Human Resource Development Strategy & Government Employees Medical Scheme: Department briefings

Meeting report

PUBLIC SERVICE AND ADMINISTRATION PORTFOLIO COMMITTEE
20 June 2007
HUMAN RESOURCE DEVELOPMENT STRATEGY & GOVERNMENT EMPLOYEES MEDICAL SCHEME: DEPARTMENT BRIEFINGS

Chairperson: Mr P Gomomo (ANC)

Documents handed out:
Human Resource Development Strategy: Review Report
Human Resource Development Strategy Briefing Document
Human Resource Development Strategy: Strategy Framework Vision 2014
Human Resource Development Strategy: Implemention Guide & Annual Implementation Plan
Government Employees Medical Scheme presentation
Government Employees Medical Scheme Hand Book: Sapphire and Beryle 2007
Government Employees Medical Scheme Hand Book: Ruby, Emerald and Onyx 2007
Government Employees Medical Scheme February Newsletter
Government Employees Medical Scheme June Newsletter

Audio Recording of the Meeting

SUMMARY
The Department of Public Service and Administration briefed the Committee on the human resources development strategy and the Government Employees Medical Aid schemes. It was noted that the human resources strategy was formulated to prioritise and allocate targeted resources to achieve the defined objectives and to develop a focused implementation plan, which included external strategic control points to examine whether the scheme was working. It was aligned with government priorities and with sectoral and provincial economic and development growth needs. It would take cognisance of poverty alleviation and backlogs in service delivery. Monitoring and evaluation were still a challenge at national level, and there was a need to devise a framework and run workshops on the implementation. During their questions Committee Members indicated their satisfaction with the human resource strategy but were concerned that the good strategy needed to be backed up with good implementation and monitoring mechanisms, by all Departments. There was a need for all lower level staff to be clear about their responsibilities within the HRDS was indicated and a proposal put forward for the committee and the Department to engage each other in this regard.

The Government Employee Medical Scheme had been accessed by 550 000 employees but 39% had not yet done so, mainly from previously disadvantaged backgrounds and lower paid levels. The State, despite paying large amounts into different schemes, had had insufficient control to monitor benefits, and the market had failed many employees, hence the decision for the Department to intervene and set up a new legal entity. This scheme was now the third largest in the country and offered five benefit plans. It had an annual strategy plan, and had, during its first year, turned a profit for its first year of operation and received an unqualified audit report. Challenges included the managing of financial performance in the face of rapid member growth and the non-application of waiting periods. Members were generally very pleased with the progress made by GEMS. They encouraged the scheme to continue striving for excellence, as other sectors would be learning from them. Questions were raised about the nature of the benefit plans, whether it would be sustainable to continue benefits before prior payment, and the identity of the auditors.

MINUTES
Presentation by the Department of Public Service and Administration [dpsa]
Professor Richard Levin, Director-General, dpsa, introduced the human resource development strategy (HRDS) of the dpsa. The purpose of the HRDS was to prioritise and allocate targeted resources to achieve the defined objectives and to develop a focused implementation plan, which included external strategic control points that could look at what was or was not working. It would also look to capacity.

Ms Colette Clark, Deputy Director General, dpsa, continued that in order to devise this new strategy, the Department had to look at the previous HRDS from 2002 – 2006.  The new strategy would promote and support the National Skills Development Agenda, including Accelerated Shared Growth Initiative (ASIGSA) objectives and Joint Initiative for Priority Skills (JIPSA) and would align all HRD with sectoral and provincial economic and development growth needs.

Everything in terms of the HRDS had to take cognisance of the HRD hierarchy which comprised poverty alleviation and backlogs in service delivery, at the lower level, followed by programmes such as ASGISA, JIPSA and Expanded Public Works Programmes (EPWP). On the next level fell the conceptual base for transforming the public sector, and the legal framework for HRD in the public service was at the top level. Ms Clark highlighted that monitoring and evaluation were still a challenge at national level and recommendations had been made that a guideline for all line and sector departments, on how to design an HRD strategy, was needed. A strategic framework for HRD had been put forward, consisting of four core pillars of capacity building initiatives, organisational support initiatives, governance initiatives and Government’s economic growth and development initiatives.  There were ten core principles to drive the pillars, which would ensure support at all levels.  The feedback received from the stakeholders highlighted lack of guidance on how to implement this framework, and the Department therefore was conducting workshops.  Ms Clark noted that there was a political and legal mandate to implement the strategy within which dpsa intended to operate.

Discussion
The Chairperson asked if the Department if it had monitoring structures on the implementation of the HRDS.

Ms M Matsomela (ANC) commented that the HRDS document seemed good, but asked what the real gaps were between what was stated, and how it could be implemented. She asked how the new strategy would improve on what the DPSA had already.

Ms B Mthembu (ANC) said that there needed to be clear policy as to how to use the strategies, because if used wisely they can lead to the rectification of skills shortage.

Dr U Roopnarain (IFP) asked what the Department hoped to achieve in dealing with skills shortage and what incentives were in place to overcome skills shortages. She expressed concern about the lack of mentoring to overcome the skills gaps. She noted that many of the Sector Education and Training Authorities (SETAs) did not seem to be working.

Prof Levin responded that these questions related to the challenges faced by the Department in trying to decentralise HRDS. He said that the Department's role in monitoring became critical and that dpsa would put in place necessary processes and tools as it took on the new annual performance reviews and annual commentative reviews. He added that no matter how much there was development of strategies, it was also necessary for departments to put them in place, and that the dpsa did not want to become time-bound in implementing the strategies.

Ms Clark added that monitoring was about leadership and development and this was one of the pillars of the HRDS. She elaborated on the draft policy for 1% utilisation, saying that the public services. She said that Public Service SETA had become a private entity, and so line departments under dpsa would have to submit annual training reports so dpsa could monitor their progress. 30% of the funding must be put to pre-service bursaries and learnerships and 30% should be targeted at improving the professionals.

The Chairperson mentioned that if the monitoring mechanisms were not in place, the Department’s efforts in devising this new strategy would go to waste.  He said that the Committee would engage with dpsa on the meeting of the objectives.  He said the intention was not to criticise but rather that the Committee be involved in helping with the process. 

Mr K Julies (DA) said that the Department should operate with an objective in mind. He suggested that a system of monitoring should include action being taken if certain individuals did not meet target objectives.

Ms Clark responded that the Department would be launching its human resources Steering Committee on the HR learnership programme, in order to guide management on how to implement the four pillars of HRDS in the different levels within a department. 

Prof Levin added that the Department was taking steps to strengthen the mandate of the Public Service Commission. In line with public service transformation and reform programmes, the Department implemented policies of good governance that comprised of decentralised public service management. Regrettably at the moment there was decentralisation into a vacuum. Dpsa wanted to ensure that these frameworks were rigorously implemented, and this could be done through the Amendment legislation in the pipeline. Dpsa wanted to stabilise the public service, as currently it was impossible to consolidate on a number of issues with the line Departments. Ultimately the aim was public service excellence.

Mr Julies commented that the Batho Pele principles of "putting the people first" were introduced to improve HR and service delivery. He was concerned that plans were being made, but at the end of the day they were achieving nothing. Somehow dpsa must put norms and standards in place to ensure that it was getting what it wanted, for the public wellbeing.

Ms Matsomela asked how dpsa co-ordinated HRDS to ensure that it was operating on the same level as the Public Management Watch.  She agreed that there were good initiatives but they were not integrated well.

The Chairperson added that there was not enough monitoring in place. He agreed that Batho Pele applied at all local government structures. He asked whether dpsa should change the method of operation to ensure that each province monitored and then reported on a national level, or whether the monitoring of everything should be done by dpsa. He asked whether dpsa had capacity on a national level to monitor the provinces.

Prof Levin responded to all these questions and concerns by saying that dpsa had a cluster system in government that integrated structures. DPSA did a lot of work to ensure that these levels of strategies were linked. There was co-ordination; for example, the Public Management Watch was a specific monitoring and evaluation strategy of dpsa. It would not tell people everything about HRD and service delivery, but would give them key strategies for reporting and would assist the Department in ensuring that there was adherence to Batho Pele standards.  Monitoring and evaluation was a modular process and dpsa would have to develop it in a modular way.  By having standardised indicators, dpsa would begin to generate information that was needed on a national level. Because bureaucracy generated particular sorts of interests, it would be true to say that many actors within a system of government could pay more lip service to co-ordination than actually practising it. Dpsa was working hard to deal with that challenge.

Mr M Baloyi (ANC) asked whether the dpsa had the capacity to monitor the implementation of the policies. He suggested that the Department and the Committee in future should have discussions instead of briefings about the HRDS. Both parties needed to ask if the questions posed by the HRDS were still relevant. Mr Baloyi said that government had the ultimate responsibility of monitoring, evaluation and service delivery inspection. He added that government needed to do some introspection and ask itself how far it was performing its duties. Parliament had a responsibility of oversight, and every individual Member must also ask to what extent that was being done. Every Member was a key player and had taken an oath to promote the interests of the State. He emphasised that accountability did not only attach to senior members in a democracy. He challenged the members to think about what they claimed to know about the democratic South Africa.

The Chairperson added to what Mr Baloyi had said, by indicating that Members needed to really think about their responsibilities, and this might prevent some people from simply walking in and out of meetings without having studied and learned anything. Even though this Committee was aware of the ramifications of service delivery, he was not convinced that people at ground level understood what it meant. All Departments had good policies but were not checking if they were capable of implementation.

Mr Julies suggested that the various Departments within public service should be made aware that a member of the Committee who made a visit, for example to a police station, was not attending in a party capacity, but rather as a Committee Member to find out how the institution being visited could work together with the Committee and Government to overcome crime. He emphasised that the Departments needed to be educated not to see matters as politically biased, but rather biased to service delivery in general.

Ms Matsomela stated that she believed that the four stages in any initiated strategy were planning, organising, leadership, and monitoring and evaluation. She believed that all the Departments planned and organised well but was not convinced that the necessary leadership was in place.  She asked whether the people who were supposed to implement the policies at every level understood what they were doing, their role and how they must contribute to reaching their goals.

The Chairperson said that people were being empowered through information and requested that Mr Baloyi organise a workshop with the Committee and the leaders of the various public sector departments in order to find out what the departments' challenges were, and to engage with them about all the issues raised in the meeting.

Mr Baloyi cautioned that the Committee should tread carefully, as it should not be regarded as finding faults rather than attempting to partner with the different departments.

Mr Mthembu suggested that there be better management of contracts of employment in the Department. He said that senior management should have performance management spelt out as to how each person would implement the strategic objectives of government. Proper contracts detailing the key areas under a person’s management should be drawn up.

Mr Julies commented on the issue of service delivery by saying that if members of parliament received performance bonuses then that would incentivise them to work in their constituencies.

The Chairperson responded that during the liberation struggle, the intention was to fight for democracy for the public, and members of parliament should not lose sight of the intention to ensure that in the democracy they must serve the public to the best of their abilities.

Prof Levin said that the Department of Public Service and Administration wanted improved service delivery. An improved service delivery system was one that was integrated at national level. He said that the Department would be debating and discussing this in the months to come. Dr Levin emphasised the importance of the improvement of the quality and accessibility of service so that those who had been deprived could access it in a simple way. The dpsa wanted to see optimal service delivery at local level, which entailed policy planning and implementation, and how these were pulled together through leadership would be evident through performance evaluation. In conclusion, Prof Levin said that personally he would be in favour of managers only receiving 100% of their package if there had been optimal performance.

The Chairperson agreed that this would be a useful strategy.

Government Employees Medical Scheme (GEMS): Departmental Briefing
Prof R Levin (Director-General: dpsa) gave the historical background of the Government Employees Medical Scheme (GEMS). In the past year 550 000 employees accessed the subsidy. The challenge lay with the 30% of employees (380 000) who had not accessed the subsidy. This 39% needed to be looked at in terms of the history of medical aid schemes, which previously catered mostly for white people, as most of the 39% were previously disadvantaged. Employees had previously been enrolled in 68 medical schemes, where, despite the huge amount of state resources going into medical aid cover, the State could not monitor the benefits offered by the different schemes. In terms of inequality and imbalance, lower paid employees were those who were largely uncovered. Prof Levin said that the market had failed them not only in failing to deliver medical aid cover, and so the Department decided to intervene in the market. In terms of the Medical Subsidy Policy, an employee could only access the subsidy by joining GEMS. There had been over 70 000 employees per annum to receive the subsidy.

Dr Eugene Watson, Principal Officer, GEMS, continued with the presentation by giving a progress report on GEMS. GEMS was now a separate legal entity and one of the third largest medical aid schemes in the country. It had five benefit plans that were not static. It was the first medical aid scheme to offer an SMS "please call me" service. It had contracted service providers, who were appointed through a tender process, under a co-operation agreement.  GEMS operated under an annual strategic plan, and, being a newly developed entity, it was finding it preferable at the moment to focus on short-term goals for the moment. The scheme turned a profit for its first year of operation and also received an unqualified audit report. One of the major challenges that GEMS faced was managing the Scheme’s financial performance in the face of the rapid member growth and the non-application of waiting periods. In conclusion, Dr Watson said that the scheme made significant accomplishments, but added that there was still a lot of work to be done

Discussion
Mr M Sikakane (ANC) commended GEMS for their hard work and said he was pleased to hear that GEMS members were encouraging other people to join. He requested an explanation of what was meant by service integration and also asked for clarity as to whether enrolment was on an individual basis or it happened in groups or unions. He lastly asked if it was necessary for the principal officer to be a medical doctor.

Dr Watson responded that different companies were bound by a contract which stated that they were jointly liable for integration amongst their own members, and therefore if some members were opposed to the scheme, then the company would be penalised, and have to sort out the question of membership internally. GEMS interacted with the employer for advertising and marketing purposes, but people applied individually. He said also that being a medical doctor was not a prerequisite for the position of principal officer of the scheme, it was merely coincidental.

Ms Matsomela congratulated the scheme for an excellent report and encouraged them to keep up the good work. She asked what was meant by the benefit options not being static, enquiring if this meant that members could move from one plan to another, or if the benefits now and in the future could change.

Dr Watson answered that as the markets evolve, so would the various benefits under the plans be reviewed and possibly be changed.

Ms Matsomela asked, for the purposes of black economic empowerment, who were the auditors of GEMS.

Dr Watson said that they were Nkonki Sizwe Ntsaluba, and the internal auditors were from the firm Nkonki. For the internal audit GEMS interacted with the internal auditors directly and not through the consortium.

Ms Matsomela noted that one of the challenges was that of keeping a close watch on cash flow. She asked if it would be sustainable for members to enjoy benefits before paying or whether that was a way of marketing the scheme, with this policy to change later. She was concerned that as more members joined, it would not be sustainable.

Dr Watson said that this benefit would not change as it was working well and GEMS would merely monitor it carefully.

The Chairperson noted that the Committee could not at present follow up on all issues, because of its work programme. The Committee would like to have the opportunity to engage with dpsa on an ongoing basis, nor merely interrogate it once a year, and requested dpsa to keep the Committee informed and to keep in contact.

The meeting was adjourned.