2013 Medium Term Budget Policy Statement and Adjustments Appropriation Bill [B37-2013]: Committee's Draft Reports

Standing Committee on Appropriations

04 November 2013
Chairperson: Mr E Sogoni (ANC)
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Meeting Summary

The Committee was taken, by the technical advisor, through one draft Report on the Medium Term Budget Policy Statement (MTBPS) and another on the Adjustments Appropriations Bill. National Treasury officials were in attendance to provide clarification on some issues, particularly the section of the Report around the transferring of money and responsibility, in respect of the Further Education and Training Colleges, from the Department of Basic Education (provincial offices) to the Department of Higher Education and Training. There was quite substantial discussion on the need for National Treasury, and the Department of Performance Monitoring and Evaluation, to be involved on different aspects of systems to enhance the delivery of the schools infrastructure programmes. It was noted, as a concern, that many departments did not ensure that they complied with Department of Public Service and Administration requirements and were operating outside approved organisational structures. Other recommendations noted that a relatively small proportion of funds allocated under expanded Public Works Contracts related to creating of jobs for beneficiaries, as opposed to administrative costs. The Committee also noted that the Public Service Commission had commented on the disjunct between targets and spending and the Committee wanted to know if anything could be done to address this aspect in quarterly reports, to pick up any discrepancies at an early stage. One member suggested more focus on the Financial and Fiscal Commission’s point on the need to look more closely at general housing policy and the effect of urban migration. Concerns were expressed in this Report, but were more fully expanded upon in the later report, about the performance of the Rural Housing Infrastructure Grant (RHIG).

The report on the Adjustments Appropriation Bill contained some similar recommendations. A Members asked if there was a general problem with rollovers granted by National Treasury, but a more specific concern about the impact of refusals of rollover requests upon the future of the projects and planning, specifically for the Accelerated Schools Infrastructure Delivery Project, and it was decided, after discussion, not to make any recommendation on that, in view of the fact that an extension of time was granted.  However, the Committee noted that it would, in principle, have a problem with recommending rollovers where departments did not demonstrate capacity to spend. The suggested recommendation on mitigating negative effects of foreign currency was also removed. There was quite substantial discussion on the RHIG and it was made very clear, in the recommendations, that the Committee, whilst agreeing that RHIG expenditure must be improved, did not think that transferring the function to local government would achieve this. Over the last six months, there was spending of only about 18% of the last rollover. One Member suggested that this shift of functions had more to do with the poor relationship between the Treasury and Department of Human Settlements than with the real practicalities. It felt that closer oversight by the DHS was necessary. Members felt that the Minister of Finance must engage with the Minister of Communications on the relevance of the 112 emergency call centre programme.  
 

Meeting report

Chairperson’s opening remarks
The Chairperson expressed his appreciation to Members of the Committee for their dedication to their work and appreciated the presence of National Treasury (NT), to give input and support.

He noted that some issues had been raised that NT had been able to respond to, and specifically referred to those raised by the Department of Basic Education (DBE) on Further Education and Training (FET) institutions. DBE had requested some rollovers, some of which were approved but others not. One thorny issue seemed to be the Teacher-Union Collaboration, which was apparently already in the process, so rollovers had been requested, and the Chairperson wondered if NT had responded on that.

He noted that the draft Report on the Medium Term Budget Policy Statement (MTBPS) was tabled today for the first time, so it may take a while to go through. Despite the assurance of the DA Members, Mr M Swart, that he had managed to read through the report, he still requested that it be read out loud.

Medium Term Budget Policy Statement (MTBPS) Committee’s Draft Report
Mr N Singh (IFP) asked if the public hearings where stakeholders had attended, were to do with the MTBPS.

The Chairperson responded in the affirmative.

Mr Singh pointed out that the Report of the Standing Committee on Finance said that no response had been received to its advertisement, but wondered if that was correct. It was of concern if nobody had responded to the Standing Committee’s invitation, and it seemed that the representations were perhaps made via the Standing Committee on Finance.

Mr M Swart (DA) replied that there was a difference. The Money Bills Amendment Procedure Act was quite explicit on what the Standing Committee on Finance and the Standing Committee on Appropriations could do. This report set out in detail the items that the Standing Committee on Finance had not covered. Additionally this Standing Committee did not deal with the fiscal side of the MTBPS, which was left to the Finance Committee.

The Chairperson added that the Finance Committee dealt with macroeconomic issues, and whilst there were two invitations to the public, the citizens were probably more interested in macroeconomic fiscal policies, although he conceded that the fact that two invitations had been advertised might have caused confusion.

The Chairperson noted that in the past, the public had taken Parliament to court for failing to advertise for public comment, and it was very important to note, specifically, in this draft Committee Report (the Report) that this Committee had advertised and that there were no public responses.

Mr Singh said that he understood the macroeconomic issues and the roles of the two committees, but said that although there were comments, there were no responses to the specific areas that the Appropriations Committee was dealing with. There was a contradiction there, because there were comments received by the Finance Committee, which was also “Parliament”, and he requested that the Report should clarify exactly the areas on which the Appropriations Committee did not receive responses.

Ms R Mashigo (ANC) added that the introduction to the Report specified the Appropriations Committee’s role, according to, the Money Bills Amendment Procedure and Related Matters Act. Its advertisement had been based on the three aspects set out in section (6), and the Report should clarify that, on those three aspects, there was no response. This was to protect the national legislature from any lawful challenge.  

The Chairperson agreed that Mr Singh’s concern was valid. He said that he was struggling to understand the economic jargon used, and asked if that was a direct quotation from the MTBPS. He recommended a technical amendment for easy of reading.
 
Mr Singh quoted the text of the MTBPS statement from National Treasury (NT).

The Chairperson suggested that the Committee should use its own language instead, as in the technical change.

The Chairperson noted that the first section was the background to the MTBPS. He said that the NT delegation could assist the Committee with some aspects of the report especially the term ‘main budget framework’, which the Chairperson was confusing with the Medium Term Expenditure Framework (MTEF).

Ms Raquel Ferreira, Director: National Budgets, National Treasury, said that basically the ‘main budget’ referred to national and provincial Governments, therefore that was the division of revenue that came from the National Revenue Fund (NRF). “Consolidated government” included public entities. The term ‘main’ was used to distinguish what levels of Government were included. “MTEF” referred to the three outer years of the Medium Term Expenditure Framework (MTEF) periods, which were from 2014/15 to 2015/16 and 2016/17 therefore those were just different technical terms.
”Main budget” was thus exclusive of the “consolidated government” so public entities were not included. It referred to the revenue from the National Revenue Fund (NRF) that was divided up.

The Chairperson said that he did not understand the calculation for non-interest expenditure and asked what the difference was between the two figures.
 
Ms Ferreira said that the figures for state debt cost were not included in the non-interest expenditure.

The Chairperson and Ms Ferreira discussed the figures and the Chairperson said that he did not agree with Ms Ferreira’s calculations.

The technical assistant suggested that probably the difference between the higher total, and non-interest expenditure, was the debt cost of R4 billion that was included in the state debt cost.

The Chairperson said that he wanted to be fair and come back to that concern. He saw the difference as R4 billion, not R100.5 billion.

Ms Ferreira said that the R4 billion was the projected under spending, if one looked at the Annual Estimates of Expenditure, in the summary chapter on table 1.

The technical assistant said that probably what Ms Ferreira was referring to was that the non-interest expenditure was as stated in the revised budget for 2013/14 and the higher figure the projected expenditure at year end, which indicated that there was likely to be under spending of that R4 billion for the three spheres of Government.
  
The Chairperson capitulated.

The technical assistant continued to take Members through the Report.

Mr Singh noted that the tables were said to be sourced from the NT, and asked then whether the rest of the document reflected the Committee’s opinion about the MTBPS, or was a quotation from the NT document.

The Chairperson replied that the document was summarised, and in some instances, quoted directly from the NT document.

Ms Mashigo noted that some italicised sections reflected the NT’s stance, and wondered if this was clear.

The Chairperson said that probably NT’s intention in using italics was to draw the attention of the reader to that section. He commented that this document, being a Committee report, should not be quoting from the NT’s MTBPS, but rather lift out the issues important to the Committee.

Mr L Ramatlakane (COPE) said that his understanding was that sections of the report would be identical to the NT’s document, because they laid the basis for the Committee’s observations and recommendations later. He wondered if the underlined sections should be separated from the main summary paragraphs, as they were reflecting the Committee’s opinions.

The Chairperson asked whether the Committee Members were satisfied with the Community Works Programme (CWP) comments, and wondered if there was a condition here, similar to the Expanded Public Works Programme (EPWP), for training and reporting. The problem with EPWP was that a lot of the funding fell through the cracks, and did not reach the intended beneficiaries, as indicated by the  Department of Co-operative Governance and Traditional Affairs (COGTA) which was responsible for the EPWP. He asked whether the Report captured the essence of the concern that the funding should reach the intended beneficiaries.
 
Ms Ferreira said she thought that the Committee was referring to the administrative costs of the CWP and perhaps the Committee could recommend that those should be kept at a minimum.
 
The technical assistant noted that the opinion was essentially to do with the fact that NGOs apparently received contracts but did not comply with the standards around types of jobs and opportunities The Chairperson was concerned not only with that, but the fact that the proportion of funding from the allocation that went to actually creating of jobs for beneficiaries was too low in comparison to the amounts accruing directly to the NGOs. That statement needed amending to capture that concern.
 
Ms Ferreira noted a technical correction to the number of social grant beneficiaries; it was 17 172 million, not 17 712 million.

The Chairperson noted again that the technical language of the MTBPS as transposed posed challenges for him, and the technical assistant proposed a technical amendment.

The Chairperson asked whether the Minister of Finance had said that the use of credit cards would be prohibited or curtailed.

The Committee responded that it was official credit cards that would be prohibited.
 
Ms Ferreira said that the Minister’s speech was emphatic that there would be no credit cards.

The Chairperson and Mr Ramatlakane suggested that rather than reading through the remainder of the sections, the Committee should move to the observations and recommendations section of the Report. MPs could highlight any concerns, however, if they wished, in the pages that the Committee would not discuss specifically.

Some figure corrections were noted.

Ms Ferreira said that the R3.14 billion under-expenditure by the three spheres of state was not consistent with NT sources, and that under spending numbers were contained in annexure A of the MTBPS.

The Chairperson understood the NT’s challenge, but noted that the Committee’s report was drawing from the Financial and Fiscal Commission (FFC) report. The NT could have made corrections under the introductory section. This was probably a rounding up of numbers.

Mr Singh asked NT what the correct figure was.

Ms Ferreira said that in annexure A there were numbers for national and provincial Governments, but FFC seemed to be adding all the spheres of Government together. NT did not do this because national and provincial Government used the cash basis of accounting, while local government used the accrual basis.

Ms Ferreira said that national government was under spending by R7 billion and provincial government was under spending by the same amount. Local government was at an accrual of about R30 billion.
 
Mr Singh said then that meant that FFC probably had underestimated.
 
The Chairperson said that FFC had suggested that the total under expenditure in all three spheres of Government was R3.14 Billion. However, because that was the figure presented by the FFC, it could not be corrected in this report, in the absence of the FFC.

Mr Ramatlakane asked what the NT figure was and said that approximately a R3.41 billion figure had been mentioned by the Minister and the NT document as projected under expenditure figure.

The Chairperson said that he had seen, in one of the tables, in one of the documents, that the R3.14 billion was national under expenditure.

The technical assistant said that the R3.5 billion that Mr Ramatlakane was referring to was projected under spending for 2013/14. The figure that the Committee was talking about was the under expenditure for the past financial year, and that was quoted by the FFC.
   
The Chairperson asked that the Committee should move on. NT had supplied the correct information, regarding under expenditure at national level. He again emphasised that the Committee Report was quoting what FFC had said.

Mr Singh agreed, but said this took him back to his earlier point that the Committee must clearly distinguish its sources, and whether this was its own opinion, in this Report.

The Chairperson asked for more information from NT about what DBE was saying, concerning the rollovers. If this was in the Adjustments Bill, the Committee would deal with it under that report.

The Chairperson also asked about the report of the Public Service Commission (PSC). As had happened in 2012 and 2011, the PSC was raising the difference and disjunct between expenditure and the pre-determined objectives. The Committee wanted to know how in future it could pick up, before year-end, whether departments were not spending according to their pre-determined objectives; for instance, might it be possible to include something to this effect in quarterly reports of Departments?  

The technical assistant read the recommendations.

Mr Ramatlakane recommended technical wording changes.

The Chairperson, referring to the same recommendation, wanted the Committee to be clear on what it meant by ‘expenditure performance’ and ‘service delivery performance’. The PSC spoke about the expenditure performance and the pre-determined objectives performance, and perhaps ‘service delivery performance’ was too generalised. He understood that pre-determined objectives could be targets in the Annual Performance Plans, indicating how departments would spend.

Mr Ramatlakane said that the Committee could not leave ‘objectives’; they were actually targets.

Mr Swart said that the finding that departments routinely spent above 90% of their budgets while achieving less than 60% of their pre-determined objectives was not correct; they actually achieved around 51%, so he suggested that ‘over 50%’ be used.

The Chairperson asked who was responsible for the capturing of achievements of targets function.
 
Ms Ferreira said that it was the Department of Performance, Monitoring and Evaluation (DPME).

The Chairperson asked whether DPME checked whether expenditure was in line with pre-determined objectives.

Ms Ferreira responded that she thought that DPME looked more to the determination of the targets but the Auditor General of South Africa (AGSA) checked expenditure against pre-determined objectives.
 
Mr Singh said that capturing of targets against expenditure would be in the AGSA report, but related to the specific departments being audited.

The Chairperson said that he was wanting to emphasise, in this Report, that the Committee should find a way of dealing with that trend during the year, without waiting until the end of the year. The problem was that some committees thought quarterly report should rest with the Appropriations Committee, and some did not get quarterly performance reports from the departments.

Ms Mashigo said that those Committees had individuals who used to sit on the Appropriations Committee.
 
Mr Singh recommended that the Committee could say that some Departments spent 100% per cent of their budgets while achieving only 22% of their targets.

Mr Swart disagreed; the average for all state departments’ performance was around 51.2%.

The Chairperson said that he thought the intention of the report was to generalise and that percentage had been averaged. He added that, from the list of departments given to the Committee, he saw only one with over 60% achievement.

Mr Swart added that the Department of Economic Development (DED) had achieved 97% of its targets, which was the reason the average had risen above 50%.
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Mr Singh suggested then that rather than using percentages, the Report should read “had achieved much less in terms of their pre-determined targets”.

Mr Ramatlakane asked if a technical amendment could not be made to put more emphasis on the non-achievement of targets.  

Mr Singh made a point on human settlements; the FFC had stressed the need to take a broader look at the country’s housing policy and the way the state delivered housing. Urban migration was causing the state to build more house in the city to accommodate the influx of people into the cities, and this resulted in some moving in to find job opportunities, and others moving in to get a free house. He believed the State had to look more closely at rural renewal, which he did not think it was being driven as much as the urban housing programme.

The Chairperson agreed that indeed the FFC had highlighted that, but there was commitment to dealing with rural development, as evidenced by the creation of the Department of Rural Development and Land Reform.

The Chairperson and Mr Swart agreed that there was a need for a technical amendment for grammatical correctness on the finding for the MTEF and medium budget allocations, involving DBE.

The Chairperson noted that the Committee had asked DBE to state its proper programme in terms of pre-determined objectives, to ensure more focused oversight

Mr Ramatlakane and Mr Swart pointed out some technical amendments.

The Chairperson noted that it was quite serious that more than 70% of departments had operated with organisational structures that had not been approved by the Department of Public Service and Administration (DPSA).

The Chairperson asked where the statement on the taxi recapitalisation programme emanated.
 
The technical assistant replied that that statement was from the MTBPS.

The Chairperson said that the CWP statement was supposed to be part of the observations and findings.

The technical assistant said that that was drawn from the Minister’s speech, which had indicated that there would not be CWPs in all Municipalities at the moment, although they were to be established.

The Chairperson reminded the Committee that this programme resided with the national Department of Public Works (DPW).  

Ms Ferreira said that CWPs were indeed in place, but not in every municipality at that moment.
 
Mr Ramatlakane asked if the Committee wanted to comment further on the 70% violation of DPSA regulations by departments; this seemed to say something about how DPSA was managing the issue, and it should be enforcing compliance more strongly.

Mr Swart attempted to re-phrase the recommendation, but the Chairperson said that this was already under the recommendations.

Mr Ramatlakane emphasised that DPSA had to sign off on the organisational structure of departments, but they seemingly went ahead without approvals, appointing personnel outside the structures.

Ms Mfulo reiterated Mr Ramatlakane’s sentiment, but the Chairperson was adamant that it was already covered in the recommendations section.

The technical assistant went on through the recommendations.

Mr Singh asked that the Accelerated Schools Infrastructure Development Initiative (ASIDI) be worded as “NT, in conjunction with the DBE”.

The Chairperson reminded Members that the Committee had asked DBE to tell the Committee how it monitored its under expenditure, and, although he had not had a chance to go through it in detail, it was clear that some effort was being made to curtail and monitor under expenditure.

Ms Mashigo said that she thought the involvement of NT should be emphasised, because it dealt with appropriations. The Committee appreciated that NT had refused to grant DBE the rollovers. Earlier, the Committee had approved an adjustment of R700 Million for DBE in the hope that the ASIDI would improve the situation.

The Chairperson asked if the Presidential Infrastructure Coordinating Commission (PICC), which was responsible for bulk infrastructure development, played a role.

Ms Mashigo responded that whatever their position was, NT needed to have influence as well.

Mr Swart asked if DPME should not be included in that recommendation as well.

The Chairperson believed strongly that NT had a constitutional responsibility to do oversight over allocation expenditure, but it sometimes shed that responsibility. He believed the recommendation should refer to only NT and DBE. The Portfolio Committee on Basic Education should also be doing oversight.

Mr Ramatlakane asked why the recommendations spoke to the successful transfers of the FET function to the DHET. This had happened some time ago and he had thought the Committee was, in this Report, dealing with delivery. He asked if additional resources were being added to the original allocations for the transfer of that function.

The Chairperson reminded Members that the Committee was aware of the challenges around the transfer of funds between the DBE, at a provincial level, and the DHET. The DBE’s Deputy Director General had said that the DBE was still to sort out that issue, but assured the Committee that from 2014, the FET funds would be with the DHET.
 
Mr Steven Kenyo, Director, Local Government Budget Process, National Treasury, said that there was still some uncertainty around the finalisation of timeframes, and the shifting of the money from the provincial DBEs to the DHET was still outstanding; there was still money for dedicated FET programmes in provinces, and there were also some salaries within the FET colleges that were also paid from somewhere within DBE.

The Chairperson thought the recommendation was then correctly worded.

Mr Ramatlakane said that if the facilitation role of that NT was to be captured, it may need to be specifically mentioned.

Mr Swart rephrased the recommendation on direct and indirect conditional grants as the two grants needed assessment against each other, rather than an assessment of both successfully.

The Chairperson said that this was related to the Rural Households Infrastructure Grant (RHIG).

The technical assistant said it could perhaps be noted that in many instances indirect grants were not performing as envisaged; one example could be the ASIDI programme, and the other the broader view whether the devolve the human settlements function to local government level. A broader view was needed on the relative challenges between direct and indirect conditional grants.

The Chairperson asked if it would be possible to give a direction to NT on focus areas – such as ASIDI – although it should not necessarily be limited to that.

Ms A Mfulo (ANC) said that she thought that the statement was inclusive already. It was important to mention the Committee’s view on direct versus indirect grants, because of the challenges.

Mr Swart said that the Committee had been told that the direct grants had performed better than the indirect grants, so that assessment by NT could give credence to that statement.

The Chairperson confirmed that the changes proposed would be made to that recommendation.

Ms Ferreira raised a technical point that the CWP was not a grant and therefore did not have a grant framework.

Mr Swart said that recommendation should have the reference to grant frameworks removed; the Committee had issues with the CWP programme.

The technical assistance read through other recommendations.

The Chairperson said that the devolvement of the human settlements function to the six metropolitan municipalities (metros) that needed to be supported by the Ministers of Finance and Human Settlements through capacity enhancement initiatives, resulted from the understanding that not all metros were the same.

Mr Swart felt the recommendation on the comprehensive implementation evaluation of the ASIDI was a duplication of the earlier recommendation dealing with the NT and DBE roles. That was why he had suggested mentioning DPME in that recommendation.

The Chairperson replied that the Committee had received a report on the state of the schools infrastructure in the country. PICC was, in Cabinet’s view, responsible for the implementation of the infrastructure. He was not certain whether DPME was the right department to deal with programmes like ASIDI.

The technical assistant explained that the first recommendation addressed the current challenges that faced the schools infrastructure programme and was aimed at capacity enhancement. The second recommendation was that the evaluation programme of DPME could include ASIDI, but that focused on roll out, not capacity.

Mr Swart suggested again that the first recommendation simply be expanded with a reference also to DPME’s role.

The Chairperson did not believe that DPME was the correct functionary; he was suggesting that the second recommendation be removed.

Mr Ramatlakane emphasised that the two recommendations dealt with different aspects and DPME had to do an evaluation or impact assessment. .

Mr Swart said Mr Ramatlakane was correct, but evaluation was normally done by a consultant; that was why the first recommendation asked for the assessment by NT and DBE.
 
Ms Mfulo differed on that point; DPME had a mandate to do evaluations, prior to any independent evaluation being undertaken. DPME would be able to caution DBE about possible challenges in the future. She proposed that both recommendations be included.

Mr Singh asked what timeframes the Committee was putting to the implementation, after the MTBPS report had been considered and recommended to the House. Normally, a deadline of 60 days was given.

The Chairperson said that the Minister of Finance, when tabling the budget report, normally responded to recommendations of the Appropriations Committee.

Mr Ramatlakane agreed, but pointed out that some of these recommendations were department-specific, relating to the Departments of Rural Development, Agriculture, DPSA and Human Settlements.  He felt they should have a responsibility also to at.

Members adopted the Committee’s report on the MTBPS, with amendments.

Committee’s Draft Report on the 2013 Adjustments Appropriations Bill
The Chairperson noted that the recommendations in the draft Report on the Adjustments Bill were similar to those of the MTBPS.

Mr Singh noted that the recommendations in the Adjustments Appropriations Bill were more specific with amounts.

The technical assistant read through the recommendations.

Mr Singh questioned the relevance of that first recommendation, and the Chairperson asked if it was asking for mechanisms to be developed, or planning processes to be aligned.

Mr Singh said the recommendation spoke to the Minister and the Department of Rural Development and Land Reform (DRDLR), whereas the Committee was actually addressing the Minister.
 
Mr Singh asked if there was a problem at that moment with the rollovers that the NT was supposed to approve to ensure the adequate adjustments on any ongoing multiyear projects.
 
The technical assistant said that the Committee had been concerned on that point, given that the ASIDI had not been allocated a rollover of R1.3 billion, about the impact of the refusal on the scope of the project and planning. It was suggesting, therefore, that the rollover process be expedited.

The Chairperson said that he thought it best for that recommendation to be removed. The Committee understood that there had been an extension of time granted. However, the Committee could not recommend a rollover for departments who could not spend. The DBE had received one adjustment rollover already, but had spent only around 18% in six months.

Mr Swart asked how NT could assess how foreign currency was likely to perform. The recommendation saying that NT “had to develop plans to enhance national departmental spending to mitigate against the negative effects of foreign currency-denominated expenditure” was unrealistic.

The Chairperson also did not think that the Committee needed that recommendation. It was only really the Department of International Relations and Cooperation (DIRCO), and perhaps Department of Tourism, who were normally affected.

Members agreed to remove that recommendation.

Ms Mashigo said that the RHIG recommendation, that NT should develop a grant framework that incorporated both direct and indirect components, was not in fact in line with the Committee’s view.  The Department of Human Settlements (DHS) had moved the RHIG grant from schedule to schedule, but the Committee was concerned with its impact, as it was not functional when moved to municipalities. The Committee felt that RHIG had to return to its original scheduling.

The Chairperson asked what the expenditure on RHIG had been after six months.

Mr Kenyo replied that there had been a problem with the transfers, as had been noted in the NT report, because funds were allocated largely to the wrong municipalities, and that process was currently being corrected. However, since most of those municipalities had large capital budgets, the RHIG would not have made much difference. He thought they would be able to spend within the next six months.

The Chairperson emphasised that the Committee’s concern was with the shifting of RHIG, which affected performance. NT and the South African Local Government Association (SALGA) had felt that RHIG was the responsibility of local government, but the Committee said that if this was so, it was still concerned about lack of performance. Even accountability of municipalities was a challenge. Only the RHIG rollover had been approved.

Mr Ramatlakane said he was going to suggest a complete rephrase of that recommendation, but wanted to put on record first that he had a different view. He thought that shift was actually largely to do with the particular relationship between NT and the DHS. There had been great animosity between the two departments’ Directors General, who had refused to meet to discuss the RHIG. That relationship directed NT’s thinking, and whatever the Committee did would be a rearguard action. The Committee did not agree with the shift of RHIG to local government, and he believed the Committee should re-state that, firmly, as a political principle.

Ms Mashigo said that she agreed with Mr Ramatlakane, and NT, being present, knew clearly of the Committee’s views.

The Chairperson said that the report before the Committee contained what the Committee had agreed upon in that regard, and read out the recommendation.

Mr Ramatlakane argued that this was merely a re-statement of the NT response, and that he believed that the end of the recommendation was a contradiction to what NT held.  

Mr Swart proposed some substantive changes to that recommendation.

The Chairperson said that although both Mr Ramatlakane and Ms Mashigo were making very clear proposals, those proposals were not helping. NT had said that neither NT nor anyone else actually knew how the RHIG was performing and this Committee simply had to ensure an effective roll out of the RHIG programme. He asked what the budget for the RHIG programme had been for 2012/13.
 
Mr Kenyo replied that the initial budget was in the region of R500 million, but during the third quarter of the financial year, in the adjustments budget, R138.5 million was taken away because of the under-spending. DHS still had under-spent by R100 million on that programme, at the end of 2012, which was why the rollover had been approved.
 
The Chairperson said that the DHS would probably ask NT to tell it where the contraction of the budget happened.

Mr Ramatlakane asked then if the Committee should not maybe rephrase that paragraph, reflecting the NT’s position, and the end of the recommendation would read “Hence, the Committee is of the view that the RHIG was properly allocated under the DHS”. The recommendation would then reflect the views of both NT, and the Committee. Then the recommendation would be aligned to the main body of the Report.

The Chairperson said that his understanding of that paragraph was that it was welcoming the fact that the money was still in the system for rolling over, as this would encourage the DHS to be more responsible. However, Mr Ramatlakane’s proposal could be included as a measure to reinstate stability in the RHIG programme. He felt that insufficient monitoring and oversight was done over the DHS; the fact that it could not completely account after six months for performance under the RHIG showed that there was a deficiency in the DHS, because it knew exactly who had received the funding, and the only question was how well each municipality had performed. However, if there were allocations to the incorrect municipalities, that showed a further deficiency. He was not sure whether DHS was in fact the right functionary.

Mr Singh suggested a change to the wording ‘the Committee viewed the successful implementation’, to ‘the Committee is of the view that the successful implementation of RHIG will be critical’.

The Chairperson accepted that, and Mr Ramatlakane’s proposal. He told the NT delegation that the Committee would insist on the RHIG being successfully implemented.

The Chairperson noted that there was a recommendation for the Department of Communications (DoC) to prioritise funding for the expeditious completion of the 112 emergency call centre. However, the Committee had asked DoC why it had not even started with that programme; the Committee was worried that it was merely “parking” money, only to shift it later, and this was a repeat finding on the  Adjusted Estimates of National Expenditure report. The DoC claimed to have stabilised, and he had asked why DoC was still budgeting in this way and was told that if that funding was taken away, it would have an impact on the digital migration process. He asked if the Committee should recommend that the Minister of Finance should engage the DoC on the relevance of the 112 emergency call centre programme, or if NT should intervene on that project, so that it got implemented.


Mr Swart said that the DBE was said to be strengthening internal capacity to ensure that stringent measures would be taken against non-performing Implementing Agents and Service Providers. It had not done so, and he wondered if this should be part of the recommendations.

The Chairperson agreed and asked Mr Swart to help with the wording, which would ‘urge’ the Department to act

Mr Singh asked whether there would be time frames put to the Adjustments Appropriations Bill report as well.

Members adopted the report, with amendments.

The meeting was adjourned.
 

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