Report of the Portfolio
Committee on Police on Property Management and Capital Works within the South
African Police Service, dated 21 October 2010.
The Portfolio Committee on Police reports as follows:
Introduction
This report identifies key research findings of the Task Team, and areas
of concern emanating from the meetings held with the SAPS on the issue of
Supply Chain Management: Property Management (18 May 2010 and 3 September
2010). It highlights the response of the
Department of Police (and where relevant the response of the Department of
Public Works) to these concerns. In
addition, the report identifies recommendations of the Portfolio Committee on
Police to address some of these concerns.
1. Background
1.1. Portfolio Committee meeting
18 May 2010
1.1.1 On 18 May 2010, the Portfolio Committee on Police met with the
National Commissioner of Police and a delegation from the Department to discuss
the issue of Supply Chain Management: Property Management within the South
African Police Service (SAPS).
1.1.2. The Department provided a
briefing to the Committee on Property Management within the SAPS. Key areas
covered in the briefing included:
Agreements between SAPS and the Department of Public Works (DPW) and the
principles on the devolvement of the budget from DPW to the SAPS
Property management including the number of leased buildings (1 368),
government-owned buildings occupied by the SAPS (5 843) and devolved properties
from DPW (271)
The process for planned and unplanned maintenance projects
Budget and expenditure for capital works, municipal services, private leases,
maintenance and property rates (including planned maintenance and unplanned
maintenance) from 2006/07 to 2009/10.
Capital Works budget and expenditure per types of infrastructure (such
as forensic science laboratories, police stations, office accommodation etc)
from 2006/07 to 2009/10
Infrastructure development including process, police stations completed
(2006/07 to 2009/10) and projects (including police stations) planned for
completion in 2010/11-2015/16
Projects completed by
1.1.3. Members posed a number of
questions and concerns to the delegation at this meeting. However, the National
Commissioner requested that the meeting be adjourned to a later date to enable
the Department to fully prepare itself in order to address the questions and
concerns raised by Members. The chairperson acceded to this request.
1.1.4. A key concern noted by
Members during the meeting of 18 May 2010, was that the capital budget for
construction, including for the building of police stations, has increased
enormously since 1994, and especially over the past four years. Yet, only a few
police stations are reported to be completed each year. Members were therefore
concerned that there seemed to be no correlation between the increased resourcing for capital projects and the outputs,
specifically in the form of new police stations constructed.
1.2 Task Team on the
construction of police stations
1.2.1 As a result of this key concern and other concerns
raised by Members during the meeting of 18 May 2010, a Task Team on Property
Management and Capital Works was initiated by the chairperson, led by
Honourable van Wyk and comprising of the following
additional Members from the Committee:
Honourable Schaefer
Honourable Dube
Honourable Ndlovu
Honourable Meshoe
1.2.2 The focus of
the Task Team was to research comprehensively the area of construction
and expenditure on police stations, specifically new and re-established police
stations, from 1994 to date.
1.2.3 The key objective of the Task Team was to
empower Members of the Portfolio Committee on Police to provide effective
oversight over a crucial area of Property Management, the area of construction
of police stations by:
providing a comprehensive overview of the construction
of police stations by collating all available information about the construction
of police stations from 1994 to date, and organising
this information into a searchable format; and
analysing
this information in order to identify trends, areas of concern and
discrepancies in information.
1.2.4 This information would also be prepared for
use by the Members of the Portfolio Committee on Police in preparation for the
follow-up meeting on Supply Chain Management: Property Management which was
scheduled to take place on 3 September 2010 between the Committee and the SAPS,
thus enabling the Members to interrogate the issues with the SAPS from an
informed position.
1.2.5 The Task Team sourced and collated the
information contained in all Annual Reports of the SAPS (and the Reports of the
Auditor-General), SAPS Strategic Plans, Estimates of National Expenditure, briefings
by the SAPS to the Portfolio Committee on Police, additional information
provided by the SAPS to the Committee, as well as the Reports of the Portfolio
Committee on Police from 1994 to date.
1.2.6 In this process, the Task Team compiled a
searchable database on the construction of police stations, which can be used
by the Portfolio Committee on Police in all future oversight initiatives around
police station construction. This database will enable the Portfolio Committee
on Police to effectively and efficiently oversee construction of police
stations (irrespective of whether the construction project is the
responsibility of the Department of Police or the Department of Public Works).
2. Findings of the Task Team
2.1 The following are the
key research findings emanating from the work of the Task Team, into the area
of the construction of police stations:
Since 1994, a total of 100 police stations have been constructed. Of
these 100 police stations, only 31 are new police stations constructed in areas
where no police station existed previously. The remaining 69 stations are
re-established police stations whereby existing police stations are replaced by
new structures on their existing sites or on new sites. Since 1994, a total of
R6.25 billion (including the allocation for 2010/11) has been allocated to the
Capital Works budget which includes (but is not limited to) expenditure for the
construction of police stations. Conclusion: the high capital works budget
since 1994 to date has not been used effectively to increase the number of
police stations.
The capital budget has increased from R80,261
million in 1999/2000 to R1,049 billion in 2009/10 (by 1206%). Yet the number of
police stations completed each year is not increasing commensurately. Despite
an allocation of R1,049 billion for 2009/10 only five
police stations were completed during that financial year, in comparison with
nine police stations that were completed in 1999/2000. In addition, from
2006/07 to 2009/10 the capital budget has doubled from R510,5
million in 2006/07 to R1,049 billion in 2009/10. Yet in 2006/07, eight police
stations were completed, in comparison to the five completed in 2009/10. Conclusion:
the increasing capital works budget especially between 2006/07 and 2009/10 is
not reflected in an increase in the number of police stations completed.
Most police stations that have been completed (71 out of the 100 police
stations) have been the responsibility of the Department of Public Works. A
total of 19 police stations have been completed by the SAPS. The remaining 10
police stations were completed under the auspices of the European Union.
Between 2006/07 and 2009/10, a total of 23 police stations were completed (new
and re-established). Of these 23 police stations completed, only four were
completed by the SAPS.
A focus on those 19 stations completed by the SAPS since 1994 and on the
11 construction projects currently in execution by the SAPS reveals the
following:
- Most of these 19 police stations took over three years to complete. In
some cases the time taken to complete the police stations was as high as
six-and-a- half years, such as in the case of the Inanda
police station which was commenced on 1 April 2003 and was finally completed on
21 August 2009.
- The cost escalations in SAPS construction projects were in some cases
extremely high. The Inanda police station escalated
by 270% from a planned cost of R15,9 million to an
actual expenditure of R43 million.
- Of the 11 projects currently in execution by the SAPS, five commenced
as early as 2004 and five commenced in 2006. Only one project (Ga-masemola) commenced after 2006 - in 2009. Thus expected
completion dates for 10 of the 11 current SAPS projects are between four and
six years. Conclusion: In the majority of cases where the SAPS is responsible for
the building of police stations, these stations take at least three years (and
in most cases between four to six years) to complete and the cost escalations
are extremely high. In comparison, police stations completed by DPW, on
average, are completed in shorter time periods and with less cost escalation.
When the SAPS is responsible for police station
construction projects extensive use is made of both consultants and
contractors. On average it is estimated that approximately 18% of the total
expenditure for each police station is spent on consultants. Despite requests for this information, the
Department did not provide a breakdown of exactly how much was spent on
consultants for each building project undertaken by the SAPS. Both National
Treasury guidelines and the Acquisition Manual of the SAPS themselves state
that consultants should only be appointed when the requisite skills are not
available within the organisation. While the appointments of consultants and
contractors for building projects are not in themselves problematic, the Task
Team raised the concern as to whether the extensive use of consultants and
contractors is in fact in line with the agreement entered into with the Department
of Public Works. As early as 2006 the SAPS stated that it had the necessary
core expertise in architects, engineers, quantity surveyors, technical
personnel, builders and financial managers and was in the process of further
recruitment. On this basis, DPW agreed to the devolution pilot. Conclusion:
Continuous outsourcing to consultants and contractors reflects that the SAPS
may not have the required expertise within the organisation. It is a concern
that the Department could not provide details of the exact amount spent for
each project on consultants. The 18% estimate seems high.
The research revealed a number of potential problems with the bid
processes used by the SAPS. Until very
recently, 1 April 2010, the Bid Adjudication Committee within the SAPS were responsible for the final decision on all bids, without
the approval of the National Commissioner.
The two Bid Adjudication Committees were, until very recently, chaired
respectively by General Hlela and General Siwundla. In addition, National Treasury notes that
consultants should, wherever possible, be appointed through a bid process, yet
the research revealed that, in many cases, consultants are appointed though
quotations rather than the bid process. Conclusion:
There are danger signs with regard to possible mismanagement in the
tender and appointment process in capital projects.
The research revealed that the SAPS had outsourced the development of
the Immovable Asset Management Plan to a consultant, but there was no
indication that this plan had been completed or adopted. The plan is a
requirement in terms of the Government Immovable Asset Management Act, No 19 of
2007. In addition, it has not finalised a Planned Maintenance Policy or an
updated Unplanned Maintenance Policy which would reflect its current agreement
with DPW around maintenance issues. It also has not completed a Prioritisation
Model which would assist in systematically identifying projects for
prioritisation, particularly in terms of construction. Conclusion: key policy and plans
required both in terms of law and to assist the organisation in property
management have not been finalised even though costs have been incurred.
The collation of information from the sources used revealed extreme
inaccuracies in the reporting of information on the construction of police
stations. These inaccuracies are apparent in formal documentation such as the
Annual Reports of the South African Police Services, as well as the written
documentation provided to the Portfolio Committee on Police during briefings
and written responses to questions. In many cases, police stations are reported
as completed for a particular year, when they were not actually completed
during that year (for example, in the presentation to the Committee 18 May
2010- where is was stated that Steinkopf police
station was completed in 2006/07 when it was actually completed in July
2005) . Planned completion dates are
totally arbitrary and are merely shifted from one reporting year to another. For
example, Inanda police station was reported to be
projected for completion in January 2006 in the 2004/05 Annual Report, in
October 2006 in the 2005/06 Annual Report, in 2007 in the 2006/07 Annual Report
and in 2008 in the 2007/08 Annual Report. It was eventually completed in 2009. In
addition, financial figures provided in the Infrastructure tables in the
Estimates of Expenditure produced by National Treasury are sometimes inaccurate
and therefore unusable. Conclusion:
Reporting errors in published and unpublished information renders effective
oversight impossible.
3. Proclamation 42:2010 by the President of the
3.1 During this same time period, there were
reports in the media with regard to possible irregularities in the leasing
agreements for the new police head office in
Issues around procurement of and contracts for goods, work or services,
including leased accommodation by the SAPS or on behalf of the SAPS by DPW or
SITA
Irregularities/problems in relation to payments made to DPW and SITA or
to suppliers/service providers for goods, work or services (including leased
accommodation) procured by the SAPS or on behalf of the SAPS
Problems in the manner in which SAPS Building Services conduct their
projects including non-compliance with the Government Immovable Asset
Management Act or non-compliance with the ‘devolution agreement’
Unlawful or irregular conduct by members of the SAPS, suppliers, service
providers or third parties relating to any of the above-mentioned allegations.
4. Further Developments
4.1 On instruction of the Minister of Public
Works all lease agreements (including the two SAPS agreements mentioned above)
were put on hold pending the results of the investigation.
4.1.1 In addition, approximately a week prior to
the follow-up meeting with the National Commissioner and the members of the
SAPS scheduled for 3 September 2010 on the issue of supply chain management and
property management, it was reported in the media that a number of key
officials within the Supply Chain Management division of the SAPS had resigned.
These included the head of Supply Chain Management, General Hamilton Hlela, as well as General Stefanus
Terblanche and General Matthews Siwundla.
5. Portfolio Committee
meeting 3 September 2010
5.1 On 3 September
2010, the National Commissioner and his delegation met again with the Portfolio
Committee on Police in order to address the concerns raised by Members in the
meeting of 18 May 2010 on Supply Chain Management: Property Management.
5.2 The Director-General of the Department
of Public Works and his delegation were also invited to this meeting, as were
representatives from the Special Investigation Unit (SIU) and the Hawks.
5.2.2 Key issues discussed at this meeting
included:
The resignations of three key Supply Chain Management managers
The
Agreements and relationship between DPW and the SAPS
The capacity of the police to build police stations
including issues around the use of consultants, and the internal capacity
within
5.2.3 The presentation by the SAPS, which
attempted to address some of the concerns that had been raised by Members at
the previous meeting of 18 May 2010, included information on:
Current challenges within SAPS Supply Chain Management and interventions
to address these challenges
Agreements between DPW and the SAPS including the advantages and
disadvantages of the devolution of custodial functions
Summary of capital works projects completed by DPW and those completed
by the SAPS from 2006/07 to 2009/10
Needs analysis and the prioritisation process for the construction of
police stations, including the identification of backlogs
The status of current funding for police station construction and other
facilities
The bid process for the appointment of consultants and contractors
Information on the Eastern Cape Radio upgrading project
Expenditure and allocation for forensic science laboratories construction
projects
Leases including the lease reduction plan
Planned and unplanned maintenance including
process, expenditure and backlogs.
6. Deliberations of the Committee: Issues of discussion and concern
The following are the key issues of discussion and of concern to the
Committee:
6.1. Irregularities in Supply Chain Management including lease
agreements
6.1.1 Committee concerns: Members raised
numerous concerns around the controversial leases. Areas of particular concern to Members
included: whether the leases for the Pretoria office (Sanlam
building)/Durban office were published for tender, and, if not, why not;
whether the National Commissioner had signed the needs assessment and budget
letters confirming available funds for the Pretoria building; and why a second
lease agreement for a second building was signed while the lease agreement for
the current head office in Pretoria had been extended.
6.1.2 Members also asked for the reasons for
revoking the decision to build a new head office using the public private
partnership model (PPP); and whether costs had been involved in the investigation
of the feasibility of using PPP. The Committee had information that a
transaction adviser and a project officer had been appointed as consultants for
this process.
6.1.3 Departmental response and response by the
Director-General of the Department of Public Works: With regard to
the PPP, the National Commissioner noted that soon after he was appointed he
had been given a document to sign, containing details and costs of building a
new head office for the SAPS, using PPP, to be constructed on a plot near the
Department of Correctional Services’ building in Pretoria. He had requested
further information, and had not signed the document, as, in his opinion, this money
would be better spent on building more police stations, than on building a new
head office. The matter was not raised with him again.
6.1.4 According to the National Commissioner the
lease for the current head office had been renewed by DPW (on 28 July 2009)
without informing the SAPS. The National Commissioner stated that he had not signed
the new lease agreement for the Sanlam building. In
terms of affordability, he stated that the SAPS budgeted R1.2 billion per year
for leases, and thus as the reported R500 million lease was actually the amount
over a 10-year period, it was affordable to the SAPS.
6.1.5 The Director-General of the Department of
Public Works noted that the DPW is responsible for entering into lease
agreements on behalf of departments, based on their needs and confirmation of
budget. He stated that the Minister of Public Works, on his appointment had
identified a number of concerns around the Supply Chain Management (SCM) within
DPW. The Special Investigating Unit was thus approached to investigate SCM
processes within DPW, which included, but was not limited to, lease agreement
processes. The manner in which the Sanlam building as
well as the
6.1.6 Members agreed that it would be important
to discuss the matter further pending the finalisation of the current internal
investigations and the investigation by the Special Investigating Unit. Many of the questions posed by Members could
not be answered by either the National Commissioner or the Director-General of the
Department of Public Works at the meeting of 3 September 2010, as the facts
would only be uncovered during the investigations.
6.2 Resignation of key managers in the area of supply chain
management and property management
6.2.1 Committee concerns: Committee concerns about the resignations
of General Hlela, General Terblanche
and General Siwundla centred on the timing of their
resignations and whether their resignations were directly related to probing by
the Portfolio Committee into the issues around supply chain management, and the
investigation by the Special Investigating Unit (SIU). Members were concerned
that when problems within the Department are brought to light, key members are
allowed to resign. Members wanted to know the reasons for the resignations, whether
these officials left of their own volition or were ‘pushed out’, and whether
these Members received ‘golden handshakes’. Members voiced disappointment that
the top management of the Supply Chain Management, who had resigned, were
therefore not before the Committee, and would not therefore be held accountable
for their actions.
6.2.2 Departmental response: The National
Commissioner stated that General Siwundla had retired
for personal reasons as he wanted to take care of his sick wife. General Terblanche had been shifted ‘in order to open up some space
for the investigation’ but had preferred to resign rather than to be shifted to
a different environment. The Commissioner noted that the Generals resigned in
the interest of the organisation and to allow for improved ‘efficiency’ within
the organisation. None of the Generals received ‘golden handshakes’ but had
only received the money that was owed to them.
6.3 Agreement between the SAPS and the Department of Public Works
with regard to property management
6.3.1 Departmental presentations: According to the
SAPS, agreements between the DPW and the SAPS around devolution of budget and
functions are consolidated in three documents. The devolution of budgets and
the introduction of accommodation charges were introduced on 18 December 2005.
A Memorandum of Understanding (MOU) on the devolution of immovable assets
between SAPS and DPW was signed by SAPS on 31 January 2006. Thirdly, National
Treasury approved SAPS’ State of
6.3.2 The devolution of custodial functions from
DPW to the SAPS is limited, in terms of the agreement, to functional assets,
such as police stations and supporting structures. To date, a total of 271
police stations have been devolved. The
SAPS has stated that the SAPS is still negotiating with DPW on the exact number
of police stations that will be devolved from 2011/12 onwards, but that they
estimate that 59 additional police stations would be devolved to the SAPS in
2011/12.
6.3.3 The MOU on custodial devolution addresses four
areas including: maintenance and property rates; payment of municipal services;
property leases; and capital works.
Currently, neither property leases nor the payment of municipal services
has been devolved. Thus the two areas of particular interest to the Committee
are the devolvement of maintenance and property rates functions; and the area
of capital works.
6.3.4 In terms of these functions, the SAPS
presented to the Committee that there were advantages to devolving the
maintenance function to the SAPS as it gave the SAPS more control over their
maintenance plans and expenditure. However, they acknowledged that the absence
of a maintenance plan (for both planned and unplanned maintenance) was a
problem. This plan was still being developed. In terms of the devolvement of
capital works functions, the SAPS believed that this was advantageous to them
as they would have increased control over planning, in terms of time frames as
well as contractual issues. In their presentation to the Committee they did not
acknowledge any of the disadvantages in taking over this construction
responsibility from DPW.
6.3.5 Committee concerns: During the two
meetings, Members of the Portfolio Committee raised a number of key concerns
around the devolution of these functions. Key concerns of Members included:
6.3.6 The request for the devolution of capital
budgets and functions from DPW to the SAPS was on request of the SAPS as early
as 2005/2006. It was clear that the DPW had agreed to this request based on
assurances given to it that the SAPS ‘would develop the necessary capacity and
expertise’ and were given in addition the assurance that the SAPS already had
core expertise in this regard. Members
raised concerns that, in fact, the SAPS did not have this capacity and
expertise as could be seen by the myriad of functions (ranging from technical
functions such as engineering and quantity surveying to basic building
functions) that were outsourced to consultants and contractors.
6.3.7 Members highlighted that the extremely poor
track record of SAPS Building Services to date (including high cost escalations
in building projects completed and the fact that it can take between four to
six years, or longer, for the SAPS to complete construction of a police station)
raised very serious questions as to whether it was desirable for this function
to be devolved from DPW. While DPW’s track record in this regard was far from perfect, it was
clear that both in terms of costs and timeframes, its record was
better than that of the SAPS. Members questioned whether the building of police
stations was in line with the core function of the police, which is to fight
crime.
6.3.8 Members highlighted concerns in terms of
the increased responsibility that the SAPS would have in terms of the
devolution agreements. Currently only 271 police stations have
been devolved, with possibly 59 more in the 2011/12 financial year.
Members questioned whether the SAPS would have the ability to cope with the
responsibility of all of the over 1100 police stations around the country.
Members noted that they had no faith in the ability of the SAPS to cope with
this responsibility in the light of its poor track record to date.
6.3.9 Members stated that they hoped that the
SAPS would reassess its desire to be responsible for the building of police
stations and that this function should remain with DPW. An alternative view expressed by a Member was
to further capacitate the
6.3.10 Departmental response: The SAPS in its
presentations to the Committee did not express any concerns around the devolution
of the capital works custodial function from DPW to the SAPS. In fact, in the
presentation on 3 September 2010 in particular, the devolution of this building
function from DPW to the SAPS was presented as having a number of advantages to
the SAPS, primarily in terms of control over timeframes and contracts. The
presentation seemed to imply that it would be desirable for the SAPS to take
over this responsibility for other assets currently not included in the
devolution agreement such as forensic science laboratories and training centres
by recording as a disadvantage the fact that the ‘SAPS has no control over
contractual issues between a supplier/contractor’ with respect to non-devolved
assets. In addition, it was stated in the presentation that the SAPS wanted to
actively drive the devolution process to ensure that more stations could be
devolved in the next few years.
6.3.11 However, the National Commissioner, in his
response to the concerns of Members, acknowledged that the SAPS did not have
the capacity to build police stations. He stated that all capacity, including
the capacity to oversee projects, was outsourced. The National Commissioner requested that he be
allowed to discuss the issue of capacity for capital works projects within the
SAPS so that they could respond to Members adequately. He would then report to the Committee with a
final conclusion on the matter. The chairperson
agreed to this request.
6.3.12 The Director-General of the Department of
Public Works acknowledged that DPW also faced challenges around the turnaround
time for capital projects and were also concerned about the escalations in
costs and the managing of consultancy fees. However, the Director-General
stated that he welcomed the National Commissioner’s admission that the SAPS did
not have the capacity to build police stations, and stated that the DPW
believed that it did indeed have this capacity to deliver on projects and
provide infrastructure to client departments.
6.4 Track record of the SAPS in capital construction projects
6.4.1 Departmental presentation: The SAPS, in its
presentations to the Committee, did not explicitly acknowledge any problems
with its current track record with regard to the construction of police
stations. In the briefing of 3 September
2010, the SAPS presented a slide illustrating ideal and actual construction
time periods for small, medium, large and mega stations. It did acknowledge in
this slide that the actual construction time periods were indeed longer than
those that are ideal. However, the actual time periods for construction
identified in the slide (ranging from two years for a small station to under three
years for a mega station) are clearly not a reflection of the actual time
periods for SAPS building projects. The
research of the Task Team highlighted above, has illustrated that these range
between three to over six years. In addition, the SAPS presented a slide
illustrating rising costs for construction.
The slide did not illustrate the difference between planned and actual
costs. However, some acknowledgement was made of the fact that SAPS building
projects had not historically been completed within acceptable timeframes, in
the slide which states that the ‘aim is to have shorter delivery time (1st
project currently ahead of program-Ga-Masemola)’.
6.4.2 Committee concerns: Members raised numerous
concerns around the length of time taken by the SAPS to build a police station
and the high cost escalations involved. Members questioned whether the projected
timeframes for completion of the current SAPS Building Services police stations
would in fact be realised, given the fact that the research has shown that the
SAPS continuously extends its projected completion dates.
6.5 Supply Chain Management
6.5.1 Departmental presentation: In contrast to the
presentation on 18 May 2010, the Department, in its presentation on 3 September
2010, did acknowledge some serious problems with Supply Chain Management within
the SAPS. Problems identified included the lack of a professional supply chain
management practice and understanding; a fragmented management approach and
practices, including general lack of command and control, poor financial and
asset management and selective compliance with the regulatory environment; the
lack of availability of management information; and the lack of a coherent
strategic framework, including a policy framework, no strategic planning and no
development framework for supply chain management capabilities. Additional
challenges included integrity challenges specifically around bid and tender
processes and conflict of interests between members and service providers;
management complacency with regard to undetected incidents of corruption and
fraud; and ineffective alignment between performance outputs and services
rendered. The present organisational culture within the supply chain management
environment is characterised by a lack of service orientation and
professionalism and a poor administrative attitude.
6.5.2 The acting head of Supply Chain Management,
Lieutenant Gary Kruse identified a number of guiding principles for
interventions that would be taken to address these extremely serious problems
within the Division. The interventions would focus on: strategic management
issues (improved strategic planning processes and agenda; scoping
of a professional supply chain management practice for the SAPS; development of
management information capabilities for priority areas; and alignment of
performance management); service delivery priority areas (including facility
management- building of police stations, vehicle fleet management- mechanical
services and availability of vehicles, provider (supplier) management, and
inventory management); and addressing integrity issues (including integrity and
corruption awareness; integrity reporting; coordinated interventions and
investigations and integrity risk identification).
6.5.3 Committee concerns: Members welcomed
the acknowledgement by the SAPS in the meeting of 3 September 2010 of the serious
problems that exist within the supply chain management environment within the
organisation. Members were, however, extremely concerned about these problems
and questioned how they had been allowed to continue and fester for so long
within the SAPS. The Members also questioned whether in the light of these
extremely serious challenges within the supply chain management division, it
was correct for the SAPS to be taking on even more responsibilities in terms of
the construction of police stations.
Concerns around the bid processes, selective adherence to policies and
procedures, and the lack of an effective management information system had been
identified as concerns in the research conducted by the Task Team as well.
6.6 Use of
consultants and contractors
6.6.1 Departmental presentation: The Department
in its presentations to the Committee identified that when SAPS are responsible
for building projects, they have two options- they may decide to use own
resources for planning (in-house architects, engineers etc) and own resources
for construction (in-house builders); or they may decide to outsource planning
(or some planning functions) to consultants and outsource building functions to
contractors. The presentation described the
situations when the formal bid process is used for the appointment of
consultants and contractors and when quotations are used for the appointment.
In the case of consultants the SAPS uses the pre-qualified roster, on a
rotational basis, for appointments. The SAPS described that in terms of design
planning, in-house personnel are used to control quality in terms of planning
and monitoring. They presented that professional consultants/service providers
are appointed when specialised skills are required and where specialised conditions
add risk. Only registered professionals are used and are paid in terms of
milestones and set fees. The SAPS in-house professionals are used in planning
and to monitor projects and service providers.
6.6.2 Committee concerns: The key concern
of the Committee centred around the extensive use of
consultants and contractors and the high percentage of costs of construction
projects (on average 18%) that are paid to these consultants, in
particular. Members raised this concern
in the light of assurance that had been made to DPW and to the Committee at various
meetings, that the SAPS did indeed have internal capacity, for example,
architects, bricklayers, quantity surveyors, etc. to take over devolved
functions, including the building of police stations. Members raised numerous
questions in this regard.
6.6.3 Additional concerns raised with regard to
consultants included the amount paid to consultants (project manager and
transaction adviser) for the Head Office that at one point was going to be
built though Public Private Partnership.
Members queried why a consultant was used to draft the immovable asset
management plan instead of in-house SAPS personnel and whether this reflected
lack of internal capacity in this regard.
They also queried
the amount paid to this consultant and whether the plan had been
completed and implemented;
6.6.4 Departmental response: The National
Commissioner acknowledged the concern of Committee Members with regard to the
extensive use of consultants and stated that, in his opinion, where the SAPS
referred to internal capacity they were in fact referring to outsourcing. The
National Commissioner stated that he was concerned about the extensive use of
consultants and the fact that 18% of costs were for consultant fees. A possible
solution was to ensure that internal skills were retained more effectively.
6.6.5 The Head of Expert Services seemed to
disagree with this position. She explained to the Committee that the SAPS never
intended to execute all construction work in-house and they only intended to
manage the process of appointments and construction. The in-house capacity was
to be used for in-house planning and documentation. In addition she stated that
not all SAPS projects were outsourced and that some projects were indeed planned
in-house. However, she did not have the documentation before her to identify
those stations that had been completely planned in-house.
6.7 Prioritisation of police stations for construction
6.7.1 Departmental presentation: The SAPS in its presentation
noted a number of important challenges with regard to the current
prioritisation process whereby police stations for construction are identified
and prioritised. Essentially the process relies on input via the provinces on
identification of provincial priorities which are then consolidated into a
national list and prioritised and approved by the National Commissioner. A work-study is used to quantify the need in terms of the
available resources. Key problems include that the Prioritisation Model, required
in terms of the Government Immovable Asset Management Act, has not been
completed; and there are no clear criteria in place to ascertain backlogs. Thus
to date the SAPS does not know what the extent of its backlogs are in terms of
police stations and satellite stations (estimated at 158 of which 28 are
currently in execution, 103 are in the 2010-2016 building programme, but
construction has not yet begun; and 27 have approved works studies but are not
included in the 2010-2016 building programme), or indeed the other facilities
(estimated at 182). The SAPS: Efficiency Services in conjunction with the
Department of Public Services and Administration will develop a scientific
process to identify backlogs.
6.7.2 Committee concerns: Members raised a
number of concerns around prioritisation and the identification of backlogs. A
central concern was the fact that stations that were identified as prioritised
for construction sometimes take many years before they are eventually
constructed. Many stations identified as a priority as early as 2005 have yet
to be built.
6.7.3 Departmental Response: The National
Commissioner acknowledged serious constraints in the prioritisation process and
stated that, as Commissioner, he knew that there was a shortage of police stations,
but could not get information from the SAPS as to the extent of that shortage
and how long it would take to address this backlog. He reiterated that he would
revert to the Committee after consultation with SAPS as to the exact extent of
the backlog and time frames to address this backlog.
6.8 Maintenance
6.8.1 Departmental presentations: The agreements
with the Department of Public Works with regard to devolution of functions
means that in effect, from 1 April 2009, in terms of the devolved and new
police stations, the SAPS is responsible for both planned and unplanned
maintenance of these stations. In terms
of non-devolved police stations and other facilities, the Department of Public
Works is responsible for planned maintenance and for unplanned maintenance over
R30 000. Unplanned maintenance under R30 000 (increased from R20 000 as of
April 2010) comes from the provincial budget for both devolved and non devolved
facilities.
6.8.2 Committee concerns: Members raised
concerns around how practically, at station level, Station Commanders access
funds/authority to fulfil their responsibility in terms of maintenance
complaints under R30 000. Members noted that in many cases, Station Commanders
complain that they cannot access this money without authorisation from the
provincial offices, and that many delays are experienced in this regard.
Members remained confused during both briefings on this issue, as the
presentations continuously state that Station Commanders are responsible for
the management of day-to-day maintenance; yet, because the money comes from the
provincial office, the Committee is aware that in fact they do not have the
autonomy to act in this regard, but need to process these maintenance complaints/requests
through the provincial office.
6.9 Inaccuracies in reporting on capital projects
6.9.1 Committee concerns: The results of
the research by the Task Team identified serious concerns around inaccurate
reporting on the issue of police station construction. Committee Members raised
numerous concerns in this regard including the identification of inaccuracies
in the information given in the presentation of 18 May 2010. Inaccuracies in
this presentation included the reporting of two stations as completed in
2006/07 when in fact these stations were completed in mid 2005; and the
incorrect reflection of actual expenditure for Capital Works which did not
correlate with the audited expenditure figures. Members were extremely
concerned that the written information, both in official publications such as
the Annual Reports and Estimates of National Expenditure and in written reports
presented to or provided to the Committee, reflected serious inaccuracies and
contradictions. This severely hampers effective oversight.
6.9.2 Members questioned the motivation for
inaccurate reporting to the Committee and there were concerns that this
reporting was purposefully inaccurate in order to mislead the Committee. This could in fact be seen as ‘lying’ to
Parliament.
6.9.3 Departmental response: The National
Commissioner agreed that this was a serious concern and stated that he had
himself addressed this issue with his officials, specifically with regard to
the information that they relayed to the Committee in meetings. He reflected
that it seemed as if members of SAPS were purposefully providing inaccurate
answers to the Committee so that the SAPS ‘looked like fools’. He hoped to be
able to address this problem.
7. Information required
7.1 Investigations
7.1.1 It is recommended that the Special
Investigating Unit and other bodies investigating the issue of Supply Chain Management
and lease agreements (DPW, HAWKS, Public Protector), relating to the SAPS,
should present a report to the Portfolio Committee on Police, on completion of
the investigations.
7.2 Agreement
between the SAPS and the Department of Public Works with regard to property
management
7.2.1 The SAPS should report to the Portfolio
Committee on Police by mid February 2011 on the capacity (and continued desire)
within the SAPS to take responsibility for the devolved function of capital
works for the building of police stations. This report should not be limited to,
but should include the vision and objectives of the Immovable Assets and Expert
Services Management structure currently and in the medium to long term, for
each of the units that fall under this structure, including Demand Management
and Policy Coordination, Resource Management: Facilities, Expert Services, and
Building Services; current capacity constraints within each of these
units/sections; assessment of current performance of each of these units in
delivering on its key objectives; and steps that are or will be taken to
address the challenges faced by each of these units. The report should include
comment on whether, in the light of the track record of Building Service, the
SAPS still believes that it is desirable that they take over this function from
DPW. The Portfolio Committee on Police
will also make a recommendation on this matter.
7.2.2 The SAPS should report to the Portfolio
Committee on Police by mid February 2011 on progress and any changes with
regard to the finalisation of the Service Level Agreement (draft
7.2.3 The SAPS should report to the Portfolio
Committee on Police by mid February 2011 on progress on the agreement/plan with
DPW on the exact number of police stations that will be devolved from 2011/12
onwards.
7.3 Track
record of the SAPS in capital construction projects
7.3.1 The SAPS should report to the Portfolio
Committee on Police by mid February in the form of a written report on the status
of completion of the 11 Building Service projects (or 10 if the project for the
Khayelitsha police station is excluded) projected for
completion in 2010/11. This report
should not be limited to, but should include, status of each project;
explanation of delays or extension of projected completion date; new
(realistic) projected completion dates; expenditure to date; final expenditure;
explanation for escalation if actual expenditure is higher than projected
expenditure; description of what technical functions were performed in-house
and which were outsourced; if technical functions were outsourced, outline of
the expenditure on consultants; and explanation of the decision for using contractors
or for construction being completed in-house.
7.3.2 The SAPS should report to the Portfolio
Committee on Police on a six- monthly basis, in the form of a written report on
the status of completion of all projected projects each year until completion
of the Medium Term Framework period. This report should includethe
status of the project; explanation of delays or extension of projected
completion date; new (realistic) projected completion date; expenditure to
date; final expenditure; explanation for escalation if actual expenditure
higher than projected expenditure; description of what technical functions were
performed in-house and which were outsourced; if technical function were
outsourced, include the cost of expenditure on consultants; and provide an
explanation for reasons for using contractors or completing function in-house.
7.4 Supply
Chain Management
7.4.1 The SAPS should report to the Portfolio
Committee on Police on a six-monthly basis, in the form of a written report, on
progress with interventions taken to address the challenges within the supply
chain management environment. This report should include progress on: strategic
management issues, service delivery priority areas, and addressing integrity
concerns.
7.4.2 The Office of the Auditor-General should
report to the Committee by mid February 2011 on findings of the Auditor-General
on Supply Chain Management in the SAPS over the past five years. The SAPS has received an unqualified audit
for the past six years (the last qualified report was in 2003/04). The Report
should address the reasons for why certain problems may not have been detected
by this Office or taken seriously enough. In addition, the Office should
provide a report to the Committee on the finding of its investigation into the
use of consultants by the SAPS, on finalisation of this performance audit.
7.5 Prioritisation
of police stations for construction
7.5.1 The SAPS should report to the Portfolio
Committee on Police by mid February 2011 on progress with regard to the
accurate identification of current backlogs for police stations/satellites
stations as well as other facilities. This report should include progress in
the development of a scientific process to identify backlogs by Efficiency
Services and the DPSA and details on this ‘scientific’ process’; progress in
the development of the Prioritisation Model as required by the Government
Immovable Asset Management Act and key aspects of this model; identification of
current backlogs; the medium- to long-term plan with timeframes to address
these backlogs; and detailed projected costs.
7.6 Maintenance
7.6.1 The SAPS should report to the Portfolio
Committee on Police in the form of a written report to the Committee by mid
February 2011 on maintenance issues within the SAPS. This report should not be
limited to but should include a report on the average time taken by each
provincial office to address maintenance concerns emanating from stations,
reasons for delays experienced in each province, and the steps taken to address
these problems.
7.6.2 The SAPS should report to the Portfolio
Committee on Police by mid February 2011 on progress in finalisation of the
Maintenance Plan/s for both planned and unplanned maintenance indicating projected
completion date for these plans.
7.7 Inaccuracies
in reporting on capital projects
7.7.1 The SAPS needs to ensure that it has an
effective Management Information system in place to accurately track and report
on progress with capital projects. The
SAPS should report to the Portfolio Committee on Police in the form of a
written report by mid February 2011 detailing steps taken to ensure that
information both in formal publications (such as Annual Reports; and relayed to
National Treasury for inclusion in the Estimates of National Expenditure) and
written and oral information provided to the Committee during meetings and in
response to questions is accurate. The SAPS should liaise
with National Treasury to ensure that information in the Infrastructure tables
is both accurate and consistent over time. The same categories of information
should thus be reported on each year and the same variables contained within
each category.
7.8 Debate
The Portfolio Committee requests that this report be debated in the
National Assembly.
Report to be considered.