TRC Final Report

Volume 2

Chapter 6

Part Part4

Subsection 4

■ THE REPORT OF THE AUDITOR-GENERAL

46 The Auditor-General was requested to provide the Commission with a report of the auditing of all secret funds utilised by the previous Government for the period 1960 to 1994. The report indicated that, in accordance with a decision of the Co-ordinating Intelligence Committee, dated 10 February 1994, all documentation on the completed auditing of secret funds had been returned to the departments concerned. This made it necessary for the Auditor-General to gain the co-operation of: the National Department of Defence; the NIS; the Department of Justice; the SAPS; the Department of Foreign Affairs; the South African Secret Service; the Department of State Expenditure; the Department of Arts, Culture, Science and Technology; the Department of Sports and Recreation, and the Department of Education.

47 A number of departments indicated that the audit documentation and working papers in question had been disposed of in terms of approved procedures, and that limited information was available.4 The Departments of Justice and State Expenditure indicated that some documentation was still available. Because the Auditor-General reported on the basis of what information he had at his disposal, he was not able to provide an audit opinion.

Funding of secret services

48 Before the establishment of the Foreign Affairs Special Account on 1 April 1967, various departments had been engaged in activities involving ‘secrecy’ such as the secret classification of documents, intelligence gathering and related matters. As a result of the growing foreign pressure on South Africa and the unstable situation within the country, certain departments, such as the SAP, the National Intelligence Agency (NIA) and the SADF, expressed the need for increased special funding in order to execute certain secret services. To facilitate this, the following special accounts were established via specific statutes:

Special Defence Account

49 The Defence Special Account Act No 6 of 1974, which came into effect on 6 March 1974, made provision for the establishment of the Special Defence Account. The Act allowed for funds in the account to be used, with the approval of the Minister of Finance, to defray expenditure incurred in connection with special defence activities (including secret services) as well as such purchases as the Minister of Defence deemed necessary.

The Secret Services Account

50 Until April 1993, and in terms of section 2(2)(a) of the Secret Services Account Act No 56 of 1978, the Minister of State Expenditure could, at the request of the minister concerned, transfer money from the Secret Services Account to the:

• Foreign Affairs Special Account;
• Information Service of South Africa Special Account;
• South African Police Special Account;
• Special Defence Account.
• Security Services Special Account;

51 In terms of section 2 of the various Special Account Acts, the money in these accounts was to be utilised in connection with services of a confidential nature, with the functional minister being able to approve secret projects subject to conditions and directions as deemed necessary.

52 Following the report of the Auditor-General on the affairs of the Civil Co-operation Bureau (CCB) and certain other irregularities within the SAP Special Account, the Government reviewed the funding of secret services during 1992. This resulted in the promulgation of the 1992 Secret Services Account Amendment Act, which established the Secret Services Evaluation Committee chaired by Mr Amie Venter (as reported earlier).

53 The amended Act provided for the evaluation and control of secret services, the establishment of an account for secret services, and related matters. The amendment deleted the provisions for the transfer of moneys to all the above-mentioned special accounts and the Special Defence Account, excluding the Security Services Special Account. All legislation creating different special accounts, except the Security Services Special Account Act No 81 of 1969 and the 1974 Defence Special Account Act, was also repealed.

54 In terms of section 2(2)(a) of the amended Secret Services Account Act, the Minister of State Expenditure was authorised, at the request of the responsible minister, to transfer funds from the Secret Services Account to the Security Services Special Account of the NIS. In the case of other departments, the Minister of State Expenditure was authorised, in terms of section 2(3)(a) of the Act, to make funds available for secret services.

55 As already indicated, the amended Act further determined (in section 3A(1)) that a committee, known as the Secret Services Evaluation Committee, be established. In terms of section 3A(6), the committee would evaluate –

"all intended secret services in order to determine whether the object thereof and the modus operandi to achieve it, are in the national interest; and review all secret services annually with the said object in order to determine whether they may be continued."

56 These amendments commenced on 1 April 1993.

57 Further refinements to the administration of secret services were effected as from 1 April 1994 and provided for the following:

• the establishment of the Joint Standing Committee on Intelligence;
• the creation of the post of an inspector-general of intelligence;
• the establishment of the National Intelligence Co-ordinating Committee (NICOC).