National Treasury on South African Human Rights Commission's Fourth Economic and Social Rights Report; Medium Term Budget Policy Statement & Appropriation Bill: briefing

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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report

11 November 2003

: Mr Nene (ANC)

Documents handed out:
Chapter 13 of SAHRC 4th Economic and Social Rights Report
Submission by the National Treasury
Joint Budget Committee Third Report

The Joint Budget Committee met with the National Treasury to discuss issues raised in Chapter 13 of the South African Human Rights Commission's Fourth Economic and Social Rights Report. Issues discussed included the differences between the Treasury's and HRC's statistics and evaluations of the budget, accountability and capacity problems faced by the different levels of the Government and ways of improving their interaction in order to deal with the weaknesses in the Parliamentary system.

National Treasury Submission
National Treasury briefed the Committee on Chapter 13 of the Human Rights Commission Report. The Joint Budget Committee had already listened to the Human Rights Commission (HRC) briefing on chapter 13, and asked the National Treasury to study this chapter in order to present a balanced report to Parliament.

Mr I Momoniat (Treasury)
Mr I Momoniat said that the role of  Parliament and legislatures was important in reforms aimed at obtaining better performance and accountability. Chapter 13 of the HRC Report attempted to examine the role of Treasury's policy program and legislative processes and to challenge its role in meeting the economic and social rights of South Africans and their progressive realisation.

It presented a set of figures corresponding to budget allocation and made assumptions on the role of Treasury in that process. The National Treasury elaborated on some of the issues raised about the report. The main concern was that the HRC did not really understand the Treasury's role. The Treasury did not make budget allocations, instead that task fell on the executive cabinet, provincial, mayoral and executive committees. They were responsible for decisions and could be held accountable by the legislatures on budgets.

The Treasury also complained about the methodology of the process and the fact that they were getting different answers from different departments on the same issues. They classified data and report differently. Consequently, it took Treasury five years just to get all the education departments to report on the spending amounts in a more consistent way. It created a real challenge.

Another criticism was that the numbers taken from the surveys were completely unreliable and not validated, hence the Treasury had a lot of reservations to the HRC Report. The amounts deviated from the data collected by the Treasury. The Treasury found it problematic to come up with conclusions based on figures contained in the surveys. The Treasury, on the other hand, used audited figures. If the HRC took that information as given, their report would become much richer. These numbers were not only publicly available but also validated. The HRC did not fully understand what the meaning of reforms. Allocation of funds depended on the nature of functions. The allocation decision was made by Cabinet and not by Treasury.

Mr T Chaponda (Treasury)
The Treasury was concerned whether there was enough understanding about the process and whether the existing documents had been used sufficiently by the HRC and other bodies as report building tools. The HRC recognised in their report that the country experienced resource constraints and that the Treasury was in the business of economic stabilisation. Having made these observations, there was a tension of trying to fulfil these rights within the available resources. They also recognised that the needs could therefore not be fulfilled immediately.
The HRC suffered from a failure to establish a standard by which the report was judging different departments.

Mr N Cole (Treasury)
The report referred to a notion of nominal and real values and from that it made no proper analysis that could in turn lead to misinterpretation. The aim was to improve performance, procedures, and practices with which to deliver services. Even if budgets declined in real terms it did not mean that performance necessarily followed that same pattern, and in fact with better performance and improved systems it was possible reach higher achievements than in previous year. The efficiency within the budget process had been improved as well as its political oversight and the top-up participation from departments. The budget submissions presented by the departments for analysis and evaluation had improved as a result of the better of documentation that helped in seeing a clearer picture of what departments were purchasing in terms of goods and services. There had been a major efforts made in insuring that the Treasury brought about better allocative efficiency within the budget process.

Mr I Momoniat (Treasury)
There was a need to empower the Portfolio Committees with the authority of dealing with the improvement of accountability. A better performance relied on improvement of the accountability system. It would be helpful to have a system that could hold the public service accountable.
In the view of Treasury, the HRC had an important role to play. There were, however, a lot of technical differences between the reports from the Treasury and the HRC. In fact some of the figures were plainly wrong.

The Chairperson inquired on the questionnaire that the National Treasury filled out and asked for comments on the response given.

Mr Momoniat said that he found some of the questions as being problematic. The method of using a questionnaire was itself very problematic and open to lack of standardisation.

Mr Cole said that in preparation for this meeting, the representatives from the Treasury should have gone back to protocols that the HRC sent to the departments and review the response provided in the questionnaire that was completed over a year ago. He mentioned that the process of completing the questionnaire took over two weeks, which raised concerns about the format of such a document. He was not able to give a specific comment comparing what was sent to the Commission and what in fact was reported by the HRC. He was, however, willing to provide the Committee with a copy of that submission.

Mr Chaponda said that in its report the HRC argued that one of the challenges faced by the Commission was receiving insufficient and incorrect information alongside of a high rate of non-response. That meant that a number of departments were struggling with the protocols. Some of the potential obstacles were the repetitive nature of the questionnaire and the fact that the process was time consuming.

The Chairperson said that these comments were very useful and that the Committee would use that information to make appropriate recommendations.

Ms N Tsheole (ANC) thanked the Treasury for comments on the HRC Report. She expressed a wish for closer interaction between the Budget Committee and the Commission and added that the HRC itself needed to interact more with the provincial and national Treasury so that together they could come up with an agreement on the way of requesting information from the outside sources. She was concerned that there  was no agreement between the Treasury and the HRC report. It was not clear whether the Commission was not satisfied with the information provided by the Treasury, or whether in their monthly report the Treasury was not able to source out enough information from provinces.

Mr D Hanekom (ANC) said that the country's budget was to assist in the fulfilment of policy objectives such as realisation human rights. The Budget Committee and the HRC needed to be mutually reinforcing in the budget analysis. The Committee's role would be to ensure better feedback from the individual Portfolio Committees and more in-depth performance monitoring. He did, however, point out that the Committee's capacity was limited. The gap between the capacities of departments and ministries and of the parliament, which is meant to be the monitoring and the oversight, is obscene.  There was a need for constant engagement between the different spheres of the government. Another concern was that the level of public participation was not what it should be and the government should take on the responsibility to ensure increased public participation.

Mr Momoniat agreed that the issues of capacity and accountability posed problems.
He divided the issue into pre and post accountability, where the latter offered more information that could later be audited. The challenge was to provide the public with easier accessibility to the proper institutions in case of a problem. In the public service there was often two or more people being held accountable, where in fact the accountability should rest with a single individual.

Another challenge was making sure that the financial and the service information sectors communicated with one another. The Portfolio Committees would have an important role to play in inspiring that junction. To better explain his point, Mr Momoniat used an example of the Housing sector, where the Housing Portfolio Committee protected the Housing Department, when in fact it should have been calling it up and trying to get to the bottom of the problem. The current system was clearly not prepared to deal with such problems. The National Department of Housing must feel responsible for solving problems. It could, however, not happen unless the Portfolio Committee became more active in approaching the Department. Unless the Committee changes its approach to acting quickly and efficiently, the problem of under spending will remain for years to come. Another issue that needed to be resolved was providing access to the  people to the available information. In short, there was a lot more work that could be put in to make the South African democracy work.

Mr Chaponda agreed that there were significant limitations of the system and added that the National Treasury was also struggling with acquiring the desired information from Departments. He was upset with the fact that as late as the third quarter of the year, most Departments would not provide detailed information and merely state that they were "on track and did not expect any under spending".

Ms C Botha (DA) doubted whether the Treasury actually knew what they were measuring, as their report provided meaningless information. Their report did not indicate whether the money had been spent well or not. Correct targets and ways of measuring needed to be established by the HRC to set up measuring formats in a more sophisticated way.

Mr Momoniat said that a quarterly budget report focused on what was spent. The Treasury did not measure anything until the Departments provided information of exact expenditure figures for specific periods of time. The Treasury's concern centred on making sure that the Departments spend on those projects that the prescribed funds were allotted for. In case the projected spending did not correspond to the actual spending, the Treasury requested that the Departments provide explanation for such misconduct and the corrective measures to deal with the problem.
The core of the issue was getting adequate performance measures.

Mr B Taabe (ANC) pointed out the difficulties of monitoring funds at the departmental level addressed by the HRC. Some of the provinces, like Gauteng, did not respond to the questions. He asked for a reason for Gauteng's lack of response.

Mr Momoniat did not have an answer to that question and suggested that Mr Taabe contacted the Gauteng officials directly.

Mr Momoniat said that the Treasury welcomed that initiatives that addressed issues of Government performance. In fact, the Treasury wanted to meet with the HRC directly to make it more aware of the performance of the current system. The National Treasury would be delighted if the HRC could produce a report, which would accelerate the necessary changes.

Dr G Koornhof (ANC) said the HRC report and the response from the Treasury pointed to the weaknesses in the system. In the discussion, the Committee should revisit the areas of responsibility in the Parliamentary system in reference to the Portfolio Committees and the budget process. The Joint Budget Committee should produce a plan of action for the next term of parliament, before the new Committee took its place after the next year's elections. The areas of scrutiny would cover the departmental output, spending, capacity and annual reports. He proposed to involve other role players like the National Treasury and the Provinces to discuss and solve the weaknesses of the Parliamentary system. The parliament must adhere to its responsibility regarding the budget process through closer monitoring and evaluation of the outputs of the departments.

The meeting was adjourned.


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