The Minister of Correctional Services, Dr Pieter Groenewald, has outlined measures taken by the Department of Correctional Services (DCS) to address financial management challenges, suspected irregularities in a coal procurement tender and concerns raised by the Auditor-General South Africa (AGSA).<\/p>\n\n\n\n
Addressing the Portfolio Committee on Correctional Services on 13 October 2026, during the presentation of the Department\u2019s 2025\/26 Annual Report, the Minister acknowledged the seriousness of the Department\u2019s financial and operational challenges. He highlighted steps taken to investigate suspected procurement irregularities, strengthen financial controls and improve expenditure management.<\/p>\n\n\n\n
The Department received a disclaimer audit opinion for the 2025\/26 financial year, underscoring the need for stronger financial governance, reliable financial reporting and effective internal controls. The Minister emphasised that the Department was taking action to address the concerns raised, including the suspension of officials and the initiation of a forensic audit into a coal procurement tender valued at approximately R1.6 billion.<\/p>\n\n\n\n
Action taken on coal procurement tender<\/strong><\/p>\n\n\n\n The Minister addressed concerns about potentially fraudulent documentation linked to tender HO 03\/2024, which attracted 234 bids and resulted in 74 suppliers being awarded contracts.<\/p>\n\n\n\n He explained that, after receiving further information on 16 February 2026 raising concerns about possible fraudulent documents, he engaged the National Commissioner, and they agreed that no payments would be made under the tender until the matter had been resolved.<\/p>\n\n\n\n \u201cAs we speak, Honourable Chair, I can assure the members of the committee and the people of South Africa that not one single cent was paid on this tender,\u201d said Minister Groenewald.<\/p>\n\n\n\n According to the Minister, the audit process identified 54 bidders or suppliers in connection with various compliance concerns. These included eight cases involving documents that may have been manipulated, five involving documents allegedly created or modified after the bid-closing date, 29 relating to insufficient proof of financial capacity, and 14 involving non-compliance with product quality and transportation requirements.<\/p>\n\n\n\n Two suppliers were flagged in more than one category, bringing the total number of instances identified to 56.<\/p>\n\n\n\n The Minister confirmed that a criminal case had been opened with the Directorate for Priority Crime Investigation, commonly known as the Hawks, under cas number 799\/07\/2026. Four officials, including the Chief Financial Officer, had also been suspended.<\/p>\n\n\n\n In addition, the Department had initiated the process of appointing a forensic auditor to investigate the tender, including the role of Supply Chain Management and the officials involved.<\/p>\n\n\n\n Minister Groenewald welcomed the identification of potential irregularities, noting that exposing suspected fraud was an important part of the oversight process. He said investigations would establish the facts and that officials found guilty of wrongdoing would face appropriate consequences.<\/p>\n\n\n\n Minister questions change in audit assessment<\/strong><\/p>\n\n\n\n While acknowledging the Auditor-General\u2019s oversight mandate, the Minister raised concerns about the process that culminated in the Department receiving a disclaimer audit opinion.<\/p>\n\n\n\n He specifically questioned the change from the initial assessment communicated by the audit management team, which was an unqualified audit opinion with findings, to the final disclaimer audit opinion.<\/p>\n\n\n\n The Minister called for clarity on the reasons for this change, emphasising the importance of fairness, transparency and consistency in the audit process. He maintained that the circumstances surrounding the final audit opinion required further examination, particularly in relation to the issues raised about the coal procurement tender.<\/p>\n\n\n\n He argued that the tender had not resulted in expenditure during the 2025\/26 financial year and was therefore not reflected in the financial statements for that period. In his view, the relationship between the concerns raised about the tender and the final audit opinion warranted further examination.<\/p>\n\n\n\n The Minister called on the Auditor-General\u2019s office to examine the matter and provide clarity on the basis for the final opinion. His concerns focused on the need to understand the reasons for the change in assessment and to ensure that the audit process was applied fairly and consistently.<\/p>\n\n\n\n The Minister\u2019s position did not amount to a rejection of the Auditor-General\u2019s mandate. Rather, he maintained that the Department had taken steps to respond to the issues raised and that the circumstances surrounding the tender should be considered alongside the applicable financial reporting and auditing requirements.<\/p>\n\n\n\n Minister Groenewald further expressed disappointment that the Department had not been present when the Auditor-General presented its findings to the Portfolio Committee. He said this had limited the Department\u2019s opportunity to respond directly to the issues raised.<\/p>\n\n\n\n He called for the Department to be afforded an opportunity to respond during future engagements so that committee members could consider both the audit findings and the Department\u2019s explanation.<\/p>\n\n\n\n Performance and growing operational pressures<\/strong><\/p>\n\n\n\n Presenting the Department\u2019s annual performance, the Minister reported that 39 of the 46 annual performance targets had been achieved, representing 85% performance, while seven targets remained unmet.<\/p>\n\n\n\n He also addressed concerns about unauthorised and irregular expenditure, explaining that the Department\u2019s financial position had to be considered in the context of increasing operational demands and budgetary constraints.<\/p>\n\n\n\n The growing inmate population remains one of the factors placing pressure on the Department\u2019s resources. The inmate population increased from 143,223 in 2021\/22 to 157,056 in 2022\/23, reaching 169,537 by 31 March 2026.<\/p>\n\n\n\n This growth has increased demand for essential services, including food, accommodation and other resources required to maintain safe and humane correctional facilities.<\/p>\n\n\n\n Minister Groenewald said the daily cost of accommodating an inmate had risen from approximately R462 a year earlier to R482. These rising costs, coupled with the increasing inmate population, continued to place pressure on the Department\u2019s budget.<\/p>\n\n\n\n Although the Department receives budget allocations over the Medium-Term Expenditure Framework period, the Minister stressed that these increases must be considered against the costs associated with incarceration and the growing demand for correctional services.<\/p>\n\n\n\n Irregular expenditure balance declines<\/strong><\/p>\n\n\n\n The Minister also highlighted a decline in the closing balance of irregular expenditure over the past three financial years.<\/p>\n\n\n\n According to the figures presented, the balance decreased from R5.24 billion in 2023\/24 to R1.83 billion in 2024\/25 and R1.52 billion in 2025\/26.<\/p>\n\n\n\n He cited the reduction as an indication of progress in addressing the Department\u2019s financial management challenges, while acknowledging that further work was required to strengthen compliance and internal controls.<\/p>\n\n\n\n The reduction in the closing balance does not, on its own, resolve the Department\u2019s financial management challenges. Irregular expenditure must continue to be investigated, appropriately accounted for and addressed in accordance with the applicable legislative framework.<\/p>\n\n\n\n Strengthening financial controls and improving the quality of financial reporting remain important priorities in ensuring that public funds are managed responsibly and that the Department can account for its expenditure.<\/p>\n\n\n\n Strengthening accountability and financial management<\/strong><\/p>\n\n\n\n In concluding his submission, Minister Groenewald acknowledged that the Department continued to face significant financial, administrative and operational challenges. He emphasised the importance of taking corrective action and ensuring that identified weaknesses were addressed.<\/p>\n\n\n\n He said he and the National Commissioner maintained regular engagements to identify challenges and develop appropriate responses.<\/p>\n\n\n\n The Minister\u2019s presentation highlighted the measures initiated by the Department in response to concerns about procurement, expenditure management and financial controls. These include preventing payments under the coal tender pending resolution of the matter, pursuing a forensic investigation, suspending officials and addressing weaknesses in financial management.<\/p>\n\n\n\n The Department will ensure that the measures already initiated translate into stronger internal controls, improved financial reporting, greater accountability and better audit outcomes while maintaining its responsibility to provide safe, secure and humane correctional services.<\/p>\n","protected":false},"excerpt":{"rendered":" The Minister of Correctional Services, Dr Pieter Groenewald, has outlined measures taken by the Department of Correctional Services (DCS) to address financial management challenges, suspected irregularities in a coal procurement tender and concerns raised by the Auditor-General South Africa (AGSA).<\/p>\n","protected":false},"author":2851,"featured_media":11393,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"_links":{"self":[{"href":"\/index.php?rest_route=\/wp\/v2\/pages\/11460"}],"collection":[{"href":"\/index.php?rest_route=\/wp\/v2\/pages"}],"about":[{"href":"\/index.php?rest_route=\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"\/index.php?rest_route=\/wp\/v2\/users\/2851"}],"replies":[{"embeddable":true,"href":"\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11460"}],"version-history":[{"count":1,"href":"\/index.php?rest_route=\/wp\/v2\/pages\/11460\/revisions"}],"predecessor-version":[{"id":11461,"href":"\/index.php?rest_route=\/wp\/v2\/pages\/11460\/revisions\/11461"}],"wp:featuredmedia":[{"embeddable":true,"href":"\/index.php?rest_route=\/wp\/v2\/media\/11393"}],"wp:attachment":[{"href":"\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11460"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}