Analysis by Parliamentary Research Unit of NYDA & Department of Performance Monitoring and Evaluation 2012/13 Annual Reports

Meeting report

Briefing on the National Youth Development Agency (NYDA) Annual Report for 2012/13
Mr Musa Zamisa, Committee Researcher, started the presentation by describing Matters Emphasised by the Auditor General South Africa. Those matters included material impairment, expenditure management, revenue management, procurement and contract management, leadership and financial performance management. Material impairments to the amount of R31 571 000 were incurred as a result of the impairment of loans.  A total gross loans of R212 220 000 receivable to the NYDA had been impaired as the recoverability was doubtful. As for expenditure management, the accounting authority did not take effective and appropriate steps to prevent irregular expenditure as well as fruitless and wasteful expenditure in line with the Public Finance Management Act  No. 29 of 1999 (PFMA). Effective and appropriate disciplinary steps were not taken against officials who incurred irregular expenditure in line with the PFMA. As for Revenue Management, the accounting authority did not take effective and appropriate steps to collect all money due in line with the PFMA.

Mr Zamisa said that proper processes were not followed when dealing with Procurement and contract management. Goods and services of a value above R500 000 were procured without inviting competitive bids in line with Treasury Regulations. Contracts and quotations were awarded to bidders based on points given for criteria that differed from those stipulated in the original invitation for bidding and quotations, in contravention of Regulations and Preferential Procurement Regulations. Contracts were awarded to bidders who did not submit a declaration of past supply chain practices such as fraud, abuse of Supply Chain Management (SCM) system and non-performance, which was prescribed in order to comply with Treasury Regulation 16A9.2. The leadership did not exercise adequate oversight responsibility regarding financial reporting and compliance with laws and regulations. Financial and performance management was poor as management did not monitor the controls designed to ensure accurate and complete financial statements, and compliance with laws and regulations.

Mr Zamisa described performance against pre-set indicators mentioning that 47 performance indicators were achieved against a total of 55. That represented 85% achievement, and a total of 8 or 15% indicators were not achieved. The performance against pre-set indicators for 2010/11 was 85.7%, 90% for 2011/12 and 85% for 2012/13.

Mr Zamisa summarised the performance on indicators per programme. Those programmes were: Economic Participation had a total of 12, only 11 were achieved and 1 missed, Education and Skills Development had a total of 6, and all 6 was achieved , Policy and Research had a total of 8, and only 7 achieved and 1 missed, Partnership & Stakeholder Management had a total of 9, and only 7 achieved and 2 missed , Communication & Advisory Services had a total of 6 and all were achieved , National Youth Services & Social Cohesion had a total of 5 and all 5 were achieved , Sport Recreation & Arts had a total of 1 and it was achieved , Health & Well Being had a total of 1 and it was achieved , Governance & Administration  had a total of 6, and only 2 was achieved and 4 missed, National Youth Fund had a total of 1 and it was achieved. The total of all programmes was 55, the total of achieved was 47 and the total of missed was 8.

Mr Zamisa said that the Committee had to note the following areas, namely; the NYDA did not achieve the target of ensuring an enhanced performance management system to support organisational performance (governance). This should be resolved since it could destabilise performance. Furthermore, the NYDA did not achieve the target of establishing a code of ethics for youth work (policy and research), NYDA Did not achieve the target of acceptably functional internal audits, with about 17 showing weak controls (governance). Proper attention was needed for the entity to curb irregular spending and non-compliance with legal prescripts.

Mr Zamisa said that in Programme 5 (Communication and Advisory Services) it was not clear if the NYDA was sustainably working with key societal institutions like universities, FET colleges, schools and libraries. Such partnerships would ensure that NYDA programmes were firmly entrenched and mainstreamed in communities. The NYDA lobbied and formed partnerships with key stakeholders (national, provincial, local government and private sector). However, it was not clear if such lobbying produced positive and tangible outcomes. As a result, the following questions were important to ask:  were there any Memorandum of Understandings (MoU) entered into? Were there any structures (youth offices) established? If yes how many? If planned, what are the time frames?

Mr Zamisa summarised human resource management, equity targets and vacancies. It was reported that 230 (35%) posts were vacant, and 636 posts were approved posts. In the area of service delivery channel, only 303 posts were approved and 137 posts were vacant. In the area of economic development, only 53 posts were approved and 26 posts were vacant. In the area of research and policy, only 35 posts were approved and 19 posts were vacant. In the area of Information Technology, only 128 posts were approved 10 posts were vacant. In the area of finance and supply chain, only 28 posts were approved and 6 posts were vacant.  As for equity targets, there was no achievement against a target of employing 4 female people with disabilities across different employment levels. That was an area needing serious attention going forward.

Mr Zamisa summarised key points going forward, mentioning that perhaps National Treasury should start to incorporate expenditure performance of the NYDA into the detailed Section 32 Report Presented to the Committee quarterly. That would enhance the Committee’s oversight and assistance to the NYDA going forward. The NYDA needed to start monitoring and evaluation the outcomes and progress of key programmes such matric re-write and report back to the Committee. For example, matric-rewrite progress report indicating how many students had benefited to date. How many had passed? How many had advanced to post-school education? How many had advanced to the world of work? There should be a focus on filling all funded positions, especially critical positions such finance, supply chain management and service delivery channels. There was a need to tighten its internal controls so as to respond to issues raised by Auditor General. NYDA should improve its financial and supply chain management to prevent future financial losses. There should be strong working together with community organs so as to mainstream the NYDA programmes into broader society.

Briefing on the Department of Performance Monitoring and Evaluations Annual Report for 2012/13
Mr Phelelani Dlomo, Parliamentary Researcher, said that the Department of Performance Monitoring and Evaluation (DPME) was promulgated in January 2010 and started presenting its own strategic plan in 2011/12 financial year. The aim of creating such a Department was to improve government service delivery through performance monitoring and evaluations fraternity. Although government expenditure on public service had increased over the past years but efficient, faster and effective service delivery is still elusive. The mandate of DPME was derived from section 85 (2)(c) of the Constitution of the Republic of South Africa which provides that the President exercises executive authority together with other members of Cabinet, by coordinating the functions of the state departments and administrations. When the Department was established in 2010, it was mandated to:
Facilitate the development plan or delivery agreements for the cross cutting priorities or outcomes of government, and monitor and evaluate the implementation of these delivery agreements,
Monitor the performance of individual national and provincial government departments and municipalities, and monitor frontline service delivery,
Manage the Presidential Hotline,
Carry out evaluations,
Promote good monitoring and evaluation practices in government, and
Provide support to delivery institutions to address blockages in delivery

Mr Dlomo said that the Department’s work was organised around three core goals: to advance the strategic agenda of government through the development and implementation of the delivery agreements for the outcomes, monitoring and reporting on progress and evaluating impact, to promote monitoring and evaluation practice through a coordinated policy platform, quality capacity building and credible data systems, and to monitor quality management practices in departments as well as the quality of frontline service delivery.

The Department was primarily funded through funds appropriated in terms of the annual Appropriation Act: vote 6 (and the Adjustments Appropriation Act). In the 2012/13 financial year, DPME was allocated an adjusted budget of R174.1 million and only spent R160.2 million or 92.2 per cent at the end of the financial year. The Department under spent by R13.9 million or 7.8 per cent in 2012/13. This marks an increase in under expenditure from R3.3 million or 3.4 per cent in 2011/12 to R13.9 million or 7.8 per cent in 2012/13. Therefore, when compared to the previous years under expenditure in the 2012/13 financial year has increased by plus minors 4 per cent. Of note is that the Departmental budget grew from R96.3 million in 2011/12 to R174.1 million in 2012/13[1]. However, as the budget grew the Department was not able to increase its capacity to spend the budget-hence the under expenditure. Mostly high level of under expenditure was identified in the following programmes:
Amongst others, administration programme had reported the highest under expenditure followed by programme 2 and 4 as outline in the above section.
In 2012/13, the budget allocation increased by R77.9 million when compared to the previous financial year’s allocation. As much as the budget has grown from 96.2 million to R174.1 million, the level of under expenditure has also grown from R3.3 million to R13.9 million in the year under review. The Department may need to improve its levels of capacity to spend in key programmes such as administration as huge chunk of budget goes into this programme.
According to the 2012/13 Annual Report, the under expenditure was as a results of the savings from compensation of employees, goods and services, and capital assets under administration programme due to the delays in the installation of the ICT infrastructure project. Unspent funds for 20 year review projects as this was requested by Cabinet in 2012 and unspent funds for conducting research for norms and standards for concurrent functions as this was also requested by the Forum of Directors General of South Africa (FOSAD) under programme 2. The Department indicated that it was not going to be possible to complete these two projects in the year under review, hence the allocations were unspent.  
Mr Dlomo described the overall performance and achievements for 2012/13 financial year. It was reported that the overall performance of the Department indicated that there were 75 planned targets for 2012/13 financial; the Department only achieved 63% or 84% of the planned targets. The Service delivery improvement plan for 2012/13 was successfully implemented based on the main services and standards provided to the political principals. Therefore, briefing notes should be submitted one day before the Cabinet meeting.

Mr Dlomo said that the aim of the administration programme was to provide strategic leadership, management, administrative and financial support services to enable the Department to achieve its strategic goals. There were 29 planned targets for 2012/13 financial year. Only 23 planned targets were achieved, and only 2 being none achieved and security plan which forms part of the ICT governance infrastructure, was suppose to be drafted and approved in the second quarter of 2012/13. Development indicator application which was supposed to be developed and used by Data Systems Branch staff that was responsible for development indicators publication, the sponsor deferred the project for the next financial year. Only 4 had been partially achieved, namely risk management policy, strategy and quarterly reports were not finalise and risk committee did not seat as planned.  6 out of 30 standards scored less than 3 for MPAT assessment, fully functional help desk service application in the 3^rd quarter, and Departmental dashboard application.

Mr Dlomo said that the following issues from administration programme  needed to be noted by the Committee, namely; the Department should explain the reasons led to none achievement of security plan target as part of governance requirements and give clear timeframe, the Department should explain the reasons for not achieving the development indicator application as a tool for Data Systems Branch and give clear timeframe, what led to the inability of the risk assessment Committee to meet on a regular basis and whether mechanisms had been put in place to ensure that such structure perform its duties accordingly, and which KPA’s were most affected by the lower scoring of less than 3 during Management Performance Assessment Tool (MPAT) assessment, and what were the time frames for finalising desk application services as this was not clear in the annual report? 

Mr Dlomo said that the aim of Outcome Monitoring and Evaluations (OME) was to coordinate government’s strategic agenda through the development of performance agreements between the President and the Ministers, facilitation of the development of plans or delivery agreements for priority outcomes, monitoring and evaluation of the implementation of the delivery agreements.There were 14 planned targets and only 12 or 85% of the planned targets were achieved. Only 2 were partially achieved. For example, from 10 Evaluation reports, only 1 report was ECD approved, others were approved in 2013/14 and 1 report was withdrawn for NSNP annual report indicated that the target was too ambitious, twenty year review project, there was a target of 20 research papers per quarter starting from the third quarter which brings us to 40 research papers. The Department only achieved 22 research papers and others were achieved in 2013/14 which is outside the 2012/13 reporting cycle.

Mr Dlomo said that the following issues from OME programme needed to be noted, namely; It was not clear how much budget was allocated for 2012/13 evaluation project, but the Committee knew that there was R12 million for 15 evaluation to be done in 2013/14, R15 million for 15 evaluation for 2014/15 and R20 million for another 15 to be done in 2015/16.The Committee should invite the Department to come and present a report on the progress report on 10 evaluations for 2012/13. That could also include a progress report on the 15 evaluations for 2013/14 and the plan for another 2014/15 target.

Mr Dlomo said that the aim of Monitoring and Evaluation systems coordination and support was to coordinate and support an integrated government wide performance monitoring and evaluation system through policy development and capacity building. In addition, the purpose was to improve data access, data coverage, and data quality and data analysis across government Department of Performance Monitoring and Evaluations. There were 14 planned targets and only 11 were achieved or 79% targets and only 3 were partially achieved. The Bill was submitted to Cabinet but not signed. GWM&E framework was developed and not approved by Cabinet- more consultations were still needed.  Development indicator’s report was not published on time, and Cabinet requested more information to be included.

Mr Dlomo said that the following issues from M& E systems coordination and support programme should be noted by the Committee, namely; consideration of many differing views about the Bill, the Committee should ascertain the position of the Department on that matter and whether the Bill will still follow the sequence as outlined in the strategic plan (March 2013 cabinet approval, and passed Parliament March 2014, and ascent by President in March 2015) or whether these had been revised.  The Committee should ascertain clear timeframes for finalising GWM&E framework as it was not clear in the annual report.

Mr Dlomo said that the aim of the Public Sector Oversight (PSO) programme was to monitor the quality of management practices in departments, municipalities and the quality of frontline service delivery. There were about 18 planned targets, and only 17 or 95 per cent of the planned targets were achieved excessively.  Only 1 target was partially achieved and this work was commendable, namely; he citizens based-monitoring framework report which was supposed to be approved by Cabinet. That was not achieved because the cluster working Committee requested more recommendations to be incorporated to the framework. It was reported that the committee should note the following issue; what are the new timeframes for the citizen based-monitoring framework report as it was not achieved by the end of 2012/13 financial year.

Mr Dlomo said that the Auditor General South Africa had raised the following issues, namely; internal controls of the Department were not adequately effective, the risk register was not fully effective- the corporate governance set out in King Report III was not fully addressed. Although the AGSA was satisfied with the performance information but issues around fruitless and wasteful expenditure and irregular were identified. The AGSA reported that the Fruitless and wasteful expenditure of R65 000 was reported in 2012/13 due travel expenses, and in 2011/12 the fruitless and wasteful expenditure was only R5 800. The irregular expenditure of R455 thousand was reported (condoned Treasury Practice), and in 2011/12 it was only R1.4 million (this has decreased). There was no unauthorised expenditure was reported in the year under review. Therefore, the Department should ensure that the effectiveness of internal control was improved in order to address the levels of fruitless and wasteful expenditure as well as irregular expenditure. The issue of risk register needed to be urgently attended to as part of the integral component of risk management mechanism.

Mr Dlomo said that the Department’s human resource management had managed to reduce vacancy rate from 30 to 12%. Outcome monitoring and evaluations seemed to have the high vacancy rate of 22%. The most affected employment levels were level 13-16. This was evident by 33% vacancy rate for senior managers in corporate services during 2012/13. This was followed by specialist positions with 23 per cent vacancy rate. The Department had met the 2% of employing people with disability, but the level of employment was not clear. Therefore, the Committee should ascertain whether the Department had retention strategy to retain critical skills considering the vacancies in the specialised areas. Female were employed, but majority were employed at lower levels such as clerks and administration level. The annual report was not clear about the employment levels of the people with disability.

In summary, Mr Dlomo said that the Department should focus on the following: improving the effectiveness of internal controls, finalise the risk register as part of the risk management mechanism, implement the security plan as a governance requirements, present a clear progress report on 2012/13 evaluation projects, present a clear progress report on 15 evaluation reports for 2013/14 financial year, and the plan for another 15 evaluations for 2014/15- hence the allocations were already available. Some targets were not defined with figures which made it difficult to measure, for instance the 115 briefing notes provided to political principals’ for Cabinet Committee meeting and other requests, but though it had been corrected in 2013/14 APP. There should be improvement all the KPA’s that were affected by a less than 3 scoring during the management performance assessment process, (especially on strategic management 66% compliance).

Discussion
Ms A Mfulo (ANC) noted that it was not clear as which provinces were helped by the NYDA. She asked what was happening in the provinces.

Mr M Swart (DA) noted that the NYDA’s targets were not clear, and there was no information as to how many people had been assisted by it. He was not sure as to whether the DPME’s annual report formed the basis of the Committee Report.

Mr G Snell (ANC) noted that the manner in which money and resources were spent was not good.

Mr N Signh (IFP) noted that it was not clear as to how DPME set targets. He suggested that DPME should provide clarity to members on the issue of targets.

Ms R Mashigo (ANC) noted that the DPME’s targets were unclear and confusing.

The Chairperson thanked the researchers for their presentations. This would inform the Committee’s interactions with both entities.

The meeting was adjourned