Department of Rural Development & Land Reform Annual Report 2011/12 & Excessive Use of Consultants: hearing

Public Accounts (SCOPA)

05 March 2013
Chairperson: Mr T Godi (APC)
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Meeting Summary

The Committee questioned the Department of Rural Development and Land Reform on what was considered to be the excessive use of consultants. Members pointed out that while there was sometimes a need to bring in outside skills, much of the money spent could rather have gone on developing in-house capacity. There were serious questions over the disbursement of funds without proper supporting documentation. The Department conceded that this had happened. Officials responsible were no longer in the employ of the Department. Members noted that in department after department, funds were mismanaged without any consequences - this was an unfortunate trend in government. There were also questions about the amounts spent on integrated communication technology projects. Plans in this area, as well as in the human resource field, had been devised but never implemented.

Members were told that an expensive integrated communication technology project had been undertaken without a proper cost-benefit analysis, as was prescribed by law. Contract management was seen to be weak. Various expenses quoted in the Annual Report were questioned. Members felt that there was a lack of respect for Parliament. It seemed that issues raised continued to be problematic for several years.

Members asked for an explanation on why it was taking so long to appoint a permanent Chief Financial Officer. Although the person acting in this capacity was described as doing a good job, she did not satisfy the qualification criterion specified by the Minister. A number of targets were vague, and half had not been met. Although a considerable sum was paid out in performance bonuses, Members were assured that these had not gone to senior management. Only a small number of posts had been analysed although the performance of senior management was evaluated.

The Department was tasked to provide a written list of persons involved in financial mismanagement, and what steps had been taken against them.

Meeting report

The Chairperson said he appreciated that there would be a need for specialist skills to be used from time to time. The work done by the Department of Rural Development and Land Reform (DRDLR) should reverse the effects of the Native Land Act of 1913. There was competition for natural resources. Being free meant more than voting once every five years. The DRDLR had to fire on all cylinders.

Use of Consultants by Department of Rural Development and Land Reform (DRDLR)
Mr R Ainslie (ANC) agreed that there was nothing wrong with the use of consultants. However, one had to consider whether the money spent on consultants could not be better used in developing in-house capacity. There had been a dramatic increase in the use of consultants by DRDLR between 2009 and 2011, amounting to over R1 billion. He commended the Department for the long list that had been produced. Members welcomed the detail given although they might not be happy with what had happened. The current figures were even more dramatic than those reflected in the 2011/12 Annual Report.

Mr Ainslie started with the human skills development project. He asked why two consultants had been appointed for over R19 million. While they had dealt with the different aspects of a skills audit and then a re-engineering project, he felt that one consultant could have handled both aspects.

Mr Mdu Shabane, Director-General (DG), DRDLR, explained that the project of organisational re-engineering was one of several projects undertaken by the Department. A consortium of firms had been appointed, with different project definitions. The audit did feed into the re-engineering exercise, but these were parallel projects. The first question was whether the DRDLR had the skills to undertake the project. When the re-engineering project was slow to progress, the skills audit had to be stalled.

Mr Ainslie asked why this had happened in parallel. The simultaneous appointment had led to a twelve month delay. The re-engineering should have happened first, leading up to the audit. This was now water under the bridge, but there were lessons to be learnt.

Mr Shabane replied that the question was very relevant.

The Chairperson said that a lot of foresight was needed.

Mr Ainslie said that Price Waterhouse Coopers (PWC) was seven months late in delivery, which had delayed the entire process. He asked if any penalty had been levied.

Mr Shabane replied that there had been no penalty. He had no reasons to offer.

Mr Ainslie said that poor contract management was a running theme in the Annual Report. Delays were caused to vital projects without any repercussions.

Ms Irene Singo, Acting Chief Financial Officer, DRDLR, accepted that the project management was weak. When the project had been designed, the Deputy DG for Project Management was responsible. This person was transferred to another department, and the Chief Director resigned. New people had to come in and try to pick up the pieces.

The Chairperson concluded that no penalties were levied due to failings in the Department.

Mr Ainslie moved on to invoices. An amount of R11 million was paid despite the lack of proper documentation and a lack of evidence of progress. He asked how this had been allowed to happen.

Ms Singo replied that a delegated authority checked that the service being invoiced had been delivered satisfactorily. In this case, the contract was designed in such a way that it was not the full amount being paid at once. The disbursement would be 10% of the contract. Receipts were not kept for travelling and accommodation costs.

Mr Ainslie said that the Auditor-General's (AG) figures added up to R11 million. The amount was not as important as the principle. Money had been paid out without supporting documentation. He could not see that payment was justified.

Ms Singo had a different understanding on the required documents.

Mr Ainslie asked Ms Singo if she was disputing the findings of the AG. He asked if DRDLR would concede that the Department had made a mistake.

Ms Singo conceded that the supporting documentation was not sufficient. There was a need to strengthen project management so that it would be clearer if milestones had been reached. She disagreed that the full R11 million was paid out without supporting documents.

Mr Ainslie said that the principle was that the AG had to be satisfied with the documents.

The Chairperson said that amounts had been paid on the skills audit project despite the lack of documented progress.

Mr Ainslie said that funds were being disbursed without invoices.

Mr Gugile Nkwinti, Minister of Rural Development and Land Reform, said that a management information dashboard had been developed at the Department. It was always hard to get information. The Monitoring and Evaluation (M&E) unit felt that the information received was not credible.

Mr Ainslie said that the human resource (HR) plan stemming from these projects was only approved five years later. He asked if this had been fully implemented. He would have preferred to see that the plan had been fully implemented, not just approved.

Mr Shabane said that it had not been implemented fully. Some parts had been implemented. When the project started, it was still the Department of Land Affairs. The structure and mandate of the Department had changed in 2009. The new mandate had to be assessed against the plan. The second reason was that the plan laid out the optimal capacity, which did not match the available resources. The plan had to be re-prioritised to match the resources.

Mr Ainslie said that R19 million should then have been classified as fruitless and wasteful expenditure. He asked if DRDLR was hoping that it would be implemented in the future.

Mr Shabane said that elements had been implemented. With the change of mandate, the plan could not be executed as it stood. Not all elements were relevant. Financial resources were insufficient.

Mr Ainslie asked if there was an HR plan in place.

Mr Shabane said that there was.

Mr Ainslie asked if more would be spent on the plan.

Mr Shabane answered that this was being done internally. There was no plan to bring in more consultants for this task.

Mr Ainslie asked if consultants were still being used for HR matters. The Annual Report said that Department of Public Service Administration (DPSA) accredited service providers were being used. He asked if consultants were still being used in key positions.

Mr Shabane replied that the DRDLR had discarded the use of consultants for the screening of applications and the short-listing of candidates. The skills qualification study had been moved to internal resources. He agreed that DPSA approved consultants were used to assess the competency of candidates.

Mr Ainslie turned to outsourced HR recruitment. One of the reasons given was the lack of capacity in the HR directorate. R48 million had been spent which might have been better used developing internal capacity.

Mr Shabane replied that a valid point had been raised. The decision to outsource this work had been taken due to a lack of internal capacity. It had been taking far too long to fill vacant posts.

The Chairperson said that officials had not been performing, and their work had to be done by consultants. The DRDLR officials should have been fired.

Mr Shabane said that there was a combination of reasons. The ability of those in position was a challenge. There were over 1 000 posts to be filled. The turnaround time was slow. The Department had decided to bring in outside help for a quick fix. The time taken showed that it would have been better to develop internal capacity. He agreed that this was a problem.

Mr Ainslie asked if any cost-benefit analysis had been taken on training existing staff against employing consultants. This was how the procedure should work by law, or if officials had simply gone out with a cheque book. This was a Cabinet directive of 2001. He asked who could be held responsible.

Mr Shabane said that a detailed analysis had been done based on the difficulties of recruitment and the limitations on the existing staff. This had not been a cost-benefit analysis as referred to by Mr Ainslie.

Mr Ainslie concluded that the cost-benefit analysis had not been done.

The Chairperson said that if it had been done, it had not helped.

Mr Ainslie said that the contract. It seemed to financially open-ended. There were no limits on spending. It was fortunate that only R19 million of an initial contract of R28 million had been spent. He asked who had drawn up this contract.

Mr Shabane said that the head of HR had been responsible for the contract. No action had been taken at the time, except that a decision had been taken to terminate the contract.

The Chairperson concluded that the Department had not felt that anything wrong had been done.

Mr Ainslie asked if any action had been taken against the Bid Committee that had oversight over the contract.

Mr Shabane said that no action had been taken.

Mr Ainslie said that in department after department, funds were mismanaged without any consequences. This would continue to happen. Between 2007 and 2010, there had been an annual payment of approximately R25 million for conducting valuations. All these valuations were undertaken by consultants. He asked why there was no in-house capacity.

Mr Shabane said that from the beginning of the land reform programme in 1994, there had been a policy that people conducting valuations for the Department against market values should be independent. This would protect the buyer. He admitted that the professional valuators were consultants. Objectivity was needed. This process had been continued. What DRDLR should have developed was an internal mechanism to critique the work done by the valuators. This had only started recently. In-house capacity was currently being developed.

Mr Ainslie said that valuation reports were sometimes not used as the basis of an offer to purchase. R25 million was being spent on reports which were not used.

Mr Shabane said there were several reasons. The sale could fall through. The valuation report must help in fixing the price at a fair market value. The seller might value his property less than the market value, although this did not happen often.

Mr Ainslie asked what percentage of valuation reports were discarded.

Mr Shabane replied that there was a report which could be made available. There might be a dispute with the land owner. A valuation could expire during lengthy negotiations and a property might have to be revalued. In that case another valuator would have to be appointed.

Mr Ainslie felt that this was verging on wasteful expenditure. An analysis was needed at some stage on valuation reports.

The Chairperson said that some land claimants had seen their claims redone five or six times. People were hired to do a job but their reports were dismissed.

Minister Nkwinti said he had seen negotiated settlements at far less than the true value. The historic problem was that low level officials were used to negotiate with lawyers and estate agents. They were 'sitting ducks' in the negotiations. More senior officials were now being used. People were being employed, but it was a demanding task. This had led to wasteful expenditure. The problem lay in the number of acting appointments, where people were doing more than one job. Should one such acting appointee leave the DRDLR, he or she would have to be replaced by two people. This was being corrected.

Mr Ainslie asked about the state land leasing system. This had been done with the State Information Technology Agency (SITA) and in 2006 a consultant had been appointed at a cost of over R2 million. For five years, SITA had not delivered on the project. He asked why the Department had waited so long to terminate the agreement. There was a total cost of over R5 million for this project, which had ultimately been abandoned. He asked if anyone had been held accountable for this wasteful expenditure.

Mr Shabane said that the analysis of the environment was that the former Department of Land Affairs (DLA) had not invested in integrated communication technology (ICT). There was no capacity in this environment. At one stage a director was managing the environment. SITA had been involved for a long time, after which a consultant had been appointed.

Ms Singo said that the consultant was Afri GHS.

Ms Shabane said that there was no progress in solving the challenge. Lease agreements needed to be put in place. There had been negative audit findings on the debtors list. Proper records had not been recorded and rental fees not collected. The Department had then decided to terminate the project and take a new approach. Money was being invested in ICT infrastructure within the Department. The Minister had approved a structure. A Chief Information Officer (CIO) had been appointed together with support staff.

The Chairperson liked the sound of the plan, but asked how this simple logic had been overlooked by the Department for so long.

Mr Ainslie was pleased that the DG was accepting institutional responsibility rather than simply blaming his predecessors, as was often the case with Departments. There was a host of strange expenses. In the AG's report there was a reference to computer service providers, but there was no mention of this in the Annual Report. He asked if this was evidence that consultants were still being used. If this figure was added, the expenses for consultants for the year under review would be over R500 million.

Ms Singo said that computer expenses were included under a different heading on the annual financial statements. These service providers were consultants in the broader terms of the definition.

Mr Ainslie wanted to see a full report. Consultancy fees were ballooning.

Ms Singo said that the costs of computer consultancies was R115 million.

Mr Ainslie said that the figures quoted on page 162 of the Annual Report were misleading.

The Chairperson said that the report on page 162 should rather be considered incomplete.

Ms Singo said that reporting was done according to Treasury standards.

Interaction on Department of Rural Development and Land Reform Annual Report
Mr S Thobejane (ANC) asked if there had been any analysis of the cost of staff members conducting the ICT projects rather than consultants.

Mr Shabane said that there had been no cost-benefit analysis. This had been an oversight on behalf of management.

Mr Thobejane said that the Public Finances Management Act (PFMA) dictated that the correct terms should be used.

The Chairperson said that the leadership of the DRDLR had acted against those responsible.

Mr Shabane conceded that no action had been taken where action was needed. When these things had happened, most of the team members managing the environment had left. A new structure and management team had been approved. There had to be a move away from consultants. These instructions had been given strictly to the CIO. A committee had been established to oversee the change required.

Mr Thobejane said that the DG was required to take action by the PFMA. The explanation could not be generalised. Specific actions were needed.

Mr Shabane said that none of the individuals were employed by the DRDLR. He had not followed where they had gone.

Mr Thobejane said that this showed that the DG did not care what happened to these people as he seemed to feel that they had done nothing wrong.

Mr Shabane did care. He had made sure that the Department had a proper ICT structure in place.

Mr Thobejane said that these same officials had subsequently paid out R3 million without evidence of deliverables. This aggravated the situation.

Mr Shabane said that this was consistent with the general weakness of project management in government.

Mr Thobejane said that the Department felt that there was nothing wrong with the use of consultants. A monitoring role was still needed. Invoices were being paid without any diligence. Lack of accountability had to be exposed. Things got worse if these issues were not dealt with. The contract had been extended beyond the principal date. There was no evidence that contract deliverables had been met. He asked how a contract had been allowed to escalate.

Mr Shabane said that where there was a long-term dependence on consultants, it was difficult to replace them with internal capacity. Existing contracts could not be terminated without causing harm to the Department.

Ms Singo said that there were different consultants during the period. The contract had been awarded to HR Computech and had subsequently been renewed to Sizwe.

Mr Thobejane said that the DRLDL had had enough time to prepare detailed answers.

Ms Singo said that the contract period had been from 2006 to 2010.

Mr Thobejane asked why laid-down procurement procedures had not been followed. The question was that the contractual period had lapsed. There should have been some plan in place as the contract neared completion. Planning had been inadequate.

Min Nkwinti said that the impression should not be created that DG and CFO were responsible. This had happened long before their time in the DRDLR. He appreciated the need for institutional responsibility.

The Chairperson said that DG and CFO were not being held personally responsible. The serious challenges of short-term management were being exposed.

Min Nkwinti had to take responsibility. He had removed key staff members from office. There had been no systems in place. Managers had been moved.

Dr D George (DA) said it was good that the Minister was present. This did not always happen. It was clear that DRDLR was financially mismanaged. His asked who was to be held responsible.

Mr Thobejane said that R1.4 million had been used to set up a project management office. Subsequently, a bidder had been appointed at R580 per hour rather than a bid of R500 and SITA's rate of R520. He had been a consultant himself. Some people thumb-sucked the figures.

The Chairperson said that it came down to explaining why certain decisions had been taken.

Mr Shabane answered that with a report of this nature, there was a conclusion that certain things had been done incorrectly. In order to move forward, each area would have to be investigated. In terms of ICT, a number of mechanisms had been put in place. There had to be continuous management.

Mr Thobejane said that most officials involved in these unfortunate management practices had left the Department. This was not good enough. The law should be invoked, with criminal investigations, where justified. The same consultants used for the project management office had been appointed for a specified fee. The DRDLR had gone back to its own consultants, who had employed themselves to increase capacity. An amount of R1.4 million had increased to over R5 million. He applauded the Minister's decisions, but criminal charges should be laid if there was evidence of wrongdoing.

The Chairperson said that an institution was run by individuals. He asked if enough had been done in terms of the law. Members felt that more punitive measures were needed. The conditions described in the report sounded like anarchy. He asked if the people involved had the interests of the country at heart. It was pointless venting in the absence of these people. The report did not make for good reading.

Ms T Chiloane (ANC) was frustrated when persons or companies whose conduct was questioned by the Committee had moved on before they could be called to account. Some were still in government.

Min Nkwinti thanked the Committee. He was also frustrated by the situation.

Dr George said that there was a list of consultants. There was an item for stage and sound crew for R511 000. He asked what this was for.

Mr Shabane replied that the DRDLR hosted different events across the country. Visits were paid and sometimes the number of people involved ran into the thousands. Some 20 000 people had attended one event, and proper sound technology was needed.

Dr George said that Ms Singo had been Acting CFO for more than a year and a half.

Min Nkwinti had made this decision. An advertisement had been placed. He wanted a Chartered Accountant for this position. One suitably qualified person had applied, but had withdrawn his candidature. The post would be re-advertised.

Dr George asked if the person currently doing the job was not qualified.

Min Nkwinti replied that Ms Singo was good in her job, but did not possess the required qualification.

Dr George said that the system needed to be fixed. The Annual Report said that there were no relevant Standing Committee on Public Accounts (SCOPA) resolutions. There had been some other matters raised by the Committee. He asked if the Committee's report had been received.

Mr Shabane had received the report. Recommendations had been made to the Department.

Ms Singo said that the official resolution from SCOPA was only received after the Annual Report had been drafted.

The Chairperson said that the key paragraph on disclosure was being reduced to an afterthought. Treasury expected the Department to reflect any key recommendations by the Committee in its report. This was very wrong.

Dr George said that the report of the audit committee had been included. Financial management was not that difficult. Reports were sent to the audit committee and recommendations made. The Annual Report section on the audit committee reported that financial control had not been effective. He understood that the CFO had only been appointed for less than a year on an acting basis, and was under-qualified.

Mr Shabane said that this was an indication that the system still had to mature. There was gradual improvement in each area. It would be dishonest to describe the systems as foolproof and fully developed.

The Chairperson said that R34 million had been spent on internal audit, and the system was still not watertight.

Mr Shabane replied that the internal audit function was well funded. There had been capacity challenges in the past. It had not always had full audit functions. Internal capacity had been built. This would reduce but not eliminate all problems.

Dr George would be pleased to know who the consultants were, and what they did.

Ms Singo said that a consortium was used including PWC and other small firms. Internal audit was at a directorate level, but had been uplifted to a Chief Directorate. Two senior managers had been appointed. Only certain functions were outsourced.

Dr George said that the consultants had clearly not delivered. After R34 million, the system was still not working properly. The consortium should appear before the Committee. The money should be refunded if it had been invoiced incorrectly. It was the people's money.

The Chairperson asked for a list of the persons involved.

Dr George said that the Department was involved in litigation worth over R2 billion. While it might win some cases, he noted that there was no provision for contingent liability, interest or legal costs. He felt that this was reckless accounting.

Mr Singo replied that whatever awards made by the courts were still unknown. The liability was on interest and legal costs.

Dr George felt that it would be sensible to make provision for costs. R790 million had been set aside for verified claims. There had been some discussion on pre-1913 claims. He asked if there had been any provision for such claims.

Min Nkwinti said that he was not in a position to answer the question. The matter was not before Dr George.

The Chairperson asked the Minister to respond. Dr George was a politician and would ask political questions.

Min Nkwinti said that 1913 was a cut-off date for making claims. Exceptions were heritage sites, monuments and the lands of the Khoisan people. He had put a team of lawyers together to look at the Constitution. Their findings would be presented to Parliament when complete.

Dr George felt that there was some confusion over the payment of municipal rates.

Ms Singo replied that by virtue of owning properties, the Department would be liable for property rates.

Dr George concluded that there would be some liability once the municipalities had submitted accounts. He asked why the targets set had been vague.

Mr Shabane replied that it was not a deliberate decision to make the targets vague. It had come after engagement. The AG had indicated that criteria must be met. DRDLR had felt it had done enough to be measurable, but AG had found them not clear enough.

The Chairperson said that the targets had been clear.

Dr George said that 45% of targets had not been achieved. He understood that it had not been intention to set vague targets. Even those which were clear had not been met.

Mr Singo said that certain indicators could not be met with more substantive evidence. The vague ones could be removed.

Dr George asked what was being done to ensure that targets were not vague.

Mr Shabane replied that this was a very important question. A planning team was in place. Targets would now meet the requirements of the AG. This could not be done before the work was complete.

The Chairperson felt that it was obvious that there should be engagement with the AG's office.

Ms Chiloane could not believe that not one of the 283 municipalities could present proper invoices to the Department.

Dr P Rabie (DA) said that DRDLR was an important Department given the importance of land. However, it still did not have an accurate register of state land. He asked if there was a deadline for the register of state land. Complete records were needed. He asked when the register would be complete.

Mr Shabane replied that the auditing exercise was moving onto the verification of 11 000 land parcels. Before they were included in the database, certainty was needed on the ownership.

Ms Singo said that some municipalities had submitted invoices and had been paid.

Ms A Muthambi (ANC) said that the DG had appeared before the Committee as a Deputy DG together with the then DG in 2009. Members were worried. Since the 2008/09 financial year (FY), the Department had never made progress on its Annual Report. Some matters were repeated over and over again, often leading to financial consequences. Audit opinions for the previous four FY had all bee n qualified. She asked if the Department took Parliament seriously.

Mr Shabane said that the DRDLR did take Parliament seriously.

Ms Muthambi said that in the 2009/10 AR, the AG had made a finding that there was a deficiency in internal controls. This situation had persisted in 2010/11 and 2011/12. She asked why there will still such expenses.

Mr Shabane acknowledged the repeat findings. These should be analysed individually. There had been a qualification. However, there had been an improvement. AG reports had not been consistent. In each year there was a finding of a different error. The AG had commended some measures to eradicate errors. The 2012/13 report would be an improvement on the previous year. The Department knew it must strive for a clean audit. There might have some areas of regression, but other areas of improvement.

Ms Muthambi said that the AG had found that financial statements were not compliant with Section 41. This was an ongoing problem. Min Nkwinti had responded on the vacancy for a CFO, but nineteen months was surely too long. Around R490 000 had been paid to consultants for auditing services. The Committee was not happy with the standard of financial statements. The services of external auditors had been procured, but their reports were not considered. She asked what the Minister's relationship was with the audit committee.

Ms Singo said that a huge adjustment had been made in the 2011 annual statements on the basis of assets.

The Chairperson said that there was a long list of problems.

CFO said that another major adjustment had been regarding leased properties. There should have prior consultation with DPW.

The Chairperson noted that the audit committee was not satisfied with the quarterly reports.

Ms Singo said that the audit committee had met quarterly. It became apparent that there were bigger problems. Specialised meetings had been held to consider specific weakness raised by the reports to the committee.

Ms Muthambi said that the audit committee was unhappy. She asked what issues had been highlighted to management.

Min Nkwinti had introduced the management information dashboard. Programme managers were often not at meetings to provide information. He had received valuable information from the Chairperson of the Audit Committee. The meetings were also attended by the M&E Unit. The detail of the information was lacking.

Ms Muthambi asked if there was value for money in the audit committee meetings. It seemed some people were paid simply for attending meetings.

Mr Shabane said that some rigorous interaction did take place. He believed that the audit committee was fulfilling its role. The Department needed to do its part.

The Chairperson felt that the Department should be doing what it was supposed to be doing.

Mr Shabane said that there were some weaknesses in the system.

The Chairperson said that some people were being paid but were not doing their job properly. He was worried by the statement made by the audit committee. It was very worrying that the content and quality of the quarterly reports had been called into question..

Ms Muthambi said that the audit committee was doing its job, but the Department did not comply with the reports raised by the committee. In certain circumstances, previously reported findings had not been corrected. There had been irregular expenditure of R7 million related to non-compliance with supply chain management. This was happening under the current DG's management. She asked what steps were being taken. The Department had adequate notice to prepare this answer.

Mr Shabane replied that in the previous FY, R6 million had been paid on interest on late payment. In 2011/12, this had decreased to R3.3 million.

Ms Muthambi said that the question of irregular expenditure was not being addressed.

Mr Shabane said that there had been improvement from the previous FY. This had been reduced from R8 million to R7 million. There had been many challenges related to restitution. A series of interventions had been put in place. There had been reductions due to officials being held accountable. Many of the challenges were historical. He accepted that it was not good enough, but there were some results.

Ms Muthambi noted the decrease in irregular expenditure, but was still not satisfied. She asked which officials had been involved and what steps had been taken against individuals.

Ms Singo said that there were was a register which would be made available to the Committee. Where there was a breach of procedure, this was addressed by the compliance committee. Labour related matters were dealt with at that level, and criminal cases were opened where necessary. The PFMA defined fruitless expenditure. The concept of financial misconduct had been clarified.

The Chairperson asked that the list of officials and the measures taken against them be forwarded to the Committee before the end of the following week.

Ms Muthambi said that this information should be at the fingertips of management. They should not have to wait for DPSA to institute disciplinary action. The DRDLR had incurred interest of R6 million payments on late payments. Someone had failed to fulfil his or her duties. The report had been received in August 2012, and she asked what progress had been made.

The Chairperson noted that Government had not been taken to court on late payments.

Ms Singo replied that an investigation had shown that no single person could be held responsible. The majority of the group involved had left the Department. She had been advised that the second matter had been won in court, and some of the money might be recovered.

Ms Muthambi continued that there had been a report in August 2012 of disciplinary action being in progress. The delegation should have prepared for this meeting, and should have had all the information at hand. In the report of the accounting officer, a statement had been made that all assets had been recorded on the asset register with no material information noted. The AG had made a contradictory finding.

Mr Shabane said that the report spoke to progress made prior to the AG's report being published. The Department believed all that it had reported on was accurate.

Ms Muthambi noted that there had been some dereliction of duty on the behalf of the accounting officer.

Mr I Mfundisi (UCDP) noted the finding on the lack of action in monitoring and compliance. There had been little improvement in some areas. There was a thread of discontent.

Mr Ainslie said that public servants were paid in full but also earned performance rewards. He failed to see how these could be justified. There was a list of negative findings, and yet over R21 million had been paid in performance awards, a fivefold increase from the previous year. In the table on job evaluation, there were over 5 000 posts. Only 12% had been evaluated. He wanted to see justification for the performance awards. Management was not being evaluated. Only one of twelve positions had been evaluated in senior management. The money should be repaid.

Mr Shabane replied that job evaluation was not related to performance assessments. It was a determination if people were operating at optimum level. Every post had to be evaluated so that responsibilities were related to salaries. A number of staff members had not been evaluated. The bonuses reflected in the Annual Report were from Level 12 down to junior staff members. The payments were not made to senior officials. The areas of weakness were the responsibility of management. It would be unfair to say that those at lower levels were not doing their work. Bonuses had been carefully considered. Bonuses could only be awarded to those with performance contracts with measurable targets.

The Chairperson pointed out that only 45% of targets had been met, let alone exceeded.

Mr Shabane accepted that the Department had spent 93% of its budget. There was an explanation of the bonus awards in the Annual Report.

Mr Ainslie said that the case was not being made. So many targets had been missed. He asked when the DG had been evaluated.

Mr Shabane said that his assessment had been conducted. The Deputy DGs had been assessed for the first quarter of the current FY. The majority of the assessments had been done. A panel of Ministers would evaluate his performance.

Dr George asked if there had been a payment to the DG and CFO.

Mr Shabane said that neither had received a bonus.

Mr S Sizani (ANC), Chairperson: Portfolio Committee on Rural Development and Land Reform, had asked for a list of those who had received performance awards, seen against areas of non-performance. It seemed that DRDLR let consultants off the hook without performing their functions or paying penalties where applicable. It seemed that the Department was similarly generous in writing off loans made to staff members. There was outstanding debt of R6.5 million, but no indication of the age of the debt or the commitment to recover it. The numbers had increased since the previous FY. The DG should be compelled to list the 32 cases under investigation. Some of these cases related to procurement irregularities.

The Chairperson said that the one outstanding issue was the area of consequences for wrongdoing. There could be any manner of explanation, but non-compliance was not acceptable. The ability of any leader to enforce discipline would ether make or break that leader. An energetic effort was needed to deal with the issues.

Min Nkwinti was feeling empowered after the meeting. He was even more aware of the shortcomings. He was committed to doing the right thing. There had been meetings at a departmental level. He wanted to avoid further similar sessions. He appreciated what Members had said and would follow their advice.

The meeting was adjourned.


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