Department of Performance Monitoring & Evaluation: 1st quarter 2012 performance; Development Indicators 2011

Standing Committee on Appropriations

24 August 2012
Chairperson: Mr E Sogoni
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Meeting Summary

The Department of Performance Monitoring and Evaluation (DPME) presented its performance report for the 1st quarter of 2012. It highlighted several areas where expenditure had been less than projected. DPME noted that it was intending to create its own IT infrastructure, given that its needs differed from those of the Office of the Presidency, but there were delays in reaching agreement with, and then procuring the necessary equipment, via the State Information Technology Agency (SITA). That had now been finalised, and it was hoped that the capital assets budget would be fully spent by year end. 33 of the 195 funded posts were filled, and all remaining vacant posts were being advertised. There had been delays in the salary negotiations, but increases would be backdated. There was underspending on the Presidential Hotline, which was transferred to DPME in 2011, due to SITA’s delays in appointing additional call centre staff, and invoices not submitted on time. The Evaluations Policy Framework had been approved in November 2011, and annual evaluation plans must be prepared, but Cabinet had delayed in granting approval. The preparatory work was done, and expenditure should increase, now that approval was given. There was a possibility of over-expenditure but it would be managed properly and in time. There had been underperformance on two of the Programme 1 issues. There was lack of consensus on the need for and scope of the Results Bill. The Monitoring and Evaluation Task Team had arranged one meeting but this had to be postponed, because of poor attendance by other departments. The guidelines on the Monitoring and Evaluation Units had been deliberately held back, at the request of the Forum of South African Directors General. Eight of the ten sectors for the Data Forum had met, but the remaining two would meet only in the second quarter. Seven out of sixteen targets were achieved in the Public Service Oversight Branch, which were more fully described.

Members noted the commitment of the DPME to achieving its targets by year end, but two Members commented that as a department that had to monitor others, its own performance had to be better managed. They questioned whether there was lack of cooperation from other departments and, if so, how the Committee could assist. The different viewpoints on the Results Bill were examined in more detail, including the question whether the Bill was necessary at all, and it was suggested that once the DPME had been audited by the Auditor-General on its performance it would be useful to arrange for another meeting to discuss the audit. Members thought that clearer timeframes were perhaps needed, but the DPME stressed that monthly information was produced for management meetings, in addition to the quarterly reports to Parliament. A COPE Member was particularly concerned at the assertion that FOSAD’s requests had delayed the preparation of some work and wanted to debate whether this was acceptable and correct, and whether complaints to the Hotline were being dealt with speedily enough. The Chairperson said it was worrying that departments had apparently spent in full, yet failed to reach their targets.

The DPME tabled the Report on Development Indicators 2011, noting that this publication was done annually, and its scope and detail was now greatly increased. 84 standardised indicators across ten categories were used, which were summarised. The data was sourced from government administrative datasets, and trends were also shown. In 2011, GPD had initially picked up, then dropped, and there were worrying declines in capital growth and unemployment. 94% of  the population had access to electricity, but rollout rates had slowed. Life expectancy had improved, an there was a decline in infant and child mortality, although South Africa was not performing as well against the Millennium Development Goals as some other SADC countries. Education showed no marked improvements. There was a negative view of social cohesion and the provision of basic services in the country, and people, particularly the youth, tended to identify themselves more strongly by race and ethnicity. Members sought clarity on the last point, and asked what research had been done into this. They questioned data on infant mortality, and commented that the decline in capital growth would have negative effects on private investment and job creation. A Member asked if there was any truth in the theory that climate change could help improve life expectancy on earth. The DPME was asked if it had its own research unit, and questions were asked about the public ratings for services, and the decline in maths and science results. 

Meeting report

Chairperson’s opening remarks
The Chairperson clarified that at this meeting, the Committee would be acting not as a Standing, but as a Portfolio Committee, as it would be overseeing the expenditure of the Department of Performance Monitoring and Evaluation (DPME). He noted that the dual classification of the Committee had added an extra burden to its work, and if it was necessary for it to meet every day, it was permitted to do so. Members of this Committee were attending exclusively to work on this Committee.

He noted that the DPME would brief the Committee on its first quarter 2012 spending, and outline the development indicators. Although other reports were first presented in March, the Committee had not been able to deliberate on them, and another time would be found to deal with those matters.

Department of Performance Monitoring and Evaluation 1st quarter 2012 expenditure
Mr Sean Phillips, Director General, DPME, said his department had projected to spend more in the first quarter of 2012, as it had hoped to purchase Information Technology (IT) equipment. The intention was to enable the Department to create its own IT infrastructure and not rely on the IT of the Office of the Presidency. However, the process of reaching agreement with the State Information Technology Agency (SITA) took longer than expected, and had led to under expenditure. However, the spending was now starting to take place. Mr Phillips explained that three economic classifications - compensation, goods and services and capital assets - were used to determine expenditure projections. There had been marked under-expenditure in the areas of goods and services, and capital assets.

In the area of compensation, 195 posts would be funded, and 33 of those had been filled to date. All the remaining vacant funded posts had been advertised and were in the process of being filled. Delays in concluding salary negotiations at the Public Service Bargaining Council (PSBC) impacted on expenditure, but salary increases would be backdated, and expenditure was expected to be much closer to projections by the end of the financial year.

Under goods and services, there were two main areas of underspending, namely, the Presidential Hotline and Evaluations. The Hotline was transferred to DPME from the Presidency in 2011. DPME had requested National Treasury (NT) for an increased budget for the Hotline, and that was approved. The increased budget was intended to create additional call centre capacity for the Hotline, increased services from SITA and also to pay phone operators, as the number was a toll-free number.

The request for additional funding was based on an estimate from SITA. The cash flow forecast was also based on the times that DPME expected to receive invoices from operators. However, SITA's inability to set up additional call centre operators, and to provide the additional services that the Department had requested resulted in underspending. In addition, telecom operators took longer than expected to send through their invoices, although those had since been received and expenditure had picked up.

Mr Phillips noted that another area of underspending against projections was on evaluations. The Evaluations Policy Framework was approved in November 2011 and that noted that DPME was expected to work with other departments to produce an annual evaluation plan for this financial year, as well as a three-year evaluation plan. The work had been done, but there were delays in obtaining approval from Cabinet for the Annual Evaluation Plan for 2012/13. That approval was obtained only in June. More work would now be done and the expenditure was expected to increase in the remaining quarters, with even a possibility of having overspending. However, if this did happen, it would be managed so as to avoid over-expenditure on the budget as a whole. Savings made on the budget would be used to augment the evaluations budget, but that would be done within the accepted 8% deviation rule.

In the area of capital assets, expenditure also did not meet projections. DPME was in the process of creating its own IT infrastructure, because its infrastructure security needs were different to those of the Presidency. DPME dealt with considerable amount of data and interactions outside of the Presidency, and thus its IT needs were large. The Presidency IT infrastructure was already overloaded, which was another reason why the DPME had decided on its own IT infrastructure.

DPME had expected to reach an agreement with SITA on what needed to be procured. There were delays in these discussions, but that had since been finalised and procurement of hardware infrastructure was under way. It was expected that the capital assets budget would be fully spent by the end of the year.

Mr Phillips clarified the statistics on performance targets and performance programmes. Under Programme 1: Administration, two targets were not achieved, for the three-year rolling internal audit plan, and the annual implementation plan. A draft plan was developed but implementation was delayed pending the appointment of service providers, whilst the process of testing possible solutions also took longer than anticipated.

DPME was responsible for coordinating the development of the 20-year Review on behalf of Cabinet and the Presidency. It had partially achieved the establishment of the governance structure that was to oversee the drawing up of a 20-year Review. The structure had been verbally approved, and would now be taken to Cabinet for formal approval. It was hoped that the plan would be approved and signed off by the end of the first quarter.

There were four outstanding targets on the data systems, which were the consultation on the Results Bill; the arrangement of a government-wide Monitoring and Evaluation Task Team meeting, the finalisation of the guidelines on the structure of the Monitoring and Evaluations Units in offices of Premiers, and the arrangement of the Data Forum meetings. In relation to the Results Bill, progress had been delayed by a lack of consensus amongst administrative centres of government departments, especially National Treasury, on the need for the Results Bill. Negotiations were still ongoing. In relation to the Monitoring and Evaluation Task Team, Mr Phillips explained that this Task Team was to oversee the management of a monitoring and evaluation framework for government, which was a task requiring consultation with other departments. A meeting had been arranged, but poor attendance meant that it had to be re-scheduled. The finalisation of the guidelines on the Monitoring and Evaluation Units had been deliberately held back, because the Forum of South African Directors General (FOSAD) management committee had requested similar guidelines for national departments, and it was thought that it would be more useful to finalise these first, as they would probably influence the Premier Office guidelines. The national department guidelines had been approved now by FOSAD, and were on the DPME’s website. Finally, Mr Phillips noted that the Data Forum was intended to work with sectors, in order to improve the quality of data produced, and only eight out of the ten sectors had met, with the remaining two scheduled to meet in the second quarter.

DPME had partially achieved on its Public Service Oversight branch management of the Hotline, with seven out of sixteen targets achieved. Those that were not fully achieved included the submission of monthly reports to FOSAD on indicators of management performance, since FOSAD had now changed the reporting requirements to bi-monthly.

DPME had a target to produce two case studies on key performance areas of departments relating to the management performance assessment. In the last financial year, it had produced 103 performance reports on national and provincial departments. The results were presented to all government stakeholders, and departments were expected to put improvement plans in place. This year, the case study methodology took longer than expected, and there was not full achievement against the first quarter target, although six case studies had been finalised.

Mr Phillips noted that there had also been delays in recruiting a specialist for the consultation and research on the policy framework for the Citizen-based Monitoring Programme. In relation to the Hotline, SITA had taken longer than expected to finalise the appointment process for additional call centre operators, although it had indicated that it was busy with all ten appointments.

Mr Phillips summarised, in conclusion, that DPME was a newly established department and had not settled fully into a multi-year budgeting and expenditure pattern. He assured Members that in 2013/14, expenditure would be evenly spread over the financial year, and more closely aligned to cash flow projections.

Mr M Swart (DA) said DPME was intended to supervise other departments’ performance, but it seemed that none of the departments were performing as expected. Whilst he understood the reasons for under-performance, he hoped the expenditure would improve in the next quarter. He stressed that if departments spent their money properly, they could achieve targets. One matter of concern to him was the apparent lack of cooperation by other departments and entities of government with DPME, which enforced the need for a Results Bill. He wondered how Parliament could assist in getting better cooperation.

Mr Phillips replied there were differing views on what the Results Bill should address. There was an argument that this Bill should focus on providing a legally binding reporting framework, but others argued that it should cover planning aspects as well. Currently, National Treasury regulations were in place to cover strategic plans and annual performance plans of departments, but there was no legal framework for planning in the country that could provide for a long-term national plan or medium term strategic frameworks. Another view was that there was a need to cover planning, monitoring and evaluation as these were all closely related; but it was difficult to monitor and evaluate in the absence of good plans. Finally, the point had also been made that government was already over regulated and there was no need for any further regulation of government. All of this was ongoing debate. The Auditor-General (AG) was currently finalising a performance audit on government's readiness to produce performance information. DPME was one of the departments that was being audited, and the whole system of performance was being examined. The audit would encompass issues such as the role of the DPME and National Treasury, as well as departments' response to NT regulations and frameworks for performance reporting.

Mr Phillips suggested that there should be a follow-up meeting with the Committee, once that audit was finalised, to look at the issues that such a report would raise. This would be useful for the debate on whether additional legislation was required to deal with these kinds of situations. The Minister had also cautioned against being too quick to formulate legislation, before ascertaining if officials could cope. He stressed that often there was not lack of willingness to cooperate, and that there was some merit in all the views put forward.

Mr L Ramatlakane (COPE) sought clarity on this response, saying that it indicated that there were differing processes being undertaken. There was no clarity, however, as to when these might be concluded. He wanted clarity also whether the discussions were geared to policy development.

The Chairperson said his understanding was that this issue was raised because it formed part of the DPME targets for the year. DPME wanted the Bill, but all bills had to be preceded by a consultation process in order to ensure compliance.

Mr Phillips clarified that the Results Bill was very much on the agenda for the DPME, and there were ongoing engagements. He would not, however, categorise this as a policy development process, because a lot of policies were in place. The main issue being debated was whether it was necessary to put the policies into legislative form, over and above the existing legislation. There was also another debate on the scope of the Bill.

Ms Ronette Engela, Deputy Director General, DPME, added that, internationally, there was no single model that was immediately appropriate, as the ideal depended on the relationship between the spheres of government. Concurrent governmental functions were an issue in South Africa and the role of the provincial legislatures and departments added to the complexity. There was already some contest around the legislative space, and any new legislation should not duplicate what was already in place, but rather put a different emphasis on monitoring and evaluation.

Mr Ramatlakane commented that this response still did not clearly indicate whether DPME was advocating for legislation. He commented that policy could not become law as it could be contested. If these were the kinds of debates, he was not sure that the Bill would ever be finalised.

The Chairperson suggested that perhaps the debate could be shelved for the moment, until more progress was made.

Ms T Mfulo (ANC) asked if it was possible for DPME to say more about the specific targets that it had failed to achieve, and to outline a plan of action to ensure that they would be achieved in future. She wondered about the link between service delivery and those targets that were not achieved, and also noted that there were no clear timeframes on how and when the outstanding issues would be achieved. It was particularly important for DPME to meet its own targets, given that it policed other departments.

Mr Phillips replied that quarterly reporting on performance against the Annual Performance Plan (APP) objectives was important. The Planning Unit at the DPME engaged with other units to produce quarterly reports, and also to hold management meetings to address areas of underperformance. These management meetings were called after every quarterly report. He stressed that DPME was not producing reports merely for the sake of doing so, but used them as a management tool to enhance its own performance. Detailed information could be forwarded to the Committee, but he wanted to assure Members that DPME was ahead of schedule in many of its programme. The main reason that some targets were not fully achieved was that matters had not moved quickly enough, as opposed to nothing being done. DPME did generally receive the required support from other departments and agencies. He added that DPME had held intensive engagements with SITA, despite an indication that things were not working out well with other departments. SITA was cooperative, and was trying to improve. Some work was not happening as quickly as hoped, but the situation was being managed.

The Chairperson interjected to ask for clarity on the role SITA had in providing support to DPME and other departments. He asked if DPME had authority to oversee the performance of SITA.

Mr Phillips replied although the Department of Public Service and Administration (DPSA) was responsible for overseeing SITA, DPME could monitor SITA's performance.

Ms Mfulo commented that the actual spending, although expressed as a quarterly figure, also needed to be broken down and expressed as monthly figures. Ms Mfulo sought clarity on the deviation of about R13 million under goods and services. She thought that it would create confusion if DPME were to accept oral approvals, and asked how long it was likely to take to get the guidelines approved by Cabinet.

Mr Pieter Pretorius, Chief Financial Officer, DPME, replied that the figures were not currently shown in the format that Members requested, but he could provide them.

The Chairperson said that the request from this Committee had been that DPME needed to prepare quarterly reports. For that reason, he thought that quarterly reports and figures were acceptable, especially given the amount of other work that the Committee had.

Ms Mfulo said the presentation was vague on the reasons why the task team on GWM&E meetings did not sit.

Mr Phillips replied that management meetings had to be delayed. Although there was an annual schedule for management meetings, they were sometimes postponed, depending on the degree of importance of the clashing commitments.

Ms R Mashigo (ANC) urged that any blockages in the work of the DPME must be addressed. She thought that any distraction to the work of DPME would in turn hamper the work of other departments. She sought clarity on the collection of invoices, and said this was likely to be a recurring issue if invoices were not submitted on time.

Ms Mashigo said DPME needed to monitor SITA closely and alert it to its role. Members would be happy if an institution like DPME could ensure that SITA performed its work. Parliament was getting impatient with inefficient departments, such as the Department of Public Works, who were impacting on the performance of other departments. The Committee was aware of how SITA worked.

Ms Mashigo sought clarity on the establishment of the 20-year Review, and said she could not see a reference to that on the Annual Performance Plan (APP).

Mr Phillips replied that the detailed answer to the question was on page 34 and 39 of the APP. He said the plan was approved by Cabinet, and was in the implementation stage of the 20-year Review.

Mr Ramatlakane said it appeared that the challenges to DPME being able to meet its targets, as set out in the APP, were external, such as the FOSAD dictating to the DPME how it should decide its deadlines. He wondered if this Committee should accept the explanation that another department had dictated something that impacted directly on DPME delivery. He thought this was not correct. Firstly, DPME did not account to FOSAD, which was simply a coordinating forum. Secondly, FOSAD did not have the ability to implement anything, and if it failed, it was easy for it to claim that it was merely a coordinating body with no supporting mechanisms. He thought that similar problems could occur with the Results Bill, if departments and Directors-General used procedures such as this to slow down the progress. He suggested that the Committee should perform its oversight on what had been agreed; and wondered if should not then be looking to the APP deliverables, rather than new targets being suggested by other departments. DPME had to focus on its work, even if this may strain relations with other departments, and Mr Phillips need not seek favours from other Directors General. He asked how the DPME intended to catch up on the time and expenditure lags. He pointed out that the DPME had already mentioned shifting funds and doing virements. He reiterated a concern as to how DPME would be able to monitor others, if it struggled to meet its own targets.

Mr Phillips replied that the decision not to report monthly to FOSAD was taken jointly. The bi-monthly reports would be more efficient and made more sense, since indicators tended not to change too much from month to month, and this would have merely increased the volume of DPME’s work without any substantial benefit. He believed the intended goals were still achieved, and reiterated that monthly reporting carried no gains in efficiency and effectiveness.

The Chairperson interjected to say that the main concern was the implication of reporting only bi-monthly on the progress of complaints received on the Hotline.

Mr Phillips replied that DPME received monthly reports from departments, and from there collated it own monthly report, for management purposes, on the Hotline. DPME engaged with departments and provinces continuously on their responsiveness to the Hotline issues. The work done with FOSAD was a peer review mechanism, over and above the management reports that were prepared in respect of the Hotline.

Mr Phillips noted that the reasons for under expenditure were set out in slides 6 and 7. In summary, he wished to say that DPME was optimistic about the cash flow projections, but that in the first quarter matters had moved more slowly than expected. However, the programmes were being implemented and the money would be spent by the end of the financial year.

The Chairperson said that the Committee was still in the learning stages of this process, and Members would find it useful to have a guide or a chart that set out and synchronised the work of the DPME, to enable them to better understand the outcomes and targets. It was important to get clarity on how the Committee could assist the DPME with its monitoring and evaluation work. He commented also that it was of concern that the Department of Public Service and Administration (DPSA) had reported that departments had spent 100% of their budgets, yet failed to meet their targets.

The Chairperson believed that legislation on monitoring and performance needed to be concise, with clear roles stipulated. There was a need to ensure compliance, but it was not necessary to rush the process until there was a proper buy-in and understanding across all departments. DPME needed to note the debates around legislation and the capacity of the Department, and to ensure that it could meet its own targets. He noted that there was still room for improvement.

Development Indicators 2011
Mrs Ronette Engela, Deputy Director General, DPME, said that an annual publication of Development Indicators was issued around December each year, and was published, subject to approval by Cabinet. The DPME was currently preparing the sixth Development Indicators (DI) report, setting out government's own assessment of the country's performance. The process of putting together the publication was lengthier now than in the past.

There were 84 standardised indicators in ten categories, which included economic growth and transformation, employment, poverty and inequality, social cohesion, education, and health. The data was sourced from government administrative datasets. The quality of this publication had improved substantially from the time that it was presented as a Sunday newspaper double-page spread. This year's publication would focus on readability, and would be available in both print and web versions, the latter with more detailed datasets.

The publication also set out some trends, including Gross Domestic Product (GDP). The 2011 year had not been an ideal period for economic development. GDP had picked up, but was on the downward slide again. The decline in growth through capital formation was worrying. The employment situation had not improved, and the numbers of unemployed had increased.

The DI Report also looked at formal housing, access to sanitation and the rollout of electricity. Data on sanitation was reliable, as the Department of Water Affairs was a trustworthy source. In relation to electricity, she noted that 94% of the population now had access to electricity, but the rollout of electricity had slowed down in comparison to the growth rate in 1994.

The Report also dealt with life expectancy, and despite showing a downward trend at one stage, there was now increased life expectancy, largely attributable to the rollout of Anti Retroviral medication (ARVs).
While there was a slowdown in the infection rate of HIV in the youth, there was an unfortunate increase in older women. The nature of the pandemic was changing. There was a decline in child and infant mortality, which was linked to the improvements in the health sector. Although the data had been disputed, the DPME was confident that it now was in possession of the right data. She said that it was also necessary that the data be published regularly.

The Report noted that South Africa had not established an improved culture of education, and that was as a result of the culture of management that impacted on school results. There was a negative view of social cohesion and the provision of basic services in the country. People were now identifying themselves more strongly by race and ethnicity than in the past, particularly the youth.

Mr Ramatlakane sought clarity on the comment around identity and ethnicity, saying that it carried broader implications to the idea of national identity and social cohesion. He wondered if the common nation issue was not influencing social cohesion.

Ms Engela replied that the DPME merely published the data, but this did not mean that any of the officials were experts in the indicators. The DI Report was published to spark further debate, and to get people to start asking deeper questions. DPME had a group of researchers based at Wits University who were trying to understand the trends around social cohesion, and why young people chose to be classified by race and ethnicity, but the results were not yet known. There were interesting patterns around youth voting as well.

Mr Ramatlakane wanted to know what level of infant mortality might be considered as the norm, although he understood that these were indicators that formed part of the Millennium Development Goals (MDGs).

Ms Engela replied that she did not know the Organisation of Economic Cooperation and Development (OECD) norms, but did know that South Africa had been reported as performing poorly in comparison to the rest of the Southern African Development Community (SADC) region over the last four years.

Mr Swart commented that the decline in growth of fixed capital would have a negative effect on the amount of money being made available for infrastructure, and would also have an adverse effect on job creation. He asked if there was anything the Committee could do to resolve that situation.

Mr Phillips replied that this information was used to discuss outcomes with departments. Departments were supposed to focus on the impact and the real results of what the figures showed. There was a decline in both public and private investment, the latter particularly because of the global economic meltdown. Exports had decreased, and the private sector had slowed investment in many areas such as mining. There had been a major increase in public sector investment, especially in the lead-up to the World Cup in 2010, but it had since slowed down. Government was now focussing on infrastructure investment, and the establishment of the President's Infrastructure Coordinating Commission (PICC) was further evidence of the emphasis that government had put on infrastructure investment. The public sector investment programmes were expected to increase.

Ms Mfulo asked if there was truth in the theory that climate change could help improve life expectancy on earth.

Ms Engela replied that South Africa’s figures for births and deaths were now more or less the same. This was an important turning point in the country in terms of demographic trends, as it meant that the population would stabilise, and that in turn would have an impact on schooling and other facilities. The life expectancy calculations were done at the point of birth, but a very different picture emerged once a person was past the age of five. She was unwilling to comment on the correlation, if there was any, between life expectancy and climate change.

Ms Mfulo wanted to know if the DPME had its own research unit, saying that if it did, there was less likelihood of questions around the reliability of data, and the work of the Department would become easier.

Mr Phillips replied that a research division had been established at DPME, and it was in the process of hiring staff.

Ms Mashigo queried the graph showing public opinion about the delivery of basic services. She asked if the improvement in the public ratings meant there was generally in fact better provision of services. She asked that some context also be given, in the reply, to the spike in service delivery protests.

Ms Engela replied that there was detailed information in the Report about a range of services, investigated over a six-week rolling period, by the Government Communication Information System (GCIS). After services were delivered, there was a period of four to five years during which people would express themselves comfortable and happy with the services, but after that there would be demands made for improvements.

The Chairperson sought clarity on why there was a decline in performance of maths and science. He asked if there was any relationship between teaching colleges and schools when it came to the area of maths and science.

Ms Engela replied that the country was not improving its performance overall in the maths and science subjects; although South Africa was performing less well in the better-resourced schools it had improved in the less privileged schools. She said there had been problems in the rollout of the Dinaledi Schools and these were not achieving what was intended.

The Chairperson noted that the Committee would take its reports through to the House. He commented that the Committee needed to increase its capacity to cope with the amount of work it faced.

The meeting was adjourned.


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