Social Development Department & SASSA 2009 resolutions; Committee Report on oversight visits to provinces; Unauthorised Expenditure Reports: Defence & Presidency

Public Accounts (SCOPA)

23 August 2011
Chairperson: Mr T Godi (APC)
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Meeting Summary

The Standing Committee on Public Accounts (SCOPA) considered five of their reports relating to recent oversight activities and adopted them with amendments.

The first two reports were resolutions based on the 2009/10 Annual Financial Statements and Auditor-General Report of the Department of Social Development and South African Social Security Agency.

The third report  provided SCOPA's findings and recommendations on its oversight visits undertaken to investigate the operations of the Third Party Fund in practice. Visits had been made to Kwazulu Natal, Limpopo, Mpumalanga, Eastern Cape (28 - 30 March 2011) and Gauteng (30 - 01 July 2011).

The fourth and fifth draft reports dealt with the unauthorised expenditure by the Department of Defence and Military Veterans and the Presidency, respectively. Further reports on unauthorised expenditure by the Department of Transport and Correctional Services were not considered due to time constraints.

Members raised their concerns about the dual accountabilty relationship that existed between the Department of Social Development and SASSA. With relation to the Third Party Funds of the Courts, they noted their concerns once more, that the entity had not submitted financial statements to the Auditor-General since the 2007/08 financial year. Members commented on the  challenges with regards to the Courts’ Financial Management System and uncleared funds amounting to millions of rands on their books, and issues such as the necessity for surveillance cameras, the insufficiency of sheriffs and the need for skills training for staff. A DA member felt strongly that the process of streamlining the system dealing with the payment of beneficiaries through the courts, should be accelerated. Members commented that unauthorised expenditure by departments should be treated more seriously by government and offenders should  appear before SCOPA.

The Chairperson updated the Committee's programme for the third quarter. Oversight visits to SASSA sites in the Eastern Cape and Western Cape and a briefing by the Auditor-General on the annual reports and financial reports of the Bushbuckridge and Magalies Water Boards followed by hearings were scheduled for September 2011.The Committee's oversight report on the Department of Correctional Services would be considered in September as well.

The Committee discussed who would attend the Association of Public Account Committees Conference from 4 - 6 October in Kimberley, and the SADC Organisation of Public Accounts Committees Conference from 30 October - 5 November 2011 in Zimbabwe.

Meeting report

Updated Committee Programme for Third Quarter
The Committee reviewed their programme for the third quarter. The Chairperson proposed that the Committee undertake an oversight visit to the Eastern Cape in the week of the 6 - 9 September 2011 as there had been indications that all was not well there. They would also visit a paypoint in the Western Cape as there had been reports in the media that the system needed improvement.

Briefings by the Auditor-General on the annual reports and financial statements of  the Magalies and Bushbuckridge Water Boards were scheduled  on the 13 September 2011. Hearings on the qualified audit reports received by them were scheduled for the 14 September 2011. Consideration of the Department of Correctional Services Oversight Report was scheduled for  20 September 2011. A Committee planning session was scheduled for 21 September 2011.

Mr R Ainslie (ANC) asked if the Committee could meet with the officials responsible for the scoping exercise that determined the Committee programme in order for them to make input into the programme. He queried why the date for the plenary of the 13 September 2011 was listed as a possibility and not a certainty as this would affect the meeting scheduled for the 14th. The Chairperson confirmed the dates.

The Chairperson referred to the oversight visit to the Eastern Cape which did not include all of the province. He requested that the Committee Secretary do a follow up and send the complete itinerary.

Association of Public Account Committees (APAC)  conference
The Chairperson noted that the date for the Association of Public Account Committees (APAC)  conference was 4 - 6 October 2011 in Kimberley, Northern Cape. All members were to attend. SCOPA members, Ms M Mangena, APAC Deputy Head for Administration, and Ms A Muthambi, executive member of APAC, could be approached for additional information.

Ms A Muthambi (ANC)  noted that a memorandum had been circulated on the APAC conference. Together with the  Western Cape and Eastern Cape, they had been tasked to develop a paper on "Strengthening governance structures in order to enhance transparency, accountability and oversight in the public sector". In the memorandum, there were guiding questions that needed to be answered and members' input would be included in the draft report. She was working with the Committee secretary and researcher on a draft paper which she requested they present at the next plenary.

The Chairperson proposed that the draft report be circulated to members before the plenary.

Ms Muthambi agreed and said the paper related to two jurisdications and the Committee secretary had been battling to be in contact with them. She felt that if they took the initiative, the provinces would follow their lead. They would circulate the draft report to the provinces for their input.

The Chairperson agreed to this process. He asked Ms Mangena if they were going to elect new leadership at the Conference.

Ms Mangena replied that it would be an elective conference as two years had elapsed.

The Chairperson said that the National Assembly should play a central role in providing leadership to APAC and in influencing how things are done.

Ms Mangena commented that the people from Tanzania had not been very happy with the delegation from South Africa as they wanted Parliament to be present (not legislatures) and were confused by the terminology. There had been 45 delegates from South Africa while the other countries sent a maximum of ten delegates.

Mr S Thobejane (ANC) stated that the National Assembly should take the leadership in ensuring that decisions were taken in the best interests of the nation and that the quality of the members that were nominated determined the level of support they received.
SADC Organisation of Public Accounts Committees Conference
The Chairperson said the Conference would be held from the 30 October - 5 November 2011 in Victoria Falls, Zimbabwe and the invitation and the programme would be made available. The National Assembly was supposed to have three delegates excluding Ms Mangena as she was one of the office bearers. The names of the representatives were needed by the end of the week from SCOPA. They could decide what to do or they could follow the travel policy of Parliament. The formula was that if there were three delegates, two had to be from the ANC and one from another political party.

Mr Ainslie put forward the names of two ANC candidates: Ms Chiloane and Ms Muthambi.

Ms Mangena observed that while the third person should be proposed by the opposition, she proposed that the Chairperson should be nominated.

Mr Thobejane supported Ms Mangena but felt it would be critical for the Chairperson to be present.

Mr N Singh (IFP) agreed with Ms Mangena but proposed that one member be taken from the ANC's delegation and an opposition member be given the opportunity.

Mr Ainslie replied that as Mr Singh had addressed him he wanted to be allowed a few hours to consult his caucus.

Mr Thobejane said it would assist if they knew who the person would be for whom they would be relinquishing the position, as there were people to whom they would never agree.

The Chairperson said that they should internalise the process as he did not want them to move into their trenches. They already had the names of the two members and there was a proposal from Ms Mangena and a proposal from Mr Singh.

Mr Singh asked for a brief space for the opposition to consult to decide on their nomination.

The Chairperson said he wanted them to do it in the meeting to prevent the Committee fragmenting.

Mr Singh stated that they had not consulted the Chairperson, as they had felt that he should be part of the delegation no matter what. They proposed Mr Pretorius as their candidate, in addition to the Chairperson. If there was a problem they would reconsider their candidate in favour of the chairperson.

Mr Ainslie stated that they approved the delegation which would be the Chairperson, Ms Chiloane  and Mr Pretorius.

The Chairperson said there had been a proposal for three people and they should take it to APAC to see if they could have an additional person.

SCOPA Report on Annual Report and Financial Statements and Auditor-General Report of South African Social Security  Agency for 2009/10
The Committee considered this draft report and members proposed amendments on each page.

SCOPA Report on Annual Report and Financial Statements and Auditor-General Report of Department of Social Development for 2009/10
The members considered the draft report and made appropriate amendments.

Mr Pretorius observed that the major problem with SASSA and the Department of Social Development was the dual accountability relationship between the two.

Referring to the Committee's recommendation on this matter on page two, he said it was not worded strongly enough. The government had to clear up the confusion in accountability between SASSA and the Department urgently. This recommendation was re-worded.

The Chairperson called for the adoption of the two reports with amendments and this was unanimously agreed upon by members.

SCOPA Report on its oversight visit to Kwazulu Natal, Eastern Cape (28 - 30 March 2011) and Gauteng (30 June - 01 July 2011)
The Committee considered the Report on the Third Party Fund's operations in various provinces and members proposed amendments where appropriate.

Ms Matladi queried what the difference was between the oversight visits and hearings and how it differed from the Committee's report on SASSA.

The Chairperson noted that the SASSA report related to the Annual Report and the Committee was still to undertake the oversight visits.

The Chairperson drew attention to the follow up sentence on the matter raised by Mr Pretorius which stated that the Fund had yet to submit their financial statements for 2008/09 to the Auditor-General for audit purposes and hence there was no audit outcome. He asked the Committee Secretary to check whether the Fund had submitted financial statements to Parliament for 2008/09 and 2009/10. 

 Ms Nkabinde replied that the Fund had not.

The Chairperson stated that it should be indicated that, since the 2007/08 financial year, the Fund had not submitted any financial statements to the Auditor-General, to date.

Ms Mangena noted that the recommendation on the need for daily and monthly reconciliations as well as for staff with the skills and qualifications to perform these tasks, was unclear. This was clarified.

Ms Chiloane referred to the fifth recommendation on appropriate disciplinary action and asked if the Committee should not receive progress reports. In practice, when the Committee encountered fraudulent activity, they did not know if there had been a follow up or if the Department and Minister were aware of the incident. 

The Chairperson proposed that they add what Ms Chiloane was raising, as number ten. This would recommend that a progress report be sent on all the recommendations made including the mismanagement and the missing security cameras.

The Committee would use the progress report as a follow-up.

Ms Chiloane raised a matter that had been brought to the attention of the Committee regarding a beneficiary who had not been able to access maintenance money from the mines since the previous year. She asked whether the Committee could make a follow up in this particular case.

The Chairperson indicated that they would do a follow up with the Regional Manager who had made a commitment to resolving the matter.

The Chairperson proposed that the conclusion should reflect Ms Chiloane's proposal for a progress report.

Mr Pretorius drew attention to number 5 under 'Recommendations' on page nine and noted that the necessity for the Department to speed up the process of improving the receipt of correctly filed and timely schedules from depositors was a serious matter. If they simply said they should speed up the process, it was not strongly worded enough. The Minister as the Executive Authority needed to do something. He had to liaise with the his colleagues to change the legislation as it reflected on the Maintenance Act which was vague on how departments and companies should submit the names of their beneficiaries. He was concerned that they were not saying enough about what departments should do and he emphasised that the Minister should do something. He added that the solution might be to formulate a private members Bill.

The Chairperson noted that there had been a statement from the Minister the previous day about a direct Electronic Funds Transfer (EFT) system at child maintenance courts. This would cut the time beneficiaries had to wait for payment and it had been well received. He suggested that they should request more information from the Department and he instructed the Committee Secretary to do so.

Mr Pretorius said that they should recommend that the Department streamline the process.

The Chairperson agreed that they should say streamline as they were not sure in which direction things were moving.

Mr Pretorius noted that the issue of Unclassified Funds and the million of rands on the Courts books that the Committee had encountered should be addressed in the report. He proposed that they add that the Department should assist the Courts to clear their books. This proposal was effected.

Consideration of Unauthorised Expenditure Reports
The Chairperson noted that the Committee's resolutions were based on the work that the National Treasury had done and that the Committee had not deviated from their recommendations. The National Treasury was the Department tasked with overseeing the implementation of the Public Finance Management Act (PFMA) and they had done the technical analysis to make a balanced assessment especially in relation to the Department of Defence and Military Veterans.

SCOPA Ninth Report on unauthorised expenditure of Department of Defence
A recommendation was made for the approval of unauthorised expenditure of R15, 1 million for military museums to be made as a direct charge against National Revenue Fund.

SCOPA Tenth Report on unauthorised expenditure of the Presidency
The Committee made amendments to the report.
Ms Dreyer noted that she had informed the Chairperson that she would have to leave the meeting early and that she would like to make some input into the Transport and Correctional Services Reports. She agreed with the technical recommendations made by National Treasury and that they had no alternative but to approve the unauthorised expenditure, but she felt that the Committee should take the matter further. The Committee should agree that the Director General or the Minister at the time when the unauthorised expenditure occurred, should come to SCOPA to account for their deeds. In the case of  the Department of Transport, it was very serious as it happened consistently and the Treasury Regulations and the PFMA had been deliberately ignored. She felt strongly that the Accounting Officers should not be allowed to get away with what they had done. She said they should be called back from wherever they were, even ambassadorial postings, to come and account to SCOPA.

The Chairperson noted that they should consider these issues at the plenary of 21 September 2011, when they reviewed their method of work. He recalled that in the matter involving the Land Bank, the Minister had noted that they were calling the institution to account but the person was no longer working for the institution and the question raised was on whose behalf was he coming to account. There were also instances when the officials said they were not there when it happened. Others who were no longer there wanted to appear in order to clear there name, even if they were no longer there. The Chairperson said the Committee should adopt a position and agree and move on that basis.

Ms Matladi stated that in terms of the Committee tightening up how they operated, she proposed that in future they had separate meetings with National Treasury and the Auditor-General before meeting with departments. In the previous meeting they had called Treasury to account in front of the departmental officials and she felt that it would have been more appropriate if that had been done at a separate meeting.

The Chairperson asked the Committee Secretary to note that for the discussions.

Mr Singh supported the Chairperson's proposal for a fuller discussion and said they should also decide how far back they had to take accountability. In the case of the Department of Trade and Industry they had discovered that officials had been fiddling the system since before 1994. He said if they called people to account it should extend to the last government too as there had been a loss of R32 million to the State and, somehow or the other, they had to draw the line.

After approval of the Ninth and Tenth Committee Reports, the Chairperson proposed that the meeting be adjourned and they postpone the Transport and Correctional Services Reports.

Mr Pretorius noted that the Department of Transport was an annual transgressor in overspending huge amounts and he suggested that the recommendations be worded stronger.

The Chairperson proposed that the first two reports be considered done and that the reports on Transport and the rest be considered at the next plenary.

Mr Singh noted that there should have been a meeting between the Department of Correctional Services (DCS) and Treasury but the Committee did not have the outcomes of that meeting and he could not agree with the recommendations unless they got the outcomes of that meeting. He requested that they receive that information before the next meeting.

He noted that the recommendations on DCS were put there principally because they had told them to meet with Treasury but neither one of them had responded. The Chairperson commented that it would be an affront to Parliament for the Committee to hold on to their work. It would be in the interest of the Departments to ask for more time if they did not agree yet were just quiet.

Ms Chiloane noted that DCS and National Treasury had two different stories and they had no choice but to hammer both departments.

The Chairperson observed that the Department of Home Affairs had also not been in agreement with National Treasury on their recommendation as was the case with DCS. He said that it was in the best interests of DCS to be seen to be assisting the process.

The meeting was adjourned.


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