Madibeng Local Municipality intervention, Department Cooperative Governance briefing; 2014 Strategic Plan & budget: Department of Public Service and Administration briefing

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Meeting Summary

The Department of Cooperative Governance and Traditional Affairs gave a presentation on the status of the Madibeng Municipality, and gave some background on previous and current interventions. Madibeng Municipality had for several years been facing administrative and financial challenges, leading to service delivery protests and allegations of financial misconduct. In 2009, the Special Investigating Unit had investigated, and an intervention, in terms of section 139 of the Constitution, ran until May 2011. Given the continuing challenges, another section 139 intervention was effected in 2012. The Minister of Cooperative Governance at the time had instructed a Ministerial Task Team (MTT) to investigate, which had recommended that support should be given under section 154 of the Constitution, coupled with disciplinary and criminal proceedings being instituted against four officials, three of whom were suspended. A Ministerial Support Team (MST) was established and was working on several matters, holding bi-weekly meetings, addressing the water crises with other bodies and addressing various functions. In 2014, the MEC for Cooperative Governance in the province notified the Minister that the Provincial Executive Council had resolved to make anther section 139 intervention but, given the current status, the Minister dis-approved that. This decision was not conveyed to Parliament because there was currently no legislative obligation to do so. The Acting Municipal Manager for the Madibeng Municipality discussed the progress that had been made to overcome the challenges.

Members were concerned with why the Minister’s decision was not conveyed, and the response outlined the new procedures that were being proposed under draft legislation. Members were also concerned that there seemed to be discrepancies between the current and past reports, with the current one not mentioning the service delivery protests in which four people were killed, skirting over some challenges, including fruitless expenditure, and asked if progress was being made. A number of Member supported an oversight visit to follow up on the issues. They asked for specifics of service delivery failures, urged that communities must feel involved, asked the role of the South African Local Government Agency, whether the disaster management unit were involved, what preventative maintenance was being done, and why disciplinary processes were taking so long. The Committee wanted full financial details, and needed to know if there were internal controls, and how collusion, if it had been found, was being addressed. The timelines, what the support team had achieved to date, and what skills it had transferred, must also be detailed. The Department of Cooperative Governance participated in giving answers, and the role of other bodies was also outlined, as well as the attempts to solve the water, communication and debt collection challenges. Members asked further questions on the “cycle” that arose from poor cash-flow, urged that all contracts be checked for validity, asked for details on the Mayoral visits, and were worried that the Municipality may find itself bankrupt within three months, although the Acting Municipal Manager assured the Committee that this would not be allowed to happen.

The Department of Public Service and Administration (DPSA) briefed the Committee on its 2013-15 Strategic Plan, and 2014/15 Annual Performance Plan and budget. The Department outlined its policy objectives and programmes. The strategic goals were directed to having an efficient, effective, equitable, professional, ethical and clean public service backed up with appropriate legislative frameworks. The DPSA also contributed to improved public administration in Africa and internationally. The priorities for each of the eight programmes were outlined. The National Development Plan’s Chapter 13 set out what was expected of the DPSA, and this mentioned that unevenness in the public service, including problems at political levels, would need to be addressed. Specific initiatives highlighted included the E-Disclosure system would make financial disclosures far easier, the setting up of the Public Administration Ethics, Integrity and Disciplinary Technical Assistance Unit, and Batho Pele service excellence awards. DPSA was intending to strengthen service delivery and compliance with public service regulations, and deal with the need to have a framework for section 100 interventions. The Public Administration Management Bill of 2013 had been submitted to the President. Generic structures were very important to guide provinces. Some detail was given on the Public Service Charter and the new moves to require better disclosure for employees even below senior management, requests for permission to engage in other work, and public servants being prevented from doing business with the State. The budget for the previous year was R829 million, but that the actual expenditure as at 31 March 2014 was R809 million (97.51%), because certain amounts were ring-fenced, but not spent, for the President's Commission on Public Service Remuneration. Future allocations with breakdowns for programmes and economic classification, were given. DPSA spent R22 554 on hiring of consultants in the 2013/14 year, for specialist skills that it did not have itself.

Members asked for more detail on Thusong Service Centres, asked when vacancies would be filled, asked for more information on the proposals for and current status of the housing scheme for government employees, and questioned why the Eastern Cape Provincial Department of Health was apparently waiting on DPSA before establishing certain structures. Members of the Committee also asked questions about the underspending, asked about the vacancies in the DPSA itself, and, in relation to the whole of the public service, wanted comment on the implementation of the Occupation Specific Dispensation (OSD) framework, which led to discrimination in many cases if it was incorrectly managed, and urged the DPSA to take a holistic approach to solving it. They questioned the wage gaps between senior management and other employees and cited salary differences between employees doing the same job and on the same level, who were of different races. They asked about the assistance rendered by the Department of Public Service and Administration to other departments. The latter part of the discussion focused on the Public Administration Management Bill of 2013 and its impact, particularly the proposed outlawing of public servants doing business with the State, and Members asked for statistics on the number of current state employees doing other work.


Meeting report

Mr Vusi Madonsela, Director General of the Department of Cooperative Governance and Traditional Affairs, tendered the apologies of the Minister and the Deputy Minister, who could not attend the meeting.

Status of interventions in Madibeng Local Municipality: Department of Cooperative Governance and Traditional Affairs briefing
The Chairperson pointed out that in the previous week, on 8 July 2014, the Committee discussed the matter of oversight over Madibeng Municipality (the Municipality). The Minister had disapproved of the intervention in Madibeng, and the Committee had received indirect notice of this during the meeting. The Committee wanted to convey that it was a poor reflection on the communications with the NCOP and NA, and in future wanted the Department of Cooperative Governance and Traditional Affairs (COGTA or the Department) to communicate directly with the Committee.

Mr Vusi Madonsela, Director General, Department of Cooperative Governance and Traditional Affairs, stated that the presentation covered four aspects: firstly, the background and previous interventions into the Municipality; secondly, the Ministerial Task Team report; thirdly, the intervention in terms of section 139 of the Constitution; and fourthly, a progress report on support currently being provided in terms of section 154 of the Constitution.

Mr Tebogo Motlashuping, Acting Municipal Manager, Madibeng Municipality, explained that Madibeng Municipality had for several years been facing administrative and financial challenges, and that the cause lay in policy-making processes. There had been service delivery protests and allegations of financial misconduct.

In 2009, the President had signed a proclamation to begin an investigation into the matter, by the Special Investigating Unit (SIU). In view of the numerous challenges, an intervention in terms of section 139 of the Constitution was invoked, but this had lapsed on 18 May 2011. There were still some challenges that persisted beyond this intervention, and so another intervention was effected in 2012. The current issues related to that second intervention.

The then-Minister of Cooperative Governance had instructed a Ministerial Task Team (MTT) to investigate matters, and that MTT had recommended that there should be support rendered in terms of section 154 of the Constitution. The Minister took the decision to effect this support. It was suggested also that there ought to be disciplinary proceedings instituted against the Municipal Manager, the Acting Chief Operations Officer (COO), the Acting Head of Corporate Services and the Speaker. Criminal proceedings against these officials were also instituted. The Sector Municipal Manager, the COO and the Acting Head of Corporate Services had since been suspended. The Department had forwarded the report of the MTT to the police for investigation.

Support in terms of section 154 was established by a Ministerial Support Team (MST) comprising Mr Tebogo Motlashuping, Mr Pascal Moloi and Mr Boysie Phehlukwayo. He outlined the terms of reference of the mandate given to the MST.

In 2014, the Department received a notice, from the MEC responsible for Cooperative Governance, that outlined the Provincial Executive Council's resolution to intervene in terms of section 139. This notice included detailed information relating to the Municipal Council's failure to implement the advice of the MTT. The current Minister did not approve the 2014 intervention, because he maintained that the challenges being faced by the Municipality could still be resolved through section 154 support, particularly since these challenges related to the same issues already covered by the section 139 intervention in 2012.

The municipality had begun to implement the recommendations and the MTT checked what was being done, every Friday, on implementation. A plan had been developed together with the Department of Water Affairs and Rand Water to address the water crisis in Madibeng. The Municipality was provided with the necessary skilled persons to assist it. In March 2014, the Department seconded Mr Motlashuping as a Municipal Manager. The thematic areas that the MST was addressing included infrastructure and technical services; an Integrated Development Plan (IDP) review; community services and an approved Supply Chain Management policy for procurement transactions; township establishment projects; the implementation of the MTT recommendations; economic development tourism and agriculture; and public safety, fleet and facility management to address problems relating to traffic and security.

The Chairperson pointed out that the issue was no longer about a section 139 intervention but what was being done under section 154.

Ms T Mokwele (EFF, North West) asked whether, in the process of being appointed as MTT, Mr Motlashuping had managed to achieve his objectives. During his stay at the municipality, there was a water crisis that led to four people being killed. The new Mayor, Speaker and Chief Whip had been appointed. She wanted to know whether the presentation was a true reflection of what was happening in Madibeng, because the challenges in that Municipality still persisted, hence the confusion between the Minister and the Executive Council of the Province, about whether there should be interventions in terms of section 154 or 139. She started to suggest that this Committee should conduct a physical inspection.

The Chairperson interrupted Ms Mokwele, and said that at this stage, the Committee’s questions should be directed to seeking clarity on any aspect of the report presented.

Mr M Chetty (DA, KwaZulu-Natal) noted the absence of the Minister and his Deputy, and said this was unfortunate, especially in view of the contradicting instructions from the office of the Minister and the MEC. He said that information should be given to the Committee much earlier; he had only received this report on the morning of the meeting and had not been able to interrogate it before the meeting.

Mr Chetty referred to the section of the presentation entitled '2014 Application of section 139 of the Constitution” and said that the last bullet point indicated that the Executive Mayor had failed to make an undertaking to implement the recommendations of the MTT. He said that this was a direct contradiction in that, at the meeting last week, the Committee was told that part of the reason for the Minister not wanting to approve the intervention was that the new incumbents were making progress. Furthermore, referring to the second bullet point on the following page of the presentation, it was said that there was implementation of the MTT report. He pointed out that the report said nothing about the deaths of the residents in Madibeng during service delivery protests. The report that had been given previously had not been addressed by the current report. The previous report had talked about divisions and disagreements, as well as a finding that there had been in excess of R300 million of fruitless expenditure, and the current report did not address these concerns. The current report also did not address the report given to the Fourth Parliament. He said that the current report if considered alone, without any reference to the previous reports, implied that the situation was rosy. He concurred with Ms Mokwele's suggestion that the Committee needed to do a physical inspection, to allow the Committee members to see the situation for themselves, in light of the contradictions. 

Mr M Mhlanga (ANC; Mpumalanga) said that he wanted to clear up some issues. He first noted that there were no statistics in terms of the challenges faced by the municipality. The municipality had failed to execute its mandate and the Committee's concern was the corruption cases, including the R3 million of expenditure mentioned by Mr Chetty. The Committee wanted to know how soon and how early these cases would be resolved so that people would get relief, and pointed out that this was a substantial concern of the masses on the ground. Service delivery took many forms, including infrastructure, electricity, water, and other services, and he wanted to know specifics of where there had been failures, to allow the Committee to exercise oversight. He asked how many people had suffered, the impact of the challenges they faced and how they should be addressed. The Committee must approach these communities with full knowledge, and with some answers. Most service delivery protests were caused by lack of community involvement. No development could prosper unless the communities were involved and felt ownership. He maintained that the Committee would have to intervene here, whether or not reports were contradictory, and the Minister must clarify anything that needed to be explained. He appreciated that there had been progress from 2011 to date, but the outstanding challenges had to be solved. The interventions in terms of section 139(d) had to be effected.

The Chairperson said that the purpose of engaging with the report was to get more clarity. He said that it was necessary to draw a distinction between the matters. The Select Committee had discovered, in its last meeting, that the Minister had not approved the section 139 intervention, directing a section 154 interaction instead. Members should avoid becoming emotive on oversight issues. The Committee must respect section 41(1)(f) of the Constitution, and the status of other spheres of government.

Ms T Wana (ANC, Eastern Cape) congratulated the Department on the report. She pointed out that the process had started in 2009, but asked why there was nothing from the South African Local Government Agency (SALGA) and why this report was silent on the status of institutional structures within the municipalities and the establishment of audit committees within local government. She wanted to know how far the MIG funding issues had gone. There was no mention of any intervention by the local government’s Disaster Management Unit. There should have been an interventions done before the section 154 intervention. She wanted to know how many houses had been given to beneficiaries. She sought clarity particularly on why the disciplinary processes seemed to be so prolonged. Economic spin-offs within the Municipality had not been addressed, and she wanted clarity on fleet management.

The Chairperson, at this point, asked that the meeting adjourn, but that Members remain behind, and the room was cleared.

On resumption, Mr G Michalakis (DA, Free State) asked about the status of the persons against whom there had been criminal charges laid, whether they were still active in the municipality, even as councillors, or in any other capacity. He said that the report seemed like a summary of the challenges faced and the crisis management that was implemented in the circumstances, but pointed out that crisis management and maintenance were not the same thing. He asked whether there were any disaster management or preventative maintenance programmes in place, to ensure that these issues did not arise again.

The Chairperson asked what the current financial position was, and said the Committee needed figures for revenue, debt collection and other issues. Given that there were allegations of maladministration, he wanted to know whether there were any internal control measures, what the impact of those measures was, and whether the change of political leadership had any impact. He also asked whether there was a strategy in place to communicate with the community, to get them on board. He also asked if there had been collusion. Heads of Departments were directly involved and there may be sympathisers, and, if there was collusion, he wanted to know how it would be addressed. He also asked the Department to outline the timelines for the section 154 process, how long the support team would be in place, and asked if there was any transfer of skills. He asked what results had been seen since the Department had intervened and whether it had left a sustainable legacy.

Mr Madonsela said that he could not venture to deal with any political issues, and some questions must be answered by the Ministry. However, he could answer questions related to the administration. He apologised that the Department had, on this occasion, been unable to submit the documents in advance, but explained that the Department had less than seven days notice of the Committee’s request that it attend the meeting. The Minister and Deputy Ministers also had not wished not to attend, but had already accepted other engagement when the invitation was received  from the Committee, and could not change these engagements. In regard to the comment about communicating with the Committee, he pointed out that the Constitution was silent on whether the Minister, when dis-approving a request for an intervention, had to communicate this to the NCOP. He said that the Department was preparing legislation to deal with section 139 and section 100 interventions in more detail, and that would require the executive, whether approving or disapproving interventions, to convey the decision to the NCOP. There was nothing sinister or malicious about this not being conveyed in the present case, because there was no legal obligation to do so.

Ms Shanaaz Majiet, Deputy Director General, Department of Cooperative Governance, said that Mr Motlashuping had been appointed as Acting Municipal Manager in March 2014, on an initial three-month assignment, which was later extended for a further three months, to expire at the end of August. There were indications that the disciplinary matters, which were quite complex, were unlikely to be completed by the end of August and would possibly run into October. The Department would ensure that it followed through consistently on all cases. Some progress had been made, but not all had been resolved. The Department was about half-way through the process of commissioned investigations.

Mr Motlashuping assured Members that this report was a true reflection of what was happening in Madibeng. The Council, and the portfolio committees of Council, sat regularly, and there had been several ordinary Council meetings, Special Council meetings dealing with compliance issues, and there was a functional audit committee dealing with internal audit issues. The Senior Management Team (SMT) sat on a bi-weekly basis to discuss issues of administration and to report to Council. All bodies were functional and issues that they resolved were implemented.

He noted Mr Chetty’s reference to contradictions in the presentation, and said that it outlined the reasons why the Executive Committee wanted an intervention in terms of section 139, including the fact that the MEC perceived that specific councillors were not giving support. After the replacement of the councillors, who had disciplinary charges against them, the new joint administration had been offering support. The Mayor, the Chief Whip and Speaker were now giving full support to the Team and the recommendations of the Task Team report would be implemented.

Mr Motlashuping explained that, following the deaths of four people during the water service delivery protests, the Municipality had given emotional and financial support to the families of the deceased, including funeral assistance, and there had been continuous engagement with them. The causes of the deaths were being investigated by the police. The whole report, with all allegations of transgressions, including fraud and corruption, had been given to the police to investigate all criminal activity. The department was awaiting a report back from the police, and did not know yet how far the investigation was. The SIU had also been given all the relevant information but the Department had not yet received the SIU response.

The District Municipality and other roleplayers, including Rand Water, Magalies Water, the Department of Water Affairs and two mining companies, had come together to solve water problems. The mining companies had drilled boreholes in the area and the Department had also taken the decision to provide water using water tankers, although the Municipality would be required to purchase its own water tankers. There had been refurbishment of the water purification plant. The dam was not designed to cater for the volume of people who lived in the area now. Once the plant was operational to full capacity, water could be provided to all low-lying areas in the Municipality. In the interim, boreholes would be drilled and water would be provided with water tankers. This joint plan was being monitored on a bi-weekly basis, and there was a check on how far the Municipality had gone on other service delivery issues. The Municipality had engaged a mining company to make R2.6 million available to install lights in an area where there were high levels of crime, and had involved Eskom, to electrify the borehole drilled by the mining companies. Water would be put in the mainstream and other areas, including the Lonmin and Marikana areas. People would have access to tap water in future, which would be augmented by borehole water.

He assured the Committee that SALGA was supporting the Municipality, and this took the form of teams of technical people who were involved on a daily basis. The Municipality had better managed its expenditure in the last year. The MEC and the Mayor recently handed over 2 000 houses, in two local townships, to expedite problems around human settlements, after the Manager for Housing was instructed to finalise this, and there was a commitment from the Department of Human Settlements to make preparations for building of houses in Madibeng. Many more houses would be provided during this financial year.

The Chairperson asked Mr Motlashuping to provide the Committee with the full details, by sending them through the Committee Secretary.

Mr Motlashuping also spoke to the disciplinary issues. He noted that many disciplinary proceedings were finalised, and that the investigator had indicated that its report would be finalised by the end of September. A Committee had been established with the purpose of drawing up a Code of Conduct, for a particular councillor who had been charged. The councillors against whom disciplinary charges were laid, namely Mayor, Chief Whip and Speaker had all been replaced in those positions but they retained their position as ordinary members of Council.

Mr Motlashuping said that the previous budget did contain allocations for maintenance costs, but the challenges arose through cash flow difficulties, which prevented implementation of the plans. The debt collection rate in this Municipality was 64%. Because of water challenges, there had been two service providers appointed to assist with collection, but they could not go into the “township” areas. The previous Mayor had indicated that there would be write-offs of debts, but this was not effected in the correct way. Communities were refusing to pay because they had been informed that debt would be written off. The Department had now drafted a plan for the Mayor to go to all wards and explain the process around the write-offs, and to offer incentives to people who paid. MMCs and all senior officials of the municipality would also attend during these outreach visits. In order for the Department to effectively implement its plans, it needed to have R95 million a month, as compared to the current income of R62 million, and the discrepancy meant that there was always a shortfall with regard to maintenance. This Municipality collected nothing from water charges.

The Chairperson asked Mr Motlashuping what the final plan was.

Mr Motlashuping said that, once all communities had been properly informed and all issues had been addressed, including write-offs, the Municipality could start to collect. At the moment, water was not being provided to people consistently.

The Chairperson asked about whether the outreach programme had a stipulated timeline attached to it, to determine whether it was effective.

Mr Motlashuping said that it was intended to run through to at least the end of July, and the Mayor was expected to visit 36 wards. Ordinary council members had received an invitation to join the programme, but for the past few weeks, only the Mayor, MMCs and senior management had been attending. Once the purification plant was operating at full strength and water was getting into the mainstream, with everyone in the “white” areas and “townships” getting access to water, and once incentives had been outlined by the Mayor, it was hoped that people would, within the next six months, feel encouraged to pay. At the moment, when water supplies were not reliable, there was no reasonable prospect of getting payment.

Mr Michalakis wanted to follow up on the remarks that the maintenance plan could not be implemented due to cash flow. If the Municipality was unable to collect, it would have cash flow problems, and that would in turn lead to it being unable to do maintenance, which would mean that water problems would continue. This seemed a never-ending cycle and it had to be broken.

Mr Chetty said that there was a dire need for intervention. The Municipality was only receiving R62 million, and he predicted that in three months time, at this rate, it would be bankrupt and in six months it would be R99 million in the red, given the deficit of R32 million per month.

The Chairperson indicated that the Department had outlined how it was intending to address the deficit. The new initiatives on collection would be phased out over six months, there would not be overnight solutions but the Committee was hoping for gradual improvements.

Mr J Julius (DA, Gauteng) also wanted an answer on the vicious cycle alluded to by Mr Michalakis, and said that if capital budget were not given, there would be a much bigger problem and he too thought the Municipality would be bankrupt within three months. He also asked whether the new contracts were valid and legitimate, stressing that the administration had to be put right.

Ms G Manopole (ANC, Northern Cape) reminded Mr Chetty that the Municipality had recently been operating more effectively, with the assistance of Mr Motlashuping, and that some progress had already been made on the shortfall.

The Chairperson said that the Municipality had been able to collect 62% revenue recently and asked what the norm was prior to this.

Mr Motlashuping said that he would check the validity of the contracts when he received them. In answer to the concerns on the cycle of problems, he said that the expenditure patterns would be looked at, and the Department was aware of the urgency and would not allow the Municipality to get to the brink of bankruptcy. A financial cover plan had been drafted and implemented, with the help of the National Treasury. The Department would not be reckless and spend where it did not have money. Prior to the water crisis, the Municipality was able to collect 75% to 80% of debt, but the water crisis led to a drop. There had not been any serious financial problems since support began. The SNT meetings were held bi-weekly. Senior management would report on the issues raised by the Auditor-General, and monthly reports were submitted to the National Treasury and Provincial Treasury. The Municipality had moved from an audit disclaimer to a qualified audit, and hoped to move up to an unqualified audit.

The Chairperson asked again about the issue of skills transfer.

Mr Motlashuping said that Rand Water and Magalies were working with local technicians to ensure skills transfer, and said that three new technicians had been appointed. Two officials were assisting with the budget and financial office of the Municipality on a full time basis.

Mr Madonsela said that these discussions would enrich the Municipality’s position and promised to provide more detail in future reports.

Mr L Nzimande (ANC, KwaZulu Natal) said that he would press for more information and the Committee would set aside more sessions to hear updates on the matter.

The Chairperson indicated that the Team seemed focused, energetic and willing to engage. He hoped that this was not a once-off interaction, and said that the Committee  may visit the sites in future.

Department of Public Service and Administration: 2013-15 Strategic Plan, 2014/15 Annual Performance Plan
Mr Mashwale Diphofa, Director General, Department of Public Service and Administration, apologised for the absence of the Minister of Public Service and Administration.

Introducing his briefing, he touched on the Constitutional mandate provided by Chapter 10 of the Constitution and the Public Service Act, saying that the Department of Public Service and Administration (DPSA or the Department) concentrated upon issues of labour relations, conditions of service and negotiating on behalf of the state in respect of wages for public servants. The work of the Department was cross-cutting, but the Minister was responsible alone for setting the norms and standards for the rest of the public service. He outlined the strategic goals of the Department as set out in the Strategic Plan for 2013/2015. These included the Department ensuring an efficient and effective public service and administration, that was equitable and professional, ethical and clean, with an appropriate legislative framework. The Department would also contribute to improved public administration in Africa and internationally. The priorities for each of the eight programmes of the APP, namely Administration, Labour, Governance, Service Delivery, Policy, Government's Chief Information Officer, Research and Analysis, and Legal Services were discussed (see attached document for more information).

Mr Diphofa said that Chapter 13 of the National Development Plan (NDP) set out what was expected from the DPSA. There were concerns about unevenness in the public service, such as problems at a political interface, leading to a compromised public service. He outlined eight outcomes that had to be met in terms of the NDP, and set out the initiatives that the DPSA would take to do so. In particular, he mentioned that the E-Disclosure system would make financial disclosures far easier. The Public Administration Ethics, Integrity and Disciplinary Technical Assistance Unit would provide for the use of communication and information technologies. The Batho Pele Excellence Awards would promote and monitor service excellence in terms of individuals and departments.

Particular focus areas would include the improvement of service delivery, monitoring compliance with public service regulations, and fulfilling the need for a framework for interventions in terms of section 100 of the Constitution. The Public Administration Management Bill of 2013 had been submitted to the President and the Department would support its implementation when it was signed. Until now, there had not been any legislation to guide section 100 interventions. He emphasised the importance of organisational structures and the generic structures that had been generated, for example, for the Department of Health. There was no need to create a new structure for each province, as a generic structure could be used, with appropriate changes according to the provincial context.

The DPSA and organised labour had signed a Public Service Charter to improve the public service. The new Public Sector Integrity Framework would require employees below the level of senior managers to disclose gifts. A public service employee may request that he or she be permitted to do work outside of the department, and these requests may be approved. If the Bill on the single public service was signed into law, the Department would have to develop regulations for the single public service legislation. He emphasised that it was also a priority that the DPSA provide reasonable office accommodation for people with disabilities, and the challenges that the public service as a whole had in attracting and retaining disabled people.

Mr Diphofa said that the budget for the year was R829 million, but that the actual expenditure as at 31 March 2014 was R809 million (97.51%). He indicated that during 2013/14, the President's Commission on Public Service Remuneration, which independently advised on the remuneration of public service, had affected expenditure. A ring-fenced budget had been set aside for this Commission, and although the money had not been spent on the Commission, it was not available to be spent on anything else. The details of the spending were set out, by programme and economic classification (see attached presentation). The MTEF allocations per economic classification and per programme were also presented.

Mr Diphofa referred to some of the programmes of the Centre for Public Service Innovation for 2014/15. The National School of Government training targets, with regard to the programmes of administration, induction, leadership and management, were outlined.

Finally, Mr Diphofa said that although the figure had not yet been audited, the DPSA had spent R22 554 on hiring of consultants in the 2013/14 year.

Ms T Mokwele asked whether Thusong Service Centres were the responsibility of the DPSA, or whether they were the responsibility of Government Communication and Information Systems (GCIS).

Ms Mokwele asked whether and how the DPSA assisted other departments to carry out their performance management systems.

Ms Mokwele stressed that critical positions would need to be filled if the DPSA was to fulfil its mandate properly and she wanted to know when the vacancies in the Department would be dealt with.

Ms Mokwele wanted more information on proposals regarding minimum wages, and the wage gap, with particular reference to the wages for top management and functional management.

Mr Julius referred to slide 14, and wanted clarity on the first budget there, saying that the available budget indicated that the department still had about R13 million in the category of Compensation of employees. He also asked about the R7 million spent on goods and services. He asked if the figures indicated that perhaps the DPSA was not employing enough people.

Ms Manolope asked about the Department's housing scheme, and what the stage of that programme was, including whether it had received Ministerial approval.

Mr D Ximbi (ANC, Western Cape) asked an inaudible question.

Ms Wana asked for clarity regarding whether anything had been put in place to monitor the implementation of the resolutions. She said that the Department of Health in the Eastern Cape had indicated that it was still waiting on the DPSA for information on structures. She also asked about baseline vacancies. In the last Bargaining Council meeting, the Occupation Specific Dispensation (OSD) framework of payment was discussed, and it was seen as discriminatory. She asked whether this was likely to be phased out.

Mr Diphofa explained that the Thusong service centres were established as information centres, where communities would access a range of information about government services. Over time, it was realised that more could be done, and that they could be expanded to become service delivery sites. GCIS had historically played a role, but over time, when the mandate widened, other departments became involved, which then led to challenges as there were different models and paths involved. The DPSA now needed to provide a better management framework model for Thusong centres.

Mr Diphofa explained that the DPSA would assist other departments to implement performance management, from a policy perspective. There was a benchmark system for the public service, at a senior management level, which had not been issued as a directive, but which each department could adapt and implement. To support implementation, the DPSA ran workshops on the implementation of the Performance Management Directive System (PMDS). The DPSA was aware that it may not be working effectively in certain areas, and there was an effort to close the policy gaps.

Mr Diphofa spoke to the vacancies, and said that there were statistics available and detailed reports, which were based on information collected from departments, and these could be discussed with the Committee at a future meeting. The DPSA itself tried to keep its vacancy rate below 10% and, on average, this was being achieved. The Department undertook to engage with the Committee further also in this regard.

Mr Diphofa said, in regard to the wage gap between top management and the rest of staff, that the gap had been reduced because over time wage increases had been done in such a manner that the percentage increases were lower at the higher personnel levels. For instance, officials at level 14 upwards got increases of 5% whilst those at lower levels were receiving higher percentage increases. He said that for 2012/13, Directors General actually had to surrender the increases they had received. This was not a new initiative, and it had been running over a number of years.

Mr Diphofa said that the government employees housing scheme was one of the resolutions reached between government and labour. A joint project between representatives of organised labour and the state was being run, on developing the model. There were some things already done towards putting the framework in place. The parties had looked at institutional models, and various options had been put on the table. In the next round of negotiations, it was expected that something much more concrete would be established. This was linked to the issue of what the Department was doing for lower level employees. It had been pointed out, in the past, that public servants at the lower levels would not qualify for an RDP house, but would also not earn enough to qualify for a bond at a commercial bank. They were currently receiving an allowance of R900 per month to assist in acquiring home ownership, but the Department acknowledged that this was not enough. The issues affecting public servants were not about money alone.

Mr Diphofa said that the Public Service regulations were being monitored, and the DPSA held register of all the resolutions, and a central unit reported on where the Department was on each resolution.

Mr Diphofa was concerned at the assertion made by Ms Wana on the Eastern Cape Provincial Department of Health, because it was not for a province to say that it was waiting on DPSA before establishing a structure. The DPSA played a regulatory and supporting role and it was in fact the function of the Provincial Executive to develop structures. He undertook to speak to the Department of Health in the Eastern Cape.

Mr Diphofa said that the OSD framework was a noble idea, and was initially put in place to encourage categories of employees to join the public service, and to incentivise them to remain in the public service. Where it was implemented correctly, it was fair, but where the implementation was incorrect, it could result in discrimination. The DPSA was dealing with grievances from employees where, for example, there were disputes whether or not those employees qualified for OSD. He could not deny that there were shortcomings in the system.

The Chairperson said that the problems could not be addressed piecemeal, and asked whether there was a holistic plan to address the issue.

Mr Diphofa agreed that there would need to be a more holistic approach to the implementation challenges of the OSD, and that the DPSA would have to change its approach, as it had previously only intervened if there was a specific problem.

Ms Manopole said that this issue needed to be prioritised. The APP had alluded to building capacity, and this would need to be addressed in terms of that plan.

Mr Diphofa said that the point was well taken.

Mr Masilo Makhura, Chief Financial Officer, DPSA, wanted to address the issues raised by Mr Julius. The lack of spending of R13 million allocated to Compensation of Employees arose because of vacancies not filled by the end of the year, when people resigned or were transferred. Half of that amount also related to the Commission that Mr Diphofa had referred to during his presentation. An amount of R3 million was supposed to be paid to the State Information Technology Agency (SITA) but was not, because it had not implemented some of its projects. Most of the money spent on consultants related to skills that the DPSA itself did not have internally. The DPSA tried to minimise its use of consultants as much as possible and ensure that it exceeded 10% against its Goods and Services operational budget.

Ms Manopole asked whether there was a development implementation plan for the Charter.

Mr Julius noted that over the Medium Term Economic Framework (MTEF), the budget for the Public Service Commission was R206 million in this year, but decreased by R15 million for 2015/16 and wanted to know the reason.

Mr Julius wanted to know how many public servants were currently doing business with government, and what the impact of the new legislation prohibiting public servants from doing business with government would be on this Department, and whether it would lose a number of employees.

The Chairperson referred to the DPSA's strategic goal to provide targeted assistance to other departments, especially in the case of section 100 interventions. He asked what the proactive measures were to ensure that that particular challenge was addressed.

The Chairperson said that there were a great number of outstanding disciplinary case, particularly where people were currently on suspension, and wanted to know how the DPSA intended to address that.

The Chairperson wanted to know what the DPSA was doing to build in-house capacity. In the State of the Nation Address, the President spoke at length about job creation, especially amongst Community Development Workers (CDW), so he wanted to know if there were any specific policy directives in place for CDWs.

Ms Wana asked whether there were any exchange programmes between the Department and other countries.

Ms Mokwele asked about salary discrepancies between whites and blacks, citing the example of a black and a white woman, both working as administrators at level 3, yet earning different salaries.

Professor Richard Levin, Director General, Public Service Commission, said that there was indeed a discrepancy in the budget allocations for 2013/14 and the following year, for the PSC, with a decline in the latter year.

Prof Levin answered that in respect of public servants doing business with government, financial information was submitted to the PSC, which was scrutinised for potential conflicts of interest. By the start of the financial year in 2014, 9 413 forms that had been submitted were scrutinised, and the PSC had picked up 3 386 potential conflicts of interest, and 54 actual conflicts of interest. This was indicative of the number of public servants involved in doing business with the State. At present, it was not illegal for them to engage in business with the State, if it was fully declared, but the new legislation would outlaw such practices. These numbers did, to some extent, cast light on the questions asked. If the Bill were to be promulgated, it would make a difference in terms of standards of integrity. Senior managers in government were earning high salaries, and it was not desirable for them to have other sources of income or other interests, for in order for them to perform their government jobs properly they needed to have a 100% focus. He did not believe there would be a departure of skills, because the salaries in government were competitive, and the Bill would not actually entice people to leave the public sector, because it would not offer anything to cause that flight of skills.

Mr Diphofa said that the system being used at the moment did not take race into consideration when setting salaries, so if there was a difference in salary between a white and a black employee on the same level, it would be due to other considerations, perhaps years of experience, but certainly not race.

Mr Diphofa confirmed that the DPSA did have a plan for the implementation of the Charter. With regard to exchange programs, he confirmed that there were partnerships with other countries, and more detail n these was available. The DPSA would be looking at performance scores, to see what departments might be struggling on mandates, in regard to the section 100 process. Speaking to disciplinary actions and suspensions, he said that the expectation was that the new Bill would establish a centralised unit to assist the Department, but that DPSA should build that capacity in the meantime as well.

The Chairperson conveyed his gratitude for the presentation, and adjourned the meeting.

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