Financial & Fiscal Commission on its 2011 Strategic Plan

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Finance Standing Committee

19 April 2011
Chairperson: Mr T Mufamadi (ANC)
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Meeting Summary

The Standing Committee heard the Financial and Fiscal Commission's presentation on its Strategic Plan for 2011/12 – 2012/13. The Commission apologised that the Commissioners were not present “due to prior commitments”. It was a momentous occasion and a welcome development, for it was the first time the Commission had presented its strategic plan to Parliament. The implementation of the Money Bills Amendment Procedures and Related Matters Act required more input from the Commission on the fiscal framework and revenue proposals. This required extra capacity. Recently the passing of the Municipal Systems Amendment Act had the potential to create extra work for the Commission. Section 71 required the South African Local Government Association to consult the Commission before it made any final offer in the bargaining process. This represented a completely new area of work for the Commission.

The Commission followed the Government's approach of the developmental state. The key strategic goals for 2011/14 were to provide advice and report to Parliament, provincial legislatures, organised local government, and other organs of state in compliance with the Commission's legislative mandate; to facilitate choices that would improve the Intergovernmental Fiscal Relations system and its developmental outcomes; to influence the Intergovernmental Fiscal Relations agenda to respond to challenges in the environment; to engage with the Government, stakeholders and citizens to ensure that the work of the Commission was understood; the retention of the best staff; and a focus on leadership and the evolution of a positive organisational culture.

The Commission pointed out that it conducted research and made recommendations on its own initiative. It was empowered to do so by its Act. However, the Commission now felt that this approach was not very useful, because the Commission might be pursuing matters that were not actually in tune with what the stakeholders required. This constituted a challenge related to the Commission's governance issues. It was the President whose responsibility it was to appoint the Commissioners. However, it was the responsibility of the Commission itself to determine the work of each Commissioner. Without committed Commissioners, it would be the Commission's secretariat that pushed the agenda on behalf of the Commission. The work of the Commission was basically not very well known, even among parliamentarians and members of provincial legislatures. The Commission sought a degree of flexibility in its governance structure and leadership. In spite of budgetary constraints, it was doing well in its stakeholder engagement. It had stepped up engagement with Parliament, with the provincial legislatures, and with local government. The Commission was trying to rework its relationship at an institutional level with the South African Local Government Association.

The objectives of the Research and Recommendations Programme were described. The Programme had identified particular research themes and projects in the fields of equitable growth paths and distribution of public resources: large scale models for macroeconomic analysis; fiscal decentralisation and economic growth; impact of no fee schools policy on equity and learner performance; and budget performance for health conditional grants. In the field of sustainable development, the Programme had identified the following research themes and projects: gender responsive budgeting; environmental economics, including the green economy, which was one major pillar of the Government's New Growth Path; the knowledge economy and how it contributed to the developmental state; and addressing capacity issues and sub national spheres. Here there were specific projects looking at public transport subsidies, the fiscal burden of human settlement patterns, the continuing work on the review of the local and provincial equitable share formulae, and a string of projects for budget analysis work. The Programme was noticing an increased centralisation of activities through measures such as special purpose vehicles and other arrangements of public service delivery. There would be a dedicated project on alternative service delivery and its impact. There would continue to be a theme around stakeholder requests, and also provision for “unforeseeable referrals”. The Programme would emphasise professional staff development, research leadership and project management, in particular forming a research group focused on intergovernmental relations. It would emphasise peer reviewed publications, and explained the process for setting targets and measuring achievements in this and other aspects. It also set the target of contributing chapters in books, as well as publishing working papers and technical reports. The Commission sought to publish a peer-reviewed book on the basis of a research symposium to mark its 18th anniversary.

The Commission had a recurring deficit, and it would continue to engage with the National Treasury and the Minister of Finance, in particular, to address this issue. Staff costs were a pressing issue, as were information and communications technology and issues of compliance, like the audit fees, which cost just over 5% of the Commission's budget. An injection in 2011/12 and 2012/13 would help the Commission address the historical negative effects of the balance sheet. To make the Commission more visible to stakeholders would require greater financial commitment from the Commission's side. It was the Commission's view that it had been prudent and transparent in its financial management. This was reflected in the Auditor-General's opinion.

 Members observed that the Commission was asking for more money, yet it had budgeted for a deficit, asked how the Commission would interface with the Parliamentary Budget Office, how the Commission intended to create more jobs, how the cutting back of office space in Cape Town and Johannesburg would not affect the Commission's employment of labour, what the Commission's gender representation was, noted that the Commission had reported that its audit fees represented over 5% of its budget and that the Commission must budget accordingly, and asked what the Commission was doing about its concurrent deficit beyond talks with the Minister of Finance. Members also noted no mention in the strategic plan of the forthcoming census, asked what action did the Commission take to make sure that the division of revenue amongst the three spheres of Government was done on an equitable basis, observed that the staff component and liabilities had increased while assets had decreased, and observed that the Commission needed to ask itself honestly why Government and the legislature were progressively under-utilising its services.

Moreover, Members objected to the Commission's implication that its vision was in line with the African National Congress' s view and policy: this conflicted with the Commission's mandate in which it was clearly stated that the Commission was an objective, impartial, unbiased, advisory institution. The Commission claimed not to be influenced by anybody or any party.

The Commission withdrew its reference to the African National Congress and referred only to the Government and its needs for the resources of the state to be used to attain developmental impact.

Furthermore, Members were “terribly concerned” about the Commissioners who were supposed to attend but were absent. A full explanation was demanded. Was this Committee not a priority to them? The Chairperson emphasised the importance of the Commissioners' attendance at presentations of the Annual Report and Strategic Plan: “We cannot have a situation where management comes here to talk to us and the people who are really appointed by the President are not here.” Whilst the present meeting had been informative, he instructed the Commission to return after the recess with a full delegation, including the Commissioners, to present the strategic plan again.

Meeting report

Introduction
The Chairperson welcomed Members and the delegation and hoped to see maximum utilisation of the Financial and Fiscal Commission's output, since historically it had not been fully used, in part because the Commission's thinking was not always in line with that of the National Treasury.

Financial and Fiscal Commission (FFC) on its Annual Strategic Plan 2011: briefing
Mr Bongani Khumalo, FFC Acting Chairperson and Chief Executive Officer,  apologised that the Commissioners were not present: none of them was available “due to prior commitments”. He introduced senior members of the secretariat management team. It was a momentous occasion and a welcome development, for it was the first time the FFC had presented its strategic plan to Parliament.

The Commission had been discouraged by the results of a survey of stakeholders, in which Members of Parliament, in particular, had responded adversely.

The implementation of the Money Bills Amendment Procedures and Related Matters Act and its requirements for the Commission's input had created more opportunities for the Commission. Its input was therefore required on the fiscal framework and the revenue proposals. This required extra capacity.

Recently the Municipal Systems Amendment Act had the potential to create extra work for the Commission. Section 71 required the South African Local Government Association (SALGA) to consult the Commission before it made any final offer in the bargaining process. This represented a completely new area of work for the Commission. The Commission had not been consulted in regard to the Municipal Systems Amendment Act. Currently Mr Khumalo was trying to set up some meetings with SALGA.

The Commission followed the Government' s approach of the developmental state. “The work of the Commission in terms of its vision is informed by the need to utilise public resources of the financial and fiscal system in a manner that supports that vision and long term goal of the Government of the ANC of a developmental state, and that is not a very simple exercise.” Mr Khumalo later withdrew the words “of the ANC”.

The Commission's interpretation of what a developmental state meant was a state that was very sensitive to the demands of the people, especially the vulnerable. So basically the work of the Commission was to address the inequities of the past whilst ensuring that the distribution of the resources empowered people to realise the objectives and principles captured in the Constitution.
 
The Commission's mission was to respect the independence and interdependence of the three spheres of Government and ensure the equitable distribution of financial and fiscal resources across the three spheres.

Strategic goals and challenges
The key strategic goals for 2011/14 were firstly, to provide advice and report to Parliament, provincial legislatures, organised local government, and other organs of state in compliance with the Commission's legislative mandate; to facilitate choices that would improve the Intergovernmental Fiscal Relations (IGFG) system and its developmental outcomes; and to influence the IGFR agenda to respond to challenges in the environment.

Mr Khumalo pointed out, however, that the Commission conducted research and made recommendations on its own initiative. It was empowered to do so by its Act. The Commission had developed its own research strategy which was looking at longer term strategies that would inform the shorter term issues while looking at the longer term vision of how the IFGR system had to evolve. It was one of the Commission's key objectives and was adopted because in any particular year or for any particular Medium Term Expenditure Framework (MTEF) cycle the Commission made recommendations on an annual basis. The Commission made those recommendations of its own accord. There was no one who actually said to the Commission that it must investigate particular issues. That approach, however, had been deemed by the Commission as not very useful, because it was very ad hoc in nature, and the Commission might be pursuing matters that were not actually in tune with what the stakeholders required.

This constituted a challenge that related to the further challenge of the Commission's governance issues, with which, through the Minister of Finance, the Commission sought consultation with the President, whose responsibility it was to appoint the Commissioners. However, it was the responsibility of the Commission itself to determine the work of each Commissioner. Without committed Commissioners, it would be the Commission's secretariat that pushed the agenda on behalf of the Commission “and that is not a very good scenario”.

Mr Khumalo said that he was glad that there was one colleague present from Parliament’s Office for Institutions Supporting Democracy, with which office the Commission had been engaging.

The key strategic goals for 2011/14 were further to engage with the government, stakeholders and citizens to ensure that the work of the Commission was understood.

Mr Khumalo referred to the survey which indicated that the work of the Commission was basically not very well known, even among parliamentarians and members of provincial legislatures.

Further strategic goals were the retention of the best staff, and to ensure that the work environment was conducive to the kind of people that the Commission would ideally like to employ; and a focus on leadership and the evolution of a positive organisational culture.

Mr Khumalo said that the Commission sought a degree of flexibility in its governance structure and leadership.

Mr Khumalo said that the Commission was performing at a level that represented about 80% of what it should be doing. It could do much better in terms of what it was supposed to do.

The Commission was largely complying with its legislative mandate.

In spite of budgetary constraints, it was doing well in its stakeholder engagement. It had stepped up engagement with Parliament, in particular, the finance committees, the Forum of Chairpersons, and the committees on Cooperative Governance and Traditional Affairs. It had also become involved in oversight visits – this had been a very useful exercise.

Also the Commission had stepped up its engagement with the provincial legislatures, and with local government. Mr Khumalo acknowledged the help of Mr C de Beer (Northern Cape, ANC), Chairperson of the Select Committee on Finance, who had facilitated the Commission's engagement with the provinces. This had gone very well in the past year. The Commission had dealt directly with the Western Cape.

The Commission was trying to rework its relationship at an institutional level with SALGA.

The Commission was enhancing its relationships with Government, for example, Performance Evaluation and Monitoring.

The Commission's other challenges were related to its budget.

The Commission had battled with antiquated information and communications technology (ICT) systems which had been an impediment to what it had been doing. It wanted to update systems and software, with a cost effective coordination of data and information and it was taking some innovative management initiatives with assets. The Commission was converting paper documents to electronic format to avoid losing corporate memory. It was reducing its office space by between 40% (Midrand) and 50% (Cape Town) to save money in order to address other areas.

Research
Dr Ramos Mabugu, Head of the Research and Recommendations Programme, said that the business objectives of the Research and Development Programme were to (A) to advance knowledge that enhanced developmental impact of public resources through the financial and fiscal system; (B) better stewardship of public funds by contributing knowledge that yielded a net social benefit, and ensured public funds were applied effectively and efficiently; and (C) continued professional staff development in research and policy development through entrenching programme and project based culture.

Dr Mabugu said that the Programme had identified particular research themes and projects for the MTEF in the fields of equitable growth paths and distribution of public resources: large scale models for macroeconomic analysis; fiscal decentralisation and economic growth; impact of no fee schools policy on equity and learner performance; and budget performance for health conditional grants.

In the field of sustainable development, the Programme had identified the following research themes and projects for the MTEF: gender responsive budgeting; environmental economics, including the green economy, which was one major pillar of the Government's New Growth Path; the knowledge economy and how it contributed to the developmental state; and addressing capacity issues and sub national spheres. Here there were specific projects looking at public transport subsidies, the fiscal burden of human settlement patterns, the continuing work on the review of the local and provincial equitable share formulae, and a string of projects for budget analysis work for the MTEF. The Programme was noticing an increased centralisation of activities through measures such as special purpose vehicles and other arrangements of public service delivery. There would be a dedicated project on alternative service delivery and its impact. There would continue to be a theme around stakeholder requests, and also provision for “unforeseeable referrals”.

Dr Mabugu said that the Programme would emphasise professional staff development, research leadership and project management, in particular forming a research group focused on intergovernmental relations. It would also emphasise peer reviewed publications, and explained the process for setting targets and measuring achievements in this and other aspects. It also set the target of contributing chapters in books, as well as publishing working papers and technical reports. The MTEF was regarded as a watershed since the Commission would have completed 18 years by 2012, and it sought to publish a peer-reviewed book on the basis of a research symposium to mark the event.

Targets, performance indicators and deliverables for the better stewardship of public funds were the annual submission for the Division of Revenue, the Medium Term Budget Policy Statement Response, the Division of Revenue Bill Response, and the Fiscal Frameworks and Revenue Proposals Response and Appropriations Bill Response.

Finance
Mr Mavuso Vokwana, Chief Financial Officer, gave a financial analytical background to the information that his colleagues had given. Over a ten year period, the Commission had been meeting its obligations whilst there were budget constraints. 2006/07 had been a particularly difficult year, but the Commission had recovered quite well. Moreover, since 2006/07 the Commission's operational costs had been going down. On the other hand, the Commission had a recurring deficit, and it would continue to engage with the National Treasury and the Minister of Finance, in particular, to address this issue. Staff costs were a pressing issue, as were ICT matters and issues of compliance, like the audit fees, which cost just over 5% of the Commission's budget. An injection in 2011/12 and 2012/13 would help the Commission address the historical negative effects of the balance sheet. To make the Commission more visible to stakeholders would require greater financial commitment from the Commission's side. It was the Commission's view that it had been prudent and transparent in its financial management. This was reflected in the Auditor-General's opinion.

The Chairperson appreciated the Commission's input and adjourned the meeting for a break.

Discussion
Dr D George (DA), who had arrived late, had been pleased to hear [during the break] from Mr S Marais (DA) that the meeting was going very well.

Dr George observed that the Commission was asking for more money, yet, while knowing that it had no money to cover it, had budgeted for a deficit. Should the Commission not cut its cloth more carefully or even radically? It did not look good for a Commission of this nature not to manage its own money as well as it could.

Mr Khumalo agreed that this was a major concern for the Commission to address this particular matter. The Commission was a labour-intensive organisation so the biggest item on its budget was personnel. He could not envisage a situation in which one woke up one morning to say to all the staff that they were to be laid off for want of money. This was impossible, so what the Commission had been trying to do was to gradually rearrange matters. For example, in the past two years, the Commission had decided not to replace staff members who had resigned. Not replacing people, especially at senior research level, was problematic in its own right, because the work basically would suffer. Alternatively, one could try to maintain the same level of work and therefore rework it in such a way that those who remained actually received a heavier workload. This had an impact on morale and retention of staff, since the Commission could not pay completive salaries. It was a very delicate balance and was part of the problem.

Mr Khumalo said, however, that a bigger problem, as the Commission's Secretary had indicated, was to deal with the information and communications technology (ICT) issue, since for some time the Commission had completely stopped doing anything about it, and this was not a good thing to do. After a very intensive discussion with the National Treasury, the Commission had begun to resuscitate the ICT matter, but then the National Treasury took back the money the following year. “So we're back to square one.”

The Commission added that it was engaging with National Treasury, and the Minister of Finance in particular, to address the recurrent deficit that the Commission was facing.

Dr George asked how the Commission would interface with the Parliamentary Budget Office.

Mr Khumalo replied that the Commission had tried to follow the discussions around that process as much as possible. In its submission at the time of consideration of the Money Bills Amendment Procedure and Related Matters Act (MBPARMA), then a Bill, it had made certain recommendations as to how it would relate to that kind of an institution.

Mr E Mthethwa (ANC) asked how the Commission intended to create more jobs. This information was missing from the presentation.

Mr Khumalo replied, that the Commission was constrained by its need to downsize. Nevertheless, the Commission intended to engage some interns, specifically in its research programme. This would be the Commission's main direct contribution to job creation. On the other hand, the Commission saw its main contribution to job creation in the economy at large was to produce recommendations that supported Government to move in the direction of creating jobs.

Mr Mthethwa asked how the cutting back of office space in Cape Town and Johannesburg would not affect the Commission's employment of labour.

Mr Khumalo replied that it would not have an impact on labour, because the Commission was understaffed. What the Commission was doing basically was downsizing. On the one hand, it wanted to engage with its stakeholders but it was able to do so only within the resources that it had. At the Midrand office the Commission would have to allow for attrition so that it would shed jobs but not replace people, unless absolutely necessary. So until this kind of situation was resolved, the Commission could not do anything about it, beyond reducing its office space – giving up a whole floor at the Midrand office and giving up 50% of the office space at the Cape Town. “That's an attempt to stay alive.”

Ms P Adams (ANC), observing no women in the delegation, asked what the Commission's gender representation was.

Mr Khumalo agreed. The Commission used to have three woman senior managers out of six, but it now had two, but they had actually resigned. However, at this level, it was very difficult for such a Commission to attract women and keep them in the face of competition from governmental departments. Moreover, at that level, the Commission sought management stability. However, the Commission would give priority to appointing women.

Ms Adams, noting that the Commission had reported that its audit fees represented over 5% of its budget, said that the Commission must budget accordingly.

Mr Khumalo agreed that the Commission should budget for its audit fees, and it did. He pointed out that the audit fees kept rising, but its budget was not adjusted to take this into account. The Auditor-General simply applied for increases through the National Treasury. The Commission was aware that for certain institutions with small budgets there had been some concessions, for example, to say that if it exceeded 1% of the institution's budget there was a special dispensation. The alternative was to investigate whether or not the Commission actually needed to be audited by the Auditor-General, because other auditing firms might charge less. “It's a catch 22; we can't actually do anything about it, and so we have to budget and pay.” So the Commission did take the audit fees into account when it drew up its budget.

Ms Adams asked about the Commission's concurrent deficit. What was the Commission doing about it, other than to have talks with the Minister of Finance?

Mr S Marais (DA) was “terribly concerned” about the absent Commissioners who were supposed to attend but “couldn't make it”, and wanted a full explanation for their absence. Was this Standing Committee not a priority to them? “It's absolutely unacceptable, and I think it is a slap in the face of this Committee and the Chair if there are certain of your Commissioners [who did not see fit] to come and appear before this Committee.”

Mr Khumalo agreed with Mr Marais that the Commissioners were actually required to be present. However, as he had said in his opening remarks, the Commission did have its issues of governance that it was trying to deal with. Even the Chairperson of the Commission could not actually instruct a Commissioner what to do or what not to do; the Chairperson could only report on what a Commissioner had done or not done. The process of how a Commissioner must be dealt with was outside the Chairperson's jurisdiction. The Commission had its own code of corporate governance, whereby the Commission tried collegially to encourage Commissioners to behave in a particular way. However, he was sure that there were genuine reasons for their absence, and if it was the Committee's view that these reasons should be presented to it in writing, then Mr Khumalo could address that matter with his fellow Commissioners, and those reasons would be provided to the Committee.

Mr Marais insisted further on clarity on a certain remark of Mr Khumalo. In the Commission's mandate, it was clearly stated that the Commission was an objective, impartial, unbiased, advisory institution. The Commission claimed not to be influenced by anybody or any party. Mr Khumalo had also said how the Commission was trying to step up its engagement with the provincial legislatures, among others the Western Cape. However, when Mr Khumalo spoke about the Commission's vision, “you saw my eyes went big,” when he said that this was in line with the African National Congress (ANC)' s view and policy. With all due respect, that was not independent or unbiased. The Commission was not present to represent the view of the ANC and the ANC policy. If this was the way the Commission was going to operate, it was never going to get Mr Marais' support, since it was telling him, as a Democratic Alliance Member that the Commission was using ANC policy “to sweetheart the Western Cape”. If this was its approach, this would mean that it had just lost friends. If the Commission were so aware of the ANC's policies and positions it should be aware of the DA's as well.

Mr Khumalo replied that maybe one tended to fudge the Government policy with the ANC policy “so I can simply withdraw the ANC part” and refer only to the Government and its needs for the resources of the state to be used to attain developmental impact. It was not simply just the ANC story by the way. Section 214 of the Constitution required the Commission to take into account the developmental role of the three spheres of Government. “So the reference to the ANC can be withdrawn if it clarifies the position.”

Mr Marias said that the damage had been done.

Mr Marais referred to the Commission's mandate to consider, among other things, the division of revenue between the three spheres of Government. How did the Commission do that? The country was now entering the stage of a census. However, the strategic plan mentioned nothing of that. Where did this fit in, and how? What action did the Commission take when it made sure that the division of revenue amongst the three spheres of Government was done on an equitable basis?

Mr Khumalo replied that the Commission had to ensure that the Division of Revenue was equitable by using the instruments that were currently available. It had to look at the formulas that were actually used, and review them on a regular basis. Mr Marais had not detected any reference to the census. However, part of the review of the provincial and local government equitable share would basically involve looking at the census. This was one of the key issues on which the Commission had had discussions, and on which Mr Khumalo himself had had discussions with the Premier of the Western Cape, who had raised this as a particular specific issue around migration and how we actually dealt with that in the formula. It was not only the Western Cape, by the way, that had that particular problem. “It's simply subsumed in the broader issue around the review of the formula, so it's taken into consideration in the detail of the strategy.”

Mr Marais observed that the staff component had increased while assets were going down and liabilities were going upwards. This was very alarming for a financial and fiscal body.

Mr Khumalo replied that the Commission as a research-intensive institution was intensive in its use of staff and therefore at any one time must maintain a certain staff complement; secondly, a reason for the increase in the number of staff was that between 1998 and 2005/06 the Commission had only about four researchers, and most of the work was subcontracted or not being done at all. From 2005/06 going forward there was a deliberate drive to re-employ researchers and internally focus the work of the Commission. This was what had contributed to the increases in the staff. In fact, in 2008 a decision had been taken jointly with the National Treasury and the Department of Public Service and Administration (DPSA), after extensive deliberation, to examine the capacity of the Commission to carry out its basic mandate of giving an annual submission on the Division of Revenue. That was the only thing that the Commission was able to do. The Commission was trying to resuscitate and rebuild its relationships, for it had ground to a halt. The situation was similar with information and technology (IT) systems. The Commission was now trying to install equipment and software that people could actually use. The Commission had only just recently moved from Word 2007 to the most recent one, Word 2010. It was those kind of tools that one needed to do one's work, otherwise one had to close shop. This explained the staff intensity in terms of the budget.

The Chairperson said that there were fundamental issues with which the Commission had to deal. The issue that it had raised regarding its role vis-a-vis the evolution of institutions of democracy was a very old debate. The waning interest in the FFC's advisory role within the three spheres of Government was impacted on when the Intergovernmental Relations Act was enacted, and now we have the Budget Office in Parliament. The Commission really had to look at those issues. In its research document, some of the recommendations were beginning to talk to these issues. Even in its strategic plan, the Commission was talking about raising its profile. The Commission needed to ask itself honestly why Government and the legislature progressively were under-utilising the services of the FFC. Was it because of internal capacity in terms of Government? Or was it that the majority of institutions were deciding that they could resolve issues by themselves?

The Chairperson said that the second issue was that raised by Mr Marais. There should be no confusion as to the FFC's mandate, which was derived from the Constitution. At all times the Commission must be seen to give an independent and unbiased view, so that it did not begin to pollute the information that it provided to Parliament and those it sought to advise.

The Chairperson said that the Standing Committee was very considerate and accommodating in the way that it did its work. “We have never sent anybody packing.” However, Commissioners were appointed by the President. These appointments were not made merely to enhance someone's curriculum vitae. The Acting Chairperson, not even the Chairperson, and managers were here to present the strategic plan. He found this very strange. This begged the question: who, in terms of the law, owned this strategic plan? The Committee did not want to be left with the impression that the Acting Chairperson and management were treating the Commission's work as a pilot project. With the exception of the former Chairperson, the 2009/10 FFC Annual Report did indicate who the Commissioners were. They were not present, “so we can't say they are Commissioners”. How many of them were still in office? Of those who were still in office, how active were they? The tendency of non-executive directors was either to completely disengage, or to create space for themselves through sub-committees and permanently get involved in the work of any institution that they were supposed to supervise in terms of policy issues. However, from what the Chairperson could deduce here, because the Chairperson of the Commission and the Deputy Chairperson were supposed to be full time, the work of the Commission had basically been “relegated” to the Commission's Chairperson and Deputy Chairperson; in this instance the work had been “relegated” to the Acting Chairperson. The Standing Committee was part of Parliament and should interact with a full delegation from the Commission as the law required. Such a delegation must include the Commissioners. The Standing Committee would not say that this strategic plan had been presented to and accepted by the Committee. Even before writing any letter, the Standing Committee wished to make it clear that it was sending the Commission back with the instruction that the Commissioners must attend for the presentation of their own strategic plan. If they were too busy with other activities to carry out this assignment from the President, then let them say so, so that people who understood their role should actually take this responsibility. South Africa was not running short of talent. This meeting was scheduled long in advance. Those Commissioners had no excuse. It would be a miscarriage of justice and dereliction of duty for the Standing Committee to treat this matter lightly. The Chairperson had allowed the presentation to go ahead, because, in any event, one could never “over-communicate”. It was information that was important, and the Standing Committee now had received it, but when Parliament returned from the recess, the Standing Committee required the Commission's management and the Commissioners to be present to make further submissions on this matter. Probably this report that the Standing Committee had received, because it was also on public funds, would warrant a presentation and a discussion. Members did not want to make assumptions, but wanted to help the Commission do what it was supposed to do. “Funds must follow functions.” Those functions must be executed by those who had been assigned to do so, yet “we don't see those people”. Moreover, the Chairperson asked how often the Commission met, because it did not meet only when it came to Parliament. Members would require to see even the attendance register, so that they knew if there were meetings with management alone, or if the Commissioners did take their responsibilities seriously and came to meetings of the Commission.

Mr Khumalo concurred with the Chairperson's observations. He agreed fully with the Chairperson's request to provide information on why the Commissioners were absent. The Commission did inform its Commissioners of forthcoming engagements with Parliament. He was sure that, over the period in which he had been Acting Chairperson, Members had seen Mr Khumalo and one or two staff members, and “occasionally one or two Commissioners”, especially those based in Cape Town. Mr Khumalo had worked for the Commission for ten years as a staff member and more recently as a member of the Commission and it was very clear to him that the issues of governance needed to be addressed. The Commission had written to the Minister of Finance and highlighted them. Mr Khumalo had met with the Director-General in the Presidency, and highlighted those issues that needed attention. Early in 2011, “for two weeks we actually didn't have a full Commission”. Two Commissioners' terms had expired and they were reappointed, namely Commissioner David Savage, [a specialist in intergovernmental fiscal relations and local service delivery] and Commissioner Krish Kumar, [a member of the South African Local Government Association’s (SALGA) Finance Working Group, and Fellow of the Institute of Municipal Finance Officers (IMFO)]. These two Commissioners were reappointed for a further two years effective from 01 March 2011.

The Chairperson asked Mr Khumalo to give that information in writing.

Mr Khumalo agreed, and would convey to the Commission that the Standing Committee wanted to engage with it in its entirety and not just with the Acting Chairperson and the Commission's Secretariat. He had already noted that there was a danger that where the Commission's Secretariat was delegated to represent the Commission that “we might present issues here as the Secretariat which were not really reflecting what the Commission wants, and there was a danger if Commissioners were not available” .

Mr Khumalo added that Commissioners were expected to attend at least four Commission meetings per year. Generally the current crop of Commissioners had been quite regular in attendance. However, there was a problem with engagement with Parliament.

The Chairperson emphasised the importance of the Commissioners' attendance at presentations of the Annual Report and Strategic Plan so that they were accounted for. “We cannot have a situation where management comes here to talk to us and the people who are really appointed by President are not here.”

The Chairperson adjourned the meeting.

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