Appropriation Bill [B1-2013]: Public Service Commission briefing; Committee Report on Department of Performance Monitoring and Evaluation Strategic Plan 2013

Standing Committee on Appropriations

20 May 2013
Chairperson: Mr E Sogoni (ANC)
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Meeting Summary

The Public Service Commission briefing emphasised good governance and the capacity of the state to deliver on infrastructure, including the effective use of public funds. The objective was to build a capable developmental state in accordance with the National Development Plan. The Committee was taken through governance, infrastructure delivery and the use of consultants. Relevant figures were supplied on a list of key government departments, indirectly or directly involved in infrastructure programmes. Departments selected were Basic Education, Energy, Health, Human Settlements, Public Enterprises, Public Works, Transport, and Water Affairs.

The briefing noted that there was increased public sector infrastructure expenditure, but infrastructure delivery was weak, due to poor planning and management. There was a shortage of engineers and in other technically skilled occupations. Under-expenditure was within acceptable margins, but performance was low due to inefficient use of resources. There was over-expenditure on employee compensation, and under-expenditure on capital assets. Partnerships with the private sector and state owned enterprises played a significant role in developing scarce and critical skills.

In discussion, the briefing was very well received by the Committee, and there were suggestions that the information presented also be made available to other Portfolio Committees. The high percentage of compliance findings against departments caused concern, as well as suspensions that went on longer than nine months. There was interest in the relation between filling of vacancies and the phasing out of consultants. There was concern about delays with performance agreements, and unauthorised and irregular expenditure. The Commission pointed out that irregular expenditure was the most prevalent financial mischief. There were questions about posts filled in addition to the staff establishment as set out in organograms. There were questions about the relation between expenditure and performance. A Member asked who in the executive would analyse the information supplied in order to know what to do, and how it could be ensured that the executive would be accountable to Parliament. The same Member observed that only a small portion of the budget was controlled by national government. There was a question about the absorption of people trained as engineers and skilled technicians, and the recognition of prior learning and experience. The Chairperson asked which Acts beside the Public Finance Management Act (No. 1 of 1999) were related to financial disclosure. There was concern about the level of anti-corruption hotline cases resolved. The Chairperson suggested future collaboration between the Standing Committee and the Public Service and Administration Portfolio Committee. Issues raised in the day’s meeting could become recommendations of the House.
 

Meeting report

Appropriation Bill [B1-2013] 2013/14: Public Service Commission (PSC) briefing
Mr Ben Mthembu, PSC Chairperson, emphasised good governance and the capacity of the state to deliver on infrastructure. There had to be effective use of public funds, and financial professional ethics had to be developed, with adherence to disclosure frameworks. Good human resources (HR) practice revolved around the filling of vacancies. The objective was to build a capable developmental state in accordance with the National Development Plan (NDP). The socio-economic rights of all had to be realised. Resources had to be used for infrastructure, especially water, roads and housing. The use of consultants by government departments was a major challenge. Accountability was crucial.

Prof Richard Levin, PSC Director-General, briefed the Committee on governance, efficient use of appropriated funds; assessment of skills and capacity in departments to deliver on infrastructure, and an assessment on the use of consultants in national government.

Focus was placed on national departments directly or indirectly involved in infrastructure programmes. Those were the Departments of Basic Education; Energy; Health; Human Settlements; Public Enterprises; Public Works; Transport, and Water Affairs.
 
Under governance, Prof Levin provided figures relating to the financial disclosure framework; the national Anti-Corruption Hotline (NACH); the management of precautionary suspensions; planned outputs achieved; expenditure vs performance; unauthorised, irregular and fruitless and wasteful expenditure; evaluation of Heads of Departments (HoDs) and vacancy rates for professionals and senior managers.  (See slides 5-18)

Skills and capacity levels were analysed. There had been an increase in public sector infrastructure expenditure, but infrastructure delivery was weak. There was poor planning at the institutional level. There was a shortage of engineers and in other technically skilled occupations. State owned enterprises and the supplier network were contributing to the development of skills for the build programme and related maintenance. (See slides 19-29)

Expenditure on the use of consultants, contractors and agencies by the public service amounted to R33.7 billion for 2011/12 [3.8% of the total Public Service budget of R896 billion] (slide 31). There was a relation between the use of consultants and the failure to fill vacancies. (See slides 30-33)

Prof Levin concluded that skills shortages in the engineering profession was a major challenge. Under-expenditure in departments was within the accepted 2% margin, but performance was low because resources were not effectively used. Per economic classification, there was over-expenditure on employee compensation, and under-expenditure on capital assets. There was lack of capacity to plan and manage projects. Partnerships with the private sector and state owned enterprises played a significant role in the development of scarce and critical skills. (See slides 34-35)

Discussion
Mr J Gelderblom (ANC) commended the presentation, and suggested that it be distributed to all Portfolio Committees. He referred to slide 13, and commented that the 55% compliance findings against departments looked bad, especially concerning Basic Education. Irregular expenditure on the part of the Department of Public Works (DPW) caused concern. Department of Water Affairs irregular expenditure was more than R1 billion.

Mr Mthembu replied that the Commission would distribute the information to other Portfolio Committees. Parliament was another set of teeth to bite, to hold the executive accountable.

Mr Gelderblom remarked that service delivery was a major problem. It had been so for the preceding ten years. He referred to the decline in the number of heads of departments evaluated over the preceding five years. He referred to more than nine months taken to fill posts in more than 70% of national and provincial departments (slide 17). He asked what could be done, and if there were comparisons with countries like Canada, the USA and African countries.

Prof Levin responded that it was indeed so that there were common themes that had come up during the preceding ten years. There were no new findings, only new information. Length of time taken to fill vacancies was an example. Departments did not manage their organograms, which caused distortion. There were big public service reforms around the globe during the 1990s, with regard to such matters as recruitment. Decentralisation had been very quick in South Africa. Canada proceeded slowly. It was made sure that departments were capacity equipped before powers were ceded to them. Supplementary information could be supplied to the Committee. The relation between consultants and vacancies was an example of supplementary information.

Dr S van Dyk (DA) pointed to capacity problems in departments. Many were challenged. There was great concern in Parliament and the media about the use of consultants. The cost of consultants had an effect on the budget. He asked about the ratio between consultants and vacancies. The question was if filled vacancies resulted in fewer consultants, and whether departments were becoming more independent. He asked what was being foreseen for the future, whether positions would be filled and consultants would disappear.

Prof Levin replied that the Commission would reflect on the ratio between vacancies and consultants. There were no specific guidelines on vacancies. The Commission had published a toolkit some years before.

Dr Van Dyk expressed concern over the fact that more than 50% of suspensions were for longer than 90 days. He asked how the Commission could regulate the matter. It had become a custom to suspend. He asked about the inevitable litigation costs.

Prof Levin replied that the Commission could not intervene on suspensions. The Department of Public Service and Administration (DPSA) was launching an initiative to set up the management of disciplinary functions.

Dr Van Dyk asked what was being done about the decline in evaluation of heads of departments. He told the Commission that the Committee had heard more about problems than solutions.

Mr Mthembu replied that the Commission gave clear solution oriented recommendations in more specific instances. The Commission was guided by the Constitution, and obligated to realise socio-economic rights.

The Chairperson intervened that the responsibility of the PSC was to inform Parliament. Laws could be extrapolated on the basis of that information, if information was brought to the attention of Parliament.

Prof Levin responded that the Commission would review the way it reported in future, to provide more recommendations.

Mr Mthembu added that government had to supply the policy framework, to be implemented by public services. The crucial question was who was to do what. The Standing Committee had to hold the executive organ to account to implement policy. There was technical and political oversight. The Commission gave accurate technical information. The Commission did not give recommendations when matters of compliance were dealt with. Legislation for compliance was in place. When it came to disclosure, it was a simple matter of submitting on time. If a department did not comply by 30 April, the Standing Committee had to hold the executive to account. It was a matter of discipline. Some matters had to be dealt with in 60 days, and posts had to be filled within three months.

Mr L Ramatlakane (COPE) referred to performance statistics. 17% had not submitted at all (slide 15). He asked which departments did not comply at all.

Mr Ramatlakane asked what percentage of non-submission of performance agreements was due to the Executive Authority (EA) neglecting to send it off. It was an administrative requirement and the responsibility of the EA. The question was who had to shoulder the blame. It had to be the EA, but perhaps it had not reached his table.

Prof Levin responded that the Commission could only look at financial disclosure and performance agreements once the executive authority had signed off.

Mr Ramatlakane referred to under-expenditure and irregular expenditure (slide 13). If the expenditure was irregular, it meant that some action had to be taken.

Mr Mthembu responded that the Public Finance Management Act (No. 1 of 1999) (PFMA) had prescriptions about under-expenditure. The question was who was responsible for what.

Prof Levin added that most financial mischief was irregular expenditure. It was often underreported, as with the R1 billion spent by Water Affairs.

Mr Ramatlakane asked about posts in addition to the staff establishment. Organograms had to be signed off. Appointments outside the organogram were irregular. He asked if the PSC monitored what skills were not available, which led to additional appointments. Sometimes the result was duplication.

Prof Levin replied that the public service allowed contract appointments additional to the staff establishment. He did not know how departments viewed that. It could be another way of appointing consultants, perhaps a smarter way. The question was why it was so. It could be for good or bad reasons.

Mr Ramatlakane referred to expenditure vs performance. Departments dumped money when they could not meet targets. Departments had to be pushed to reach targets.

Mr G Snell (ANC) remarked on the role of Parliament and the executive in using the information presented. It had to be used for monitoring and evaluation.  He asked who in the executive would analyse the information to see what had to be done.

Prof Levin replied that the Department of Performance Monitoring and Evaluation (DPME) did some analysis on behalf of the executive, but there was still not really a central dashboard. A high level of strategic information had to be brought together. The provincial departments had to be approached for figures on capital.

Mr Snell said that the Constitution provided for socio-economic progress. Government frameworks had to be created for that purpose. The question was how that framework impacted on accountability and service delivery, and how to ensure that the executive accounted to Parliament. Service delivery within a legal framework ensured concurrent functions. The problem was that the national government only controlled a small portion of the budget. There was diluted accountability, rippling away from the centre. The question was how to establish a developmental state, and who did the analytical work towards that.

Prof Levin responded that what was shown about money for infrastructure in national departments was only a part of it. Cooperative Governance and Traditional Affairs (CoGTA) had the municipal data. There was an analytical gap. Yet there was innovation of institutional relations.

Ms A Mfulo (ANC) said that capacity was lacking because people were lazy. Skills capacity levels were not sufficiently developed. Eskom and Transnet were training people, but there was no relation between training and absorption. People were not being placed out after their training. She referred to the shortage of trained engineers. A solution was to recognise prior learning. There were people who were not qualified but who had experience and knowledge, who could take engineers through the process. The question was where to fit in experience and knowledge, to absorb skills.

Mr Mthembu responded that it was rather a matter of lack of accountability. There were people who were competent, but lacked a commitment to service delivery. People also had to be accountable to the citizens of the country, for quality services. Performance had to be managed. The lack of capacity concept was being abused. Billions were available for skills development. The question was how money was being used.

Ms Mfulo said that expenditure was underreported. She asked what the Commission was doing about that. She would have liked to see breakdowns according to provinces.

Ms R Mashigo (ANC) asked about the backlog of education infrastructure in the Eastern Cape. She asked why schools were not being completed.

The Chairperson remarked that the presentation was an eye opener. He asked about the State of the Public Service (SOPS) barometer.
 
Prof Levin replied that it was a new product. All official information was put together. Indicators were looked at. The analysis was expanded. Relevant information on compliance was added. There would be more information on individual departments.

The Chairperson agreed with Ms Mashigo that efficiency was found here and there. Financial disclosures had improved, but the North West was still reluctant. There were legislation issues, people were breaking the law if they did not do what they had to do. The PFMA and the Public Services Act (No. 103 of 1994) could provide guidance. There were several Acts related to financial disclosure. The DPME, National Treasury and the Public Service Commission did almost the same kind of work. Parliament had to know which legislation was relevant in situations where breaches occurred. The Committee was familiar with the PFMA, but not so much with others.

The Chairperson referred to issues of disclosure (slide 5). He asked how many departments had 100% disclosure. The Committee wanted to know which departments did not comply. There had to be a move from generalisation to confronting specific people. Where departments were involved with building infrastructure, amounts involved could be high, as with Basic Education. He asked if the Commission had that information. He asked how much was involved with regard to the DPW.

The Chairperson asked about the level of the National Anti-Corruption Hotline (NACH). The level of resolved cases was wanting. He asked who measured performance, and why information was not available.

Prof Levin replied that information from the Presidential Hotline came to the Commission. It was especially high with regard to teaching. The number of cases could be supplied.

The Chairperson asked about capital assets budgets. He asked if there were guidelines in the event of the budget being too low, and spending went over 100%. He asked about guidelines on vacancies.

Mr Ramatlakane noted that feedback on NACH cases was expressed in numbers, but cases resolved as percentages (slide 8). It was confusing. He asked how data was utilised.

The Chairperson concluded that there had to be collaboration between the Standing Committee and the Public Service and Administration Portfolio Committee. Consultants were a difficult challenge. There would always be areas where government did not have 100% capacity. People were employed for certain functions, but consultants were still being employed. The Auditor General had flagged that issue. He asked for detail about the Presidential hotline and the NACH. Government had declared that everyone had to fight corruption.

The Chairperson continued that Parliament dealt with irregular and unauthorised expenditure through the Standing Committee on Public Accounts (SCOPA). The Standing Committee on Appropriations supported it. SCOPA had to ask if progress was being made.

The Chairperson remarked that the lack of consequences for non-compliance was a critical issue. The tools were there. There had to be a summary of the legislation. The PFMA was very clear.

The Chairperson suggested that issues raised could become recommendations of the House.

Department of Performance Monitoring and Evaluation Committee Report: adoption
The Committee's Report on the Department of Performance Monitoring and Evaluation (DPME) was adopted.

The Chairperson adjourned the meeting.

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