Off the books: SAPS liability fund hidden - and growing
The South African Police Service's latest annual report is a largely technical report, but tucked away among data on reported crimes, the numbers of open investigations, closed cases and so on, it does contain an exceedingly juicy piece of information. The DA also seems to think so, at any rate. By PAUL BERKOWITZ.
On Wednesday, Dianne Kohler Barnard, the DA’s Shadow Minister of Police, released a press statement on the party’s website claiming the South African Police Service was incurring huge liabilities in the form of civil claims against it. She also linked the militarisation of the SAPS to the increase in claims.
Let’s leave aside for now the fact that Kohler Barnard is in the party of the main opposition and that part of her job is to make political hay while the sun shines. Or, if you don’t care for that mixed metaphor, part of her job is to press the advantage when her ANC counterpart stumbles. She has asked Nathi Mthethwa, the minister of police, to immediately demilitarise the service.
Some might see this as opportunistic. I happen to second the call for demilitarisation of the force, so feel free to take this analysis with your choice of condiments. The purpose of this piece is not to score political points, but rather admit that there a problem and to try and quantify it. In other words, what is the cost, in tax money, of paying for the excesses, negligence and criminal activity of certain members of the police force?
Here are some of the numbers: The SAPS budget for the financial year, which ended 31 March, was R58.6-billion. The contingent liabilities are R20.6-billion, up from R16.6-billion in the previous year. Of the R20.6-billion, R14.8-billion is for claims against the SAPS. The claims line item also represents the lion’s share of the increase in total contingent liabilities from the previous year.
Kohler Barnard says (correctly) in her statement that these liabilities make up around a third of the SAPS budget, which assumes that the SAPS has budgeted for the liabilities in some way. That seems to be a generous assumption, because there is no provision for the contingent liabilities in the financial statements.
The reference to the liabilities is tucked away in the disclosure notes and the annexures to the financial statements with a note explaining that information on the liabilities is “disclosed to enhance the usefulness of the financial statements.” It is one thing to recognise that the final settlement value of these claims is highly variable; it is another thing to not make any provision for the claims at all.
These outstanding claims, comprising almost R15-billion, can be seen as a stock item representing claims made against the SAPS across a number of years. In any one financial year some of the outstanding claims will be settled and a fresh batch of claims will be added to the stockpile. There may also be an adjustment to the value of the previous claims, up or down (but usually down).
Of the claims that are settled, some of them will be settled in full, some will be settled in part and some will be dismissed at no cost to the SAPS. Some will be dismissed or settled at a reduced rate because police culpability cannot be established, or the claims were fraudulent, or perhaps for another dozen reasons.
We might not be able to calculate definitively how much the SAPS is costing the fiscus by not doing its job properly, but we should be able to identify a few trends and arrive at a conservative estimate for these costs. Of the R14.8-billion in outstanding claims, R11.9-billion is due to “police actions”, R1- billion to shooting incidents and R840-million to assault.
These shares are broadly unchanged for the last five years, although this is not particularly illuminating. “Police actions” seems to be a broad catch-all which doesn’t pinpoint which police actions could be potentially costing the police so much money. Are these claims for pain and suffering caused by the police, for rape, for what? Claims for assault have risen as a proportion of the total value of claims, but is this good or bad? It’s not immediately clear.
How much money is paid out in a year for the claims that are settled against the SAPS? Again it’s not totally clear. In the last financial year, claims to the value of R2.8-billion were settled. Only R106-million of these were settled in full: the other R2.7-billion were “cancelled or reduced”. But what share of this R2.7-billion was cancelled outright and what was settled at a reduced rate? The report doesn’t say.
What was the average settlement value, as a percentage of the R2.7-billion, of those claims which were cancelled or settled at a reduced rate? Does 33.3% sound conservative enough for you? It does for me, and it gives an even R1-billion for the total value of the claims paid out: R106-million paid in full and a further R900-million (one-third of R2.7-billion) paid in part.
There will always be some element of human error and some tragic events that just could not be avoided. In an ideal world these would be kept to a minimum and we would have a well-trained, motivated and professional police force.
What we have is a police force that is costing the taxpayer R1-billion (estimated) a year for things that could and should be avoided. That R1-billion is not on any balance sheet. It should be, and it is rising every year.
The value of these claims has been rising every year by a magnitude of 20% and 30% since at least the 2005/06 financial year. This should be unacceptable to the minister of police, but this number is not on any balance sheet. Maybe if the SAPS budgeted for this annual payment there would be changes made.
You can work out how many toilets, teachers and tenders that money could buy you, if you want, in your own time. I would like to think about how much more training and equipment this much money could buy for policemen. How much more therapy and support services could be extended to officers suffering from post-traumatic stress disorder, the same officers who have been convinced by past and current commissioners that they are in a state of war.
I’m still assuming that this tax money should be spent on the police force, minarchist milquetoast that I am. The real libertarians are probably wondering why government should provide policing services at all, and I have to say, the SAPS is not helping its own case for more public funds. But we have to acknowledge that our current policies around policing are hurting us. They are not making us feel safer, and they are hurting us in our pockets.
Next week, the minister of finance will deliver his medium-term budget policy statement and he will make adjustments to the national budget. I really hope he takes the opportunity to give us the bad news unvarnished, and maybe to make sure that all the off-balance sheet costs to the country are put back on the books. DM
- South African Police Service annual report
Photo: Police keep watch outside Lonmin's Marikana mine. REUTERS/Siphiwe Sibeko