Technology is among the trump cards South Africa will play in its moves to ensure state capture will not happen again in the future.
This emerged yesterday, when president Cyril Ramaphosa detailed interventions that will be made in response to the State Capture Commission recommendations.
Government believes technologies such as data analytics can make a difference in thwarting corruption and unethical business practices, especially among state-owned companies.
An estimated R50 billion was channelled from state entities to the infamous Gupta family during the period of state capture associated with former president Jacob Zuma’s presidency from 2009 to 2018.
The Special Investigating Unit and the Council for Scientific and Industrial Research recently partnered to use digital inventions to tackle the scourge of fraud, corruption and cyber-related crimes in the country.
The organisations are collaborating in areas such as data analytics, digital forensics, information and cyber security, artificial intelligence, distributed ledger technology or blockchain, and cyber infrastructure support.
The partnership will also see capability-building in the development of digital investigation tools, digital forensic investigations and analysis, cloud and high-performance computing to uproot cyber crimes before they occur, say the entities.
New chapter
Ramaphosa said the state capture response constitutes an ethical, moral and institutional departure from the abuses revealed by the State Capture Commission.
“The actions we are taking and the implementation of the commission’s recommendations are designed to provide redress in respect of the events of the past and to advance the renewal of our society.
“Through the implementation of the actions contained in this response, we can start a new chapter in our struggle against corruption,” the president said in his address to the nation in response to the State Capture Commission Report at the Union Buildings on Sunday.
The commission, led by chief justice Raymond Zondo, was established as part of the remedial action contained in the report of the Public Protector released on 2 November 2016.
Strengthening the auditing system with technology is one of the biggest reforms the country believes will arrest future state capture attempts.
This, as a fundamental challenge exposed by state capture is that, despite the highly-regulated nature of the procurement system and the considerable work done by the Auditor-General of South Africa (AGSA), corruption was not meaningfully impeded, according to government.
As an immediate response, the AGSA considered the various parts of the report in the planning and execution of the 2021-22 audit of all departments and entities covered by the work of the commission.
The commission’s findings informed the risk assessment of those audits in the past and present, as well as whether appropriate procedures were performed to respond to the areas of risk.
According to the state capture response document, the AGSA has indicated that attorney-general Tsakani Maluleke will elaborate on these concerns when she tables the 2021-22 PFMA general report towards the end of this year.
It notes the AGSA has revised its strategy to respond to vulnerabilities in key areas, in particular governance, ethics, human resource practices, and procurement of goods and services.
Changes will include performing transversal assessments of suppliers that do business with all spheres of government; reconsidering the timing and frequency of the audit scoping decision process to improve agility; using computer-assisted audit techniques and data analytics to broaden its view across all spheres of government; and expanding the AGSA’s database on politically exposed persons and closely related business partners.
It adds the AGSA has now established relationships with most investigating and law enforcement agencies, fellow constitutional institutions and several public bodies with suitable mandates to receive material irregularities for further investigation and consequences.
“The national audit office is working with the South African Institute of Chartered Accountants and the Independent Regulatory Board of Auditors to dissect the findings and recommendations of the commission,” reads the document.
“Where appropriate, these bodies should make the necessary adjustments to their processes and programmes to address the commission’s outcomes.”
Robust IT controls
According to the AGSA, an inherent part of the control environment in national and provincial auditees is the status of their IT controls.
It notes IT controls ensure the confidentiality, integrity and availability of state information, enable service delivery and promote national security.
“It is, thus, essential for good IT governance, effective IT management and a secure IT infrastructure to be in place,” says the AGSA.
“Effective IT governance underpins the overall well-being of an auditee’s IT function and ensures the auditee’s IT control environment functions well and enables service delivery. As the majority of financial management controls are automated and monitoring takes place mostly on reports generated by the IT systems, good IT controls and skills are fundamental to enabling robust financial management systems and in-year monitoring.”