Arts and Culture Strategic Plan Workshop: Day Two

Meeting report

National Treasury: Presentation on the Public Finance Management Act (PFMA)
Dr Mark Blecher, Chief Director, Public Finance, National Treasury, apologised for the Minister of Finance who could not be present, and gave the first presentation of the second day of the workshop. He focused on the Department of Arts and Culture's strategic plan and National Treasury's concerns on the Department's financial management.

The aims of the PFMA were to regulate financial management; to ensure that all revenue, expenditure, assets and liabilities were managed effectively and efficiently; and to provide for the responsibilities of persons entrusted with financial management. The Act applied to all public entities, except the Reserve Bank, the Auditor-General, higher education institutions, and local authorities, which were governed by their own acts.

The presentation dealt firstly with the legal framework. This was followed by the Act and Parliament's role of oversight. Thereafter the role of portfolio committees and the Money Bills Amendment Procedures and Related Matters Act (Act No 9 of 2009) were dealt with.

The legal framework comprised the Constitution of the Republic of South Africa, 1996, Chapter 13; the Public Service Act, 1994 and Regulations; the PFMA (Act No. 1 of 1999, amended by Act No. 29 of 1999) and Treasury Regulations 2005; and the Money Bills Amendment Procedures and Related Matters Act 2009.

Dr Blecher pointed out that the PFMA 1999 amended by Act No. 29 of 1999 focused on outputs and responsibilities; it balanced flexibility with accountability; and clarified the role of the accounting officer of the department. 'Let the managers manage, but hold them accountable'. The Act laid down rules for extra expenses. The PFMA was applicable to all departments and public entities, but not state-owned enterprises, which had their own acts.

Ultimately Parliament passed laws and could amend them. Under the new Act Parliament could not only appropriate funds but it could also amend Money Bills. Previously it could pass them or reject them only in their entirety.

Dr Blecher read an amendment to the Treasury Regulations published in the Government Gazette, February 2007. The Accounting Officer must prepare a strategic plan for approval by the Executive Authority, but it also had to be considered by the portfolio committee concerned.
 
National Treasury acknowledged that many committees preferred to summon their departments to ask for updates, since there was a long time between planning and achievement.

Dr Blecher was not sure if Arts and Culture was reporting quarterly. He glossed over the detail of definitions.
National Treasury made a great effort to help departments.

In considering the role of the PFMA there was a focus on outputs and responsibilities, flexibility with accountability, and the need for clarity of the role of the accounting officer. The sentence 'Let the managers manage, but hold them accountable' was quoted.

Parliament's PFMA roles were listed, along with constitutional responsibilities: legislate the framework for the budget, and financial management; protect the integrity of the National Revenue Fund; appropriate funds for governance requirements; receive annual budgets (by main division of vote); receive departments' 'measurable objectives'; receive MTEF and macro-economic projections; receive adjustments budget; review unauthorised expenditures; oversight of use of funds in emergency situations; review unfunded mandates; receive and publicise audited annual financial statements; receive annual reports and other documents; receive information on the discharge of auditors by public entities; receive Auditor-General's reports; and receive information on financial misconduct by accounting officers.

With regard to the Money Bills Amendment Procedures and Related Matters Act (Act No 9 of 2009), parliamentary committees were annually to assess the performance of departments using the following: the Estimates of National Expenditure (ENE) of the department under their oversight, with strategic priorities and measurable objectives; the strategic plan of the department; the department's expenditure reports (Section 32 of the PFMA) and quarterly reports to the Standing Committee on Appropriations (National Assembly); financial statements and annual reports; reports of the Standing Committee on Public Accounts (National Assembly); and any other relevant information. Committees were annually to submit their budgetary review and recommendation report on their department's service delivery performance.

National Treasury Presentation on framework for strategic plans and annual performance plans
Dr Blecher explained the background. In May 2007 the National Treasury had issued the Framework for Managing Programme Performance Information (FMPPI) which described the constitutional and legislative framework for performance information; set out the concepts of performance information and introduced standards; described the structures, systems and processes required to manage performance information; defined roles and responsibilities for managing performance information; and promoted transparency by providing timely, accessible, and accurate information.  Section 7.2 of the FMPPI indicated the National Treasury's role in relation to performance information. Through this framework, National Treasury sought to give effect to its role in the following: developing formats for accountability reporting, particularly in relation to strategic plans and annual performance plans; providing input into the processes to select and define performance indicators; and developing the core sets of performance information in collaboration with sector departments to ensure uniform information was produced to measure service delivery across provinces and municipalities. This framework applied to national and provincial departments, and national and provincial public entities. It was important to note that 'public entities' did not include state-owned enterprises (SOEs). The framework served primarily as a good practice guideline. Section 5 of the Treasury Regulations (to be read together with Part IIIB of the Public Service Regulations) provided the legal basis.

Dr Blecher explained the planning, budgeting and reporting cycle; and the relationship and timing of the different accountability documents; the structure and content of planning documents; the hierarchy in the relationship between planning concepts; and the definitions of vision, mission, values, strategic goals, budget programmes, strategic objectives, and programme performance indicators.

Dr Blecher indicated the timeframes for key processes in national departments; and the tables of contents for strategic plans and annual performance plans.

Dr Blecher spoke on practical matters concerning the Department of Arts and Culture; National Treasury's budget manager for Arts and Culture was especially concerned about the vacant position of Chief Financial Officer, empty since March 2008. The result was poor budgeting and financial management; there had been a suspicion of fraud. It was unacceptable to have such a post vacant for so long. He would have to refer a question about the length of suspensions to a colleague at the National Treasury.

Discussion
Mr H Maluleka (ANC) asked that the Committee be provided with a set of 12 copies of the following documents: Chapter 13 of the Constitution; the Public Service Act, 1994; the PFMA 1999; the Treasury Regulations 2005; the Money Bills Amendment Procedures and Related Matters Act 2009; the Municipal Finance Management Act (MFMA). The amendment to the Treasury Regulations published in the Government Gazette, February 2007, was also requested.

Dr Blecher said that he had been requested to ask some questions of the Department, on, for example, the budget to promote community arts; by the end of January 2010 only R9.6 million had been spent. Some of the problems appeared to be related to financial management capacity. Some officials had been suspended.  There were other examples of under-spending, including 2010 World Cup projects. There were weaknesses of budgeting and planning across the department.

The Chairperson commented that inputs such as provided that morning by National Treasury were most valuable, especially to new Members and to the researchers.  There was nothing top secret in what the Committee had heard.

Mr Maluleka seconded. He said it was vital for the Committee to check before the end of each financial year how far the Department had progressed in addressing the issues raised by the Auditor-General in the audit report included in the Department's annual report. Members needed to guard against distraction by fascination with the beautiful photographs and glossy documents that departments offered them. 

AFReC commented that the Department of Arts and Culture was 'not up to speed' in developing indicators and measurable objectives.

Mr P Ntshiqela (COPE) asked if there was anything that the National Treasury could do to help the Department on the matter of lack of capacity in its financial management.

The Chairperson said that especially based on the tight time frames, unless these issues were addressed quickly, one would disadvantage the citizens. Therefore the Committee must have a robust programme to address the issues raised by National Treasury. 

Professor A Lotriet (DA) proposed a vote of thanks for the clear presentation and valuable information. It had really helped Members understand the implications of the new Money Bills Amendment Procedures and Related Matters Act 2009. 

Mr Maphiri said that the Department's inability to spend all its allocated funds reinforced the need to call it in every month to account for its progress. He referred in particular to projects for the FIFA World Cup, soon to begin. 

Mr Maphiri suggested that the Appropriation Bill was basically financial numbers and perhaps not of as immediate importance as a department's strategic direction.

Mr Maphiri said that the executive might not be able to help; the Committee needed external support. In its last strategic plan, the Committee had expressed the need for a researcher. It was necessary for all concerned to understand the importance of information in advance. He was not marketing on behalf of his own organisation, since that would constitute a conflict of interest. Research capacity was the best way of getting information since researchers were independent from the department of which a committee had oversight. 

With regard to the Money Bills Amendment Procedures and Related Matters Act 2009, Mr Maphiri interpreted the views of the Committee that Parliament must be able to prepare an alternative budget in order to be able to amend. Thus one reinforced what had been said earlier that day. Unless the Parliamentary Budget Office was allocated sufficient funds to function, Parliament would never be able to prepare an alternative budget and would not be able to exercise its new powers under the Act to amend money bills and the Act would be just another  item of legislation  that would be 'on the shelf' and of no practical value. The Parliamentary Budget Office must have enough capacity. 

Mr Maluleka suggested that when the Committee drew up its own strategic plan, it should schedule a meeting with the Department to give it a list of the Committee's questions and requirements. This should be within the next two weeks. Members must not take anything for granted when the Department presented to the Committee. Members must scrutinise figures, and ask themselves if the Department was really on course to achieving its stated targets. It was a matter of dismay to find that a department had spent less than 10% of funds allocated for a project. It was a challenge to Members and an indictment on them if they did not examine microscopically glossy departmental reports and statements; for these Members must take some of the blame themselves. New Members must beware of a culture which officials took for granted that Members of Parliament had different interests; Members were not deployed on the grounds of their specialities but were assigned according to need; however, it was for Members to look at what was presented and what had been achieved. The Department may have informed the Committee about the chief financial officer issue, but Members might not have been sufficiently alert and may have accepted the Department's explanations at their face value. Perhaps Members were inclined to ask 'sweetheart' questions. Members should really interrogate. The Department was accountable to Parliament not to the National Treasury, so the Committee must fulfil its oversight obligations. Therefore, let the Committee prepare its list of questions and requirements of the Department and add to it. 

Professor Lotriet concurred. Members should analyse the reports that the Committee received from the Department. Since departmental reports were prepared in general terms, the Committee should be prepared to interrogate all instances of vagueness in them. It was necessary to go more deeply into issues, such as the 2010 World Cup projects. The Committee must be much more vigilant. 

Portfolio Committee on Arts and Culture: strategic plan of the Committee
The Chairperson said that the workshop had not been enough to equip Members with all the tools and knowledge that they needed. But it was a useful start in that direction. It was therefore necessary to have enough time for the Committee's strategic plan. After this the Committee would require a very robust programme. If we don’t attend to outstanding matters then the Committee would betray the nation.

Ms M Nxumalo (ANC) said that Members needed to hold a study group to examine the reports before the meeting and prepare questions.

Mr Maphiri said that the workshop would highlight the Committee's previous strategic plan, that of 2007-2009, and prepare a revised one. 

The Chairperson said that there were too many things that meant the same thing. A more summarised document, ‘pregnant-with-meaning' would be preferable. It was aimed to promote and enhance a united democratic and non-racial society; the Department of Arts and Culture played a key role. Society embodied the elements of nation-building and coherence in social cohesion. He was surprised that the Committee had missed that in its vision.

Mr Maphiri agreed that more input was required on the sentence that the Chairperson had described. Social development and social cohesion must be captured in the Committee’s mission. Already the Committee had the gist of it and would include the National Anthem.

Professor Lotriet advised adding heritage tourism. 

The Chairperson said that it was important that the Department translated its policies into its programmes, and that it indicated measurable outcome indicators. The role of the Committee was less to define the Department's policies, but to monitor the Department and intervene only where the Committee saw a clash between it programmes and the national vision. Traditional leaders should be included.

Mr Maluleka said that it was important to be realistic when the Committee met with Departments. It was necessary at all times to have the relevant documents. This applied to the entities too; one had to ask how many entities the Committee could see in a day; given that each entity would take an hour. Perhaps three entities in a day was the maximum.

The Chairperson said that quantity would compromise quality. The engagements should be scheduled carefully by the Committee and the Committee Secretary. .

The Chairperson suggested that one needed a library on each activity represented; one must work very hard to ask meaningful questions.

The Chairperson referred to the job description of the Committee Secretary.

The Chairperson said that he thought that Members should be able to use their mother languages.

Ms Nxumalo reaffirmed the need for a Committee researcher.

Ms E Nyalungu (ANC) seconded.

Mr Lusanda Myoli, Committee Secretary, said that the Committee did have a researcher, Mr Nickie van Zyl, who analysed the budget.

The Chairperson said that he had met him and that Mr Van Zyl must be introduced to the Committee. The Chairperson said that he would accept the idea of appointing a content specialist.

Mr Myoli said that the amount of work entailed by the BRRRs needed a dedicated person.

The Chairperson conceded that the Committee needed a capacity effectively to monitor the BRRRs, so it would do no harm to continue to lobby for a content specialist.

The Chairperson acknowledged the importance of issues that cut across departments, such as education, science and technology, and tourism. Also those who dealt with traditional leaders must interact with the Committee. 

Mr Maluleka agreed, and asked for a review of the checklist.

Mr Maphiri edited the Committee's annual work plan spreadsheet for the 2010-2011 financial year.

The Chairperson said that the Committee would be expected to deal with legislative amendments, for example, the position of the Cape Town Castle which still belonged with the Department of Defence, but which the Cabinet had said should be relocated to the Department of Arts and Culture. However, this had not yet been translated into amendments.

Mr Maphiri said that the Committee would also have to deal with the Third Cultural Laws Amendment Bill.

Mr Maphiri said that there was nothing wrong in asking the Department to table reports monthly, but days would have to be found to discuss those reports.

Mr Maluleka said that it was very important to know the impact of projects on their intended beneficiaries, and for that purpose it was necessary to interact with them. The Committee should make an effort to make more provincial oversight visits, and the Secretary should see which weeks were open. 

The Chairperson said that it was important to preserve the distinction between oversight visits and oversight in the sense of public hearings. The one should not be done at the expense of the other. It was also necessary to accommodate both the rural and the urban areas, and not give preference to one province over another.

Mr Maluleka said that some bias was unavoidable, and suggested some bias to the rural areas. 

The Chairperson agreed to some bias but not to exclusion.

The Chairperson spoke of Presidential nodal projects. In Arts and Culture there were many of those possibilities. It was important to have special projects.

Mr Maphiri said that capacity building included practising the best techniques in reading annual reports and how asking questions.

Mr Ntshiqela said that Members' should be able to use information and communication technology with ease. 

The Chairperson added that capacity building included the ability to lecture 'off the cuff' to members of the public on matters of legislation, and not being dependent on secretaries.

The Chairperson said that it was necessary for Members to monitor the departmental time frames.

Mr Maluleka commented that it was important to be able to measure whatever one did.

The Chairperson said that the Departmental budget and personnel issues raised by the Treasury were quite critical, especially since the recess and the end of the financial year were at hand. It was vital that the Committee Secretary note important dates, so that the Committee did not miss deadlines in its business.

Professor Lotriet reminded Members of the following week's budget discussion. 

The Chairperson said that all relevant information was needed before the budget vote; Members went on recess on 26 March 2010. Then in April there would be the budget vote in the National Assembly.

The Chairperson remarked that the present financial year 2009/10 had been a lean one for committees; it was only two weeks previously that the Committee learnt that it could spend some funds. Now the Committee knew that in the new financial year there would be adequate resources for the Committee's work. Initially each committee was given an equal allocation, but depending on how a committee used its allocation; some money might be transferred to another committee. It was the responsibility of each Committee to motivate well for the use of its funds and to use them wisely.

He requested that the draft strategic plan be completed and submitted to him by 19 March 2010.

Conclusion
The Chairperson said that postponement of the workshop would have resulted in a loss of a valuable opportunity for interaction and loss of confidence on the part of participants. It would have also led to fruitless and wasteful expenditure.

Members had been misinformed that the Department had cancelled the workshop on the grounds that the Minister was allegedly in Germany: the travel agent had accepted responsibility for the misunderstanding. Misinformation could be a casus belli. In future, a hands-on approach would be required, without depending on the good promises of others. It was to be noted that a department could not cancel a meeting of a portfolio committee.

Ms Nxumalo proposed a vote of thanks to Members and participants, especially the facilitators - AFReC, Professor Prah, the Auditor-General of South Africa, and the National Treasury, who had provided Members with tools with which to work. She expressed the wish that the workshop could have lasted all week. She thanked Mr Lusanda Myoli, the Committee Secretary, Mr Donald Maphiri and AFReC for coming so early to organise the event, and the Parliamentary Monitoring Group for observing the workshop.

The meeting was adjourned.