Unauthorised expenditure by Departments: SCOPA reports

Meeting report

The Chairperson reminded the Committee that it had held hearings in 2014 with various government departments on their unauthorised expenditure. The Committee now had to recommend to Parliament whether to approve the unauthorised expenditure. If approved, this unauthorised expenditure would be absorbed by the national fiscus. If not approved, the respective departments would have to incur savings to cover it. These matters had been debated by the Committee and National Treasury had provided input and after dealing with technical aspects had made recommendations. He proceeded to place the Committee Reports on the unauthorised expenditure of each department before the Committee for consideration. He asked members to concentrate on the recommendations made by the Committee in the respective Committee Reports.

Committee Report on unauthorised expenditure of Department of Social Development
The Committee agreed to the recommendation made that the amount of R26m of unauthorised expenditure by the Department of Social Development during the 2007/08 financial year be approved as a direct charge against the National Revenue Fund.

Committee Report on unauthorised expenditure of Department of Water Affairs
Mr M Booi (ANC) commented that the recommendation contained in this Committee Report reflected what the Committee had agreed upon.

Ms G Tseke (ANC) stated that when recommendations were made it should be clear as to what was being recommended. She felt that the reason for the unauthorised expenditure given by the Department of Water Affairs as being expenditure for a research study was not good enough. The Department should have budgeted for the research study. Government departments needed to take parliament seriously.

Mr M Hlengwa (IFP) reacted that he was under the impression that at the last briefing by the Department, the Director General had explained the reasons for the unauthorised expenditure. The Committee at the time had been satisfied with the explanation given.

The Chairperson conceded that if a person had not been present in that briefing session and had just read the Committee Report, it could seem that the explanation given was not good enough. He did point out that the National Treasury submission to the Committee over the unauthorised expenditure was more substantive in nature. He suggested that the Committee Secretariat beef up the background to the unauthorised expenditure as contained in the Committee Report.

Ms Tseke agreed to the suggestion made by the Chairperson.

The Committee agreed to the recommendation in the Committee Report that the unauthorised expenditure of R3.782m be approved by parliament as a direct charge against the National Revenue Fund since there was no evidence of impropriety, wasteful expenditure or losses to the state.

Committee Report on unauthorised expenditure of Department of Trade and Industry
The Chairperson suggested that the Committee Secretariat attend to the format used in the Committee Report in that the Report should be more summarised.

Ms Tseke agreed that the Report should be summarised.

Both Mr Booi and Mr Hlengwa agreed that the recommendation reflected in the Committee Report was what the Committee had agreed upon. The recommendation stated that the Committee noted all the instances of unauthorised expenditure by the Department in previous years and recommended that parliament approve the amount of R37.38m as a direct charge against the National Revenue Fund.

The Committee agreed to the Report.

Committee Report on unauthorised expenditure of the Presidency
The Chairperson reminded the Committee that it had requested the Presidency to provide greater detail on the unauthorised expenditure. He felt that the background to the unauthorised expenditure by the Presidency as captured in the Committee Report was not done correctly. The figures, as captured, were confusing. He explained that the total unauthorised expenditure of R45.506 m comprised of two separate instances of unauthorised expenditure of R28.428m and R17.0787m. He asked the Secretariat to make changes to the Committee Report. The recommendation should mention the actual amount of R45.506m in unauthorised expenditure which had been omitted.

The recommendation should state that the Committee recommended that the R45.506m in unauthorised expenditure should be charged against the National Revenue Fund.

Mr Hlengwa noted that he had received the additional document provided by the Presidency on its unauthorised expenditure in the present meeting. There were some aspects which he did not understand. He did not feel that the Committee would be doing justice to its work if the Committee made a decision without debating the additional document containing further details. He emphasised that there needed to be greater oversight over the spending of the Presidency. He felt it came down to poor planning. He suggested that the Committee work through the reasons given by the Presidency for the unauthorised expenditure and thereafter make a decision.

Mr Booi responded that the "further detail document" provided by the Presidency had been forwarded to members for perusal before the meeting. The issue of oversight over the expenditure of the Presidency was a totally different matter. What was wrong with the Committee making a recommendation that the unauthorised expenditure amount of R45.506m be charged against the National Revenue Fund.

Ms Tseke added that members were sent the "further detail document" from the Presidency earlier in the week. The Presidency had given explanations to the Committee. She agreed with Mr Booi that the recommendation should stand that the unauthorised expenditure amount of R45.506m be charged against the National Revenue Fund.

The Chairperson said that the Committee needed to interrogate matters further if Mr Hlengwa had specific areas that he wished to discuss.

Mr Hlengwa reiterated that he had only received the Presidency document containing further details that morning. He had not received it days earlier as other members had apparently had. He asked what the need was for the Presidency to have two national orders ceremonies within one year. It was the consequence of poor planning. He understood that each president wished to craft his own executive as every five years government structures often changed. The expansion of the executive under the current president needed better planning. He also had an issue with expenditure on legal fees. Was the expenditure on legal fees in the Presidency a cost to the President personally or was it in his capacity as the President. The major concern was that there was a lack of forward planning.

The Chairperson appreciated Mr Hlengwa laying out specific areas of concern that he had. He continued to elaborate on the response given by the Presidency that it did not have a significant budget for legal fees and that it had not anticipated a number of legal cases.

Mr Hlengwa said that his question was more on the detail of the litigation.

The Chairperson stated that he assumed that the litigation involved cases relating to the Presidency as an Office.  

Mr Hlengwa appreciated the Chairperson’s efforts to explain things but in the end it was all based on assumption.

Mr Booi said that National Treasury had explained that the Presidency’s legal fees had exceeded its budget for it. He asked where the line of discussion was leading to. Further detail had been requested by the Committee from the Presidency and it had been provided.

The Chairperson asked what was needed by the Committee on the matter of legal fees. Did members need a breakdown of the cases involved? Was certainty required that it was in fact cases relating specifically to the Office of the Presidency?

Mr Hlengwa responded that the Committee needed to know what the legal cases were for which the Committee was condoning expenditure. He would have liked the responses from the Presidency to have been more specific. He felt that greater forward planning needed to be done by the Executive.

The Chairperson said that what Mr Hlengwa was requesting, was fair. The Committee could request a breakdown of the legal cases with which the Presidency was involved. If after perusing the list of cases something substantive emerged, then the Committee would deal with it.

Ms Tseke said that she would not have a problem with what the Chairperson was suggesting if it was done to all the other departments that the Committee was dealing with at present. The Committee could not single out the Presidency. The Committee needed to be consistent in its requests for details, be it from departments or the Presidency.  The choice of cabinet was after all the prerogative of the President.

Mr Booi noted that Mr Hlengwa was asking that the Committee do oversight over the President. He did not agree with what the Chairperson was suggesting as it would be setting a precedent. What was the Committee trying to achieve?

The Chairperson suggested that the Committee move forward with consideration of the Report and adopt it.

Mr Booi noted that the Committee could not be used to do oversight over the Presidency. Was the concern in question that of the Committee or one of Mr Hlengwa personally?

Mr Hlengwa responded that the information was needed in order for the Committee to do the work it was supposed to do.

Ms Tseke said that the Committee Report was a true reflection of what transpired. The additional information that had been requested from the Presidency had also been provided to the Committee. She did not feel that there was a need for a breakdown of the legal fees of the Presidency. The Committee did have a breakdown of the unauthorised expenditure of the Presidency. The Committee had a programme to follow and could not go through all the legal cases of the Presidency. The Report was before the Committee and members could agree to disagree.

Mr Hlengwa understood that the Committee was not tasked with doing oversight over the President, what the Committee needed to consider was the expenditure of the Presidency. Things had to be viewed in context. There was no intention to hold the President to account. If consistency was what was needed why then had the Department of Trade could and Industry provided the Committee with a breakdown, line item by line item. The Presidency should be requested to do the same.

The Chairperson suggested that the Committee move forward and deal with the Committee Report. He noted that the important thing to consider was that since 2010/11 there had been no unauthorised expenditure by the Presidency. Over the issue of national orders, a check needed to be done on policy. He reiterated that the paragraph in the draft Report titled “Background” needed to be rewritten and corrected. It was reiterated that the recommendation should state that the Committee recommended that the R45.506m in unauthorised expenditure should be charged against the National Revenue Fund.

The Committee agreed to the Report.

Committee Report on unauthorised expenditure of Department of Home Affairs

Ms Tseke, referring to the Committee Report, pointed out that as it was written in such a way that it gave the impression that the unauthorised over expenditure by the Department was in excess of a billion rand. The document was after all a public document and was not a true reflection of the state of affairs. She asked if this could be captured differently in the Committee Report.

The Chairperson suggested that just above the recommendation paragraph a line could be inserted which explained the process. Furthermore it should be stated that the Department needed to tighten things so that unauthorised expenditure did not recur.

Mr Booi noted that the Department indeed had problems. What was the core work of the Department? In as far as the verification of people in SA was concerned, the Department had outsourced the work to private companies. He was concerned that even if the Committee made recommendations, he was not sure whether the Department would be able to implement them, given the manner in which it operated.

The Chairperson said that members could address the Department during hearings when it appeared before the Committee.

Ms Tseke asked whether the Department had put control measures in place.

The Chairperson stated that the Department’s accounting officer had stated that control measures had been put in place. The Committee could check on whether the process on procedure between the Department and National Treasury had been fixed so as to prevent a recurrence of problems.

The Committee agreed to the Report.   

Women, Children & People with Disabilities Department's unauthorised expenditure: Committee Report
The recommendation stated that the overspent amount of R3.729m had to be recovered from the Department’s future baseline budgets.

Mr Hlengwa pointed out that the Department already had a minimal budget and that it was wrong for the Department to be required to pay the sum back. It was an unnecessary punishment on the Department. It was unfair on women development. It was an ill-conceived recommendation which the Committee could not allow.

Mr Booi added that the Committee had agreed that the unauthorised expenditure of the Department should be covered by the National Revenue Fund.

Ms Tseke agreed with members’ sentiments that the National Revenue Fund should cover the unauthorised expenditure by the Department.

The Chairperson explained that the recommendation was taken from National Treasury’s recommendation. National Treasury took the position to write reports from a purely legal point of view. The Committee could choose to agree or disagree with the National Treasury recommendation. He was glad that the Committee had taken a firm stand on what it believed to be the right thing to do. The Committee wished to accommodate the Department. It did not however mean that the National Treasury recommendation was wrong legally. The Committee had decided to arrive at a different conclusion to National Treasury.
The Committee recommendation to be incorporated in the Report would state that the unauthorised expenditure of the Department in the amount of R3.729m would be charged against the National Revenue Fund. 

In conclusion the Chairperson stated that the Reports which members had considered would follow due process and be published in the Announcements, Tablings and Committee Reports (ATC). Thereafter it would be debated in the House. The Committee needed to highlight the work it did.  

The meeting was adjourned.