The Acting Secretary of Defence briefed the Committee on the strategic focus of the Department of Defence, and the Annual Report, for 2008/09. Strategic objectives had included the execution of defence commitments as ordered and funded by the government, the provision of contingency-ready and cost effective defence capabilities as specified by approved policy, sound management of the Department, and correct focus on the regulatory framework and government policy. Priorities had included the rejuvenation and upgrade of the Landward Programme, infrastructure and Department’s Works Regiment, putting the Defence Review Update into operation, the revitalisation of the Reserves, and Information Technology. The achievements of the Defence Secretariat were outlined. There had been attempts to address issues that led to a qualified audit, servicing of international legal instruments and signing of seven Memorandums of Agreement. The case backlog of the Presidential project had been reduced. New aircraft and submarines had been delivered. There was now a dedicated financial support office in the South African National Defence Force (SANDF). The South African Military Veteran's Association had been launched.
The SANDF achievements were outlined as including various peace support operations, and military assistance operations. It had also supported three internal operations for borderline control, support to the South African Police Service and support to other government departments. The SANDF had also assisted with health support to displaced foreign nationals, and with support to the Mpumlanga Department of Health when it experienced shortages of personnel. Over 17 000 learners had been qualified through the centres of excellence. There was provision of air defence capabilities, with no major aircraft accidents.
The challenges that the Defence Secretariat faced included lack of office space, human resources and capacity constraints, the lack of secure IT infrastructure, as well as legacy resource management systems, the lack of project officers with appropriate experience on project management for defence acquisition, as well as unfunded mandates and limited financial resources. Challenges specifically affecting the SANDF included logistical sustenance, underfunding for integration and the operation of special defence projects, lack of air and sea lift capability, shortages of spare parts, as well as ongoing challenges of SA Army equipment. There was a shortage of scarce skills and resignations in key musterings remained a challenge. Inadequate numbers from Military Skills Development Service personnel were joining the Reserves. The Department had insufficient funding. Some military infrastructure was in a poor state, due to budgetary constraints, and the deal for delivery of A400M aircraft had since been cancelled. The Department had received a qualified audit.
The Committee expressed concern over the poor state of equipment and infrastructure, and asked what was being done. It also expressed its concerns at the poor state of IT infrastructure, fleet vehicle management as well as military equipment. The state of affairs at Luatla base was particularly probed by the Committee. The Committee had felt that there was a lack of emphasis as to what the Department was doing to address the various audit qualifications, especially around leasing and asset management. The Committee was of the opinion that it was too dangerous to continue to use live ammunition at training facilities where residents were still living, and noted that where eviction orders had been granted against such residents, these should be enforced for safety reasons, and the Committee would support the Department in ensuring that the evictions were done. Members also questioned the numbers of senior staff in acting positions, feeling that this was contributing to poor discipline and uncertainty in the armed forces, and the recruitment strategies for the forces, including the Military Skills Development Service. Further questions were asked around the use of the training facilities by foreign defence forces, border patrols by the Defence Force, and the actions to be taken around the internal audit of the Castle Control Board.
Department of Defence and Military Veterans (DOD) Annual Report 2008/09 briefing
Mr Tsepe Motumi, Acting Secretary of Defence, informed the Committee that the Department of Defence (DOD or the Department) strategic focus during the 2008/09 financial year focused on the commitments stipulated in the Constitution. These were defending and protecting the Republic of South Africa and its people, supporting the government's diplomatic initiatives on the Continent and in the region, as well as providing support to other government departments when required. The Department's strategic objectives included the execution of defence commitments as ordered and funded by the government, the provision of contingency-ready and cost effective defence capabilities as specified by approved policy, sound management of the Department, the administration of the DOD within the prescripts of the law, the regulatory framework and government policy.
The priorities that were set out by the Minister of Defence were: the rejuvenation and upgrade of the Landward Programme, infrastructure and DOD Works Regiment, putting the Defence Review Update into operation, the revitalisation of the Reserves and Information Technology.
The Defence Secretariat's achievements were then outlined. These included implementing measures to address the issues that led to a qualified audit in the financial year 2007/08, servicing of 16 standing international legal instruments and facilitating the signing of 7 Memorandums of Agreement (MOUs). The Secretariat had reduced the case backlog of Presidential Project 19 by 28%, had delivered 5 Augusta and Hawk and 5 Gripen aircrafts, and a submarine to the South African National Defence Force (SANDF). It had established a dedicated financial support office in the SANDF and successfully launched the South African Military Veteran's Association (MVA).
The Defence Secretariat faced various challenges, which Mr Motumi cited as including the lack of office space, human resources and capacity constraints, the lack of secure IT infrastructure, as well as legacy resource management systems, the lack of project officers with appropriate experience on project management for defence acquisition, as well as unfunded mandates and limited financial resources. However, the Defence Secretariat was addressing these issues. It had implemented the CSIR Project, had begun the implementation of Project Clean Audit to enhance internal controls and good corporate governance, and had engaged with State Information Technology Agency (SITA) on IT systems support.
The SANDF achievements were the execution and sustaining of six Peace Supporting Operations, and three general military assistance operations in Uganda. Eleven Infantry Companies and four Engineer Troops were deployed in Peace Support Operations and eight multi-national maritime exercises were successfully executed. The SANDF supported three internal operations: Operation INTEXO (for Borderline control), Operation KGWELE (for support to the SAPS) and Operation HUMAN (for support to other government departments). Health services were provided to 1 200 displaced foreign nationals in the Western Cape, Reserves Medical Officers provided health support to the Mpumalanga Department of Health during shortages of health care workers at Rob Ferreira Hospitals in Nelspruit. The SANDF appointed its first black Special Forces Regimental Commander and Brigade Sergeant Major.
The SA Army qualified 17 685 learners in its Centres of Excellence, and this included 91 members of other defence forces. Air defence capabilities were provided, with a total of 34 840 hours and no major aircraft accidents. The challenges that the SANDF faced were logistical sustenance, underfunding for integration and the operation of special defence projects, lack of air and sea lift capability, shortages of spare parts, as well as ongoing challenges of SA Army equipment. Human Resources incurred a loss of scarce skills, and resignations in key musterings remained a challenge. There were inadequate numbers from Military Skills Development Service (MSDS) joining the Reserves. The corrective action taken was the establishment of the Department of Defence Works Regiment, and increased MSDS and focus on development. Internal control processes were being reviewed and rectified.
The Department's corporate risks were insufficient funds for the rejuvenation of the Landward Defence Programme, loss of scarce skills, resulting in the overburdening of existing capacity, inadequate capacity to deliver on objectives, the poor state of facilities, poor IT infrastructure, as well as a poor state of military infrastructure of military equipment due to budgetary constraints. There had been a delay of the A400M aircraft delivery and this deal had since been cancelled. There were further risks in dolomitic soil areas where some defence facilities were located.
The Department had six audit qualifications. This showed a significant improvement from the 2005/06 financial year when there were 24 audit qualifications. Various interventions had been undertaken to address the DOD's qualifications, including Project Clean Audit.
Mr M Makhubela (COPE; Limpopo) referred to page 13 of the report and asked if the budget was centralised at the Department or if it was distributed at units across South Africa.
Mr Motumi responded that every programme was allocated funds, and then during the year a determination was made as to how funds were re-allocated.
Mr Makhubela asked what had been the reason behind the delay in appointments for vacant posts. He also asked how many senior members were in acting positions.
Dr Mary Ledwaba, Chief Director of Human Resources, DOD, informed the Committee that currently two acting senior members held acting posts. These were the Secretary of Defence and the Chief Financial Officer. The posts were the prerogative of the Minister. Other vacant posts were the Internal Auditor, Director for International Affairs and the Chief Director for the Office of the Secretary. These were newly created posts, so the Minister had to make the appointments.
Mr Makhubele said that it must be indicated to the Minister that permanent senior staff had to be appointed in order to curb poor discipline amongst soldiers and staff.
Mr Makhubela pointed out that at Luatla Base all the vehicles were not functioning very well, as they were very old. He asked how the Department was planning to rectify this, and how could the SANDF be ready if the state of vehicles was so poor.
Mr Motumi said that fleet vehicle management was a problem, but the mitigating factor was that the fleet would be reduced in order for others to be fixed properly, although he conceded that this was a short term measure. The long term strategy was a total overhaul of the fleet. Various projects had been undertaken to achieve this. The average age of the vehicles was 20-25 years.
Mr Makhubela asked at which parts of the border there were still deployments of troops.
Mr Motumi noted that in 1998 it was decided by Cabinet that the Defence Force would withdraw from the border, and the last withdrawal should have been on 31 March 2009. However, by that date there was a realisation that border security was not improving. A further decision had since been taken to go back and start patrolling the borders again.
Mr Makhubela asked how many flying hours were done.
Mr Makhubela noted that the internal audit at ARMSCOR was functioning well but this was not the case at the Castle Control Board, and he wanted to know the reasons behind this. The audit report indicated certain corrective steps that would be undertaken, and he asked what guidelines and policies were in place to ensure that officers followed procedure.
Mr Motumi responded that this matter would be investigated further since the report from Castle Control Board was tabled last week only.
Mr Makhubela asked for a further explanation of the reasons for delay at the WaterKloof project site.
Ms Muttoane, Acting Chief Financial Officer, DOD, informed the Committee that the budget was issued by divisions. The delay for the appointment of contractors for the WaterKloof project was as a result of the Department of Public Works. When digging was done at the site, dolomite was found, so another way to dig around the dolomite had to be found. The WaterKloof project would be completed soon.
Mr D Bloem (COPE; Free State) asked if the CEO of ARMSCOR had resigned by now, what was the nature of his contract, and whether there had been signature of contracts.
Mr Motumi stated that he was not in a position to respond to the questions regarding the CEO of ARMSCOR as he had not been given any information on this. The matter was being handled by the ARMSCOR board at this stage.
Mr T Chaane (ANC; North West) commented that the training done at Luatla was very old, and this was a concern. He asked how the Department was intending to address this issue.
Mr Chaane said that live ammunition was used at Luatla and there were Khoi residents living near the base, so he feared that sooner or later this would lead to deaths during training. He recommended that the DOD must engage with other departments to find alternative settlements for these residents.
Mr Motumi noted that when live ammunition was used during training, the communities were informed in advance. In some areas judgments had been issued for communities to move from a certain area but these communities had not complied.
Mr Chaane said that notices to communities were not sufficient. The Commander at one of the bases had informed the Committee that livestock had died during training exercises. Where judgments were handed down, then forced removals had to be carried out where it was necessary.
The Chairperson said that it was the view of the Committee, and this view had been tabled in the house, that where judgments had been handed down, forced removals could be carried out to ensure safety. The Department had the Committee's support on this.
Mr Motumi agreed with the Chairperson and Mr Chaane.
Mr Chaane said that the Auditor-General had expressed concerns about assets. He asked when the Department was anticipating the completion of its initiatives, and asked that there should be an indication of the time frames for this. In relation to the audit report, he noted that the Department merely commented on the lease commitments and revenue, but it did not say what it would do to address these issues. Many areas of concern had not been addressed by the Department. The committee was interested in the strategies that were put in place to address these. The report was not clear on the current assets.
Mr S Montsitsi (ANC; Gauteng) asked if the last two items referred to in the audit report, relating to goods and services, and irregular fruitless expenditure, were classified as cleared in the financial statements.
Mr Motumi responded that the two items were cleared during the 2007/08 financial year, but not in the 2008/09 financial year.
Mr Montsitsi commented that what Mr Chaane was highlighting earlier was the lack of consistency in the Department.
Ms Dudu Mutloane, Acting Chief Financial Officer, DOD, responded on all the audit issues. She said that in 2007 an awareness campaign was initiated on the Public Finance Management Act (PFMA), accountability and accounting. A course was developed on Section 45 of the PFMA. This was to ensure compliance with asset management, risk management and auditing policies and procedures. A strategy was drawn up and approved by the former Minister, aimed at improving on the audit qualifications. A fraud awareness campaign was also drawn up in order to educate officers on what constituted fraud. A logistics and re-alignment programme was formed in order to curb qualifications for the asset register.
The auditing firm KPMG had been assisting in ensuring a clean audit and this project would end on the 15/12/10. Classic 1 and Council for Scientific and Industrial Research (CSIR) were keeping track of immovable and fixed assets. Their timeline was different and would end in 2014. By 2010/11 the Department would have achieved a clean audit for assets.
Ms Mutloane noted that three qualifications were cleared and two new ones came in, during the past financial year. Accruals, Assets, Revenue and Leased Commitments constituted the areas where there were constant audit problems. The Department was looking at improving the compliance culture, as well as improving on policies and procedures. If internal control was found wanting, then it would be either improved or done away with altogether and replaced with something else that would achieve the aims.
The Procurement Division had a register of suppliers from which all divisions could get goods and services, and where a particular division contracted with a party outside of the list it often happened that there was no copy of the agreement. This had contributed to a qualified audit for the asset register. The Department had since compiled a register and accounted for assets throughout the regions. This would be made available to the Auditor General on 30 November 2009. From the register it would be possible to trace the contract and the procured asset.
Mr Chaane wanted to find out what the reasons were for the various transgressions where the procurement of assets were concerned.
Mr Motumi responded that in many cases it was not malice but a lack of knowledge on policies. This was one of the reasons why there were awareness campaigns that the Department was running. The IT system was also being upgraded to ensure that the procurement of assets was being tracked.
Mr R Naidoo, Director for Material Governance, reiterated that the actions of officers were not malicious where the procurement of assets was concerned. Officers in fact found that the procurement process was cumbersome. It was now mandatory for all divisions to be able to provide a lease register on a monthly basis, and this was then correlated against the contracts. The Department was confident that this audit qualification would be withdrawn.
Mr Chaane asked why the R12 million loan to SAFI was classified as a loan in the financial statements, when there was no interest on this figure.
Ms Mutloane noted that the SAFI loan was unsecured and interest free. The Department had been engaging with National Treasury to reclassify the loan as a debt, so as to write it off with a note, since SAFI had indicated that it could not pay it back.
Mr Montsitsi asked for further details of the recruitment strategy for the MSDS. The Committee was not saying that all young persons with matric or young graduates should be recruited. However, it did wish to know how the Department was recruiting.
Dr Ledwaba informed the Committee that the MSDS system was implemented from January 2003. To date, 25 000 men and women, between the ages of 18 and 24, had been recruited. The Department had a recruitment strategy that comprised road shows, and the representatives of the various SANDF divisions visited schools throughout the various provinces. The Navy and the Air force had relationships with various Dinaledi schools. Two streams of recruitment had been established, one was for the Reserves and the other was for full time members, and this was because not enough personnel were recruited.
Mr Montsitsi noted that the problems around IT were of long standing, and he wanted to know exactly how far the Department had gone in the development of the IT infrastructure.
Mr Motumi stated that the Department acknowledged that the IT infrastructure was not up to standard, but measures had been put in place to mitigate this and written reports would be submitted to the Committee on this matter.
Ms Mutloane said that the Housing, Telephone and Parking Revenue policies had been updated. The tariffs had been revised and Mr Motumi had signed them. They were awaiting the approval of the Department of Treasury.
The Chairperson said that the Committee had been informed that training facilities were used by foreign countries, and so he asked if there were payments made for the use of these facilities, and whether any of the funds were used to upgrade those facilities that were deteriorating. The Chairperson also asked how countries that used these facilities were identified, and did the use of these facilities compromise the security of the country.
Mr Motumi said that all training by foreign forces was paid for, and security risks to the country were considered including the approval of Cabinet being sought for such exercises.
In regard to facilities, Mr Motumi said that a programme was under way, which was reviewed periodically and submitted annually in conjunction with the Department of Public Works, for the speeding up the repair and maintenance of facilities.
The meeting was adjourned
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