Department of Performance Monitoring & Evaluation & Youth Development Agency budgets: Committee Report adoption

Meeting report

Committee Report on the Strategic Plan & Budget of the Department of Performance Monitoring and Evaluation
The Chairperson asked Mr Phelelani Dlomo, Committee Researcher, to take the Committee through the Committee’s draft Report on the Department of Performance Monitoring and Evaluation (DPME) budget and strategic plan.

Mr Dlomo read through the Report, verbatim.

In summary, the report provided context for the formulation of the Department and noted that it was assigned Vote 6 after being removed from Vote 1 (The Presidency). The section of the Report dealing with the Strategic Plan included a statement of the mandate of the Department, and noted that it also had the mandate of managing the Presidential Hotline and evaluation. A summary was given of the input that the Department made when it appeared, the reports of its Internal Audit Unit and the report of the Auditor-General South Africa (AGSA). The outputs were also detailed. The Report then tabulated the Budget Vote 6, with its four funded programmes for the financial year 2012/13, the Medium Term Expenditure Framework (MTEF) and appropriation for 2013/14 and 2014/15. It then elaborated upon the programmes, in turn, and their individual allocations, and noted the strategic outcomes of each programme. Finally the Report set out the Committee’s deliberations, findings and recommendations,

Discussion
As Mr Dlomo went through the Report, Committee Members suggested grammatical corrections, word choice edits and syntax corrections, and ensured that there was consistency and uniformity.

The Chairperson asked members for comments other than grammatical corrections. He asked Mr Phelelani Dlomo to clarify for him whether the Report was outlining the strategic plan, the Annual Performance Plan (APP), or both, noting that the main focus should be on the APP.

Mr Dlomo replied that it was his understanding that both were being considered; the Strategic Plan was a five year plan, which was subject to review through the APP.

The Chairperson noted that the subheading of “Mandate of the Department” only made mention of inputs from the Auditor-General (AG) and Internal Auditors. He pointed out that input from a number of other stakeholders should be mentioned, such as premiers. He suggested that this be corrected by insertion of the phrase ‘amongst others’ but not necessarily mention the stakeholders by name.

Mr Dlomo replied that he was not too sure how to include other stakeholders. The AG was responsible for auditing the Strategic Plan. The Budget Allocations per Programme, as set out in Table 1, showed clearly the appropriation for the 2012/13 financial year. The Table was then divided into economic classifications, listing current payments, transfers and subsidies, and payments for capital assets, so that the Committee could get an understanding of where the budget went.

The Chairperson asked from where the points were taken, under the subheading ‘Strategic objectives’ for each programme, and whether these came from the APP or the Strategic Plan.

Mr Dlomo replied that it was important to ensure that the correct referencing for the timeframes were inserted, and that some were taken from the Strategic Plan.

Mr G Snell (ANC) asked for some clarity with regards to the 50% targets that the Department in MTEF would be using for 2013/14 and 2014/15.

The Chairperson agreed and asked what exactly this was referring to.

Mr Dlomo said that he had asked the DPME to answer his own questions on this, immediately after the DPME’s presentation, and what informed this percentage, because the percentage was supposed to be derived from a certain number of items. There was a requirement that the APP outline targets in figures.

The Chairperson decided that this question must be flagged and that greater clarity should be requested from the DPME on this point.

Mr M Swart (DA) suggested that the problem was that the DPME did not know what the figure related to either.

Mr Snell commented on the section subheaded ‘Overall Budgeting and Programme Allocations’. The Report noted that the budget of the DPME had increased by about R68 million and was mainly driven by the increase in consultancy fees, yet the increase in consultancy fees was noted as only about R7 million, and it could thus not be the major driver. He said that this would have to be looked at in more detail.

In addition, the breakdown of the figures for expenditure, under the subheading ‘Deliberations’, added up to R13.8 million, although the total expenditure for the 2012/13 financial year was stated as being R12.2 million. He asked for an explanation on this discrepancy.

Mr Dlomo replied that it was necessary to look at this again after the meeting. The breakdown was given as it appeared in the APP, and he had also noted that this was more than the stated R12.2 million.

The Chairperson said that this inconsistency should be flagged.

Mr Snell reiterated his earlier comment that consultancies could not be the major driver of the increase. He wondered if perhaps additional staff were budgeted for.

Mr Dlomo replied that the DPME would have to be asked to elaborate on this. There were some additional mandates that necessitated the allocation of more funding.

The Chairperson said he thought that there was some information that had not been included in the report, which led to a disjuncture.

The Chairperson noted that, under the subheading ‘Findings’, the Committee should not insert figures in regard to consultancies and professional fees as there was a need to get further clarity on these being the major cost drivers. However, he did think that the Committee should note its concern that the DPME was relying on consultancies, rather than building its own capacity.

Mr J Gelderblom (ANC) agreed and said that the concern was really, with many departments, including this one, that they ended up outsourcing many of the government functions.

Ms R Mashigo (ANC) said that when the DPME was asked about this issue, the representatives had replied that it was more cost-effective to make use of external auditors than internal staff. The Committee had not probed further into this point and asked how often this department, being a new department, did audits. She wondered if this was a once-off process, or if it was done to avoid having to pay a salary to an internal auditor each month. The DPME had claimed that its international studies had shown that independent auditors were more credible and cost effective. She suggested that this point needed to be debated, perhaps in a workshop session, so that the DPME could enlighten the Committee further.

Mr Musa Zamisa, Committee Researcher, agreed that the DPME had stated that the nature of that department required use of independent consultants, to confirm its credibility. Perhaps the Committee could, under the subheading ‘Findings’, express this along the lines of: “While acknowledging the need for consultancy due to the nature of the Department, the Committee is, however, concerned...”.

The Chairperson agreed and asked whether the Committee Members wished to suggest any other matters to be included under ‘Findings’.

Mr Snell noted that whilst this was the first time in which this Committee had undertaken the same kind of work as a portfolio committee, the Committee should consider whether the R174 million currently allocated to the DPME was sufficient to allow it to undertake the work that it was mandated to take on. He asked if this had been sufficiently interrogated, and said that perhaps the Committee may need to look at this during the workshop with the Department. The baseline it had created for itself would never work, and he would like to interrogate the points.

The Chairperson agreed, and added that the question of capacity had been raised with the Department.

The Chairperson asked if the Committee wished to adopt the Report at this meeting, or wait until the following day.

Mr Gelderblom replied that if it could be finalised today, there was no point in waiting, but Mr Swart proposed that it be adopted on the following day.

Synopsis of the Report on the Strategic Plan and Budget of the National Youth Development Agency
Mr Musa Zamisa took the Committee through the draft Report on the National Youth Development Agency (NYDA). After outlining the history, mandate, four strategic outcomes and ten programmes, the Report tabulated the budget allocation for the 2011/12 period and the amount to be appropriated in the 2012/13 period. It also included a paragraph on the consolidated budget, which included other income sources. Table 2 was a detailed budget allocation, per programme, for the 2012/13 financial year. The report then set out details on the Committee’s deliberations, findings and recommendations.

Committee members suggested grammatical corrections, word choice edits, and syntax corrections, where appropriate, to ensure consistency and uniformity.

Mr Zamisa noted that the Committee had observed that the NYDA was different from other departments, as it was an entity that both received a grant from government, but also got revenue from elsewhere. This was the reason why the budget portion of this Report had two components. The Committee had wanted to check how much the NYDA was planning on doing with the budget from the Presidency and how much it was planning to do with the overall budget that included other sources of income.

Mr Zamisa further noted that he was not sure how much of the Report the Committee would be able to adopt at this meeting. The Committee had requested information  and documents from the NYDA, but this had been delivered only after working hours on the previous day, and could not be included in the Report that was tabled at this meeting.

The Chairperson asked for comments on the outline and the programme sub-headings. His understanding was that this Committee served as the Portfolio Committee for the NYDA, and thus needed to monitor the funding that NYDA received, to ensure that all funds were used for the purposes for which they were donated.

Mr Zamisa then explained the budget on Table1 and stated that NYDA had an appropriation of R376 million, for the 2012/13, from the Presidency. The table also showed that the budget had declined from R385.9 million in 2011/12, to R376 million in 2012/13. This had been a major issue, as youth problems had increased. The consolidated budget, which included other sources of income, came to R414.4 million. In Table 2, there was a breakdown of allocations across all programmes, and this breakdown was of the total amount of R414.4 million, not the Treasury appropriation of R376 million. He said that this  was requested from the NYDA, for the benefit of the Committee.

Discussion
Mr Swart asked about the differences in the income. The total, as reflected in Table 2, added up to R406.5 million, yet the total figure given for consolidated income was R414.4 million. He made the general observation that interest income was budgeted as R38.3 million, and noted that R34 million was required for capital repayment, but there was little hope that this would ever be given.

Dr van Wyk (DA) agreed with this observation and said that a table of figures should add up to the same figure as the total given previously, and any errors had to be rectified. The monitoring of the allocations and figures should also be the responsibility of the Accounting Officer at the Presidency. He felt that the Committee should be monitoring the exercise by the Presidency of Vote 1, and not necessarily the budgets.

The Chairperson agreed. He noted that the figures would be sorted out once the missing documents that Mr Zamisa had mentioned were taken into account.

Mr Snell agreed and said that it was uncertain exactly where the R38.3 million was allocated,  as it was not reflected in Table 2. He thought that the Committee needed to get some further clarity on interest income, and how the Committee would exercise oversight over this.

Mr Swart agreed with Mr Snell and added that the Committee had to monitor the R34 million capital repayment. When the NYDA received that money it should be subjected to close scrutiny by the Auditor-General or Portfolio Committee.

The Chairperson agreed. Both Mr Snell and Mr Swart were correct in saying that the Committee should ask National Treasury for assistance with this issue.

Mr Zamisa drew Members’ attention to the footnote that explained the inconsistencies in the figures.

The Chairperson replied that the Committee should make the changes in the report, despite the footnote. He suggested that the issue be “parked” for further discussion for the moment, and requested if there were other comments in respect of the subheadings ‘Deliberations’ and ‘Findings’.

Mr Zamisa said that another issue worth mentioning and noting was that the NYDA also undertook fundraising, yet the income from this was not included.

The Chairperson agreed.

Members agreed with the adoption of the Report on the Strategic Plan and Budget of the Department of Performance Monitoring and Evaluation.

Members agreed to attend to final adoption of the Report on the NYDA on the following day.

The meeting was adjourned.