Communications, Human Settlements, Police Departments, National Youth Development Agency spending

Meeting report

Opening remarks
Proceedings were delayed following the continued “refusal" by the Department of Communications Director General (Ms Rosy Sekese) to appear before the Committee. The Chairperson said the Department had made excuses that it was still assembling information from entities. This followed the Committee's insistence that the Department appear on the 4 September. The Committee had agreed to subpoena the Department if it became necessary.

The Chairperson said he had written to the Department of Communications complaining about its behaviour and had included the Minister in that correspondence. Again the Committee received an apology that the Director General would be sending another official in her stead, without alluding to the reasons for her unavailability. The Chairperson said subsequent to the apology, he had instructed secretariat to inform the DG that the meeting would not go ahead without her presence. He enquired from the Parliamentary Legal Services as to how the Committee could subpoena the Director General.

Adv Charmaine van der Merwe, Parliamentary Legal Advisor, explained that this was possible in terms of the law and it needed to be done via the Office of the Speaker. She explained the process to be followed: details of the subpoena should be forwarded to the Secretary of Parliament. The person subpoenaed had to be clearly identified, for when the Sheriff delivered the correspondence. The Department could not be subpoenaed, but an individual within the Department. This was time consuming, and had to be processed through the Offices of the Secretary and the Speaker.

Mr N Singh (IFP) suggested the Committee needed to make a formal resolution where it contacted the Minister for assistance, but also to inform her the Committee intended to subpoena her.

Ms L Yengeni (ANC) suggested that the discussion about the Department be adjourned until the next day as that would allow Members sufficient time to digest the situation with the Director General.

Mr L Ramatlakane (Cope) said non-appearance by senior officials of the Department of Communication was becoming a trend. The Director General and the senior management had just refused to come to the Committee, and it was not the first time. The Director General was the accounting officer and could not just refuse to come to the Committee. This was disrespect. He objected to the Committee contacting the Minister; Parliament did not account to the Minister.

The Chairperson ruled that the issue be finalised by 5 September. He temporarily adjourned the meeting, to wait for the Department of Human Settlements (DHS).

When the meeting resumed the Chairperson requested that officials not waste time on mission and vision, as the Committee knew those. The reason the Department was invited was because of its underspending. The Committee was aware that DHS worked with a big budget, and that might lead to under expenditure. He told DHS to speak to those issues so that the meeting could be focused. He handed over to the Department. An apology was tendered for the DHS Director General who was on a business trip to Kenya.

Department of Human Settlements (DHS) 4^th quarter 2011/12 performance
Ms Funaneng Matlatsi, DHS Chief Financial Officer, said the figures presented were final and audited. There was an original allocation of R22.5 billion, but that had increased to R22.8 due to rollover funding that was approved, and other funding received such as the disaster relief funds. Due to the needs within the programmes, funds had to be shifted.

The total sum for the disaster relief amounted to R180 million and was shared amongst the provinces. Expenditure at the Department was largely driven by conditional grants including the Rural Housing Infrastructure Grant. There were also the Urban Settlement Development (USDG) and the Human Settlement Development Grants (HSDG). All these were encompassed with the Housing Development Finance programme.

She admitted to the underspending and said it occurred mainly in the Administration and Strategic Relations and Governance programmes. Most underspending did not occur at national level, as funding was transferred to provinces and departmental institutions.

The compensation of employees, as one of the economic classification, should have been at 100%. There was a high vacancy rate due to the moratorium the Department had on posts. Critical positions would soon be filled, pending the approval of the turn-around strategy, in order to address this hiccup in expenditure. Compensation of employees was coupled with related costs. If DHS did not have positions being filled, the related costs accompanying the personnel cost would be affected, hence the Goods and Services were also affected. Under Goods and Services the Department managed to contain cost – it needed not to spend on least important issues rather human settlement developments.

Both the HSDG and the USDG were transferred to all the provinces and metropolitan municipalities. The Rural Housing Infrastructure Grant (RHIG) could not be spent as there were delays in appointing service providers. They started very late and the service level agreements were only signed towards the end of the financial year. Although expenditure had since improved, there was a variance of R70 million. That amount was requested from National Treasury as a normal rollover in this financial year. DHS awaited response from National Treasury on whether the amount would be approved.

The Department could not transfer and utilise the Social Housing Foundation grant because of the different vote. That money was returned to National Treasury as unspent funds and that contributed to the under expenditure. DHS could not shift the money to the Social Housing Regulatory Authority.

Under Administration there was a challenge with the Special Investigating Unit (SIU) that could not spend its grant. The Unit had a system that it used to assess spending according to the service rendered to the Department. SIU monitored that against performance; and had delayed giving invoices. The Department could not push the SIU, on the basis of having to reconcile on their system. Several meetings had been held with SIU, and it was agreed at the end of each claiming session, SIU needed to indicate the amount they would be claiming. Nevertheless, too much money was allocated to the SIU given the amount of work they were to undertake for 2011/12. Consequently, the Unit surrendered R30 million and that was split among programmes at the Department.

Ms Matlatsi said there was a challenge with a building that DHS was to occupy in Walker Street. The building was scheduled for refurbishment. That was allocated for in the budget but it did not happen as a dispute ensued between the landlord and the Department of Public Works (DPW). Discussions were ongoing, and an agreement had been entered into with the three parties involved in the service level agreement. This had contributed to the underspending.

She said the HSDG was a major grant and was allocated accordingly. Gauteng received the largest chunk and had indicated 100% expenditure. The Eastern Cape under spent by 19% largely due to the rollover funding that was approved. Limpopo expenditure was affected by the intervention enforced by National Treasury on that province. The intervention also influenced spending at the provincial department, as the province could not pay some invoices. The entire grant recorded 98% expenditure.

The Housing Disaster Relief Grant (HDRG) also affected expenditure. DHS was aware of underspending but transfers could not be done without provincial plans. Provincial plans came towards the end of the financial year. Given the importance of the HDRG, funds were transferred to provinces in February. Few provinces could spend the money and, in fact, only 18% was spent and most provinces had requested rollovers. DHS awaited the response from National Treasury on this.

Ms Matlatsi said 98% of the HSDG bought over 172 000 development housing opportunities split between the site and top structures. The target for the previous financial year was 222 927 structures. A delivery variance of 50 000 was carried over to the current financial year. This was what the HSDG bought at the value of R14.9 billion, including the rollovers.

The USDG amounted to R6.6 billion and Gauteng got the hugest chunk. Buffalo City had challenges in spending the grant and DHS was dealing with those. The metro underspent by 60% on the grant. The least underspending was recorded in Tshwane.

Information on rollover approvals was yet to be received from National Treasury because financial year for municipal councils ended only in June. These were part of the reasons the Department could not spent the entire budget. The Department was also funding a post for a chairperson to head the programme DHS was driving with the Nelson Mandela Metropolitan University (NMMU). An amount of R3 million was being requested as a rollover.

Mr Neville Chainee, Acting Chief Operations Officer, DHS, explained that in conjunction with NMMU, the Department was introducing a three-year degree in human settlements. The chairperson would manage the degree.

Discussion
Mr N Singh (IFP) described the report as well presented and that it had explained, satisfactorily, the reasons for under expenditure. He wanted to know if there were mechanisms for DHS to monitor expenditure, at the level of provinces and municipalities - especially since R21 billion of the budget was transferred. The Committee was aware of the June financial year-end for municipalities. DHS needed to reassure Members that transfers did not amount to fiscal dumping.

Mr M Van Dyk asked for reasons that led to the non-transfer of the R70 million under the RHIG. He wanted to know the possible consequences for the under expenditure of R698 million overall by the Department, and if there were any measures to rectify this in the future.

The Chairperson requested Members to hold question on mechanisms to address under expenditure, as that information would be contained in a strategy that the Committee had previously instructed DHS and National Treasury to draw up on underspending. The R698 million was a huge amount of money, and underspending happened every year. This was the reason the Committee instructed the departments to formulate a strategy. Underspending made the work of the Committee - approving budgets that would not be spent - difficult.

Ms G Borman (ANC) agreed and said the suggestion was very good. She pointed out that the 100% expenditure on the HSDG did tie with the delivery targets and performance. Why was there such a huge variance; were the targets on sites and top structures in relation to the amount allocated? This was not tying up.

Ms Borman asked how quickly was the Department able to turn around situations where there were disasters. Where were the bottlenecks when it came to releasing the disaster relief money? The relief money did not make sense in terms of releasing the funds to the victims, as it took too long. DHS was correct in asking for provincial plans, but why did it take so long?

Ms Borman commented that the USDG was a problem area. When Parliament allocated money the intention and the hope was that it would be spent. Why would the Department only discover at the end of the financial year that there was, for an example, a 60% under expenditure in Buffalo City? Was DHS not able to detect such challenges early in the financial year?

Mr S Mokgalapa (DA) said Members accepted the ruling on RHIG and under expenditure, and that it had caused friction in the Portfolio Committee on Human Settlements. It was sad that 82% of the Disaster Relief Grant was not spent in the previous financial year. There was an immeasurable need for this money on the ground, and Members failed to understand rollovers. He asked if there was anything tangible the Department could do to avoid rollover funds.

Mr Mokgalapa also expressed concern on the decreasing delivery targets whilst allocation was on the increase. This led to underspending. R30 million transferred from the SIU back to the Department was huge given the amount of corruption in the housing sector. He asked if the targets for the SIU and its performance were known.

The Chairperson sought clarity on the exact amount allocated to the SIU.

Ms Matlatsi replied the total budget allocated to the SIU was R56 million for the year. DHS over-budgeted because the Unit could not estimate how much it would need for the year as it had changed its scope of work. Given this under expenditure it would appear that their plan was not in line with what was budgeted for.

Mr M Swart (DA) asked if the R3 million budget for the turn around strategy was the total sum. What did the turn around strategy entail? He commented that it was strange that money would be availed for a turn around strategy when officials were employed to do the work.

Ms A Mfulo (ANC) commented that it appeared that provinces just took out money from the Department as there was no actual spending. There was no mechanism to monitor poor performance. She requested that the transfer percentages be translated into actual expenditure to provinces. DHS was not doing its work; the Department should be hands on and not dish out funds. She sought clarity on the request for employee cost while there was a moratorium on posts.

Mr Chainee replied there was a housing subsidy system, that as part of the Division of Revenue Act (DORA) provinces were compelled to use to indicate what the money was spent on. This was an electronic database that allowed DHS to track spending. There was also a monitoring and evaluation unit that filed quarterly reports and included site visits. The CFO and the audit unit also conducted site visits, but there were reports submitted by the National Home Builders Registration Council (NHBRC). In addition there were performance reviews.

Mr L Ramatlakane (Cope) wanted an explanation on the underspending on the R180 million earmarked for the DRG. What was this money for?

Mr Ramatlakane commented that he failed to understand the suggestion in the presentation that a new grant contributed to underspending, because it was availed late. When a grant was decided upon it would be on the basis of a need, and a two-year investigation. Prior to grants being approved there would always be a discussion and then an intervention - by way of a grant - would be decided upon. How many of the new grants contributed to underspending of the total budget.

Ms Matlatsi replied DHS got its allocation on time. The grant was indeed new; even DHS had little understanding of the grant. The grant was a combination of the Municipal Infrastructure Grant (MIG) and the HSDG. DHS needed to understand from both the municipalities and the provincial departments that which the grant had to buy. There were business plans and the built environment performance plans and the departments and municipalities were expected to understand what was incorporated into the plan. The metropolitan municipalities understood the USDG as the MIG. DHS had to table a new strategy on what the USDG would do for both infrastructure and human settlements. That strategy could be availed to Parliament.

Mr Chiane replied there was an intensive process, which included the built environment performance plan assessments, with the metros prior to the activation of the USDG. DHS relied on honesty and integrity of both provinces and municipalities. Indication was received from all the metros as what they would spend the money on. There were a number of deficiencies within that system. This was being taken up, and the Portfolio Committee was aware of it.

Mr Ramatlakane asked for the implications of unmet targets or less output in terms of the performance on service delivery. He was not sure if the new strategy would address under performance, if so, how did DHS hope to address that? He was worried about the impact this would have on the incoming budget.

Mr Chainee replied underexpenditure impacted on communities. Politically and administratively there was an amount of pressure to improve the situation. The Department had to be reconfigured in such a way that provinces and municipalities were better accountable. This was the intention of the turnaround, and as part of the turnaround a separate branch had been established, with a deputy director general (DDG) responsible for project management. Underspending and project management were issues that needed to be dealt with, and there would be an improvement from the Department when reporting on these issues.

The Department dealt with under performance. On an annual basis, provinces drew their plans and those were consolidated to the national plan. The Department relied on the provinces and the expertise to correctly indicate what they would be able to spend.

Mr Ramatlakane enquired about the disaster plan. What was the responsibility of the Department in terms of helping other departments if they were unable to come up with own strategies?

Mr Chainee replied the R180 million was gazetted in November, and only made available to the Department in December. The lag between the release of funds and occurrence of disasters, in relation to housing, was a result of compilation of plans and assessment processes. DHS had taken it upon itself to work with the Department of Cooperative Governance and Traditional Affairs (COGTA). This would sort out responses to disasters. The disaster relief funding for 2011 was only received 18 months after the flood disasters had occurred. The department was playing catch up. The Department had asked that provinces should be allowed to provide some disaster money. If this did not happen, communities would be disadvantaged when it came to responses.

Mr Ramatlakane asked why was the allocation of dismantling substandard structures was not reflecting on the presentation.

Mr Chainee replied that the Department had taken a decision that 10% of the business plans should be allocated to the rectification. For this year, there was an allocation of R986 million for that purpose. The consequence of all of this was that this was an amount that could have been spent better without having to rectify.

Ms P Duncan (DA) asked what would the Department do with the financial year of municipalities not running concurrently with other spheres of government. This was the major issue because it was being used as an excuse. She commented that rollovers were not a good financial practice, and wanted to know what could be done about them.

Mr Chainee replied that a municipality's financial year started on the 01 July. This allowed municipalities three months to better utilise the money allocated. This had always been the rationale of having parallel financial years, but the Committee could decide if it wanted to intertwine. One of the challenges that had since been picked up was the serious capacity challenge around programmes and project planning.

Ms B Dambuza (ANC), Chairperson, Portfolio Committee on Human Settlements, wanted to know why the R4.6 million allocated for the State Information Technology Agency (SITA) was not utilised. She asked that DHS clarify the statement that it had transferred 100% but there was a variance of 91%.

Mr Chainee replied provinces and municipalities did not have a pipeline for projects. This impacted on actual delivery in terms of sites, and houses. There was a whole range of issues around land purchases and planning. It was for this reason that the Department had established a unit to assist.

Ms Dambuza asked why was the Department not spending on the housing policy research and monitoring. Research was critical; and DHS was in the process of reviewing legislation. She also sought clarity on the 63% under expenditure on the Strategic Relations and Governance programme. Why would DHS budget for programmes only to fail to spend?

Ms Dambuza pointed out that the R3 million budgeted for the Social Housing Foundation should not have been there this financial year. The Social Housing Regulatory Authority had already been established; why budget R3 million for that purpose if it had been achieved.

Ms Dambuza commented that the Eastern Cape only got money for the Housing Disaster Relief in February. This was fiscal dumping and National Treasury should assist with this. She asked who was responsible for the late transfer of the money?

Ms Dambuza asked for the details, in figures, of monies transferred to the Department and subsequently to provinces. She sought clarity on the 20% that the Minister had set aside in the budget for national priority projects. How was this money used, especially that it was not transferred to provinces?

Ms Matlatsi replied that the Minister's programmes were regarded as national priority. The 20% of the R14.9 billion was R2.9 billion. The grant was initially R17 billion but R3.5 billion of this money was ring-fenced for the USDG. The projects that received money from the 20% were in the Eastern Cape (Duncan Village); Gauteng (Diepsloot & Khutsong); Kwazulu-Natal; Limpopo (Lephalale); and the Western Cape. DHS transferred the whole amount to provinces. The Department would have to provide a separate report on the priority projects.

Ms Dambuza interjected and said in the context of having transferred an amount of R22 billion; it was not clear what the R2.9 billion would have achieved. It was crucial that DHS provided supporting statements in the presentation to whatever was submitted to Parliament. This would facilitate the work of the Portfolio Committee, and the Standing Committee as well, as they have to oversee projects on the ground. She sought clarity on whether the R2.9 billion was spent entirely.

The Chairperson said when the Committee asked any department to come and account, Members needed to be alert. When there was anything outside of the annual performance plans (APPs), how would the Committee be able to monitor. It was confusing even to the Auditor-General, that departments would budget for something and implement another. Parliament needed to deal with this confusion in the future.

Ms Yengeni agreed and requested that the official be given sufficient time to unpack the issue around the R20% spent on national priority projects.

Ms Borman commented the R2.9 billion had given the Minister the ability to be hands on. The intention was to establish what the money was spent on as the Minister was accountable to Parliament. The Committee wanted a breakdown of the figures to understand what the money was spent on.

Ms Matlatsi explained that the R2.9 billion came from the R14.9 billion and was allocated for national programmes. However the National Department did not “perform”; it could only transfer to municipalities and provinces, as they were the developers. The Minister was in control of the R2.9 billion but he could not retain the money at national level. The money still had to be transferred to provinces for the projects they were undertaking. That money was transferred to provinces, and the only challenge was with Duncan Village and Lephalale; the Department could not determine if service delivery had indeed taken place.

Mr Chainee said measures were put in place with provinces to sort out the challenges at Duncan Village and Lephalale.

Ms Dambuza wanted to know the kind of assets the Department had?

Mr Singh commented that he had misjudged the presentation and, thus, should have interrogated it further. He asked if there was money set aside for the purpose of building houses for people earning less than R15000. He asked if national policies filtered through to provinces and municipal level, in terms of method of working and affording people assistance.

Mr Swart commented that departments were failing by not advising municipalities on how to plan for budgets, particularly since the budget was finalised in October of the preceding year, and approved in February.

Ms R Mashigo (ANC) commented that this indicated that there was no planning and was the cause of instability of financial processes. Parliament did not budget to spare money so it could be moved to other areas. Another area of concern was the lack of coordination between the money spent and the targets.

Chairperson's remarks
The Chairperson said Departments needed to find out in time about rollover funding being approved by the National Treasury. Departments needed to know not only at the time of the Additional Adjustments Appropriation Bill that they would be getting the rollover funding. This created challenges and could result in fiscal dumping. It was not ideal to have a disaster relief fund that was only released after 18 months; it should be able to respond to people immediately. These things should be included in the budget process. The monitoring of transfer funding was critical.

He said disaster funding should not be included in transfers, but if that happened then conditions had to be very tight. Also the 20% grant for national priority projects was not clear. The intentions of this should be measurable. Committees needed to discuss the rural housing policy. It was a serious indictment that there was no rural housing policy after 18 years of democracy. The perception among rural folk was that government was biased towards urban people. This was a well founded perception.

He requested that all unanswered questions be replied to in writing.

South African Police Service (SAPS) 4^th quarter 2011/12 performance
Lieutenant-General Stefan Schutte, Chief Financial Officer: SAPS, noted the five programmes for the Police: Administration; Visible Policing; Detective Services; Crime Intelligence; Protection and Security Services. The Police had been allocated R57.9 billion for these programmes and had achieved 99% expenditure. Although all programmes performed well, the little underspending was a result of varying factors involving capital works, Information Technology (IT) infrastructure, and the Criminal Justice System (CJS) revamp in the Administration programme.

Under the Visible Policing programme, a little more had been required for compensation and fuel. The cost of fuel and oil increased regularly and that had an impact on the programme. Police operated a fleet of over 40 000 vehicles, and required 193 million litres of fuel annually. Compensation costs coupled with machinery were the cost drivers for the Detective Services programme. SAPS had acquired transport assets in the year.

Mr Schutte said expenditure was very close to previous years, and was consistent with the utilisation of funds by the SAPS for the past six years. The unspent amount of R617 million was money that was appropriated for the CJS and capital works.

The CJS revamp had a number of objectives that included timeous investigation of the crime scene, case load reduction, and improved cycle time for forensic investigations. This would be achieved by an increase in the number of forensic experts, improvement of equipment and retention of skills. The programme contained IT and operational elements. The intention of the revamp was to eliminate blockages in the system.

A strategy had been developed to ensure system integration and better coordination amongst departments in the Integrated Justice System (IJS). ICT infrastructure was critical, as well as business architectural designs that emphasised integration. The strategy would address also integrated case management objectives, business intelligence and identification services.

He said R3 million was spent on capital assets. Enhancement of machinery and equipment took place significantly. Underspending on buildings and fixed structures was due to delays in site clearance, changes in design and scope of projects, and delays experienced as a result of non-performance of contractors.

In certain instances the non-performance of contractors resulted in liquidations. Legal processes to terminate contracts and appointment of second contractors ensued. Designs, scopes changes and site clearance issues also contributed to delays in areas such as Langlaagte, Zeerust, Lusikisiki, Carltonville and Doornkop. The change of priorities contributed to the delays as well.

Another unforeseen aspect was the budget for civil claims against the state. An amount of R76 million was budgeted for civil claims, and yet an amount of R134 million was paid out. This was a very difficult area to budget for. SAPS could neither use the line item approach or the estimated approach, as one did not know how this would pan out.

The best way was to look at previous trends. If there were a couple of significant civil claims, chances were that one would overshoot the budget amount. Civil claims were interwoven with uncertainties in terms of occurrence and amounts, and millions were being cancelled or reduced. Police made provisions for these situations.

SAPS did a lot in trying to limit these claims. A number of courses were prepared, and members encouraged to improve their driving skills. Guidelines and manuals had been developed with a view to reduce collisions by SAPS members. There were awareness campaigns to educate members on causes of claims and losses in general. There were also pocket books to inform members of law changes and the legislation process in general.

Discussion
Mr Swart commented that the R617 million under expenditure was a lot of money even though it amounted to only 1% of the total budget. He pointed out the only aspect that was not addressed in the presentation was the annual amount paid to police officers suspended on full pay.

Mr Swart said he was concerned with the under expenditure on vehicle maintenance. Also worrying was the poor performance of contractors doing work for SAPS. He understood police officers had been contracted to do construction work for the Department and build police stations. How had those contributed to poor performance? If one was a police officer, then surely such a person could not do construction work as well? What action was taken against those non-performing contractors?

Ms Mfulo sought clarity on the role of the Safety and Security Education and Training Authority (SASETA) and if it claimed for the training work it did.

Ms Mfulo asked what would SAPS do with civil claims. The presentation was silent on police behavior and most of the time the claims were as a result of police behaving inappropriately.

Ms Mfulo asked how the Department would address underspending. She sought clarity on whether SAPS was the only department funding the IJS project.

Mr Singh sought clarity on the capital expenditure and new police stations, especially as it pertained to rural communities. If SAPS underspent this meant people would lack confidence in the rural police stations that were often under resourced. He asked if there was a special allocation for police stations in rural areas.

Mr Singh sought clarity on the death grant. He then turned to SAPS lease agreements and acquisitions. What was the Department doing about this, or was it simply a DPW matter? He asked for an indication of the kind of relationship SAPS had with DPW.

Mr Singh queried the efficiency of the 10111 line and how resources were allocated to ensure such efficiency.

Mr T Snell (ANC) said the Department had spent a lot of money in building the e-docket system. He was not aware if the e-docket system was working. Was this a case of progressive budgeting towards a certain date when the system would be implemented or was it IT problems that delayed the implementation?

Mr Ramatlakane commented that the spiraling over expenditure on civil claims was concerning. Settling a claim took a long time and the Department should have an idea of what and how much it would be spending on that. This was a management issue, and to claim that it was difficult to estimate was misleading. Civil claims could be quantified and estimated. He asked the Department to comment on his view.

Mr Ramatlakane asked if the consequential effects of the delays in site clearance and construction resulted in rollovers. He said if underspending resulted whilst commitments had been made, then rollover funding could be expected.

Ms A Van Wyk (ANC), Acting Chairperson for the Portfolio Committee on Police, commented that she doubted the list of success noted in the presentation and labeled these as “creative”. She said built infrastructure and lease successes were doubtful when police were reportedly evicted monthly from police stations because rent had not been paid.

Ms Van Wyk said if the Plattekloof Forensic Laboratory were to be taken out of built infrastructure then SAPS had spent nothing on infrastructure. The Department had only spent 54% of the budget on buildings and maintenance. The Department indicated it had capacity to build and wanted to take this responsibility away from DPW. Unlike other departments, SAPS had taken the responsibility of building upon itself and the Portfolio Committee had raised this issue as well.

Ms Van Wyk commented that the e-docket system under the Integrated Justice System did not exist, and yet billions of rands had been spent on it. Rollover of the project was initially planned for 20 police stations, and with the amount spent already, it should have been rolled over to all stations.

Ms Van Wyk commented that the presentation was silent on automated vehicle location (AVL), and yet it was listed as a success. The Portfolio Committee was aware that the AVL contract had expired. There was an option to renew, but SAPS did not do that. The Department would have to enter into a new contract for AVL. The Committee would be interested in understanding how this would impact on vehicle management.

Ms Van Wyk said SAPS had previously challenged civil claims it knew it had to pay. And as a result costs had escalated in the form of legal costs, especially when they hired expensive advocates. This had been an issue since 1999. This was not about the kind of information one had but how civil claims were managed. She sought clarity on how civil claims and the legal services costs were managed.

Mr Swart commented it would be ideal if a five-year trend on how the legal services costs were outlined.

The Chairperson replied the Department might be unable to answer some questions as it had focused on certain aspects. However, this was no justification for inability to provide clarity on performance issues as they were all interrelated.

Ms Yengeni said there were programmes where the department had overspent. The responsibility of the Committee was to see departments sticking to the budget, and if not, there had to be an explanation. Not sticking to a budget was an indication of poor planning. She asked if civil claims were avoidable, and if so, why was it not happening?

Ms Yengeni asked which department was responsible for accounting on the CJS.

Ms Yengeni asked for clarity on Visible Policing programme expenditure. What was the money spent on, especially since very little visible policing happened in the townships? The same applied to Crime Intelligence; where did the bulk of the money go? Could SAPS also comment on allegations of SAPS funds being spent on things for which they were not intended.

Ms Yengeni requested that examples of projects where delays occurred as a result of site clearance and non-performing contractors be provided. Specific provinces should be mentioned as well as cost escalation challenges.

The Department was asked if the Department planned to have new designs done, or had it just stopped commissioning new work. Under expenditure on the professional services for building consultants was noticeable.

The Chairperson asked if departments had budgeted correctly for the CJS and the IJS.

Responses
CJS conundrum
Mr Kgomotso Phahlane, Lieutenant General, Divisional Commissioner: Forensic Services, replied the CJS allocation was made primarily to SAPS; the intention was to focus on building forensic capacity, especially crime scene management. This would enable the collection and processing of exhibit evidence for the use at courts. SAPS was not the only department involved. Police collaborated with other departments such as Home Affairs, Correctional Services, Justice and Constitutional Development and Transport. The intention was to ensure integration of critical information required for the broader criminal justice system. A Cabinet decision had been taken on the set of changes required for a modern, efficient and transformed criminal justice system in 2007. The changes would entail setting up a new coordination mechanism and a management structure that encompassed all stakeholders in the sector.

Mr Phahlane said CJS had underspent 17.1% equaling R92 million of the budget. One of the contributing factors was procurement, where Police could not secure contracts. Many of the services required were in the area of forensic investigation. This was a specialised environment that needed credible providers and efficient equipment that could be sustained. Prolonged procurement processes and non-availability of suppliers in certain areas had really contributed to the under expenditure. The Police needed to ensure that there was quality management training within the forensic sciences. There was an undertaking to shun fiscal dumping in that the Department avoided buying untested equipment. The Department adopted a pilot approach where equipment was tested and validated prior to being procured.

Mr Phahlane said in order to curb under expenditure there had to be proper planning. Project capacity management had been established at the Department. Technical management had been established to assist with monitoring, but also ensure that the procured equipment added value to the work of SAPS.
The Police had streamlined structures in terms of allocating responsibilities. Bids had already been advertised and were in the process of being awarded. Re-prioritisation had also been done looking at where the Department had contracts.

Ms Yengeni commented that this was what the Committee had wanted to hear. She hoped that the Police would not come up with “stories” next year. Hopefully there would be a major shift in terms of the budget. Excuses of under expenditure on issues such as procurement and contractors were not acceptable.

Mr Ramatlakane commented that the explanation on the IJS and CJS was plain confusing, and did not indicate clearly if a new plan was being coordinated or whether the old one was being implemented.

Mr Phahlane replied he would not understand the old system, but since government departments were functioning within clusters, it was in that context that SAPS collaborated in the Criminal Justice System cluster. Regarding the systems, reference was particularly made to forensic services where departments worked together. The integration did not mean that all information, such as criminal records kept by forensic services, was out there with everyone having access. Some state information was subject to a strict protocol. He cited examples of having to work with the Transport Department to access information on a particular car used at a crime scene; or Home Affairs to get a photo of a suspect from the population register.

Ms Van Wyk commented that the CJS and IJS systems were old, as they had existed for the past nine years. There was a need for Parliament to engage the criminal justice cluster on what it had done with all the money it received. The e-docket was suppose to be part of the modernisation; officials were no longer supposed to be carrying manual dockets to courts. There needed to be electronic dockets as millions of rands had been pumped into the project. And yet there was nothing to show for it.

Ms Van Wyk said the concern of the Portfolio Committee was that the trend of under expenditure in the previous financial year had continued in the first quarter. Expenditure at SAPS was already lagging again.

The Chairperson said the purpose of budgeting for three-year cycles – the Medium Term Expenditure Framework – was that departments would know their needs way ahead of time, and the allocations they could expect.

The missing e-docket
Mr Musa Buthelezi, Major General: Technology Management Services, SAPS, said the e-docket system had been implemented at 20 police stations in Gauteng around March. The performance of the system and its stability was being monitored. There was a need to ensure a smooth transition from the Criminal Administration System, to e-docket. The Police were also guided by the readiness of the National Prosecuting Authority (NPA) and the Justice Department. It would not help SAPS to have the e-docket ready whilst other departments lagged behind. Another rollout would happen in September to a further 40 police stations but the NPA and DoJ would have to indicate readiness.

The Chairperson interjected and said the explanation was confusing. Indication was that these were old programmes; and now SAPS was saying it would not want to leave other departments behind. The expectation was that the e-docket was a cluster project where all departments involved planned and moved together.

Mr Ramatlakane pointed out that the e-docket and partner departments debate was not a new issue; this had been around for a while. He said the system was operational in the Western Cape.

Mr Buthelezi replied implementation was guided by the progress of other departments, and the decision was taken at the IJS Board monthly meetings. The project was a multi-year project.

Mr Buthelezi noted that the AVL contract had expired in 2010 but negotiations were entered into six months before the expiry date. The contract had been extended but there were questions on the validity of the contract. However, those had since been addressed and the AVL project contract was continuing.

Officers as builders
Major General Emily Mantsie, Manager: Immovable Assets, replied that members of the Police provided a building service, but not as private contractors. The President had issued a proclamation to investigate such a service. She did not know if the office of the National Commissioner had already received the report of such an investigation. But in terms of the organisation, there was a building service that carried out some of the construction projects. And the members who provided that service had qualifications in that trade.

The Chairperson sought clarity and confirmation if indeed police members possessed construction qualifications on top of being officers. This needed to be clarified in the context of the question that was asked, about the Police usurping the construction responsibility from DPW.

Mr Schutte clarified that the primary responsibility of constructing police stations and procuring leases was that of DPW. The Department had however allowed SAPS to build and perform certain maintenance. Members involved in Visible Policing who had found to have also been involved in construction work, without being with the building service of SAPS, were being dealt with. He said the 15 members of the force that were fingered by the Auditor-General, were not involved with the building service of the SAPS, and thus disciplinary measures had been called for.

Ms Yengeni sought further clarity on whether the General was saying there were SAPS members involved in building police stations, without being sanctioned, but with the employer's knowledge.

Mr Schutte replied that he referred to individual cases, but he did not have such details. He was not disputing the possibility of that happening, rather distinguishing the function of visible policing and the individuals who were not approved.

Ms Yengeni insisted, and wanted to know if there were individual members, known to SAPS, who were involved in the construction of police stations.

Mr Phahlane replied that SAPS could not dispute that there would be such individuals who privately were involved with companies doing construction work. But the delegation did not have that information at hand. The regulations provided that if an individual was involved in such behaviour, then such a person needed to declare this and get approval to do remunerative work. Approval would be denied if the work compromised the core business of SAPS. If one was found to have gone into private business without declaring this and getting approval, disciplinary action would be instituted.

Ms Yengeni said she was disappointed with the replies. The Committee could not get an answer. The delegation should go and gather information and compile a report on the police involved in building police stations soon. The investigations should include the commanding officers of those members; they should know what their members were up to and, if not, that was bad reflection on the leadership of SAPS.

Mr Ramatlakane said the Committee was not on a witch-hunt, but needed reassurance that the ongoing investigation did not include those members already fingered in the A-G report.

Mr Schutte replied SAPS would have to present a status report to the Committee on the 15 members referred to by the A-G.

The Chairperson clarified that if the information was still under investigation, as suggested by another Member, the Committee would not like to interfere, but would still prefer to receive a report.

Ms Van Wyk commented that a lot of this was part of the investigation that was instituted by the President in 2009. It was a huge investigation across departments.

The Chairperson requested that the issue was left at that.

Police stations that were never there
Ms Mantsie replied there was a relationship with DPW and meetings had been held on how to improve on expenditure on capital assets. There was an ongoing rural development strategywhere 30 projects were planned. But there were issues with site clearances but such challenges were being addressed. Site clearance took about 18 months before it was completed. Much of this time was allocated to consideration of such matters as Environmental Impact Assessment and soil type analysis.

The Chairperson interjected and said the Committee should be provided with a list and details of the 30 police stations so that it could determine where it could help.

Ms Van Wyk commented that the Portfolio Committee had been trying to get that information without luck. Part of the problem was that SAPS prioritisation happened at provincial level. When a new provincial commissioner was appointed, priorities changed too. There were police stations that were in the programme, but sites had not been identified since 1999. The Portfolio Committee had recommended that the 30 police stations project be centralised, with provinces making an input.

The Chairperson agreed and said there could never be certainty in such a scenario. The Committee would want the existing list of the projects which would also be for the Portfolio Committee.

Ms Mantsie replied the list would indicate all the relevant information: escalation costs; expenditure and the reasons.

Replies continue
Mr Schutte replied that SAPS was provided for a SASETA payment based on information billing including a 5.5% salary increase. This was a normal consequence of negotiations with labour; this was not something one could plan for.

Mr Schutte said he differed fundamentally with the view of the Member, and insisted civil claims were not a matter that could be budgeted for as it was not know if it would occur in terms of realisation. If it was realised, one would not know what the quantum of damages would be. He cited an example of a court judgement and said these judgement could not be foreseen to such an extent that one could be absolute about the budget. One could have an estimated settlement value but it was very difficult to foresee what would happen in an incoming financial year. The management of civil claims was important given their uncertainty; whether one paid or opposed, was not an issue. There was a contentious debate at SAPS on whether the general approach should be to oppose or settle.

Mr Ramatlakane commented that he was less than satisfied with the reply to the civil claim question. The reply suggested that the Committee needed to expect that the expenditure on civil claims would spiral out of control because it was impossible to manage. There was a need for a breakdown on reasons that the expenditure spiraled out of control. The Committee should have discussions with the police on this matter. Claims did not come to SAPS for immediate payments. All the claims that contained human behavior had a trend. There was a way to budget estimates. He believed this was a management issue.

Mr Schutte replied Visible Policing consisted of a number of sub programmes such as border patrol and crime prevention.

Ms Yengeni proposed that SAPS come back to give the Committee a strategy that SAPS had put in place to address under and over spending, before the recess in December.

Mr Schutte replied leases were procured by DPW on behalf of SAPS. In the past the Department paid quarterly advances for the service being rendered and that would be reconciled at the end of the year. Since July 2011, DPW proposed payment on a reimbursement basis where monthly payments were effected. SAPS paid DPW, who then negotiated with the landlord.

Mr Schutte replied that unanswered questions would be dealt with in writing. The breakdown of information for issues raised such as civil claims and outstanding projects would be provided.

The Chairperson said there was a need for a follow up meeting, even if it was done jointly with the Portfolio Committee. He commented that there were a number of items that needed to be discussed to improve SAPS. The Police were not doing badly but could improve.

National Youth Development Agency (NYDA) 1st quarter 2012/13 performance
Ms Teboho Selane, NYDA General Manager: Strategy, said the organisation had supported over 7 000 young people in the first quarter and helped them create over 184 businesses. The NYDA created 253 jobs and spent over R630 000 supporting young people create businesses. The organisation facilitated 321 job placements throughout the country.

Ms Selane said the education and skills development programme of the NYDA saw over 2 000 young people enroll with the NYDA Rewrite programme. The organisation hoped to offer bursaries and scholarships as part of its mandate. Up to 12 000 youths were targeted to attend a job preparedness programme, where they were taught skills on how to present themselves to potential employers and how best to prepare a Curriculum Vitae.

She said as part of the policy and research programme, the NYDA produced research material that focused on youth development. In the first quarter there were 10 publications. The institution had not been able to create dissemination points for information but had reached agreements with service providers and would report on it in the next term.

Government departments were being lobbied to establish youth directorates and implement youth development programmes. Four of these had agreed. Municipalities also were lobbied about establishing youth councils and 11 were on board. The purpose of the youth councils was to ensure issues affecting young people were taken into consideration. The councils would coordinate the work of integrating such issues into the plans of municipalities. These were not necessarily the employees of the NYDA but were adding value to youth strategies.

Ms Selane said five dialogue sessions had been conducted throughout the country on social cohesion and racial integration. The NYDA continued lobbying the private sector to support youth development. In that quarter the organisation had met with 10 different organisations to get them to understand the mandate of the NYDA, but also contribute to the programmes. The organisation had worked with 247 young women.

As part of the National Youth Service, about 113 youth had enrolled and eight institutions were registered. Over 6 000 young people participated in the youth month and proud to serve campaign.

Mr Khathu Ramukumba, CFO: NYDA, said the grant and interest income had been a bit lower than what was expected. The NYDA received funding from the Department of Arts and Culture for the 16 June celebrations. The organisation had taken a different approach to June 16 this year – not having a rally only, but also other events that were aimed at delivering on youth development. The intention as well was to brand and market the NYDA especially as it had not been introduced formally to young people.

He said a number of projects could not be initiated during the last financial year as NYDA had received its last allocation late from the Office of the Presidency. Of the R38 million project disbursements for the first quarter, R14 million related to projects that would be funded from rollovers, and the remaining R24 million would be funded from the 2012 budget.

Discussion
Mr Van Dyk sought clarity on how the NYDA would maintain a situation where its targets were far exceeded, or missed by a long shot.

Mr Steven Ngobeni, NYDA Chief Executive Officer, clarified that NYDA changed tactics. The initial focus was on Small Medium and Micro Enterprises (SMMEs) lending, a decision was taken to look at micro financing of not more than R100 000, to help young people start business. The Agency was able to cover more young people because they got smaller loans than was initially planned.

Mr Van Dyk asked if the National Youth Wage Subsidy could not help the NYDA realise its employment targets especially as it had targeted 1 100 jobs, and yet had ended up with a paltry 321 for the quarter.

Mr Ngobeni replied the Agency worked in a difficult environment and struggled to convince people that it was a credible institution. Businesses relied on the funding received from the public sector, and when there was no response, that led the NYDA to perform poorly. The Agency had undertaken a campaign to convince business that it was a right thing to invest in young people.

Mr Swart sought clarity on whether the NYDA was a registered financial service provider especially as it lent payable loans.

Mr Ramukumba replied that the NYDA was an accredited institution that it could provide loans.

Mr Swart asked the NYDA to explain the details around those it supported for matric rewrite last year. He asked if the organisation was still in contact with those students. It would not help to just pay money.

Mr Singh wanted to know the kind of projects allocated as CEO, Chairperson and Deputy Chairperson projects in the budget.

Mr Singh asked if the NYDA had engaged government departments around accommodation, as the cost of rentals appeared to be high. He wanted to know about the outcome of lobbying government departments.

Mr Ngobeni replied that the mandate remained that of lobbying and advocacy. Most Departments met were positive; the strategy now was to meet directly with Directors General. Many government departments still struggled in the area of youth budgeting but were beginning to make headway into what ought to be done. Ground was being gained even in the private sector.

Mr Ngobeni said the NYDA had looked at the issues of building and was partnering with municipalities. The Agency looked to establish two functional service offices at Vhembe and Ekurhuleni municipalities, and the respective municipalities would carry the cost. Mostly for all the office space the NYDA had, it partnered with municipalities. In some areas this was difficult; there were a few municipalities that were not receptive in Kwazulu-Natal.

Ms Mfulo commented that when the NYDA prepared a budget spend report, it needed to put figures next to targets as achieved. As this report stood, it said nothing. Secondly, the NYDA was a coordinating structure and not implementing. The organisation would forever be asking for a budget because it wanted to implement, and yet it did not have that power.

Mr Ngobeni replied some questions arose about the mandate of the NYDA. Members needed to look into that mandate. As the NYDA had complained during one of the Committee's oversight visits, the Act was very broad and gave problems. It used specifically the word “implement”. He said the work of the Agency would be very easy if it was just to coordinate.

Eastern Cape outing exchange
Mr Ramatlakane wanted more information on the Port Elizabeth Youth Day Outreach expenditure that was reported in the City Press. The NYDA chairperson was alleged to have incurred unnecessary costs. What was the correctness of that story, and where would it be in the expenditure report?

Mr Ngobeni, NYDA Chief Executive Officer, replied that the organisation had not received a formal correspondence from the City Press enquiring about the event in the Eastern Cape. It would be very difficult to comment on correctness or incorrectness of any story.

Mr Ramatlakane objected and said the Eastern Cape expenditure was a response to a parliamentary question. He clarified that the question was not about complaints from the City Press but what the CEO knew about the incident. What was reported was the issuing of cars by the chairperson during the event, an expensive hotel was used, but also the party was in an exclusive area. The claim in the City Press was that the Agency was billed for this event. Surely, as the CEO, if the media reported such claims one needed to be worried especially when coming to account on first quarter expenditure. He found the response very casual and in fact a throwaway. This was a very serious question and one needed to respond in a manner that warranted the seriousness of it.

Mr Ngobeni replied the question was now clearer, and elaborated. The Agency read about this as well, but the allegation could not be verified. Car hire was done centrally and this was not true. During June month PE was full, and there was one hotel that was booked for NYDA staff, both provincial and national. The details of the outing could be provided to the Committee by way of a comprehensive report.

He said the exclusive party did take place.

The Chairperson requested that unanswered questions be replied to in writing and that a report be prepared on what exactly occurred in Port Elizabeth. The Committee needed sufficient time to deal with the NYDA budget.

The meeting was adjourned.

Appendix
Hey, big spender!
by Sabelo Skiti City Press 24 June 2012
Behind the scenes, Matiti was infuriating NYDA members with his demands

Meet Mr Big Spender – the ANC Youth League’s provincial leader Ayanda Matiti.

Matiti flitted about in hired luxury cars, drank in exclusive clubs and booked his colleagues into high-end hotels in the days leading up to last week’s failed Youth Day celebrations in Port Elizabeth.

Now, unhappy National Youth Development Agency (NYDA) employees are accusing Matiti of using the government event to effectively throw a massive party for his friends and cronies.

Matiti is also chairperson of the NYDA in Eastern Cape.

The provincial government paid R2.2 million towards the event, which organisers expected at least 20 000 young people to attend.

But keynote speaker Minister Collins Chabane delivered his speech to only 3 000 people at KwaZakhele’s Wolfson Stadium – most of them hostile ANC Youth League members.

President Jacob Zuma was initially supposed to address the event, but he pulled out at the last minute and sent Chabane in his place, who was heckled by league members.

Behind the scenes, Matiti was infuriating NYDA members with his extravagant demands.

A frustrated employee said: “By the time the actual Youth Day came, everybody was tired of all these insane requests and we just wanted it to end.

“We didn’t know who these people were and why they were being given (hotel) rooms, but no one would dare question Matiti. He’s always done what he wants.”

This was corroborated by three other employees, who accused Matiti of running the agency with an iron fist.

These are some of the irregularities uncovered by City Press:
» Agriculture MEC Zoleka Capa donated two cows and ten sheep for slaughter to feed people at the event.

Instead, Matiti kept the meat for a braai at which he hosted youth league members, friends and influential local businessmen;

» Matiti instructed that a R600 000 tender to construct the stage for the day be taken from one businessman and given to someone else connected to him;

» Promotional material publicising the event, posters and T-shirts arrived as late as the night before and are now taking up space in the front area of the agency’s Port Elizabeth offices; and

» Matiti had a running tab for his friends for three nights at Diamonds, a nightclub on Parliament Street in Port Elizabeth.

When approached for comment, Matiti denied any knowledge of double-bookings, saying all bookings instructed by him were for legitimate workers.

The braai, he said, was for everyone who worked on preparations for the event, including Social Development MEC Pemmy Majodina, Nelson Mandela Bay metropolitan mayor Zanoxolo Wayile and NYDA chief executive Steven Ngobeni.

“It was decided to deviate and have the braai for everyone who worked, including officials, their friends, board members and all the youth of the region. It was not an Ayanda Matiti braai,” he said.

“As provincial chairperson why would I be busy with detail of braais and bookings?”

According to invoices seen by City Press, East London resident Matiti ran up a car hire bill of R29 000 from June 5 to June 30.

Two rooms under his name at the luxury Radisson Blu Hotel and Resort added to just under R22 000.

Three days before the event, Eastern Cape Premier Noxolo Kiviet came to the youth’s rescue, doubling an earlier contribution of R1.1 million to make things happen.

When asked how the money was used this week, Kiviet’s spokesperson Manelisi Wolela said their contribution – through the department of sport, arts, culture and recreation – was part of more contributions from elsewhere.

He said all tenders procured with the R2.2 million, including the stage, passed through Kiviet’s office. Car hire and accommodation was paid for by the NYDA.

“Everything (procured through provincial government funds) went through us and there were no frills. We only paid for what was necessary because we have to account for that money,” Wolela said.

Ironically, relations between Kiviet and Matiti became strained after she refused to give the NYDA a R20-million budget and other support.

At the time she said there were no clear lines of accountability.

The NYDA, the youth league and the department of social development were recently embroiled in a funding scandal when it emerged the latter’s money was used to fund youth league regional conferences under the guise of them being strategic workshops.