The Chairperson of the Commission for Conciliation, Mediation and Arbitration briefed the Committee on the response to the findings of the Auditor-General on the 2009/2010 annual report. The Commission had compiled a template to indicate the action taken to address the 18 items identified by the Auditor-General. Most of the findings were related to problems with supply chain management processes. The processes followed by the Commission were not aligned with the Public Finance Management Act and the National Treasury regulations. The Commission reported that most of the recommendations had been implemented.
The Chairperson was seriously perturbed that the presentation document was not received by the Committee five days prior to the meeting, as required. The Members of the Committee had no opportunity to discuss the information provided with the respective parties and arrive at a collective position on the action taken by the Commission. Members of the Committee limited their questions to matters of clarity. The Commission would be called before the Committee again at a future date.
Members raised questions about the supply chain management policy, the recovery of an overpayment to a supplier, the inadequate recording of deviations to procedure, the disciplinary action taken against staff members responsible for irregularities and the amount of travel by officials.
Members suggested amendments to the Budgetary Review and Recommendations Report concerning a more detailed business plan, the deletion of an inaccurate percentage and the rephrasing of certain words. An additional recommendation would be included that the Department of Labour speeded up the process of filling the existing vacancies in order to provide sufficient resources for the planned mobile service units intended to reach outlying areas.
The Budgetary Review and Recommendations Report of the Committee was adopted, with amendments.
The Chairperson said that the Committee had requested the meeting with the Commission for Conciliation, Mediation and Arbitration (CCMA) to hear the response to each and every issue raised by the Auditor-General in his findings on the annual report for 2009/2010. The Members wanted to know what the entity and the Department were doing to deal with the matters raised and the relevant timeframes so that the Committee could engage on the issues and consider recommendations where necessary.
The Chairperson had not been able to study the document because she had only received it that morning. She referred to the policy decision, which stipulated that documents should be sent to the Committee at least five days in advance of a meeting. The Committee’s secretariat had only received the CCMA documentation at 17H30 on the preceding day but the working day ended at 17H00. There were channels through which documents could be sent after hours if necessary and information regarding the alternative procedure had been sent to the entity concerned. She requested an explanation on why the procedure that was communicated had not been followed.
Ms Tanya Cohen, Chairperson, CCMA replied that the Commission had not been aware of the five day policy. The letter that was received by the CCMA had indicated that the meeting would be a briefing to the Committee. The Commission was unaware that the briefing documents should be forwarded to the Committee in advance. She acknowledged that the document was sent to the office of the Minister only during the previous weekend. She apologised and confirmed that the policy would be complied with in future.
The Chairperson was surprised that Ms Cohen had no knowledge of the policy as it was not the first time that the CCMA had been to Parliament. A letter was written to the Acting Director-General of the Department of Labour (who had since been appointed permanently) about the requirement that the relevant documents had to be provided at least five days in advance. The matter would be taken up with the Director-General. The Members needed the opportunity to familiarise themselves with the documents and to discuss any matters raised with their respective parties. The recommendations presented to the Committee might be regarded in a superficial manner as the Members had not had the opportunity to engage or discuss the issues.
The Chairperson said that the ANC, as the ruling party, was taking issues of maladministration, non-compliance, financial irregularities and any suggestion of corruption, very seriously. If the documents had been received five days in advance, the Members would have taken a collective decision on any serious issues beforehand and if any recommendations did not further the objectives of the party, the entity would be informed. When dealing with matters of irregularities and non-compliance and the other issues raised by the Auditor-General, it had to be remembered that the ANC took the institution of the Auditor-General and any issues that were raised in audits very seriously. Any opinion on the recommendations made by the CCMA would be the personal opinion of the Member rather than the collective view of the party.
The Chairperson ruled that the CCMA would be granted the opportunity to make the presentation but would have to return once the Members had an opportunity for a collective engagement. Certain instances of irregularities involved the police and Parliament might have to be involved in the matter. No single incidence of irregularity would be swept under the carpet. It was unfortunate that additional time was needed to allow the Committee to confer, regardless of the recommendations made by the CCMA.
Mr Dickson Mkondo, a representative from the Office of the Minister of Labour, confirmed the policy on the submission of documents. The information that the documents were required at least five days in advance of a meeting with the Committee had been communicated to the Director-General. He regretted that there appeared to have been a misunderstanding. He confirmed that the relevant document was only received on the previous Saturday evening and was forwarded to Parliament on the following Monday morning. He had subsequently learned that the person to whom the document was e-mailed to was on leave.
Briefing by the CCMA
Ms Cohen presented the CCMA's response to the findings of the Auditor-General on the Commission’s annual report for 2009/2010. She explained the template used to collate the relevant information, which itemised the findings and recommendations of the Auditor-General. The response of the CCMA to each issue raised was indicated and information on what action was taken was provided. The status of the work in progress was indicated (see attached document).
The Auditor-General had identified 18 items requiring attention. Most of the items were related to the supply management policy of the CCMS being misaligned with the legal prescripts of the Public Finance Management Act (PFMA) and the regulations of the National Treasury. The Auditor-General, in the debriefing meeting with the CCMA on their investigations, had agreed to perform an interim audit by early 2011 to validate the compliance with the recommendations.
The recommendations were submitted to an internal audit process. Feedback had been received and the confirmation that the recommendations had been implemented to the satisfaction of the Auditor-General was awaited. The CCMA was considering the appointment of a chartered company secretary with the necessary qualifications and extensive public sector experience to vet and to advise the Commission on all policies and decisions concerning compliance with the legislation and regulations.
The Ministry had supplied the Committee's Secretariat with a number of additional documents, i.e. the revised supply chain management policy of the CCMA, the annexures to the Bid Evaluation Committee forms and the Bid Adjudication Committee forms and the annexures on the Decision Registers and Deviation Registers. These administrative measures had been implemented during the year to guard against further incidents of irregular expenditure from occurring.
Mr I Ollis (DA) referred to item 7 on the template, which dealt with the overpayment of an amount of R377,160 to a service provider that the CCMA was attempting to recover. He wanted to know if the amount would be written off if it was not recovered. Concerning item 9, he was concerned about the inadequate recording of deviations and wanted to know why three quotations were not obtained. The explanation provided for item 12 was unclear. He asked if the staff member concerned had attempted to avoid the process requiring the invitation to submit competitive bids by splitting the bill. He wanted clarity on item 13 and asked if it was necessary to fly staff around the country to such an extent. He suggested that the explanation was placed on record so that the Committee would be able to respond to questions on this particular issue in future.
Mr G Boinamo (DA) observed that whenever irregularities occurred, the CCMA made recommendations and the case was closed without any reference to retribution for those responsible for the maladies. He queried the silence on the disciplinary action taken by the CCMA.
Mr E Nyekembe (ANC) said that the CCMA had made a good start in addressing the matters raised by the Auditor-General. Referring to item 1, he asked why the status was recorded as ‘closed’ when the final point on the measures implemented stated that the final input from the Auditor-General was awaited before the updated supply chain policy was submitted to the Governing Body for approval. As the input from the Auditor-General was still pending, the matter could not be considered to be closed. He advised that the CCMA worked within the framework recommended by the Auditor-General to rectify the matter. Referring to item 5, he noted that the corrective action taken was that all CCMA management and supply chain practitioners underwent extensive training on PFMA and Treasury prescripts relating to supply chain procedures and processes. He suggested that such training be on an ongoing basis. Referring to item 7, he recalled that the CCMA had disclosed the problems experienced with the service provider concerned during the briefing to the Committee on the 2009/10 annual report. He asked the CCMA to refresh the memories of the Members on the matter. With regard to the amount of travelling by CCMA officials, he queried whether officials were expected to travel to provinces other than the province where they reside. Item 17 dealt with the disciplinary action taken against an employee for the unauthorised payment of a salary advance. He suggested that the CCMA included details of disciplinary action taken against employees in future annual reports, as was done by the Unemployment Insurance Fund, the Compensation Fund and the Department of Justice and Constitutional Development.
Ms Cohen explained that the CCMA was engaging with the service provider in an attempt to recover the overpayment of R377,160. The business was small and the CCMA preferred to have the money repaid over a period of time rather than cause the business to go under by insisting on a single large payment. The CCMA did not intend to write the overpayment off.
Mr Ngoako Sekgololo, Chief Financial Officer, CCMA, responded to the question concerning the non-compliance with supply chain management policies (item 9). The item referred to the recruitment of human resource skills and three quotes had to be obtained from recruitment and placement agencies. In this particular case, the quotations were sourced from a single vendor but the transgression was detected before the payment was processed. The matter was reported to the Finance Committee and to the Governing Body for condonation. At the time (i.e. 2008), the Supply Chain Unit was in the process of being established and the procedure stipulating that three quotes had to be obtained from different suppliers was subsequently implemented. The incident was reported as a deviation requiring condonation in August 2008 and before any payment was made.
Mr Sekgogolo explained that the service provider referred to in item 12 had entered into an agreement with the CCMA concerning the advertisements placed in newspapers as far back as 2004. The service provider (a media house) obtained quotations from newspapers such as The Sunday Times, City Press or Sunday Independent and the CCMA decided which quote would be accepted. The deviation was that the service should not have been performed by the media house but by the CCMA amongst different media houses. The advertising expenditure for the period under investigation (approximately 3 years) amounted to R612,760. The Auditor-General found that the services were of the same nature, even though the CCMA had had requested quotations from three different media houses. The orders were split to avoid inviting competitive bids for transactions over R200,000.
Ms Cohen responded to the queries about the extent of travel by CCMA officials. The officials needed to travel because there were often labour disputes in outlying areas and it was impractical and costly to appoint officials with the necessary expertise who resided in those areas on a permanent basis. The Governing Body and the Human Resources Committee had considered the appointment of local officials on a contract basis and reviewed the deployment of staff and the level of skill required.
Ms Nerine Khan, Director, CCMA explained that there were not enough senior Commissioners who could be deployed to all the provinces. The Governing Body had developed a strategy whereby management could intervene in the worst performing provinces by deploying a management team with the necessary expertise to resolve the disputes referred to the CCMA. This was a roving team with specialised skills that was deployed as and when needed and had proved to be very successful. In addition, certain personnel held both national and provincial positions, and were required to travel frequently. An example was Mr Ronald Bernikow, who was currently deployed in the national office in
Responding to Mr Boinamo’s question, Ms Cohen explained that the third column indicated the implementation of action taken on the recommendation and the fourth column indicated the current status of the recommendations. In response to Mr Nyekembe's question, she said that the status of ‘closed’ indicated that the old supply chain management policy had been replaced by the new policy. The recommendation was that the new supply chain management was compliant with the PFMA and National Treasury regulations.
Mr Sekgololo advised that the CCMA had reached an agreement about the process with the Auditor-General approximately two months ago and the matter would be finalised shortly. The relevant documents had been provided to the technical department of the Office of the Auditor-General. The CCMA had received feedback from the external auditors appointed by the Auditor-General, Deloitt's. The due date for feedback from the Auditor-General was the end of October 2010. The Governing Body was scheduled to meet on 24 November 2010. The Auditor-General had advised that the CCMA applied the exact legal precepts until such time that the CCMA had adopted its own supply chain management policies, including the delegation of authority and other specific matters.
Ms Cohen agreed that training should be ongoing as there were always new staff coming in and existing staff constantly required refresher courses. The precepts and regulations changed from time to time and it was important to keep up to date with the latest requirements. Many problems identified in the supply chain management policy resulted from the fact that the policy was not aligned with the new requirements.
OMs Khan pointed out that the summary table in the annual report provided information on the disciplinary action taken against employees. The CCMA would be happy to provide more detail if required.
Mr Nyekembe warned that too much detail on disciplinary action could allow the employee concerned to take legal action against the employer if the matter was still being pursued.
The Chairperson thanked the CCMA for the presentation. She reiterated that the Members would have to collectively consider the recommendations and the action taken by the CCMA. The Commission would be requested to again appear before the Committee at a later date.
Consideration and Adoption of the Budgetary Review and Recommendation Report
The Chairperson tabled the Budgetary Review and Recommendation Report for adoption by the Committee. The report was compiled by the Parliamentary Researchers. She suggested that the Committee considered the report on a page-by-page basis and that Members noted any objections.
Mr Ollis was not in agreement that the service delivery programme of the Department had delivered on the targets set. The same position applied to the recommendations on pages 7 and 8. He felt that the business plan was too vague and generalised and did not specify timeframes and quantities. He felt that delivery had been only partial.
The Chairperson agreed that the extent of delivery was unclear. This concern had been raised on prior occasions and would be noted in the report. She questioned if the recommendations would be affected and after some discussion, the Members agreed that the recommendations were not affected.
Mr Ollis suggested an additional recommendation. With regard to service delivery (dealt with on page 8 of the report) he proposed rephrasing 'relatively delivered' to 'partially delivered' on the set targets. The Committee had conducted oversight visits to labour centres and the Members had not been happy with the level of service delivery at the centres. The percentage of 41% quoted on page 9 was not possibly accurate and he proposed that the percentage was deleted.
Mr Ollis proposed an additional recommendation to be inserted on page 13. The recommendation should include that the business plan must have more detailed goals and that the timeframes and quantities were specified to facilitate better monitoring. He agreed with the idea of mobile labour centres and suggested that 'plus staff' should be added to the recommendation because additional staff would be needed. He recalled the Committee’s oversight visit to a labour centre where this problem was highlighted as staff was already overstretched.
The Chairperson asked the Members if they agreed that the recommendation concerning additional staff should be added.
Mr Nyekembe said that the issue was how to take the services offered by the Department of Labour to remote areas. The mobile units were meant to address this issue. He did not see the relevance of the suggestion as visits to the remote areas would not take place everyday. He felt that Mr Ollis should substantiate his recommendation.
The Chairperson asked Mr Ollis to expand on his recommendation for the benefit of the other Members.
Mr Ollis said that during the Committee's oversight visit, the Members had complained about the lack of service, the long queues and the fact that the computer system did not work. The staff had responded to these observations of the Members by stating they were short-staffed and that it was necessary for inspectors or front desk staff to undertake visits to outlying areas. The implication was that staff would have to be utilised from the existing labour centres if additional staff was not appointed for the mobile units. If additional staff was not provided, the situation would worsen.
Mr Nyekembe said that the large number of vacancies in the Department of Labour had contributed to the problems raised by Mr Ollis. The recommendation for additional staff should not be based on the need to staff the mobile units but rather on the need to fill the existing vacancies.
The Chairperson remarked that the Members were not in disagreement on the need to provide adequate resources for the mobile units. She agreed that the Department had to speed up the process of filling the existing vacancies to ensure that the implementation of the mobile units would not result in interruptions in the labour offices.
Mr Nyekembe proposed the motion for the adoption of the report, with amendments. The motion was seconded by Mr Ollis. The Committee adopted the report of the Committee, with amendments.
The meeting was adjourned.
- PC Labour: Briefing by Commission on Draft Report of the Study Tour to Brazil; Adoptiuon of minutes Part 1
- PC Labour: Briefing by Commission for Conciliation, Mediation & Arbitration (CCMA) on recommendations by Auditor-General Part 2
- PC Labour: Briefing by Commission for Conciliation, Mediation & Arbitration (CCMA) on recommendations by Auditor-General Part 1
- PC Labour: Briefing by Commission for Conciliation, Mediation & Arbitration (CCMA) on recommendations by Auditor-General
- PC Labour: Briefing by Commission on Draft Report of the Study Tour to Brazil; Adoptiuon of minutes Part 2
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