The Department of Defence received a qualified audit report from the Auditor-General for the 2009/10 financial year. The basis for the qualified opinion was the failure of the Department to properly account for all tangible and intangible and movable and immovable assets. The hearing was attended by the Minister of Defence, the Secretary for Defence, senior officials from the Department, representatives from the National Treasury and the Office of the Auditor-General and the Chairperson of the Portfolio Committee on Defence and Military Veterans.
The Secretary for Defence informed the Committee of the progress made by Operation Clean Audit to address the issues raised by the Auditor-General. The project would be completed within twelve to 18 months. A consortium of external consultants was appointed to address the issue of the Department’s asset register. Progress had been made in the numbering and labeling of assets and the implementation of a Treasury requirement-compliant computerised asset management system. The Department had experienced some difficulty in determining the location of all vehicles and weapons and in tracing the supporting documentation required to determine the value of assets.
Members of the Committee asked questions about the progress made in addressing the asset management challenges identified by the Auditor-General; the financial management capacity of the Department; the depreciation policy and the signing of performance agreements with senior personnel. Members asked for explanations for the items of irregular expenditure and fruitless and wasteful expenditure listed in the annual report. The Department undertook to provide detailed written reports on the irregular and fruitless and wasteful expenditure as well as the disciplinary or criminal action that was taken against the persons responsible.
Other questions asked by Members concerned the cancellation of the Airbus A400M contract; the “evergreen” contract with the Aero Manpower Group; the overdraft in the Consolidated Paymaster-General Account; the loss of State money; unclaimed salaries; the foreign exchange losses incurred; the amount of R467.7 million carried over since 1998 that should be written off and the outcomes of cases referred to the Board of Enquiry.
Hearing on the 2009/10 Annual Report of the Department of Defence (DOD)
The Chairperson welcomed the Honourable Lindiwe Sisulu, Minister of Defence and Military Veterans and Ms Mpumi Mpofu, Secretary for Defence, to the hearing. The delegates from the Department of Defence, the National Treasury and the Office of the Auditor-General were introduced. The Chairperson of the Portfolio Committee on Defence and Military Veterans, Mr M Motimele (ANC) attended the hearing.
The Chairperson noted the progress made by the DOD in reducing the number of qualifications from the Auditor-General to a single item.
Ms F Muthambi (ANC) referred to the report of the Auditor-General on page 177 of the Annual Report and to the explanatory notes 3 and 24 concerning the restatement of corresponding figures as a result of errors. She asked what action had been taken by the Department to ensure that such errors would not occur in future
Ms Mpofu explained that the Auditor-General had found that there had been errors in the amounts reported for the compensation of employees. Certain items had been incorrectly classified and the adjustments required by the Auditor-General and the National Treasury had not been done. The Department had launched Operation Clean Audit to ensure the accuracy of the figures reflected in the financial statements and that the errors made would not recur. Additional capacity had been made available and Operation Clean Audit was scheduled for completion by May 2011.
Ms Muthambi referred to the basis for the qualified audit opinion concerning the tangible and intangible assets of the Department. She was concerned that the qualification had been made by the Auditor-General for four consecutive years. The interventions of the Department and the challenges associated with compliance to the National Treasury regulations were noted. The Department had appointed a consortium of external service providers for a period of two years to address the problems experienced with accounting for assets. She asked what progress had been made in addressing the matter and if the appointment of external consultants provided value for money.
Ms Mpofu referred Members to the report submitted to the Committee by the Department on the asset management action plan. The report summarised the progress made in accounting for the tangible moveable and immovable assets of the DOD. The vast number of assets under the control of the Department was a major challenge. The first priority was to address the areas of concern indicated by the Auditor-General. The short-term objectives included the acceleration of the classification of National Stock Numbers (NSN’s) in accordance with the Standard Chart of Accounts (SCOA); applying the modified cash basis of accounting to determine stock value; phasing out the Unit Information Management System (UIMS) and the Directorate Information Management Services (DIMS); implementing the Computerised Aided Logistical Management Information System (CALMIS) at all operational units; raising awareness of the applicable asset management guidelines and finalising the numbering, labeling and verification of all the assets. The high-value items were targeted during phase 1. These items included vehicles, equipment and weapons systems and accounted for 80% of the value of the total asset base. The report gave a breakdown of the progress made on the phase 1 disclosure items for the South African Air Force (SAAF), the South African Navy (SAN), the South African Army and the South African Military Health Service (SAMHS). To date, the focus had been on locating and identifying assets. The value of the assets must still be determined and agreed with the Auditor-General. The project would be completed in 12 to 18 months.
The Chairperson observed that only 88% of SAAF vehicles and 44% of SA Army vehicles had been identified. He wanted to know what the challenge was in locating the vehicles.
Ms Mpofu replied that progress was being made in locating the vehicles and expected the exercise to be completed in three to four months’ time.
The Chairperson asked what the reason was for the delay as there were a limited number of sites where the vehicles could be and the base commanders should be in a position to provide the necessary information.
Major-General J Nkonyane, Chief of Logistics, SANDF, explained that the Auditor-General had been unable to verify the existence, rights and obligations, completeness and valuation of the assets. A complete register of all the items would be in place before the end of the 2010/11 financial year. The SAAF had a total of 7,819 vehicles but the exact location of all the vehicles could not be established as some had been lent to other units and the documents confirming the location of all the vehicles could not be found.
Mr R Ainslie (ANC) remarked that the location of all the assets was of primary importance and had to be known at all times.
Major-General Nkonyane explained that certain vehicles on loan to other units would be re-deployed and the system used to record the location was not updated. As a consequence, the current location could not be determined.
Mr P Pretorius (DA) asked if Operation Clean Audit was the same intervention as the Logistics Intervention and Repositioning Programme (LIRP) referred to on page 146 of the annual report.
Ms Mpofu explained that Operation Clean Audit was launched at the time the annual report was compiled. At the time, not much progress had been made but the Department currently had a clearer idea of how the issues that had been raised by the Auditor-General should be dealt with. The Department regularly consulted with the Auditor-General during the process.
Mr M Steele (DA) observed that the percentages of items accounted for appeared to be acceptable but the actual number of the unaccounted items presented a different picture. For example, 81% of SA Army weapons had been identified but 72,772 items remained unaccounted for. He asked for the assurance of the Department that the matter was being taken seriously and wanted to know what was being done to locate the items. He asked for information on the Department’s depreciation policy.
Ms Mpofu replied that satisfactory progress was being made with identifying and locating all the items but the process had not yet been completed. The data provided did not imply that the unidentified items were in fact missing. She was confident that all the assets would be accounted for before the programme was concluded.
Major-General Nkonyane added that the Auditor-General required supporting documentation to verify the existence of the assets. For example, certain aircraft were acquired a number of years ago and the original documentation were difficult to locate. There were weaknesses in the systems previously used to record the location of assets. The introduction of the new CALMIS and Operating Support Information System (OSIS) had resulted in closing the gaps created by the failure of the previous systems that were used.
Mr N Singh (IFP) asked what progress had been made in increasing in-house capacity in order to reduce the reliance on external consultants.
The Chairperson requested Members to restrict their questions to matters concerning the accounting of assets.
Mr S Thobejane (ANC) asked if proper logistical control systems were in place to track the location of assets.
Ms Mpofu replied that the Department was in the process of migrating to the OSISS and CALMIS systems approved by the National Treasury and the Auditor-General. The original manual and legacy systems did not adequately track the movement of assets and resulted in the problems.
Ms M Matladi (UCDP) was under the impression that the Department had a special unit that was responsible for record-keeping and wondered why the Department had not resolved the problems before the audit.
Major-General Nkonyane replied that specialist employees were appointed to deal with each asset class. The control systems previously used by the Department were up to thirty years old and did not comply with current National Treasury requirements. The movement of assets was difficult to trace in cases where vehicles were lent to a unit that used a manual system. He confirmed that a document control system was in place.
Ms Muthambi referred to the comment in the report of the Accounting Officer regarding the lack of skills and competence of staff members, who were not aware of the National Treasury requirements (see note 220.127.116.11 on page 163 of the annual report). She noted that certain senior and financial management positions had remained vacant for longer than 12 months and that external consultants were appointed to perform internal audit functions.
The Chairperson clarified that the Committee was concerned over the development of skills within the Department and had found that the practice of appointing external consultants did not contribute to the transfer of skills.
Ms Mpofu replied that Operation Clean Audit was originally planned to be finalised by December 2010. The Department had found it necessary to extend the period allowed to finalise the asset register. Progress meetings were held with the Chief Financial Officer on a fortnightly basis and with the Secretary for Defence on a monthly basis. She was confident that personnel would be adequately capacitated by May 2011. The necessary management structure to take full control of the asset management system had been set up throughout the SANDF. The matter concerning the internal audit function had been discussed with the Auditor-General. The Department had the position of an Inspector-General that performed functions similar to an internal auditor. The Auditor-General had found that the functions performed by the Inspector-General were not fully compliant with the Public Finance Management Act (PFMA). The post of Chief Internal Auditor had been advertised and interviews with the short-listed candidates were currently in progress.
Major-General Nkonyane reported that the Department had identified the areas of weakness and had developed policies and an action plan to address the weaknesses. The Department had undertaken road shows to educate and train the financial officers. As the skill level of officers varied, the necessary guidance was provided and performance was monitored. He was confident that the reconciliation problems experienced had been resolved. There were currently three vacant senior positions, resulting from the recent departure of the previous incumbent. The depreciation policy was currently under discussion with the National Treasury. The policy was based on the useful life of an asset and the Department had submitted proposals to the Treasury for consideration.
Mr Steele was not satisfied with the response provided. He said that the assets of the Department could not be considered in the same manner as other Government assets. Certain assets had a considerably longer lifespan, which needed to be taken into account in the depreciation policy.
Ms Muthambi referred to page 178 of the annual report and wanted to know why it took a year to appoint an internal auditor. She noted that certain officials had not signed performance agreements and asked what action had been taken against the officials concerned.
Ms Mpofu undertook to provide a report on the number of officials that had not yet signed performance agreements and the reasons for failing to do so. The need to obtain security clearances for senior management personnel had resulted in delays. Most of the agreements at the Chief Director and Deputy Director-General levels had been signed. There were two levels of management at the DOD, i.e. the SANDF and the secretariat. Senior personnel were subject to prescribed security clearance parameters. A period of three months was allowed to elapse between the date of appointment and the date by when the performance agreement had to be signed.
Ms Muthambi asked for the assurance that the problems linked to the lack of capacity and weak leadership had been addressed.
Ms Mpofu stated her personal commitment and the commitment of the Chief Financial Officer to turn around the performance of the Department. A lot of effort had been made to resolve the problems and she was confident that significant progress had been made.
Mr Ainslie referred to pages 240 to 245 of the annual report. No figures were provided and he suspected the reason for the lack of information was that the value of the assets was not known.
Ms Mpofu confirmed that Mr Ainslie’s assumption was correct. The Department had not disclosed the cost of assets in previous financial statements. Operation Clean Audit would be in a position to accurately determine the value of assets within 12 to 18 months.
Mr Pretorius referred to the emphasis of matter concerning the items of irregular expenditure identified by the Auditor-General. The Auditor-General had found that R1 billion of staff-related expenditure was irregular as the proper processes had not been followed. He asked for an explanation of the comments made regarding the incompleteness of data, the lack of supporting documentation and the failure to follow the required approval processes.
Ms Mpofu replied that the irregular expenditure item included the implementation of housing allowances, the new military dispensation and performance awards. The Public Service Act required the expenditure to be approved by the mandating committee but there was not enough time to meet with the committee before the date by when the benefits had to be paid. The mandating committee had approved the additional human resource expenditure after the fact. The Department had understood that the legal provision allowing for the Minister of Defence to consult with the Minister of Finance on the matter was adequate. The irregular expenditure item was subsequently condoned. SANDF employee benefits had been aligned with the benefits payable by the other entities in the security cluster. The Defence Amendment Bill made provision for the establishment of a service commission to determine the benefits of military personnel. The urgency to implement the increased staff benefits was intended to address the low morale of military personnel. There had been an error of interpretation that had resulted in housing allowances being paid to personnel living in State-owned accommodation. The Department had developed a recovery plan to recoup the erroneous payments made from personnel over a period of time.
Mr Pretorius wanted to know if the decision to proceed with the payment of additional benefits before the approval of the mandating committee was obtained was made for technical or for political reasons.
Dr Mary Ledwaba, Chief Director: Human Resources Strategy and Resources, DOD replied that the circumstances prevailing towards the end of 2009 had to be taken into consideration, i.e. the protest action of members of the SANDF and the march to the Union Buildings. The decision to proceed was taken by the Council on Defence, comprising the Minister and the Deputy Minister of Defence and the Secretary for Defence.
Mr Pretorius asked that a detailed breakdown of the irregular expenditure item was provided to the Committee. He referred to note 7.3 on page 274 of the annual report and asked for an explanation of the amount of R63,999 regarded as irregular expenditure related to the cancellation of the Airbus A400M aircraft contract.
Ms Mpofu referred to page 236 of the annual report where the amount of irregular expenditure for the Airbus A400M was indicated as R22,685,000 in 2009/10.
Mr Mziwonke Dlabantu, Chief Financial Officer, DOD explained that an amount of R2.940 billion had been transferred to the debtors account. This amount was the capital amount recoverable from Airbus after the contract was cancelled. The expenditure of R63,999 was for related expenses incurred before the contract was cancelled and was considered to be irregular because all the costs relevant to the Airbus contract was classified as irregular expenditure.
Mr Pretorius queried the irregular expenditure of R93,393,000 paid to Aero Manpower Group (AMG) during 2009/10 (see page 236 of the annual report). He recalled that the contract with AMG had been subjected to a Board of Enquiry and asked what action had been taken by the Department.
Mr Dlabantu replied that the National Treasury had approved the payments made to AMG in previous years.
Ms Mpofu explained that an “evergreen” contract was entered into with AMG in 1986 to provide specialist skills to the SAAF. AMG employees had become entrenched at the SAAF. The contract had no end date but was valid. The AMG account had always been a problem and record-keeping was an ongoing issue. The Department had to reconstruct all the data and trace the supporting documents required for audit. The Department had embarked on a process to rationalise the contract with AMG. The organisation provided an essential service to the SAAF and the DOD was considering a long term solution.
Ms T Chiloane (ANC) pointed out that the requirements of the PFMA had to be adhered to. She asked if the Department had any other “evergreen” contracts in place.
The Chairperson asked what the finding of the Board of Enquiry into the AMG contract was.
Ms Mpofu replied that “evergreen” contracts were a problem but the Department had taken steps to ensure that no new contracts were entered into. The Board of Enquiry had found that no person could be held accountable as it was common practice at the time to enter into such open-ended contracts.
The Chairperson was of the opinion that the Department should not have remained in violation of the PFMA in prior years.
Mr Steele referred to page 230 of the annual report. He asked for an explanation of the loss of State money totaling R13.7 million during 2009/10 (increased from R10.9 million in the previous year). He asked for an explanation of the bank overdraft amounting to R737,695,000 for the Consolidated Paymaster-General Account (see page 231 of the annual report).
The Chairperson noted that no disciplinary or criminal action had been recorded for any of the irregular expenditure items listed in the annual report.
Ms Mpofu replied that all the items had been thoroughly investigated by the Department. She undertook to provide the Committee with a detailed written report that would include the action taken.
Mr Dlabantu replied that the loss of State funds totaling R13.7 million included a number of incidents. He undertook to provide the Committee with a detailed breakdown in a written report that would include the action taken by the Department. The overdraft for the Paymaster-General account was historical and had been carried over from previous years. The Committee had not been able to approve the additional appropriation to eliminate the overdraft in the account.
Mr D Maynier (DA) recalled a statement made by Mr Popo Molefe, Chairperson of Armscor, that the amount of nearly R3 billion would be recovered from Airbus by December 2010. He quoted a statement made by the Minister of Defence during the previous week that the money had not been recovered and that the Department of Defence had requested the National Treasury to assist in recovering the money. He asked why the intervention of the National Treasury had been requested and asked for assurance that the failure of Airbus to repay the money was not as a result of a bungle by Armscor.
Ms Mpofu explained that Armscor had to obtain a mandate from the National Treasury to agree to repayment terms as Airbus had not repaid the money held within the 30 day period stipulated in the contract.
Mr Maynier could not find any reference in the annual report to Project Consolidated Fleet that could have significant financial consequences to the Department. The matter had been discussed in a briefing to the Joint Standing Committee on Intelligence. The Chairperson requested that the matter was referred to the Joint Standing Committee.
Mr Barry Wheeler, Corporate Executive: Audit, Office of the Auditor-General confirmed that the issues concerning the project referred to by Mr Maynier was dealt with by the Joint Standing Committee on Intelligence. All matters concerning sensitive Defence projects had to be referred to that Committee.
Mr Singh referred to the items of fruitless and wasteful expenditure listed on page 237 of the annual report. He asked for an explanation of the amount of R5.4 million that was paid as a flight cancellation fee for an external mission. He asked for an explanation of the amount of R998,935,000 reported as “compensative/circumstantial” employee compensation (page 225), the amount of R11,757,000 in unclaimed salaries (page 231) and the amount of R985,049,000 for capped leave commitments (page 234).
Ms Mpofu undertook to provide a detailed written report on the items of fruitless and wasteful expenditure to the Committee. The obligation to pay the flight cancellation fee was incurred when an aircraft was chartered to deliver supplies for a foreign mission. There was an error in communication and the flight had to be cancelled.
Mr Dlabantu explained that salaries were withheld under certain circumstances, for example when a soldier went absent without leave or when a person was the subject of an investigation. He offered to provide the Committee with a written report as there were many reasons why salaries were not paid. The figures for employee benefits remained the same but had to be re-stated because allocations were applied to a different set of categories. The leave policy introduced by the Department in 2001 prevented employees from accumulating unclaimed leave benefits ad infinitum. The Department agreed that the accumulated leave entitlement at the time would be capped and the item remained a liability that became payable when the employee retired.
Mr Thobejane asked what the difference was between the performance awards referred to on page 225 and the performance incentives referred to on page 236 of the annual report.
Mr Dlabantu replied that performance incentives were regarded as items of irregular incentives but performance awards were approved expenditure items.
Mr Thobejane recalled that the issue of performance incentives was mentioned in earlier audit qualifications. He wanted to know what criteria were applicable in determining who qualified for performance awards.
Mr Pretorius advised that the information on performance awards was provided on page 102 of the annual report.
Ms Mpofu replied that performance awards were applicable to salary levels 1 to 12 and were based on the Department’s performance management system.
Dr Ledwaba was satisfied that the performance award policy of the Department was correctly applied.
The Chairperson remarked that an inordinate percentage of employees qualified for performance awards, i.e. 60,533 persons (81%). He asked for an explanation of the tables on page 102.
Mr Thobejane asked if the pervious Chief Financial Officer had received a performance award.
Ms Mpofu explained the data provided in the tables. She confirmed that senior management personnel did not receive performance awards.
Ms Matladi noted irregular expenditure totaling R141.8 million incurred because of the failure of the procurement policy. She wanted to know why policies were not followed, who had benefited and who had approved the payments.
Ms Mpofu explained that there were two categories of irregular expenditure. The National Treasury was requested to condone the over-spent amount for employee benefits. She undertook to provide the Committee with a detailed report on the items of irregular expenditure listed by the Auditor-General. The Department was monitoring all requests for condonement and had introduced a mechanism to ensure that financial authority was properly exercised.
The Chairperson asked if the Inspector-General played a role in bringing transgressions to the attention of the Department in the absence of an Internal Auditor. He asked if any fraud prevention measures had been introduced. He was concerned that the failure to follow procedure was done with the intention to defraud the organisation.
Ms N Balindlela (COPE) asked for a detailed report of all incidents of fraud that had been uncovered and the action that was taken by the Department. She asked if there were any other “evergreen” contracts in force.
Ms Mpofu agreed to provide the report to the Committee. She confirmed that the Inspector-General reported all instances of the failure to follow proper procedures and that the Department instigated disciplinary procedures against the responsible persons. She confirmed that the AMG account was the only “evergreen” contract in force.
Ms Chiloane noted that an amount of R10.5 million had not been condoned and was awaiting economic classification (see page 237). She wanted to know the comment of the National Treasury on the item.
Mr Dlabantu explained the procedures that had to be followed in terms of the National Treasury practice note on condonements. Condonation was granted once the authority was satisfied that the problems had been resolved.
Ms Chiloane referred to the comment of the Auditor-General that the Department did not fully comply with all legal requirements. She asked what action had been taken to address the matter.
Mr Ainslie noted that the amount of unauthorised expenditure that was not approved by Parliament for 2009/10 was the same as the amount reported for the prior year (see page 230). He asked what the effect was if an amount of R467.7 million was written off. He asked for a breakdown of the item and if the Department had exhausted all possibilities in trying to recover the money.
Mr Dlabantu explained that the amount of R467.7 million had originally occurred six to seven years earlier when the budget for employee benefits was overspent during the integration of the liberation forces into the SANDF.
The Chairperson requested the Department to investigate the issue and to submit a motivation to the Committee for the item to be cleared.
Mr Ainslie asked why the item had not been written off before.
Mr Philip Van Schalkwyk, Director: Portfolios Department of Defence and Independent Complaints Directorate, National Treasury advised that the matter arose during the 1997/98 fiscal year. The additional expenditure incurred was not approved by the Cabinet and consequently the Committee could not approve the over-expenditure. In terms of the PFMA, the item was carried over to the following financial year and the Department was required to recover the shortfall from the following year’s budget.
The Chairperson advised that Parliament could not deal with the matter and the Department had to take the necessary action to clear the item from the financial statements.
Mr Pretorius asked for an explanation of the contingency provision for a R1.9 billion claim against the State that would be heard in a civil court in Lisbon, Portugal.
Ms Mpofu advised that the matter referred to the Special Defence Account and that she was unable to divulge the details. The Chairperson confirmed that the matter was outside the scope of the Committee.
Mr Pretorius referred to the labour relations report on page 109 of the report. He questioned the fact that there had been only 49 cases of misconduct during the year, given the size of the Department’s staff complement. The statistics did not correspond with the statement on page 43 of the annual report regarding the disciplinary action taken against the soldiers who had participated in the illegal protest action during August 2009.
Ms Mpofu explained that the information provided referred to civilian personnel. Military disciplinary cases were dealt with by the Board of Enquiry and were not included in the Annual Report.
Mr Pretorius considered the omission of a report on the activities of the Board of Enquiry from the annual report to be a serious oversight. The Committee needed to have the information.
The Chairperson agreed with Ms Mpofu that the Committee would receive a report on the outcomes of the Board of Enquiry investigations.
Mr Maynier reiterated his earlier question concerning the reasons why the repayment from Airbus was expected to drag on for a period of 12 to 18 months. He felt that the Committee had a right to know the financial implications of Project Consolidated Fleet and who was responsible for the potential loss.
The Chairperson re-stated the Committee’s position that the matter would be dealt with by the Joint Standing Committee on Intelligence or another appropriate structure.
Ms Mpofu replied that Airbus had indicated that the company was unable to pay the R2.9 billion in a single tranche by December 2010 and a repayment schedule was in the process of being negotiated. The repayment schedule would be approved by Armscor and the National Treasury.
Mr Maynier did not believe that Airbus did not have the funds available to refund the amount owed to South Africa. He suspected that the company had other reasons for renegotiating the contract.
Mr Steele queried the R5.7 million foreign exchange (forex) loss reported on page 227.
Mr Dlabantu replied that the reported loss involved a number of accumulated losses incurred as a result of changes in the exchange rate. He undertook to provide the Committee with a detailed written report on the item.
Mr Pretorius queried the amount of R18.6 million paid for overtime worked by senior professional personnel.
Ms Mpofu explained that the senior professional personnel included medical doctors employed by SAMHS. This category of personnel qualified for the occupation specific dispensation.
Mr M Motimele, Chairperson, Portfolio Committee on Defence and Military Veterans thanked the Committee for the opportunity to attend the briefing.
The Chairperson observed a marked improvement in the manner in which the Department was addressing the issues raised by the Auditor-General.
Minister Sisulu was pleased with the performance of the delegation from the Department and the responses provided to the questions from the Members of the Committee. She was pleased to note that the Committee was satisfied with the improvement demonstrated by the Department in dealing with the problems experienced in previous years. The number of audit qualifications was reduced from 16 in 2005/06 to one in 2009/10. The necessary mechanisms were put in place to ensure that the Department received clean audit reports in future and that it would not be necessary to appear before the Committee again.
Minister Sisulu reported that 900 participants in the illegal protest march in 2009 were put on special leave. A court case was pending and the reason why the matter was not reported in the annual report. The Department was appealing the earlier court ruling. The Minister of Defence was the executive authority and was a member of the Cabinet. She had appointed the Interim National Defence Force Service Commission to investigate and make recommendations on the service conditions of members of the SANDF. The decision on the increased salary benefits was taken in principle and she was under the impression that the approval of the Minister of Finance would be sufficient. Attempts were made to convene the mandating committee before the effective date of the increases but the committee was only able to approve the additional benefits after the fiscal year end.
Minister Sisulu was concerned over the delay in receiving the payment due from Airbus and had engaged with Armscor and the National Treasury on the matter. The Department had appointed Mr Wally van Heerden in the position of Compliance Officer to address the concerns that had been raised concerning compliance with the legal requirements. The SANDF had no airlift capacity and had to charter aircraft to undertake foreign missions. A recent example was the rescue mission to return 40 South African nationals trapped in Libya. She thanked the Committee and the Office of the Auditor-General for the support and encouragement provided to the Department. She thanked the team from the Department for their hard work and dedication and said that she was very proud of them.
The Chairperson reported that the Office of the Auditor-General was very complimentary on the positive role played by the Minister in turning around the performance of the Department. The Department had a high profile and many people were interested in how the Department was managed.
The meeting was adjourned.
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