The Committee interrogated the 2008/09 Annual Report and Financial Statements of the Department of Rural Development and Land Reform (the Department)and the South African Social Security Agency (SASSA)
The Deputy Minister of Rural Development and Land Reform was called upon to address especially the issue of targets set for land distribution to black people. The Committee questioned the fact that the Department had not handed over supporting documents to the Auditor-General regarding lease contracts, and that the database for lease debtors was not up to date. There was intensive questioning around the issue of the lack of record keeping, system failures and their negative impact on service delivery. The Committee thought that what the Department called a ‘systems failure’ was in fact a management failure. Members emphasised the fact that the Department had been experiencing the same problems since 2005, but still ignored the warnings of the Auditor-General to put proper systems in place. Members discussed the new Master Plan of the Department and expressed disappointment that it had as yet to be put into practice to effect proper service delivery. The Department was sometimes unable to provide answers. Members asked if the provincial departments of agriculture were capable of dealing with the Department of Rural Development and Land Reform regarding parcels of land that still had to be dealt with. The Department was asked for assurance that the land acquired since 1994 had been properly captured on its database. Members discussed fruitless and wasteful expenditure at length, and stressed that this was perpetuating fraud, since the Department did not seem to have proper disciplinary mechanisms in place, and questioned the action the Department had taken against the perpetrators of the fraudulent buying of the Gora farm and the Cornucopia project. The Committee felt that arguments that problems stemmed from the past were an excuse for lack of service delivery. The effectiveness of the human resource policies and the failure of the organisational structure to adequately address areas of responsibility were examined.
The Deputy Minister of Social Development emphasised SASSA’s commitment to improving service delivery to all those in need of grants. The Committee questioned the status of the SASSA in relation to the lack of a Board; the legality of SASSA as an entity; and its relationship with the Department of Social Development. Members asked why the services of Cash Payment Master Services was still being used given that their services had been terminated due to poor service delivery. SASSA was questioned about its ability to deliver services and when it would show a readiness to fulfill its mandate adequately. Members requested copies of the Master Plan, the names of offending officials, and asked how the deficiencies identified by the Auditor-General were going to be addressed. The Committee asked how long the migration process would take to an accrual-based accounting system. Members were disconcerted that the matter of fruitless and wasteful expenditure was mentioned in such a casual fashion, and questioned its presence in the Report, and what disciplinary actions had resulted. The Committee asked how many assets were missing, who was responsible for the loss, and if any action had been taken against those responsible. Members asked about the constitution of the Financial Misconduct Board and its functions, the financial values for financial misconduct, the R400 million overdraft and the lack of internal controls for the administration of grants. Explanations were sought on the distribution of food parcels and if there were mechanisms in place to ensure that a register was kept of all the beneficiaries. The overpayment of a supplier for the amount of R142 million, as also the identity of the supplier must be explained. The Committee asked for an explanation about former employees owing the SASSA R10.2 million, and if the perpetrators had been disciplined.
Interrogation of 2008/09 Annual Report of Department of Rural Development and Land Reform
Ms M Mangena (ANC) said that in regard to receivables for departmental revenue, the Auditor-General (AG) had discovered that the database of the Department of Rural Development and Land Reform (the Department) for lease debtors, in the amount of R56.07million, was not up to date, and not all lease contracts were available for audit. She asked why the supporting documents were not handed over to the AG.
Mr Thozi Gwanya, Director-General, Department of Rural Development and Land Reform, said that there were leases that affected the Power of Attorney, which meant that there were contracts that were housed in the provinces, and it was difficult to collect contracts from the provinces.
The Chairperson asked what the difficulty was, as faxes, scanning and e-mailing facilities were available.
Mr Gwanya said that there was not proper record keeping at the level of provinces, but that this problem had been corrected.
The Chairperson asked why this was not corrected before.
Mr Gwanya said that there were inadequacies at the level of the provinces, and at the level of provincial departments of the national office.
Ms Mangena said that the documents should have been sent, so that by the time AG needed them, they were available.
The Chairperson asked what had happened to the people who should have provided this information.
Mr Gwanya said that the relevant people were asked for detailed plans of how they intended to correct the situation. The Department had since updated those records, having found that some leases were not in place. The Department had since consolidated the system of getting contracts and these had been put on database.
The Chairperson asked why this had not been recorded before.
Mr Gwanya said that there were no clear systems in the past.
The Chairperson asked why there were no systems; the impression was given that only when the AG identified the problem was it acted upon. He worried that the same might be the case in other areas.
Mr Gwanya acknowledged that there had been a systems failure
The Chairperson said that in fact there had been a management failure, since systems were created by management
Ms Mangena asked why manual or automated controls were not designed to ensure that transactions had occurred or been authorized, and were completely and accurately processed by the time the AG visited.
Mr Vusi Mahlangu, Acting Chief Financial Officer, Department of Rural Development and Land Reform, said that the system was developed in the year 2006. A combination of factors like timeout failures and network errors had occurred. The system was not up and running, and this was something that could not be done internally but had to be out-sourced, so there had to be heavy reliance on service providers, to provide a system that was effective and efficient. When the audit was done, the system was not in place; the Department had relied heavily on a manual system. The system was now up and running now and by the end of this month the AG would find all the systems in place.
Ms Mangena said that this Department had been having problems ever since 2004 and the AG had been constantly warning the Department about these issues. Although it was to be expected that the Department would correct the situation, it clearly had not taken the AG’s recommendations into consideration. She asked why this was so.
Ms Mangena asked why the immovable property of other entities and departments was recorded in the asset register of the Department.
Mr Gwanya said that this problem was historical, because the assets emanated from the time of the Homeland Government administration. They had proved extremely difficult to work through. The Department was working with the Department of Public Works, and other government departments and State entities to plough through the list. Some of the properties had not been surveyed, and some had no title deeds.
The Chairperson pointed out that it was now 15 years since the new administration, and this problem could not drag on.
Mr Gwanya said the Department did have a Master Plan that was developed with the Department of Public Works.
The Chairperson interjected to ask again why the situation had not improved. Last year the Department had given the same reason, and had said it was attending to the matter. There seemed to be lack of understanding what was involved.
Mr Gwanya said a copy of the Master Plan was available and would be shared with the Committee.
The Chairperson asked when the Plan was drawn up.
Mr Gwanya said that this had happened last year, and was finalised earlier this year. There had been a realisation that all departments were working on their own, in silos, but this Plan had now been consolidated to allow departments to work together as a team.
The Chairperson said that at the moment there was only a Plan, but it still had to be put into practice.
Ms Mangena asked if the Human Resource policies of the Department were able to facilitate effective recruitment, training, discipline and supervision of personnel.
Mr Gwanya said that the Department had developed Human Resource policies and had looked at those issues that were mentioned. The Department had tried its best, and would keep on improving.
Ms Mangena asked what the Department had to say about the AG’s comment that the organisational structure did not address areas of responsibility and lines of reporting, to support effective control over financial reporting.
Mr Gwanya responded that the findings of the AG were correct and had been accepted. The Department had developed a way to address the matter. It had recruited senior management personnel. The vacancy rate was reduced to about 14%, from the 22% -27% from previous years.
Ms M Matladi (UCDP) addressed the question of tangible assets and the acquisition of State land. She asked what the Department and the National Treasury were doing about land acquisition.
Mr Gwanya said that in regard to the completion of the Asset Register, significant progress had been made. There were, however, three or four provinces that required lots of work. There were approximately 13 million hectares of land, with over 30 000 parcels of land on the database. The outstanding work concerned 4.5 million hectares of land, where the Department wanted to ensure that there was certainty about full registration and certainty about ownership.
The Chairperson asked what the timeframes were regarding the work with the land.
Mr Gwanya said that the timeframe, as part of the Master Plan, envisaged completion of the whole task in 2012 or 2013.
Mr S Thobejane (ANC) said that although Mr Gwanya had acknowledged that supporting documents and systems were not in place to make sure the AG received this information, he had not clarified who was responsible for doing that work at the time that matters went wrong. He asked who the people were, and what steps were taken against them. If nothing was done, the Department was in violation of Section 81 of the Public Finance Management Act (PFMA), which stated that disciplinary measures had to be applied to any official who failed to do the work.
Mr Gwanya said that the official responsible for the problem was no longer with the Department. In 2009 the Department had put a new official in place and seen positive changes, as the Master Plan would show.
The Chairperson interjected that the question was simply who the people were who could not submit the required documentation, and what had the Department done to discipline them. If nothing had happened to them then the Committee should be told this succinctly.
Mr Mdu Shabane, Deputy Director General, Department of Rural Development and Land Reform, said that this was not so much a question of documents but of the provinces depositing money into the Department’s system, without giving the Department all the necessary information on who the debtors were. The Department had since rectified the matter.
The Chairperson said that the Department was just repeating itself. Again, he asked who those persons were and what was done to them.
Mr Shabane responded that the Department had Powers of Attorney (POAs), but the offending officials were working for Provincial Departments of Agriculture, so the national Department could not take direct action against them.
Mr N Singh (IFP) said that the expected progress had not been made. He asked if all the POAs had been securely signed and finalised with provincial Departments of Agriculture. He asked also if the provincial Departments of Agriculture were capable of dealing with the national Department of Rural Development and Land Reform regarding these parcels of land. He asked further for the role of the Department of Public Works. He noted that the provincial Departments of Agriculture had made a submission that they should retain the income from the leases and plough it back into development of the provincial land, and he questioned what had happened in this regard.
Mr Mahlangu said that the entire Department had to sit down with the provinces, when the previous Powers of Attorney did not work. In 2008 the former Minister met with the relevant MECs in the Provinces, and by mutual agreement the Powers of Attorney were terminated. The Department then took direct control of the leases at that time, because the provinces did not have sufficient capacity to do the work.
In regard to the submission about retaining income, as put forward in Kwazulu Natal (KZN), part of the problem was that there was an application but no formal decision was taken. As a result, when the AG came the Department could not account for all the leases. Subsequently the national and provincial Departments met on the matter, and provincial departments provided all the relevant schedules. New Powers of Attorney had been renegotiated with the provinces. Some provinces did not have Powers of Attorney for specific reasons, like the province of the
Mr M Steele (DA) asked for an assurance from officials that all the land acquired since 1994 was properly captured on the database, even if there were still problems with information in the pre-1994 period.
Mr Gwanya said that the Department had a register and a database of the land that had been acquired since 1994.
Mr Steele said that there were problems with databases of lease debtors that were not up to date and there with supporting documentation not being available for lease receivable balances. All of these issues pointed to the potential for fraud, and this should have alerted the Department to the fact that fraud had taken place. However, the Department did not undertake a risk assessment and consequently had not updated its fraud prevention plan. He asked who was responsible in the Department for undertaking risk assessment as required by the National Treasury regulations, and who would be held responsible for not complying with the required risk assessment.
Mr Gwanya responded that the Department did have a Director of Risk Management. However, that post was vacant for two years until it was filled in 2009. The Department had developed a risk management profile for each of the components of the department, and was working through the Risk Management Committee to deal with the issues of risk and fraud.
Mr Steele said that the National Treasury regulations applied to the entire Department, for which Mr Gwanya was accountable. He enquired whether Mr Gwanya was saying that he had not applied his mind to the problem because the post was vacant, and whether there was a two year gap during which National Treasury requirements were not being met.
Mr Gwanya said that this was definitely not the case because the function of risk management was actually performed.
The Chairperson asked who performed the function.
Mr Gwanya said the function responsible for Internal Auditing had been carrying out this role.
Mr Steele asked if there was anybody present from Internal Audit who could speak to this issue.
Ms Irene Sango, Chief Director: Finance, Department of Rural Development and Land Reform, responded that Internal Audit was not doing the full function of risk management, but risk registers were being updated. When the Internal Audit plans were done, risk assessment was also done. The Risk Management Directorate would perform this function, when doing the independent Internal Audit review.
The Chairperson said that this was just some low level risk management that was done.
Ms Sango conceded that it was not a complete risk management exercise, but said the Department had subsequently put processes in place.
Ms A Steyn (DA, Member of Portfolio Committee on Rural Development and Land Reform) followed up on the question of the asset register since 1994, saying that although a document had been received, it was incomplete. She asked if the Department had a full register.
Mr Mahlangu said that he would not like to say that the database was flawless and 100% accurate. As far as the Department was concerned, it had a full database, and could make it available to the Committee.
The Chairperson said that if the Department could not vouch for it being 100% correct, then it was not complete. The Department should just have said that it was not complete.
The Deputy Auditor-General said that when referring to the completeness of the Asset Register, the question arose if it was costed, and what its value was.
Ms Sango said that the Department used the Asset Management Framework designed by the Accountant-General, in terms of what was recorded as “cost”. She said she needed clarity in terms of the value of the land or purchase price of the land, as she could not say offhand what the market value was.
The Chairperson said that the Department should have indicated, at the outset, that it did not know this value.
Mr R Ainslie (ANC) said that the AG had identified that R4 865 000 was spent on fruitless and wasteful expenditure. This expenditure was the result of the purchase of Gora farm, for R3 650 000, and for the Cornucopia project, costing R1 214 000. He asked if the Department could provide more details about Gora farm and the Cornucopia project.
Mr Gwanya responded that both the projects were land projects in the
Mr Ainslie asked the Department to tell the Committee who the suspended officials were, how many of them were involved, and what their designations were.
Mr Gwanya said that the officials were Deputy Directors in the
Mr Ainslie asked how long this process had taken.
Mr Gwanya said that this process had started last year, and one case had been concluded last month. The final outcome was awaited.
Mr Ainslie asked if these two officials had been on full pay all this time.
Mr Gwanya said that they had been on full pay throughout the process.
Mr Ainslie asked what had happened to the official whose case had been concluded.
Mr Gwanya said that the Department was awaiting the written judgment from the presiding officer.
Mr Ainslie asked when the Department expected the case of the other official to be completed.
Mr Gwanya said the case should be completed in about two to three weeks
Mr Ainslie asked if the Department was contemplating criminal charges in addition to the disciplinary measures being taken.
Mr Gwanya responded that the recommendation of the forensic audit was that these findings should be referred for criminal charges to be laid.
Mr Ainslie asked if the Department was going to take steps to ensure that the amount of R4 864 000 was recouped. The fact that they had been paid had an effect on service delivery.
Mr Gwanya responded that it was the intention of the Department to follow up on those criminal charges and if undue enrichment had taken place, the Department would recover this amount.
Mr Ainslie asked why this was allowed to happen with no control measures in place. He also asked if the Department had now instituted control measures to ensure that it did not happen again.
Mr Gwanya said that this matter had been reviewed. In future, all approvals would be at the level of Deputy Director-General, and proper analysis would be done of applications that were presented.
Mr Ainslie said that there might have been more than two people involved, because others could have given them permission. He asked if anyone else giving permission had been identified, and, if not, what measures were being taken against those allowing this to take place.
Mr Gwanya said that in the process of analysis, the Department had looked at all possibilities and had found that only these two officials were directly linked. There was a committee, and it could have been their poor judgment that did not identify that there were irregularities taking place. These two officials were directly involved in this.
Mr Ainslie urged the Department to look at the wider field, and asked whether investigation was still ongoing to establish if other people were implicated. He asked if in this case the Department had to apply to the National Treasury for condonation of the spending.
Mr Gwanya said that the Department would do so.
Mr Ainslie expressed dissatisfaction that the outcome revealed that only two officials were involved.
Mr Gwanya said that a committee was involved when the assessment done.
The Chairperson asked how many officials were involved.
Mr Gwanya said that the officials in the
Mr Ainslie said he found it problematic that the committee had given its authority to the two officials. He asked who chaired this committee.
Mr Gwanya said that it was the Chief Director of the province, who was based in
Mr Ainslie asked if any action was contemplated against this Chief Director.
Mr Gwanya said that the Chief Director had resigned before the Department had even received the reports.
Mr Ainslie asked if this Chief Director was still in the civil service.
Mr Gwanya said the Chief Director had left the civil service.
Mr Ainslie said that this then meant that the Department had just dropped the matter entirely. He said that this was unfortunately a common situation, but the fact remained that over R4 million of wasteful expenditure incurred was not being followed up properly because of a resignation. He asked for the name of the person
Mr Gwanya said that he was the Chief Director in the province, and his name was Dali Mater.
Mr Ainslie asked if this Chief Director was part of the investigation of the other two officials, or if he was also being investigated in addition to the two officials.
Mr Gwanya said that when the Department appointed a forensic auditor, the investigation did not point to the Chief Director. Only a criminal investigation might be able to link his actions to those of the two officials.
Mr Ainslie said that it was not acceptable that he was getting away with this.
Ms L Mashiane (COPE) felt that the officials were trying to dodge the questions. She asked how many people were sitting in the committee chaired by this person, and if they were employees of the Department. She suspected connivance by a number of people, and felt that it was not fair to suspend and investigate only one or two. All were employees of the Department.
Mr Mahlangu spoke to the composition of the committee and said that there were two levels. At the district level, applications were screened. Recommendations were made to a committee at the provincial level. The committee at the provincial level was comprised of officials from the national Department, officials from the Provincial Department of Agriculture, and other relevant stakeholders, including some from agriculture. He could not give a specific number.
Mr S Thobejane suggested that the best route might be through the South African Police Service (SAPS).
The Chairperson said that there was no criminal investigation, and therefore no case opened with the police. It seemed that the usual approach had been taken where, on resignation, a case was simply closed.
Mr Gwanya said that there was no criminal case yet, and only out of the charges that emerged would the Department have a strong case.
Mr Pretorius (DA) asked what the list of Contingent Liabilities concerned. There were figures of outstanding cases which still had to be paid by the Department to possible recipients in respect of land transferred to the Department. Some amounts had been rolled over from 2007/08 and had been supplemented by R158 million in the last financial year, making the total amount outstanding as R394 million. He asked what exactly these figures were, and why were these people not paid.
Mr Gwanya responded that this was as a result of an arrangement that the Department had structured with landowners regarding the time of payment for the land. In terms of the Deed of Sale, the Department paid 50% at the time of buying the land, and the other 50% was paid once the conveyancing process was completed. The amount owed for the sale was stated in the Deed of Sale.
Mr Pretorius asked if the farmers had agreed to receive final payment only two to three years later.
Mr Gwanya said they had not really done so; the amount would be changing all the time, depending on the Deed of Sale.
Mr Ainslie said that there had been Irregular Expenditure of R74 960 000, and as a result of parliament not approving them, certain purchases were made which fell outside the mandate of this Act. He asked why the Department expected Parliament retrospectively to condone this illegal expenditure.
Mr Mahlangu responded that this related to the Department’s acquisition strategy, where the State acquired land. At the time the Department started the programme, it was of the view that it was empowered by the legislation to acquire both immovable and movable assets. However, the legal division advised that this was not the case. The Department then immediately embarked on amending the legislation, which was brought to Parliament, who had not agreed with the Department.
Mr Ainslie said that it seemed that this Irregular Expenditure had gone on for a number of years.
Mr Mahlangu responded that in fact this was so.
Mr Ainslie asked who was responsible.
Mr Mahlangu said that the Department was perhaps aware of the situation.
Mr Ainslie asked who was ultimately responsible.
Mr Gwanya said that when the Department bought this land or farm this was immovable property..
Mr Ainslie interjected and reiterated that the Department had acted in contravention of the law. He wanted to know what action had been taken against the person who made the decision.
Mr Gwanya responded that the decision was made by the former Director-General, who had left in 2008.
Mr Ainslie asked if any action was taken against that Director-General.
Mr Gwanya said that no action was taken.
The Chairperson said that when actions were taken without planning and foresight then they resulted in conflict with the law when implementing. He stressed that the law should have been amended first.
Mr Ainslie asked when the Department had first realised that the law was not on their side in this regard.
Mr Gwanya responded that the Department had realised this in 2007, when going through the audit process.
Mr Ainslie asked why then the Department had made the same mistake in 2008 and spent a further R10 million.
Mr Gwanya responded that the Department had stopped these transactions once it had received the report that pointed to the problem. The Act was amended in 2009.
Ms Matladi asked for a response from the Department regarding the report which stated that 90% of the finance distributed was unproductive.
Mr Gwanya said that the Department had received three reports about projects that were not working. The acquisition of going concerns, coupled with training, was an attempt to address those challenges and to correct them.
Mr Ainslie said that there was non compliance with applicable legislation. Section 8.2.3 of the Treasury regulations required that all payments to creditors had to be settled within 30 days. He called for explanations.
Mr Mahlangu said that it related to accruals. In the previous financial year one of the Department’s trading accounts was suffering from over expenditure, due to poor economic conditions, and could not generate enough revenue. The PFMA did not allow for trading accounts to be in deficit. The Department had to stop some of the invoices in order to offset the negative balance on this account.
Mr Ainslie asked if the Department was up to date now with making payments within 30 days.
Mr Mahlangu responded that the projections had indicated that there might be a deficit of R54 million, but fortunately during adjustment estimates, when the Department did its prioritisation, it had set aside a large amount money for this, so the invoices would not have to be compromised.
Mr Ainslie asked what the Department did when it was unable to pay within 30 days. He asked if the Department had been sued.
Mr Mahlangu said that 30 days might have been an exaggeration; this took place towards the end of the financial year and it could have been 15 days or less.
The Chairperson asked if the Department was saying that the Auditor-General had made exaggerations in this report.
Mr Mahlangu responded that the Department did not have details of people who had sued.
Mr Ainslie asked if the Department knew what non-payment did to small businesses. He asked for an indication of the extent of the problem and how many creditors were involved.
Ms Sango said that the Department did not have the number of creditors with it at present. The Department had put processes in place, and now kept a register of all the invoices, and followed up on commitments regularly. The majority of the commitments not followed up were due to capacity constraints. The Department had now filled more positions.
Mr Ainslie said that the AG had found that the Accounting Officer had not taken effective and appropriate steps to timeously collect all Section 78 (2)(a) monies held in trust on behalf of the Department. He asked why this regulation of the National Treasury had not been adhered to.
Mr Mahlangu responded that this was as a result of a problem with restitution and the acquiring of land, whereby the Department would pay 50% in advance for the land. The agreement was supposed to state that interest accrued from that 50% should accrue to the Department, but in some sale agreements was not properly reflected, with the result that the Department could not recoup the interest that was due. However, this had since been rectified.
Ms T Chiloane (ANC) asked for clarity whether the R20.4 million related to the money held in the Trust account, and what plans the Department had to avoid such occurrences in the next financial year.
Ms Sango said that the interest received also included the interest held in Trust that was paid back to the Department. The Department had put guidelines and a policy in place which enforced that the agreement between the attorneys and the Department must state the fact that interest must accrue to the Department. The guidelines and policy also showed how the interest must be calculated. Those personnel working with Restitution were currently using these guidelines.
Mr Steele asked about the share portfolio of the Department that generated R119 million in dividends.
Ms Sango said that this was the surplus relating to registration of the trading account. When this surplus was declared to the National Treasury, it passed through the National Revenue Fund.
Mr Thobejane asked, with regard to non-compliance and interest due to service providers, how much the Department was going to pay in interest, and who was going to pay back government.
Mr Mahlangu responded that the Department did not have the details around the interest. The Department wished to work around that and give feedback.
A Committee Member said that even if the Department did not have details, they should talk to the principle of repayment.
Mr Mahlangu said that it was beyond the control of the Department, because a trading account should generate its own revenue. Because of the economic conditions, people were not buying properties as they used to. There were negative effects, and the Department had no choice but to shift money and compromise the invoices. If a specific individual was responsible for the deficit, the Department had to charge that person.
Mr Ainslie said that with regard to Performance Indicators, the AG had found that there was a lack of documentation with regard to the information in Programme 5.
He also noted that he, and Ms Chiloane, had found the totals in the table on page 34 to be incorrect. If these figures were wrong it would cast doubt on all other entries in the table.
Mr Mahlangu said he had just made a quick re-calculation, and the rest of the columns were fine, apart from the total of the number of projects, which was incorrect and should be 500.
Mr Ainslie asked if the number for the benefieciaries was incorrect.
Mr Mahlangu said that the table worked vertically.
Mr Ainslie said that there should be agreement that the figures were either wrong or just confusing.
Mr Ainslie said that the AG had indicated that the Department had not provided documents to show that the limited actual targets were achieved regarding the strategic objectives outlined on page 35 of the Annual Report.
Mr Mahlangu said that the information on the files in district offices, where applications were registered, had farm names, so the filename had remained as a farm name, although by the time the file was screened and approved, the individuals who had applied had given the project a name.
The Chairperson asked why was it so difficult to provide the AG with this information, if the explanation was as simple as that,
Mr Mahlangu said that this problem was first established internally, and the Department had been unable to correct it for the AG at the right time.
Mr Ainslie asked why, if it was easy for the Department to come up with the figure, it did not provide the AG with proof.
Mr Mahlangu responded that it was easy because the information was there.
Mr Ainslie asked why then did the Department not give it to the AG.
Mr Mahlangu said that although the information was there, there were still contradictions in terms of farm names versus project names.
Mr Ainslie asked why, if the Department could explain the contradictions to themselves, it could not explain the contradictions to the AG.
Mr Mahlangu said that it was because it was done later.
Ms Steyn said that this was specifically the reason why she had asked about the Asset Register after 1994. If the Department had a full and complete document there would not be problems.
Ms P de Lille (ID) said that this was not the full reason. The Department had reported to the Portfolio Committee for Rural Development and Land Reform that one reason why land redistribution was not going to carry on in the next five years was that, in respect of money diverted to 90% of redistributed land, all the projects had failed. There was a need to recapitalise. The post-settlement support to land had also already been distributed. There would be no more land distribution, and R225 million would be diverted to make sure that land already distributed became productive.
Mr Mahlangu said that even if the Department took all the money available on the baseline, it would still be unable to achieve the target.
The Chairperson asked how the Department could set a target that it was unable to achieve.
Mr Singh asked to what extent, in 2008/09, there were claims finalised and agreements signed, but farmers not paid for their land.
Mr Gwanya said that where sale agreements were signed, the Department must pay about R700 million to settle those land claims. In some cases 50% had been paid, so the department had to pay about R300 million. The Department was experiencing delays from conveyancers, so there was not a problem of payment, but the process of transfer of the land.
Mr Singh asked if the Department had the R700 million rand to honour its obligations.
Mr Gwanya responded that the Department was able to pay, as it had planned for this, and could honour those agreements from the budget.
Ms A Muthambi (ANC) referred to page 138 of the annual report, which dealt with types of misconduct, and asked if there were employees on suspension.
Mr Gwanya said that there were employees on suspension.
Mr Gwanya said that some of the investigations were still at very early stages, due to capacity within the Internal Audit. Some of the investigations had to make use service providers.
Ms Muthambi asked why the Department was in the position where things were dragging for so many months.
Mr Gwanya said that some cases were very difficult and were referred to the internal auditors.
Ms Muthambi said that the Director-General had the responsibility to take disciplinary steps as promptly as possible. Employees were on suspension with full pay. She asked how much money was involved.
Mr Mahlangu said R4.8 million, but that the rest was as yet undetermined.
The Chairperson indicated to the Department that if it did not know, it must say so. He asked if the Department could supply those figures to the Committee.
The Department confirmed that it could.
Mr Ainslie asked if, given the capacity constraints and the problems indicated with these investigations, there was a large backlog in the number of cases for previous years.
Mr Gwanya said that the cases resulted from investigations done by Internal Audit. There were also enquiries from the Public Service Commission, the Presidential hotline and the public. A lot of investigation had been done and the challenge had been the appointment of service providers. It was found that the level of investigation required did not justify spending so much money on investigation. Internal Audit had been requested to categorise the types of the investigations.
Mr Ainslie asked if there were 200 pending cases.
Mr Gwanya said that those were the cases that had been resolved. The pending cases were the list of the 17 cases that Internal Audit had reported to the Department.
Mr Gwanya said that the Department could supply the schedules of the outstanding cases that were being investigated.
The Chairperson said it would not make a difference. He asked if the Office of the AG wanted to say something about this.
The Office of the Auditor-General said that the Department should be allowed to provide the schedules. The AG had mentioned that there was a huge backlog. Internal Audit should have the correct numbers.
Ms Muthambi asked why there was a reluctance and a lack of interest from the Department in implementing the Internal Audit observations and recommendations. She asked if the Department was taking the Internal Audit functions and the AG’s report seriously. The AG had reported to the Committee that there were prior recommendations that had not been implemented. In the audit history of the Department, the same matters recurred time and again.
Mr Gwanya said that the Department had looked at this and tried to improve in a number of areas, and this was why the number of areas with qualifications was reduced from five to two.
Ms Muthambi said that with the second Trust account the Department was unable to collect the interest due from attorneys. She asked what was the level was of the head of the legal unit.
Mr Gwanya said that it was a Director.
Ms Muthambi asked what remedial steps had been taken against the Director because he had not collected the interest due.
Mr Mahlangu said that it was not about an individual, but about the processes followed in order to collect the money. Once the debtor had been identified, it was the responsibility of the Director to issue and have signed an Acknowledgment of Debt. In most instances where debts were not paid, the cases were referred to the State Attorney, who would in turn often write back to the Department and request that it write off the debt. The Department was trying to avoid this process, hence some of the monies were not recovered.
The Chairperson said that nothing was done to the person who headed up the legal unit.
Ms Muthambi asked how many attorneys were involved in the defaulter payments, and what amounts were involved.
Mr Gwanya said that he did not have the names of persons involved, but could provide this later. The amounts were that from R30 million owing,R11.5 million had been collected, so about R18 million was outstanding and still had to be collected.
The Chairperson asked for this information to be provided by next Wednesday.
Ms Muthambi asked the Department to provide proof of its engagement with the Law Society.
Ms Muthambi asked why the Director-General had not prioritised the filling of vacancies.
Mr Gwanya said that the Department had had a challenge in filling the vacancies, especially in the finance section. The Department had advertised three times for a Chartered Accountant and had only been successful this year. The Department had reduced the vacancy rate from 27% in 2006 to 14% by March 2010.
Mr Singh said that just R170 million has been spent on the utilisation of consultants. He asked why so many people were outsourced, and if the persons employed in the offices of the Land Claims Commissioners were permanent employees of the Department.
Mr Gwanya said that most of these service providers were used in the area of auditing, particularly because of the capacity of the Internal Audit. In the areas of evaluation, conveyancing and surveying, the Department lacked capacity.
Mr M Mbili (ANC) asked how it was possible for the Department to employ surveyors full time.
Mr Steele asked if the Department had the capacity to deal with complaints for restitution and land reform.
Mr Gwanya said that the Department did have the capacity to deal with complaints. It had a fraud line, a tollfree number for customers to reach the Department, and had people working in those components. There was also a Director tasked with dealing with all those complaints. The issue here was the responsiveness. The Department had observed that it was not able to respond to all the enquiries, and therefore developed that capacity. With regard to restitution, the staff had been absorbed into the Department, but all the Commissioners were on contract for a term or period and were treated as consultants, in terms of accounting for their expenditure.
Mr Steele asked how many persons who, to the Department’s knowledge, had not received their grants.
Mr Gwanya that it should be around 2500 persons.
Deputy Minister’s closing remarks
Dr Joe Phaahla, Deputy Minister of Rural Development and Land Reform, thanked the Committee for the very useful discussions, which would assist the Executive of this Department to play a leadership role and to make sure that the issues that arose from the report would be addressed. In terms of the targets for land redistribution, he noted that the Department intended to redistribute 30% of the agricultural land to black people who had been dispossessed of land, and this policy still remained. He accepted the criticism from Members that in the financial year under discussion, the strategic plan elaborated on targets that were not achievable in terms of the resources available. The current strategic plan would discuss how and when the targets could be achieved. Some of the issues discussed were emotive, including the issue raised by Members about wasteful expenditure. This matter needed to be discussed again.
In terms of the current resources available, the Department would continue to acquire land and redistribute, both from the land reform programme and also from the restitution programme. Many restitution plans had not been executed to final payment, because of the resources available. The Department, however, remained committed to the process, as its Constitutional mandate had to be fulfilled, and the matter would be pursued with the available resources. The Department would remain focused on restitution and would make sure that what had been distributed and restituted was working. It has been decided to use 25% of the allocation for land reform and 25% of the restitution budget to make sure that those farms allocated to previously disadvantaged people, were actually working.
The Chairperson said that he was sure that the Department had noted the issues around investigation and the disciplinary processes, but there was not a convincing explanation why it was moving so slowly to rectify matters. Generally the problem in government was that there appeared to be reluctance to deal with people who broke the law.
The South African Social Security Agency (SASSA)
Ms M Matladi (UCDP) asked if SASSA was an entity and if so, why there was no Board, and only a Chief Executive Officer.
Mr Vusi Madonsela, Director-General, Department of Social Development, said that SASSA was indeed a Schedule 3 entity established under the PFMA. When SASSA was being established, the Department of Social Development (DSD) had every intention of introducing a Board, similar to other agencies like the National Development Agency (NDA), but the nature of SASSA’s work required it to liaise closely with the National Treasury (NT), who favoured a different arrangement. At the time when the Department of Social Development was busy setting up SASSA, public entities were being reviewed, and there seemed to be a strong view that Boards were an undesirable arrangement. On this basis, DSD and NT had agreed to set up SASSA to closely resemble what was happening with the South African Revenue Service and the Minister of Finance, as NT had advised that this was the only basis on which it would support SASSA.
Ms Matladi said that the Department was talking about the situation in the past, because it was now written in the legislation that entities should have Boards. There was a huge amount of money that had to be accounted for by SASSA, and she felt that this should ideally be handled by the Board, not a CEO.
Mr Madonsela admitted that he was unaware of any law that insisted that every entity had to have a Board. Cabinet had not supported the establishment of a Board in relation to SASSA.
Ms Matladi cited Section 49(1)of the PFMA, which referred to the importance and role of Boards.
Ms Matladi asked how the Department of Social Development and SASSA related to each on the administration, given that the bulk of the money in the budget was housed with the DSD.
Mr Madonsela said that the relationship was a very complex one. The complications were caused by dual accountability. The relationship in terms of the law was that DSD exercised oversight and not direct management of SASSA. This opened up the Department of Social Development to the risk of qualification. It had been raised with the Audit Committee, the Auditor-General, and the National Treasury. The question was referred to the National Treasury for clarification.
Mr Brenton van Vrede, Director, National Treasury, said that the responsibility of social grants welfare was housed with the Department of Social Development; and SASSA was a delivery agent for the paying of grants. The National Treasury had therefore decided to form an entity because it desired that this business and responsibility for delivery of grants should remain within a government entity. The accountability arrangement was slightly problematic, but he reiterated that grants were the business of government.
Mr Freeman Nomvalo, Accountant-General, National Treasury, said that the fundamental principle here was that the function of providing social grants to society was a function of government. If this accountability line was broken, then the accountability of government was weakened in these matters.
Mr Madonsela said that SASSA was a government entity, and that having SASSA deal with social grants was merely a streamlining of the responsibilities, and not an abdication of responsibilities of the DSD.
Ms Matladi asked about Cash Pay Master Services (CPMS) and if there was any relationship between the provinces and the CPMS.
Mr Coceko Pakade, Acting Chief Executive Officer, SASSA, said that SASSA was an implementing agent of the DSD, and on the payment side the model currently being used was that contractors had been appointed deliver social grants. CPMS was one of those contractors.
Ms Matladi asked if it was not CPMS who had been paying the social grants in provinces before, whose duties were terminated due to the poor work that they were doing. She thought that the whole reason why SASSA was established was to centralise grant payments. She asked why CPMS was put back into a system in which it had failed.
Mr Pakade said that the overall objective of establishing SASSA was to take over the administration and payment of services from the provinces. However this was a phased process. SASSA was in the process of completing its third year of operation. In the first three years the focus was on establishing administrative systems and capacitating the provinces. Only now was SASSA’s focus on developing its own payment model, to ensure a replacement of the current system which was a more cash based system of payment.
Ms Matladi asked how SASSA was allocated this function if it was not totally ready to deliver.
Mr Madonsela said that there might be an impression that the services of SASSA had to be procured. This was not true. SASSA was a creature of a statute passed by this Parliament, with a specific mandate to administer and pay social grants. The DSD was allowing SASSA to develop over time and to reach the point where it was now able to deliver. SASSA was now setting up the requisite capacities to directly deal with the payment of grants.
The Chairperson asked how long it would take SASSA to be finally ready to deliver the required services adequately.
Mr Pakade said that SASSA had in the past presented to Parliament that it had a five year plan to do this.
The Chairperson said that this was not presented to the Portfolio Committee on Public Accounts. He asked how long it would take SASSA to have the capacity to run this service themselves.
Mr Pakade said that the initial plan was five years.
The Chairperson asked what the latest plan was.
Mr Pakade said that by the end of this current financial year, SASSA planned to be able to do the procurement process for the new payment model, which would commence in 2011/12.
Mr S Thobejane (ANC) asked how the procurement process worked, in the relationship between the DSD and SASSA,
Mr Madonsela said that it was essentially the responsibility of SASSA at this stage to do procurement, but the practice was that every time SASSA procured, it enlisted the assistance of the DSD to capacitate the various bodies that were set up in the process of procurement. This continued to be the case.
Ms Muthambi asked when the plan spoken about was submitted to Parliament, and whether the Committee could see this plan to enable it to also assess whether SASSA had met the targets presented to Parliament.
Mr Pakade said that the Strategic Plan would be presented to the Committee.
Mr Mbili asked about the relationship between SASSA and the DSD with regard to the transfer of money.
Mr Madonsela said that the money paid to beneficiaries still remained on the books of the DSD, but there was a portion of money, about R5 billion, that was transferred to SASSA.
Mr Mbili asked what would happen if something went wrong with the DSD or the implementing agency, such as a misappropriation of funds, and whether this would not affect the audit opinion of the DSD.
Mr Madonsela responded that if there was a misappropriation of the funds of beneficiaries, then it would definitely impact on the audit of the DSD.
Mr Steele addressed the Asset Register and irregular expenditure, and asked what the Department was doing to address the deficiencies identified by the Auditor-General (AG) on pages 102 and 103 of the Annual Report.
Mr Pakade said that asset management was a challenge in the organisation, largely due to the staff capacity problems around the numbers of people in finance, and the need for training of those people.
Mr Chairperson said that this division was started afresh and the problems could not have been inherited from somewhere else.
Mr Steele asked if the problem was that SASSA had not hired the right people.
Mr Pakade said that the bulk of the staff at SASSA were transferred through Section 197 of the Labour Relations Act, from the DSD. New people had to be appointed in terms of support services. The bulk of the staff were transferred for grant administration-related activities. Amidst the financial constraints and budgetary allocations, areas had to be prioritised that dealt with operations, and it was true that problems relating to asset management could not be divorced from the transition that had taken place. Most of the Asset Registers that were kept by the provinces left much to be desired, and SASSA struggled to reconcile them up to the level where they were now. All assets had subsequently been verified, by 30 November 2009.
Mr Steele asked for time frames for the migration to an accrual based accounting system.
Mr Pakade said that this was obviously a challenge because it was being implemented at the same time as the financial management system. SASSA had acquired a team of accountants to ensure full compliance with general accounting practice. The National Treasury had been approached formally, to alert it to the possibility that an extension of one month might be required. NT had indicated that the situation would be monitored, and at an appropriate time would decide whether to allow for an extension for the finalisation of financial statements.
Mr Mpho Mofokeng, Chief Financial Officer, SASSA, said that the organisation was in the process of transferring the Asset Register to the new Oracle system. In terms of the action plan, SASSA had its own steering committee, as well as a steering committee with the National Treasury, to constantly assess progress.
Mr Steele referred to page 99 of the Annual Report, and asked for comment from SASSA on the last paragraph which related to non-compliance which “might have resulted” in fruitless and wasteful expenditure. He had found it disconcerting that mention had been made of this matter of loss in such a casual fashion, and asked why this was put in the report. He asked further how many of the assets were missing.
Mr Mofokeng initially said that he did not have the figures at the meeting, then hastened to add that the value of loss of the assets in the truck was R298 956.
Ms Muthambi referred to page 100 of the report and asked what the progress was on the investigations into fruitless and wasteful Expenditure.
Mr Pakade said that the initial step in the process was to take all the identified fruitless, wasteful and irregular expenditure reports to the Financial Misconduct Board, so that it could further investigate the matter, and then submit a report to the CEO for action to be taken. Mr Mofokeng would give a fuller account of the situation because he was also the Chair of the Financial Misconduct Board.
Mr Mofokeng said that the total fruitless expenditure identified was R1.2 million. This related to the bandwidth acquisition, and it was labeled as “fruitless” because it was not used for some time by the mobile trucks, and some of the trucks had not been repaired timeously. The Financial Misconduct Board had completed its investigation report and presented its findings so that the labour relations unit could take action against the officials involved. The other issue was project management, and the fact that contract management was not properly handled. Action was also being taken on this matter. The third area was the issue of transport - for example, vehicle repairs not being taken care of timeously - and all persons involved in misconduct here were also to be dealt with.
Mr Steele asked what the Financial Misconduct Board was, whether it was an internal operation or was out-sourced, or if it effectively was the Internal Audit unit. He also asked about its position and capacity.
Mr Pakade responded that the Financial Misconduct Board was basically an internal committee, which was an internal control measure. It would give effect to the requirements of the PFMA that fruitless, wasteful and irregular expenditure had to be dealt with.
Mr Steele asked if SASSA could provide a figure for the financial conduct reported on page 178 in the Annual Report.
Mr Mofokeng said that the total value was R69 million, of which R41.8 million was for the year 2007/8, and R27 million was for 2008/09.
Mr Singh asked who would be taking responsibility for the R400 million overdraft. With regard to goods and services, he asked what had caused the increases in maintenance and repairs.
Mr Pakade responded that the Accounting Officer had written to the National Treasury to indicate that SASSA was in dire financial straits, and Treasury had requested that a turnaround strategy be developed to address the situation. The key issue here was to save costs on the handing fees. SASSA was currently working with the Special Investigating Unit (SIU) and with other law enforcement agencies to recover the money from the banks.
Mr Mofokeng said that maintenance and repairs related to the mobile trucks. SASSA was planning to ensure, through the turnaround strategy, that it saved R74 million as the overdraft was paid back.
Ms Matladi asked what had happened to the officials who had failed to follow the proper tendering process.
Mr Pakade said that the CEO had condoned this action.
Ms H Lamoela (DA) asked about the cost incurred for the 40 mobile units, and if all the 40 mobile units were always in use.
Mr M Malale (ANC) said that the Committee needed the names of the persons who had flouted procedures.
Mr Pakade said that SASSA was also very concerned with situation and had commissioned a review of all irregular processes.
Mr Malale said that the AG’s Report had shown that there were no internal controls for the administration of the grants, and asked SASSA to explain this.
Mr Pakade said that SASSA was progressively implementing control measures and also seeking assistance from the National Treasury.
Mr Malale said that in the year under review, SASSA had spent R624 million for social relief of distress. The AG, however, had indicated that SASSA could not always confirm beneficiaries. He asked if this meant that SASSA could not confirm who had received the food parcels.
Mr Pakade said that there were challenges, but all the necessary processes and procedures were in place to deal with the challenges.
Mr Malale asked if SASSA had a complete and up to date register and database of beneficiaries for food parcels.
Mr Bandile Maqatuka, Executive Manager: Customer Services, SASSA, said that a standardised process for social relief of distress had been developed, and all the regions and provinces had been instructed to capture all the issues on the SocPen system.
Mr Malale asked how the applications for beneficiaries were maintained.
Mr Maqatuka said that, for most of the regions, the manual system was still being used, except in one particular office in the
Mr Malale asked if SASSA was able to provide the Committee with the numbers of potential beneficiaries.
Mr Maqatuka said that SASSA had electronic records for all applications on a daily basis. For Social Relief of Distress, records were still being taken manually, but from 1 April all records would be captured electronically.
Mr Malale said that SASSA had drafted a standardised policy for this grant, and asked if it was now operational.
Mr Maqatuka said that SASSA had drafted a standardised procedural manual, with a view to ensuring uniformity for this programme throughout the country. This programme was now operational.
The Chairperson asked if the Committee could have a copy of this programme.
Mr Maqatuka said that he did have a copy and would give it to the Committee today.
Mr Malale said that the AG had indicated that SASSA was not following supply chain management procedures when these food parcels were procured. He asked for an explanation for this problem.
Mr Pakade responded that there were normal tender processes that should be followed. However, because of the urgent need for the allocation of this money towards the end of the financial year, there was a deviation from the open tender processes. However, this required some control measures, so all regions were instructed to utilise a quotation for their supplier databases. Any instance of non-compliance that resulted in irregular expenditure would have to follow the processes and procedures as outlined by the Financial Misconduct Board.
Mr Malale asked for the names and positions of individuals who had flouted the laws, and for the amounts involved. The Committee would need to assess whether disciplinary procedures were instituted against these individuals, to ensure that they were held accountable for their actions.
The Chairperson noted the fact that government sometimes procured services at highly inflated prices.
Mr Malale asked why there was overpayment to a supplier for R142 million, and who was this supplier.
Mr Mofokeng said that the name of the person was not available at present, but would be made available to the Committee.
The Chairperson asked who had made the payment, and if the details could be forwarded to the Committee, noting that someone had authorised the payment. He asked what had happened to that person.
Mr Malale asked for an explanation for the fact that former employees owed R10.2 million to SASSA.
Mr Mofokeng said that the problem was a national one, and normally started with the supervisors. It was not only a human resource issue.
The Chairperson asked if SASSA was able to identify the person or persons responsible for paying pensions to these people when they terminated their service, whilst they still owed money to SASSA.
Mr Mofokeng said that SASSA was aware that it was the two supervisors.
The Chairperson asked what had happened to the supervisors.
Mr Mofokeng said that nothing had been done about the situation.
The Chairperson said that the Department was owed money and now it seemed that this money was lost.
Mr Mofokeng said that the money was not lost, as it was going to be recovered.
The Chairperson asked SASSA how it was going to recover the money if the people involved had already left. He noted that because nothing had been done about the supervisors, there was no reason for them not simply to continue being irresponsible.
Mr Mofokeng responded that it was important to note what SASSA was doing to avoid similar situations in future. Recently, it had engaged with HR on a similar case, and pension payments had not been approved until investigations took place. Measures had been in put in place to avoid recurrence.
Mr Malale asked for the reasons why 571 persons had resigned from the entity.
The Chairperson asked that this question be reserved for later.
Mr Thobejane asked for an explanation regarding the 4 100 employees who had been handed over for disciplinary action as stated on page 47 of the Annual Report.
Ms Thandi Sibanyoni, Executive Manager: Audit and Risk, SASSA, said that these disciplinary matters referred to the investigations being conducted by the SIU. Once the investigations were completed, the SIU had the responsibility to prepare disciplinary files and hand them over to the different departments. Those persons were not employees of SASSA, nor were they employees of the Department of Social Development.
Ms Chiloane said that the AG had reported that the distribution of Relief Aid had not been performed in a consistent manner in all provinces. She asked why provinces were not prepared equally, and asked what was the remedial situation at present. She asked further which provinces were most affected by this finding.
Mr Pakade said that the priority for SASSA was now to develop uniform guidelines for all relevant systems to address all these problems.
Mr Steele asked whether the database for Social Relief of Distress (SRD) grants, which was due for electronic activation on 1 April, would be linked to all the other databases such as South African Revenue Services and the National Treasury, so that non-qualifiers could be eliminated by their identity numbers.
Mr Pakade said that that was SASSA’s vision for the future. SASSA was not only working on SRD grants in this regard but on social grant applications as well. SASSA was currently linked only to the Department of Home Affairs database.
Ms Matladi and Mr Singh asked about the monitoring of food parcels and if there were any mechanisms in place to effect this.
Mr Pakade said that there were policies, but the control mechanisms in place regarding these procedures were not satisfactory, as they did not ensure that food parcels were adequately distributed. SASSA was looking into alternative ways for food distribution to eliminate the risks.
Mr Thobejane referred to page 151 of the Annual Report and asked for an explanation regarding the number of posts indicated and the vacancy rates.
Mr Madonsela said that this referred to the time before SASSA become operational. The Department had benchmarked what it thought was an acceptable ratio for the number of beneficiaries and the number of staff members. The numbers reflected in the report were 1: 800 beneficiaries. It had, however, been difficult to get sufficient resources to fill those posts over a period of time, and the number of posts filled were far less than the DSD had anticipated.
Mr Pakade mentioned that the 18 653 posts were based on the norms and standards determined at the time, but there had been ongoing negotiations between SASSA and the DSD with regard to the appropriate structure, for which funds were needed. This culminated in an interim structure that was approved by the then Minister of Social Development, with a specific requirement that SASSA had to review its structure in line with the strategy and configuration of the regions. Six months was set aside for this process. SASSA had realised that a bigger process had to be undertaken, and the Minister of Social Development had now mandated SASSA to go through a business process review, to look at a more appropriate configuration for this entity in terms of its mandate.
Mr Thobejane said that the explanations provided were not satisfactory.
Mr Malale asked if SASSA had a database with records of all the organisation’s debtors.
This question was not directly answered.
The Chairperson reiterated the concerns about the target and ratios and the challenges of such an approach, and closed the subject.
Deputy Minister’s closing remarks
Hon Bathobile Dlamini, Deputy Minister of Social Development, thanked the Committee for the time it had spent assessing the report of the Auditor-General. She had made copious notes to ensure that SASSA would follow up on the issues as promised. It was stressed that this interaction was not seen as a threat but as a process to ensure that it became used to good practices and proper accounting procedures. The Acting CEO and other officials at SASSA had always tried their best to ensure that SASSA was above board.
She touched on the issue of the Board that was raised earlier. She agreed that there was a large amount of money being handled, that was intended for the most vulnerable. She said it could be unhealthy and lead to unintended consequences if this money was given to an outside body that was not directly accountable to the government.
The other issue of concern was the very complex issue that the CEO of SASSA accounted directly to the Minister, and not to the Director General of DSD. The Director General (DG) of DSD was ultimately responsible and would have to account if anything was wrong, but there was substantial funding over which the DG had no authority. SASSA has been looking into how to ensure that the DG would get the reports and then have a composite report of the whole Department. It was pleasing that the DG had touched on the historical background of SASSA and that the Acting CEO had touched on the issue of the forward looking strategies in terms of the payment of grants.
SASSA was to follow-up on the issues raised by the Committee. These issues include fruitless and wasteful expenditure, issues of accountability, the internal control systems, and the turnaround time for disciplinary procedures. It was not easy to deal with disciplinary issues in government, as labour relations came into play. SASSA would furnish information on cases that had been finalised, and the ones that were still under investigation. It was not clear whether there was any problem with the finalized issues, but there was a need to be careful with those under investigation.
The list regarding the Social Relief of Distress was shocking and had to be cleaned up so that SASSA could give the Committee proper information.
SASSA was in the process of trying to consolidate relief funds or emergency funds, so that they could be controlled centrally. It was not possible to come up with a consolidated list now, because people who received food parcels or social relief of distress funds were not permanently stationed in one place. SASSA responded to emergencies, and there was a need to develop systems to be able to show that the people who received Social Relief of Distress funds were really in need of these funds.
She noted that perhaps the DSD and SASSA might not resolve all issues by 1 April and she thought that perhaps further discussions were needed before reaching a more workable starting point for accounting for all activities.
She noted that SASSA would supply the names of those making the over-payments and the issues raised by the CFO would be investigated. The Committee would also be informed about performance bonuses.
At present SASSA had an Acting CEO, and the Committee would receive information on the progress of matters regarding the suspended CEO. SASSA worked very closely with the SIU because of the amount of money being handled, and SIU had presented SASSA with a report on its preliminary investigations into the suspended CEO. The CEO was put on special leave so that a proper investigation could be done, and was then charged, but whilst the charges were being formulated, he had attempted to resign. That resignation was not accepted. It was felt that, in respect of such a senior position, the person would need to give a three-month notice period. The Minister had instituted a disciplinary hearing. SASSA was awaiting the final report to present to the Minister.
The meeting was adjourned.
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