Department of Home Affairs Audit Outcomes: AGSA briefing; DHA Annual Report briefing

Meeting report

Audit outcomes for the Department of Home Affairs
Mr Nareen Mooloo, Senior Manager: Auditor General of South Africa (AGSA), said the briefing covered the audit outcomes for the Department of Home Affairs (DHA) and its entities. The Committee was provided with brief information relating to the oversight model and oversight legislation that was implemented. The oversight required parliament, provincial legislatures or municipal councils to consider, amend, approve or reject legislation and ensure that all appropriate executive organs of state in its portfolio were held accountable for their actions, among other duties.

The audit outcomes over the past three years showed that there was a fluctuation in the performance of the entities, with some improving in one year and then declining in the following years. For 2013-2014, AGSA found that 75% of the findings were unqualified and 25% amounted to adverse or disclaimer findings.

Ms Fatima Chohan, Deputy Minister of Home Affairs, outlined the status on the key commitments for 2013-2014. The commitments in progress were to improve the relationship between Department of International Relations and Cooperation (DIRCO) and the DHA to ensure better quality of information on the vouchers from foreign missions. The other aims were to improve record keeping with regard to the capturing of vouchers in the financial records (monthly listing for both local and foreign revenue), improving the process of asset management with regard to maintenance of the asset register, and fast tracking the automation of the systems, thereby reducing manual intervention.

New commitments included implementing proper financial management processes and improved financial accountability, and establishing an improved leadership model with stronger and strict leaders. The Minister also sought to implement credible action plans with milestones for tracking progress and to perform a competency-based gap analysis and implement corrective action. The appointment of a new chief financial officer (CFO) to assist in the turnaround strategy was among the already implemented commitments for the year 2014. The common causes of the overall regression in audit outcomes occurred due to slow responses by the accounting authority and senior management, and the key officials lacked appropriate competencies. The other cause of regression could be attributed to the rate of instability, or vacancies, in key positions.

Mr Mooloo stressed the need to have accountability and remedies to address transgressions and poor performance. The matters reported by AGSA in their general report included a failure to comply with legislated obligations and responsibilities, and unauthorized, irregular and fruitless and wasteful expenditure. Cases of possible fraud and corruption were also reported, as well as other areas of non-compliance with legislation.

Discussion
Mr M Hoosen (DA) asked whether the findings in the outcome report really reflected the situation on the ground in terms of the financials being based on opinion, and the outcomes on findings. Mention was made to situations where there had been irregular expenditures in the past, and he asked if the DHA had taken any steps to address and correct the problems in the following years and report on them.

In response, AGSA said that the Public Finance Management Act (PFMA) required the Auditor General to express an opinion on the financial statements, and they were published in the financial gazette of the financial year, but the requirement to do that had not been issued for the year 2014. The audit report explicitly covered everything that happens on the ground.

AGSA confirmed that they do follow-ups each and every financial year on the expenditures, but in the previous years it had been difficult because the DHA had been experiencing slow starts due to issues from previous years. The short time frame did not correspond with the large issues inherited from the previous years. It was recommended that two task forces be set up, one dealing with current audit issues and the other dealing with the previous years.

In reply to the issue of the National Development Plan (NDP) alignment, it was held that AGSA carries out its audits in terms of credit requirements, which must comply with key strategic plans.

The Chairperson reiterated that DHA management needs to comply with the requirements of AGSA in submitting documents for auditing purposes on time, and failure to do so should not be tolerated at all. The relationship between the Auditor General and the Minister was commendable, because it facilitated transparency and accountability. Improvements in terms of the relationship between DIRCO and the DHA were also welcomed, in order to give better information on the vouchers from the foreign missions. The Auditor General was encouraged to continue with capacity-building assistance to the entities, to help them move towards a clean audit.

2013-2014 Annual Report for Department of Home Affairs
Mr Mkuseli Apleni, Director General: DHA, said it was a priority for the DHA to contribute to the National Development plan(NDP) by facilitating the acquisition of the critical skills needed for economic growth. The DHA could play a key role in enabling regional development by working with Southern African Development Community (SADC) countries to establish efficient, secure and managed movements of people.

Among the strategic objectives of the DHA was the facilitation of efficient movement of bona fide travelers, to support national interests and priorities, and to prevent and prohibit the movement of undesirable persons in the interests of national security. The DHA strived towards realising a positive skills migration trend of around 50 000 migrants annually, and obtaining a clean audit report.

The challenges faced by the DHA during the years included systems that were out of date and not integrated, compromising security and service delivery. There was a highly uneven quality of infrastructure, with a large dependency on the Department of Public Works (DPW) and rented accommodation. There were risks and threats to civil registration, identity and immigration systems from local and transnational criminal syndicates.

During the 2009-2014 period, all 2010 FIFA World Cup guarantees had been delivered to a high standard. Amended civic and immigration legislation had addressed serious security gaps and improved service delivery, including vulnerable groups. There were major IT breakthroughs in the design and development of new systems, including the rollout of smart ID cards. The improvement of the Beit Bridge border post was also a major highlight.

In 2013, 7 289 applications for asylum seekers had been received. 37% were unfounded, 51% were manifestly unfounded, and only 12% were approved. In terms of movements of citizens and foreigners, 14 919 420 foreigners arrived in the country and 13 656 189 departed during the year. 39 065 permanent residence applications were received, and only 19 035 were finalized.  16 382 temporary residence applications were received, and 4 612 finalized. In the 2013-2014 period, 1 515 officials received training.

Discussion
Ms N Mnisi (ANC) expressed disappointment with the audit outcome report presented by the AGSA, on the grounds that it lacked improvements from the other reports given to the Committee in the previous financial years. It was not acceptable that there had been no significant improvement in the relationship between DIRCO and DHA to ensure better quality of information on the vouchers from foreign missions. She suggested that the issue be resolved, since it was becoming monotonous that it was presented as a challenge every financial year.

Clarification was sought on the difference between the number of arrivals and departures of foreign nationals into the country, and the causes of the substantial decline in the departures, as opposed to arrivals, in the years 2012-2013.

She asked how the Department was certain that the performance indicators provided accurate information in the reports. The improvements on the Beit Bridge border post were noted with appreciation, and she asked if there were any measures being taken currently to move towards a one-stop border post.

She also enquired about the status of improving service delivery, as recommended by the Presidency Performance Assessment Tool. In the wake of the difficulties in fighting against corruption and fraud, especially by the DHA, clarity was sought on the extent to which the officials in the Department were being held accountable.

Mr Hoosen supported the Deputy Minister’s view of having a separate, in-depth discussion on the issue of the Lindela Repatriation Centre, saying that it was a matter of serious concern to the Committee, which demanded that special time be devoted to dealing with the way people who had stood by South Africa when it was fighting for its democracy, were now being treated.

The DHA was commended on some improvements in the year 2014, especially with the introduction of smart ID cards and the passports.

The outcome report was likened to a teenage love-story where, in the beginning, it is all exciting and fun but as the relationship continues, it becomes more and more heartbreaking as it draws to the end. The same applied to the Auditor General’s report, where one was not sure whether it was a horror-story or a sad story. There was need for the Minister to clarify issues raised in the report.

On the issue of performance, it was mentioned that when the DHA achieves only half of its targets, this creates a bad impression in the eyes of the public -- the staff are getting paid but fail to deliver and achieve their own targets. Clarification was then sought on the measures of accountability that are taken to ensure that the targets are met and to alleviate a situation where there is a recurrence of these issues in the outcome reports every year.

Concern was expressed in relation to the issue of contingent liability, which makes up to 20% of the DHA’s budget. It was noted that there had been an increase in the number of legal matters, which was an indication of a decline in service standards. The more the service deteriorated, the more the DHA had to use money for legal matters, and the “shenanigans” at the Repatriation Centre exacerbated the situation. Service delivery should be improved so fewer funds needed to be allocated to litigation matters, and swift action should be taken to eradicate the culture of impunity.

The Director General was asked if there was an asset management register showing the control and whereabouts of assets.

Dissatisfaction was expressed with the DDG of Immigration Services’ department, to the point that the praises that had been given in the past were withdrawn in the hope that criticism might draw the Department’s attention to deal with important issues. This emanated from a situation where the concerned DDG had been contacted and asked for assistance in securing study permits for a certain company representing a group of foreign students, which had lost R5.5 million after visas could not be processed. It was alleged that the DDG gave only a one-line response to the request and the matter was ignored until the company was closed, despite its owner appealing to the Minister of the DHA for help. It was recommended that the Department should deal swiftly with such matters.
Mr A Figlan (DA) asked about the Department’s total budget, to determine whether they had overspent or not. The slow pace at which the Department was dealing with the issue of corruption was said to be worrisome, and that there was need to improve in this area.

Ms T Kenye (ANC) asked about the measures that should be taken to address and improve pre-audit outcomes, as presented in the Auditor General’s report. The Department was asked if they had any specific training on finances, in relation to obtaining qualified and unqualified audit reports. The accuracy of the audit reports was also questioned, since the Audit General’s report stated that there was a lack of necessary evidence in certain reports.

Mr D Gumede (ANC) referred to the issue of the Lindela Repatriation Centre, and asked if the DHA or the Human Rights Commission could fully report on the issue, giving attention to the correct numbers of the immigrants. It had been reported that the Department had to deal with unexpected and unplanned arrivals of illegal immigrants, and that it was very difficult to organize for their stay. A full report would enable the country as whole to respond, because lamenting about the breach of human rights and showing the pictures of the immigrants suffering was not enough, as it could serve as propaganda against South Africa.

On the issue of disclaimers, the Department was requested to also report on the measures it takes to deal with those accused of misconduct and negligence, as required by the National Development Plan. There was need for an internal audit and a competent Chief Financial Officer to exercise a measure of control in dealing with accountability issues.

The Committee adjourned for lunch.