The Eastern Cape is mired in problems. From poverty to corruption and debilitating administration woes the province, and particularly its DSD, struggles to develop a presence that resonates well with the vision for all South Africans embodied in the Constitution. However, it is also fast developing a national reputation for its vigorous, watchful civil society – perhaps spurred into action by the endemic weaknesses. The judicial system and, in particular, the judges, are also arguably among the most progressive in the country (Walton 2006). Recently, the Eastern Cape adopted a unique and much-publicised approach for other interventions that purport to assist in harnessing the potential of the department.
Some may argue that the anti-corruption interventions in the Eastern Cape have been over-researched by government itself (by way of investigation through these initiatives), by civil society, the media and the courts. In analysing the Eastern Cape, however, the aim of this case study is not merely to scratch old wounds but rather to review all anti-corruption interventions so that a more holistic understanding may feed into debates on the province’s progress. Indeed, the researchers’ field research with key stakeholders in the social assistance arena in the Eastern Cape has largely been a positive interaction from which enlightening findings emerged. What follows is a brief history of, and insights into, the workings of the department and anti-corruption interventions from a social assistance point of view, gleaned from both desktop research and through interviews.
The Eastern Cape has been charged with being one of the poorest and most corrupt provinces in the country. This may be attributed to a large extent to the legacy of the homeland system that was put in place by the apartheid government. Business Day quotes Minister Skweyiya thus:
We have established that former homeland civil servants, particularly in places such as Umtata, which is the capital of this crime, are prone to abuse of the system to enrich themselves (Radebe 2006).
This point has been alluded to earlier. In keeping with the policy of ‘separate development,’ the homelands sought to segregate blacks from whites by dividing blacks into ‘ethnic nations’ (GCIS 2005/06). The Eastern Cape was thus divided into three distinct areas, two of which were the homelands: Transkei and Ciskei.39 Far from being the establishment of independence from the apartheid state, the creation of the homelands was rather an expulsion of Black people into overpopulated, over-burdened pieces of land ruled by a collaborating class.
Thus what is now the Eastern Cape Province was divided under apartheid into three distinct ‘zones,’ subdivided by race. Most prominently there was a white and two black areas, each with its own administration. There were also government structures for coloureds and indians. The result was that six different administrations were responsible for social grants with different Acts and Regulations applying to each administration (Froneman J in Ngxuza and Others v Secretary, Department of Welfare, Eastern Cape Provincial Government and Another (2000:3)).
The Social Assistance Act 59 of 1992 finally brought legislative consolidation and consequently repealed all previous Acts (Froneman J in Ngxuza and Others v Secretary, Department of Welfare, Eastern Cape Provincial Government and Another (2000:3)). Social grants were thereafter administered from a central point: Pretoria. This also meant that previously fragmented databases were unified into SOCPEN, also referred to above. The difficulties associated with the amalgamation resulted in the detection of anomalies and fraud.
Currently, poor administration and corruption are blamed on the legacy left by the past administrations. For instance, Jonathan Walton, regional head of the Black Sash in the province, argues:
Unfortunately when the homeland system was demolished there was a lot of corruption (in the homelands) and when the new government came in, they had to accommodate them. They had to absorb the corrupt officials. Our province really battled in that regard. Mismanagement and maladministration was a massive problem (Walton 2006).
The problem of weak internal controls
A 2006 report released by the Auditor-General’s office in the Eastern Cape gave the provincial DSD a ‘disclaimer’,40 its most serious audit opinion. In an interview the Provincial Auditor-General, Singa Ngqwala, stated that the provincial DSD was faced with severe problems of internal control (Ngqwala 2006). He further noted that ‘activities were not adequately monitored, supervised [and] authorised so it impacted on the Department. They could not produce the reports [that were requested].’ Ngqwala identifies these as the root causes of the problems manifesting in the DSD, especially in areas such as social grants.
In fact, a deeper revelation is that many of the current challenges emanate from the lack of leadership and direction in the department. This relates back to the central issue of corruption and the fact that ‘[a]ll the top people in the Department were suspended’ (Ngqwala, 2006) on corruption and fraud charges.’ A corporate services director allegedly went as far as using ‘fraudulent ways to obtain an unqualified audit report for the 2003/2004 financial year’ (Zuzile 2005).
Currently the department has an acting head seconded from the provincial Department of Sport, who had only been in this position for just over six months at the time of writing.41 The Acting Chief Financial Officer had also been in the position for a brief period.
Reports from the provincial Auditor-General’s office for the past five years also show a beleaguered department beset with issues of internal control. Box 11 highlights the key findings from the PSAM’s monitoring brief on the department from 2001 to 2005.
Box 11 Summary of key findings of the PSAM’s Monitoring Briefs, 2001–2005
In response to the issue of weak internal controls, the department is reportedly planning to develop a new and enhanced permanent structure in the form of an internal control unit to improve internal capacity (Webb 2006). At the time of the research interview the proposed structure was yet to be approved.
Social grant delivery bottlenecks continue to compromise the realisation of indigents’ right to access social security in the Eastern Cape. This inaccessibility and violation of the fundamental right to social security exposes the provincial DSD to numerous class action litigations. It is therefore no surprise that the bulk of cases that the Black Sash advice office in Grahamstown encounters relate to the DSD (Black Sash 2004). Litigation has had major cost implications for the department. Within a space of three years, litigation costs increased by 25 per cent from over R5 million in 2002/03 to R20 million in 2003/04 (Tetyana 2005). In most cases that end up in court the department opposes the payment of the grants to recipients. This occurs in spite of the contention that poor administration or maladministration by the department itself lies at the root of the problems. The consequences are explained thus:
Each time the Department opposes a case in this nature it costs in the region of R4 000 in legal fees. This would mean that for the Port Elizabeth High Court alone, in one week R892 000 was spent fruitlessly and wastefully by the Department of Social Development in the province. What this means is that the Department is paying out huge sums of money, which would be better used helping the poor and needy in the province, because of its inability to timeously process social applications. The problem is made even more serious because the Department does not budget for litigation costs which means that resources are clearly being diverted from departmental programmes to cover these costs, thus hindering the Department’s ability to properly fulfil its mandate in the province (Joseph 2006).
The consistent under-performance of the department in terms of the administration of social grants is belaboured by the PSAM. However, the Acting Head of Department for the Provincial DSD, Denver Webb, disassociates from these problems entirely. In an interview he attributed this attitude to the separation of the department’s social grant wing from the department’s other functions. In effect, all problems that previously existed are now transferred to the SASSA. He stated: ‘Social security loomed over everything in the Department and other things tended to be neglected’ (Webb 2006). Now, however, it is really only the MEC that has some involvement, though only via political interventions that do not directly relate to the operations of SASSA. The department is then arguably left to get on with other aspects of its role effectively (and perhaps indeed with impunity).
Box 12 Ruling for the people – the verdicts of Judges Froneman and Cameron
In spite of this, the department, supposedly on advice from counsel, declined to comply with the court mandate and reinstate the grants. This provoked a vitriolic response from the judge, which was heard on 31 August 2001 (FronemanÂ J in Ngxuza and Others v Secretary, Department of Welfare, Eastern Cape Provincial Government and Another (2000)).
Fast forward to the present and the same complaints are voiced. Sarah Sephton from the Legal Resources Centre – the organisation that represented the people in the class action suit against the department in 1997 – complains that the department is still full of ‘people who really don’t care’ (Sephton 2006). She also describes the ‘threatening’ tactics used whenever the organisation attempts to bring a case to the department. She relates that what is equally disturbing is the fact that predatory lawyers in the region are benefiting financially from the administrative delays of the department, extracting money from poor clients (Sephton 2006).
Webb (2006) confirms the existence of an adversarial relationship between the department and local organs of civil society. However, he emphasises the department’s attempts at ‘building a better relationship â€¦ to avoid a confrontational approach between government and â€¦ civil society’.
Interim Management Team
The performance of the provincial DSD has been of great concern to central government, as has the performance of the provincial departments of health, education, roads and public works, and the Treasury. Concrete expressions of this concern included the deployment of a multi-sectoral interim management team (IMT) in 2002. The team comprised one national manager from each of the departments listed above, as well as the Presidency. The provincial Directors-General, the DPSA, the Public Service Commission and the Superintendent-General of the Provincial Treasury led the IMT (BuaNews). They were accountable to Premier Makhenkesi Stofile and, through the DPSA, to Minister Geraldine Fraser-Moleketi, who in turn reported to President Thabo Mbeki. The IMT was also significant because it was the first initiative of its kind in South Africa.
President Thabo Mbeki authorised Premier Stofile to set up the IMT for the purpose of ‘dealing with maladministration and breakdowns in service delivery in the province’ (GCIS 2003). Unlike previous interventions, which only focused on problem analysis, the IMT was to develop turnaround plans for implementation.
The establishment of the IMT coincided with an anti-corruption study by the PSC, which recommended the creation of an anti-corruption unit within the Premier’s Office. The Anti-Corruption Unit, which was duly established in 2004, is meant to contribute to the fight against corruption by developing ‘an updated database on all cases of corruption, including their resolution’ (Balindlela 2005/06). It is also meant to give effect to the Public Service Anti-Corruption Strategy, which sets out minimum anti-corruption requirements for all government departments, and is further responsible for co-ordinating all anti-corruption activities and initiatives in the provincial departments. At the time of interviewing Zola Tyikwe, Head of the Anti-Corruption Unit, the Unit was set to contract the Gobodo forensic firm to develop a fraud-risk profile for all 12 provincial departments (Tyikwe 2006). The provincial Auditor-General, however, had already pronounced the Department of Social Development as ‘high risk’ (Ngqwala 2006).
The IMT’s intervention in the provincial Department of Social Development came after a long history of departmental clean-ups. Twenty interventions prior to the IMT found similar types of problems (Interim Management Team 2003).
Joint Anti-Corruption Task Team
Propping up the IMT by way of prosecuting uncovered cases of fraud and corruption was the Joint Anti-Corruption Task Team (JACTT). This comprised the SAPS, the provincial Auditor-General, the DSO and the SIU. Different structures were pulled together under one roof for the first time. All personnel were remunerated by their respective institutions. Overall leadership of the JACTT, including financial matters, was vested in the DSO (Vabaza 2006).
JACTT was a highly effective mobilisation of disparate law enforcement agencies, and outlived its anticipated initial six-month lifespan. As a task team, however, JACTT was by definition not meant to last indefinitely. This fact seems to have been overlooked and its successes engendered the ambition to take on more cases. However, the more JACTT exceeded its shelf life, the more it seemed to lose its flavour. This primarily manifested internally, among its personnel, as the disparate elements within the structure began to assert their original identities. SAPS personnel would normally be promoted after serving for a certain period but working in JACTT did not accommodate this peculiarity, which was a huge disincentive (Vabaza 2006). Working in JACTT provided no prospects of additional financial rewards. Uncertainty about the future was another nail in the JACTT coffin. By February 2006, JACTT’s staff complement had decreased sharply – from 87 to 22. JACTT’s eventual disbanding in April 2006, nearly three years after its inception, was therefore inevitable.
Notwithstanding its ultimate demise, JACTT provided concrete proof that law enforcement agencies can work together successfully under one roof and for extended periods. Even more remarkable was the fact that ‘there were no criminal charges or disciplinary enquiries brought against any of [JACTT] members’ (Vabaza 2006). This is unheard of, especially in agencies like the SAPS and the NPA.
The provincial DSD and SASSA Regional Office
The provincial DSD began investigations into social grant fraud in 2001, before the social security function was transferred to SASSA. To date42 22 000 cases have been dealt with, many of which were cases of negligence in which grant recipients fail to notify the department of their change in employment status. They not really constitute an offence in terms of the law (Stassen 2006). Only 30 per cent of the cases dealt with were cases of misrepresentation in which people intentionally applied for grants to which they were not entitled.
Because the investigations and the Compliance Unit have been moved to the SASSA, the provincial DSD has no investigative clout. It refers all matters relating to grant investigations to the SASSA regional manager. The Eastern Cape has 24 SASSA district offices and about 58 service offices where people can apply for grants, among other things (Stassen 2006). But only the regional head office can undertake investigations and develop fraud prevention strategies. The internal audit function for all the district offices is also located at the head office.
As of April 2006 1 400 personnel from the Social Security programme had been transferred to the SASSA regional office. More than 600 contract workers were also hired (Stassen 2006). Of the 57 critical posts, 52 have been filled, even though the recruitment of critical staff is said to be a time-consuming challenge (Parliament of the Republic of South Africa 2006).
In terms of social grant fraud prevention, SASSA’s regional office has put in place certain control measures such as the introduction of pre-numbered application forms, and the Management Information System (MIS), which replaces the manual records management process with an electronic system (Parliament of the Republic of South Africa 2006). It also functions as a tracking tool that stalls the system whenever a document is missing. The creation of a central registry of files also means that the regional head office is able to locate application files within two or three minutes, compared with the two-month period that was characteristic of the pre-SASSA era (Stassen 2006). The effect is a reduction in potential litigation costs.
The SASSA regional office is also working closely with the education and home affairs departments to ensure, among other things, that children listed for the child support grant are indeed in existence, and that birth certificates are not fraudulent. However, syndicates are still found in collusion with officials in the Department of Health, who sell TB cards for use in fraudulent grant applications (Stassen 2006). The SASSA regional office has reportedly identified 3 109 government employees illegally receiving social grants (Stassen 2006). These cases have been referred to the SAPS for criminal prosecution. The Scorpions, meanwhile, are dealing with a case involving 175 municipal employees who were also fingered for fraudulent receipt of grants.
The SASSA regional office has come a long way since it became operational in April 2006. It now has departments for corporate services, finance and human resources, which did not exist initially (Stassen 2006). There are also now managers in financial accounting and supply chain management. However, there is clearly still a lot to be done. While more staff members have been sourced, shortage of personnel is still a formidable challenge. At the time of the research, the Compliance Unit, which, as we have seen, is the hub of anti-fraud and anti-corruption in SASSA, had only four permanent appointees. Two of these, plus one contract worker, are tasked with risk management control for all the 24 districts. This involves scrutinising reports of the auditors general, Gobodo forensic reports, and all the exception reports, including ACB payments, to identify risk areas.
Of the 13 recently employed contract workers, only one had an investigative background (Stassen 2006). Yet the unit currently has a case involving 14 252 civil servant pensioners who are accessing social grants (Stassen 2006), which is more than half the number the SIU identified in its preliminary analysis. (See Table 3). Of these cases, 1 500 originate in the Department of Education and 900 are from the Department of Health (Stassen 2006). Only 15 cases have been finalised in court in the past two years (Stassen 2006), making it rather puzzling that the Eastern Cape claims to be, ‘far ahead of the country in terms of investigations pertaining to Social Development and SASSA’ (Stassen, 2006). Since October 2005 some 1 301 cases were reportedly handed over to the SIU and nearly half a million rand recovered from the various departments (Stassen 2006).
Without diminishing the inroads SASSA has made in dealing with social grant fraud in the Eastern Cape, it is fair to say that there is still a lot of room for improvement. For example, the Compliance Unit, which is located at the heart of the fraud and corruption battleground, is, despite assertions to the contrary, extremely stretched and under-capacitated. Tasking only three people with all the provincial investigations borders on the absurd. Any improvements hinge on acknowledging and tackling the acute capacity issue within the unit.
Previous sections of this report have already reflected on the litigation challenges facing the DSD. The bulk of these stemmed from the process of cleansing the SOCPEN database. The then-Acting Head of the DSD, Denver Webb, notes that people came forward ‘claiming that they were taken off the system and they should have been on the system â€¦ now we’ve had to pay legal costs to fight that’. The key question, however, is, to rephrase Webb, whether the savings accrued from cleaning up the system justifies the costs incurred in litigations. At the time of the research Webb did not have any assurance on this because he ‘does not have the figures’. Therefore it could well be that the costs of litigation far outweighed the savings accrued from cleansing the system.
It also remains unclear who, between the department and SASSA, is responsible for litigation cases that were filed before and after 1 April 2006, when the SASSA officially became operational. For the Agency’s legal services unit, this is a very stern challenge (Parliament of the Republic of South Africa 2006).
However, it is encouraging to note that the provincial department does acknowledge the severity of its problems. For instance the DSD, in its 2003/04 Performance Brief, reports that:
It lacks effective internal control mechanisms
Expenditure on litigation against the department has increased from R5 million in 2002/03 to R20 million in 2003/04
The department has a 51 per cent vacancy rate (Black Sash 2005/06)
Although the Eastern Cape is a compelling case study for anti-corruption interventions, for reasons highlighted earlier it is unfortunately not a suitable example for reflecting on the SIU’s national anti-corruption achievements. To start with, other anti-corruption initiatives already taking place in the province, such as the DSO, SAPS and JACTT investigations, reportedly led to a joint decision by the DSD and the SIU to move on to other provinces where there was a shortage of investigative capacity (SIU 2007). SIU interventions in the province therefore only began later, on 1 March 2005 (SIU 2006), which was actually prior to the publication of the Presidential Proclamation on 6 April 2005. Our research into the DSD anti-corruption campaign began roughly 18 months later when SIU investigations were still building momentum.
A caveat is thus required: At this stage any conclusions that may be drawn regarding the role of the SIU vis-Ã -vis social grant fraud investigations in the Eastern Cape province are at best premature. That, however, does not absolve the provincial SIU of the onus of proving its relevance, particularly given the complaint that the prevalence of corruption in the province tends to be blown out of proportion (Wolwaard 2006), for reasons that are not exactly altruistic. Unfortunately this is not the perspective of one disenchanted individual. Webb notes how ‘[the] Eastern Cape has got this unfortunate habit of shooting itself in the foot â€¦ [W]hen we uncover fraud and corruption it is reported as if [it] has increased when in fact what â€¦ is increasing is the detection and action against it’ (Webb 2006).
The challenge for the SIU is how to integrate and reconcile these perceptions with the apparent self-generated headline-grabbing corruption statistics. If the Presidential Proclamation is a more reliable indicator of the extent of the problem, then the stipulated period of investigation – 1 April 1996 to 1 April 2005 – may need to be revisited. Surely the periods before and after also deserve thorough scrutiny. This is, of course, beyond the SIU’s statutory powers but is an issue for the President and the Minister of Social Development to revisit.
Co-operation and conflict
The working relationship between the SAPS and the SIU in the province is a murky area. This is despite reported efforts on the part of the SIU to cultivate a good working relationship with the police, including consultations at the highest level. Visagie concedes, albeit conservatively, that in some instances there are difficulties because the SIU is placing certain demands on the police and on their time (Visagie 2006). Personality differences, Visagie continues, also factor into the equation. Stassen, on the other hand, in his capacity as chairperson of the steering committee that comprises the SASSA, the SAPS Commercial Crimes Unit, the DSO, and the SIU, among others, is more explicit:
There is not a good, and I will say this on record â€¦ there is not a very good relationship between the SAPS and the SIU (Stassen 2006).
At the time of initial research, the Head of the SAPS Commercial Crimes Unit, Piet Wolwaard, expressed concerns about the SIU’s deployment to investigate grants, which are highlighted here43 along with counter-arguments, where applicable, from the SIU.
The state created a ‘very expensive’ middleman between the Department and the police. However, it is unclear how Wolwaard relates the R2 million the SIU charges per month to the R80 million previously paid to a conglomerate of private forensic firms for six months work, i.e. averaging R13 million per month
The department is clearly prepared to invest its financial resources, but not in the proper structures. In funding the SIU to prosecute corruption cases it bypassed the legitimate structure – the Special Commercial Crimes Court (SCCC). The SIU argues that ‘the SCCC clearly conveyed that they would not accept social grant cases as the amounts involved were not significant. In any event, it would not have been possible for the Department to create a dedicated investigative capacity within the SAPS or the SCCC’ (SIU 2007)
Criminal prosecution, the policeman’s key expertise, is now also an increasingly prevalent component in the work of the SIU. The latter vigorously denies extensive involvement in criminal matters because it is aware of the impropriety of doing so. They know that ‘legislation does not allow them to do what they do’
Social grant fraud cases are ‘too straightforward’, and not sophisticated enough to warrant deployment of ‘special investigations’
At the time of the interview the SIU did not have the personnel to deal with the new work structures it was assuming. At times this meant poaching experienced staff from other agencies, particularly SAPS.
The conduct of prosecutions is unjust. Only those who plead guilty are pursued while those who do not plead guilty are let off the hook. The SIU argues that this assertion ‘has absolutely no foundation and is untrue. Irrespective of whether a person pleads guilty or not guilty, they are prosecuted if there is a prima facie case â€¦ When Wolwaard made these allegations, the prosecution of cases had not even commenced in his province. In fact, the DPP in the province has given the go-ahead for prosecutions to proceed on the basis explained’44
Concern with statistics at all costs seems to take precedence over strategy and proper planning. Although not a direct counter to this assertion, the SIU maintains that while the SAPS is concerned with statistics, the SIU concentrates on money saved45