Department of Military Veterans briefing on its 1st Quarter 2015/16 performance, audit findings progress report

Meeting report

Department of Military Veterans First quarter 2015 performance briefing;
The Chairperson reminded Members that in the last meeting it had been suggested that the Committee should get a briefing on the expenditure patterns of the Department of Military Veterans (DMV or the Department), and the briefing should also cover any interventions made by the Department and what the Committee could do to assist.

Mr Vernon Jacobs, Acting Deputy Director-General, Department of Military Veterans, noted that there had been changes in the Department recently. Mr T to begin with the presentation.
The senior management within the Department had changed in the last period. Mr Tsepe Motumi, former Director-General, had been transferred to an advisory position in the Office of the Premier, and Maj Gen (retired) L Make was appointed as Acting Director General, but he had been unable to attend this meeting due to ill health. Mr Jacobs wished to tender apologies on his behalf.

He introduced other members of the briefing team: Mr Mbulelo Musi; Head of Communications; Mr Banie Engelbrecht, Acting Chief Financial Officer; Ms Semakaleng Madtlhodi, Director in the Office of the DG; Ms Meso, Director: Internal Audits; Ms Xolisa Morola was representing staff on the Socio-economic Support Programme 2.

He also introduced the South African National Military Veterans Association (SANMVA) representatives: Mr Tembile Magingxa, President; Maj- Gen (Ret) Mbulelo Fihla and Mr Moses Rampele from the planning unit.

He noted that the Department had held meetings with the Auditor-General (AG), and the new audit report would show qualifications on two issues only - asset management and transfer management. This showed an improvement in the Department.

Mr Jacobs highlighted that the Department had a legislative mandate, and everything the Department spoke of or spent on was derived from the Military Veterans Act, and other Acts of Parliament.

The Department's Approved Budget Programme Structure comprised of three programmes: Administration, Socio-Economic Support (SES) and Empowerment and Stakeholder Management (SEM).

The overall first quarter performance analysis was then presented. In the Administration branch, there were twelve targets planned, of which ten were achieved, in SES there were three targets planned of which two were achieved and in ESM there were three targets planned of which one was achieved. The overall performance rating was at 59%, in terms of what was targeted for the first quarter.

The Annual Performance Plan showed the performance indicators. The Department was doing fairly well in the Administration programme, in terms of the percentage of the SMS financial disclosures, planning instruments and quarterly reports achieved. In this year the Department had been judged against a Management Performance Assessment Tool (MPAT) and rating, and was found to have performed well in that.

The communication strategy activities were not as strong, and here the overall progress indicator was marked in red, which meant the Department needed to work harder in that particular space. One intervention tool was to engage more vigorously in information sharing sessions as well as making those sessions more visible to the public, so that more people were aware of the work being done by the Department of Military Veterans. Matters were being resolved fairly quickly when reported to the Presidential Hotline.

The percentage of signed Performance Agreements submitted was marked in amber, which meant that the Department was not performing fully in terms of the targets. The Department was engaging in meetings with EXCO and MANCO, and determined that by the end of August there would be an update done to the report, and every senior manager would need to ensure that their performance agreements were completed and submitted, as the immediate intervention.

Staffing was on track. Settlement of outstanding payments was also running according to plan, so the challenges that were faced in the past had been reduced considerably, so the Department could report favourably on both.

In terms of targets for Programme 1: Administration, the targets achieved were at 83% and targets not achieved were at 17%, and this was not considered to be a material divergence at the present moment.
Under Programme 2: SES, the target was that 50% of bona fide military veterans should be verified and captured in a secure database, but the Department was currently sitting at around 23% of records that had been cleaned and verified. However, something that did not appear from the slide related to the numbers of records. The Department had 57  802 military veterans on the database, but new data that had come in showed that the Department had around 70  000 records submitted through the State Information Technology Agency (SITA)  process. The real work behind cleaning that and verifying the data meant that although the overall progress indicator showed red highlighting, with the figures at 27%, this did not mean that work was not being done. The process for doing the on-site verification (visits to provinces) had closed, and the improvements to be shown in the future would look at the data already presented, but updating it through cleaning and verification.

There was no planned deliverable for the end of the first quarter in respect of providing military veterans with decent housing, because this was to be measured by the end of the financial year. The Department had visited provinces as it was developing a monitoring team, and there was a report about the 17 completed houses in the Mpumalanga area. The Department’s communication team had been out to this area but had not taken the opportunity to collect pictures for the meeting. There were also ten completed houses in the Eastern Cape and the Department was going through the final processes for the handover of those houses to military veterans. For both provinces, the formal handover of the homes would be done in September and November, and by that time the Department may be able to report on the delivery of more homes.

The target for the number of military veterans with access to healthcare was exceeded by 218, and 7218 military veterans had access to healthcare services in this year.

There was a target of 600 bursaries to be provided for military veterans and their dependants for the financial year. The Department had a session with the executive authority and there was a decision to continue with the process. On the records, there were 3 650 applications for basic and tertiary education, and the Department was finalising payments to be made. It was important to note that because the target was 600, the Department did not have all the staff in place or the resources to ensure that the Department would be meeting the turnaround time, and would be able to report that 3 650 bursaries were paid. The Department was still lagging behind on this. The Department knew, through the media and direct reports, that the children were being affected at school, and so were students at university, so part of the intervention strategy was to set a deadline, and say that by 30 September 2015, the Department would aim to ensure that all payments for all 3 650 bursaries had been sorted out. In order to do that the strategy was to bring in additional people. There were offers as volunteers from local military veterans, and the Department was also looking at its contracts, as the Department had quite a large contingent of contract workers, and was trying to move as many as possible into education support, so that in the next few months there would be a concerted effort to deliver in this space. By the end of September the Department wanted to report that all the bursaries were paid and that children were at school because of this particular process.

There was an additional challenge, because for the next two years (full year 2015/16 and full year of 2016/17), the National Student Financial Aid Scheme (NSFAS) was the agency and entity being used as catering for the throughput of learners in that space. The Department would have to ensure that there were no challenges for 2016/17, and that the throughput had been followed through, and funding would be available for the 3 650 applicants.

There was no deliverable reported for the target of military veterans having access to public transport, for the end of the financial year. Mr Jacobs highlighted that the Department still did not have any firm commitment from any of the partners. It was difficult to set up any legislative process to pay for the transport of military veterans. Transport in municipalities was not necessarily government-owned and even the policy was not a straightforward matters, and the Public Finance Management Act (PFMA) would have to be complied with.  The Department was still engaging strongly with the Department of Transport. In KwaZulu-Natal, the Department had had a meeting with some municipalities and the Department was engaging with Passenger Rail Agency of South Africa (PRASA) and other structures to assist the Department to create a tangible target for transport for military veterans.

There was 67% attainment of targets in Programme 2: SES, and targets not achieved stood at 33%.

In Programme 3: ESM, the Department was compelled to engage with private sector companies. Here the target was attained and new MOUs were signed in the past quarter. In terms of strategic initiatives established, there were discussions running with different entities. The Department had not listed these as an achievement as yet, because there was no conclusion yet.

There were discussions with the Department of International Relations and Cooperation (DIRCO) and these were very positive, because through DIRCO the Department needed to establish strict protocols or a treaty-like agreement with Lesotho. The intention was to build a memorial wall in Lesotho to honour those who fell there. The documents were in place, but the final steps would be done through DIRCO and the High Commissions of South Africa and Lesotho. Although the administrative work had been done, this was not yet listed as an achievement, in the absence of having a signed agreement.

Similar to this was the progress with Uganda from last year; there was a current agreement between Uganda and South Africa regarding the 14 graves in Khaweta, and the memorial wall in Khampala. The Minister had agreed that the DMV must continue to review the current document. Again, however, because the Department had not yet completed the process, it was not listed as a complete achievement.

The number of military veterans to receive relevant training and skills development applications was around 800. The number of applications that were signed off, approved and paid was 197. Those awaiting approval brought the number close to 500. There were some problems; either the institutions did not have tax clearance certificates or failed to comply with other matters of governance that were very important for compliance with the PFMA. It was not always easy to approve straight away on the transfer and payment of invoices submitted, so although the Department was engaging with these issues, the Department was not listing this as a full achievement.

He explained the difference between this skills training and tertiary education. The skills training classes happened on an everyday and continuing basis. There was no clearly identified start and end date, as there would be for an academic year, and he cited the example that the Department might engage with driving schools. Once the Department was able to sort out the paperwork, it would definitely be able to report and show a better picture in the next quarter.

No target was met for the establishment of military veteran cooperatives or for the military veteran memorial sites erected.

For the first quarter in Programme 3: ESM, the Department was listing the target achieved as 33% and the targets not achieved at 67%.

Under the Human Resources Targets and Compliance, the learnerships and other processes, the Department did not seem to be doing too badly. The number of posts filled in the first quarter was 132, compared to the target of 169. There were no concerns about equity in this branch.

The actual financial expenditure by the end of the first quarter sat at 10%. He noted that this tied in with the indicators that had been marked in red, but said that there was no particular cause for concern in this first quarter, especially when looking at the various interventions put in place -  for example, the houses that the Department already had in place. For the current financial year, the Department did not envisage any huge financial transfer to the Department of Human Settlements, but it did see an increase in servicing the houses and bonds of military veterans who were in distress.

The Department had discovered that there were many military veterans who had fallen into some kind of arrears with their bonds, and applications were coming into the office. The top up amount of R75  000 was going to be diverted into that space, to assist military veterans, whilst the Department entered into further discussions with the Department of Human Settlements. Some military veterans were living in homes that did not have good infrastructure so many had put in put in requests for refurbishments, and another portion of the top up amount would be used for renovations. This included cases where municipalities themselves had built homes but they had used the 40/45 square metre specification, and they had also submitted, knowing there was a top up amount. Yet another portion of the top up would go to upgrading military veterans' municipality-built homes. No achievements were reported in this space. There were some military veterans who had received homes built by municipalities but because funding was not part of the top up, this had not yet started featuring in the Department’s reporting. Mr Jacobs stated that that area needed to be looked at further for the future, as well as to report how many military veterans had homes and the Department’s interventions to improve the statistics on that in the future.

He added that some military veterans had also approached the DMV, saying they had pieces of land in townships, and in the Department’s Memorandum of Agreement with the Department of Human Settlements (DHS) , there was provision made for that. Engagement with DHS would continue, so that the DMV could find ways to service even in those areas.

Mr Jacobs noted that on a strict division of the budget the DMV should be showing a 25% spend by this time, yet it was only showing 10%. He noted, however, that the targets would improve for the rest of the year. He added that for education, spending for the calendar years of 2015 and 2016 would be done as there was  funding available to fund all the Department’s students in the throughput phase, but the marked increase in the spend on bursaries would be seen in the last quarter. Applications would be opening now for students who wanted to go to university and schools in the new academic year, but these would be dealt with in the latter part of the year. By the end of the year the Department would have captured all of those applications into the system and then the funding on education would manifest itself in the last quarter. It was important to highlight that, to avoid this being classified as a spike or as fiscal dumping, and to emphasis that this was a planned spend for that time.

The Department had said previously that there was a document waiting for Ministerial approval. The Department had recalled the document from the Minister, because there was an area on which the Directors-General could conclude a particular Memorandum of Understanding quickly, in the Social Relief of Distress category, through the Social African Social Security Agency (SASSA) for the provision of food parcels, and that did not need Ministerial approval. Other components did still need guidance, particularly to provide for other dependants. Social Relief of Distress was supposed to provide for 12 months. There had been positive spending by the Department and it would show good figures.

The Department had received a number of applications for compensation for injuries in battle and at this point, 53 were reported, 23 had been paid, 30 were still being processed and there another 40 to be considered, giving a total of 73. This would also begin to show a positive spend. Again, he emphasised that this showed that there was work ongoing and no need to be overly concerned at the spending of 10% in this quarter.

Mr Jacobs described some categories; in respect of compensation of employees the Department was spending at 25%, Goods and Services was showing spending at 7.3%, Transfers and Subsidies was at 7.5% and Capital Assets was at 39%. Overall, the spending was 10.5%.

Mr Jacobs repeated that the audit position was looking healthier. There was an asset management team that captured the bulk of the Department’s capital and more minor assets and it was able to submit a positive report. With regard to DMV capacity, the Department was currently talking to the Department of Public Service and Administration, and discussed a service delivery model. The next phase of discussions would be about the staffing requirements for the service delivery model. In respect of the transfer payments and all other payments, the Department had a monitoring and evaluation team, which was to be boosted by the Department to introduce a monitoring and evaluation aspect in each programme, and not to confine it to where it currently sat in corporate services, so that all services delivery across all three programmes was to be monitored regularly, and then also on a quarterly basis and at the end of the financial year.

In order to address those payments of invoices that did not happen within 30 days, a service provider was appointed to improve internal control systems, as part of Operation Clean Audit. The Department was addressing the capacity challenges in internal audit. In supply chain, an area where the Department had had challenges in the past, there was a process also to ensure improvement.

Mr Jacobs concluded that successful implementation was reliant on common and shared vision, teamwork and the appreciation of the strategic role and importance of communication in enhancing service delivery. As part of the Department’s revised and reviewed communications strategy, the Department recognised that it would be vital to consistently and continuously inform the portfolio committee and all stakeholders even of the smallest achievements attained in the sector.

Finally, he quoted a statement by the Minister of Defence, Ms Nosiviwe Mapisa-Nqakula: “if all of us work together as government, business, labour, civil society, the communities and, most importantly, the military veterans themselves, we can only but succeed.”

Discussion
Mr S Marais (DA) stated that he had attended some outreach programmes for veterans and found them good. It was his opinion that these were the right way to interact with military veterans and get them involved. He hoped the Department would continue to engage strongly as it meant that the Department could get direct and first-hand feedback and experiences, rather than information changed in the relaying through others.

Mr Marais referred to the slide on human resources targets and compliance and noted that the Department had reported that it was not worried and was happy with the achievements. However, Mr Marais wanted to know what the Department’s targets were with regards to demographics, because what he saw on the report was not representative of the South African population. The Department had not made mention of disabilities. Over the years he had become used to departments reporting on disabilities, but there was nothing in this report. He said that a failure to report specifically on this group could not be condoned, and he was keen on finding out about them and the Department’s demographic targets.

Mr Marais noted that this Department had underachieved on all three programmes. Programme 2 was probably the closest to its target, but others were underachieved by around a third. In the second quarter, there would be similar targets to achieve, and the Department would need to catch up as well as achieve those collective targets. Mr Marais wanted to know how it would be able to both catch up and meet the second quarter targets. He commented that constantly trying to catch up would mean that the backlog could build right through to the end of the year. The shortfall was not only seen in performance but also in spending. The assumption was that the year of spending was split into 25% for each quarter, but he accepted that this was not always the reality.

Mr Marais wanted to know to what extent the Department worked with all three levels of government ,in terms of outreach to military veterans and service to them. He commented that the targets for medical services were relatively low when compared to the indication of 70  000 who were in need of help, and the Department was only scratching the surface. The "big numbers" still needed to be achieved.

Mr J Skosana (ANC) stated that there was movement and hope, but more effort was needed for the Department to deliver according to the targets. All sectors and programmes were covered in the report, but what was expected now was real achievement. The Department needed to continue with speed and ensure that interventions were made, to meet all targets, where needed.

Mr D Gamede (ANC) also confirmed that there had been improvement on achieving targets, and as time moved on it seemed that the Department was improving and reducing the audit qualifications. However, he asked for clarity on the figures on slide 5. He appreciated Mr Marais raising the issue of disability. The other issue was how the Department tested the transfer of funds to NSFAS. The fund was for military veterans and their beneficiaries. He wanted to know how the Department determined whether that money was going straight to the target, being military veterans or their children.

The Department had not met targets related to cooperatives, and Mr Gamede wanted to be advised of what exactly the challenges were. This issue was dealt with last year, when the Department was trying to register cooperatives, and he wondered what the particular challenges were in this year, given that nothing had been recorded.

The Chairperson thought that some of the programmes should have been targeted differently, and instead of escalating up they should have cascaded down. The Chairperson could not understand what the reason would be for the Department delaying signature of performance agreements. When a new person was put in to the system, then in accordance with the job compact, a person could not be hired without the performance agreement also being done. For this reason, he urged that this must be cascaded down urgently.

Similarly he commented that verification of military veterans should have been 100% targeted and completed, and he asked why this was not done. A child that needed to go school could not be told to wait for the Department to verify first, and a person who did not have a home needed a home immediately instead of being left destitute. He urged that verification should be attended to swiftly and properly at all times.

Mr Jacobs confirmed that the Department also felt the positive benefit when going out on the ‘roadshows’. Roadshows were usually held when Departmental officials went out with the Deputy Minister and could target large numbers, between 500 and 1 000. Although issues could be raised and debated with heat, it was very important for the Department to meet with military veterans on the ground and hear them individually and in their communities. Because a full team would attend, this meant that many of the issues raised could be responded to almost immediately. The Department was continuing with those roadshows, both with the Minister and as individual units, as there was real value.

Mr Jacobs confirmed that all departments were required to employ at least  2% disabled people. This was not listed visibly in the report at the moment, but it must also be noted that disabilities could be obvious or not; for instance he was disabled by being deaf in one ear. The Department wanted to improve on these numbers. He also conceded that the Department would need to unpack the demographic breakdown, into gender and other elements.  He acknowledged that as a shortcoming and would make the figures more visible for the future.

He also noted the comment on underachievement and the need to ramp up performance in several areas. The Department had on its own gone into determining strategy. He had already mentioned that tthe Department decided that it must display that all 3 600 bursaries were paid. The priority in the Department was to look at all the activities, and how to move people around to ensure full resources where needed.  The Department must ensure that by the end of September it was able to report that all bursaries had been dealt with. This would help the Department in its positive reporting. One of the reasons why the Department may not have been showing achievements was related to the fact that the Department did not have provincial offices ,but only provincial officers with no defined office space. Each province had a coordinator and assistant coordinator, but a defined infrastructure and space was needed to show effective service delivery.  The Department continued to engage vigorously.

He noted that one of the issues that the Department wanted to raise related to the procurement instruction with the Department of Public Works. The specification was there, but he asked if perhaps the Portfolio Committee might be able to offer assistance in concluding that process much quicker than the normal public works process would move. He explained that the procurement instruction and specification was in place, but it could take another 12 or 18 months to complete, and this Department did not have the luxury of time. With every day lost, another military veteran in Limpopo would be hampered by not getting service delivery in his or her area and would travel by bus to Pretoria. More engagement with the Department of Public Works to expedite the projects would contribute to addressing that.

Mr Jacobs conceded that there was much to do in terms of spending. The Department did not want to show 100% or 90% attainment in terms of performance in this quarter, but he agreed that spending was low. He noted that the targets might not be fully attainable; for instance, in this year, the DMV did not envisage making any transfers to the DHS. However, the top up money was to be used for refurbishment of houses for those in distress and in particular areas, so it was still used for housing benefit, but in a rescue-type situation.
Mr Jacobs confirmed that there was improvement in working with all levels of government. There was a team in Eastern Cape on the previous day who was concluding a Memorandum of Understanding with the Premier of the Eastern Cape. The Department had discussions with 5 or 6 municipalities at this time (in KwaZulu-Natal, Limpopo, Capricorn). There was an MOU signed with Sedibeng, and another with Ekurhuleni. The Department was engaging with all three spheres as best as it could and was also engaging with the private sector, semi-private and parastatals like Armscor, which had been a strong supporter of SANMVA and had donated 50  000 blankets during the winter initiative.

The positive commendation sets the bar higher, and he noted that the DMV did require assistance in dealing with the Department of Public Works and would continue with the process in place, and ask for assistance on particular areas where needed.
 
Mr Jacobs noted that the figures on slide 5 would be corrected.

Mr Jacobs said that regular meetings were being held with NSFAS to make sure that funds were used properly and were targeting the desired groups. The Department had also decided that it wanted to put a minimum of two people into the NSFAS office, to work directly with NSFAS. The Department knew the universities where the students were placed, but this was a slow process. The Department wanted to be sure that it was monitoring more directly. There was discussion around whether having a person in the Cape Town office was sufficient, or whether maybe it was necessary to deploy another person to the university itself. He reiterated that the DMV had a good idea of where the students were at university and what was due, but administrative processes between universities and NSFAS were slow. He also confirmed that the database and verification was on track. Staff were able to work with the data and check that comrades were listed, with their information, and information on their children.  A good verification process was needed, but Mr Jacobs said that 99% of learners at universities and schools were the children of military veterans. It would be necessary however, to strengthen the credibility of the database. He confirmed that the DMV would not pay out anything for short courses, without first checking that the applicant was on the database. If a military veteran with a business needed a letter of support from the Department, the Department would check the database first to ensure they the person was in fact a military veteran. The database had value but the Department was aware that it needed to be strengthened.

In response to questions on cooperatives, Mr Jacobs said that the fact that this was not specifically mentioned in the report did not imply that the Department had not achieved anything; there were instances where the Department had nothing targeted for the first quarter. Work on cooperatives was ongoing, there were roadshows to provinces, skills training with entities through Small Enterprise Finance Agency and South African Revenue Services, handling the applications for cooperatives, to ensure that the information would be ready for the second quarter report.

Mr Jacobs confirmed that when a person started work at a government department s/he should have a performance contract and the Department should be consistently at 100% compliance on this point. In this particular process, there were some missing points. At its last meeting, there was a firm determination made that when the Department gave its final report at the end of the financial year, it must report 100% attainment on this point, and all senior management were encouraged to ensure all that was in place to do so.

Mr Jacobs spoke to the overall membership database. The figure of 70 000 meant that 70 000 could be traced back to a CPR and other verifying referencing documents, which could, physically, be found. However, the  27% figure was related to the Department's work in going through and cleaning up of the 70  000 on the database. he cleaning process was ongoing, and 13  000 records were absolutely clean.

Mr Jacobs noted that the healthcare benefit was initially based on a means test process. There was a move to make sure that, in line with the apex goals of government, no persons were deprived of healthcare, and therefore there had been abolition of the means test. The Department was catering for people on the NSF database, and who were eligible. The numbers in the report looked at those who were part of the Non Statutory Force (NSF) component - others from the South African National Defence Force (SANDF) were also receiving benefit. The Department needed to structure its reporting more effectively and critically.

Mr Marais stated the Department could answer in the next meeting, but he wanted clarification on the point that 132 people were employed, out of the 169 posts, yet there was 100% spending.

SAMVA presentation deferred
The Chairperson noted that the SAMVA had asked to defer its presentation, in order to polish up on some points, and it would be given at the next meeting.

Adoption of Committee Programme
The Committee's draft programme was adopted.

The meeting was adjourned.