Minister of Women, Children & People with Disabilities on overspending; Communications Department on underspending

Meeting report

Department of Women, Children and People with Disabilities (DWCPD) briefing

The Chairperson said the third quarter report of departments were indicators for the Committee whether departments were going to spend their budgets. He said that Treasury had reported that most of the spending of the Department had been on travel. What were the core responsibilities of the Department and was the money being spent efficiently.

The Honourable Minister, Lulu Xingwana, said she had respect for the role of Parliament. She pointed out that the Department’s budget was small and the Department’s staff was ill equipped, operated inefficiently and had failed to articulate its role. The Department had a mandate to attend meetings of international bodies and to travel to report and learn on the status of women and children and people with disabilities. Locally it was working with women and children on empowerment and gender equity and the Bill and therefore needed to consult extensively, going to provinces or inviting women to national meetings. Children involved in children’s programs needed to be chaperoned and disabled people had special transport needs which all affected the travel budget. The budget itself was limited from the beginning, giving the example of the program for violence against women and children having a budget of R2.5m and asking what could be done with that amount of money while women and children were being raped every day. She said the Department was supposed to have a staff complement of 205 but only had 129 people. The Department did have problems with leadership and that she had heard allegations of nepotism, fraud and financial mismanagement, particularly in the supply chain. She had instituted an investigation by Fluxmans, reputable labour lawyers, who had started work at the beginning of April and she hoped that this would assist in cleaning up the Department. She had asked the Auditor General (AG) to advise her on further investigations over Public Finance Management Act (PFMA) violations. She added that the Director General (DG) had been put on three months’ sick leave.
 
Ms Bahumi Matebesi, Department CFO, said the largest percentage of the budget was transferred to the Commission for Gender Equality (CGE). All programs suffered a shortage of funds and the internal audit function was not yet established. The Logis supply chain management system was not yet operational due to budgetary constraints, there was no records management in place and inadequate office accommodation.

She said the current budget would not permit the implementation of the Department’s obligations in terms of Program 2 – Women Empowerment and Gender Equality. Some programs, however, were partially capacitated by donor funding.

There was no funding for campaigns for the rights of people with disabilities yet the Department was hosting the International Day of Disabled People. It was requesting assistance from National Treasury.

Discussion
Mr N Singh (IFP) said government appreciated the need for specialised travel requirements and asked if officials had factored in the additional requirements to Treasury. Were the current resources optimally used? Was the Department duplicating functions that were carried out by CGE? He said it appeared that the Department had a top heavy administration.

Dr S Van Dyk (DA) said it would be difficult to get a 40% increase in budget approved. Was the Department ready to operate should the increase not be granted?

Mr G Snell (ANC) said the increased allocation the Department was seeking was above average and Treasury needed to brief the Committee on their view especially as systems were not in place.

Mr J Gelderblom (ANC) asked if donor funding had been affected by the state of the global economy.
 
Ms L Yengeni (ANC) asked if it was true that employees had been paid above their grade and was this not a case of non-compliance with Department of Public Service and Administration (DPSA) policy. She said the third quarter report also spoke of negligence in spending 561% of its budget on advertising and 204% of its catering budget which were not core functions of the Department. How much did the Department budget for travel and how much was given by Treasury?

The Chairperson said that with limited resources the Department had to prioritise to function properly.

The Minister said she would take the third quarter report and investigate it thoroughly. She had instructed that the Department prioritise finance and the Logis system. The issue of the supply chain management was under investigation. She said CGE was a Chapter 9 institution and the Department had no oversight over them.

She said employees who had worked for her in other departments could not expect to be started at entry level salaries but she would read the report and investigate the salary structure of every official paid above their grade. She was investigating allegations of nepotism. She hoped to get some additional support even if not the full R78m because the funding was not enough while South African Airways (SAA) received R6bn in additional funding. She said she and six officials had travelled to New York at a cost of R1.1m

Mr Mzolisi Toni, Acting Director General, said that the Department had transferred R9.7 m for April-May to the CGE. He said the Department got a technical level of support from Treasury and had received aid from Japan for services the Department had needed. The Department was working with what it had and was focussing on putting its systems in place.

Ms Matebesi said transport needs had been factored into the budget. She said it had asked the CGE whether it wanted the amount in a lump sum or on a monthly basis. The Department would provide a breakdown of the advertising spend.

Mr George Tembo, Director: Public Finance at National Treasury, said there had been consultation and the Treasury tried to negotiate with the Department. An amount of money had been provided and the Department had to define the outputs.

The Chairperson asked how new departments were supported.

Mr Tembo said the funding was meant to establish the Department. Once that was in place then the budget would grow in real terms. The Department had an approved establishment of 195 while staff totals currently were 109, but would increase over time. The Department had to demonstrate two things: the capacity to spend and the spending had to result in high value outputs. In this regard there might be capacity problems within the Department. He was aware of the request for additional funding and said he would shadow the Department through the adjustment process. He said the Deputy Minister of the Department had shifted from the Department of Public Works together with her budget. Her budget was large because of her special needs because she was disabled. The money was not specifically earmarked for her use and the Department could decide how the money was used.

The Minister said the Department only had half its staff and that overspending had occurred because the Department did not have a choice as women and children and people with disabilities expected them to deliver She said the Department had challenges but she was dealing with the issues head on and would like to have a meeting with Treasury to give their own perspective and share the Department's challenges and how the Department was disabled in trying to realise its mandate.

Department of Communications (DoC) briefing
The Chairperson said the Committee’s primary responsibility was to monitor spending and the Department had only spent 46% of its budget by the end of the third term. He asked if the Department had sufficient systems in place to prevent temptations to defraud the state as Supply Chain Management (SCM) had become a cancer in all departments.

Mr Sam Vilakazi, Acting DDG, said the total budget for 2012/13 was R1.7 bn of which the biggest share (66%) were transfers and subsidies to the Information and Computer Technology (ICT) Enterprise Development Program. To show that spending patterns had turned around from the last financial year, he presented the budgeted versus actual expenditure for the month of April 2012, the first month of the new financial year. The expenditure ran to 9% of the annual budget. The Department would be tracking expenditure on a monthly basis. The Department had implemented a turnaround plan as there was a need to establish critical pillars in the Department which would focus more on strategic management, having governance systems in place and for the first time a risk mismanagement strategy. In this regard it had received technical assistance from Treasury‘s Technical Assistance Unit and the Department of performance, monitoring and evaluation. Each project now had a project plan with monthly performance and finance targets. In the second phase of the turnaround it would focus on developing an organisational culture around service delivery improvement and business processes. It was reviewing priority areas of finance and supply chain management with the AG’s Office. It had established an organisational assessment board which would have external members to support the audit committee through its less subjective views.

Discussion
Mr Gelderblom asked for the Fourth Quarter Report.

Dr van Dyk asked if the training of employees was done at tertiary institutions that were accredited in providing the skills.

Mr Snell asked why the variances on page 9 of the presentation were so large. He said no mention was made in the turnaround strategy about ICT policy with regard to other departments’ implementation of ICT.

Ms Yengeni asked if the recruitment to various senior management posts were new positions, if not, what had happened to the people in those posts? She asked how the Department had managed to spend 53% in the last quarter. Could the Department explain the AG’s findings of irregular expenditure of R2.8 m and wasteful expenditure of R1.3 m? Was the Department on track for the 2015 target for digital migration?

The Chairperson said the budget of the Department had been reduced from R2 bn to R1.7 bn. He said the decline was related to the issue of planning. He believed the clause in the Division of Revenue Bill on planning should also be part of the national department’s planning.

Ms Rosey Sekese, Director General, said the Department did have an action plan and that the availability of set top boxes was a critical milestone. It would increase awareness campaigns as the time got closer. Sentech was on target with Digital Terrestrial Television. She said the DDG of Finance and State Owned Enterprises (SOEs) had left the Department in 2010. The Department had separated the functions of finance and SOE into two posts. In the performance appraisal system, all non-senior management would be done by the DG, while senior management would be referred to the Minister.

Mr Vilakazi said that managers had a sense of urgency on the need to perform from the start of the financial year. He said there was a budget of R236 000 for skills development and a bursary scheme to accredited institutions as long as the training was linked to the core jobs of the employees. He said the reason why the bulk of the spending occurred in the fourth quarter was that many were transfers to entities which occurred at the end of the year.

Ms Yengeni asked how the transferred money was used as it was important that the money was used and not just transferred.

Ms Sekese said the under expenditure had been picked up in the first quarter but that engaging on the issue was a process that needed to be followed.

Mr Vilakazi said transfers were guided by the readiness of the entity

Ms Sekese said the turnaround plan did deal with the ICT issue and it was sourcing a service provider for a skills audit.

Mr Snell wanted a written response on the ICT question.

Ms Sekese said it was collaborating with other departments on ICT, for example with the Department of Basic Education on a skills connection, with the Department of Health on a health connection and with the Departments of Science and Technology and Trade and Industry. It would be doing an ICT analysis which would inform its interventions, for example on the issue of broadband penetration, and it was doing a full policy review

Mr Maselaganye Matji, Director: Public Finance, National Treasury, said the heart of the budget was looking at coming up with a national ICT strategy including for local government. There should be core deliverables and broadband would focus on rural areas as these could initially create jobs and provide access to information. It was working with the Department especially on infrastructure.

Ms Yengeni said the Department had a history of under spending and thought it engaged in fiscal dumping

The meeting was adjourned.