State Information Technology Agency, Public Service Commission & Public Administration Leadership and Management Academy briefing

Meeting report

The Honourable Richard Baloyi, Minister for Public Service and Administration, gave some background remarks on each of the entities briefing the Committee. The State Information Technology Agency (SITA) was a State-owned entity, with Government as the sole shareholder. SITA’s Board had been depleted by four resignations but these vacancies would be filled by the end of November 2009. There was currently a team of three persons running SITA with rotating arrangements for acting as Chief Executive Officer (CEO). A permanent CEO would also be appointed by the end of November 2009.

The Minister said that the Public Service Commission (PSC) was an independent body. The acting Chairperson had been appointed on a permanent basis until 2011. A permanent Deputy Chairperson had been appointed and appointments for National Commissioners had been approved.

The Public Administration Leadership and Management Academy (PALAMA) operated under the executive of the Ministry of Public Service and Administration. PALAMA had undertaken a serious process of transformation.

Briefing by the State Information Technology Agency (SITA)
Ms Zodwa Manase, Chairperson, SITA, advised that the presentation would cover the services that SITA provided to Government as well as the tenders that had been reported in the media. SITA had a strong internal audit process and an anti-fraud hot-line had been installed. In an attempt to improve on the matters raised in the Auditor-General’s report, SITA had progressed from having “matters of emphasis” to “other matters”. To deal with these “other matters”, SITA had implemented a number of steps. A new system would be introduced in November 2009 to solve many of the tender problems being experienced. There were a number of imminent staff appointments. However, the signing of Service Level Agreements needed to be addressed.

The other challenges facing SITA were employees leaving to join other information technology (IT) firms, tendering firms offering positions to SITA employees and the leaking of tender documents. A new clause had been added to the contracts that stated that a firm winning a tender could not employ a SITA employee for the duration of that contract. Also, if any offer was made to a SITA member of staff, that would be viewed as a breach of contract.

Mr Moses Mtimunye, Chief of Strategic Services, SITA, explained that the mandate of SITA was to improve service delivery to the public and to promote efficiency through the use of information technology (IT). SITA was mandated by the SITA Act (Act 88, 1998) and Regulations to provide certain services to Government entities, such as a private telecommunication network, IT procurement, a disaster recovery strategy, training, software development, management services, etc.  The SITA Service Catalogue listed the various services provided. Seven capability areas were identified, divided into 56 service groups, 233 service elements and 1140 service components. Details of the four components of the SITA Service Catalogue were included in the presentation, i.e. full outsourcing, value-added services, systems integration and solution development and support and transaction services.

The SITA Act required that a Business Agreement was entered into by SITA and the relevant Government Department; which was supported by an SLA negotiated between the two parties. Details were provided of the number of SLA’s that were signed with the various Departmental clusters (e.g. the Department of Defence) and the number of unsigned agreements (e.g. the South African Police Services (SAPS)) A breakdown of the SLA’s per province was provided.  To date, 86.3% of SLA’s had been signed.

Mr Mtimunye moved on to the procurement issues that had been raised internally and in the press. He described a number of tenders that were investigated, what the issue was for each tender and how SITA had responded. For example, the “WHO-AM-I-ONLINE” tender for the Department of Home Affairs had been highlighted by the Auditor-General as an example of SITA’s failure to comply with tendering policies. SITA had acknowledged the omissions and had tightened the controls. Another example involved a staff member in Limpopo province, who had awarded tenders for larger amounts than he was authorised to.  This person had been suspended, pending a disciplinary hearing. There had been allegations that small and medium-sized enterprises (SMME’s) and black economically empowered (BEE) firms had been excluded in tender processes and certain tenders had been cancelled to allow further investigation to take place.

Mr Mtimunye presented a list of challenges for SITA to improve the procurement processes, along with the mitigating actions that were required. SITA would deal with allegations of corruption by involving auditors throughout the procurement process and by collaborating with the Special Investigations Unit. SITA had also developed strategies to deal with local economic development (LED) requirements, SMME’s, BEE organisations and internal capacity challenges. SITA had no access to Government’s long-term planning processes, which would assist with estimating future demand for services. SITA had also taken mitigating action against non-compliance with legislation and the leaking of procurement information.  A full list of SITA’s clients was made available to the Committee prior to the meeting.

Discussion
Mr E Rasool (ANC) said that SITA had large tenders and a substantial budget, but was dealing in a world of fast-changing technology. He felt that it was not enough for SITA to merely react to the Auditor-General’s reports. There was a need to readdress the ethical foundation of SITA as an organisation. He wanted to know if SITA was managing the procurement process effectively, from the identification of needs to maintenance. He asked who was responsible for the writing of specifications at SITA. He had heard of companies that had provided specifications to SITA and had then won the tender. He wanted to know if SITA had the capacity to write proper specifications, to manage the procurement process and to manage the contract.

Ms F Bikani (ANC) was not satisfied with the action taken concerning the “WHO-AM-I-ONLINE” tender. She felt that phrases such as “tightening controls” and “acknowledging omissions” were too vague and did not adequately describe what was actually being done.

Mr Baloyi advised that certain cases were still under investigation and should not be discussed in a public meeting. He felt that the raising of these issues was an “unwarranted opportunistic manoeuvre” by SITA and strongly condemned the disclosure of the details of the cases.

Ms Manase replied that SITA had started to seek help in strengthening the procurement processes as early as 2004. Delays in implementing a new system had occurred but the new system for contract management would be in place by November 2009.

Mr Baloyi agreed that procurement was a major issue for SITA. Consultation with the broader SITA constituency base had been carried out and was crucial to determine the effectiveness of SITA. The turnaround strategy would place Government and SITA in a better position to effectively deal with these issues. Decentralisation of procurement processes had to be carefully planned and should not be an impulsive reaction.

Ms Bikani requested a copy of SITA’s procurement policy framework.  She wanted to know what the reasons were for the delays in the signing of the SLA’s

Mr L Suka (ANC) asked for a further explanation of the statistical information provided in the presentation concerning the SLA’s signed with the Departments of Public Works and Home Affairs. He was concerned over the large numbers of unsigned SLA’s. For example, 42 out of 62 SLA’s were signed in KwaZulu Natal and a similar trend was apparent in the Free State and Gauteng provinces.  The contract with SAPS involved a substantial amount (R1 billion) but no SLA had been signed.  He was concerned that Government Departments were spending large amounts without the necessary requirements being in place.

Mr A Williams (ANC) asked what the total value of the unsigned SLA’s was.

Ms Manase replied that SLA’s required protracted negotiations between the parties concerned and could take a long time to finalise. She advised that the SAPS negotiations had been concluded and it was expected that the SLA would be signed in the near future.

Ms J Maluleke (ANC) noted that the Chief Executive Officer (CEO) had resigned in July 2008 and wanted to know when permanent appointments to the many vacant posts at SITA would be made.

Ms H Van Schalkwyk (DA) asked why there had been more than ten CEO’s at SITA during the previous ten years.

Mr Baloyi admitted that the staff turnover rate was high. Only one CEO had served a full term at SITA. He confirmed that a new CEO would be appointed by the end of November 2009. The high staff turnover was not caused by low salary levels and an investigation had been carried out, which had identified 22 issues that had to be addressed. He advised that SITA’s turnaround strategy would be published in 2010.

Ms Manase pointed out that the average time spent in jobs in the IT industry tended to be very short.

Mr Rasool wanted to know if it was sufficient to specify in tender contracts that the firm could not employ a SITA staff member for the period of the contract. He felt that all SITA employees should be subjected to a restraint of trade period of up to five years before they could join another IT provider.

Mr Baloyi said that policy pronouncements on this issue should not be made impulsively. It was important to look at the legal aspects and where the responsibility for policy lay.

Ms Manase said that the imposition of a cooling-off period had implications for the expenditure of SITA and that the contractual issues involved needed to be considered.

Ms Bikani asked whether the training provided was only for SITA employees. She wanted to know if SITA was a profit-making entity and whether the profits were re-invested in training.  She asked how SITA ensured that the system integration services measured up to expectations and if there was an implementation plan and a timeframe. She asked to what extent SITA was complying with the Act in terms of effectiveness of service delivery and what obstacles were preventing the implementation of the Regulations.

Mr Mtimunye replied that SITA offered training to Government departments. He confirmed that there were project-specific timelines and implementation plans in place against which the progress made was measured.

Mr Rasool suggested that the definitions were reviewed. He wanted to know if the LED and BEE companies were doing anything productive or merely passing along technology from overseas for a fee.

Due to time constraints, the Chairperson suggested that the remaining questions from Members and the responses to the questions by SITA were submitted in writing.

Briefing by the Public Service Commission (PSC)
Dr Ralph Mgijima, Chairperson, PSC, said that the Committee was familiar with much of the work done by the PSC and the presentation would focus on the 2008/09 Annual Report. He informed the Committee that the PSC had conducted an impact study of its outputs, which had given confidence to the Commission but at the same time had revealed points that needed to be strengthened.

Mr Mashwahle Diphofa, Acting Director-General: Monitoring and Evaluation, PSC, briefed the Committee on the 2008/09 Annual Report of the Commission (see attached document).

The key strategic programmes included administration, leadership and management practices, monitoring and evaluation and integrity and anti-corruption. The PSC had received an unqualified audit from the Auditor-General for the sixth consecutive year. The total budget for the PSC had increased by 5.9% in 2008/09 to R113.672 million. Salary increases had been larger than expected but, through tight financial management, the PSC had spent in excess of 99% of its budget and only surrendered R15 857 to the National Treasury. In March 2009, the vacancy rate was 10.5% and 43% of the staff complement was female.

Under the leadership and management practices programme, the PSC had published a report evaluating the selection processes of the National and Provincial Government. There was concern that performance agreements were not being submitted by Heads of Departments (HoDs) as only 33% at the National level and 51% at the Provincial level had been received. 644 grievances were received by the PSC during the year under review. A significant number, 281, were referred to the PSC prematurely and were sent back to the Departments to follow due process.

The monitoring and evaluation programme had published the State of the Public Service (SOPS) report as well as reports on health services, education services and the Batho Pele principle of information. An impact assessment of the work of the PSC was completed and the topic for the 2010 SOPS Report was decided, i.e. Integration, Coordination and Effective Public Service Delivery.

The status of the 186 complaints received by the PSC was provided. The majority (i.e. 100) of these cases were dealt with by a desktop audit. The PSC also received complaints through the National Anti-Corruption Hotline (NACH) and the statistics for these complaints were included in the Annual Report. With regard to professional ethics, the statistics for financial disclosures as at March 2009 indicated that 15% of senior managers had still not disclosed their financial interests as was required. 

The regional links of the PSC were detailed. The PSC was the secretariat of the Association of African Public Services Commissions (AAPSComs) and the Chairperson of the PSC was the first President of this regional group. The PSC had provided support to the Southern Sudan Civil Service Commission (SSCSC).

Discussion
The Chairperson asked about the performance contracts of HoDs and wanted to know if performance indicators on gender equity and the employment of persons with disabilities were included in the contracts. She asked if evaluations could be carried out annually rather than once in five years.

Dr Mgijima agreed that this matter needed to be revisited. It was important to content of performance contracts from time to time and an increase in the clauses dealing with the mandatory areas had already occurred. He felt that there should be a review of Government priorities before the contracts were reviewed. He agreed that both gender and disability equity were important, but that changes to contracts and performance indicators should be carefully considered.

Ms Van Schalkwyk wanted to know what progress had been made with obtaining the financial declarations of the spouses of Government employees.

Dr Mgijima replied that this issue was crucial and a conflict of interest framework was in the process of being prepared. The PSC believed that the financial declarations of spouses should be included in the financial declarations of employees.

The Chairperson remarked that the concerns over the issue of financial disclosures needed further investigation.

Ms Van Schalkwyk wanted to know whether complaints were being referred from the Presidential Hotline to the NACH.

Dr Mgijima replied that there were ongoing discussions with the Presidential Hotline. The NACH continued to deal with complaints concerning corruption and cross-referrals were being made. The PSC was ensuring that there was no duplication of effort.

Mr Diphofa explained that the NACH focussed on matters concerning corruption but often received complaints concerning service delivery issues. Likewise, allegations of corruption were reported to the Presidential Hotline. The PSC was working with the Office of the President to establish protocols for dealing with corruption allegations.

Ms Bikani asked about the Thusong centres and Community Development Workers (CDW’s). The PSC was limited to giving recommendations on how these services should be run. She wanted to know what the recommendations were and what monitoring and evaluation procedures were in place.

Dr Mgijima replied that the PSC had made recommendations on the operation of Thusong centres and had tracked the implementation of the recommendations.

Mr Diphofa said that the PSC planned to conduct a follow-up study of the Thusong centres in 2009/10, which was expected to result in new recommendations.

Ms Bikani complimented the PSC on the improvement in labour relations but was concerned about the amount spent on labour-related cases.

Mr Diphofa replied that the major concern was investigations into cases where personnel had been suspended on full pay and the requisite disciplinary hearings had not taken place. Prescripts and guidelines on disciplinary procedures had to be followed.

The Chairperson thanked the PSC for the presentation and said that further engagement was necessary. A follow-up meeting with the Commission would be arranged.

Briefing by the Public Administration Leadership and Management Academy (PALAMA)
Prof Solly Mollo, Acting Director-General, PALAMA, covered the introduction to the briefing on the 2008/09 Annual Report (see attached document). The report covered the transition from the South African Management Development Institute (SAMDI) to PALAMA. PALAMA was launched on 1 August 2008, as a replacement for SAMDI.

Mr Rufus Mmutlana, Deputy Director-General, PALAMA, outlined the mandate of PALAMA to provide or oversee the provision of training in all three spheres of Government. He presented an overview of the strategic objectives, i.e. to deliver training, to develop partnerships with stakeholders, corporate governance and the transformation of the organisation from SAMDI to PALAMA. During the 2008/09 financial year, the number of officials trained had increased by 45% and the number of training days had increased by 29%.  PALAMA offered 65 training programmes.  During the year under review, the demand for training reflected a steady increase, peaking in the months of August to October.  44% of training programmes were commissioned by Provincial authorities and 48% by National Government entities.  Training was provided in all the Provinces, with the most programmes being conducted in Gauteng.

There were 237 posts at PALAMA, of which 130 were filled (i.e. a 45% vacancy rate). The vacancy rate for senior management personnel was 35%. The total expenditure on personnel amounted to R44.743 million (i.e. 19% of the total expenditure).  55% of PALAMA staff were female and 1.5% of staff were employees with disabilities.

Mr Carlo Venter, Chief Financial Officer, PALAMA, outlined the financial performance of the organisation during the 2008/09 period. The full appropriation of R105.5 million had been spent. In comparison to 2007/08, the compensation of employees, expenditure on goods and services and spending on capital assets had decreased. Due to the increase in training days, income from course fees and expenditure on training had increased.  Total revenue had increased by R9.2 million. The surplus for 2008/09 was R1.8 million, a decrease of R35.9 million over the previous year and mainly due to an additional R28 million allocation included in the 2007/08 financial statements.

PALAMA had received R34.4 million for donor projects, of which R17.8 million was spent during 2008/09 and the balance would be spent in 2009/10. A breakdown of the donors and amounts received was included in the presentation.  PALAMA was proud to have received an unqualified audit report for the sixth consecutive year. The Auditor-General’s report required only one minor matter to be addressed.

In conclusion, Prof Mollo remarked that the achievements of 2008/09 should be acknowledged but PALAMA continued to be aware of future challenges resulting from its developmental state. The fundamental question was how PALAMA should transform and develop in the future.

Discussion
The Chairperson asked whether PALAMA was on track with the implementation of the recommendations made by the Cabinet task team.

Prof Mollo agreed that this matter was the core issue. The fundamental question was the reason for the problems with capacity in the public service. It was important to continue to assess whether PALAMA was meeting its mandate. PALAMA was aware of all the concerns and the issues and had a process to deal with the challenges. He felt that it was important to examine whether PALAMA should be a Government or a State academy as this would determine how PALAMA had to conduct its business, including considering outsourcing options.

Ms Maluleke asked if the transformation from SAMDI to PALAMA had resulted in an improvement.

Prof Mollo replied that the transformation process was still underway and that it was too soon to assess the extent of the benefits that had been derived from the changes.

Ms Van Schalkwyk asked why it was necessary for Government Departments to engage external consultants and felt that the practice reflected negatively on PALAMA.

Mr Suka acknowledged that the high level of outsourcing was a major concern and the issue should be thoroughly investigated.

Prof Mollo agreed with Mr Suka’s comment.

The Chairperson asked whether the organisations carrying out training on behalf of PALAMA were accredited. The Committee needed to have sight of the procurement database.

Mr Venter advised that PALAMA was fully compliant with the Preferential Procurement Policy Framework Act and all purchases over R30 000 were subjected to this process.

Prof Mollo said that the database was available and would be forwarded to the Committee.

Ms Bikani asked whether PALAMA operated on a centralised or decentralised system of training. She wanted to know if only public servants were benefiting from the training.

Prof Mollo replied that much depended on whether PALAMA was competing with other institutions in the provision of training. He advised that training was decentralised, but the manner in which training was decentralised was equally important.

Ms Bikani requested clarity on the statistics on donor donations included in the presentation.

Mr Venter suggested that the Annual Report was referred to as it contained more information on the figures. He explained that the table in the presentation indicated the monetary values that were received from each donor.

The Chairperson asked for details on the Government-to-Government donations.

Mr Venter replied that these payments were made through bi-national and bilateral agreements between the Governments concerned.

Mr Suka asked what the roll-over provisions and the strategy was for donor funds.

Mr Venter replied that page 135 of the Annual Report explained the plans. The donor funds would be applied over a number of years.

Ms Bikani asked if PALAMA offered management leadership courses designed specifically for women.

Mr Mmutlana replied that PALAMA trained more women than men. He pointed out that it was the Government Departments that decided who would be trained. He confirmed that PALAMA had a training course designed specifically for women in leadership roles.

Mr Rasool noted that PALAMA received revenue from Government, donors and fees. He suggested that a calculation that took into account the revenue and the number of training days in order to determine a rand-per-training-day figure would be very helpful to PALAMA in considering their future focus. This was especially important when considering the shift from an output-based to an outcomes-based Government.

Mr Suka asked whether PALAMA was making an impact on public servants and public service.

The Chairperson said that many issues could not be covered because of time constraints but deserved to be re-visited.  She requested that written responses to the remaining questions from Members were forwarded to the Committee and that a follow-up session was arranged.

The meeting was adjourned.