The Acting Director General provided a clear analysis of why one found overspending and non-achievement of targets within the Department of Women, Children and People with Disabilities. She discussed what the Department could not currently change and what they were doing to mitigate the problems that could be avoided. She then looked at the successes they could report on. These were:
• It was successful in holding consultations with the sectors to assess their expectations from DWCPD.
• In this regard they ensured an acceptable level of visibility where there was previously none.
• They ensured meaningful participation and representation at international fora in relation to women, children and people with disabilities.
• Partnerships were established with development agencies.
• A national action plan for children has been developed.
The Director of Finance then presented on Employee Compensation for the first quarter and for the whole financial year
and explained the reasons for the unavoidable overexpenditure for Employee Compensation which was 27% overall (instead of 25%) for 1st Quarter. He also provided an analysis as at 30 June 2012 and for the whole financial year for: Goods and Services; Transfer Payments; and Machinery and Equipment expenditure.
Members were keen to know that every attempt was being made to avoid the extreme over expenditure incurred on the previous Director General’s watch. They asked questions about over expenditure and adherence to the Public Finance Management Act, IT Migration, the LOGIS supply chain management system, the optimal use of resources, issues raised about DWCPD during Appropriations Committee meetings, the remuneration rate for new employees, work done with other departments, under performance within programmes and the turnaround strategy which needed to be presented to the Committee. The Chairperson said that the Department could sense the disappointment of the Committee about missed targets. She asked the Department that when it returned with the turnaround plan it convince the Committee that it could work.
The Commission for Gender Equality presented on the work done by its the research department on the Victims Charter Report, the monitoring of the Departments of Health and Correctional Services, Gender Barometer, 365 Days Action Plan, and work done into land study, widowhood, the private sector, water study and the education report. It also presented on the work of its legal department and public education and information department. The Chief Financial Officer provided a spending analysis for the first quarter, a financial status analysis and spoke about financial management and the Public Finance Management Act.
The Chairperson commended the Commission for Gender Equality for having made strides in “turning around the woes of the past into noticeable improvements”. Members raised questions about the impact on the Commission’s service delivery during the time of Commissioner vacancies, litigation done on behalf of members of the public and the audit matters raised by the Auditor General. A concern was raised about the lack of visibility of the Commission for Gender Equality.
Department of Women, Children and People with Disabilities (DWCPD): April-June 2012 performance
Ms Thandeka Mxenge, DWCPD Acting Director General, the Department was operating in an environment in which there was continuous over expenditure and they were struggling to meet targets. The Department had done an analysis and they had found that this was the case because there had been an anomaly in the key planning processes of the Department:
Why Do We Find Overspending And Not Meeting All The Targets
• The 2011/12 Estimates of National Expenditure was submitted in December 2010, without a strategic plan as a basis.
• The strategy was only approved in February 2011.
• Therefore there was no alignment between the budget and the organogram.
• There was insufficient provision for operational costs either
• It is assumed that the ENE was based on the allocation that was used for the programmes that were incubated at the Presidency.
• There was also no provision for Corporate Services.
• In hindsight it is noted that the appointments could have been deferred to the following years when there was sufficient funding.
• The DIRCO programmes could have been taken on condition that the accompanying budget is transferred to the department.
• In-year monitoring could have been used to allow the department and national treasury to detect the problem much earlier.
• There is a need to review the Annual Performance Plan for 2012/13 to ensure that the indicators and targets are SMART.
• There is also a need to reduce the indicators to three strategic ones, and move the rest to operational
What We Cannot Change / Unavoidables
• We cannot avoid remunerating the current employees regardless of them being appointed outside the allocated budget.
• We cannot avoid purchasing tools of trade for these employees despite the fact that they were not budgeted for.
• We are obligated to continue remunerating employees at higher notches as they were transferred from other departments.
• The MTEF process cannot be used to source the required funding as we have to do so within the current baseline allocation.
• The strategic plan is fixed for the next four years
• There is no sufficient capacity within the finance unit to fully implement the PFMA and Regulations.
• The lack of internal controls both in finance and human resources contributed to the problem.
• The lack of proper governance structures such as the internal audit function, risk management committee and audit committee also contributed.
• The relocation from the Presidency was not well planned for and thus contributed to the problem.
• The department was successful in holding consultations with the sectors to assess their expectations from the department.
• In this regard we ensured an acceptable level of visibility where there was previously none.
• We also ensured meaningful participation and representation at international fora in relation to women, children and people with disabilities.
• Partnerships were also established with development agencies.
• A national action plan for children has been developed
Ms Val Mathobela, DWCPD Chief Director of Strategic Management, looked at the objectives and Key Performance Indicators for the 1st Quarter of each of the Department’s four programmes: Programme 1: Administration; Programme 2: Women’s Empowerment and Gender Equality (WEGE); Programme 3: Children’s Rights and Responsibilities (CRR); Programme 4: Rights of People with Disabilities (RPD). She reported on how well these had been achieved and provided reasons for lack of achievement.
Mr Llewellyn Louw, DWCPD Director of Finance, looked at employee compensation for the first quarter and for the whole financial year. On the compensation of employees, he said that at present the current funding of R57.126m was not enough to pay the actual incumbents in the department. A consultative process had been done to re-look at the shifting of funds from Goods & Services to Compensation within all four programmes with the minimal effect on the delivery of targets and outcomes. A moratorium has been placed on the filling of posts, including two critical posts that were vacated (CFO and Special Advisor to Minister). As part of addressing the funding requirements, the department was working together with National Treasury on a turnaround plan to ensure that the financial requirements and considerations were addressed.
On the projected Good and Services expenditure analysis for this financial year, he said that goods and services expenditure analysis on 30 June 2012, goods and services expenditure analysis for 30 June 2012, the narrative explanation to goods and services, transfer expenditure analysis for 30 June 2012, the narrative explanation to transfer payments, machinery and equipment expenditure analysis from 30 June 2012, narrative explanation to machinery and equipment, projected expenditure analysis for March 2013 within the overall Department, projected compensation expenditure analysis for March 2013, projected goods and services expenditure analysis for March 2013, projected transfer expenditure analysis for March 2013 and the projected machinery and equipment expenditure analysis for March 2013.
Mr Louw also looked at transfer payments, machinery and equipment expenditure analysis as at 30 June 2012 and for the whole year.
The Chairperson said in each report IT migration had been mentioned. What was the progress on this?
Ms Mxenge replied that there were different phases. The first phase had involved the Department gaining their own infrastructure and not depending on that of the Presidency. This had happened. There were now further processes that still needed to be adhered to. A diagnosis had been done and one problem that had arisen was the finance unit was no longer getting feedback from State Information Technology Agency (SITA) which served to warn the Department about challenges in accessing the transversal systems. The Department was trying to rectify these problems.
The Chairperson said she was worried about the continual over expenditure. It was also worrying that it was under administration. There was the Public Finance Management Act but it seemed the Department disregarded it and spent without authorisation. Was there an audit committee?
Ms Thandeka Mxenge replied the audit committee was appointed late last year and since its establishment it had met three times and had looked at the annual financial statements. A director of internal audit had been appointed. However given the kind of problems the Department had, they were cognisant that the appointee would not be able to carry out the duties by herself. This was why the Department had asked Statistics South Africa if it could assist. They had also talked to National Treasury and a turnaround plan had been developed. This listed all the problems the Department experienced currently and stated how the problems were to be fixed. One issue that had been identified was records management which had been in a shambles. Some records had even still been with the Presidency.
Ms H Lamoela (DA) said that it was shocking that it seemed the Department did not adhere to the Public Finance Management Act (PFMA). Someone from treasury had been requested to help the Department as they did not know how to handle their finances. It was as if the Department did not know that they could not exceed their budget. Over expenditure affected a Strategic Plan and goals could never be achieved if there was constant overspending. She asked who was going to jail for the Department not implementing the regulations of the PFMA? She asked if it was the Minister, or the Director General whom she had never seen for the entire period Ms Lamoela had served on this Commitee.
Ms Thandeka Mxenge replied she wanted to apologise for giving the impression there would be over expenditure and there would not be an adherence to the PMFA. Implementing it was a priority of the Department. Implementation of the PMFA and Treasury regulations was not negotiable and the leadership emphasised this.
Ms M Tlake (ANC) said the scenario before the Committee was worrying. In the Department there was no capacity for finance management or compliance with the PFMA. She wondered how Treasury would give the Department more money with the high levels of overexpenditure (overspending had been R23 million last year). She also wondered if the turnaround strategy would really resuscitate the Department.
LOGIS supply chain management system
Ms Van de Merwe asked about the LOGIS (Logistical Information System) supply chain management system which had not yet been put in place due to budgetary issues.
Ms Thandeka Mxenge replied that the Department was working with National Treasury as this was their system. LOGIS was twofold in that there was the system itself and the people employed to manage it. The Department had November 2012 as the target for 100% implementation.
Ms van der Merwe asked the Department if they were using the limited resource optimally? Was it duplicating work done by other departments? Why was so much being spent on things such as cell phones?
Ms Mxenge replied the Department admitted that they were not using their resources efficiently. She had met with Vodacom to figure out the terms of the Department’s contract and had received a bill and breakdown. She had also asked what caused the expenditure and the problems had been identified. The Department had changed its contract with immediate effect. The previous contract was one that had been signed by the Presidency. The change would save around 68% on current expenditure in that field. On landlines people had had their calls limited which would result in a change of about 26% of current expenditure. In terms of duplication she was studying legislation in order to ensure that there was not overlap. The Department was aware of these issues and addressing them. There was a need to look at the strategic focus so that the Department came in where there was a gap.
Ms L van der Merwe (IFP) said in a Department such as this where funds were limited the issue of money continued to arise. Recently, when she had attended a Standing Committee on Appropriations meeting, the Minister had appeared before the Committee and said that the Department did not have problems in regard to leadership but there had been allegations of nepotism, fraud and financial mismanagement (particularly in supply chain management). There had been an investigation by reputable labour lawyers. The Minister had hoped this would assist in cleaning up the Department. What was the status of the investigation?
Ms Mxenge replied that the report had been finalised and the Minister would be able to brief the Committee properly on this. The report was being studied and once this was done the Department would come back to the Committee on that.
Ms Lamoela said she had been ashamed that the Department could not answer the questions posed to them at the Appropriations meeting that had occurred on 23 May, just before the budget vote. Eventually the Chairperson of the Committee had requested someone from National Treasury to help the Department as it did not know how to deal with their finances. There was already over expenditure from last year, was this to be deducted from this year’s budget?
Ms Mxenge replied that the Department did not know the decision on this yet. The Department had been to Standing Committee on Public Accounts in June regarding the matter and no decision had yet been made.
Ms van der Merwe asked how did the Minister’s statement at the Appropriations committee meeting (that there were not enough office space or staff members for the Department to function optimally) gel with the presentation? It seemed that DWCPD did not have enough money to fund the people they had currently.
Ms Mxenge replied that office space remained a challenge and DWCPD had written to Public Works which had said it had not received the Department’s needs. DWCPD had provided this and they were waiting for Public Works to find them space. The Department was working also with Treasury in order to meet their targets, despite the financial constraints.
Progress in the Department
Ms Lamoela said she was concerned about the Department. There had been little done in the last four years as problems it had had at the beginning were still present. It was a struggle to get the Department up and running and it was needed by the most vulnerable people.
Ms Lamoela said she did not understand why people were paid a salary in a ‘higher notch’ after being transferred from another department/agency to fill the Department’s vacancy. What had been the reason for this and why were these people not performing?
Ms Mxenge replied that this had been a concern. What happened was people applied from another Department and if they applied for a similar position they could ask for more pay. The other scenario is that they had a higher ‘notch’ within their old Department and the Department merely took them over on that level. This had been a mistake on the part of the Department. The Department was now hiring people on the minimum notch and were screening CVs thoroughly. Currently the position of CFO was vacant and the CVs were being screened. The position would be filled at a minimum notch.
Ms Lamoela asked if the relevant departments were assisting the Department with projects that they needed to assist with?
Ms Mxenge replied that the Department had asked for interim arrangements with other departments but there was a need for a commitment financially. There had been Memoranda of Understanding signed to allow the Department to go further with other departments in terms of defining roles. The Department had also approached Treasury about assistance from other departments. The Department had looked around the public sector to see who could help in the interim.
Ms Lamoela said the Department should not enter agreements or Memoranda of Understanding unless they knew who was to carry the costs. It seemed the Department had been created to create employment for people and not achieve the goals it said it would. She was disappointed.
The Chairperson noted that at the end of the last fourth quarter DWCPD had reported underperformance in a number of programmes. What happened to the programmes that were not undertaken?
Ms Mxenge replied that so far there had been no money to fix the over expenditure and the final word had not been given yet. The Department hoped to return to the Standing Committee on Public Accounts and have the matter finalised. They had needed a breakdown. At the moment the over expenditure was not funded. In terms of the programmes there was a need to look at whether there was the capacity to undertake an activity. When the quarterly report had been presented to the Minister, the Department had picked up some of the targets were unachievable due to capacity challenges.
Ms Mathobela said that the targets that had not been achieved in the previous financial year had been prioritised for this quarter one. Managers had been told not to have too many targets this quarter. When one counted the number of targets in the core business were quite minimal compared to those of programme one which was administration. The problem is that the targets of administration were generic and related to compliance matters. When one looked at over spending there were items that could not be deferred in administration but when one went to the core business there were items that could be deferred. Within core business manager were advised to not prioritise targets that they did not have the budget for.
Turn Around Strategy
Ms M Nxumalo (ANC) said she was waiting for the turnaround strategy document and the Committee could then see what was going to change.
The Chairperson said that the Department could sense the disappointment of the Committee. There was to be a Budget Review Debate and nothing was going to be hidden thus she was asking the Department that when it returned with the turnaround plan it convinced the Committee that it could work. The Department seldom produced reports and was always in the process of ‘achieving’ something but never getting anything done.
Commission for Gender Equality: April-June 2012 performance
Ms Keketso Maema, Chief Executive Officer, Commission for Gender Equality, spoke about the activities of each of its programmes. The CGE research department had been involved with the Victims Charter Report, the monitoring of the Departments of Correctional Services and Health, the Gender Barometer, and the 365 Days Action Plan. Five draft policy briefs were prepared for land study, widowhood, the private sector, water study and education report following from research reports on these Dialogues on these policy briefs were planned for the next quarter. Within the legal department, work was done on the Traditional Courts Bill, women’s football and SAFA gender transformation. Ms Maema listed the number of complaints that had been received and handled. CGE was involved with eight court cases and these were listed. Its public education and information department had held information sessions on maternity benefits and consultative dialogue on sex work.
Mr Mashabi Putu CFO for the Commission for Gender Equality, presented on the financial activities and status of the Commission for the financial period 1 April to 30 June 2012. The presentation covered the Commission for Gender Equality (CGE) budget in brief, a spending analysis for the first quarter, a financial status analysis and financial management and the Public Finance Management Act (PFMA).
Commendation of the CGE
The Chairperson commended the Commission for having made strides in turning around the woes of the past into noticeable improvements. She thanked the Commission for the presentations made by both the CEO and CFO.
A Member asked if the existence of Commissioner vacancies, that also resulted in under-spending, have an impact on service delivery? If so, in what way?
Commissioner Mfanozelwe Shozi, Chairperson of the Commission, answered that the commissioner vacancies did indeed affect the work of the Commission because in terms of for example their oversight role, this was not as effective during the period the vacancies existed.
Lack of visibility of CGE
A concern was raised about the lack of visibility of the CGE and it was suggested that the Commission should develop and implement outreach programs and Imbizos amongst stakeholders. Examples given for the need for this was the heightened prevalence of Gender based Violence (GBV) in communities and victims being largely unaware of their rights. The CGE had a responsibility for raising critical awareness.
The CGE replied that the concern was noted and they agreed to undertake more outreach programmes as well as use alternative means to ensure that the Commission met this obligation as was legislated, including the involvement of all the stakeholders.
Clarity on litigation matters
A Member requested clarity on whether the CGE engaged in litigation on behalf of members of the public. Had there been follow up on cases that had been referred to authorities such as the courts?
The CGE answered that there had been litigation and follow up as this was a legal obligation in terms of the Promotion of Equality and Prevention of Unlawful Discrimination Act (PEPUDA).
The Committee asked for an indication of a few areas in which there had been audit issues that needed rectification by management as had been noted in the CFO’s presentation.
The Chairperson suggested that this matter should be attended to in a month or two in detail when the Commission would be appearing before the Committee to table its Annual Report. This report would include the audit issues identified by the Auditor General.
The meeting was adjourned.