Two entities from the Department of Environmental Affairs (DEA) presented their Annual Reports to the Committee. The Committee had heard quarterly presentations from both in the past so asked them to focus on points raised by the Auditor-General South Africa (AGSA) in relation to the audit reports. Both entities had received unqualified audits, but with matters of emphasis, and he asked for explanation on these and on over and under-achievements in relation to the performance targets. Overall, there were issues around IT governance in both entities and this had an impact on their performance.
Isimangaliso Wetland Park Authority had met 18 targets, exceeded 10 but not achieved 2. It particularly over-achieved on creating jobs, providing support to SMMEs, and granting bursaries. There was under-achievement in increasing visitor numbers, although it was pointed out that the numbers of casual visitors, who could enter the un-ticketed areas of the Park, were not counted because this would simply be too costly. In regard to tourism the Park was showing a negative growth rate ten years ago, but that had turned around. It now contributed 6.7% to Kwazulu Natal’s GDP and had contributed 6 000 direct jobs. The introduction of a R5 levy, which had been quite some time in consideration before being implemented, had increased revenue and there were more school visits than anticipated, more than double the target. Indicators not meeting the targets were that 23 out of a target of 24 newsflashes were emailed and two park tours had not been held but were delayed to the following financial year.
Members complimented the entity on its overall achievements. However, they did want more clarity on the figures, including the increase in the net financial assets, where that arose specifically. They asked about transformation and commented that only two of the ten or more drivers came from previously disadvantaged backgrounds. The Park Authority noted that where white people were seen, they were either employed by or partnered with black enterprises and every tenderer would be thoroughly checked. In regard to transformation, it was explained that all factors, such as creating roads, increasing health awareness and empowerment had all expanded the BBBEE efforts. The background to the Park itself and the surrounding communities was fully explained. There had been a need for adjustment of budgets to get more staff. It had tripled its potential for accommodation of visitors in the last year. Members noted that in future it would be useful to present all reports with accurate figures and explanations of percentages and actual rand amounts.
Members had a lengthy discussion on the targets and questioned if they were incorrect in the first place, given that they had been so substantially exceeded. Members, having heard that some unexpected funding had been received that allowed for more to be done, suggested that surely there must have been some intimation of the funding from the World Bank and the US before it was received, and in that case, questioned why the targets had not been revised. A lengthy discussion was held on that point and eventually the ISPA conceded that this would have been the correct route to follow. Members made suggestions as to how this should be reflected in future reports. The Chairperson suggested, in order to prevent any difficulties in oversight in the future, that the Minister for Environmental Affairs should be immediately notified of any substantial, unforeseen cash inflow during the year, and a revised APP should be prepared to accommodate the additional funds reflecting the inflated and anticipated delivery. Members asked other questions on the strategy of revenue enhancement, and whether biological assets were counted and included,.
The South African Weather Service (SAWS) noted that the audit report was unqualified, but enumerated and explained the plans to address the findings of the AGSA . Overall, there was 85% with 21 targets achieved, two targets partially achieved and four targets unachieved. There were enumerated in the various programmes. In relation to employees, SAWS recognised that there had been a long-term problem, but efforts had been made to achieve realistic results by the next evaluation in 2017/18. The objective of increase in percentage readiness of critical skills was not achieved, and SAWS wanted leadership development programmes to be prioritised to deal with it. Not all bursaries could be awarded, because of financial constraints. Some of the over-achievements came about through not having used a baseline, whilst others were due to additional recruitment of staff. The SAWS acknowledged that this was a situation very similar to that of the ISPA and in future, should SAWS receive extra funding or support, it would attend to re-doing the targets. There had been some problems around user access and ITC. However, the Committee were disappointed to note that the SAWS delegation seemed to be merely repeating the finding of the AGSA without specifically addressing what measures had been put in place to deal with it, and stressed that it was very important to get this information on record, rather than merely stating it verbally. Members were not happy with the quality control of the slides, and, as with the ISPA presentation earlier, questioned whether some of the events had not been foreseen and therefore led to an adjustment of the figures. They requested more specifics on the partnerships, the employment challenges, including shortage of women and shortage of core competencies, and requested details on disabled employment, which they were disappointed to see reflected her at around 1% instead of the 2% expected. The SAWS was asked to put steps in place to deal with this. Members questioned the demographic descriptors and asked about the difficulties with leadership.
They wondered if the Indian community had been sourced specifically to try to fill posts and suggested it would have more correct to refer to “black” rather than “African” employees. It was agreed that SAWS did not function as well as it could, but oversight had commenced to ensure that strategies and processes were being implemented to ensure longer-lasting solutions. Members asked about the employee satisfaction survey, increase in legal fees, an explanation of the doubtful debt, and loss of assets.
Isimangaliso Wetland Park Authority (ISPA) 2014/2015 Annual Report briefing
The Chairperson summarised briefly that because the Committee had previously taken quarterly reports, he had asked the Authority (ISPA) to focus on previous omissions, concentrating on the reasons and background for any unmet issues and the relevant corrective measures to resolve any problems. If any findings of the Auditor General South Africa (AGSA) raised concern, then the Authority should stipulate what actions were taken to ensure progress.
Mr Andrew Zaloumis, Chief Executive Officer, Isimangaliso Wetland Park Authority, took the Committee through the opinion of the Auditor General and the outcomes of the programmes set. The annual programmes consisted of park operations; transformation; commercialisation/tourism and corporate governance. The total number of the programmes were 30, with the key performance indicator (KPI) resulting in 2 not met, 18 met and 10 which had exceeded the targets set.
Mr Zaloumis said the first exceeded target was the rehabilitation of 15 000 degraded habitats, with 17 260 rehabilitated due to additional funding, within Programme 1: Conservation and Park operations). The key performance indicator (KPI) was exceeded throughout Programme 2: Transformation.
The Chairperson requested focus on the targets unmet and exceeded
Mr Zaloumis explained that the creation of temporary jobs was achieved by 2 049 created as against the target of 1 530. Small, Medium and Micro Enterprise (SMME) support was achieved by 142, compared to the target of 50 and the BEE procurement as percentage of qualifying expenditure was achieved by 86%, against target of 76R, due to the increase in alien clearing budgets. The SMME support had also received funds from the USA and an extended entrepreneurial mentorship yielded results. A decision was made to retain all contractors in dangerous game and because the training was not procrastinated, that was achieved by 1 184, compared to the initial target of 400. There were 47 bursaries granted, because the GEF facility enabled more training and reconstruction, although 25 were targeted.
Programme 3: Commercialisation/Tourism had unmet targets for the increase of visitor numbers. The target set was 533 451 visitors, but 506 860 visitors were recorded. This result had not reflected any walk-in visitors, so the total influx of visitors had not been captured. The revenue of this programme, however, had been exceeded due to the introduction of a R5 overnight levy, with R15.9 million achievement against a R12.4 million target. Tourism had also been exceeded by the influx of school-orientated visits. There were two types of entries for children to participate in environmental programmes. One was through groups organised by Isimangaliso and another was through the groups managed by the schools, but conducted by a facilitator of the park, and that had created an increase of unsolicited visitations. Consequently, although 2 700 school- orientated visits were expected, 5 710 was received.
Two indicators did not meet the outcome; the implementation of annual communication and PR programme in respect of government, environment and groups other than local community. 23 out of a target of 24 newsflashes were emailed. The two park tours had been scheduled for the end of the year, but were delayed until the following financial year.
Mr T Hadebe (DA) complimented the overall achievements, including the financial aspects of the entity as rather impressive. He asked what had caused the increase in the net financial assets.
Ms Abeeda Kadir, Chief Financial Officer, ISPA, explained that the increase of the net assets had been a result of the surplus for the year. The financial statements showed a R10.3 million surplus; consequently the net assets have increased.
Mr Hadebe requested further elaboration as to what exactly led to the net asset increase.
Ms Kadir replied that there was an increase regarding Property, Plant and Equipment, which affected the Fixed Assets, which then increased by R3 million. Cash Equivalents and Cash Receivables had greatly increased, by R115 million. Total Assets then equated to R118 million. The Liabilities too had increased from the previous year and consisted of R107 million. The difference between the Assets and Liabilities was what had amounted to the R10.3 million surplus.
Mr S Makhubele (ANC) questioned the reflection of transformation within the presentation. The overall presentation was impressive, but sometimes the financial and human resource statements, although they seemed sound on paper, did not reflect adequately at ground level. For instance, only two of the 10-15 tour guide drivers within the Isimangaliso Wetland Park came from previous disadvantage backgrounds. There had been a request for a forum that accommodated transformation of the new South Africa, because there should be greater improvements,
Mr Zaloumis explained that in order to properly address transformation, perhaps a whole separate presentation would be required. Whenever the entity has tendered or has advertised for licences, the private sector had bid. That particular process had included minimal targets to be evaluated, specifically for environmental, financial, empowerment and business planning or performance.
In regard to tourism, he wanted to point out that ten years ago, the Park was showing a negative growth rate but that had turned around. It now contributed 6.7% to Kwazulu Natal’s GDP and had contributed 6 000 direct jobs. In line with that growth, the Park had taken up other endeavours, such as the infrastructure of the area (building of roads) or addressing malaria, and empowerment had expanded also through those ventures. For instance, a number of the licences that had been offered,were reserved for locally-managed and owned businesses of black people. Hence the entity had subscribed to governance and its Broad Based Black Economic Empowerment (BBBEE) protocol.
He explained that Isimangaliso’s BEE programme was two-fold, with the other aspect called “mandatory departments”. This referred to local people residing in the area. The entity’s physical landscape was surrounded by a population of 640 000 people, South Africa’s second poorest area, second biggest backlog and largely failed local government. Most of the municipality had been under special management by the State. Hence, job creation had been scarce within the area. However, the Park, with its very minor resources, had generated multiple forms of employment. 60-65% of the entity’s revenue outflows into capital expenditure, such as projects that create jobs and a tourism platform. The entity also had an entrepreneurship programme incorporating 180 entrepreneurs (also SMEEs) with long-term monitoring and support. Despite transformation in the community, frustration may yet exist on ground level. Even through a person visiting the Park may be taken around by a white tour guide, he could assure the Members that such guides could be an employee or have partnered with a licenced black-owned business. For instance, the tour guide drivers or boat drivers may have been white individuals, but their companies of employment have been BEE compliant and/or derivatives from the 60% locally black-owned business.
Mr Zaloumis noted that there had been an appeal to work with the Department of Tourism to be involved with the budgets, with the motivation of accelerated opportunities within ISPA. He noted that the principles of supply and demand applied. The entity could not make more licences available to businesses, because there was simply no need and to do this might create bankruptcy. Prior to licences being issued, proper business assessments had been conducted, to ensure that the ‘demand’ of tourist (anticipated influx of visitors) has been met by the appropriate ‘supply’ of viable and properly compliant businesses.
The other area of concern had been the need for a slight budget adjustment, in order to get more staff. This would have been a minimal amount of increase of money, by R5 million or R6 million annually. The current annual allocation for the Medium Term Economic Framework (MTEF) was R20 million. However, accelerated radical transformation has entailed access to relevant programmes. The other area of frustration has been the evasion of several opportunities for development, due to lack of sufficient support. Development had included tender for fixed assets, namely, buildings as opposed to vehicles. There had been minimum targets set for local community equity, besides employment and the relevant training. The entity received a minor grant funding (not from the Department, but elsewhere), which had kick-started four or five key developments. Another example given by Mr Zaloumis of development was the increase of accommodation at Isimangaliso. Approximately twelve years ago, the Park itself could have only accommodated 500 guests. Currently, it had 1 500 beds for accommodation. The difference was that the entity had really been ambitious to develop. There was a proven opportunity for government to capitalise on further development, but further support by way of finances to do projects would then be required.
Mr Hadebe questioned the accuracy of internal controls. Although the ISPA cited key performance indicators as having been “exceeded” there were no figures. In order to avoid the need, in future, for long-winded enquiries about reports, it would be essential for the reports to be presented with entirely accurate figures.
Mr Zaloumis took responsibility for the omission, had assured that there were proper internal controls and apologised for the mistake.
The Chairperson asked how ISPA would properly account for all visitors, noting that there had been increased numbers, but many were also apparently unrecorded. In addition, how would ISPA make sure that in the future the right number of newsflashes were recorded.
Mr Zaloumis apologised for the 23 newsflashes produced, instead of the targeted 24 newsflashes, and said it was an oversight. The process would be better monitored throughout the year. In regard to visitor numbers, he noted that in some sections of the Park, the visitors did not have to pay any fees, and the recording of visitor numbers related to paid visitors. Recording the number of those walk-in individuals would have proven too costly for the budget.
The Chairperson has also questioned the over-achievements of programme two, which were the entity’s transformation strategic objectives. He asked if the targets were incorrect in the first place. He wondered whether, when drafting targets, there had been sufficient understanding of the operations involved, which was the main reason for those being exceeded. He cited, as one example, visitations from schools targeted as 2 700, but more than double that, at 5 710, was achieved. Although the Auditor General had not faulted the report, and it was agreed that the Annual Report showcased overall good performance, there was still some concern about the setting of the targets as realistic. Another example was the training programmes, where 400 were set but 1 184 achieved. He noted that a smaller percentage deviation would be understandable, but it seemed that the Annual Performance Plan (APP) may have been faulty in crafting, without perhaps a proper understanding of the environment. Furthermore, he noted that there seemed to be an element of a “gambling mentality” in relation to the exponential increase in funds, and wondered if these increases were not expected, and repeated again that surely it was possible to plan with a greater degree of certainty. Those additional funds should have been foreseen. He appreciated that “manna from heaven” by way of additional funding or grants may not have been quantified in advance, but surely the fact of it being offered might have been foreseen. If the increased performance was due purely to the extra funding, then the reverse would surely also apply; if financing was delayed, under-performance would have been expected. He asked how much the increased or “new” money amounted to, and where it was reflected in the statements. He wondered also whether, when it was received, new targets were set.
Mr Zaloumis clarified the over-achievement of the targets by distinguishing two types of targets. One target type was largely in the entity’s control, and the other set of targets were peripheral, and subject to external influence. Speaking to Mr Hadebe's point about visitor numbers he pointed out that MEC for Education in KwaZulu Natal had, a few years ago, announced that school trips to national parks were no longer allowed, following some tragedy around drowning that had resulted from another poorly-managed trip to another park. School visitor numbers had plummeted, However, they had picked up slightly, although it was difficult to assess what visits there would be with any accuracy. There was large potential, with 600 schools in the area.
He added that in regard to training, the APP was closed off but then something might happen that meant that training on dangerous game could not be procrastinated. He cited the example of an elephant deciding to take an interest in a particular gate and remain around that area; staff would have to be trained immediately to prevent any incidents or accidents until the elephant could be safely persuaded away from that area. The training could not be held back.
Mr Zaloumis also noted the positives from the external funded projects, which constituted the additional budgets. The World Bank had funded a three project that could possibly be extended by another year, and these projects would be regularly reviewed by the World Bank, followed by a consultation that would serve as guidance for budget adjustments. Those budget adjustments had been incompatible with the South African government and Treasury timeframes. Some of the examples and business planning were completed at the direction of the World Bank in that case. There was also additional and unforeseen funding from the US. Regular applications for funding were made as opportunities warranted, and it was possible that the funder would respond either inside or outside the financial year, resulting then in the ability to exponentially increase the relevant targets. He agreed that if the vast difference between the targets and the achievements reflected the lack of adequate planning of targets, it would be cause for concern.
The Chairperson repeated a request to be told who the other funders were and where, within in the Report, they were incorporated. He noted the verbal reference to the World Bank and the USA funding but asked where this was recorded.
Mr Zaloumis replied that sponsors were listed in the acknowledgements section at the end of the Annual Report. Off hand, the following institutions were quoted, the World Bank (GEF facility), the United States of America, the Lotto, provincial projects, DG Murray Trust, NSFAS. Many sponsorships were funded by Expanded Public Works Programmes, such as the programme on water.
The Chairperson asked how, if any, accounting for non-fiscal deposits was done. He asked what mechanism would inform the entity of any funding received and what were the amounts received.
Mr Zaloumis assured the Committee that all received funds had been accounted for within the books that were audited and which were now before the Committee.
The Chairperson clarified that his persistence in questioning was not directed to doubts about the integrity of the Annual Report, but rather to whether the planning had been correct.
Mr Zaloumis admitted that had the additional funds have been solely accounted for, it may have looked as though the entity had won the Lottery. However, he did see the point and acknowledged that additional funding should ideally have been followed with an adjustment of the relevant APP targets.
The Chairperson suggested, in order to prevent any difficulties in oversight in the future, that the Minister for Environmental Affairs should be immediately notified of any substantial, unforeseen cash inflow during the year, and a revised APP should be prepared to accommodate the additional funds reflecting the inflated and anticipated delivery.
Mr Hadebe enquired about the strategy of revenue enhancement. For instance, the overnight levy of R5 was recently (and inconsistently) implemented, but could have been used to enhance revenue sooner, and he wondered why this had not been done.
Mr Zaloumis explained that Isimangaliso tried to keep the entity as affordable as possible for the South African public. The target market of Isimangaliso comprised mostly those who had to be very careful with their money. It would have to be very cautious before any price increase could be introduced. For instance, should a petrol price increase occur before the Easter weekend, this might affect the influx of visitors. It was largely low cost tourism and activities such as camping within the Park. The R5 overnight levy was recently introduced, because one charge had meant access for three to five nights beforehand. The levy had still proven cheaper than other national parks. He noted that the exact amount of difference could be given before the end of the presentation as Ms Kadir was trying to source this now.
Mr Hadebe asked if biological assets were included in the division of assets of the financial statements.
Mr Zaloumis replied that biological assets had not been included. There were no requirements to have those counted, either by the AGSA or under the accounting standards. To physically count biological assets would have had incurred several challenges. For instance, the biological assets of fish and birds had been unquantifiable, due to their voluntary access “without passports”. The action of counting game superceded the value of the game in itself. The best manner to do so would ultimately be to walk through the entire Park, as air views may have shown merely a few at a time. In addition, the entity did not trade in game nor sell any of its animals. If one sphere of government required figures but the other did not, then the contention between national and provincial spheres may be a monetary issue. Note 17 on page 65 of the Annual Report dealt with that.
The Chairperson requested clarity on page 77 of the Annual Report (Conditional Grants) and said that it seemed that additional funding was enumerated in the report, as Mr Zaloumis had said. However, the Committee would have to have sufficient time to review the services and the levels of services by Isamangaliso. He pointed out that prior identification of this would have saved time. Although the exact amounts of additional funding could have been unknown until they were received (and here he was referring to the R232 million of additional funding by way of Conditional Grants) it was clear that this had been reflected in the prior years (when R129. 9 million was received). Thus, it was clear that additional funding was not unprecedented and only limited to this year. He felt that it was therefore possible to have accounted for it within the APP. He said that in reality, it was not correct that the targets were over-achieved, when the APP itself had been, from the outset, an under-statement.
Mr Riaan Aucamp, Acting Chief Executive Officer, Department of Environmental Affairs, said that in all fairness additional funding may have been received after the APP submissions were made. The GEF funding (mechanised by the World Bank) had been received, and this happened even after the review for the Annual Reports. Exponential increases and additional funds would normally be reflected and accounted for in quarterly reports.
The Chairperson concluded that the entity could not have stipulated that it had exceeded achievements, unless this was an absolute certainty. The issue of transformation was also something that was an ongoing point to watch.
South African Weather Service (SAWS) 2014/2015 Annual Report briefing
Mr Siboniso Saugqu, Director, Department of Environmental Affairs (DEA) said that SAWS would present highlights such as the targets not achieved as well as the relevant corrective measures that would be taken and explain the reasons behind the over-achievements. The Chief Financial Officer would elaborate on any gaps within the Auditor General’s report.
Speaking to financial matters, he noted that in the previous year, there were five points raised in the audit report, but this year there was only one. The AGSA raised concerns around not having established an IT governance framework to support and enable the business, and over the controls to ensure reliability of the systems and availability, accuracy and protection of information. Other points related to performance reporting, and to compliance with legislation, particularly the exercise of oversight responsibility on financial and performance reporting and compliance, and on internal controls. HR should have ensure there were adequate and sufficiently skilled resources in place and monitored,and that policies and procedures would support the understanding and execution of internal control objectives, processes and responsibilities.
Mr Saugqu highlighted that overall performance was that there was 85% achievement overall. 21 targets were achieved, two targets partially achieved and four targets unachieved. The target to increase partnerships was 17% up on the current number, but one partnership was achieved. There had been plans to reach finalisation of agreement with one commercial partner, and that should hopefully be achieved by the time of the next meeting. Extensive effort had been put into its finalisation, because this partner had extensive skills in radar and data management. The percentage increase of commercial revenue growth was not achieved. The strategy of partnerships had been aggressively reviewed for commercial purposes. One downfall was related to the observation infrastructure, with merely 79% of data available on the radars. To address this issue, sector specific products would now be produced. One out of two targets were achieved of the issue of radar data. SAWS had now engaged with the original radar equipment manufacturer, OEM,, because the wait in delivery – up to six months – had posed a challenge. Direct engagement now aimed to reduce time. SAWS was to have provided training for the radar experts in order to have cleared radar data. However, this encountered a challenge during load shedding, because there was a period of time when the data had been unusable, regardless if the generator had been on or not.
Another target unmet was the Employee Satisfaction Index, and SAWS had recognised that this had been a long-term problem but efforts were made to achieve realistic results by the next evaluation in 2017/18. The objective of increase in percentage readiness of critical skills was not achieved, and SAWS wanted leadership development programmes to be prioritised to deal with it. The partial achievement of awarding only 62 out of 75 planned bursaries had been due to financial constraints, but additional funding for this had recently been secured.
Mr Saugqu said that the first over-achievement of 96.5% application usage levels, as against the target of 70%, happened because of not having a baseline. The purpose of the target was to check if the products offered were used. The next over-achievement was that six products and/or services were developed as opposed to a target of four, and that was enabled by additional appointments of researchers. Also the stakeholder Satisfaction Index recorded an 84.8% achievement, against a 75% target. The other over-achievement also stemmed from not having a proper baseline, but there had been interactions prior to this; it related to Memorandums of Understanding being signed, and here there was 14% achievement rather than the target of 5% as MoUs were concluded with other institutions (see attached presentation for full details).
The Chairperson queried the unmet target of 17% increase in partnership.
Ms Esther Makau, Chief Financial Officer, DEA, clarified that steps had been followed to enter into this partnership but it was unverified when the Annual Reports were submitted.
Mr Saugqu continued with the over-achievements. 28 scientific publications were produced, compared to the target of 14 scientific publications. No baseline had been set. Aviation Revenue growth was targeted for R101 million, against a baseline of R82 million, but R104.5 was achieved. The actual air-traffic volume was higher than initially predicted. Next, in relation to retaining talent, there was a target of 92% and 98% was achieved, because of increased productivity throughout the organisation, due to holding better (managerial) accountability. Other over-achievements were a 78.26% average organisational performance rating against a target of 75%. Another that arose because of lack of a baseline was the target for 5% increase in resource competency index, and here, because the aviation in competencies was achieved by 20.85%. He noted that there was a need for compliance to an external body and international standard. The academic qualification of Honours or Masters degree was insufficient, because prospective employees required a Portfolio of Evidence and were scrutinized and tested according to international standards of skills and competencies. Another over-achievement was the absorption of 65% of bursary recipients into critical strategic areas against a target of 45% absorption. A delay in filling vacancies had meant the employee budget had been freed up, and bursary recipients were included to minimise the overspend.
Ms Marilize Hogendoorn, Chief Financial Officer, South African Weather Service, confirmed that the target unmet from the financial division was the design and implementation of formal controls over information technology, as noted by the Acting CEO earlier. This ITC problem had derived from user access and security login access. The operating systems could not have accommodated all security logins as the Auditor General had advised the entity. Subsequently, compartmentalisation of information that required security logins had been identified and implemented.
The Chairperson requested where this had been dealt with in the presentation. He stressed that it was important to have that in writing, and the Committee wanted to see what was being done, rather than the entity merely repeating what the findings of AGSA had been.
Mr Hadebe agreed with the Chairperson, and pointed out that this presentation was a public document, and it was very important to get a response stating clearly what the planned resolutions would be.
Mr Saugqu apologised for the lack of ITC accountability within the presentation. The SAWS did not want to make this too detailed a presentation. The details had been submitted to the Board.
The Chairperson requested the explanation in writing, pointing out that it was very important to have a record of any referrals back to the Auditor General. Verbal commentary was insufficient, particularly in regard to IT governance. The AGSA had specifically commented that all entities in the Department of Environmental Affairs had failed in respect of IT governance – including user access problems, risks not properly mitigated, lack of ITC governance models. The Committee wanted to see an assurance on corrective measures in writing.
The Chairperson challenged what he saw as dismissive body language of Ms Hogendoorn, when the need for a written explanation was raised – he asked why she had shaken her head, and whether this was supposed to imply that the omission was not significant.
Ms Hogendoorn noted that she had thought that this was a “housekeeping” matter but she apologised for the omission and would get that comment in writing.
Mr Hadebe suggested that nodding, rather than shaking of one's head, would be wise in Parliament.
The Chairperson questioned the quality control of the presentation slides. For instance, on slide 26 the annual target for the Commercial Revenue Growth has cited the number 26 followed by asterisks and information in red citation. The achievement section followed it by “12.5M”. He asked what the correlation was in the text.
Mr Saugqu confirmed that the asterisk was confusing; it should have been a footnote number. The information was correct but it was perhaps not presented in the right way.
Ms Makau assented to the call for improvement in quality control of information and clarified that the number 26 on slide 26, should have had the capitalized R and M letters to reflect “R26 million”. She then apologized for the typing error.
The Chairperson accepted that apology.
Mr P Mabilo (ANC) required elaboration on the performance targets not met, pointing out that performance objectives had been central to the success of the organisation. The Commercial Revenue Growth had been cited as a new area entered, and he wondered if it had been unprepared for this. He asked why the commercial revenue growth target was not achieved. He pointed out that one reason for shortfall on targets was cited, continuously, as budget constraints. However, he wondered whether these were not foreseen? SMART principles should have underpinned the planning.
Mr Saugqu responded that the under-achievement of the commercial revenue growth had been due to the (then) vacant position of a General Manager for the Commercial division. This had been supported by other operations in the organisation, but without a dedicated structure; expertise was limited. A cautious decision to delay the appointment of the General Manager was made, but in the last three months that position had been filled, and this should then show improvements for the future.
Mr Mabilo (ANC) requested further details of the second strategic goal (set out slide 21) not achieved. Unconvincing reasons were given as to why the partnership, which had been identified as strategic for collaboration, was not achieved and he wanted to hear more on this. He noted that page 121 and slide 41 cited employment challenges, including shortage of core competencies for the overall operation of the organization, shortage of women in the field of atmospheric sciences and budget constraints , and he wondered what measures were in place to resolve this.
Ms Khanyisa Hanisi, Acting General Manager: Human Capital Management, South African Weather Service responded that the interventions for transformation programmes had included the advancing of women into managerial positions; employment of people with disabilities and employment of Africans across the organisation, especially into positions that would further scarce and critical skills. The talent retention rate had been achieved by 86% as a result of the leadership programmes that have been implemented, such as the Career Development Leadership Programme.
Mr S Makhubele (ANC) questioned the entity’s staffing profile. He asked if the Indian community had been sourced as an employee of choice, and commented that slide 38 showed insufficient women employees.
Ms Hanisi addressed the demographic mark-up of the Indian community within the organization as a secondary focus to the recruitment of African employees, as the entity’s equity plan dictated. Recruitment of Indians was happening but she pointed out that they were not under-represented at 2.7% compared to the national figure of 2%.
Ms H Nyambi (ANC) questioned the lack of representation of people with disabilities within the entity’s Employment Equity as per slide 39.
Ms Hanisi highlighted that collectively employment equity targets were 91% achieved. There had been a focus on recruitment of Africans, especially women and people with disabilities. Although the target of having 3% of the entity’s total workforce comprise of people with disabilities, there were 1% and measures to increase this included awarding of bursaries to this group and working with specialised recruitment agencies for people with disabilities.
The Chairperson noted that by having only 1% disabled employees, SAWS was disregarding the government policy for incorporating at least 2% of people with disabilities. The employment equity of the Department of Environmental Affairs comprised 2.8% of people with disabilities. Given the length of time it had been in existence, SAWS should have reached the targets.
Ms Hanisi clarified that at the time the employment equity plan was developed, the people with disabilities already constituted 2% of the workforce. There were plans to increase this by another 1%, bringing it up to 3% in all, but during the course of the year some people had left.
The Chairperson further elaborated that government policy mandates strategic planning transcending the financial year. As an entity, SAWS should have reviewed what 2% of its workforce constituted and consequently how to accommodate 2% of the workforce as people with disabilities. He wondered if it had actually planned for 1% representation; terminations should not have altered proper planning. It was possible that SAWS actually needed to revise its APP. The disabled and other vulnerable groups had always been present in society, and should have been planned for. He instructed that SAWS must meet the prerequisite of having at least 2% of its workforce comprising of people with disabilities by the next meeting.
The Chairperson then asked what percentage of people with disabilities were recipients of bursaries, as this was not stated on slide 40, although it was noted that 62 bursaries were awarded, 47% to women and 89% to Africans. He then wanted to know who “Africans” meant, and said that it may have been more accurate to use the term “black”. He felt that the employment recruitment and bursary strategies had not addressed the history of the country.
Ms Makau agreed with the Chairperson that management faced several challenges. One challenge was acquiring and retaining Africans with critical skills within the organisation. The other challenge was the appointment of women at management level and this was what the bursary scheme sought to address. Management had noted and scrutinised the potential to improve the recruitment of people with disabilities. The challenge was not merely recruiting people with disabilities into non-core functions, but attracting them into viable positions that consisted of core and critical functions. Admittedly, the entity’s current strategy had not been proven to address those aspects yet.
Ms Makau further agreed with the Chairperson that SAWS was not as accomplished as it would like. Management had required oversight to ensure strategies and processes were implemented to ensure longer lasting solutions, and to minimise loss of trained and focused staff.
The Chairperson asked when these issues had started being addressed.
Ms Makau said that she did not want to stipulate the priority of one focus group above the other., but SAWS had managed to achieve well on recruiting Africans, and management had been honest about the need to address this, and also to look at available skills in the organisation.
Mr T Hadebe noted that the entity should fast track the Employee Satisfaction Index and should this find a discrepancy, then a new strategy would be needed to retain employees. This was a critical organisation.
Ms Hanisi acknowledged the failure to complete the Employee Satisfaction Index formal evaluation in the 2014/15 year, but said there were corrective measures in place and it would be addressed by 2017/18. In the interim, the key areas and/or issues that arose in the employee climate survey would be addressed by the development of appropriate programmes. The success of implementation should ensure further testing of the Employee Satisfaction Index within 2017/18.
Ms Makau confirmed that the management of the entity had had to give careful thought to the issues that were raised, for the sake of long-term resolutions. One of the issues raised by staff was the work / life balance. Another was the need for improved communication within the organisation. Collective solutions to address the issues were necessary, but there should be sufficient time to ensure a proper review of success.
Mr Makhubele asked SAWS to elaborate again on the reasons for the over-achievement listed in slide 33 .
The Chairperson said that if the target of 5% for availability of strategy driven human capacity was superceded by the aviation increased achievement, then this seemed to be acceptable, unless the target was initially understated.
Ms Hanisi explained that the over-achievement happened as a result of concentration on the development of the human aviation competencies. When the target was devised for 2014, consideration was given to budget constraints, but since the entity had had to comply with the WMO standards, such as the competence of the net technicians, the available budget was expended solely on the development of those competencies. SAWS had achieved an overall 100% competency rate, and 89% competency for the net technicians.
Mr Saugqu clarified that the over-achievement of aviation competencies had been one of the areas that should have been revised – similar to the comments that were made to the Isimangaliso Wetland Park when it omitted to revise targets when it obtained additional funding.
Mr Mabilo (ANC) enquired the reasons behind the increase in legal fees from R0.60 million to R2.77 million. He noted that provision for doubtful debts increased, with R4.68 million for the year, and asked what was regarded as “doubtful debt”.
Mr Makhubele (ANC) asked for the circumstances behind, and particulars of the amounts paid to fraudulent recruitment agencies due to the collusion among some employees in the Human Capital Management Division of SAWS, which was mentioned on page 124 of the Annual Report.
Ms Hogendoorn replied that doubtful debtors were categorised according to an assessment of how long a debt had been outstanding. This was distinguishable from debt written off, because provision would be made for its recoverability and the debt incurred interest for the period that it had been outstanding.
She added that the increase of legal fees related to the matter of fraudulent payments to invalid recruitment agencies. Here, a loss of R1 million over a period of five years had resulted in approximately doubled legal, forensic and audit costs. These costs were however considered necessary because SAWS wanted to take the strongest possible action again fraudulent activities, and follow-up on suspected fraudulent behaviour.
Ms Makau elaborated that the engagement of outsourcing legal services was to ensure objective and fair processes (and outcomes).
The Chairperson asked what was meant, respectively, by the decrease in total assets by 4% and current assets by 21.8% and wondered if assets had been lost through litigation.
Ms Hogendoorn explained that the Cash and Cash Equivalents decrease of R77 million to R55 million in the current assets had collectively affected the decrease of total assets. It was not a loss of an asset as such, but an expense drafted the year before was merely implemented in the 2014/15 year.
Other Committee business
Mr Makhubele noted that five Members of Parliament would be represented in the forthcoming trip to Paris; three from the ANC and the other two from the opposition parties.
The Chairperson congratulated Mr Scotney on being promoted from Researcher to the Committee’s Content Advisors.
The Fourth Term programme was briefly presented and adopted.
The meeting was adjourned.