In the presence of the Deputy Minister of Justice and Constitutional Development, the Committee questioned the Department on its Annual Report and Financial Statements 2009/10. Since 2005/06 the Department had consistently received a qualified audit report from the Auditor-General. The Third Party Fund was a basis for qualification for the fifth year running. A new basis for qualification in the 2009/10 financial year was irregular expenditure in respect of non-compliance with the Preferential Procurement Policy Framework Act.
Members frustrated by their late receipt of copies of the Annual Report, were at a loss to know why the Department lacked ready answers to so many of their questions, and were not satisfied with the promise of written replies subsequently. The Department should have better prepared itself. Members asked about irregular expenditure, fruitless and wasteful expenditure, restatement of corresponding figures, the Third Party Fund, non-compliance with the Public Finance Management Act, and non-compliance with Treasury Regulations. Members also asked about the internal audit, were concerned about the effective functioning of the Department's Audit Committee and poor attendance at its meetings, asked if the Department was doing anything to ensure transfer of skills while building capacity, asked why a critical post was not filled, asked how much was paid to consultants and why, what the Department's vacancy rate was, if it was correct that some staff members were on holiday with pay whilst they were not entitled to leave, asked how common the performance of staff beyond the call of duty was to warrant such amounts for performance awards, about the last financial statements produced by the Third Party Fund and the prevalence of fraud, about the workings of the Justice Deposit Account System, why just one permanent magistrate had received a performance award, when the Department would implement the Committee's resolutions, when it would it introduce a risk management plan, and when it would be fully functional.
The Chairperson was worried that there were no standards or norms on the issue of consultants. It was his observation that consultants were interested only in getting more work for themselves; meanwhile, they said the most racist things about the Government at the same time as they signed big contracts. Officials should not privatise decision-making to consultants who showed no loyalty to South Africa whatsoever.
The Deputy Minister said that there must be no doubt as to the Department's political commitment. The Public Finance Management Act indicated the direction to be taken towards the kind of country that we wanted to build. The Government was committed to access to justice and the Department was doing its best to achieve it through conversion of courts, magisterial districts, and providing high courts to provinces, also through the small claims courts. The Department would work with sister departments in the cluster to combat crime and corruption, and fight corruption in the cluster. This was why the Department had a zero tolerance policy. The Department thanked the Office of the Auditor-General and promised that the existing extensive interaction would be intensified. There would be greater involvement of the executive authority. Over-dependence on consultants concerned the Department considerably; in line with the Government's decision, the Department had done away with labour brokers. The problems of the Department were deep rooted and had a long history; the Department could not promise a clean audit next year (2010/11), but it was confident in the medium term of achieving its objective of a clean audit.
Introduction and welcome
The Chairperson welcomed the Hon Andries Nel, Deputy Minister of Justice and Constitutional Development, delegates from the Department, the Office of the Auditor-General of South Africa (AGSA), and the National Treasury, and asked delegates and Members to introduce themselves.
The Deputy Minister conveyed the apologies of the Minister, the Hon Jeffrey Thamsanqa Radebe, who was obligated to attend a meeting of a Cabinet committee. He thanked the Chairperson for the invitation to attend the hearing. He emphasised that sound financial administration was one of the Department’s highest priorities in its aim of achieving access to justice for all South Africans.
The Chairperson recalled the Committee’s earlier engagement on 24 February 2010 with the Department: he hoped that this meeting would continue in that spirit. He noted that Justice and Constitutional Development (DoJ&CD) was one of the strategic departments of Government.
Mr S Thobejane (ANC) registered his concern that the Department had apparently not submitted its Report to the Committee in advance: this was an “abnormal situation”. He had received his copy only that morning.
Mr M Steele (DA) said that he had visited Parliament’s document store at lunchtime the previous day and found no copies available.
Ms Nonkululeko Msomi, Director-General: DoJ&CD, said that the required number of copies had been sent to Parliament in mid-September 2010; she had checked with the Department’s parliamentary officer that the reports had been submitted, and additional copies together with some copies on compact disc were sent; but she apologised in case the reports had not been given to Members of Parliament. In future, the Department would follow through the submission process to verify that reports actually arrived in Members' hands.
The Chairperson endorsed Mr Thobejane’s concern, and asked the Department please to check in future where the reports actually landed, and when. He recalled a previous instance in which some reports had remained lying in boxes where they had landed and were distributed to Members only at the last minute.
Department of Justice and Constitutional Development Annual Report 2009/10 hearing
Mr Thobejane asked about irregular expenditure in respect of non-compliance with the Preferential Procurement Policy Framework Act. This was a new basis for qualification in the 2009/10 financial year. (Annual Report, page 278, table 27).
Ms Msomi replied that if the Department had applied the correct prescript, the Department could have reached the correct determination.
Mr Thobejane asked about the capacity of the unit concerned; it was important to avoid irregular expenditure for the third year running.
Ms Msomi wanted to decouple matters. The irregular expenditure (Annual Report, page 235) referred to expenditure, which, she concurred, was indeed irregular. Last year the auditors had specified this item. She conceded that the Department should have followed the correct prescript. The Department needed to quantify the correct intervention, perhaps with the help of the National Treasury. To the extent that there were constraints upon the Department of insufficient capacity, she wished to assure Members that the Department had recently appointed a head of the supply chain, and the director of supply chain management was assisting. This was an area in which the Department was still endeavouring to build capacity.
Mr Thobejane inferred that in the previous audit part of the problem was capacity. He asked who was “sitting on” this responsibility.
Ms Sandra Gomm, Chief Financial Officer (CFO): DoJ&CD, replied that this was the first appointment of a chief director for supply chain management nationally. Some of these instances of non-compliance were because of the lack of skills in those areas. There had been a vacancy for a considerable period of time.
Mr Thobejane rebutted Ms Gomm; this was not an excuse. The Director-General must establish the systems necessary in order to do the work.
The Chairperson asked why a critical post was not filled.
Ms Gomm replied that it had been necessary to follow the appropriate processes. It was the subsequent human resource process that the Department had to act upon.
Mr Thobejane asked Ms Gomm to please name the person concerned: a reply “in parables” was not acceptable.
Ms Gomm replied that a single person could not be blamed. It was a human resources function subsequent to the approval of the Director-General. The appropriate unit within the human resources division would ensure that the posts were advertised and candidates short-listed for interview.
Mr Thobejane said that there was no other excuse. There was no other reason: hence it might be asked where the audit committee of the Department was.
Ms Msomi replied that it was “one of those things”; the second issue on this question was that if we were talking at systems level it was indeed the responsibility of the Director-General to ensure that the system was in place; the system of procurement was in place but it was based on the wrong premise.
Mr Thobejane demanded that Ms Msomi say whether there was dereliction of duty; she had failed to do what she was expected to do.
The Chairperson said that it should not have happened at all. There should have been provision of capacity in better time. There was sufficient capacity now, but there had not been enough previously, with the results that were now evident.
Mr Thobejane asked about the internal audit.
Ms Msomi replied that the Department did have an internal audit. The Department was strengthening this area because it had realised the need to do so. She was not defending the internal audit, however; a fully effective internal audit process could have helped the Department detect problems at an earlier stage.
The Chairperson inferred that it was clear that the internal audit had not been functioning properly.
Mr Motsamai Karedi, Chairperson: Audit Committee, DoJ&CD, replied that these matters had been brought to the management and the Audit Committee had made recommendations. There would be a job evaluation.
The Chairperson sought a reply in more practical terms. He asked what was happening to the Audit Committee's recommendations to management.
Mr Karedi outlined the skills audit to address shortages and capacity.
Mr Thobejane asserted that, despite the internal audit, the Department could not implement what was recommended to it. It was important to avoid a recurrence of the same situation.
Mr N Singh (IFP) was not satisfied that the internal audit was assisting the Department. He was worried about the appointment and payment of consultants from appropriated funds (Annual Report, page 323, table 16.1 and 16.2). How much was paid to consultants and why?
The Chairperson asked what the Department's vacancy rate was.
Dr Khotso De Wee, Chief Operations Officer, DoJ&CD, gave information on the vacancy rate.
The Chairperson inferred that the Department had “warm bodies”; but if so it had to be asked why there were so many consultants, contractors and agencies, and how these were linked with skills.
Ms Msomi replied that it was true that the Department had a history of reliance on consultants for a time. Naturally this caused erosion of internal skills; however the use of consultants was not always bad. The Department had not built enough internal capacity, but it had done away as much as possible with external support.
The Chairperson asked in which areas.
Ms Msomi replied that the level of intensity differed; primarily consultants had been deployed in finance.
The Chairperson said that this would not explain the delay; that would be but one of the elements. He endorsed Mr Singh's question.
The Chairperson asked how far the Department had progressed with the internal audit.
Ms Msomi replied that the Department firstly did not have internal audit as part of the executive committee (Exco) and secondly the internal audit was not able to tell Exco what was emerging from its own processes – that aspect had been done; the Department was no exception to internal jostling for positions. However, the Department was “turning the corner”.
The Chairperson asked about the “jostling”. He perceived that internal audits were disliked as prying eyes.
Ms Msomi replied that if the Department had had an effective internal audit it would not be in this position. The internal audit needed capacity and the Department was dealing with that.
Ms Msomi identified three critical sets of skills, to fulfil the requirements for which the Department was to advertise for job applicants.
The Chairperson asked if the Department had already advertised.
Ms Msomi replied that the positions would be advertised. She had not brought the details to the meeting. She could submit the plan afterwards. The Department had had a number of interactions with the head of internal audit and had warned him about small issues of discipline. The Department was short of three or four persons in auditing, a section which needed at least a total of 10 persons.
Mr Singh asked if the Department was doing anything to ensure transfer of skills while building capacity within the staff for internal audit.
Ms Gomm confirmed that the Department was transferring skills. Consultants had helped address issues and there had since been a better audit result.
Mr R Ainslie (ANC) was concerned about the effective functioning of the Audit Committee (Annual Report, page 206). He noted poor attendance at the six meetings reported. Some of these meetings must have lacked a quorum. This was where the rot started.
Fruitless and wasteful expenditure; restatement of the corresponding figures
Mr Steele asked Ms Msomi if the head of internal audit had received a performance bonus.
Ms Gomm replied that to the best of her knowledge that member of staff had not, but she would confirm in writing.
Mr Steele asked for confirmation the next day.
Mr Steele asked Mr Karedi about the several deficiencies in internal control noticed by the Audit Committee (Annual Report, pages 206-207). There was, on the part of the Audit committee, apparent satisfaction with the key controls. He asked Mr Karedi to compare this with Auditor-General's findings on the lack of efficient systems of controls and, in the next paragraph, on the inadequate quarterly reporting (Annual Report, page 236).
The Chairperson observed that the internal audit was on of the most important matters. Its importance could into be overemphasised. Internal audit required someone who was self-driven.
Mr Ainslie asked that the Department should publish the table in a more user-friendly format.
Mr Steele asked about fruitless and wasteful expenditure, his area of focus (Annual Report, page 235). He requested the Department to explain the fruitless and wasteful expenditure arising from not using reserved accommodation and failure to board flights (Annual Report, page 280).
Ms Gomm explained that those no shows would have been on the part of the justice college when people scheduled for training left it too late to cancel because of illness. Such cases were reported by the house travel agent and the Department recovered the costs were possible through due legal process.
Mr Steele asked if these claims were invalid.
Ms Gomm replied that there was due investigation. The Department had a case If there was no sick note or due reason.
The Chairperson asked if, beyond conceptual practices, anything effective was done.
Ms Gomm replied that she would submit a detailed written report after the meeting. In one case there was condonement and the amount was not recovered. In two out of nine cases the Department had created a debt account and the Department was recovering the costs from those individuals concerned.
Mr Ainslie demanded numbers. He could not understand why cancellations were not made on time. He himself frequently changed his flights or cancelled but did not incur loss or penalty.
Ms Gomm said that she would include details in her report.
The Chairperson observed that it seemed that those who cancelled their bookings did not report to Ms Gomm or that Ms Gomm did not inform the travel agencies.
Ms Msomi said that she dealt with this part of the recovery process frequently. In the case of the no shows, she had approved only one, for a manager in KwaZulu-Natal who had provided a detailed explanation. She confirmed that she herself made cancellations in good time, but conceded that perhaps at that time the Department had been slack. She assured the meeting that the Department was serious about avoiding penalties because of no shows.
Mr Steele asked who the individuals who were negligent with renewing leases were.
Ms Gomm said that she could provide a detailed list after the meeting.
The Chairperson was aware that there was an administrative structure in the regions but who asked who was responsible.
Ms Gomm replied that the Department did not yet have a supply chain in the regional offices.
The Chairperson understood that it was decentralised.
Ms Gomm replied that each court manager was responsible.
Ms Gomm said that the Department would follow the process of the National Treasury. If that person were liable the Department would recover the funds.
The Chairperson asked why the Department was still so technical in its answers. It was surely obvious who had signed a contract. He did not detect a very firm and forward approach. Someone had to be brought to account. The cycle had to be broken.
Ms Gomm said that the leases problem had been corrected from January 2010. There should not be any further non-compliance. She agreed with the Chairperson that it was too slow a process. However, ground work was progressing. Although the Department was to blame, capacity constraints were mitigating circumstances.
The Chairperson wanted to see vigour in recovering the losses in the Department's books.
Mr Steele said that the Committee should not have to ask that recovery would take place; moreover the Committee should not have to draw answers out of the Department, whose responsibility it was to protect state assets. He was disturbed at the lack of departmental initiative.
Ms Msomi replied that the Department had not had the space to discuss the subject until now. The Department had put internal audit risk management and recoveries together. Perhaps at a different time the Department could provide the House with a project plan for discipline and recoveries.
The Chairperson asked how the insufficient capacity of the internal audit impacted on this project.
Ms Msomi replied that the Department could not let the staff concerned remain idle. These staff members must be involved in real work. There was an integrated and multidisciplinary team. Thereafter the Department could receive feedback.
Mr Steele asked about the reinstatement of corresponding figures (Annual Report, page 235). He highlighted lease commitments and contingent liabilities; the situation was getting worse, year after year.
The Chairperson asked why it was that way.
Ms Gomm conceded that it was not good to restate comparative figures. As in the meeting with the Committee in February 2010 the Department had to restate the previous year’s number since it included dollars into rands to show correct number.
The Chairperson asked how the dollars into rands conversion had arisen, and how the Department had missed the discrepancy whereas the Auditor-General had detected it.
Ms Gomm replied that the amount was incorrectly shown, but the error was apparent only when one referred back to the files.
Mr Steele asked who was responsible for this error; how could senior officials miss it, when the Auditor-General had picked up the mistake. Somebody was not doing his or her job.
Ms Gomm replied that one had to go into detail - hence the problem. The amount shown on the schedule to complete the financial statements was incorrect.
Mr Steele asked if the conversion from dollars was the only reason, and about the operating leases (Annual Report, page 278, paragraph 27.2).
Ms Gomm replied that these were the leases that were omitted in the previous financial statements.
Mr Steele asked what negative leave balances were (Annual Report, page 276, table 24).
Ms Gomm replied that negative leave balances occurred when staff members took leave but lacked any leave credits.
Mr Steele asked for confirmation that such staff members were on holiday with pay whilst they were not entitled to leave.
Mr Gomm explained that this was because of the late capturing of leave on the Personnel Salary (PERSAL) system.
The Chairperson was dismayed that these staff members were on leave when they were supposed to be at work.
Mr Steele said that so much state money was at stake. The Committee demanded a serious explanation on what should be done. He had yet to hear a serious explanation.
The Chairperson asked what had been done.
Dr De Wee replied that the Department had tried to remove employee benefits as a cause for qualification.
The Chairperson asked who was in charge of human resources.
Dr De Wee replied that every office was obligated to maintain an attendance and leave register to avoid errors. The Department had in the last nine months tightened up on capturing of leave and had decentralised the management of leave The Department was monitoring and following up on capturing leave taken.
The Chairperson asked why the capturing of leave had been slow.
The Department replied that the slow capturing was the fault of the managers concerned.
Ms Msomi emphasised that she was indeed concerned.
Mr P Pretorius (DA) said that his calculations indicated a restatement again this year.
Mr Pretorius asked why there were differences in the figures given for performance awards (Annual Report, page 263, paragraph 5, page 276, and pages 314-315).
Ms Gomm replied that she would have to reply later.
The Chairperson asked how common the performance of staff beyond the call of duty was to warrant such an amount for performance awards. He asked if there was any management of performance.
Ms Msomi replied that the Department had a performance system. Performance management was a function of the kind of contract in place. It was necessary to measure the right thing.
The Chairperson said that it was a flawed process; it was not done qualitatively; this was the reason for the Department's need of consultants. If his knowledge was correct, perhaps there were a few who were on contract, the rest were civil servants. He did not know how it applied, unless the bulk of this money went to the higher echelons.
Mr Pretorius asked Ms Msomi if she agreed that the amount was excessive; how did the Department allocate money to a specific function? Was that money given to a specific section? (Annual Report, page 316).
Dr De Wee replied that the Department did not have the specifics; he asked to submit a reply in writing.
The Chairperson was dissatisfied; Members needed information in the meeting and not to have to wait for so many answers to be sent by electronic mail (e-mail).
Mr M Mbili (ANC) said that that the Department's request to send so many replies in writing was utterly unacceptable. The Department must come prepared to provide Members with the required information.
The Chairperson asked how the budgeting was done.
The Department explained that in terms of the Department of Public Service and Administration (DPSA)’s rules the performance bonus was budgeted per component.
Mr Steele said that he hoped Ms Msomi was keeping track. In two hours the Committee had identified so many weaknesses. Ms Msomi had a massive job in holding staff accountable. He referred to the Annual Report, page 235.
Mr Steele asked about paragraph 26 on page 277. The note was not informative.
Ms Gomm apologised that her footnote was not user friendly. However, the Department had verified the information.
Mr Steele called for better financial information.
Mr Thobejane asked about the provision for non-recoverable loans to the Guardians’ Fund (Annual Report, page 280, paragraph 31, note). This was pure waste. Was the Department a financier institution? He was concerned about debts incurred by staff members. Were these non- recoverable loans?
Ms Msomi said that debtors owned the Department money not because they were loaned money but because the Department had prosecuted them and they had to reimburse the Department in such cases as vehicle accidents causing damage to Departmental property and they had to pay over 12 months
Ms Gomm said that the Government Printer had charged the Department interest; the case had been referred to the legal department and it could not find any grounds for holding any staff member liable. In the case of the Justice College the losses arising from late cancellations of flights and hotel bookings had been condoned because of the Department’s lack of capacity.
Mr Thobejane asked if the National Treasury allowed this.
Ms Gomm said that the Department had investigated the matter and tried to find someone who could be held liable, but no one could be found to be liable, so the losses were condoned.
Mr Thobejane demanded to know who was this person and why did he or she failed to do his or her work.
The Chairperson asked the Department to assume that Members were lay people and reply directly - “take it the other way round'.
Ms Gomm replied that she could submit details of these two cases the next day.
Mr Steele was adamant that it was not possible to alienate an asset by means of a donation. The case of a piece of land (Stand 113, Sheepmorton) that was donated to the Department sounded seriously problematic. (Annual Report, page 288).
Ms Msomi replied that she would wait for verification.
Third Party Fund
Advocate M Malale (ANC) asked about the Third Party Fund, a basis for qualification for the fifth year running.
Adv Malale said that there were now various directors at an operational level with funds; now there was another private entity; the money was not going through that institution. For five years there was no accountability. There was a disclaimer in 2007/08; then in 2008/09 there were no reports to the Auditor-General. The Department must outline the procedure. What, in simple terms, was the procedure?
Ms Msomi replied that money paid by debtors was deposited into an account. The Department had numerous accounts countrywide. There followed a reconciliation process.
Adv Malale interpreted this to mean that money came in and out but the state was not certain how much was received in a given month and from whom.
Ms Msomi explained that there were different types of debtors; in the case of debtors subject to garnishee orders there was a schedule according to which the Department issued a receipt and then made a comparison against the beneficiaries. However, some reconciliations were not being done.
Adv Malale noted that the Auditor-General had indeed remarked that some reconciliations were not being done. There had been a disclaimer and sub audit opinions. He asked about control systems.
Dr De Wee conceded the Auditor-General's point that the systems in courts were not good enough; the Department needed to ensure proper reconciliation. Most reconciliations were done on a manual basis. The Department had considered a public private partnership (PPP) to automate. Moreover, the Department was concerned about the amount of money going through South Africa's courts. There was the possibility of fraud and theft of state money because of these challenges. When the Department considered a PPP, given the financial difficulties, it was realised that the Department's budget was insufficient, although the National Treasury had helped and made available money for the salary increases.
The Chairperson asked Dr De Wee to confirm that the Department was not considering the PPP.
Dr De Wee said that a consideration had been the potential retrenchment of staff.
Adv Malale inferred that the Department could not rely on this system because it did not capture the information needed for ordering. Nothing had happened after the recommendations.
Ms Msomi said that the recommendations were a function of all these upgrades. The Justice Deposit Account System (JDAS) as a system was just a service delivery system,
The Chairperson replied that it was promoted to the Committee as a system that would solve all problems. The Committee had been misled.
Ms Msomi acknowledged the Chairperson's point. The Department's management had become excited at the prospect of a new system and had oversold it.
Adv Malale sympathised with Ms Msomi – he knew that she was new to her position. However, the fact remained that JDAS had been promoted as a sophisticated system, while it could be anticipated that the Auditor-General would reject it. Adv Malele thought that the Department was telling the Committee something strange. He was relying on historical records. He had gone to courts, had talked to the police, and learned that the key of the court's safe was kept by an officer on a particular day, who recorded the money and then handed the key to the next officer on duty. Adv Malale maintained that the safe was not safe. The officer on duty would fill out the name of the offender, then the officer would sign, and the offender would sign. If one was careful one would ask for a receipt but one might not be sure where the money went.
The Chairperson commented that Adv Malale was presenting a case.
Adv Malale asked about the quality of the provider. Was this the level at which one should execute this task?
Ms Msomi explained the reasons for appointing a chief director in the Third Party Fund. The chief director was a financially literate person and reported to the Director-General directly although the chief director was based in the CFO office.
Adv Malale observed that in a bank reconciliations were done on a daily basis; he asked if the Department
Ms Msomi confirmed that reconciliation was in progress. This information she could share with Members.
Adv Malale asked how many courts there were where there was proper reconciliation and accounts. In the last financial year many courts were still on the manual system that he was talking about earlier.
Ms Gomm replied that all courts had been automated and were now on the JDAS system.
The Chairperson said he thought that courts still relied on manual processes.
Ms Gomm replied that the JDAS system accommodated receipts and payments.
The Chairperson was satisfied.
Adv Malale asked how the Department envisaged improving its system.
Ms Gomm said that Dr De Wee and Ms Msomi were more equipped to answer than she herself.
The Chairperson asked the Department what system it really wanted.
Ms Msomi replied that the Department was proposing to manage the Third Party Fund by itself to take account of the service delivery pillar and the accounting pillar and to reduce the number of days to complete a process. In order to improve the audit the Department needed a proper accounting system, especially for the Guardian Fund – it must be a sustainable programme. Moreover, the Department acknowledged that there would always be an unbanked population. The Department aimed to reduce the amount of money that it held on a daily basis. The Postbank could help the Department to pay maintenance to beneficiaries.
Adv Malale asked what the Department was doing to assist the process.
The Chairperson inferred that the Department was trying to clear this mess by bringing in a service provider.
Adv Malale said that the Department had the responsibility to unearth this data but it was a massive task.
The Chairperson said that he sympathised with the Department's predicament.
Adv Malale asked if the staff in this Third Party Fund were being investigated.
Ms Gomm replied that she did not have the specific details with her.
Adv Malale asked how many in the Department and the National Prosecuting Authority (NPA) had been disciplined.
Dr De Wee replied that he had information on those who had been disciplined.
Adv Malale pointed out that one could not give a warning to a thief who stole from state funds. The audit had lacked help on Third Party Fund. He commented that this situation must change.
The Deputy Minister reiterated that the Department exercised a policy of zero tolerance. He referred to what Dr De Wee had read out. In fraud and theft there was no such thing as a written warning. He had received appeals from officials being dismissed for thefts of less than R1 000. The Ministry had upheld the dismissals.
Mr Pretorius referred to the 181 cases the previous financial year and gave details. He noted that there had been only a few dismissals for very serious offences (Annual Report, page 320) but he would give the Department the benefit of the doubt.
The Deputy Minister said that the figure could have referred to cases rather than convictions. Where there was a conviction, there was zero tolerance.
Mr Steele observed that specifically related to the information system there were a number of problematic user access controls. It was all very well having a digital system, but this could still be vulnerable to fraud. He asked who was responsible for security and if those responsible were improving their controls over user access.
The Department replied that the answer lay in corporate services. Officials would share passwords and in this way misconduct arose. The Department's financial instructions were clear, but at court level there were cases where those procedures were not followed.
Mr Steele asked if the Department's system allowed it to identify who was accessing the system, and if records of access left an audit trail.
Mr Singh asked what the Department intended to do, and if it would build capacity but use consultants for Third Party Funds until the Department had established sufficient capacity of its own, with the PPP replaced by an alternative. It was a question of accountability. He asked if automation was something with which the Department would be seized. He thought that the Department's “warm bodies” were not doing the work to be expected of them.
Non-compliance with the PFMA; non-compliance with the Treasury Regulations
Mr Singh asked about the last financial statements produced by the Third Party Fund. What was the prevalence of fraud?
Ms Msomi replied that the Department could not give a conclusive response in this meeting. She would not wish to make a public statement until she had contacted the Department's partners. The Department would automate its processes but also train staff to ensure accountability, which was a second pillar of the Department's strategy to administer its Third Party Fund. There would be a substantial number of people who would loose their jobs but those who could be retrained would be retained. The Department would make available the previous financial statements. The Department had found some activities on the part of syndicates, but, generally, not all the Department's Third Party Fund had been infiltrated.
Mr Singh said that the Committee still found that many departments failed to follow the PFMA. He noted that the Department had for three consecutive years been qualified under Section 38 of the PFMA with reference to the strategic plan that the Department was required to have. There had been inadequate performance against the plan which should have been a roadmap for the Department. How did the Department manage performance? Did the Department really have a strategic plan in an acceptable format?
Ms Msomi replied that the Department did indeed have a strategic plan. The Department had just reviewed the Key Performance Indicators (KPIs). However, its base information had to be improved and it had to table the revised strategy. As for the previous year, the document had been submitted late.
Mr Singh trusted that the Portfolio Committee on Justice and Constitutional Development would follow up this matter. It was necessary that the Department submit quarterly reports linked to the strategic plan.
Mr Singh asked about performance awards. He noted that some members of the Department's senior management staff (SMS) had not signed performance agreements (Annual Report, page 313). Had all of them now signed? And if not, why not?
Ms Msomi replied that not all of the SMS, including herself, had signed. She gave reasons.
The Chairperson asked if no warnings had been issued.
Ms Msomi said that she was working with a small team from the human resources division; the signing should have been completed in July 2010. However, the Department had been grappling with the need to realign. She needed to engage her principal to sign off. She could sign off the others herself. In some areas there had been difficulties.
Mr Singh asked if any SMS staff had been reluctant to sign.
Ms Msomi replied that none had been reluctant but some had wanted more clarity. She had not felt any resistance. It was also linked to the mismatching and matching of people, key management points, and the strategy to measure performance.
Mr Singh queried the consistency of the Department's reporting (Annual Report, page 315). Why had just one permanent magistrate received a performance award? Did Ms Msomi know the circumstances?
Dr De Wee replied that the Department did not have the details and asked permission to submit the information in writing.
Mr Singh commented that the magistrate must be a hero. The judges had got nothing.
The Deputy Minister said that judges and magistrates, like Members of Parliament (MPs) had their remuneration determined by the same commission.
Mr Singh said that, nevertheless, one magistrate had been given a performance award.
Mr Singh said that the performance targets for Programme 2 were not specific.
Ms Msomi acknowledged that the Department had been weak in dealing with the targets. If the Department did not re-table its strategic plan it might be in the same situation.
Mr Singh questioned the exception reports on the late capturing of leave (Annual Report, page 231). This had happened before. He drew the Department's attention to the Committee's recommendations.
Ms Msomi replied that the Department was now obtaining for the first time a report on leave. This would assist the Department in managing the situation. Part of the Department's KPIs was that leave must be captured within 20 days.
Mr Singh asked the Department thought that the justice system was doing justice to the citizens of South Africa and if the system could cope with the demands of our society.
The Chairperson indicated that the Deputy Minister would respond at the end of the meeting.
Mr Steele asked about the Department's audit committee.
Mr Karedi spoke of key controls, interviews for new employees, quarterly reports, and management accounts.
The Chairperson said that these were questions for the National Treasury.
Mr Steele said that Members needed to hear the same thing; otherwise there was a problem of credibility.
Mr Pretorius asked about the unit costs for the sports shirts and caps for the World Cup 2010. The unit costs for these items were very high. Who were those volunteers to whom these items were issued?
Dr De Wee replied that the volunteers were people from outside the Department whom the Department wanted to be identifiable in the courts.
Mr Ainslie said that recommendations of the Committee (SCOPA Resolutions) were essentially resolutions of Parliament. Why was the Department not implementing them? (Annual Report, page 230). Who was in charge of implementing them, were they tabled in the audit committee, and how seriously did the Department take them?
Ms Msomi explained that the SCOPA Resolutions and the recommendations of the Auditor-General were addressed through the Department's meetings of its executive committee (Exco) which examined issues of accounting. The Department's finance committee (Fincom) made its recommendations to the Exco. Ms Msomi had interviewed for project managers - one for the work of the cluster and one for the project of implementing the recommendations.
Mr Mbili would have been happy to hear the time-lines. He maintained that the Department had failed to implement the recommendations for the past three years.
Mr Mbili said that Members were disadvantaged as they had not engaged with the strategic plan. When would the Department implement the SCOPA Resolutions? When would it have a risk management plan? When would the Department be fully functional?
Mr Mbili was at a loss to know why the Department lacked ready answers to Members' questions.
The Chairperson asked if the Department had time lines.
Ms Msomi replied that the Department did have time-lines, and the scope was very wide. The greater part of the Department's strategy was dedication to turning the corner on audit findings. The Department was revising its formally tabled strategy.
A Member said that the Committee needed to be taken very seriously. Ms Msomi must give leadership. .
The Chairperson commended the Minister and the Deputy Minister on their commitment. Moreover while Ms Msomi’s commitment was not in doubt, more effort was needed to induce people to perform. It appeared that line managers were not held to account.
The Chairperson was worried that there were no standards or norms on the issue of consultants. It was his observation that consultants were interested only in getting more work for themselves; meanwhile, they said the most racist things about the Government at the same time as they signed big contracts. Officials should not privatise decision-making to consultants who showed no loyalty to South Africa whatsoever.
The Deputy Minister said that he had suffered gladly. He thanked the Committee for an enlightening experience which would put the Department in a much better position. There must be no doubt as to the Department's political commitment. The PFMA indicated the direction to be taken towards the kind of country that we wanted to build. The Government was committed to access to justice and the Department was doing its best to achieve it through conversion of courts, magisterial districts, and providing high courts to provinces, also the small claims courts. All of the Department's programmes were directed to access to justice for all.
The Department would work with sister departments in the cluster to combat crime and corruption, and fight corruption in the cluster. This was why the Department had a zero tolerance policy. The Department thanked the Office of the Auditor-General; there was extensive interaction and that would be intensified. There would be greater involvement of the executive authority.
Consultants concerned the Department considerably; in line with the Government's decision the Department had done away with labour brokers but the Deputy Minister pointed out to Mr Singh that spending on consultants the other money was on other providers including sheriffs' fees. The problems of the Department were deep rooted and had a long history; the Department could not promise a clean audit the next year (2010/11), but with what it had set out to achieve, it was confident in the medium term of achieving its objective of a clean audit.
The Chairperson thanked the Deputy Minister, Ms Msomi and colleagues.
The meeting was adjourned.
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