Strengthening the Financial Intelligence Centre: New lifestyle audit powers unveiled

The government plans to give the Financial Intelligence Centre (FIC) more wide-ranging powers to conduct lifestyle audits, whose outcomes could be made available to other organs of state, public entities, or municipalities at their request.

According to the draft General Laws (Anti-Money Laundering and Combating Terrorism Financing (AML/CFT) Amendment Bill, the proposed law will allow the FIC to conduct lifestyle audits to continue strengthening the country’s AML/CFT system.

The bill is also part of additions that will better prepare the country for the next Financial Action Task Force (FATF) Mutual Evaluation for South Africa that will commence in mid-2026 and conclude in October 2027.

The FATF leads global action to tackle money laundering, terrorist, and proliferation financing. A lifestyle audit is described as an audit to determine if a person’s living standards are consistent with the income from legitimate sources that can be attributed to that person.

In terms of the draft bill, it provides for the FIC to conduct lifestyle audits and to expand the centre’s general powers to include the requesting of information from a public entity, municipality, and municipal entity.

Additionally, only prescribed persons at the request of an organ of state, public entity, or municipality, if the FIC reasonably believes the entity is affected by or has an interest in the information it obtains through conducting a lifestyle audit, will have access.

Earlier this week, the Department of Public Service and Administration revealed that data for the 2024/25 financial year showed that 8,982 senior managers underwent audits, and 172 cases were flagged for further investigation, including 97 at the national level and 75 within provincial departments.

Investigations uncovered conflicts of interest such as officials being registered on the government’s Central Supplier Database or the Companies and Intellectual Property Commission in violation of public service rules.

The DA has also referred the matter to the Chairperson of Parliament’s Portfolio Committee on Public Service and Administration, Jan de Villiers, to call on Public Service and Administration Minister Inkosi Mzamo Buthelezi to appear and explain how nearly 9,000 senior public servants have undergone lifestyle audits, with 117 officials under internal investigation and 24 cases flagged by the Presidency for suspected undeclared income or hidden assets, yet no criminal action is yet under way.

DA MP and spokesperson on Public Service and Administration Eleanore Bouw-Spies has requested a departmental breakdown of where the 141 flagged officials are employed, along with the monetary value of undeclared assets identified, as well as written protocols and policies which govern, specifically when, lifestyle audit findings must be referred to external law enforcement agencies, and whether such protocol exists at all.

In addition, Bouw-Spies wants a timeline and status for the 117 internal investigations and when these investigations were initiated, what the expected completion date is, and what oversight mechanisms are in place to monitor progress.

She wants access to the preventative measures that have and are being implemented to ensure that officials under investigation for undeclared assets cannot influence the investigation process or access to sensitive procurement decisions while investigations are pending and the public reporting framework – what mechanisms exist for transparent reporting on lifestyle audit outcomes to Parliament and the public, beyond responding to parliamentary questions.

loyiso.sidimba@inl.co.za