Department of Military Veterans 2014/15 Annual Report: hearing with Deputy Minister

Public Accounts (SCOPA)

09 March 2016
Chairperson: Mr TN Godi (ANC)
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Meeting Summary

Members of the Standing Committee on Public Accounts, from both sides of the House, launched a vigorous and forthright interrogation of the Department of Military Veterans (DMV) over its poor performance during the past year. The Deputy Minister, the Acting Director General, the Audit Committee and the turnaround team all had to face critical comments and questions.

Members expressed anger, frustration and disbelief at the fact that there was a constant movement of people through the key positions of Director General and Chief Financial Officer, while at the same time there was stagnation in the DMV’s performance. Recurring problems pointed out by the Auditor-General (AG) had not been attended to for two years in a row, and this was likely to continue into the following year. The Chairperson had to cut the first hearing short, as it seemed to him that the DMV would try to justify all the Department’s wrongs on its lack of capacity. The Committee was not disposed to accept that explanation. It argued that the DMV was in fact oversubscribed in terms of staff, but still it had  underperformed.

There were severely critical comments about the state of internal audit in the Department. The internal audit section consisted of three members, who asserted they were not getting support from senior management. The Deputy Minister was challenged about the lack of political leadership. The Committee resolved to have a political discussion with the Minister and Deputy Minister, as the DMV was perceived to be incapable of rolling out benefits to military veterans.

Under-spending came in for severe criticism. There was concern that the DMV had not responded to the Auditor General’s (AG’s) findings, qualifications and recommendations in key areas like supply chain management and internal controls. Pre-payment and transfer issues were raised. Strong positions were taken on consequence management. The acting DG was told in no uncertain terms that he would have to take full responsibility for the audit outcomes and financial performance of the DMV, failing which he could be criminally charged, and fined or imprisoned.

The Audit Committee was criticised for providing a cut and paste report which was a replica of the previous year. The Committee felt that the DMV had been granted enough time to implement the AG’s findings and to improve its spending performance. The Chairperson concluded that the DMV’s inability to perform simple, basic tasks defied his understanding.

Meeting report

Introduction by the Chairperson
The Chairperson welcomed the Deputy Minister of Defence and Military Veterans, and rendered an apology from the Minister. Introductions were allowed for the DMV team; the Audit Committee; delegates from the Auditor-General of South Africa and the National Treasury, and the Chairperson of the Defence and Military Veterans Portfolio Committee.

The Chairperson noted that at a previous engagement SCOPA had resolved to remain engaged with the DMV until the situation was satisfactory. There was a request for continuous briefing so that steps to correct an untenable situation. Since that time a resolution was passed in Parliament. He had read a document that spoke to change, but it was not up to scratch with respect to issues. He told the Deputy Minister that there had to be continuous interface. SCOPA was on the side of the Ministry. Its areas of concern were clear, as well as what it wanted to see addressed. SCOPA wanted to know how it could assist the process. The DMV had moved from a disclaimer to a qualified audit opinion. Other findings indicated that all was not well. Areas of common concern had to be looked at to know how to deal with it. He did not wish to go into the importance of the Department and the people it served. He asked that the Deputy speak at the end from his level as the executive authority, to provide clarity on what the Ministry wanted to give guidance on.

Annual report and financial statements of Department of Military Veterans
Mr M Booi (ANC) said that the Department of Military Veterans (DMV) was a highly important area of work. Miserable progress had been made as a result of under-spending. The acting Director General (DG) was also doubling as Chief Financial Officer (CFO). The Department had to make known what the challenges were. The DMV had under-spent its budget and the National Treasury (NT) had had to come in and take back the money. SCOPA wanted to assess the Department’s capacity. There was an ongoing problem of capacity in that area. One soldier was having to protect another, and if that was not done, there were problems. Money had been granted from the fiscus to fight poverty, but military veterans were dying as paupers. The Departyment had to protect South African soldiers. Money had to move to poor people. The government was being accused of not caring. He asked what the challenges related to under-spending were.

Mr Eric Sokhela, Acting Director General, DMV, replied that the under-spending was because of capacity challenges. Positions had not been filled.

The Chairperson remarked that it was not an act of God. There was alack of capacity.

Mr Booi asked how the DMV felt about the situation. The DMV had been created and money had been provided to assist veterans. The DMV could not register its assets, and the Auditor General (AG) could not find statements to back up its auditing work.

Mr Sokhela replied that he had looked at challenges as identified in the Annual Report (AR). He had resolved to act to fill positions. The CFO position had been vacant for one year. An appointment was being made.

The Chairperson asked why such a critical position had not been filled for a year.

Mr Booi told the DMV to not mislead SCOPA. The DMV had stated in the previous year that there were challenges. SCOPA did not wish to go into the dynamics thereof. The DG and the CFO had been openly at war with each other the year before. Soldiers were dying like paupers. The DMV had been given money to help them and could not fulfill its responsibility. It had returned after a year and quite brazenly told the Committee that it was filling positions. He asked Mr Sokhelea how he felt when he went to funerals of MK veterans and other soldiers, who were buried in poverty. People were dying and Mr Sokhela was only talking of filling positions.

Mr Sokhela replied that he felt bad as well. But the CFO position had not been filled for a long time. The vacant Deputy Director General (DDG) position for socio-economic support had also been filled. Other DDG positions were in a process of assessment. In a previous engagement, the DMV had appealed that the law be applied to fill the positions. Capacity was in place for more effective spending in future. Medical invoices that were received were analysed. R79 million worth of invoices had not been received. A team had been assembled to process invoices. He was feeling bad about military veterans suffering.

The Chairperson remarked that this had been allowed to happen by those who had lived and worked with veterans

Mr Booi said that things were in bad shape. There was an absence of senior management. Privilege was being abused. It had been deemed necessary to create the DMV and use the fiscus, on the basis of the contributions military veterans had made. People were going to school and bursaries had to be signed off. It was haunting how senior managers were not on hand to sign them off. The AG had commented that senior managers had not been there to sign off immediately for bursaries and houses. Money owed by the DMV was not always settled within 30 days. Contractual obligations were not being met. The DMV’s administration was not up to standard. The DMV was not able to use the fiscus to care for veterans. There was a lack of compliance with supply chain management and internal control directives. SCOPA had warned on a previous occasion that people had huge expectations of the DMV. The DMV were undisciplined soldiers. They could not do internal auditing. There was no bookkeeping. Comrades were dying and the DMV was not sympathetic.

Mr Sokhela replied that documents had been prepared to support financial statements. The AR would be gone through to make sure the audit file had documentation. There would be engagement with the NT. There was concern in the DMV about how to do transfer payments. The NT had had to tell the DMV how to go about it. There had been a meeting on 9 February. The DMV wanted to comply, and did not want the transfer process to break the law. The AG itself was a major stakeholder. He had met with the AG to devise a strategy for the AG to do continuous monitoring. There would be meetings on a weekly basis, to monitor progress with access plans. Each month would be treated like a year-end. Supporting documentation would be supplied. Approval of documents for the expenditure report was already taking place.

Mr Booi said that the Acting DG wanted to outsource to the AG. That would invalidate his own employment. It did not make sense. All of them had to be fired. The AG had emphasised material understanding. The DMV had materially under-spent.

The Chairperson advised that material understanding should not be discussed.

Mr Booi said that he was referring to inefficiency. Correspondence figures had been restated in 2014 because of errors discovered for the year ending on 31 March. The DMV could not do its work. The AG first had to search for evidence, and had then found a lot of errors. The DMV did not understand money received, and could not do the books. He asked how many protest actions there had been against the DMV. The DMV could not outsource to the AG. He asked what the real problems were.

The Chairperson noted that there was a trend in the responses to come back to lack of capacity. Mr Smith could very well get the same response. He advised that something different be tried.

Mr Booi said that there was dereliction of duty. If the DMV misled Parliament, it opened itself up. As the Chairperson had noted, the DMV consistently told the same story and thereby created problems for itself. Mr Sokhela was the accounting officer and had to be aware of the Public Finance Management Act (PFMA). The PFMA stipulated what was to be done when officials failed. Mr Sokhela had chosen to remain on as Accounting Officer (AO). An official could either be criminalised or would have to leave and face disciplinary action, if he was not willing to open up to the Committee as in the previous year. The DMV had said good things in the previous year, but had returned to say the same things.

The Chairperson advised that Mr Brauteseth should proceed with his interrogation, so it could be seen how things unfolded.

Mr T Brauteseth (DA) asked Mr Sokhela who had been DG before him.

Mr Sokhela replied that it had been Mr Tsepe Motumi.

Mr Brauteseth asked why he had left.

Mr Sokhela replied that his contract had ended.

Mr Brauteseth asked why the contract had not been renewed.

Mr Sokhela replied that it was the prerogative of the Minister to renew a contract.

Mr Brauteseth said that that there had been talk about a medical diagnosis. He asked the Deputy Minister to comment.

Mr Kebby Maphatsoe, Deputy Minister of Military Veterans, replied that Mr Motumi’s performance had been discussed with the Minister when his contract was coming to an end. It was found to be not up to standard. The Department had been in a sorry state and the Minister wanted good leadership, and a new DG appointed.

Mr Brauteseth asked what Mr Motumi had done wrong.

The Deputy Minister replied that he had been assessed and found to be lacking in leadership. As he was not performing, someone else had to be found.

Mr Brauteseth asked what lack of leadership entailed. The DMV could have made sure that there was someone else in position. Since August, there had been no-one. Mr Sokhela had been treading water. He told the Deputy Minister that it was a matter of his own lack of leadership. The Deputy Minister had found a problem similar to his own. He asked if the Deputy Minister and the Minister had a contingency plan. It pointed to a lack of leadership.

The Deputy Minister replied that the DMV was where it was because of lack of leadership. The previous DG could not oversee the people under him. A leader had to continuously assess people under him. The positon had been advertised and a short-list had been compiled. Interviews had been held. There would be a new DG in May.

Mr Brauteseth noted that the DMV had been without a DG for nine months. He asked Mr Sokhela who the previous CFO had been.

Mr Sokhela replied that it had been Mr Rabelane Tshimomola.

Mr Brauteseth asked why he was no longer CFO.

Mr Sokhela replied that he could not disclose full details.

The Deputy Minister replied that there had been a disciplinary process. The previous CFO had delayed the process. He had submitted doctor’s certificates to postpone the hearings. He had been fired.

Mr Brauteseth asked what had been done since May the previous year about the CFO position. It pointed to a lack of leadership.

The Deputy Minister replied that there were challenges related to short-listing. Sometimes a track record could not be relied on. It had become necessary to re-advertise. A good CFO had finally been appointed.

Mr Brauteseth said that military veterans were struggling to get on to the DMV database. People’s lives were on the line. It was not acceptable to have gone so long without a CFO.

The Deputy Minister replied that he was a military veteran himself. He would not allow people to die as paupers, but short cuts could not be taken.

Mr Brauteseth said that the Deputy Minister had found a vacancy of nine months acceptable, but it was utterly unacceptable. There were serious AG issues related to the asset register. He asked about the DMV asset register. He asked if it referred to buildings, vehicles, kettles and the like.

Mr Sokhela replied that it included furniture, computers and cars -- anything that was worth under R5 000.

Mr Brauteseth asked whose job it was to control the asset register.

Mr Sokhela replied that accountability was delegated to the CFO.

Mr Brauteseth said that it meant that an absent person was running it. Mr Booi had been told that there was a problem of capacity. He asked if the DMV had people who were able to read and write. Items could be written down and provided with a description and a serial number. All that was needed was people who had matric.

Mr Sokhela replied that items had been tagged, and the asset register was being updated.

Mr Brauteseth asked why that had not been done before. The incorrect asset register was not a capacity issue, it was a laziness issue. There was a lack of attention to detail. The asset register was out by R5 million. He asked why it had not been recorded.

Mr Sokhela replied that he could not provide a list there and then, but would do so.

The Chairperson asked him to focus on why the recording had not been done.

Mr Sokhela replied that it was not possible to engage with the CFO who had been there at the time.

Mr Brauteseth asked Mr Sokhela how long he had been with the DMV.

Mr Sokhela replied that it had been two months. He had previously been employed by the Department of Defence (DoD).

Mr Brauteseth remarked that everyone present was new to the Department.

The Chairperson asked for a comment from internal audit.

Ms Lydia Meso, Internal Audit Director, replied that she had been with internal audit since 2011. The asset register had not been properly compiled. There were gaps with the identification, preparation and quantification of assets.

The Chairperson asked why that was so.

Ms Meso replied that the previous CFO was responsible for financial administration and supply chain management, but there had been no-one specifically responsible for asset management. There had been a vacancy at the director level. Assistant directors could assist with asset management and capturing, and had to make sure that the information was provided to the CFO.

The Chairperson asked why that was not happening. Ms Meso was talking conceptually. He asked about why things were not happening, in practical terms.

Ms Meso replied that it was the responsibility of the CFO.

Mr Brauteseth asked if the internal audit section had raised concerns with the CFO, the DG and the Deputy Minister. She had stated that things were not being done properly. He asked if she had raised her concern, to get support to drive the issue home.

Ms Meso replied that internal audit was responsible for administrative and consultative services. She had engaged with the CFO to make sure that there was an adequate asset register during the move from Centurion Park to the new building. However, during the transition from Denel she had been on maternity leave and could not follow up.

Mr Brauteseth asked if she had said anything during 2014/15 about the asset register being out of kilter. He asked if she had raised a flag, to get support to fix things.

Ms Meso replied that that she had engaged with the acting CFO during the current financial year. There were plans to appoint a service provider to assist.

Mr Brauteseth asked if the CFO position had been vacant since May of 2014/15. If Mr Engelbrecht was acting CFO at the time, the question was where the CFO, who was sick all the time, was.

Ms Meso replied that Mr Fanie Engelbrecht had been the acting CFO in August 2014. He had still been in charge at the end of 2015.

The Chairperson said that the discussion was straying off the track.

Mr Brauteseth asked if Ms Meso had received adequate support when she raised issues.

Ms Meso replied that she had not received adequate support.

Mr Brauteseth asked who had to support her.

Ms Meso replied that there had to be support from the Chief Director of supply chain management and the acting CFO.

Mr Brauteseth asked why that was so. The issue had been raised. The situation was like moving sand. People came and went. The matter of the asset register had been raised by internal audit. Leadership had not responded. He referred to transfer payment misallocation. There were R175 million and R31 million understatements and overstatements. The R175 million was payment to the National Student Financial Aid Scheme (NSFAS). Transfers had not been made in terms of the memorandum of understanding (MOU).

Mr Sokhela replied that his information indicated that there was non-compliance with NT recommendations. Pre-payment had to be avoided. In terms of the law, unless there was an obligation, an amount was to be paid only as stipulated in the MOU. Transfers to the NSFAS had to be on request. Obligations had not been adhered to. Currently there was engagement with NT about such matters. Before a transfer was made, it had to be established what was the correct way.

Mr Brauteseth asked who was responsible. Transfer payments had been overstated, and pre-payments understated.

Mr Sokhela replied that under the PFMA it was the responsibility of the accounting officer. Powers could be delegated to the CFO to transfer funds.

Mr Brauteseth said that the accounting officer was still responsible. He asked where Mr Motumi currently was.

The Deputy Minister replied that he was in the office of the Minister.

Mr Brauteseth said that it was the revolving door policy at work. If the Deputy Minister knew he was headed for the Ministry, the question was if he had pointed out that Mr Motumi had fared badly in the DMV.

The Deputy Minister replied that Mr Motumi was employed as a political advisor.

Mr Brauteseth asked who Mr Engelbrecht was acting for, when he was acting CFO.

Mr Sokhela replied that he was acting for Mr Tshimomola.

Mr Brauteseth asked which of the two had the delegation from Mr Motumi to sort out pre-payment and transfer issues.

Mr Sokhela replied that he could not say.

Mr Brauteseth said that he felt for Mr Sokhela. In future it had to be found out where the officials were currently employed. If they were employed by the State, they could be subpoenaed. SCOPA could call anyone.

The Chairperson noted that the Committee was sitting with an acting DG who had been there for two months. The question was what could be discussed within that context.

Mr V Smith (ANC) remarked that there was not much point in asking where Mr Motumi was. Mr Sokhela was the Accounting Officer and he had to take responsibility. He had to be taught to take responsibility, otherwise people would be let off the hook. It was pointless to say that someone else who was there yesterday could be held accountable. It was still the same ANC government and the same administration. Mr Sokhela had chosen to play musical chairs with himself. He told Mr Sokhela that the two of them had come a long way. Mr Sokhela had been a CFO for many years. He asked about the internal audit organogram, and how many people were in it.

Mr Sokhela replied that there was a Director and two deputies.

Mr Smith noted that the Audit Committee and the AG had raised non-capacity issues for two years in a row. The issue had been raised in 2013/14 and again in 2014/15. He asked if there were any plans to change the situation.

Mr Sokhela replied that the structure was being revised, to get up to full capacity.

Mr Smith asked what the ideal number was. Having three people in internal audit was not working. The question was why the same thing was done, hoping to have a different result in the following year. Internal audit had been paid for four years to do the same things. He asked Mr Sokhela for his opinion. He had to pronounce on the issue, so that he could be held to it, to enable SCOPA to make a resolution as Parliament. Mr Sokhela had to tell the Committee if he was fit to serve as CFO or CEO.

Mr Sokhela replied that the current structure was not working. It had to be revised. There would be an organogram that could talk to the DMV’s business.

Mr Smith asked about a deadline for approval of a revised organogram. He knew that it might very well be said in future that the Minister had not approved it. He asked when Mr Sokhela would insist on urgent approval. He asked why the DMV had to be given a budget at all for the following year. The DMV was unable to put structures in place to spend money. He asked when the proposed organogram would be ready.

Mr Sokhela replied that an organogram for the entire organisation would be ready by the end of June.

The Chairperson remarked that the problem was material assets. He could not understand how the DMV could think that only three people could do the work. The fact that such a conclusion had been reached at all, seemed to him to be at the heart of the problem. Officials were either clueless or they did not care. A new accounting officer could make adjustments, but people were not thinking. They were just going through the motions.

Mr Smith said that he had known Mr Majombozi, the head of the turnaround strategy team, for a long time. It could be assumed that Mr Majombozi had not come down from Johannesburg just for the ride. He would have to answer. He could not just sit there. Mr Smith noted that it was stated on page 87 of the AG’s report that internal control had not evaluated the effectiveness and reliability of control and compliance. Nothing had been done about that. He asked when it would be done. He told the Deputy Minister that things could not continue in that fashion. It would get to be fruitless and wasteful expenditure. Three internal audit people were sitting in offices doing nothing. The Department would have to pay, if fruitless and wasteful expenditure occurred. He told the Chairperson of the Audit Committee that he had concurred with the AG for two years in a row. The Audit Committee was not doing its work. He asked if he was working for the sake of compliance, or because it was decided that every department had to have an audit committee, or to add value.

Mr Ameen Amod, a member of the Audit Committee, replied that the Audit Committee’s role had to be understood.

The Chairperson told him that the role of the Audit Committee was understood. The Audit Committee had to answer whether it was being effective in terms of its own capacity, and whether its work was being used, and had an influence on managerial decisions.

Mr Amod continued that the last report had highlighted issues, which had been discussed in terms of the Audit Committee’s concerns. Capacity had not been discussed. The root causes were related to a lack of effective supervision and monitoring in the Department, which had led to gaps in controls. That was especially true for reporting on financial performance. It was linked to database issues. The Audit Committee had performed its duties in terms of its responsibility to highlight gaps to mangement. It was up to management to implement the findings of the Audit Committee and AG.

Mr Smith told Mr Victor Nondabula, Chairperson of the Audit Committee, that the AC report had been a cut and paste job. The Audit Committee’s conclusion for the current year had been that the DMV was still challenged in many areas of leadership and internal auditing. It had been signed on 31 July 2015. The conclusion signed on 30 October 2014 had been exactly the same. What was said on 30 October 2014 had been repeated exactly the next year. There was no thought that SCOPA would be looking at the report of the previous year. Mr Sokhela would know what he was talking about. It was an insult to Parliament to presume that politicians did not read previous reports. If the Audit Committee had picked up issues for two years in a row, this should have been raised with the Minister or Deputy Minister. There had been cutting and pasting. If there was no assistance from the Department, issues had to be escalated. SCOPA did not deal only with the DMV, it looked at 35 departments. SCOPA had a helicopter view. The Audit Committee was being undermined and sabotaged and rendered useless in the same way that Mr Sokhela had done when he was with the Department of Correctional Services. It was not in order to sign the same document two years in a row to SCOPA. It was an insult to him, as a representative of the people. Cutting and pasting frustrated “the living whatever out of him,” in his words.

He referred Mr Sokhela to findings about leadership on page 87 of the AG report, related to the performance report and non-compliance with regulations. A number of findings had been said to be recurring issues. Prior year qualifications had not been addressed. Findings about internal audit had also been the same for two years in a row. It was very likely that at year end of 2016 there would be the same findings with regard to internal audit. There had been procurement issues, and supplier tax matters had not been verified. All the issues were related to internal audit. The AG could not obtain audit evidence.

There were 30 days until the end of the financial year. He told Mr Sokhela that he knew those things, and Mr Sokhela knew that he knew. He had been in SCOPA for 21 years. Things would be the same at the next year end. He asked the Chairperson why those officials had been brought down. It had become necessary to sit with the Minister and Deputy Minister and tell them how grave the situation was. There would be the same disclaimers, qualifications and findings the next time around. Internal audit was a replica of the previous year in terms of inefficiency. The same would be true for leadership, as there had been no change. Nothing had changed with regard to financial performance, or preparation of the AR and the asset register.

He referred to consequence management. He told Mr Sokhela that a few departments were going to be made an example of in the current year. Section 38 of the PFMA stated that negligence on the part of the Accounting Officer counted as misconduct. Section 87 prescribed a fine or a five year imprisonment term. It was a criminal matter. He warned Mr Sokhela that two DGs were facing criminal charges in the current year. He was telling Mr Sokhela in public that he had to take care that he did not become the third.

The Chairperson remarked that it had become clear why he had had to cut Comrade Booi short and proceed to Mr Brauteseth. It might be necessary to have a political discussion with the Minister and Deputy Minister. Administrators were not getting anywhere. He told the Deputy Minister that Mr Motumi had come and left and then General Make had been acting Accounting Officer. Currently, Mr Sokhela was the AO. The year end was in two weeks’ time. After Mr Motumi, General Make had acted for seven or eight months, followed by Mr Sokhela for the preceding two months. He asked how that situation was accounted for. The political leadership had to account for it. If there was an inability to establish stability of positions, the current discussion was a waste of time. It was impossible to grapple with issues. The DMV future plans were not of substantive interest to SCOPA. The Committee wanted to understand the past. It was of no use if new people promised that certain things would not happen again. That was why he had had to interrupt Mr Booi. Things were not going anywhere. There had to be more political talk, to show how to get out of the current situation.

Ms N Khunou (ANC) said that nobody wanted to take the blame. Responsibility was shifted to others. No-one wanted to own the faults. It was always a matter of, you did that, not I. She was hoping that the head of the turnaround initiative would say something. Military veteran houses did not fall under the Reconstruction and Development Programme (RDP) because they did not qualify. It would not do to have a wish list. A strategic plan was needed. One had to wonder what Parliament had given a budget for. People who had done something wrong were even promoted. There were cut and paste reports. In the absence of a plan, some problems would persist forever. No-one wanted to assume leadership. The Deputy Minister had agreed that there was poor performance. Before senior personnel was hired, performance and expertise had to be known. Results could not be expected from incompetent people. People had died serving their country. They had to be assisted.

Mr M Hlengwa (IFP) remarked that there was a musical chairs game with regard to management and positions. The Deputy Minister had said that the DMV was not performing. The Committee had to be informed about areas of non-performance. There had to be benchmarking against the findings of the AG. Non-performance could not be discussed in a vacuum. It had to be specific. The musical chairs game was confusing -- it was hard to understand ‘who was who in the zoo.’ The Committee had to be told who was acting for whom. There had to be an honest assessment, with challenges contextualised. The Audit Committee had to do better than provide a ‘tip of the iceberg’ cosmetic cut and paste report. There had to be minutes and a record of resolutions, and who it had been escalated to. The political leadership had to be interrogated for SCOPA to know what actions to take as a Committee.

Mr S Esau (DA) noted that the Department had been granted its own budget vote two years ago, but it was not capable of owning that vote. The Management Performance Assessment Tool (MPAT) report, provided by the Department of Performance Monitoring and Evaluation (DPME), had been damning. Key indicators had been considered, including governance, leadership and internal audit. Most under-performance had been repeated. There was a lack of capacity that went back to recruitment. As long as appointments were made on the basis of a relationship or some kind of connection, rather than merit, there would be serious problems going ahead. The Department had stated that a skills audit would be done, but it had never been brought to the Committee. There were 169 staff and 50 additional posts available, which included interns and contract posts. There were many people, but they were not doing their jobs properly. The DMV was oversubscribed in terms of staff, but underperforming. He asked who was responsible for recruitment, assessment and appointments. Charges had been laid against the Department by a previous CFO, who had acted as a whistle blower. There had been irregularities, but a report was not available and the official was not available for comment. The case was coming up and issues would come to the fore.

Ms T Chiloane (ANC) noted that a case against the DMV had been laid by a former CFO, and a CFO had also been charged for negligence. A trend was visible. Every time a department or entity was brought to the Committee, they brought in new people. In future hearings, when there was change of leadership, it had to be possible to trace who was at the helm and responsible for audit outcomes. It had to be found out who was responsible, and the official had to be traced. A good 99% of them were probably in the employment of the State.

Mr E Kekana (ANC) commented that the law was clear and on the side of the Committee. The Accounting Officer was the successor in law, and could not delegate to someone the Committee did not know. The AO had to give answers, and if he could not he had to take the blame. The buck stopped with the Accounting Officer. The Committee would not assist the DMV with tracing people. The AO was responsible for the information that SCOPA needed. If there were problems, the Accounting Officer had to take responsibility, and if there were charges, it would be against him.

Mr Booi remarked that a clear understanding was needed. The Committee had serious concerns. Veterans were dying like paupers and the Department did not have a conscience and did not care. Departments like Correctional Services and Defence were not complying with the law. They were supposed to be soldiers, who were supposed to uphold the law. It showed questionable character to be careless about the running of a constitutional state. The Deputy Minister was allowing people to die. People were sharing money amongst themselves. There were departments that handled billions. The DMV could not run a department with a small budget. Money was being transferred back to the NT. It would not do to have people who did not understand the law, and did not look at the Act before they did things. Responsibility had to be taken.

There was non-compliance with the law, and legislation was not understood. The AG had reported that it could not find slips in order to take the DMV to account. People took money to buy each other petrol, and could not keep the slips. The Department was changing people on the eve of meetings with the AG and SCOPA. The Zuma administration was alleged to be corrupt, but the Committee was looking at the corruption of officials who could not maintain the dignity of the country. The law was clear. SCOPA would be in favour of arresting those responsible. It was no longer possible to work on a basis of friendship. If the AO could not do good for the people, he had to leave or get taken to jail. The Committee was authorised by its own structures. It was not lamenting. It was unacceptable to speak as if the CFO did not exist. The CFO and the DG had fought openly a year before, and the Chairperson in his goodness had kept it away from the public eye. He hoped that the turnaround strategy would look at the issues. The DMV had been granted enough time to improve its work. SCOPA had pleaded with the DMV a year before. As Mr Smith indicated, it was about to give a repeat performance for the third year in a row.

Mr Brauteseth noted that a previous CFO had laid charges against the DMV. He asked why that had been done.

Mr Nondabula, Audit Committee Chairperson, commented that the Audit Committee had escalated audit matters to SCOPA. He would arrange for an update. There had been meetings with the Defence Minister and a report of resolutions taken by the Audit Committee, which would be supplied. There were issues raised of accountability, consequence management and gaps in controls and reporting. SCOPA worked hand in hand with the Audit Committee in terms of what it wanted to achieve, although it was limited in some ways. He was heartened by the new appointments, but policies and procedures for effective leadership were not there. There had to be accountability of everyone in the Department, in terms of roles and responsibilities.

The Chairperson asked for input from the turnaround strategy initiative. He asked if Mr Majombozi was appointed as an individual, or if he represented a consultant firm.

Mr Sipho Majombozi, Chairperson of the turnaround team, said that he was glad to respond to the question, as it spoke to the core approach of the turnaround team. It was not of like the approach of a PricewaterhouseCoopers (PWC) type of organisation. The approach was that the solution to military veteran problems could not be achieved without their participation. He therefore did not represent himself as an individual. He had been appointed formally as a resource partner. The structure of the turnaround strategy required the incorporation of military veterans. The turnaround team had been appointed by the Minister in September 2015.

Challenges had been tabulated within the first two months, and the team had wanted to present in November 2015, but had been prevented by the strike. The approach was not to make a list of recommendations for the end of the term. The team would rather consistently work closely with the Department, and advise the Minister on management issues. All findings would be discussed. The turnaround team could present a more colourful picture of issues to be addressed. Issues would be identified and advice generated in consultation with the Department. It would not wait until the patient was dead before a remedy was supplied. The turnaround team would share strategies with the relevant authorities. The basic approach would be to ask what could be done about issues. Interaction with the DG office had started with General Make. The team would share approaches, solutions and advice.

There had already been an intervention with regard to bursaries. Bursaries had had to be paid at that time of the year. The team had pointed out the dangers of approaches used in the past. Of the two disclaimers received, one had been for pre-payments, and one for transfers to the NSFAS. The turnaround team had pointed out that it would not solve the problem if another transfer was to happen. The DMV approach had been to appoint a particular company to direct the Department. It was pointed out that the current approach would solve the problem temporarily, but would make it a bigger problem in the long run. The pre-transfer of a large amount of money to that company would create a risk area. There were similar problems with regard to housing, which could be shared openly in a structured way. There had to be more focus on generating solutions. Veterans had to be involved in the solution. Their issues were taken to heart.

Ms Khonou asked if the things alluded to had been communicated to the Department.
If they had, there might have been different answers. There was a communication problem.

Mr Brauteseth remarked that everyone hated consultants. That should not be so. They were trying to help. He asked if the team had the necessary capacity. He noted that “diagnostic” was misspelt.

Mr Majombozi replied that the misspelling was a typographical error. Mr Brauteseth was talking to a taskmaster who was particular, even with spelling. Many people could tell Mr Brauteseth about the turnaround team leader as a teacher and everything else -- and a successful businessman. The capacity was there. The steering committee would resource people and create work streams across formations like Umkhonto we Sizwe (MK), the Azanian People’s Organisation (AZAPO), and the Azanian National Liberation Army (AZANLA).

The Chairperson reminded him that AZAPO was not in the war. He was not to forget the Azanian People's Liberation Army (APLA).

Mr D Ross (DA) asked about the current status of the turnaround. He asked when the team had been appointed and at what cost, and if the team had been externally recruited.

Mr Majombozi replied that the team had been appointed in September 2015 by the Minister as a Ministerial resource due to an outcry by military veterans.

Mr Booi said that the Minister had to be allowed to comment on such matters.

The Chairperson said that the Minister could pronounce on the details.

Mr Kekana said that the Committee had wanted an executive summary, and had got it. It was not correct to interrogate Mr Majombozi.

The Chairperson advised that the matter should be parked. He asked the Deputy Minister for concluding remarks.

Concluding remarks
The Deputy Minister said that he appreciated the frank engagement. The picture was bad and had to be taken seriously. He would meet with the Minister and with the Department about the meeting of the day. The Department needed a hands-on approach. It needed to realise that it was not there for itself. There had been an outcry from military veterans. The executive was convinced that if people could not perform, they had to resign. Veterans had to be looked after. They were getting old and dying. It was not acceptable to return money that was destined for veterans, back to the Treasury. The DMV had to pull up its socks. The next report had to be in a better state. Benefits had to be rolled out to veterans.

The Chairperson concluded that SCOPA wanted to see the picture changed. How certain things had happened defied logic. Parliament had given money to a Department that did not care about military veterans. The DMV had a national responsibility and had to understand how to position itself. There was no difference between what the Audit Committee and the turnaround team were saying. The question was why it was necessary to advise the DMV on matters like pre-payment. He did not understand how grown people who were given responsibility could act in such a way. He implored the Department to get the necessary capacity. It could not expect to chop and change and expect continued forward momentum. It was embarrassing to talk to the DMV, and it reflected badly on SCOPA. The DMV was useless and hopeless and were not doing the right things. Officials were not doing their work. They could not do simple, basic things. He could not process it in his head why there had to be a need to talk to the DMV about basic things. He struggled to understand it..

The Chairperson told the Committee that Correctional Services would be met with on the following Tuesday.

The Chairperson adjourned the meeting.

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