Integrated Financial Management Systems (IFMS) replacement of PERSAL: DPSA, Treasury & SITA input, Filling of posts, qualification verification, security clearance, 50% employment of women, 2% people with disabilities in Public Service

Meeting report

IFMS Overview and Progress Report

Mr Cornel Uys, Chief Director: Human Resources Management Information System, Department of Public Service and Administration (DPSA), said that the Integrated Financial Management System (IFMS) was a joint initiative between National Treasury, DPSA and the State Information Technology Agency (SITA) to modernise and integrate the public service’s transversal information technology for the following domains:

• Human resource management
• Financial management
• Supply chain management
• Business intelligence

The current transversal systems in the public service -- Persal, BAS, LOGIS, and Vulindela -- would be decommissioned when the IFMS is implemented. IFMS was being implanted to replace ageing technology, to avoid increasing costs in maintaining obsolete systems, to process and compile data in ways that improve the availability of quality information planning, reporting and better decision making, and to take advantage of global lessons learned in the management of the public resources.

In November 2013, Cabinet had approved the proposal to change the IFMS solution architecture to a single integrated cost, off the shelf, solution to be implemented with limited customization. Engagements were taking place with service providers of the old IFMS to review the impact of a change in the solution architecture on existing agreements. A process had been initiated by the IFMS Project Management Office (PMO) to gather information on public service policies and procedures, as well as information on the current IFMS blueprints to identify any solution that may be adapted to a “vanilla” solution. The key priority was to complete the procurement of software within the 2014/5 financial year. The IFMS team had started initial readiness reviews in some provinces and national departments to assess the Department’s technical and organisational capacity to migrate to the new solution and to initiate any enhancements that may be required.

Filling of Vacant posts and the verification of applicant information

Mr Geeva Pillay, Chief Director, Human Resource Planning, DPSA, said that the public service experienced a high vacancy rate and a slow turnaround in filling posts. In 2012, the Public Service Commission had commenced a study on the blockages in filling of posts and had found that the cause of blockages were insufficient delegation of authority, lack of competency to execute delegated authority, political interference and a high turnover rate at the executive interface.

The presentation’s diagrams showed the average time it takes to fill posts per province in departments with low and high vacancy rates. The study also revealed that there were delays in employment screening and security vetting by the South African Police Service (SAPS) and State Security Agency (SSA), which ranged from between three to six months. The SSA and SAPS told DPSA and the Public Service Commission (PSC) that contributory factors to the delays in filling of vacancies included capacity constraints and the high volume of requests for top secret security clearance, without due consideration of the sensitivity and role attached to each position. Furthermore, in some instances in took up to four months for the SA Qualifications Authority (SAQA) to finalise the verification of qualifications, with the problem being verifying pre-1994 qualifications, which was done manually.

Gender equity and targets for people with disabilities

Ms L Sizani, Commissioner, Public Service Commission (PSC), said that gender equity was governed by the Constitution, the White Paper on Transforming Human Resource Management in the Public Service, the White Paper on Affirmative Action in the Public Service, the Employment Equity Act, the Public Service Act and the Public Service Regulations 2001, as amended. South Africa was also a signatory to regional and international conventions on gender equality. The target was to achieve 50% by 2014, but it was still at 40%.

Despite improvements in the number of women employed since 2004, gender representation at management level had not been achieved by several departments, possibly due to a limited skills base or a lack of commitment to attain these targets. 1.6% of people with disabilities had been employed by June 2014, against a target of 2%, with the major challenge being a limited skills base and the lack of educational opportunities among non-white people with disabilities.

Ms Barbara Watson, Chief Director: Transformation, DPSA, made a presentation on the status quo with regard to the representation of persons with disabilities in the public service and women and senior managers. The presentation diagrams showed trends on the representation of women and people with disabilities in national and provincial departments.

Discussion

The Chairperson asked the DPSA what could be done to increase the number of women and people with disabilities in the public service. Woolworths, for example, had disabled employees and the public service was such a big organisation that it should be able to employ disabled people too. Alternatively, it must appoint them in acting capacities and nurture them. There had been complaints of a high wage bill -- but what had been done thus far? She asked if there was any value for money in implementing IFMS, and how it would assist in combating fraud. Had any unintended consequences been experienced with IFMS? The public sector was taking an unacceptable time to fill vacant posts. What exactly needed to be done to fill them on time? In her opinion, vacant posts in various departments should have been filled with women. What happened if a post was not filled? At what stage would the public sector be able to vet people before they were employed so that the government would not be embarrassed when people were found with fraudulent qualifications and reported in the press? Did SAQA have the capacity to vet qualifications on time? In her opinion, there was nothing wrong with bringing in consultants to vet qualifications.

Mr J McGluwa (DA) said the reports were too high level and difficult to digest for ordinary Members. He asked how the 50% equity target in the public service was going to be achieved. Where IFMS had been piloted, did it have any successes or failures? Why had it taken so long for it to run? The existence of vacant posts for a long time created an opportunity for “ghost” employees, affected quality and negatively affected service delivery. He asked what was done to make heads of departments comply with the filling of vacancies, and whether any action was taken against them. He asked if people who possessed fraudulent qualifications were arrested, and whether they had to return the total costs incurred by them. When would the whole public service be vetted, because there were some with credible qualifications, while others had fakes? Was it possible to name and shame the departments that were not complying with gender equity requirements?

Mr M Dirks (ANC) said there was no will in departments to comply with gender equality requirements. He did not believe that women had limited skills, given the number of women who were graduating from institutions of higher learning every year. It was not unconstitutional to advertise a position limited to women only. Some of the problems of today were because of officials inherited through the amalgamation of the apartheid government and the former homelands.

Ms R Lesoma (ANC) hoped that the DPSA and the PSC would continue coming to the Committee together. There was a need to define fruitless expenditure well, because it was sometimes given a different connotation in the media. She asked what the presenters wanted from the Members. Was there any role for domestic service providers in IFMS, and did it respond to centralized supply chain management? She was concerned at the decline of recruitment and retention of young people. Government departments must set key performance indicators (KPIs) for employing people.

Dr M Cardo (DA) said that IFMS was conceived in 1998 and approved by Cabinet in 2005, but it had not yet been implemented. How much had the initial IFMS cost, because reports in the press in January had indicated around R1billion? He asked about the legal implications of the current tender, given that the last one had legal challenges. The tender was also limited to software providers, and not service providers, which was likely to sideline many domestic players. There was a problem of fraudulent qualifications in South Africa, among them the SABC’s Chief Operating Officer and former board chairperson, as well as South Africa’s ambassadors to Washington and Japan, which meant there was depth to this problem.

Mr A van der Westhuizen (DA) asked Treasury what the budget implication of phase one of IFMS was. Going forward, how much money would be spent and of the funds used, how much would be rolled back? He asked who was responsible for customising commercial off-the-shelf (COTS) to be effective, and which domain had been tested in the public service. Were there budgets to train people to be able to use IFMS well? What plans were in place to expedite the vetting of senior managers?

Ms S Dlamini-Dubazana (ANC) asked about the proclamation that had given the mandate to IFMS. A budget of R1 billion had been spent on a project that was not running -- was that not fruitless expenditure? IFMS needed high-skilled technical officials to run it, so why was it being implemented, given the exodus of skilled labour to the private sector? What were the gender implications of IFMS? What model was being used to detect vacant positions in the public sector? Was there any retention strategy to prevent the exodus of people from the public to the private sector? Jobs advertised in the Sunday Times called for six to ten years’ experience, and excluded recent graduates. She asked if there was a need to digitise pre-1992 qualifications from nursing and teachers’ colleges that had closed, as the Council of Nurses, for example, had all the data. Digitising was just a waste of time and money. Given that the DPSA acknowledged the lack of capacity at the SSA, and bulk verifications delayed appointments, she asked if there was an alternative to this.

Mr Freeman Nomvalo, CEO SITA, said that IFMS was driven by National Treasury, DPSA and SITA. The initial project, as conceived, was about eight different systems that would be pulled together and SITA would play a role in integrating them. This was informed by developments in other countries. However, there was the potential challenge of difficulty in pulling the information together from the different systems which could undermine the benefits of having IFMS. Progress in implementation also faced some challenges, as SITA needed to have some system developments, and it was known that over the years that SITA had been experiencing challenges. The potential costs seemed bigger. Expenditure incurred would not be considered fruitless if one read the Public Finance Management Act (PFMA) well. It was a failed project? Yes. But was money spent in vain? No.

SITA was now playing a different role from being a primary system integrator in the previous project. That role was no longer needed with this “vanilla” solution, because a composite system was being bought, with all the elements. SITA had the capacity to deliver on the demands of the project. The software could be bought only from the original software manufacturer, and domestic ICT players would be invited to participate in the roll out of the IFMS. With an integrated supply chain management, it made life easier as more things would be done more efficiently. All the service providers who had participated in the initial IFMS would be called in at the implementation stage, except where the extent of legal binding agreements that emanated from previous discussions needed to be reviewed. SITA had a past, and a future that was different, and that ought to be supported.

Mr Uys said that IFMS would prevent corruption. It contained audit and left traces of who had done what. IFMS was used in both developing and developed countries around the world. It automatically records which public servants do business with the state. Vanilla would not lead to corruption. IFMS had been piloted in the DPSA, Free State and procurement by the National Treasury, as well as in Limpopo. There were no challenges, but some people were resistant to the new system. In the pilot phases, no job losses had been observed, but people who were responsible for leave management would be affected and retrained to work in other areas, as the system captured leave applications by itself.

Mr Michael Sass, Accountant General, National Treasury, said that fruitless expenditure referred to money spent in vain. The initial budget had been R4 billion, and the current incurred cost of implementing IFMS was R1.3 billion. The DPSA and National Treasury were using the system, and only 10% of the initial amount used would not be reused.

Mr Pillay thanked the Committee for raising thought-provoking issues and good guidance. He said resources drove service delivery and when a vacancy was not filled, the post remained vacant until it was abolished. Issues of vacancies varied per sector. For example, clinicians might be a problem in the Department of Health. A funded position was money paid to a department to deliver a service.

The DPSA was developing a model on graduate recruitment in the public service. The Committee must invite SAQA, the Department of Higher Education and Training (DHET) and SSA to explain why they took so long to verify qualifications. When fraudulent qualifications were discovered, a higher education institution may place a charge, and it became a criminal offence. It was the duty of accounting officers to streamline the vetting of employees, not necessarily the DPSA.

Ms Sizani said that the DPSA had done a lot of work in developing frameworks and issuing directives. It was not a matter of the DPSA employing people without qualifications, but line departments. Some departments would employ a person, telling him that his employment would be terminated if his qualifications were found to be fraudulent, but termination of employment had to be done in terms of section 17 of the Public Service Act. The accountability of departments needed to be pinned to the performance agreements of heads of departments.

Ms Watson said the Committee must call Director Generals and Ministers to account. When the Committee met any senior managers, it should ask them about disability and gender equity because departments did not seem to take directives from the DPSA seriously on gender mainstreaming. A certain department could be BEE compliant, but far from being transformed.

The meeting was adjourned.