Annual Report 2008/2009

Private Security Industry Regulatory Authority

481 Belvedere Street, Arcadia, Pretoria, 0002

Tel no.: +27 12 337 5500

Fax no.: +27 12 337 3337

www.psira.co.za

Annual Report 2008/2009Private Security Industry Regulatory AuthorityPrivate Security Industry Regulatory Authority


Tel no.: +27 12 337 5500

Fax no.: +27 12 324 3337

www.psira.co.za

Annual Report 2008/2009Private Security Industry Regulatory Authority

2 Annual Report 2008/2009

Primary Objectives of PSIRA

The primary objectives of PSIRA are to regulate the private security industry and to

exercise effective control over the practice of the occupation of security service provider in the

public and national interest and in the interst of the private security industry itself.


Primary Objectives of PSIRA

The primary objectives of PSIRA are to regulate the private security industry and to

exercise effective control over the practice of the occupation of security service provider in the

public and national interest and in the interst of the private security industry itself.

3Private Security Industry Regulatory Authority

TABLE OF CONTENTS

PAGE

Council of the Authority 4

Developments within the Council regarding Corporate Governance 5-6

Foreword by the Acting Chief Executive Officer 7-8

Executive Summary 9-11

Divisional Reports 12

Operations Division Law Enforcement and Training Department 13-26

Legal Services Department 27-28 Registrations and Administration Department 29

Information Technology Division 30-33

Human Resources Division 34-37

Finance and Administration Division 38-40

Report of the Auditor-General 41-49

Annual Financial Statements 50-81 Statement of Financial Position 52 Statement of Financial Performance 53 Statement of Changes in Net Assets 54 Cash Flow Statement 55 Accounting Policies 56-64 Notes to the Annual Financial Statements 65-79 Detailed Income Statement 80-81


COUNCIL OF THE AUTHORITYTERM EXPIRED 31 AUGUST 2008

Standing from L-R: Dr. Thandi Ndlovu (Councillor); Mr Sipho Majombozi (Councillor)Seated from L-R: Ms. Mary de Haas (Councillor); Adv. Ngoako Ramatlhodi (Chairperson) and Dr. Fazel Randera (Vice Chairperson)


DEVELOPMENTS WITHIN THE COUNCILREGARDING CORPORATE GOVERNANCE

The Council of the Authority appointed by the Minister for Safety and Security consists of a Chairperson, Vice Chairperson and three additional Councillors.

The Council is responsible for the governance of the Authority as prescribed by the Private Security Industry Regulation Act, 2001.

During the year under review the composition and attendance of meetings by the Councillors was as follows:

9 April 2008 8 May 2008 Special Council Meeting

12 May 2008

23 June 2008

Adv. N A Ramatlhodi √ √ √ √Dr. F Randera √ √ √ √Dr. T Nldovu x √ √ xMs. M de Haas √ √ √ xMr. S L Majombozi √ √ √ x

The following are the key strategic achievements of the Council during the period under review:

1. Monitoring of the strategic objectives as set out in 2008/2009 strategic planning document, namely:

•• •••••

To commit to a democratic, transparent and interactive Council.To enhance stakeholder relations.To ensure sound control and prevent exploitation of firearms.To enhance fair and objective regulation of the private security industry.To promote ongoing research.To ensure efficient and effective operations of the Authority.To ensure financial stability and sustainability.

The Council’s term ended on 31 May 2008 and was extended by the Minister for Safety and Security for a further period of three months untill 31 August 2008.

2. Strengthening of Corporate Governance

Approval of the delegation of authority policy framework which will enhance corporate governance within the Authority.

3. The Council further identified the following priority areas to be addressed:

• Finalisation of the human resources audit.

- The final steps of the audit, involving job grading and evaluation, which requires a firm of consultants are still to be undertaken.


• Ensuring financial viability of the Authority.

The restructuring exercise in which a number of essential new posts have been created has added to the annual expenses of the Authority, as will any further expansion of services to meet the demands of the rapid growth of the industry. To ensure long-term financial viability of PSIRA various options have been discussed by the outgoing Council, such as the activation of the Levies Act.

4. Suspension of PSIRA’s Chief Executive Officer

• Steps to ensure compliance with the requirements of the PFMA

- Establishment of the Audit Committee and taking the necessary steps to ensure compliance with the requirements of the PFMA.

•

•

The need for legislation reform.

Establishing a national footprint with a view to significantly increase the Authority’s visibility on the ground.

Following serious misconduct/poor performance allegations against the Chief Executive Officer, the Council decided at a special meeting held on 12 May 2008 to suspend the Chief Executive Officer. At the end of the reporting period, the matter was not yet finalised as due processes were taking place in order to put the matter to rest.

Developments within the Council regarding Corporate Governance


The Private Security Industry Regulatory Authority, formerly known as the Security Officers’ Interim Board, takes pleasure in submitting its annual report for the 2008/2009 financial year. The report is tabled in terms of Section 10(1)(b)(i) of the Private Security Industry Regulation Act, (Act No. 56 of 2001) (hereinafter referred to as the Act).

Since the creation of the Private Security Industry Regulatory Authority in terms of Section 2(1) of the Act on 14 February 2002, it went from strength to strength. I obviously do not want to underestimate the formidable difficulties and challenges PSIRA had to overcome, especially if one considers the significant increase in the regulatory scope of PSIRA during the last seven years.

In a joint venture, the Council and PSIRA determined several strategic priorities for the regulatory body. These were identified by a consolidated review of PSIRA’s legislative mandate, stakeholder interests and needs. In addition, PSIRA’s strengths and weaknesses were considered. The strategic priorities included:

• Committing to a democratic, transparent, accountable and interactive Council.• Enhancing stakeholder relationships and communication.• Review and enhancing legislation.• Promoting high standards in the training of security service providers.• Enhancing fair and effective regulation of the private security industry.• Ensuring effective and efficient operation of PSIRA through efficient management practices.

Plans and strategies of both the Council and PSIRA were successfully implemented. These yielded positive results. The key performance areas of the said plans and strategies are highlighted throughout the report.

FOREWORD BY THE ACTING

CHIEF EXECUTIVE OFFICER

Mr Ntusi MbodlaActing Chief Executive Officer


PSIRA was honoured to have a high level delegation from Lesotho. Information was shared on various regulatory issues. It is encouraging to learn that South Africa is not alone in the never-ending fight against crime. Lesotho passed a law to establish a Security Officers’ Board which is comparable to the South African regulatory body. In particular the two countries seem to share matters such as:

• Renewals of registration after a certain period.• Security Officers’ Board that comprises both employer and employee representatives. This Board is similar to our previous Security Officers’ Interim Board.

PSIRA, in partnership with the Safety and Security Sector Education and Training Authority, held 13 national stakeholder workshops with the private security industry. The main purpose was to communicate the newly proposed training standards to the industry and the changing environment as far as quality assurance of training is concerned. PSIRA anxiously awaits the publication of the new training standards that will support the principles of professionalism in the industry. This will ensure that the industry become a valuable and competent partner for the South African Police Service in the fight against crime.

Half way through the period under review, the extended term of the Council came to an end. The Minister for Safety and Security acting in terms of Section 11 of the Private Security Industry Regulation Act, 2001 took over the functions of Council.

Subsequently in 2009 the Minister for Safety and Security appointed a Task Team to conduct an in-depth en-quiry into the functioning of the Private Security Industry Regulatory Authority (PSIRA), with particular focus on all factors that impede on its effectiveness as a regulatory body. The Task Team paid particular attention to:

• Structural weaknesses that exist.• Competence and experience of key staff members of PSIRA.• The capacity of PSIRA to deliver on its statutory mandate.• Organisational gaps and weaknesses that may give rise to risks.• Gaps and weaknesses that exist in the legislative framework.• Security weaknesses and threats.

In appointing the Task Team, the Minister empowered the members of the team with the authority to enter the premises of PSIRA, to interview members of staff and to requests and be furnished with any documents or other information pertaining to PSIRA.

The Task Team comprised of four members:

• Ms Jenny Irish-Qhobosheane• Mr Josiah Jele• Mr Dumisweni Zimu• Adv. Anton Wiid

The Task Team was appointed for a period of two months.

In conclusion, I want to acknowledge with appreciation the diligent work of PSIRA’s senior management team and the staff of PSIRA. I value the support and strategic guidance from the previous Council of PSIRA whose extended term of office ended 31 August 2008. I also appreciate commitment by the private security industry to work closely with PSIRA to bring about comprehensive and effective regulation. I highly value the political stewardship of the Minister for Safety and Security.

NTUSI MBODLAACTING CHIEF EXECUTIVE OFFICER

Foreword by the Acting Chief Executive Officer


EXECUTIVE SUMMARY

PSIRA conducted 6 453 inspections on existing security service providers. These inspections led to 1 302 dockets for contraventions of provisions of the statutory Code of Conduct for Security Service Providers. The charges mainly related to illegal underpayment and general non-compliance with labour legislation, deployment of untrained and unregistered security officers, as well as administrative irregularities. When compared with the previous year, the number of inspections conducted has decreased by 7%. This was the result of staff turnover within the Law Enforcement Department.

Accredited training centres were monitored through different types of inspection. A total of 425 inspections was conducted at accredited training providers. Inspections were also conducted at 16 centres following changes of address. All these centres were approved. PSIRA received 604 applications from training instructors for accreditation, of which 421 were approved and 183 rejected. During the corresponding period in the previous year, 413 482 course reports were processed, compared to the processing of 486 286 course reports. This shows an increase of 18%. No new training centres were accredited, as a moratorium had been placed on new accreditations during May 2007. This was done in view of the implementation of the PSIRA/ SASSETA Memorandum of Understanding. The registration of a number of training providers and instructors was sus-pended due to their involvement in issuing fraudulent certificates. These instructors are awaiting the finalisa-tions of improper conduct enquiries.

Collaboration with the South African Police Service (SAPS) was also instrumental in obtaining PSIRA objectives. The SAPS received 104 charges laid against security businesses who rendered services while unregistered or for fraud, theft and other criminal offences. There are currently 839 criminal cases pending with the SAPS. The Law Enforcement Department had followed up with the Station Commanders concerned, as well as, with the Department of Justice in some cases, regarding progress on the prosecutions. A close working relationship exists with the Monitoring and Audit Unit of the SAPS. This unit investigates criminal cases related to the private security service providers and they made several arrests.

It is important to establish and strengthen a good working relationship with other state organs and to ensure compliance with our Act and Regulations. PSIRA received a total of 3 732 enquiries pertaining to prospective security service providers from state tender boards and other stakeholders. This constitutes a 16% decrease in the number of enquiries received compared to the corresponding period in the previous financial year.

PSIRA received 978 enquiries from the Registrar of Firearms regarding applications for firearms, compared to 529 enquiries received in the previous year. This constitutes an increase of 89%. The high number of enquiries received can be attributed to the requirements of Regulation 13(5) and 13(6), which state that a security services provider requiring the use of a firearm must provide a suitable firearm for that purpose, as well as the renewal of firearm licence requirements in terms of the Firearms Control Act, 2000 (Act No. 60 of 2000).


The Complaints Help Desk handled numerous enquiries. The enquiries included, inter alia, registration pro-cedures and fees, registration status of companies, and representation and appeals procedures.

A total of 1 463 charge sheets and 1 604 summonses was served on security service providers in terms of the Improper Conduct Enquiries Regulations compared to 900 charge sheets and 1 412 summonses the previous year. The summonses resulted in successfully finalisation of 748 prosecutions. The apparent discrepancy between those summonsed, charged, and convicted under the authority of the Legal Services Department may be due to figures carried forward into the year under review. Various reasons, such as postponement and untraceable respondents, may also apply.

PSIRA suspended the registration of 111 security businesses and withdrew the registration of 35 security service providers for failure to pay statutory fees. A further 28 security service providers were convicted of improper conduct. As a result their registration as security service providers was withdrawn.

PSIRA received 14 appeals, of which three were dismissed and 11 were upheld by the Appeals Committee. This followed improper conduct enquiries where rules were made against the security service providers. PSIRA also received a total of 859 appeals from individuals, of which 484 were dismissed and 375 were upheld by the Appeals Committee. Thirteen applications for exemption from the provisions of the Act were also received. Of these, two were granted, and 11 were still pending.

The number of active registered businesses increased by 16% from 5 504 to 6 392. The number of active registered employee security officers increased by 11% from 339 108 to 375 315.

The total income of R79 037 904 against the total of expenditure R83 390 666 resulted in a deficit of (R4 352 762) compared with a surplus of R675 335 for the same period last year.

A five-year IT strategy plan was developed in respect of the improved delivery of IT services within PSIRA. The areas identified by the plan include wide area network (WAN), Internet services and e-mail, application and desktop support, information technology services management, and information technology infrastructure management services.

The Human Resources Division was primarily involved in determining best practice and developing the human resources strategy across the various divisions of PSIRA. Some of the key priorities were the adoption and the implementation of a human resources audit report, which was compiled by outsourced management consultants. This included the adoption and implementation of a new organisational structure, recruitment of senior management, and the development of new human resources systems.

Council and senior management identified the following challenges:

Executive Summary

Sustaining growth and the increasing importance of the private security industry in strengthening democracy.Renewing of registrations and ongoing security vetting.Enforcing firearms control within the private security industry.Developing a BEE charter for the industry.Strengthening the legislative and regulatory framework.Establishing a national footprint and increasing the public profile.

• • ••••


Executive Summary

Council identified the following strategic objectives on which the senior management of PSIRA’s business plan will focus in the next financial year:

•• •

Deploying of unregistered and untrained foreign nationals in the industry.Applying/practising extraterritorial enforcement.Managing financial constraints of PSIRA.

Ensure compliance with legislation by the private security industry.Ensure transparent, fair, objective, and in-time registration processes as well as the sound control of firearms.Promote high standards in the training of service providers.Ensure protection of users and promote responsiveness to users’ needs as well as enhancement of stakeholder relations and communication.Promote BBBEE, EE, and fair employment practices in the private security industry.Ensure effective and efficient management practices, systems, and processes in the operation of PSIRA.

••

••

• •


DIVISIONALREPORTS


OPERATIONS DIVISION

Inspection of Security Businesses

In terms of the Law Enforcement Department’s operational policy, each inspector must conduct a minimum of 20 inspections per month. This target is considered reasonable taking into consideration all the other functions associated with the position of an inspector. In certain cases the targets of individual inspectors are reduced under special circumstances i.e. special investigations, annual leave, sick leave, etc.

During the period 1 April 2008 to 31 March 2009, a total of 6,453 regulatory inspections of security businesses were conducted, compared to 6,874 inspections for the previous financial year.

The regional breakdown was as follows:

REGION NUMBER OF INSPECTIONSHead Office - National Investigation Team (NIT) 3 778

Gauteng Mpumalanga Limpopo North West Free State/Northern Cape

2 065376495427415

Western Cape 650

Eastern Cape 307

KwaZulu-Natal 1 718

TOTAL 6 453

Law Enforcement &Training Department


NATIONAL INVESTIGATION TEAM

GAUTENGMPUMA-LANGA

LIMPOPONORTH WEST

FREE STATE/

NORTHERN CAPE

TOTAL

Total number of routine/regulatory/training/ infrastruc-ture/accreditation inspections conducted

2 065 376 495 427 415 3 778

First-time inspections 429 101 232 75 66 903Triggered inspections 317 76 46 101 82 622Infrastructure inspections 615 102 245 48 54 1 064

COASTAL BRANCHES

WESTERN CAPE

EASTERN CAPE

KWAZULU-NATAL

TOTAL

Total number of routine/regulatory/training/ infrastruc-ture/accreditation inspections conducted

650 307 1 718 2 675

First-time inspections 154 86 430 670Triggered inspections 52 86 638 776Infrastructure inspections 129 91 303 523

Inspectors Law Enforcement Department

A lesser number of inspections were conducted compared to the previous financial year as a result of staff turnover. A regional breakdown as far as the type of inspection conducted from 1 April 2008 to 31 March 2009, is as follows:

Law Enforcement and Training Department

Note must be taken that “first time inspections” referred to above refers to businesses that have not been the subject of an inspection from its date of registration. These businesses are newly registered businesses. “Trig-gered inspections” refers to complaints sourced via the help desk, telephonic, written or personal complaints, internet, newspaper articles, debtor clerks, etc. In terms of the Law Enforcement Department’s operational policy, priority must be given to complaints and infrastructure inspections first.

Routine inspections are conducted, depending on the particular area visited, on the basis of when last an in-spection was conducted at a particular security service provider.


Statistical information pertaining to the different categories or classes of security service providers inspected from 1 April 2008 to 31 March 2009 is as follows:

NATIONAL INVESTIGATION TEAM GAUTENGMPUMA-LANGA

LIMPOPONORTH WEST

FREE STATE/

NORTHERN CAPE

Total number of routine/regulatory/training/infrastructure/ accreditation inspections conducted

2 065 376 495 427 415

Category or class of security service provider inspected• Commercial/industrial/residential/ guarding or patrolling

1 473 277 448 307 297

• Assets in transit 26 13 3 10 15• Close protection services 60 11 7 19 6• Reaction or response services and monitoring signals from security equipment (control room)

200 43 22 57 49

• Ensuring safety and order on premises (special events)

69 8 10 16 6

• Car watch or related activities 69 2 7 6 12

Providing advice on the protection of per-sons/property (consultants/advisers)

38 - 4 17 8

Installing, servicing, or repairing security equipment

130 16 13 52 27

Private investigators 34 2 7 20 11

Providing security training or instruction as well as accreditation

113 31 31 34 43

Providing services of a locksmith 72 8 4 10 5Making persons or their activities available for rendering of security service (labour brokers)

3 2 - 2 2

In-house 40 8 10 6 11Manufacturing, importing, distributing, or advertising of monitoring devices

- - - - -

Ms. Charity SetataHelp Desk : Law Enforcement Department



COASTAL BRANCHESWESTERN

CAPEEASTERN

CAPEKWAZULU-

NATAL

Total number of routine/regulatory/training/infrastructure/ accreditation inspections conducted 650 307 1 718

Category or class of security service provider inspected• Commercial/industrial/residential/guarding or patrolling 378 243 1 223• Assets in transit 16 8 78• Close protection services 2 10 152

• Reaction or response services and monitoring signals from security equipment (control room)

69 41 187

• Ensuring safety and order on premises (special events) 1 25 115• Car watch or related activities 1 6 4Providing advice on the protection of persons/property (consultants/advisers)

16 22 58

Installing, servicing, or repairing security equipment 116 39 157

Private investigators 20 15 46Providing security training or instruction as well as accreditation 49 20 104Providing services of a locksmith 50 5 69Making persons or their activities available for rendering of security service (labour brokers)

- 4 7

In-house 14 22 84Manufacturing, importing, distributing, or advertising of monitoring devices

- 1 5

On review of the statistical information presented above, note must be taken of the fact that certain security service

providers may render more than one particular security service. One inspection conducted at a particular security

business may therefore result in two or more categories or classes of security service being inspected. It will be

noted that certain of the categories or classes of security service providers were not subjected to any inspections

during the period under review. Taking into consideration the number of security service providers registered in

a particular province, the number of inspectors and the policy regarding the number of inspections to be con-

ducted in a particular month, security businesses are on average subjected to one inspection every 8 to 12 months.

Senior Inspectors Law Enforcement Department

*



REGIONNUMBER OF BUSINESSES

SMALL BUSINESSES

MEDIUM BUSINESSES

LARGE BUSINESSES

INFRASTRUCTURE & CAPACITY

Head Office (NIT) 2 069 289 356 1 064Western Cape 433 67 21 129Eastern Cape 175 18 23 91KwaZulu-Natal 1 257 90 68 303TOTAL 3 934 464 468 1 587

With reference to all the above statistics, the overall performance pertaining to inspections conducted for the period 1 April 2008 to 31 March 2009 is 104% compared to the target set. The regional breakdown is as fol-lows:

REGION TARGETNUMBER OF

INSPECTIONS CONDUCTED

PERFOR-MANCE

Head Office (NIT) 3 526 3 778 107% Gauteng 2,030 2 065 102% Mpumulanga 357 376 105% Limpopo 385 495 129% North West 379 427 113% Free State and Northern Province

375 415 111%

Western Cape 674 650 96%Eastern Cape 271 307 113%KwaZulu-Natal 1 721 1 718 100%

REGION NUMBER OF DOCKETSHead Office (NIT) 826Western Cape 111Eastern Cape 108KwaZulu-Natal 257TOTAL 1 302

Statistical information pertaining to inspections conducted at large, medium and small businesses from 1 April 2008 to 31 March 2009 is as set out below. For the purpose of this statistical information, a small business is considered to be employing less than 20 security officers, medium 21 to 50 security officers and large, 51 and above security officers.


Improper Conduct Investigations

During the period 1 April 2008 to 31 March 2009, a total of 1,302 improper conduct dockets against secu-rity businesses were compiled compared to 1,433 dockets for the previous financial year. The resignation/ dismissal of inspectors and newly appointed inspectors under training, all contributed to a decreased in the number of dockets compiled. The regional breakdown for the period under review is as follows:


REGIONNUMBER OF DOCKETS

SMALL BUSINESSES

MEDIUM BUSINESSES

LARGE BUSINESSES TOTAL

Head Office (NIT) 451 148 227 826Western Province 85 14 12 111Eastern Cape 83 5 20 108KwaZulu-Natal 182 33 42 257TOTAL 801 200 301 1 302

A further regional breakdown as far as Code of Conduct dockets against, large, medium and small businesses from 1 April 2008 to 31 March 2009 are concerned, is as follows:

Improper Conduct Investigation Dockets pertaining to Minimum Wages

One of the objects of the Authority is to promote the protection and enforcement of the rights of security of-ficers and other employees in the private security industry particularly to ensure that security businesses pay the prescribed minimum wages as determined by the Department of Labour in order to ensure that employee security officers are not exploited.

As at 31 March 2009, there were 735 Improper Conduct dockets pending against security service providers for allegations of failing to pay the statutory minimum wage to employee security officers. The regional breakdown was as follows:

REGION NUMBER OF INSPECTIONSHead Office (NIT) 622

Western Cape 13Eastern Cape 3KwaZulu-Natal 97TOTAL 735


Criminal Investigations

Regulatory inspections are also conducted to investigate and detect unregistered security businesses as well as other criminal contraventions of the Act for the purposes of opening cases against them with the South Afri-can Police Service.

As at 31 March 2009 a total of 839 outstanding criminal cases were pending with the South African Police Service, where inspectors of the Authority have been the complainants.

During the period 1 April 2008 to 31 March 2009, a total of 104 criminal cases were opened by inspectors of the Authority, compared to 153 cases for the previous financial year.


During the period under review, a total of 44 criminal cases were also finalized by the National Prosecuting Authority compared to 50 cases for the previous financial year. The regional breakdown in respect thereof was as follows:

REGION SUCCESSFUL FINALISED

UNSUCCESSFULLY FINALISED TOTAL

Head Office (NIT) 24 2 26

Western Cape 4 0 4Eastern Cape 13 0 13KwaZulu-Natal 1 0 1TOTAL 42 2 44

As previously stated, there were at 31 March 2009 a total of 839 criminal cases outstanding with the South African Police Services countrywide. The regional breakdown is as follows:

REGION CRIMINAL CASES OPENED

Head Office (NIT) 543Western Cape 147Eastern Cape 16KwaZulu-Natal 133TOTAL 839

The regional breakdown in respect of criminal cases opened during the period under review in the various of-fices of the Authority was as follows:

REGION CRIMINAL CASES OPENEDHead Office (NIT) 66Western Cape 13Eastern Cape 15KwaZulu-Natal 10TOTAL 104

Firearm Applications

The Authority provides information to the Firearms Registrar pertaining to security service providers applying for firearm licenses. This information includes, inter alia, the following:

• The registration status of the security business. • Number of security officers employed by the business and their registration and training status.• Annual amounts due to the Authority.



During the period under review, a total of 978 firearm application enquiries were received from the Firearms Registrar and finalized compared to 529 applications for the previous financial year. Of the 978 processed, the Firearms Registrar was informed that 128 security service providers owed annual amounts or fines to the Authority, 166 of the applicants failed to inform the Authority of changes, 62 responsible persons for the firearms were not linked to the business, registered or trained, 27 businesses were not lawfully registered, 12 owners/directors/members were not trained or registered, 2 businesses did not indicate their intended services, 1 business was liquidated and in 99 cases, the business applied for more firearms than their staff complement. A total of 481 applicants were cleared by the Authority for consideration by the Central Firearms Registry.

Charge Sheets and Summonses Issued

During the period 1 April 2008 to 31 March 2009, a total of 1,463 charge sheets and 1,604 summonses in respect of improper conduct cases were prepared by the Authority compared to 900 charge sheets and 1,412 summonses for the same period last year.


These summonses and prosecutions bear no reference to the businesses charged as the charge sheets and summonses issued by the Authority could be from previous years and not necessarily from the year under re-view. Furthermore, the variance between summonses served and the total successful prosecutions could be a result of various reasons such as postponements and respondents not being traceable.

Untraceable Security Service Providers

Following on from the issuing of charge sheets and/or summonses from 1 April 2008 to 31 March 2009, 127 security service providers could not be traced by Inspectors of the Authority compared to 36 security service providers the previous financial year. Steps taken to trace these security service providers include, inter alia, the following:

• Visits to known addresses of the businesses as well as that of the owners/directors/members, etc.• Enquiries at neighbouring businesses.• Calling all numbers available on the Authority’s database.

Staff Complement of the Law Enforcement & Training Department

Inspectors

There were at 31 March 2009, 44 inspectors (which included 3 managers), compared to 40 inspectors at 31 March 2008. The inspectors were in turn supported by a total of 10 administrative support staff that underpin the Department’s administration in the 4 regional branches of the Department.


The Law Enforcement staff complement in the different regions was at 31 March 2009 as follows:

REGION HEAD OFFICE(NIT) KWAZULU-NATAL EASTERN CAPE WESTERN

CAPEManagers 1 1 1 1Inspectors 21 13 3 4Support staff 6 2 1 1TOTAL 28 16 5 6

During the period under review, six (6) inspectors resigned and 1 inspector was dismissed compared to 7 resignations during the previous financial year. Three (3) inspectors within the KZN branch employment were also suspended during the period under review and their disciplinary enquiries will be finalized in April 2009.

A number of inspectors were also appointed in vacant positions during the period under review as well as additional inspector positions were created. A total of 12 inspectors were appointed in the following geographic areas:

• Head Office (NIT) : 3• KwaZulu-Natal : 4• Eastern Cape : 4 (two inspectors were transferred to the Mthata branch and reports to KwaZulu-Natal)• Western Cape : 1


There are a number of vacancies still open as a result of resignations/dismissals or transfers in the Law En-forcement Department. The details of these vacancies are as follows:

• Head Office : 5 inspector positions and 1 legal typist• Kwazulu-Natal : 1 inspector position and 1 legal typist• Eastern Cape : 1 senior inspector position• Western Cape : 2 inspector positions

In certain of these positions, interviews have already been held and the successful candidates will be appointed in the next financial year. The remainder of the vacancies will be addressed in the next financial year.

A number of inspectors were also promoted to the position of senior inspector during the period under review. This not only allowed for Law Enforcement Department to enhance its organizational structure to support the impact of the additional appointments, but also created an opportunity for deserving inspectors to be recog-nized through a promotion. This is also an attempt by the Authority to create a career path for inspectors to restrict staff turnover.

In view of an organisational need, two chief inspector positions were also created and the positions were advertised in February 2009. Interviews will be held in the next financial year.

Training

The Training Department’s staff complement was at 31 March 2009 as follows:


Administrator 1

Help Desk Administrators6 and 3 temporary staff

members

Course reports on hand 31 March 2008 8 572Course reports received from 1 April 2008 to 31 March 2009 508 062Course reports processed from 1 April 2008 to 31 March 2009 486 286Course reports returned from 1 April 2008 to 31 March 2009 20 324Course reports carried over to April 2009 10 024

Course Reports

During the period under review, the following was the position regarding course reports in the Training Depart-ment:


Interaction between the Authority and the Safety & Security Sector Education & Training Authority (SASSETA)

The Safety and Security Sector Education and Training Authority (SASSETA) will become the sole quality assu-rance body for the private security industry, following on from an agreement signed with the Private Security Industry Regulatory Authority (PSIRA) during 2005. This agreement was extended during August 2008 for a further 3 years.

In terms of the agreement, SASSETA, as a SAQA Accredited Education, Training and Quality Assurance body (ETQA), will quality assure all education and training in the security industry, whilst PSIRA will register security training providers and security service providers who wish to operate in the security industry.

One of the most important issues in the PSIRA/SASSETA interaction is the alignment and comparison between the accredited courses in terms of the Training of Security Officers Regulations, 1992 and the NQF-Registered Qualifications. This alignment is not only crucial in respect of recognition of prior learning, but also formed the basis for the new statutory training qualifications for all security service providers in the industry.The new proposed training standards (skills programmes) were compiled from, inter alia, the following SAQA registered qualifications:

(NC – National Certificate / FETC – Further Education and Training Certificate)NC : General Security Practices (Level 3) FETC : Specialist Security Practices (Level 4)FETC : Use of Firearms (Level 4)FETC : Firearm Training (Level 4)FETC : Dog Handling (Level 4)NC : Locksmithing (Level 3)NC : Close Protection (Level 5)FETC : Electronic Security Installation Practices (Level 4)FETC : Generic Management (Level 4) NC : Generic Management (Level 5)NC : Resolving of Crime (Level 5)NC : Policing (Level 5)


The skills programmes include, inter alia, training standards for the following categories or classes of security service providers:


PROVINCE TOWNGauteng MidrandLimpopo PolokwaneMpumalanga NelspruitNorth West MmabathoFree State Bloemfontein

Northern Cape KimberleyUpington

Eastern Cape UmtataPort Elizabeth

KwaZulu-Natal NewcastleDurban

Western Cape Cape TownGeorge

Following on from determining the new statutory training standards for all the categories or classes of security service providers during the period under review, the Authority issued a communiqué to all security service providers in respect thereof during June 2009. The Authority also compiled draft Training Regulations and submitted same to the office of the Secretariat for Safety and Security during November 2008. These draft regulations must be published in Government Gazette for public comment and the proposed implementation date is 1 October 2009. The Authority is still awaiting the publication of the proposed regulations. Further, in view of the fact that it is of paramount importance to ensure that the private security industry, and in particular the training providers, are clear in their understanding of the changing training environment and the manner in which it will impact on the industry, 13 Imbizo’s were also held in partnership with SASSETA during the period under review. These Imbizo’s were held in the following areas:

••

•••••••

•••••

Guarding Sector (grades E –A)Generic Management and Management for all the particular categories or classes of security service providersConsultants / AdvisorsReaction OfficersAssets in TransitRetail SecuritySpecial EventsClose ProtectionElectronic security which includes CCTV, Alarm Systems, Access Control, Fire Detection, X-Ray Inspection, Metal Detection, Bomb Detection, Monitoring / Interception Devices and Satellite Tracking.Locksmith and Safe TechniciansPrivate InvestigatorsDog HandlersTraining Instructor / FacilitatorNational Key Point Officers



To ensure a proper understanding of the NQF and skills development. The implications of the PSIRA/SASSETA memorandum of understanding. Proper understanding and debate on the new proposed statutory training standards for all the categories or classes of security service providers.The importance for training providers to timeously apply for accreditation with SASSETA in order to build training capacity.Building assessor / moderator capacity prior to the implementation of the new training regulations.

•••

•

•

Finalization of the development of learning material in respect of all the skills programmes.Capacity building within the training industry for all categories or classes of security service providers. This is obviously subject to the publication of the training regulations.SASSETA national footprint. In this regard SASSETA requested the Authority to consider making of-fice space available within the PSIRA infrastructure for certain dates to host a SASSETA practitioner / administrator. This matter is under consideration. Quality Assurance of the management level 4 and 5 skills programmes. Alignment of databases in order to retrieve information from the SASSETA learner database in order to facilitate registration of applicant security service providers.Changing SAQA environment with the publication of the National Qualification Framework Act and the establishment of the Quality Councils and uncertainty of the continued existence of SASSETA.

The purpose of the workshops included, inter alia, the following:

Lastly, there are a number of challenges currently being addressed by PSIRA and SASSETA pertaining to the implementation of the M.O.U. These includes, inter alia, the following:

••

•

••

•

Complaints and Helpdesk

The Authority has a full-time Complaints and Helpdesk at our Head Office as well as at the KwaZulu- Natal branch. The purpose of these facilities is to deal with general enquiries and to register complaints that need further investigation by inspectors. Statistical information pertaining to the number of enquiries received at Head Office and KwaZulu-Natal during the period under review, is as follows :

NUMBER OF ENQUIRIES/COMPLAINTS HEAD OFFICE KWAZULU-NATAL

Telephonic 21 449 146

Personal 6 660 342Enquiries 4 871 294Complaints 4 299 188Enquiries pertaining to registration/training 453 126Wages 797 147Provident Fund 420 49TOTAL 38 949 1 292



Stakeholder Interaction

During the period under review, several meetings took place with the SAPS, NIA, Department of Labour and other stakeholders. Some of the meetings include, inter alia, the following:

•

•

•

•

•

•

•

•

•

•

•

•

Monthly meetings were held with the Department of Labour to address issues of non-compliance in terms of labour legislation.

Several SAQA meetings were attended to discuss the qualifications within the industry.

Regular meetings were attended with the Compliance Sub-committee of the Private Security Sector Provident Fund to discuss compliance and give feedback on regulatory matters in respect of non- compliance. A meeting was also held with the trustees of the fund to discuss the issue of exemptions from the fund.

Several meetings were held with the Firearm Registrar to discuss applications for firearm licenses within the industry and statutory requirements in terms of the Private Security Industry Regulatory Act. A draft policy document in respect of firearm regulation in the security industry, and PSIRA / SAPS co-operation in respect thereof, was also handed to the Registrar for comment and certain changes were proposed. Unfortunately there has been some delay in moving forward in the implementation of this proposed policy and the Authority hopes to finalize this matter in the next financial year and formalize the relationship between PSIRA and the Firearm Registrar’s Office.

Several meetings were attended with Business Against Crime (BAC) in respect of the SAPS/ Private Security Industry Partnership initiatives and in particular the Honeydew Project.

Government Sector Security Council meetings and Steering Committee meetings were attended during which time the Authority also made presentations on the new proposed training standards for all security service providers, including government employed security officers.

The Authority gave a presentation on the overview of PSIRA and our Legislation to the office of the Premier: Limpopo and other Government Departments.

The Authority was appointed as a member of the University of Technology’s Policing Advisory Commit-tee.

The Authority was also requested to assist the South African Qualification & Certification Committee (SAQCC) (Fire) in the development of standards and attended several meetings on invitation from the Fire Detection Installers Association (FDIA).

A workshop was attended with the South African National Parks and a presentation was also given on the role of PSIRA as well as our legislation.

A meeting was held with Northern Province Security Association (NOPSA) (Limpopo) to discuss issues of compliance as well as problems experienced by the industry to address wage increases with their clients and, in particular, government departments.

A Provincial Security Summit in respect of the 2010 World Cup was attended in Cape Town and a presentation given on the PSIRA’s expectations and the requirements of the Act as far as event security is concerned.



The annual Securex exhibition was attended and the Authority was requested to give a presentation on the new proposed training standards.

Several meetings were held with the 2010 FIFA Local Organising Committee (LOC) and other stakehold-ers to resolve issues relating to registration of stadium stewards and the training requirements.

A presentation was made to the security committee of First Rand Bank in conjunction with Business Against Crime in respect of registration requirements and obligations of employers of in-house security officers.

A number of meetings were held with the Security Industry Alliance.

Two presentations were given to the security industry on the new proposed statutory training standards which was arranged by a training company, Corporate Assessments.

Tracker’s SAPS award ceremony was attended.

Several SASSETA Security Chamber meetings were attended to discuss allocation of grants for the different categories of security service providers.

Several meetings were held with the Tshwane Metro Police Department to discuss by-laws for the private security industry operating within the Municipal District (car guards) as well as training of security officers in terms of the new skills programmes.

Two meetings were held with the office of the Secretariat for Safety and Security in respect of the new training regulations for the private security industry. These regulations were submitted to their office to publish in Government Gazette but unfortunately the Authority is still awaiting the publication thereof.

As mentioned previously in the report, 13 stakeholder Imbizo’s were held with the industry in conjunc-tion with SASSETA in respect of the new proposed statutory training standards and accreditation with SASSETA.

The Authority attended the first International Conference on the role of the Private Security Sector in protecting the community in Abu Dhabi, on invitation from the United Arab Emirates Government.

A technical committee meeting was attended at the South African Bureau of Standards in respect of standards for the private security industry. The Authority will be playing an active role in this committee going forward.

A meeting was attended with the Department of Labour and the Private Security Sector Provident Fund in respect of issues of compliance in the guarding sector pertaining to the Provident Fund.

A two day workshop was attended with a Lesotho Delegation (security regulator) in respect of the regula-tion of the private security industry in South Africa. Two presentations were made on the Authority, the Act and training standards.

•

•

•

•

•

•

•

•

•

•

•

•

•

•


OPERATIONS DIVISION

Legal Services Department

Code of Conduct enquiries finalised

MONTH NIT WESTERN CAPE

EASTERN CAPE

KWAZULU- NATAL TOTAL

April 2008 39 24 9 1 73May 2008 19 12 13 15 59June 2008 38 26 4 20 88July 2008 9 23 4 17 53August 2008 60 27 2 9 98September 2008 37 1 1 25 64October 2008 41 8 13 21 83November 2008 25 9 16 13 63December 2008 1 0 0 4 5January 2009 45 0 1 0 46February 2009 26 15 12 16 69March 2009 4 23 16 4 47TOTAL 344 168 91 145 748

Refusal of registration as a security service provider

PSIRA refused 6 124 individual applications for registration as security service providers. These applicants were found guilty of a disqualifiable criminal offence as set out in the Schedule to the Act.

Withdrawal of registration as security service provider

PSIRA withdrew 30 registrations of individual security service providers, after it became clear that they supplied false information in their applications for registration.


MONTHNUMBER OF ENQUIRIES RECEIVED

APPROVED DENIED

FURTHER INFORMA-TION RE-QUESTED

ANNUAL FEES/ FINES COLLECTED

RApril 2008 599 459 120 20 111 165,08May 2008 364 275 87 2 111 775,34June 2008 259 212 47 0 84 755,51July 2008 456 394 59 3 61 925,19August 2008 362 234 70 58 82 869,25September 2008 267 216 50 1 41 399,81October 2008 279 230 48 1 43 578,29November 2008 0 0 0 0 0,00December 2008 150 122 28 0 67 198,10January 2009 173 140 33 0 74 054,42February 2009 323 254 66 3 196 897,93March 2009 257 199 58 0 151 888,12TOTAL 3 489 2 735 666 88 1 027 507,04

Legal Services Department

•

•

•

Considered 836 appeals against PSIRA’s refusal to register a security service provider and against the withdrawal of registration due to a conviction of a scheduled offence. Of those considered, 472 (56%) were dismissed, and 364 (44%) were upheld by the committee.

Considered 23 appeals against PSIRA’s refusal to register a security service provider due to non-South African residence. Twelve were dismissed, and 11 were upheld by the committee.

Finalised 14 appeals against the conviction and/or sentence resulting from the finalisation of an improper conduct enquiry convened in terms of the Act. Of these, three were dismissed, and 11 were upheld.

In addition, PSIRA withdrew 188 registrations of security service providers, following their conviction, of a disqualifiable criminal offence as specified in the Schedule to the Act while registered as security service providers.

Appeals

The Appeals Committee:

Tenders

Applications for exemption

During the period under review, 13 applications for exemption where replications were requested were received from the Minister of Police. Of these, two were granted and 11 are still pending.


OPERATIONS DIVISION

Registration and Administration Department

REGIONSNUMBER OF ACTIVE REGISTERED

BUSINESSES2008 2009

Gauteng 2 090 2 374

Mpumalanga 398 450Eastern Cape 384 473Western Cape 673 741Limpopo 659 819North West 229 256Free State 181 215Northern Cape 78 82KwaZulu-Natal 812 982TOTAL 5 504 6 392

Overview

The Registration and Administration Department of PSIRA fully utilised all available resources.

In the past, SAPS had a statutory obligation to furnish PSIRA with information regarding fingerprint classifica-tions. However, the SAPS outsourced that function to IDC who subcontracted the function to IDECO. Sub-sequently, the SAPS ceased to render fingerprint classifications to PSIRA on 25 October 2007, and an interim agreement was signed with IDECO following a resolution of the Council of PSIRA. The Council recommended that the agreement had to be reviewed annually.

Register of security service providers

The 6 392 registered and active security service businesses compared to 5 504 in March 2008 represents an increase (16.13%).

The 375 315 active registered security officers recorded in PSIRA’s register of security service providers as compared to 339 108 active security officers in 2008, represents an increase of 10.68% The additional 940 330 registered inactive security officers as compared to 858 489 at 31 March 2008 represents an increase of 9.53% registered inactive security officers.

A provincial breakdown of the 6 392 registered security service providers in South Africa was as follows:


INFORMATION TECHNOLOGYDIVISION

Mr Simon NkosiChief Information Officer

•••

Purpose

The purpose of this Annual Report is to review the Information Technology (IT) Division’s 2008/2009 objectives, activities, achievements, failures and reasons thereof and provide a roadmap for the Division’s goals, objec-tives and planned activities for the 2009/2010 financial year.

Mission

The Information Technology Division is responsible for the design, implementation and maintenance of the Information and Communications Technology architecture of PSIRA. Over the short to medium term, this division will implement appropriate policies, processes and procedures to ensure the effective utilisation of the IT infrastructure. It will also ascertain that robust controls are implemented to ensure data integrity and that all support systems utilised by PSIRA are fully integrated with one another.

IT’s Objectives

The IT Division’s objectives included:

Identifying, developing, and implementing IT-related policies and procedures.Establishing and enforcing integrity rules on the systems, in consultation with stakeholders.Implementing/improving system security.


• Initiating processes to integrate operational and support systems, to prevent crime, fraud and corruption by linking databases with other stakeholders:

Identify, develop, and implement IT related policies and procedures:

----

SAPSHome AffairsSASSETANational Intelligence Agency

••••

Identifying, developing, and implementing IT-related policies and procedures.Establishing and enforcing integrity rules on the systems, in consultation with stakeholders.Implementing/improving system security.Initiating processes to integrate operational and support systems, to prevent crime, fraud and corruption by linking databases with other stakeholders:

IT activities

In pursuit of the objective to:

•

Researches, consultations and meetings with various stakeholders from other public entities took place to identify the necessary IT policies. This culminated in the drafting of several policies, procedures and standards.

-

Establish and enforce integrity rules on the systems in consultation with stakeholders:•

A number of internal meetings with each section within PSIRA took place. These meetings were instrumental in identifying loopholes in the systems used by PSIRA. A system work flow was designed. A document to enforce integrity within the business system of PSIRA was drafted and circulated. This solicited inputs and comments from the users of the system and their supervisors within PSIRA.

-

Information Technology Division

• Implement/improve system security:

Logical security in the form of passwords and physical security in the form of physical access control to the IT infrastructure were made compulsory. PSIRA’s information is daily backed up and stored off-site. This ensures the continual protection of PSIRA’s information.

-

• Initiate process to integrate operational and support systems by linking database with those of other stake-holders to pevent crime, fraud and corruption:

Meetings were held with these stakeholders. This accumulated in:-

---

National Intelligence Agency being linked to the PSIRA database.A working agreement with SASSETA.A work in progress with the Security Industry Association (SIA), Criminal Records Centre and Home Affairs.

Improving the efficiency in the registration process by finalising the identification of business systems, infrastructure and software requirements of PSIRA.Defining and implementing service standards of PSIRA in rendering IT services.

-

-



• Define and implement IT service standards of PSIRA:

A service and support contract for the hardware infrastructure was signed with a service provider to provide IT support and implement IT best practices within PSIRA. PSIRA and the service provider signed a service level agreement (SLA). This document defined the service standards that must be adhered to when rendering IT services.Several meetings were held to address support for the main application software that provides the main business of PSIRA. These culminated in a working agreement in the absence of a formal con-tract until a new Council is appointed.

-

-

• Improve the efficiency and effectiveness in the registration process and in the regulation of the private security industry by finalising the identification of business sytems, infrastructure and software require-ments of PSIRA:

IT initiated and implemented a project to improve access and connection to the business applica-tion systems of PSIRA by the branches. Several meetings were held with different stakeholders regarding the appropriate infrastructure that will bring about the necessary change at PSIRA.IT initiated a project to identify the hardware, software, networking and telephone infrastructure that will change PSIRA into a productive environment with reliable information that is efficient and effec-tive in registration and in regulation.Different hardware and software vendors or companies were engaged to do a proper hardware and software audit that fits the business requirements of PSIRA. These audits resulted in requests for proposals (RFP’s) by PSIRA and to vendors.Submissions were made to the management of PSIRA regarding the required change, the hardware, software and related licensing.

-

-

-

-

Accomplishments/achievements

Change Management PolicyUser Account Management PolicyIT Security Policy – physical and logicalInternet and E-mail PolicyBackup Policy

• The IT Division developed the following policies and procedures, which were not yet approved/adopted by the Authority:

-----

•

•

••••

The IT Division met with business representatives. This resulted in a report outlining the loopholes of the system. The Division made logical security in the form of passwords and physical security in the form of physical access control to the IT infrastructure compulsory.PSIRA’s information is backed up on a daily basis and stored off-site. This ensures that PSIRA’s informa-tion is always protected.Hardware and software requirements for PSIRA were successfully identified. The level of service delivery by the contractor according to the SLA has been improved.IT successfully created a mobile connection solution for users to work away from the office.IT finalised a project to change the e-mail system from Webmail to Outlook which improved the speed of connection by PSIRA branches.



A support and service standard contract was entered into between PSIRA and BCS-Net, for a period of three years to implement service standards.

•••••

Develop enabling IT architecture for the Authority.Maintain and enhance IT infrastructure.Develop IT plan, with costing, to support re-registration.Develop plan to ensure overall data integrity.Perform IT reviews and make recommendations to the Accounting Authority.

•

Challenges

A support contract for the main business application could not be finalised/approved and put PSIRA at risk of the main business application crashing without support.

A project to bring stability of systems, efficiency and effectiveness in the registration process and proper regula-tion of the industry was not implemented.

Reasons for Challenges

The main reason was shortage of funds to implement projects. The fact that there was no Council to approve projects also attributed to failure to achieve goals.

Strategic Projects (2009/2010)

IT set the following projects:

IT Team in action


HUMAN RESOURCES DIVISION

Organisation and Staff Complement

The staff complement was as follows:

Permanent employees 189Temporary employees 10TOTAL 199

The Human Resources Division comprises of five staff members and is responbile for the administration and oversight of the recruitment and selection processes, employment equity, training/skills development pro-grammes, leave matters and payroll system to mention but a few.

During the year under review the General Manager: Human Resources and the Manager: Human Resources resigned resulting in some of the key activities not being performed as planned and/or being implemented on a timely basis. These activities include:

•• •

The development and implementation of a performance management system.The review, development and implementation of human resources management policies.Organisational design plans not developed or finalised.

Notwithstanding the above and in an effort to eliminate salary disparities, offer competititve salaries and to ensure that all positions of the Authority are properly evaluated and graded, the Authority designated a profes-sional services provider and established a Job Grading Committee. The job grading project and implementa-tion thereof should be finalised during the third quarter of the 2009/2010 financial year.

Composition of Staff Complement:

DIVISION/DEPARTMENT NUMBER OF STAFF MEMBERS

Strategic and Governance IssuesDirectorate 2Communications 8Sub-Total 10Finance and AdministrationFinance 16Debt Collection 9Asset Management 1Facilities Management 8Office Services 11Sub-Total 45


DIVISION/DEPARTMENT NUMBER OF STAFF MEMBERS

OperationsLaw Enforcement (NIT) 27Legal Services 7Prosecution 4Registration 22Training 7Western Cape Branch Office 14Eastern Cape Branch Office 11KwaZulu-Natal Branch Office 21Mthatha Branch Office 5Johannesburg Branch Office 13Nelspruit Branch Office 3Polokwane Branch Office 4Sub-Total 138Information TechnologyInformation Technology 3Sub-Total 3Human ResourcesHuman Resources 3Sub-Total 3TOTAL 199

Composition of Labour Force

AFRICAN WHITE COLOURED INDIAN TOTAL %Males 67 14 2 2 85 42.71Females 77 21 13 3 114 57.29TOTAL 144 35 15 5 199 100

Employment per Category

African72.36%

White17.59%

Indian2.51%

Coloured7.54%

Human Resources Division



New Appointments, Terminations, Transfers And Promotions for the period under review:

Permanent Appointments 38Temporary Appointments 10Resignations 23Terminations due to end of contract 6Termination due to misconduct 3Termination due to death 1Transfers 7Promotions -Vacancies 36

Trade Union Activity

The following three trade unions were active within PSIRA:

• SATAWU – with 50 members, which was 25,13% of the staff complement• Solidarity – with 27 members, which was 13,57% of the staff complement, and• United Association of SA (UASA) – with seven members, which was 3,52% of the staff complement.

Skills Development and Training

Skills development and training of employees at all levels remained key to the achievement of the PSIRA’s core strategy. PSIRA continued to invest in the development of its people.

Training provided to employees by Occupational Category

OCCUPATIONAL CATEGORIES

Designated Non-Designated

TOTALMale FemaleWhite Male

Foreign Nationals

A C I A C I W W Male FemaleLegislators, senior officials and managers

3 2 5

Professionals 1 1

Technicians and associate profes-sionals

3 1 1 5

Clerks 3 16 2 2 23

Elementary occupations 1 1

TOTAL PERMANENT EMPLOYEES

11 19 2 2 1 35

GRAND TOTAL 11 19 2 2 1 35

A = African C = Coloured I = Indian W = White A = African C = Coloured I = Indian W = White


Employment Equity

PSIRA remains committed to taking affirmative steps to ensure the provision of equal opportunities for all employees at all levels.

Workforce Profile by occupational level (including employees with disability) in terms of the Employment Equity Act

OCCUPATIONAL CATEGORIES

Designated Non-Designated

TOTALMale FemaleWhite Male

Foreign Nationals

A C I A C I W W Male FemaleTop Management 1 1

Senior Management 3 3

Professional qualified and expe-rienced specialists and middle management

6 1 3 2 3 15

Skilled technical and academi-cally qualified workers, junior management, supervisors, fore-man and superintendents

20 2 8 1 10 41

Semi-skilled and discretionary decision making

32 1 61 13 3 17 1 128

Unskilled and defined decision making

5 6 11

TOTAL PERMANENT 67 2 2 78 13 3 20 14 199GRAND TOTAL 67 2 2 78 13 3 20 14 199

A = African C = Coloured I = Indian W = White A = African C = Coloured I = Indian W = White


Human Resources Training Session with Help Desk Staff Members


FINANCE AND ADMINISTRATIONDIVISION

In May 2008, the Council of PSIRA formally requested the Minister of Finance to register PSIRA as a public entity in terms of Section 47 of the Public Finance Management Act (PFMA).

The listing and classification of PSIRA as a Schedule 3A public entity was approved and published in Govern-ment Gazette No. 31417 dated 19 September 2008.

PSIRA faced the challenge of ensuring compliance with the requirements of the PFMA, Corporate Governance and any other relevant legislation while aligning its operations to achieve its mandate in terms of the Private Security Industry Regulation Act.

In its strategic planning session for the 2009/2010 financial year, PSIRA:

• Identified the need to review operational systems.• Developed and implemented policies and procedures.• Prioritised initiatives aimed at complying with the requirements of the PFMA.

The process of strengthening the operations systems of PSIRA started with:

• Appointing a financial manager and filling of the vacant position in the Supply Chain Management Unit. This will assist PSIRA in implementing the procurement policy and in strengthening internal controls.

Mr Hendrick MahlanguChief Financial Officer


2009 2008

Revenue 79 037 904 95 016 647

Regulation of the industry 61 181 463 77.41% 51 516 807 54.22%

Other income 14 258 345 18.04% 41 442 939 43.62%

Finance income 3 598 096 4.55% 2 056 901 2.16%

Total operational expenditure 83 390 666 94 341 312

(Deficit)/Surplus for the year (4 352 762) 675 335

Capital Expenditure 1 487 535 1 792 619

Additions 1 534 146 1 798 270

Disposals at cost (46 611) (5 651)

Developing a three-year strategic plan for PSIRA with measurable objectives and key performance indica-tors. This process laid the foundation for the production of monthly and quarterly reports for timely sub-mission in the future.Advertising the outsourced internal audit function. The establishment of an internal audit unit will assist the Authority to exercise an oversight responsibility over the financial reporting and internal controls.

Finance and Administration Division

•

•

There is no doubt that the appointment of a new Council for the Authority in the new financial year will pave the way for the establishment of an audit committee and other relevant sub-committees of the Council and thereby strengthen the Authority’s Corporate Governance.

Although PSIRA was formally listed as a public entity, it did not receive any funding from Government. It relied solely on generating own revenue to fund its mandate of regulating the private security industry.

One of the major objectives of PSIRA was to strengthen the debt collection unit for effective implementation of the debt collection strategy. PSIRA faced the challenge of collecting all outstanding debt as required by Section 51(b) of the PFMA. A need to appoint and strengthen the debt collection unit and the appointment of a debt collection manager to lead the debt collection team was identified. PSIRA has started a process to establish systems for interfacing the debtor’s sub-system with the financial system.

Some of the projects identified and started included:

Integration of the debtor’s sub-system with the financial system.Draft Asset Policy – awaiting approval by the Accounting Authority.Draft Investment Policy – awaiting approval by the Accounting Authority.Planning for the implementation of an electronic management system.

•• • •

A summary of the income and expenditure of PSIRA:


Sources of Income

PSIRA received income from the following sources:

Annual Fees

Total annual fees increased from R46 300 707 in 2008 to R52 575 377. This reflects a difference of R6 274 670 which is an increase of 13.55%.

Registration Fees

Total registration fees increased from R8 297 865 in 2008 to R9 735 423 resulting in a difference of R1 437 558, i.e. an increase of 17.32%. The registration fees are projected to increase by 10% per annum as new security service providers and security officers enter the security industry.

Interest Received

Annual interest received increased from R691 799 in 2008 to R2 194 654 resulting in a difference of R1 502 855 i.e. an increase of 200.17% In the previous financial year a penalty interest concession was granted to encourage service providers to pay their accounts regularly.

Sundry Income

Sundry income was derived from the issuing of manuals, registration certificates and infrastructure assess-ment fees. This decreased from R2 871 182 in 2008 to R2 328 268 resulting in a difference of R542 914, i.e. a decrease of 18.91%.

ID Cards, Fines and Certificates

Income from ID cardholders, fines and certificates increased from R5 216 100 in 2008 to R8 605 086 resulting in a difference of R3 388 986, i.e. an increase of 64.97%.

Supply Chain Management

In order to improve on the statistical requirements regarding the utilisation of historically disadvantaged indivi-duals during the Authority’s procurement processes, the Authority has decided to establish a Supply Chain Management Unit. This unit will ensure that a supplier database is established and maintained to provide accurate and reliable information and to comply with the requirements prescribed by the various statutes and regulations specifically the Preferential Procurement Policy Framework Act, 2000 (Act No. 5 of 2000) and the Broad Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003). The implementation should be finalised by the third quarter of the 2009/2010 financial year.

Finance and Administration Division


REPORT OF THE AUDITOR-GENERAL

TO THE ACCOUNTING AUTHORITY ON THE FINANCIAL STATEMENTS AND PERFORMANCE OF THE PRIVATE SECURITY INDUSTRY REGULATORY

AUTHORITY FOR THE YEAR ENDED 31 MARCH 2009

I was engaged to audit the accompanying financial statements of the Private Security Regularity Authority (PSIRA) which comprise the statement of financial position as at 31 March 2009, and the statement of financial performance, the statement of changes in net assets and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes as set out on pages 52 to 79.

1.

REPORT ON THE FINANCIAL STATEMENTS

Introduction

The accounting authority’s responsibility for the financial statements

2. The accounting authority is responsible for the preparation of these financial statements in accordance with the basis of accounting determined by the National Treasury, as set out in accounting policy note 1.1 and in the manner required by the Public Finance Management Act, 1999 (Act No. 1 of 1999) (PFMA) and for such internal control as the accounting authority determines is necessary to enable the prepara-tion of financial statements that are free from material misstatement, whether due to fraud or error.

The Auditor-General’s responsibility

3. As required by section 188 of the Constitution of the Republic of South Africa, 1996 read with section 4 of the Public Audit Act, 2004 (Act No. 25 of 2004) (PAA), my responsibility is to express an opinion on the financial statements based on conducting the audit in accordance with the International Standards on Auditing and General Notice 616 of 2008, issued in Government Gazette No. 31057 of 15 May 2008. Because of the matters described in the Basis for disclaimer of opinion paragraphs, however, I was not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.

4. I conducted my audit in accordance with the International Standards on Auditing read with General Notice 616 of 2008, issued in Government Gazette No. 31057 of 15 May 2008. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.


Basis for disclaimer of opinion

5. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

6. There was no system of control over unknown deposits of R11 709 278 as disclosed in note 5 to the annual financial statements, on which I could rely for the purpose of my audit. PSIRA received direct deposits in the bank account but was unable to allocate the deposits to the specific debtors account due to a lack of information. Consequently, I could not obtain sufficient appropriate audit evidence to satisfy myself as to the valuation or completeness of accounts receivable, revenue and accounts payable.

Unknown deposits

Value-added tax (VAT) liability and net income

7. Sufficient, appropriate audit evidence could not be obtained with regard to the existence, valuation and allocation, and completeness of the VAT liability of R16 807 178 as disclosed in note 5 and note 13 to the annual financial statements. PSIRA was listed as a schedule 3A public entity in September 2008. Public entities are exempted from VAT. PSIRA was, however, registered for VAT as a natural person prior to being listed and is therefore not automatically exempt from VAT in accordance with VAT Practice Note No. 39.

8. With reference to the contingent liability, note 18.3 to the financial statements, completeness could not be audited. The ultimate outcome of a VAT audit by SARS on final deregistration could not be determined, and no provision for any liability that may result was made in the financial statements for the VAT due and possible penalties and interest incurred.

As of 1 December 2008 PSIRA has discontinued charging VAT on revenue and claiming VAT on expenses, without the finalisation of the deregistration process. This resulted in an overstatement of expenses by R2 328 679. Consequently, I could not obtain sufficient appropriate audit evidence to satisfy myself as to the valuation and completeness of the VAT liability, revenue and expenditure.

9.

Report of the Auditor-General


10. In terms of the International Accounting Standards (IAS) 16, paragraph 51, the residual value and the useful life of an asset shall be reviewed at least at each financial year-end and, if expectations differ from previous estimates, the changes shall be accounted for as a change in estimate in accordance with IAS 8. The reassessment of residual values and useful lives was not taken into account at financial year-end. Consequently, I was unable to satisfy myself as to the valuation of property, plant and equipment.

Property, plant and equipment

In terms of the International Accounting Standards (IAS) 36, paragraph 9, an entity shall assess at the end of each reporting period whether there is any indication that an asset may be impaired. No assess-ment was done at the end of the reporting period. Consequently, I was unable to satisfy myself as to the valuation of property, plant and equipment.

11.

Other income

12. Sufficient appropriate audit evidence could not be obtained in respect of the valuation and completeness of other income and accounts receivable, to the value of R2 194 653 as disclosed in note 9.3 to the annual financial statements. The debtor’s information system automatically calculates the penalties of 10% per annum on late payments of debtors.

Disclaimer of opinion

Because of the significance of the matters described in the basis for disclaimer of opinion paragraphs, I have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, I do not express an opinion on the financial statements.

13.

Emphasis of Matter

I draw attention to the following matters on which I do not express a disclaimer of opinion:

Basis of accounting

The public entity’s policy is to prepare financial statements on the basis of accounting determined by the National Treasury, as set out in accounting policy note 1.1.

14.

Trade debtors

With reference to note 18.2 to the financial statements, PSIRA granted penalty interest concessions to its trade debtors during the 2008 financial year, which paid the excessive penalties raised.

15.



Fruitless and wasteful expenditure

As disclosed in note 19 to the financial statements, fruitless and wasteful expenditure to the amount of R949 641 was incurred. This expenditure was incurred for the following:

16.

Other matters

I draw attention to the following matters that relate to my responsibilities in the audit of the financial state-ments:

Non-compliance with applicable legislation

17. The accounting authority did not comply with the following sections of the Pubic Finance Management Act (PFMA):

18. The accounting authority did not comply with the following Treasury Regulations:


•

•

Acquisition of printer cartridges that are not compatible with the printers of PSIRA amounting to R617 043.A lease agreement signed on 1 July 2006 leasing premises that are not utilised by the authority amounting to R278 598. The contract expires on 30 November 2009.

•

• •

•

•

••

•

Section 49(1), as a new accounting authority was not appointed after the previous council’s term came to an end in August 2008.Section 51(1)(a)(ii), no internal audit function was appointed.Section 51(1)(a)(iii), an appropriate procurement and provisioning system which is fair, equitable, transparent and competitive was not established to procure goods and services.Section 51(1)(b)(ii), effective and appropriate steps were not taken to prevent irregular, fruitless and wasteful expenditure.Section 51(1)(e), PSIRA failed to take effective and appropriate disciplinary steps against employees who contravened the provisions of the PFMA, or who undermined the financial management and internal control system as there are no policies to prescribe appropriate action to deal with financial misconduct as required in Treasury Regulation 33.1.1.Section 52, an annual budget was not submitted to the treasury.Section 55(1)(c), the financial statements were not submitted for audit purposes within two months after the financial year-end, it was submitted on 5 June 2009.Section 77, no audit committee was appointed.

•

•

Treasury Regulation 26.1.2 – Quarterly reports were not submitted to the executive authority through the designated accounting officer.Treasury Regulation 27.2.1 – PSIRA did not prepare a fraud prevention plan.


Governance framework

The governance principles that impact the auditor’s opinion on the financial statements are related to the responsibilities and practices exercised by the accounting authority and executive management, and are reflected in the internal control deficiencies and key governance responsibilities addressed below.

19.

Internal control deficiencies

Section 51(1)(a)(i) of the PFMA states that the accounting authority must ensure that the public entity has and maintains effective, efficient and transparent systems of financial and risk management and internal control. The table below depicts the root causes that gave rise to the deficiencies in the system of inter-nal control, which led to the disclaimer of opinion. The root causes are categorised according to the five components of an effective system of internal control. In some instances deficiencies exist in more than one internal control component.

20.

Par. No. Basis for disclaimer opinion CE RA CA IC M6 Unknown deposits 27, 8, 9 Value-added tax 510, 11 Property, plant and equipment 512 Other income 2

LegendCE = Control environmentThe organisational structure does not address areas of responsibility and lines of reporting to support effective control over financial reporting.

1

Management and staff are not assigned appropriate levels of authority and responsibility to facilitate control over financial reporting.

2

Human resource policies do not facilitate effective recruitment and training, disciplining and supervision of personnel.

3

Integrity and ethical values have not been developed and are not understood to set the standard for financial reporting.

4

The accounting authority does not exercise oversight responsibility over financial reporting and internal control.

5

Management’s philosophy and operating style do not promote effective control over financial reporting.

6

The entity does not have individuals competent in financial reporting and related matters. 7



RA = Risk AssessmentManagement has not specified financial reporting objectives to enable the identification of risks to reliable financial reporting.

1

The entity does not identify risks to the achievement of financial reporting objectives. 2The entity does not analyse the likelihood and impact of the risks identified. 3The entity does not determine a risk strategy/action plan to manage identified risks. 4The potential for material misstatement due to fraud is not considered. 5

CA = Control ActivitiesThere is inadequate segregation of duties to prevent fraudulent data and asset misappropria-tion.

1

General information technology controls have not been designed to maintain the integrity of the information system and the security of the data.

2

Manual or automated controls are not designed to ensure that the transactions have occurred, are authorised, and are completely and accurately processed.

3

Actions are not taken to address risks to the achievement of financial reporting objectives. 4Control activities are not selected and developed to mitigate risks over financial reporting. 5Policies and procedures related to financial reporting are not established and communicated. 6Realistic targets are not set for financial performance measures, which are in turn not linked to an effective reward system.

7

IC = Information and CommunicationPertinent information is not identified and captured in a form and time frame to support financial reporting.

1

Information required to implement internal control is not available to personnel to enable internal control responsibilities.

2

Communications do not enable and support the understanding and execution of internal control processes and responsibilities by personnel.

3

M = MonitoringOngoing monitoring and supervision are not undertaken to enable an assessment of the effec-tiveness of internal control over financial reporting.

1

Neither reviews by internal audit or the audit committee nor self -assessments are evident. 2Internal control deficiencies are not identified and communicated in a timely manner to allow for corrective action to be taken.

3



Key governance responsibilities

The PFMA tasks the accounting authority with a number of responsibilities concerning financial and risk management and internal control. Fundamental to achieving this is the implementation of key governance responsibilities, which I have assessed as follows:

21.

No. Matter Y NClear trail of supporting documentation that is easily available and provided in a timely manner1. No significant difficulties were experienced during the audit concerning delays or the

availability of requested information.√

Quality of financial statements and related management information2. The financial statements were not subject to any material amendments resulting from the

audit.√

3. The annual report was submitted for consideration prior to the tabling of the auditor’s report.

√

Timeliness of financial statements and management information4. The annual financial statements were submitted for auditing as per the legislated dead-

lines [section 55 of the PFMA].√

Availability of key officials during audit5. Key officials were available throughout the audit process √Development and compliance with risk management, effective internal control and governance practices6. Audit committee

• The type of entity had an audit committee in operation throughout the financial year.

√

• The audit committee operates in accordance with approved, written terms of reference.

√

• The audit committee substantially fulfilled its responsibilities for the year, as set out in [section 77 of the PFMA and Treasury Regulation 27.1.8]

√

7. Internal audit• The Agency had an internal audit function in operation throughout the financial year.

√

• The internal audit function operates in terms of an approved internal audit plan. √• The internal audit function substantially fulfilled its responsibilities for the year, as set out in Treasury Regulation 27.2

√

8. There are no significant deficiencies in the design and implementation of internal control in respect of financial and risk management.

√

9. There are no significant deficiencies in the design and implementation of internal control in respect of compliance with applicable laws and regulations.

√

10. The information systems were appropriate to facilitate the preparation of the financial statements.

√



No. Matter Y N11. A risk assessment was conducted on a regular basis and a risk management strategy,

which includes a fraud prevention plan, is documented and used as set out in Treasury Regulation 27.2

√

12. Powers and duties have been assigned, as set out in section 56 of the PFMA √Follow-up of audit findings13. The prior year audit findings have been substantially addressed.14. SCOPA/Oversight resolutions have been substantially implemented. √ Issues relating to the reporting of performance information15. The information systems were appropriate to facilitate the preparation of a performance

report that is accurate and complete.√

16. Adequate control processes and procedures are designed and implemented to ensure the accuracy and completeness of reported performance information.

√

17. A strategic plan was prepared and approved for the financial year under review for purposes of monitoring the performance in relation to the budget and delivery by PSIRA against its mandate, predetermined objectives, outputs, indicators and targets Treasury Regulation 30.1.

√

18. There is a functioning performance management system and performance bonuses are only paid after proper assessment and approval by those charged with governance.

√

Investigations

22. PSIRA was listed as a public entity in September 2008. Key governance responsibilities were not imple-mented due to the vacancy of the accounting authority since September 2008. This resulted in a lack of leadership and delegation of powers which impacted negatively on decision-making, service delivery and morale of staff.

23. The CEO was suspended in May 2008 and therefore the investigation was not concluded due to the vacancy of the accounting authority. There were three more investigations, two of which have not yet been completed. The completed investigation lead to the dismissal of the employee who sold registration certificates.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

Report on performance information

24. I was engaged to review the performance information.

The accounting authority’s responsibility for the performance information

25. The accounting authority has additional responsibilities as required by section 55(2)(a) of the PFMA to ensure that the annual report and audited financial statements fairly present the performance against predetermined objectives of the public entity.



The Auditor-General’s responsibility

26. I conducted my engagement in accordance with section 13 of the PAA read with General Notice 616 of 2008, issued in Government Gazette No. 31057 of 15 May 2008.

27. In terms of the foregoing my engagement included performing procedures of an audit nature to obtain sufficient appropriate evidence about the performance information and related systems, processes and procedures. The procedures selected depend on the auditor’s judgement.

28. I believe that the evidence I have obtained is sufficient and appropriate to provide a basis for the review findings reported below.

Finding (Performance information)

Non-compliance with regulatory requirements

29. The entity has not reported performance against predetermined objectives, as required by section 55(2)(a) of the PFMA.

APPRECIATION

30. The assistance rendered by the staff of the Private Security Regularity Authority during the audit is sin-cerely appreciated.

Pretoria

31 July 2009



FINANCIAL STATEMENTS

2008/2009


The reports and statements set out below comprise the annual financial statements presented of the Private Security Industry Regulatory Authority.

Index Page

Statement of Financial Position 52

Statement of Financial Performance 53

Statement of Changes in Net Assets 54

Cash Flow Statement 55

Accounting Policies 56-64

Notes to the Annual Financial Statements 65-79

The following supplementary information does not form part of the annual financial state-ments and is unaudited:

Detailed Income Statement 80-81


STATEMENT OF FINANCIAL POSITION

as at 31 March 2009

2009 2008Notes R R

ASSETS

Current assets 37 853 925 35 074 956Loans and other receivables 3 5 889 779 4 758 040Cash and cash equivalents 4 31 964 146 30 316 916

Non-current assets 10 471 550 11 180 378Property, plant and equipment 2 10 471 550 11 180 378

Total assets 48 325 475 46 255 334

LIABILITIES

Current liabilities 34 563 779 17 542 129

Trade and other payables 5 32 266 650 16 392 066Provisions 6 1 854 368 773 907Lease obligations 7 442 761 376 156

Non-current liabilities 4 190 000 1 546 000Retirement benefit obligation 8 4 190 000 1 546 000

Total liabilities 38 753 779 19 088 129

NET ASSETS

Accumulated surplus/(deficit) 9 571 696 27 167 205Total net assets 9 571 696 27 167 205


STATEMENT OF FINANCIAL PERFORMANCE

for the year ended 31 March 2009

2009 2008Notes R R

REVENUE

Sale of goods 9.1 7 670 894 2 005 715Levies received 9.2 52 575 377 46 300 707Fines and penalties 9.3 935 192 3 210 385Other income 9.4 14 258 345 41 442 939Interest received 11 3 598 096 2 056 901TOTAL REVENUE 79 037 904 95 016 647

EXPENSESEmployee costs 10.1 38 544 142 33 642 872Other operating costs 10.2 42 610 217 58 348 510Depreciation and impairment of items of property plant and equipment

2 220 400 2 241 455

Finance costs 12 - 53 892TOTAL EXPENSES 83 374 759 94 340 621

Profit/(loss) on sale of property, plant and equipment

15 907 691

(Deficit)/Surplus for the year (4 352 762) 675 335


STATEMENT OF CHANGES IN NET ASSETS

Accumulated surplus/(deficit)

Total equity

R R

Balance at 1 April 2007 26 491 870 26 491 870Surplus for the year 675 335 675 335Balance as at 31 March 2008 27 167 205 27 167 205Correction of prior year error 13 (13 242 747) (13 242 747)Balance as at 31 March 2008 as restated 13 924 458 13 924 458Deficit for the year (4 352 762) (4 352 762)Balance as at 31 March 2009 9 571 696 9 571 696



CASH FLOW STATEMENT


2009 2008Notes R R

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts Sales of goods and services 60 20 452 58 627 118 Interest received 3 598 096 2 056 901Payments Payments to suppliers and employees (60 443 839) (53 225 209) Interest paid - (53 892)NET CASH FLOWS FROM OPERATING ACTIVITIES

14 3 174 709 7 404 918

CASH FLOW FROM INVESTING ACTIVITIESProceeds on disposal of property, plant and equipment

6 667 4 509

Acquisition of property, plant and equipment 2 (1 534 146) (1 798 270)Net cash flows from investing activities (1 527 479) (1 793 760)Net increase/(decrease) in cash and cash equivalents

1 647 230 5 611 158

Cash and cash equivalents at beginning of period 30 316 916 24 705 758Cash and cash equivalents at end of period 31 964 146 30 316 916


ACCOUNTING POLICIES

1.1

1.1.1

Reporting entity

The Private Security Industry Regulatory Authority (PSIRA) is an entity domiciled in South Africa. The address of PSIRA is 481 Belvedere Street, Arcadia, Pretoria. The PSIRA is responsible for the regulation of the Private Security Industry as defined in the Private Security Industry Regulation Act (Act No 56 of 2001).

Basis of presentation

Statement of compliance

The annual financial statements have been prepared in accordance with the South African State-ments of Generally Accepted Accounting Practices (SA GAAP) including any interpretations of such Statements issued by the Accounting Practices Board, with the effective Standards of Generally Recognised Accounting Practices (GRAP) issued by the Accounting Standards Board replacing the equivalent GAAP Statement as follows:

Standard of GRAP Replaced Statement of SA GAAPGRAP 1 : Presentation of financial statements AC 101 : Presentation of financial state-

mentsGRAP 2 : Cash flow statements AC 118 : Cash flow statementsGRAP 3 : Accounting policies, changes in ac-counting estimates and errors

AC 103 : Accounting policies, changes in estimates and errors

Currently the recognition and measurement principles in the above GRAP and GAAP Statements do not differ or result in material differences in items presented and disclosed in the financial statements. The implementation of GRAP 1, 2 and 3 has resulted in the following changes in the presentation of the annual financial statements:

Terminology differences

Standard of GRAP Replaced Statement of SA GAAPStatement of financial performance Income statementStatement of financial position Balance SheetStatement of changes in net assets Statement of changes in equityNet assets EquitySurplus/deficit Profit/lossAccumulated surplus/deficit Retained earnings

Contributions from owners Share capitalDistributors to owners Dividends


1.1.2

1.1.3

1.1.4

1.1.5

1.1.6

1.1.7

1.2

1.3

Cash Flow Statement

The cash flow statement can only be prepared in accordance with the direct method.

Specific Information

Specific information has been presented separately on the statement of financial position such as:

• receivables from non-exchange transactions, including taxes and transfers;• taxes and transfers payable; and• trade and other payables from non-exchange transactions.

Restriction on Cash Balances

Amount and nature of any restrictions on cash balances is required.

Budget Information

Paragraph 11 – 15 of GRAP 1 has not been implemented due the fact that the local and international budget reporting standard is not effective for this financial year. Although the inclusion of budget information would enhance the usefulness of the financial statements, non-disclosure will not affect the objective of the annual financial statements.

Functional Currency

These financial statements are presented in South African Rand, which is the functional currency, rounded to the nearest Rand.

Use of Estimates and Judgements

These accounting policies are consistent with the previous period.

Significant Judgements and Sources of Estimation Uncertainty

In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the annual financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements. Significant judgements include provision for bad debts.

Revenue Recognition

Revenue is recognised when it is probable that future economic benefit will flow to the enterprise and these benefits can be measured reliably.

Accounting Policies


Sale of Goods and Services

Sale of goods and services comprises of fees collected from issue of identity cards, registration certificates.

Levies Received

Levies received comprises of income from annual fees charged to security service providers and security officers in terms of the Private Security Industry Regulation Act.

Fines and Penalties

Fines and penalties represents amounts payable to PSIRA as a result of charges to security service providers who have been found guilty of misconduct.

Other Income

Other income comprises of registration fees, interest charged on overdue accounts and other related fees charged to comply with registration as prescribed by the Private Security Industry Regulation Act

Interest Received

Interest income is accrued on a time proportion basis, taking into account the capital outstanding and the effective interest rate over the period to maturity.

Property, Plant and Equipment

Recognition and Measurement

The cost of an item of property, plant and equipment is recognised as an asset when:

• It is probable that future economic benefits associated with the item will flow to the PSIRA; and• the cost of the item can be measured reliably.

Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is re-cognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.

Items of property, plant and equipment are carried at cost less accumulated depreciation and any impairment losses, except for land. Land is not depreciated and is carried at costs while buildings, furniture and fittings, office equipment, motor vehicles and computer equipment are written off on a straight basis over their estimated useful lives.

Accounting Policies

1.3.1

1.3.2

1.3.3

1.3.4

1.3.5

1.4

1.4.1


1.5

1.6

The gain or loss arising from derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

Depreciation

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be depreciated separately.

The depreciation charge for each period is recognised in profit or loss unless it is included in the car-rying amount of another asset.

The estimated useful lives of the main categories of property, plant and equipment are as follows:

Buildings 20 yearsFurniture and fittings 10 yearsOffice equipment 5 yearsMotor vehicles 5 yearsComputer equipment 3 years

Impairment of Assets

PSIRA is required in terms of IAS 16 to assess at each statement of financial position date whether there is any indication that an asset may be impaired. If any such indication exists, PSIRA estimates the recoverable amount of the asset.

Intangible Assets

Intangible assets acquired by PSIRA are measured at cost less accumulated depreciation and accumulated impairment losses.

Subsequent expenditure is capitalised only if it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in surplus or deficit as incurred.

Amortisation is recognised in surplus or deficit on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. The estimated useful life for the current and comparative periods is three years.

Cash and Cash Equivalents

Cash and cash equivalents consist of the balance on the current account, cash on hand, call deposit balances including interest earned.

Accounting Policies


1.7

1.8

1.9

1.9.1

1.9.2

1.9.3

Trade and Other Receivables

Trade and other receivables consist of amounts charged in terms of the Private Security Industry Regulatory Act, 2001 (Act No. 56 of 2001) to the security industry but not yet settled by the trade debtors. Interest is charged on outstanding amounts as prescribed by the Private Security Industry Regulatory Authority Act. Amounts that are potentially irrecoverable are included in the disclosure notes.

Trade and other receivables are classified as loans and other receivables

Trade and Other Payables

Trade payables represents amounts owed to the third parties resulting from goods received or services rendered to PSIRA prior to the end of reporting period for which PSIRA has not yet effected payment.

Provision for Impairment of Trade Receivables

PSIRA reassesses the recoverability of its trade receivables at the end of each reporting period. The outstanding amounts owed of 60 days and over are considered as indicators that trade debtors are impaired.

The carrying amount of an asset is reduced through the provision for bad debt account, and the amount of the loss is recognised in profit or loss. Subsequent recoveries of amounts written off are credited against operating expenses in profit and loss.

Non Derivative Financial Instruments

Non derivative financial instruments comprises of trade and other receivables, cash and cash equiva-lent and trade and other payables.

Measurement

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit and loss, any directly attributable transaction costs. Subsequent to initial re-cognition non-derivative financial instruments are measured as described below.

Trade and Other Receivables

Trade and other receivables outstanding at year end are carried in the statement of financial position at amortised cost less provision for impairment.

Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand and demand deposits and are subject to an insig-nificant risk of changes in value. These are initially and subsequently recorded at fair value.

Accounting Policies


1.9.4

1.9.5

1.9.6

1.10

1.10.1

Trade and Other Payables

Trade and other payables are carried at fair value.

Recognition and Derecognition

A financial instrument is recognised if PSIRA becomes party to the contractual provisions of the in-strument. Financial assets are derecognised if PSIRA’s contractual rights to the cash flows from the financial assets expire.

Financial liabilities are derecognised if PSIRA’s obligations specified in the contract expire or are discharged or cancelled.

Offset

Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position when PSIRA has a legally enforceable right to set off the recognised amounts, and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Employee Benefits

Defined Benefit Plan

PSIRA’s net obligation in terms of the defined benefit pension plan is calculated by estimating the amount of future benefit that employees have earned in return for their services in the current and prior periods. That benefit is discounted to determine its present value, and the fair value of any plan assets is deducted. The discount rate is the yield at the balance sheet date on instruments that have the same maturity dates that approximates the terms of PSIRA’s obligation. The calculation is per-formed by a qualified actuary using the projected unit credit method every three years.

When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognised as an expense in profit or loss on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognised immediately in profit or loss.

All actuarial gains and losses as at 1 April 2004 were recognised. This is due to the correction of an error. Actuarial gains and losses that arise subsequent to this date, to the extent that any cumulative unrecognised actuarial gains/losses exceeds the greater of 10% of the present value of the defined benefit obligation and the fair value of plan assets, that portion is recognised in profit or loss over the expected average remaining working lives of the employees participating in the plan. Otherwise actuarial gains/losses are not recognised.

When the calculation results in a benefit to PSIRA, the recognised asset is limited to the net total of any unrecognised actuarial losses and the past service costs and the present value of any future refunds from the plan or reductions in contributions to the plan.

Accounting Policies


1.10.2

1.11

1.12

1.13

1.14

Short-term Employee Benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided

A liability is recognised for the amount expected to be paid under the short-term cash bonus if PSIRA has a present legal or constructive obligation to pay this amount as a result of past service provided by the employees and the obligation can be estimated reliably

Provisions

Provisions are recognised when:

• PSIRA has a present obligation as a result of a past event;• it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and• a reliable estimate can be made of the obligation.

Provisions are not recognised for future operating losses.

PSIRA recognises annual leave and bonus payments that accrue to its employees as provisions. A provision has been raised for the estimated liability of annual and bonus payments as a result of services rendered by employees up to the reporting date.

Operating Leases

In terms of IAS 17 rental payable under operating lease are charged to the statement of financial performance on a straight-line basis over the term of the relevant lease. PSIRA has accounted for rental payable on the lease of offices on a straight-line basis.

Rental payable under the operating leases has not been charged to the statement of financial performance on a straight-line basis over the term of the relevant leases as the majority of the leases are due to expire and the amount involved is considered not material.

Borrowing Costs

Borrowing costs are recognised as an expense in the period in which they are incurred.

Finance Income and Expenses

Finance income comprises interest income on funds invested. Interest income is recognised as it accrues in profit or loss, using the effective interest method.

Finance expenses comprise interest expense on borrowings. All borrowing costs are recognised in profit or loss using the effective interest method.

Accounting Policies


1.15

1.16

1.17

1.18

Normal Taxation

PSIRA is exempted from normal taxation in terms of section 10 of the South Africa Income Tax Act, 1962 (Act No. 58 of 1962).

Related Parties

Related parties are considered to be related if one party has the ability to control or jointly control the other party or exercise significant influence over the other party in making financial and operational decisions. Key management staff and their close family members are also regarded as related par-ties. Key Management staff is those persons having the authority and responsibility for planning.

Contingent Liabilities

A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of PSIRA, or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or the amount of the obligation cannot be measured with sufficient reliability.

Irregular, Fruitless and Wasteful Expenditure

Irregular expenditure means expenditure incurred in contravention of, or not in accordance with, a re-quirement of any applicable legislation, including the PFMA or legislation providing for procurement.

Fruitless and wasteful expenditure means expenditure that was made in vain and could have been avoided had reasonable care been taken.

Any irregular, fruitless and wasteful expenditure is charged against surplus or deficit in the period in which it is incurred.

Accounting Policies


New Standards and Interpretations not yet Adopted

At the date of authorisation of the financial statements of PSIRA for the year ended 31 March 2009, the following Standards and Interpretations were in issue but not yet effective:

Standard/Interpretation CommentsIAS 1 (AC 101) Presentation of Financial Statements

The objective of this standard is to pre-scribe the basis for presentation of gen-eral purpose financial statements, to en-sure comparability both with the entity’s financial statements of previous periods and with the financial statements of other entities.

This statement will not impact the results of PSIRA but will likely result in certain additional disclosures.

GRAP 100 Non current assets held for sale and Dis-continued operations.

This statement will not impact on the results of PSIRA as PSIRA did not have non current assets held for sale and discontinued opera-tions.

IFRIC 13 (AC 446)

Customer Loyalty ProgrammesAC 446 addresses accounting by entities that grant loyalty award credits to cus-tomers who buy other goods or services. Specifically, it explains how such en-tities should account for their obligations to provide free or discounted goods and services to customers who redeem award credits.

This statement will not impact the results or disclosures of PSIRA as PSIRA has not entered into any customer loyalty programmes.

IFRIC 14 (AC 447)

The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their InteractionAC 447 provides general guidance on how to assess the limit in AC 116 on the amount of the surplus that can be recog-nised as an asset. It also explains how the pension asset or liability may be affected when there is a statutory or contractual minimum funding requirement.

This statement will impact the re-sults and disclosures of PSIRA as PSIRA will need to apply the limit to a defined benefit asset.

Accounting Policies

1.19


2.Pr

oper

ty, P

lant

and

Equ

ipm

ent

2009

2008

Cos

tA

ccum

ulat

ed

Dep

reci

atio

n

Car

ryin

g

Valu

e

Cos

tA

ccum

ulat

ed

Dep

reci

atio

n

Car

ryin

g

Valu

e

Land

2 62

3 00

0-

2 62

3 00

02

623

000

-2

623

000

Bui

ldin

gs5

658

859

(1 8

55 9

89)

3 80

2 86

95

658

859

(1 5

73 0

46)

4 08

5 81

3

Furn

iture

and

fitti

ngs

2 02

6 71

4(1

045

295

)98

1 41

92

012

063

(876

602

)1

135

461

Offi

ce

equi

pmen

t5

619

212

(3 5

81 4

04)

2 03

7 80

84

573

542

(2 8

00 9

48)

1 77

2 59

4

Mot

or

vehi

cles

156

529

(86

073)

70 4

5715

6 52

9(6

1 91

6)94

613

Com

pute

r equ

ipm

ent

11 1

05 5

04(1

0 14

9 50

6)95

5 99

710

678

289

(9 2

09 3

92)

1 46

8 89

7

Tota

l27

189

817

(16

718

267)

10 4

71 5

5025

702

282

(14

521

904)

11 1

80 3

78

Notes to the Financial Statements


Prop

erty

, Pla

nt a

nd E

quip

men

t

2009

Prop

erty

, pla

nt a

nd e

quip

men

tC

arry

ing

Valu

e 31

Mar

ch 2

008

Add

ition

sD

ispo

sals

Cos

tD

ispo

sals

A

ccum

ulat

ed

Dep

reci

atio

n

Dep

reci

atio

nTo

tal

31 M

arch

200

9

Land

2 62

3 00

0-

--

-2

623

000

Bui

ldin

gs4

085

813

--

-(2

82 9

43)

3 80

2 87

0Fu

rnitu

re a

nd fi

tting

s1

135

462

61 2

62(4

6 61

1)24

037

(192

730

)98

1 42

0O

ffice

equ

ipm

ent

1 77

2 59

41

045

669

--

(780

456

)2

037

807

Mot

or v

ehic

les

94 6

13-

--

(24

157)

70 4

56C

ompu

ter e

quip

men

t1

468

897

427

215

--

(940

115

)95

5 99

7B

alan

ce11

180

378

1 53

4 14

6(4

6 61

1)24

037

(2 2

20 4

01)

10 7

41 5

50

2008

Prop

erty

, pla

nt a

nd e

quip

men

tC

arry

ing

Valu

e 31

Mar

ch 2

007

Add

ition

sD

ispo

sals

Cos

tD

ispo

sals

A

ccum

ulat

ed

Dep

reci

atio

n

Dep

reci

atio

nTo

tal

31 M

arch

200

8

Land

2 62

3 00

0-

--

-2

623

000

Bui

ldin

gs4

258

141

106

224

--

(278

553

)4

085

812

Furn

iture

and

fitti

ngs

1 12

8 98

519

8 71

7(5

651

) 45

0(1

87 0

40)

1 13

5 46

2O

ffice

equ

ipm

ent

1 66

4 16

473

9 08

1-

-(6

30 6

51)

1 77

2 59

4M

otor

veh

icle

s11

8 77

0-

--

(24

157)

94 6

13C

ompu

ter e

quip

men

t1

835

703

754

248

--

(1 1

21 0

54)

1 46

8 89

7B

alan

ce11

628

763

1 79

8 27

0(5

651

)45

0(2

241

455

)11

180

378



3.

4.

5.

6.

6.1

6.2

2009 2008R R

Loans and Other Receivables 5 610 545 4 307 971Trade receivables 178 842 006 163 251 815Less: Impairment of debtors (173 231 461) (158 943 844)Deposits 105 655 91 464Bank control/adjustments 98 554 292 240Prepayments and advances 75 025 57 786 Staff advances 44 278 42 691 Travel and subsistence 30 747 15 095 Prepayments - 8 579Total 5 889 779 4 758 040

Cash and Cash EquivalentsCash and balances with banks 4 825 208 7 201 738Short-term deposit/investments 27 128 919 23 104 959Petty cash 10 019 10 219Total 31 964 146 30 316 916

Trade and Other PayablesTrade creditors 3 240 632 3 013 748Staff bonuses 509 561 430 858Deposits 11 709 279 9 347 548VAT 16 807 178 3 599 912Total 32 266 650 16 392 066

Provisions Carrying value begin-ning of year

Additional provision

Used during the year

Carrying amount at

end of yearR R R R

Legal cost provision 773 907 - (773 907) -

Leave pay benefits - 1 854 368 - 1 854 368773 907 1 854 368 (773 907) 1 854 368



7. Operating Lease Obligations

Lease payments (non cancellable leases - Buildings)

PSIRA has branch offices in Johannesburg, Durban, Port Elizabeth, Cape Town and Mthatha where it leases offices for the purpose of servicing the security industry. The expenses incurred in honouring the lease agreements are included in profit and loss. PSIRA straight-lined its operating leases over the period of the lease contract. The future minimum lease payments under non cancellable leases are as follows:

Not later than one year 954 498 820 291

One to five years 3 436 806 3 777 457

Later than five years 265 736 879 582

Total 4 657 040 5 477 330

Current portion 442 761 376 156

2009 2008R R

Retirement BenefitsGrand total net liability / assets 4 190 000 1 546 000

Defined benefit planPresent value of funded and unfunded obligations

8.1 18 603 000 16 128 000

Fair value of plan assets 8.2 (14 413 000) (14 582 000)

Net liability / (asset) 4 190 000 1 546 000

2009 2008R R

Reconciliation of present value of fund obligation:Present value of fund obligation at the beginning of the year

16 128 000 13 529 000

Current service costs 1 001 000 858 000

Benefits paid (1 546 000) (1 366 000)

Interest cost 1 719 000 1 260 000

Actuarial (gains) / losses (154 000) 660 000

Contributions 1 455 000 1 187 000

Present value of fund obligation at the end of the year

18 603 000 16 128 000

8.

8.1



Reconciliation of fair value of plan assets:Fair value of plan assets at the beginning of the year

14 582 000 13 434 000

Expected return on plan assets 1 515 000 1 186 000

Contributions 2 480 000 1 919 000

Actuarial (gains) / losses (2 618 000) (591 000)

Benefits paid (1 546 000) (1 366 000)

Fair value of plan assets at the end of the year

14 413 000 14 582 000

Staff costsDefined benefit planCurrent service costs 2 402 000 2 104 000

Interest costs 1 719 000 1 260 000

Expected return on plan assets (1 515 000) (1 186 000)

Acturial loss (gain) recognised 2 464 000 1 251 000

Total expensed in the statement of finan-cial performance

5 070 000 3 429 000

Key Assumptions Used (expressed as weighted averages):Discount rate 9% 10%Expected return on plan assets 9% 10%Expected rate of salary increases 8% 9%Future pension increase 3% 4%

Revenue

Sale of GoodsID cards and holders 1 962 144 1 621 343

Certificates 5 669 528 344 692

Other 39 222 39 680

Total 7 670 894 2 005 715

Levies ReceivedAnnual fees 52 575 377 46 300 707

Total 52 575 377 46 300 707

Fines, Penalties and ForfeitsFines 935 192 3 210 385

Total 935 192 3 210 385

8.2

8.3

9.

9.1

9.2

9.3


2009R

2008R


Notes 2009 2008

R R

Other IncomeRegistration fees 9 735 423 8 297 865

Interest and penalties received (trade debtors)

2 194 654 30 273 892

Infrastructure assessment fees 2 178 428 1 968 171

Sundry income 149 840 903 011

Total 14 258 345 41 442 939

Operating Expenses

Operating expenses are stated after taking the following into account:

Employee Costs Staff costs 38 544 142 33 642 872

Included in staff costs are Contributions to defined benefit plan 8.3 5 070 000 3 429 000

Other Operating ExpensesAudit fees 729 881 284 803

Councillors expenses 17.1 299 449 610 577

Depreciation 2 220 400 2 241 455

Interest paid - 53 892

Lease rentals on operating lease 66 605 122 579

Penalty interest concession - 29 582 093

Profit/loss on disposal of assets 15 907 691

Provision for bad debts 14 287 581 3 591 594

Finance Income

Interest income on call deposits and loans receivable

3 598 096 2 056 901

Finance Expense

Interest expense on amounts due - 53 892

9.4

10.

10.1

10.2

11.

12.



13. Correction of Prior Period Error

Correction of error relating to the accrued VAT calculated from accrued income of prior years. Prior to 31 March 2008, income was accounted on a cash basis. The opening balance of accumulated surpluses has been adjusted, while comparative amounts were restated accordingly. The provision for accrued VAT is based on output VAT payable on 31 March 2005, the date on which the relevant public entities were required to deregister for VAT purposes in terms of Vat Practice Note No 39.

The effect of the adjustment of this error on the results of 2008 was as follows:

2008R

Decrease in accumulated surpluses 13 242 747Increase in trade and other payables (13 242 747)

Cash Flow from Operating Activities 2009R

2008R

Reconciliation of net cash flows from operating activities to surplus/(deficit)

(Deficit)/Surplud as per statement of financial performance (4 352 762) 675 335

Non-cash movementsDepreciation 2 220 400 2 241 455

Decrease/(Increase) in trade and other receivables (1 131 739) (1 158 941)

(Increase)/Decrease in trade and other payables 3 928 458 4 169 596

Increase/(Decrease in provisions)-employee costs 2 644 000 1 451 000

Increase accruals 145 309 122 579

Deficit on disposal of property, plant & equipment 15 907 691

Increase/(Decrease) in provisions (294 864) (96 797)Net cash flows from operating activities 3 174 709 7 404 918

14.



Financial Instruments

Notes Total Loans and receivables

Finance liabilities at armortised cost

2009 R R RAssetsLoans and other receivables 3 5 889 779 5 889 779 -Cash and cash equivalents 4 31 964 146 31 964 146 -Total assets 37 853 925 37 853 925 -

LiabilitiesTrade and other payables 5 14 949 911 - 14 949 911Total Liabilities 14 949 911 - 14 949 911

2008Loans and other receivables 3 4 758 040 4 758 040 -Cash and cash equivalents 4 30 316 916 30 316 916 -Total assets 35 074 956 35 074 956 -

LiabilitiesTrade and other payables 5 10 985 971 - 10 985 971Liabilities 10 985 971 - 10 985 971

15.

15.1

The fair values of financial assets and liabilities shown above approximate their carrying amounts at the reporting date.

Exposure to credit and interest rate risks arise in the normal course of PSIRA’s business.

Credit Risks

PSIRA is exposed to credit risk emanating from a possible failure by its clients (trade receivable) to meet their contractual obligations.

PSIRA is in the process of developing a debt collection strategy and risk management policy in an effort to minimise its exposure to credit risk.

Trade and other receivables relate mainly to fees payable by the security service providers and security officers registered with PSIRA.

At the reporting date there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet.



Exposure to Credit Risk

The carrying amounts of financial assets represent the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

Note 2009 2008R R

Trade and other receivables 3 5 889 779 4 758 040

5 889 779 4 758 040

15.1.1

15.1.2 Impairment Losses

The ageing of trade receivables at the reporting date was:

Gross Impairment Gross Impairment2009 2009 2008 2008

Restated RestatedR R R R

Not past due 859 366 - 3 163 -Past due 0 – 30 days 5 751 272 - 4 304 807 -Past due 31 – 60 days 1 416 075 1 416 075 6 181 373 6 181 373More than three months 171 815 351 171 815 351 152 762 472 152 762 471

179 842 064 173 231 426 163 251 815 158 943 844

The movement in the allowance for impairment in respect of trade receivables during the year was as follows:

2009 2008Restated

R R

Balance at 1 April 158 943 844 154 803 086

Impairment loss recognised 14 287 582 4 140 758

Balance at 31 March 173 231 426 158 943 844

Based on historic default rates PSIRA believes that no impairment allowances is necessary in respect of trade receivables not past due or past due by up to 30 days.

The allowance account in respect of trade receivables is used to record impairment losses unless PSIRA is satisfied that no recovery of the amount owing is possible; at that point the amount consi-dered irrecoverable is written off against profit or loss.



Interest Rate Risk

PSIRA is exposed to interest rate risk as it invests funds in the money market at fixed and floating interest rates. This is managed by investing PSIRA’s surplus funds in short term investments, thereby taking advantage of the maximum rates available from time to time from the money market.

Exposure to Interest Rate Risk

The following table reflects the market value of the call and term deposits:

15.2

15.2.1

2009 2008R R

Call and term deposits 27 128 919 23 104 959

PSIRA measures the value of the call and term deposits for the purposes of its financial statements at market value. As such, the market risk variable to which PSIRA is exposed in terms of these assets is interest rates.

Sensitivity Analysis: Interest Rate Movements

The sensitivity analysis focuses on cash flow sensitivity (the impact on future interest-related cash flows). It is understood that while interest rate changes may not have a significant impact on the fair value of the call and term deposits, they would impact variable interest cash flows.

Liquidity Risk

The following are the contractual maturities of financial liabilities, including estimated interest pay-ments and excluding the impact of netting agreements.

15.3

15.3.1

2009 Carrying amounts

Contractual cash flows

Within a year

R R R

Trade and other payables

22 854 500 22 854 500 22 854 500

Liquidity Risk Management

PSIRA is successfully managing this risk by ensuring that sufficient funds are available to meet the financial obligations in line with the cash-flow forecasts.



15.4 Maturity Analysis

2009 2008Within one year R R

- Trade and other payables 22 854 500 21 437 328- Trade and other receivables 5 889 779 4 758 040

16. Related Party Transactions and Balances

PSIRA is wholly owned by the National Government of South Africa represented by the Minister of Police. In South Africa, state controlled entities are referred to as public entities in the national and provincial spheres of Government and municipal entities in the municipal sphere of government. PSIRA is a public entity in the national sphere of government and is thus related to other public entities in the national sphere of government.



17.

C

ounc

il an

d Se

nior

Man

agem

ent E

mol

umen

ts

Mem

bers

Offi

ce H

eld

Term

Cou

ncil

Fees

Rem

uner

atio

n

Oth

er

Trav

ellin

gC

ell

Phon

e

2009

2008

Tota

lTo

tal

RR

RR

RR

Cou

ncil

(Acc

ount

ing

Aut

horit

y)

Adv

N A

Ram

atlo

di: C

hairp

erso

nC

ounc

il M

embe

r1

Apr

il 20

08 to

31

Aug

ust 2

008

32 5

0011

550

3 24

11

779

49 0

7012

4 34

4D

r F R

ande

ra: D

eput

y C

hairp

erso

nC

ounc

il M

embe

r1

Apr

il 20

08 to

31

Aug

ust 2

008

22 5

007

875

3 36

0-

33 7

3566

145

Dr.

C T

Ndl

ovu

Cou

ncil

Mem

ber

1 A

pril

2008

to 3

1 A

ugus

t 200

822

500

--

-22

500

100

170

Mr.

S L

Maj

ombo

ziC

ounc

il M

embe

r1

Apr

il 20

08 to

31

Aug

ust 2

008

19 0

0056

700

13 1

60-

88 8

6014

0 37

5M

s M

de

Haa

sC

ounc

il M

embe

r1

Apr

il 20

08 to

31

Aug

ust 2

008

22 5

0045

004

37 7

80-

105

284

179

543

Tota

l11

9 00

012

1 12

957

541

1 77

929

9 44

961

0 57

7



Cou

ncil

and

Seni

or M

anag

emen

t em

olum

ents

(con

tinue

d)

Sala

ryB

onus

esC

ar

Allo

wan

ces

Pens

ion

from

C

ontr

ibut

ors

Med

ical

Aid

C

ontr

ibut

ions

Oth

er

Allo

wan

ces

Trav

ellin

g an

d su

bsis

tenc

eO

ther

C

ontr

ibut

ions

2009

2008

Seni

or M

anag

emen

t Sta

ff:To

tal

Tota

l

Chi

ef E

xecu

tive

Offi

cer

App

oint

ed 1

Apr

il 20

0450

8 87

651

458

124

400

62 0

6123

856

-7

303

7 49

078

5 44

474

7 28

0

Chi

ef F

inan

cial

Offi

cer

App

oint

ed 1

Aug

ust 2

007

414

902

41 4

4996

000

50 3

08-

30 0

00-

6 62

363

9 28

235

0 48

3

Gen

eral

Man

ager

: Ope

ratio

nsA

ppoi

nted

1 J

uly

2003

437

706

34 5

5782

200

41 8

5528

158

-2

300

6 52

163

3 29

748

7 98

5

Chi

ef In

form

atio

n O

ffice

rA

ppoi

nted

3 S

epte

mbe

r 200

737

7 27

841

892

138

000

46 0

1644

802

-25

765

6 42

468

0 17

730

7 36

7

Gen

eral

Man

ager

: Hum

an

Res

ourc

esA

ppoi

nted

20

Aug

ust 2

007-

30

May

200

8

*76

966

14 0

7414

000

6 69

47

236

--

-11

8 97

029

2 55

1

Tota

l1

815

728

183

430

454

600

206

934

104

052

30 0

0035

368

27 0

582

857

170

2 18

5 66

6

*Incl

udes

leav

e pa

y of

R23

413



18.

18.1

RContingent Liabilities 13 666 597

Contingent Liabilities : Legal

S Maseko 115 000PO34 Opinion 65 000PO30 Opinion 48 000PO27 and PO23 73 000PO21 21 530Share-A-Deal 121 CC 256 289Association of Security Service Providers 1 566 641S Stander 43 259C Mohamed 154 12202/P1/005 206 05502/p1/006 (Legal Opinion) 10 260Total 2 559 156

Contingent Liability :Trade Debtors

PSIRA granted penalty interest concessions to its trade debtors during the 2008 financial year on outstanding penalty interest balances. A contingent liability of R 7 208 560 raised is in respect of trade debtors who had made the penalty interest payments, prior to the penalty interest concessions

7 208 560

Contingent Liability : VATIn terms of VAT Practice Note No 39, public entities were required to de-register for VAT purposes. PSIRA did not deregister for VAT purposes until after being listed as a public entity under Schedule 3A of the PFMA. The accrued vat since the required date of deregistration (1 April 2005) till the after the date after registration as a PFMA entity is disclosed as a contingent liability

3 898 881

18.2

18.3

19. Irregular, wasteful and fruitless expenditure

Fruitless and wasteful expenditure

Consumables

Acquisition of printer cartridges that are not compatible with the printers of PSIRA. Upon discovery of the expenditure, the execution of the orders which were alleged to have been placed verbally were discontinued. No further expenses were incurred. At the time of discovery the expense in September 2007, the amount of R 617 043 has already been paid by PSIRA.


19.1

19.2


Rental expense A lease agreement signed on 1 July 2006 leasing premises that are not utilised by PSIRA. The contract is legally binding and expires on 30 November 2009.The amounts paid since the date of inception amounted to R 243 017. Irregular Expenditure Expenses for Computer Software Support Services A number of payments amounting to R 565 440 have been made to the computer software service provider (Ntier Software Services) in respect of services rendered prior to the signing of the service level agreement. No disciplinary action has been taken. Expenses for Advertising PSIRA placed recruitment adverts with the press and incurred expenses amounting to R36 388.30 without obtaining three quotations as required by National Treasury Practice Note No. 8 of 2007/2008. PSIRA placed staff recruitments adverts in specific national newspapers in order to attract persons with required competencies and to allow equal opportunities to all prospective applicants.


19.1.2

19.2

19.2.1

19.2.2


ANNEXURE 1

Notes 2009R

2008R

REVENUE

Sales of goods and services 7 670 894 2 005 715

Annual fees 52 575 377 46 300 707

Fines 935 192 3 210 385

Other income Registration fees 9 735 423 8 297 865

Interest and penalties interest 2 194 654 30 273 892

Infrastructure assessment 2 178 528 1 968 171

Sundry Income 149 840 903 010

Interest received 3 598 096 2 056 901

79 034 904 95 016 647

LESS OPERATING EXPENSES

Advertising and publications 70 472 149 765

Amenities and cleaning 567 064 629 161

Audit fees 729 881 284 803

Bank charges 225 730 174 419

Consulting and professional fees 4 461 476 5 644 856

Councillors expenses 299 449 610 577

Depreciation 2 220 400 2 241 455

Debt collection agent - 126 751

Fingerprint costs 5 155 323 3 518 561

Insurance 316 786 129 607

Interest paid - 53 892

Lease rentals on operating lease 66 605 122 579

Legal fees 2 727 906 2 939 773

Office rent and operating expenses 1 379 914 1 327 072

Penalty interest concession - 29 582 093

Postage and courier 729 981 569 673

Printing and stationary 2 082 604 1 603 527

Detailed Income Statement


Notes 2009R

2008R

Profit/loss on disposal of assets 15 907 691

Provision bad debts 14 287 581 3 591 594

Repairs and maintenance 1 032 080 1 196 428

Rental office machines 780 634 795 574

Security safeguarding officers and assets 1 842 046 1 479 094

Seminar/functions 560 692 128 464

Software licenses 29 833 49 451

Subscriptions 112 375 190 009

Staff training 259 702 182 384

Sundry expenses 93 126 200 071

Travelling local 2 190 936 1 221 353

Telephone, fax and diginet costs 2 608 020 1 954 763

Employee related costs 38 544 142 33 642 872

83 390 666 94 341 312

(DEFICIT)/SURPLUS FOR THE YEAR (4 352 762) 675 335

Detailed Income Statement (continued)


NOTES

Private Security Industry Regulatory Authority


Tel no.: +27 12 337 5500

Fax no.: +27 12 337 3337

www.psira.co.za

Annual Report 2008/2009Private Security Industry Regulatory AuthorityPrivate Security Industry Regulatory Authority


Tel no.: +27 12 337 5500

Fax no.: +27 12 324 3337

www.psira.co.za

Annual Report 2008/2009Private Security Industry Regulatory Authority

Annual Report 2008/2009

Documents