Appointment and Utilisation of Consultants by Departments: briefing

Meeting report

PUBLIC SERVICE AND ADMINISTRATION PORTFOLIO COMMITTEE
29 January 2003
APPOINTMENT AND UTILISATION OF CONSULTANTS BY DEPARTMENTS: BRIEFING

Chairperson: Mr J. Gomomo (ANC)

Documents handed out:
Report on Appointment and Utilisation of Consultants
Presentation on the appointment and utilisation of consultants

MINUTES
Briefing by the Auditor General's office
Ms Laubscher, Mr Lawrence and Mr Benjamin, a team from the Auditor-General's Office, presented a report on the utilisation of consultants within national Departments, which was released in August 2002.

Ms Laubscher stated that the purpose of the report was to facilitate public accountability by bringing audit findings as well as suggested corrective measures in respect of the appointment and utilisation of consultants in certain national Departments. A previous audit on the same issue had been compiled into a report in 1996 but has never been implemented.

Firstly, it is to be noted that a clear definition of the term "consultant" did not exist at the time of commencement of the preparation of this report. However for the purpose of this audit, the Australian definition was adopted. It refers to a consultant as an "entity, whether an individual, a partnership or a corporation providing professional expert advice or service".

With respect to expenditure, the amounts spent on consultants by different national Departments within the country for the 1998-199 and 1999-2000 financial years are clearly tabled in the audit report. Before allocating projects to consultants, it was noted that Departments did not duly consider alternative ways of addressing their needs, such as training staff, building more capacity to recruit new employees, working overtime. The team suggested, as corrective measures, the filling of vacant positions, working overtime amongst others to be considered before contracting consultants.

Procurement principles were also neglected by certain Departments when allocating tenders. The comparison of tenders, not only on the basis of price but also on functionality, workplan, expertise and knowledge of those putting in tenders were often ignored.

As a corrective measure, the team suggested that all consultants be appointed through a tendering process to:
-Identify the best consultant for the job.
-Promote cost effectiveness through competitive pricing.
-Promote equity and fairness in the procurement of services.
-Preserve the highest standards of integrity.
-Promote competitive and transparent procurement and prevent corruption.

In some cases, consultants who did not have the required experience or competencies to perform their work effectively were appointed. This resulted in their staff having to be withdrawn from their functions to assist consultants in performing their tasks. It was therefore suggested that before appointing consultants, Departments should be aware of the internal cost of consultancy services in terms of their own staff's time. References provided by consultants should be followed up; criteria should be developed against which consultants are rated; Departments should require that consultants provide proof of previous successes and lastly a code of conduct system of accreditation for consultants should be introduced by the DPSA.

The report finds that contracts or terms of reference failed to provide for skills transfer, which could alleviate the further need for consultants and extension of contracts. The creation of mixed teams would ensure that staff was provided with the opportunity to learn from the consultants.

It was noted that the period of appointment of consultants or contract workers was vague or even not defined. In some cases their contracts were continually extended, or some consultants were appointed on a permanent basis. This resulted in the establishment concerned being extended or the Department becoming reliant on consultants.

It is therefore suggested that vacancies be filled as soon as possible and where the need for a consultant arises, the duration of the appointment should be limited to a reasonable period. The cost effectiveness of the appointment of consultants as compared to the filling of vacant posts should be considered.

The report stated that Departments fail to evaluate their resources and skills early in the year before the appointment of consultants. Also, a detailed description of the services required is usually not done. This would avoid extension of tenders and the Departments would only appoint consultants when their internal needs cannot be met.

It was noted that most consultants were neither monitored, nor regularly evaluated, when in fact their remuneration should be assessed by their level of performance. Regular monitoring and evaluation could lead to follow up by other Departments. The Departments also failed to create an environment where consultants could perform their duties effectively, for example, by providing software or hardware. This highlighted the need to plan in terms of resources before appointing consultants.

In terms of implementation, consultants' reports were not followed. The main reasons were inadequate human and financial resources, lack of computer skill. The recommendations made by the office were the following: proper contract management which would require skilled and competent people in contract management, the appointment of consultants should be a budgetary and strategic process and consultants should be monitored and evaluated on a regular basis.

Discussion
Dr Roopnarain (IFP) was extremely concerned that the 1996 Report had to date not been implemented. Why was that?

Ms Laubscher explained that, in terms of procedure, the Auditor-General's Office had briefed the relevant committee and it was up to the said Committee to report to Parliament .The Committee was therefore the one to make the appropriate recommendations to Parliament and follow up.

Dr Roopnarain asked why some figures in the report were not available.

The AG representative explained that the lack of information was due to the fact that certain Departments did not have a system in place to give the said information at the time this audit was carried out.

Mr T Abrahams (UDM) enquired about the monitoring of consultants. He wondered who would be the third party to monitor the consultant, and whether it would be a second consultant.

The representative explained that it was normally to be done by internal personnel, someone within the Department. However, some Departments appointed other consultants to monitor the first one. This was not correct or cheap.

Mr Bell (DP) asked how consultants were to prove previous successes and experience.

The AG representative said that this was usually linked to the big audit firms, but a process of accreditation by National Treasury on the guidance to be used for appointment of consultants existed.

It was also recommended that a website be set up for comments from the different Departments concerning the consultants' skills and expertise.

Mr Kgwele (ANC) commended the audit report and suggested that the Committee put forward a resolution to be forwarded to Departments concerning the future implementation of reports in view of the unimplemented 1996 Report.

He asked whether the embargo on the filling of vacancies at national Departments still applied.

The representative acknowledged that there was an embargo on the filling of vacancies and this was maybe part of the problem but the main cause was that Departments failed to plan their resources before appointing consultants. Furthermore, the Departments with a high number of vacancies were the ones with the highest level of expenditure.

Ms Maloney (ANC) was concerned about sub-contracting when contracts of tenders were drawn. She felt that this could result in having inefficient consultants carry out the task.

The representative felt that this depended on contract management. If the Department specified that it did not want a subcontractor or specified what person exactly it needed, this could be avoided.

The meeting was adjourned.