NELSON MANDELA

METROPOLITAN MUNICIPALITY

ASSET
LOSS CONTROL
POLICY
 ASSET LOSS CONTROL POLICY

INDEX
Page

ASSET LOSS CONTROL POLICY EXECUTIVE SUMMARY..................3

ASSET LOSS CONTROL POLICY ...........................................................4
1. BACKGROUND.........................................................................................4
2. INTRODUCTION.......................................................................................5
3. AIM ............................................................................................................7
4. STATUS ....................................................................................................9
5. METHODOLOGY ......................................................................................9
6. IMPLEMENTATION OF POLICY ........................................................... 10
7. PRACTICAL OBJECTIVES.................................................................... 10
LOSS CONTROL POLICY : MATRIX OF EFFECTIVE MEASURES.... 11
8. OPERATIONAL IMPLEMENTATION OF THE LOSS CONTROL
POLICY .................................................................................................. 12
9. MONITORING AND OVERSIGHT ......................................................... 13
10. PROCEDURES MANUAL FOR THE REPORTING OF LOSSES......... 14
11. ANALYSIS OF CRIMINAL AND OTHER INCIDENTS, WHICH IMPACT
ON COUNCIL LOSSES ......................................................................... 14
12. SPECIFIC GUIDELINES TO ASSIST WITH THE REDUCTION OF
LOSSES ................................................................................................. 14
13. COUNCIL POLICIES TO ADDRESS SPECIFIC AREAS OF LOSS
REDUCTION .......................................................................................... 14
14. GUIDELINES FOR THE UTILISATION OF EXTERNAL AGENCIES TO
ASSIST WITH SPECIALISED INVESTIGATIONS ................................ 14

ANNEXURE A...................................................................................... 15
PROCEDURES MANUAL FOR REPORTING LOSSES

ANNEXURE "B" ..................................................................................... 45

ANALYSIS OF CRIMINAL AND OTHER INCIDENTS WHICH IMPACT
ON COUNCIL LOSSES

ANEXURE"C ......................................................................................... 52
SPECIFIC GUIDELINES TO ASSIST WITH THE REDUCTION OF
LOSSES

ANNEXURE "D" ..................................................................................... 59

COUNCIL POLICIES TO ADDRESS SPECIFIC AREAS OF LOSS
REDUCTION

ANNEXURE "E" ..................................................................................... 67

GUIDELINES FOR THE UTILISATION OF EXTERNAL AGENCIES TO
ASSIST WITH SPECIALISED INVESTIGATIONS

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 ASSET LOSS CONTROL POLICY

EXECUTIVE SUMMARY

The Asset Loss Control Policy has not been designed as a new initiative, but
a strategy document utilizing various and existing methods of operation and
work procedures of the different Business Units as the basis for the policy.
The current fragmented approach in this regard has thus been combined into
one reference document.

A fundamental shortcoming to consider when utilizing the policy is the fact that
an Asset Loss Control Policy cannot be properly researched and compiled
without conducting a comprehensive Asset Risk Analysis. The lack of such an
analysis has forced the process to utilize existing loss data of the Security
Division as a guideline.

Although the Background and Introduction in the main document refers, on a

continued basis, to the Safety and Security Business Unit, this policy, due to
the topic covered, cuts across all Business Units. The reference to the Safety
and Security Business Unit merely highlights its central position in terms of
requirements and efforts to reduce Council losses

The Policy, for ease of reference, has been grouped in divisions as follow;

DIVISION TOPIC COVERED PAGE NO.

1 Background and Introduction 3-5
2 Loss Control Policy 6-12
3 Procedures Manual for the Reporting of Losses 14-43
4 Loss Reduction Guidelines 44-64
5 Utilization of External Agencies to assist with 65-70
Specialized Investigations

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 ASSET LOSS CONTROL POLICY

1. BACKGROUND

1.1 This policy is designed to assist Business Units to:-

1.1.1 Reduce direct and indirect costs through the timely detection and
correction of conditions (identified risks) that may cause losses.

1.1.2 Set standards for effective accountability and management of assets.

1.1.3 Facilitate the maintenance of an orderly record and investigation of all

losses.

1.2 The Nelson Mandela Metropolitan Municipality is required in terms of

legislation, certain policies and plans to provide for proper asset
protection measures. Although this requires a combined Business Unit
approach the Safety & Security Business Unit is central to achieving
this objective. The following Safety & Security internal provisions, in
support of the legislative requirements, are relevant extracts:-

1.2.1 INTEGRATED DEVELOPMENT PLAN

The IDP (Safety & Security portfolio) indicates, in terms of its Strategic
Direction and Values that; The continued protection of municipal
assets is critical to transformation and effective service delivery.

The Safety & Security Portfolio 5 year Developmental Priority

Strategies requires the Development of a long term and more
effective municipal asset protection strategy and plan.

1.2.2 SAFETY & SECURITY BUSINESS UNIT BUSINESS PLAN

The Business Units core values and strategic direction is categorized

into themes, one of which specifically covers Protection of municipal
assets.

1.2.3 SECURITY DIVISION MISSION STATEMENT

The Mission Statement of the Security Division is clear in respect of

asset protection, as follow To render a service to the Council by the
provision of a system whereby the needs for protection and
safekeeping of Council employees, installations, buildings,
equipment and other assets are met, in order to ensure secure
working conditions and reduce unnecessary costs due to loss
through negligence or otherwise.

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2. INTRODUCTION

2.1 The Safety & Security Business Unit firmly believe that the protection of
Councils assets, staff and infrastructure is the collective responsibility
of all Business Units and is central to Council achieving its objectives
as per Vision 2020.

The following schematic illustration highlights this fact.

ASSET PROTECTION vs DEVELOPMENTAL

REQUIREMENTS

2.2 It is clear, considering this schematic illustration, that the

developmental strategy and direction of Council will seriously be
jeopardized without:-

2.2.1 Adequate and serviceable assets

2.2.2 Staff feeling safe to perform their functions.

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2.2.3 An infrastructure adequately protected against criminal threats from
within and out of Council.

2.3 The criminal threat against assets will ultimately impact on sustainable
service delivery and could have a far-reaching negative and potentially
crippling effect on Councils strategic efforts, finances and political will.

The collective responsibility to address losses can best be described by

the following illustration:-

2.4 One of the most serious negative implications against the effective
protection of assets in terms of the criminal threat is the:-

2.4.1 Fragmented approach of Business Units in addressing losses.

2.4.2 Lack of a holistic business solution, such as a proper Asset Risk

Analysis and Security Policy / Plan.

2.5 Asset protection is a multi-faceted discipline that places a burden of

responsibility on Council to select the correct, effective security
solution/s to a particular scenario.

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2.6 The mission of Council should thus evolve from merely a protector of
assets and personnel to a key decision maker, emphasizing Risk
Management and Loss Prevention.

3. AIM

3.1 In recent years the Municipality has experienced an unacceptable

increase in asset losses, mainly due to theft from within and outside of
Council. It is the aim of this policy to maintain awareness of the
seriousness of the Municipal loss problem and what can be done about
it.

3.2 It should be noted that this policy does not necessarily include all
potential sources of loss, nor is it intended in any way to warrant that it
includes all aspects of a program that assures that premises and
equipment are safe or are in compliance with any law, rule or
regulation.

3.3 This is a policy to identify assets in risk categories of importance and to

focus on proactive protection and security measures, in an effort to
reduce losses.

3.4 It is required that a comprehensive Asset Risk Analysis be

conducted in order to effectively identify the risk profile of assets
and before a proper Loss Control Policy can be formulated.

One cannot begin to evolve a plan to cope with potential losses until
the risk exposures have been identified and eradicated or at least
reduced.

Once that exercise is complete then appropriate planning can begin.

There is little point in planning for something that will never occur.

For that and other reasons the residual risks (those risks that cannot be
eradicated) have to be evaluated.

It would be a futile exercise to make elaborate plans to cater for a risk

that will hardly generate a crisis. Thus the identification and evaluation
exercise is all-important for it will determine what risk (loss) control
measures should be introduced.

The lack of such an analysis has resulted in the utilization of

existing loss data from the Security Division as a guideline in the
compilation of an interim policy. The following diagram of incidents
investigated by the Security Division between 1995 and 2003 identifies
those high-risk areas, which need attention. The Loss Control Policy
places particular focus on losses as a result of these incidents.

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4. STATUS

4.1 The status of the Loss Control Policy needs to be clarified, taking into
consideration a holistic approach as detailed in entry 3.4.

4.2 The following schematic illustration places the Loss Control Policy into
a proper order of priority perspective.

ASSET PROTECTION

ASSET RISK ANALYSIS

SECURITY POLICY / PLAN

LOSS CONTROL
POLICY

4.2 On 10 September 2001, a working group, consisting of the Security

Manager, Internal Audit and Legal Advisor formulated a draft Loss
Control Policy that was adopted by Council during May 2002.

4.3 This policy has been incorporated, as approved, into this document,
with minor cosmetic changes in order to clarify certain issues, as follow.

5. METHODOLOGY

5.1 The following methodology was followed in analyzing the loss statistics
and trends of Council in an effort to ultimately focus on those areas and
where the most losses occur.

5.1.1 The first step was to create scenarios by reverse analysis that would be
conducive to loss, taking into account how and where losses were
occurring in the Metropolitan area.

5.1.2 During this step the 80:20 rule was applied in that 20% of the
categories of loss were probably responsible for 80% of the loss or that
80% of the losses were occurring in 20% of the Metro by area.

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5.1.3 This process will also assist in deciding what action to take and how
much of its resources to invest in asset loss prevention.

5.1.4 The second step was to formulate counter measures in order of

importance to combat the losses as identified by the process in entry
5.1.1. This process is based on the premis that you cant manage what
you cant measure and culminated in and is summarized in a Matrix
of Effective Measures. The criteria, measurements and scores are
the cornerstone of the Loss Control Policy.

6. IMPLEMENTATION OF POLICY

6.1 The policy should be administered at Business Unit Manager level in

order to ensure cross Business Unit application and timely
accountability.

6.2 Business Units should have in place a system that constantly monitors
losses in order to provide for the finances of, and implement relevant
counter and preventative measures. Details as required by the Loss /
Damage report forms as well as those highlighted by entries 7.2 and
8.4 should form the basis for proper statistical control.

7. PRACTICAL OBJECTIVES

7.1 The policy aims at implementing the following:-

7.1.1 To constantly monitor losses.

7.1.2 To establish the cost to the Municipality of the individual losses and
categorize the losses by financial seriousness and locality, including
indirect costs.

7.1.3 To enable Business Units and Council to introduce and justify financial
measures to prevent losses from occurring.

7.2 In order to achieve these aims, loss reports must include the following
detail:-

7.2.1 Loss by category and cost.

7.2.2 Recommended preventative measures and their cost.

7.2.3 Preventative measures taken / implemented and their cost.

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 LOSS CONTROL POLICY : MATRIX OF EFFECTIVE MEASURES
Key: 3 Crucial Key for Rating:
Note: Special locations and needs are to be taken into account where
2 Necessary A - Crucial
1 Useful necessary. Individual procedures need to be formulated for each B - Necessary
0 Not Applicable location/need. C - Useful

Non-
Physical Preventative Occupied Motor
Resorts Depots Parks Occupied Total Total Grand Total Rating
Steps Buildings Vehicles
Buildings

Overall
Supervising/Checking 3 3 3 3 3 15 3 3 18 A
Prosecute Offenders 3 3 3 3 3 15 3 3 18 A
Disciplinary Enquiries 3 3 3 3 3 15 3 3 18 A
Inventory Control 3 3 3 3 3 15 3 3 18 A
Exit Checks 3 3 3 0 3 12 3 3 15 A
Trained Security Staff 3 3 3 2 3 14 0 0 14 B
Secure Perimeter 3 3 3 1 3 13 0 0 13 B
Gates/Doors 3 3 3 1 3 13 0 0 13 B
Asset Tagging 2 2 1 2 3 10 3 3 13 B
Alarm Systems 1 3 3 0 3 10 2 2 12 B
Detection Systems 2 3 3 0 3 11 1 1 12 B
Patrols 1 2 3 3 3 12 0 0 12 B
Office Locking 3 3 3 0 3 12 0 0 12 B
Key Control 3 3 3 0 0 9 3 3 12 B
Fence/Wall 1 3 3 1 3 11 0 0 11 C
Secure/Lock buildings 1 3 3 0 3 10 0 0 10 C
Access Control 3 3 3 0 0 9 0 0 9 C
Boom (Manned) 1 1 1 0 0 3 0 0 3 C
Desk Locking 1 1 1 0 0 3 0 0 3 C
Cabinet Locking 1 1 1 0 0 3 0 0 3 C
Identification Cards 2 0 1 0 0 3 0 0 3 C
Searching 1 1 1 0 0 3 0 0 3 C
Log Books 0 0 0 0 0 0 3 3 3 C
Logging Systems 0 0 0 0 0 0 3 3 3 C
Procedures for taking
vehicle home 0 0 0 0 0 0 3 3 3 C
Escort (Floors) 2 0 0 0 0 2 0 0 2 C
Exit Permit 2 0 0 0 0 2 0 0 2 C

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8. OPERATIONAL IMPLEMENTATION OF THE LOSS CONTROL
POLICY

The following actions are recommended for implementation in order to

assist with the immediate operational activation of the Loss Control
Policy:-

8.1 Business Unit Managers must identify or appoint a dedicated senior

official within their respective Business Units to take responsibility for
their Loss Control function.

8.2 Business Unit Managers must determine what crucial steps are being
applied, if any at all, to protect municipal assets and the cost of
implementing such measures where they are lacking.

8.3 Assistance by Councilors to explain the strategy behind asset protection

to the community in order to enhance public awareness of the
seriousness of the municipal loss problem.

8.4 Immediate asset management at Business Unit Manager level. This

entails overall supervision and administration of the asset protection
policy with constant feedback on losses (their costs and where they are
occurring), preventative measures taken and recommendations for
action (including cost details and opportunity cost warnings).

8.5 Protection of municipal assets at all levels of all Business Units.

8.6 The fast and effective investigation of losses.

8.7 Fast and effective disciplinary enquiries following negligent and / or

deliberate acts or omissions by municipal employees. Section 10G
recoveries should be pursued where justified. (Section 10G refers to
monetary recovery from municipal employees who have acted
negligently and caused the municipal loss). The appointment of
specialist staff, within Business Units, to assist with disciplinary cases
in the capacity of either Prosecutors or Presiding Officers is a strong
recommendation. Furthermore, external professionals should be
considered to act as Presiding Officers in higher profile cases.

8.8 Employment practices, with the emphasis on pre-employment

screening and background checks, in order to eliminate the dishonest
candidate. Pre-placement forensic interviewing and SAPS clearance to
be considered where necessary.

8.9 Stringent inventory control, including a central Council Asset Register,

asset tagging and exit control.

8.10 Secure perimeters and effective Security Officer patrols.

8.11 Maintaining municipal and public awareness of the seriousness of

the municipal loss problem.
8.12 Prudent key control.
8.13 Locking of offices, cupboards, cabinets and drawers by staff.
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8.14 Adequate training of security personnel to deal with the challenges of a
Loss Control Policy, proper investigation of criminal incidents and to
maintain a high security standard, linked to advanced technological
security systems.

8.15 Disciplined access control linked to a high degree of supervision

thereof.

8.16 Stringent motor vehicle logbook control and strict enforcement of

rules governing the taking home overnight of municipal vehicles. See
relevant policy on page 58.

8.17 Installation of integrated security systems where the Municipality

is at high and medium risk. Systems such as CCTV at localities where
high volumes of visitors have unrestricted access, e.g. Clinics and
Treasury satellite pay points to be considered. The Risk Planning
Officer in the Security Division is available to assist.
8.18 Visitor verification passes and escort systems.

9. MONITORING AND OVERSIGHT

9.1 Although the operational implementation and management of the Loss
Control Policy has been decentralized as a Business Unit level
competency, the overhead monitoring has been delegated to the
Monitoring Task Team under the auspices of the Safety & Security
Standing Committee. The Chairperson of the Safety & Security
Committee, supported by selected Councilors, Security Manager and a
representative (Loss Control Officer) of each Business Unit form
the composition of the Task Team.
9.2 The purpose, authority and responsibility of the Monitoring Task Team
is advisory in nature and is not to assume the responsibility of the
functioning of the Loss Control program. It should further not be
concerned with daily problems in individual Business Units, which
should be addressed and resolved within those Units.
9.3 The scope of the Monitoring Task Team can be defined as follow:-
9.3.1 Evaluation of the effectiveness of the Loss Control program.
Objectively review and appraise the soundness, adequacy and
application of Loss Control operating controls and propose
improvements where necessary in order to ensure objectives are met.
9.3.2 Monitoring and highlighting of trends in order for corrective action to be
taken timely.
9.3.3 Evaluation of incident investigation reports, the number of
investigations, adequacy of investigations, action recommended and
taken.
9.3.4 Study of high profile incidents / problems, which may affect the entire
Metro.
9.3.5 Review the quality, reliability and integrity of original investigations in
order to identify those incidents for re-investigation to ensure complete
and accurate reporting.

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9.3.6 Monitor whether Business Units are performing in compliance with the
Loss Control Policy.
9.3.7 Assist with the identification of incidents requiring possible specialized
investigation utilizing other sources.

10. PROCEDURES MANUAL FOR THE REPORTING OF LOSSES

It is vital that all losses are properly reported in terms of administrative,

financial and other provisions. For details see attached Annexure A.
11. ANALYSIS OF CRIMINAL AND OTHER INCIDENTS, WHICH
IMPACT ON COUNCIL LOSSES
This analysis includes the identification of high profile criminal and
other incidents, which contribute to and have a profound impact on
Council losses. For details see attached Annexure B.

12. SPECIFIC GUIDELINES TO ASSIST WITH THE REDUCTION OF

LOSSES
These guidelines have been designed from a municipal perspective
considering lessons learnt from past loss incidents, or incidents which
could have resulted in substantial losses, such as Office Security. For
details see attached Annexure C.

13. COUNCIL POLICIES TO ADDRESS SPECIFIC AREAS OF LOSS

REDUCTION
Certain policies have already been developed and approved to deal
with specific areas identified as potential high risks, such as taking
Council vehicles home for whatever reason. For details see attached
Annexure D.

14. GUIDELINES FOR THE UTILISATION OF EXTERNAL AGENCIES

TO ASSIST WITH SPECIALISED INVESTIGATIONS
It has been found in the past that certain specialized skills are lacking
to effectively investigate complex and high profile loss cases. This
guideline has been developed to assist Council in utilizing external
agencies in such investigations. For details see attached Annexure E.

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