage the Minister had been alerted to the need for two more members. The Minister later requested a shortlist for prospective members, and the positions were advertised. Three names were given to the Minister and he was expected to make appointments following the relevant process. There was fortunately still a quorum, but if any were unable to attend, there would still be a quorum of two as per the Act.

The Chairperson said that she had understood that Mr Bopela’s term had come to an end and asked if it had been extended.

General Anwar Dramat, PSIRA Council Member, admitted that his appointment and that of the Deputy-chair had expired in December 2012 but that it had been extended by six months.

Ms Kohler-Barnard said that it was extraordinary to have a quorum of two in a five member council. She asked who had extended the contracts for the council members and also who was actually responsible for making appointments. She said that by choosing three candidates the Minister’s choice had been severely limited. She asked if this was normal process for selection.

The Chairperson added that the APP claim that the council had been filled was therefore incorrect.

Mr Ndlovu asked whether there was any quality control over PSIRA documents. He said that the trend of errors and inconsistencies was very serious.

Mr Chauke said that the omission of the seventh strategy objective was accidental and he apologised. Efforts were made to edit all documents but this was clearly not infallible.

Ms Kohler-Barnard asked if a risk management strategy had been devised.

Programme 2: Finance and Administration
Mr Mongwenyana said that this Programme existed to ensure that PSIRA was a financially stable and sustainable organisation so that it could at least break-even financially. There were a number of components in the programme, including finance and administration, which provided revenue management, effective financial management and auxiliary services to the Authority. The second component was Business Information and Technology, which rendered IT services to the Authority including development and maintenance of enterprise solutions. Supply Chain management looked at the acquisition of goods and services in line with the Public Finance Management Act. The Internal Audit component reported to the Audit Committee and the Accounting Officer. It also provided internal audit services such as compliance and performance audits.

The first key performance indicator was the date for implementation of pay-a-bill service via SAPO, which was a new indicator, that should be concluded by 31 October, after which it would be monitored. The percentage of revenue collected from billing was expected to increase from 77% to 80%, and then further increase to 92% over the next two years. The target for conducting reviews of administrative fees was also a new indicator, and that would happen annually. Review of bad debts would be maintained as a bi-annual review, occurring in June and March of each year. The frequency of reporting on financial performance would be improved from quarterly to monthly, and the frequency of reporting on performance management would be maintained as a quarterly system. The annual average ratio of working capital management was going to be improved from 0.75:1 to 1:1. PSIRA aimed to ensure that audit opinions would remain unqualified. The implementation date for presentation of Business Continuity Plan was another new indicator, and the planning would be done in February 2014, at the latest. The frequency of monitoring and reviewing IT strategy would be done annually, on 1 May. The number of IT user satisfaction customer surveys to be conducted, also a new indicator, was named as two.

The dates for development and implementation of IT policies such as the risk management policy and software licensing policy were set out as November. Turnaround time for the completion of IT repairs was going to be sharply reduced, from 36 hours to 4 hours. The same time period would apply to turnaround time for completion of Business Online Services. This programme would be allocated R47 million in 2013/14, R46 million in 2014/15 and R48 million in 2015/16, totalling 26% of total expenditure.

Discussion
The Chairperson asked why the pay-a-bill service date for implementation had been moved to 31 October.

Mr Mongwenyana admitted that the target had not been met for the original date of implementation for the pay-a-bill service but that this had been due to disagreement with the Post Office over fees and this was being negotiated.

The Chairperson asked why the target for revenue collection had been decreased to 80%, despite claims that collection had improved.

Mr Mongwenyana responded that the 90% debt collection target had been distorted by the court case, and this had warranted the target being lowered.

Ms Molebatsi asked why there was a decrease in compensation for employees if the finance unit was meant to have been capacitated. She also asked if the appointment of a new CFO would involve the council in the future.

Mr Mongwenyana explained that the decrease in compensation was due to decrease in personnel but that the finance unit was being strengthened in other ways, such as through systems. He was unable to give an exact figure for the number of employees in this environment and was therefore unable to explain how employee numbers had changed.

Mr Bopela explained that the previous CFO had left PSIRA in December of the previous year and that the position had been advertised but that the interim strategy was to quickly appoint a suitable person in a temporary capacity. The council was looking to make this appointment permanent.

The Chairperson asked for clarity on the appointment of the CFO and whether or not the position had been advertised.

Mr Bopela confirmed that an advertisement had gone out.

Ms Kohler-Barnard asked how much backlog existed for unpaid fees, and how much of the previous year’s backlog had been cleared. She also asked how much was being spent on collection agencies.

Mr Mongwenyana said that the collection of fees was done using an external agency, and this was included in the earlier figure for contracting. The expenditure on this was approximately R600 000.

The Chairperson asked if the ERP system had gone live by March, as it was intended to, and observed that it was no longer in the APP.

Mr Mongwenyana said that the ERP system had been concluded, but was not yet live, and would take three years to reach this point.

Mr Chauke said that from time to time targets proved to be unrealistic and the ERP system had therefore had to be broken into phases.

The Chairperson said that this was a target set by PSIRA and there was no excuse for it not being met. In light of it not having been met, she asked why it had been excluded from the APPs.

The Chairperson asked what was being done about the software licensing policy as there were discrepancies in projections.

This question could not be answered and it was added to the list of written answers expected from PSIRA.

Ms Kohler-Barnard asked why expected revenue was expected to decrease by 50% and why the sale of the previous Head Office was not included under “disposable assets” if it was expected to be sold soon.

Mr George said that he had expected an improvement in employment procedures but the procedure did not appear to have been improved at all.

The Chairperson asked what saving was being made in goods and services to the value of 27.8%.

She requested the answers to all outstanding questions in writing.

Programme 3: Communication and Training
Mr Chauke began by explaining that the main purpose of this programme was to ensure meaningful and fruitful engagement with all stakeholders, as well as achieve a full understanding of the industry, so PSIRA would be responsive to the needs and challenges of the industry. There were a number of components, such as Communication and Marketing, which provided effective communication between the Authority and key stakeholders, Training, which oversaw training of prospective service providers, and Research, which undertook to research developments in the industry over the medium term.

The Key Performance Indicators were discussed. The Communication Policy was to be approved and implemented in the upcoming year. Twelve public awareness activities on the role of PSIRA would be held. The date of the launch of the website was going to be May 2013. The internal communication strategy was to be developed and implemented by 30 June 2013. There were a number of national events to be profiled, including Workers Day, Heritage Day, Days of Activism against Women and Child Abuse and Human Rights Day.

The average turnaround time for the conclusion of applications for registration of individual security officers, where the applications met all requirements, was to be maintained at 30 days. The average turnaround time for the conclusion of applications for registration of security businesses would also be maintained at 30 days.

There would be five workshops for Research Development hosted and four Industry Compliance Forums established.

Mr Mongwenyana showed that the estimated expenditure for this programme was to be R25 million in 2013/14, and then, respectively, R26 million and R30 million in the following years. This totalled 15% of overall expenditure.

Discussion
Ms Molebatsi asked about participation in National Events, especially how this would manifest.

Mr Chauke said that there would not be money spent of parties or events, as the national holiday awareness-raising was in fact profiling on the intranet.

Ms Molebatsi wanted to know what was being differently to achieve “improved training”, given that there were no longer any targets on training.

Mr Chauke said that even though training targets had been removed, training was continuing and was the result of continual engagement with stakeholders.

Ms Kohler-Barnard noted that there had not been any public awareness activities in the previous year, but that twelve were planned going forward. She asked what this would cost and how sure PSIRA was of these being successful.

Mr Chauke noted that the activities would take the form of events and workshops, to which stakeholders would be invited and that the main cost involved the preparation and distribution of pamphlets. These would be on a number of topics such as the role of PSIRA.

The Chairperson asked why the Communication Policy was not accompanied by a deadline, and said that this was inconsistent with the goal of improving communication within the environment. She also said that these kind of targets should not be recent developments but long standing policies. She also said it was troubling that the launch of a website was considered an APP.

The Chairperson pointed out that research was a problem area as it had proved very unfruitful in the past and showed no signs of improving. She asked what research topics had been decided on in the previous year. She said that the two people in the department had taken the whole of the previous year deciding which areas to research but there were no targets to correspond with whichever decision they had taken.

Mr Chauke clarified that the PSIRA had been previously attending to the development of the communications plan but it had not been properly implemented as it had not been verified by the Council. He revealed that one of the research topics decided on was a separate project funded externally focussed on electronic security.

The Chairperson asked for detail on the two topics that had been developed in the previous year by the two employees in the research department. There was no information on it in the report but it had a budget allocated to it.

Ms Kohler-Barnard asked why there was a performance indicator for putting information up on the intranet while research targets were completely ignored. She said that this was “puffery”.

The Chairperson asked why the average turnaround time for applications was under Programme 3 if this was a core part of the PSIRA mandate.

Mr Chauke said that this fell under communications due to the structure of PSIRA. Customer relations was included in communications.

Programme 4: Corporate Services
Mr Isaac Ralioma, Senior Manager, Human Capital Management, PSIRA, said that the purpose of this programme was to ensure that PSIRA had competent and skilled employees who were able to execute their tasks effectively, and also to ensure that the authority had a culture of learning and embracing excellence. In terms of key performance indicators, the number of courses implemented on training and development was to increase from eight to ten. There would be six policies developed and reviewed, up from two in 2012/13. There was a new indicator for the frequency of conducting employee performance assessments, and this would be done bi-annually. Employee satisfaction surveys would be conducted annually. Recommendations and action plans to address employee concerns would be submitted annually as well. The number of disabled employees would remain at one for the next financial year and then increase to two.

Mr Mongwenyana showed that Programme Four would receive R25.6 million in 2013/14, R30.6 million in 2014/15 and R33 million in 2015/16, totalling 17% of PSIRA expenditure.

Discussion
Mr Ndlovu asked for an explanation for why there was no remuneration policy already.

Mr George asked if PSIRA thought it was succeeding in creating competent employees.

Ms Molebatsi asked for an explanation in the increase of salary level, and asked how many individuals were employed in the programme.

Ms Sibiya asked why internal disciplinary figures and training numbers had been omitted.

Ms P Mocumi (ANC) noted that there had been two policy workshops conducted and asked what policies had been workshopped.

Mr Lekgetho asked if capacity was sufficient to achieve the desired outcomes.

Ms Kohler-Barnard asked about employee compensation, as salaries appeared to be very high. She asked how personnel numbers were increasing while compensation expenditure decreased.

The Chairperson asked why Change Management Strategy target had been omitted, and wanted to know if it had been achieved.

Mr Ralioma dealt with the review process, saying that it needed to be developed. He said that the remuneration policy was awaiting approval. With regards to learning and development, he confirmed that this required competent staff. He expressed his belief that investments in staff skills had had a positive impact. There was an issue with the staff balance in human resources. There were only five permanent staff members. The skills audit had been finalised. Each employee had to undergo training. He confirmed that the skeletal structure might pose a problem, but said that there had been some outsourcing and that the unit was doing its level best to meet all targets. The HIV policy and the Employee Wellness Policy had been subjected to stakeholder engagement and approved. He said that the Change Management strategy had been implemented.

The Chairperson said that the Change Management strategy, if implemented, had not yielded any benefits. She said that once a policy was implemented it was measured and this became a target.

Medium Term Budget
Mr Mongwenyana tabled the budget for 2013/14, and highlighted certain aspects. These included projected revenue of R164 million, a positive variance of 27% on the actual R129 million achieved in the last year.. Annual fee revenue were expected to see a positive variance of nearly 50%. Fines would decrease by 50%, but Sales of Goods and Services would increase by 28%. The lowlights were the pending legal action over the 2011 annual fee regulations, the going concern challenges. There was a projected deficit of R1 million. A trend analysis was shown to illustrate the anticipated deficit.

Factors influencing revenue growth were named as the annual review of fees, optimisation of revenue generation, minimising of bad debts and awareness campaigns on the role of PSIRA. Factors influencing expenditure growth included corporate identity rollout, development of an integrated business information system, building law enforcement capacity, and stakeholder engagement initiatives. The Capital investment budget was set to decrease from R5 million in 2013/14 to R618 439 in 2015/16.

Risks faced by PSIRA included litigation by the Security Industry Alliance, including an order to set aside the 2011 Annual Fee Regulation, and a risk of not achieving planned objectives. Risk mitigation would require a review of the funding model and alternative revenue streams.

Discussion
Ms Molebatsi asked how many vehicles PSIRA had and what the expenditure on motor vehicles related to.

Mr Mongwenyana explained that no vehicles had been bought but there would be one bought in the current year.

Mr Chauke added that there was an existing vehicle used for collecting and delivering documents. An additional vehicle was budgeted for and this would replace the old one.

Mr Ndlovu asked what the expenditure on office furniture entailed, and also what was meant by “leasehold improvement”.

Mr Mongwenyana said that the furniture budget related to two offices which were reported as being a bit run down. Leasehold improvement was in the event of new staff being employed which required movement around the offices. Software costs dropped due to licences being renewed.

Ms Kohler-Barnard said that she had a huge problem with the fact that there was zero expenditure on motor vehicles, because PSIRA was supposed to have its inspectors travelling around. There was also zero allocation for office equipment and leasehold improvements beyond 2013/14.

Mr George asked about the deficit and what the plan was to deal with it.

The Chairperson said that in one document, PSIRA noted a R20 million investment, yet in this one it was noting a deficit, and the two documents simply did not correlate. This contradiction alone almost crippled PSIRA’s credibility.

The Chairperson decided to halt the meeting, saying that the lack of responsiveness from PSIRA was frustrating. A surplus was predicted in one document and a deficit predicted in another. She said that PSIRA was in need of assistance. She said that much time would be spent on serious recommendations from the Committee.

She requested the outstanding figures and revisions of those that had been presented incorrectly, by the following Friday. She requested the total and details spent on consultancy fees, as well as the number of registered companies. She requested a complete breakdown of budgets across all programmes, details around events, deadline for the implementation for the communication policy, number of training courses and participants, and an explanation for the contrasting medium term projections. She expressed significant concern over the lack of contingency budget given the pending court action. She made a series of recommendations and requested further information.
The meeting was adjourned.