The Public Service Commission (PSC) addressed the Committee on the 2016 Appropriations Bill, presenting a table setting out the achievement of targets by different departmental programmes, although it was also explained that shifting of targets and programmes between departments sometimes made it difficult to assess trends. The PSC also spoke to performance of Departments against spending, and reported that often there was a mismatch between amounts spent and targets achieved. The four worst-performing departments were Department of Energy (spent 83.6%, but achieved only 28.6%), Department of Public Works( spent 98.4%, but achieved only 42.4%), Department of Telecommunications and Postal Services (spent 97.5%, but only achieved 24.1%) and Department of Women, Children and People with Disabilities (spent 99%, but only achieved 36.4%).
The PSC went on to give an analysis of the management performance assessment tool used by the Department of Planning, Monitoring and Evaluation, noting the four performance areas and achievements in each. It was pointed out that in many cases the compliance was at less than level 3. It was found that 24% of national and provincial departments’ scores were compliant by reaching at least a level 3 rating, and 26% of these were at level 4, showing at least 50% compliance overall.
The PSC also addressed governance issues, through audit outcomes and compliance with strategic and annual report plans. The Department of Correctional Services, Department of International Relations and Cooperation and Department of Water and Sanitation had received qualified audits for the past three years. The statistics were also presented for performance management, showing a major dip in compliance to 18% in 2015/16, with an improvement to 69% in the following year, although the same did not hold true for the financial disclosures, with as high as 25% non-submissions at all in the last year. There was also a huge increase in the finalisation of financial misconduct cases. In the last two years there had been a sharp increase in amounts not recovered from financial misconduct, from R12.2 million to R29.4 million. There were still far too many invoices not being paid within the 30-day deadline, amounting to R395.67 million in 2015. In relation to disciplinary matters, although the number of employees suspended had decreased, the average length of time suspended has increased, although the cost of the suspensions overall had dropped. Unfortunately many departments, when asked to report on suspensions, would not report on employees placed on “special leave” which was not only illegal but also a way of concealing costs of suspensions. Most departments were said to be managing their vacancy rates, but there was an unfortunate trend that departments would tend to add posts additional to establishment, which had virtually doubled, and this was blurring the true picture. Furthermore, there was still quite high dependency on consultancy, particularly where those in senior positions were unable or unwilling to do the work themselves, and this also led to consultants who were appointed being supervised by more junior employees.
Members appreciated the information which provided them with strong material for oversight. They asked for specifics on the departments in default under the various categories, whether departments were responsible for unfinished disciplinary hearings and how they were handling suspensions. Members were disappointed to hear of the practice of “special leave” and the PSC recommended that in oversight, this question should be specifically asked. They also sought further information on appointments additional to establishment.
Ms Y Phosa (ANC) was elected formally as the new Committee Chairperson.
2016 Appropriations Bill: Public Service Commission (PSC) submission
Ms Phumelele Nzimande, Commissioner: Monitoring and Evaluation Public Service Commission, reminded the Committee that, unlike the Human Sciences Research Council, the Public Service Commission (PSC or the Commission) does not have comprehensive research capacity. She would present a tool to aid the Committee in oversight, by providing a starting point for it then to drill down further into the issues. The Committee had asked for a comprehensive analysis of all the government departments' performance versus the budget.
Ms Carmen Domingo, Director: Monitoring and Evaluation, Public Service Commission, said that the PSC has established a database to generate presentations. In respect of the Annual Reports, the PSC had focussed on the performance and budget of all national Departments. She noted that several slides in the presentation highlighted this, setting out targets and performance over the last three years. The PSC also picked up some discrepancies in the information and so had the Auditor-General. From 2014/15 there had been new programmes created in departments and others had been transferred between departments, which made it difficult sometimes to determine performance trends when numbers of targets or performance indicators were altered. The PSC thought that this was a point that needed to be addressed. PSC had also previously highlighted the need for quality Annual Reports and the competency, rather than capacity, to monitor and report. The PSC had also noted that, year on year, there would be changes in Annual Reports. She would suggest that any patterns were indicators more than real trends.
Ms Domingo said overall, many departments were not achieving the planned targets, while incurring high expenditure. She would highlight also those departments with over-expenditure. This could be an indication that the budgets are being used for unplanned activities, which raised the question whether government is planning appropriately, although it was also attributable to changes, mergers and movements of programmes between Departments.
Ms Domingo highlighted four departments with low achievement but which had nonetheless spent most of their budget:
- Department of Energy spent 83.6%, but achieved only 28.6%
- Department of Public Works spent 98.4%, but achieved only 42.4%
- Department of Telecommunications and Postal Services spent 97.5%, but only achieved 24.1%
- Department of Women, Children and People with Disabilities spent 99%, but only achieved 36.4%.
Ms Domingo said the management performance assessment tool (MPAT) administered by the Department of Planning, Monitoring and Evaluation (DPME) had four key performance areas (KPAs), which were:
- strategic management (KPA 1),
- governance and accountability (KPA 2),
- human resource management (KPA 3)
- financial management (KPA 4).
DPME would assess each national department against the indicators. She indicated that in respect of KPAs 2 to 4, government is not achieving compliance with the legal framework, because there are below level 3 ratings. 24% of national and provincial departments’ scores are compliant (by reaching at least level 3) and 26% are at level 4 (50% overall). KPA1 shows a good score but this area has not improved over the past few years, perhaps because other areas are more regulated. KPA 2 achievements showed notable improvements, but still a partially compliant score. A decline in professional ethics is the cause of this and this suggests the need for consequences for transgressions. Consequence management has been an issue which the PSC has highlighted to the Committee previously. There was stagnation of KPA 3, which was of concern because there were consistent performances here below a score of 2.3. Particular areas where improvement was needed included organisation design, human resource planning, recruitment, and Heads of Departments’ (HoD) Performance Management Development System. She explained that it is essential that organisational design, governance, workflow and human resource deployment should be aligned. Often, the quantity of resources (or people) was not the main issue, but how they were mobilised and deployed. , because resources are not always the issue rather it is how they are mobilised and deployed. KPA 4 showed a marginal improvement although persistent challenges were non-payment of suppliers within 30 days, service delivery mechanisms and the finalisation of disciplinary cases. The continued non-payment of service providers has a negative impact on government’s stated objective of creating employment. While many Departments are complying with the National Treasury (NT or Treasury) instruction to report, the problem is that the Departments are still not paying.
Ms Domingo said that questions received from the Committee had highlighted a separation between areas where efficiencies may be realised, and areas where there is potential for value realisation. The PSC indicated in the previous year that these two concepts are closely linked and the questions have been merged. The Budget Speech had spoken to exploring sharing of scarce skills – for instance, health professionals in the employ of the Department of Health could provide support to the Department of Correctional Services. Legal support services in the Department of Justice could be used to curb legal expenses across other Departments. The Policy and Procedure on Incapacity Leave and Ill Health Retirement (PPILIHR) is being reviewed and provides an opportunity to identify cost savings in managing ill health, promoting productivity and the ultimate output.
Ms Domingo turned to governance issues across the public service. Information on audit outcomes was sourced from the Auditor General’s (AG) consolidated report. There was a general improvement in audit outcomes in 2014/15. On the other hand, some Departments have been getting qualified audit outcomes for the past three years. These are the Department of Correctional Services, Department of International Relations and Cooperation and Department of Water and Sanitation. The AG sends a management letter to require that every department have an audit committee, and these concerns about qualified audits have to be flagged to the departments concerned, to find out exactly what the obstacles are to achieving unqualified audits. The status of human resource management has also not improved, particularly in regard to vacancy rates and instability, performance management, and consequences for transgressions. The AG attributes this to inefficiencies in management and administration incapacities.
She added that having excellent officials in senior positions is critical for effective strategic planning and performance management, which will also affect the quality of Annual Reports. The problem is that not all departments allocate these functions to senior management oversight.
Speaking to effective use of consultants, she noted that national and provincial departments have spent a total of R8.5 billion on consultants in 2014/15, a reduction of R3.1 billion from the previous year. The three major areas where consultants are used are financial reporting services, preparation of performance information, and IT services – but there was an anomaly here because some departments had received additional funding to delivery strategic management but were still using consultants to do the work, which meant that it was not clear what the “warm bodies” of personnel were actually doing. Significant areas, where there had been a year on year increase, were preparation of performance information (R37 million) and IT services (R1.2 billion), and the involvement of the State Information Technology Agency (SITA) and the IT components of departments needed to be investigated. The AG also found that there is insufficient skills transfer. The consultants are appointed because the skills are not present in Departments; yet there is no process in place to ensure that when they leave the skills will have been transferred so that internal staff will be able to continue the process. Without this transfer of skills, there will be no return on the investment and there is the potential of creating a dependency on the consultants. Other areas of concern here are adequate planning and appointment processes, and performance management and monitoring of consultants. The AG found that often the officials responsible for oversight of consultants are at a low level, with more senior people having no expertise in the processes, which made it difficult for management to assess the quality of the consultancy being provided.
Ms Domingo spoke to performance management, and said the foundation of effective governance and accountability is defined within the performance agreements. Legal requirements were set out for submission of performance agreement, especially with senior management. During 2014/15 there was a major dip in compliance to 18% although 2015/16 had seen a marked improvement to 69%.
The financial disclosure framework also recorded a trend over the last three years of a fall in the compliance rate of 4%, and only a 1% improvement in instances of compliance in full. One quarter of departments submitted no information financial disclosure of senior management.
There had been a huge increase in the finalisation of financial misconduct cases, from 290 cases in 2013/14 to 563 in 2014/15. The South African Police Service reported the most - a total of 311 cases. Speaking to the costs of financial mismanagement, she noted that between 2012/13 and 2013/14 there was a decline in the amounts not recovered, but for the last two years there has been a sharp increase in the amounts not recovered, from R12.2 million to R29.4 million. The Department of Water and Sanitation failed to recover R9.5 million, the Department of Telecommunications and Postal Services lost R4.9 million, and the National Prosecuting Authority lost R5.3 million.
Ms Domingo then spoke to payment of invoices. In 2014/2015 there seemed to be a decline in the number of invoices paid after 30 days, but in 2016 so far there had been an increase in the number of invoices that were unpaid after 30 days. The value was also significant, at R395.67 million.
Ms Domingo then turned to the disciplinary matters, specifically suspensions. The number of suspension and periods of time for which people are suspended, for the disciplinary issues raised in MPAT and the AG’s consolidated reports, are of importance. In 2014/15 the number of employees suspended had decreased, but the average length of time suspended had increased. For the last three years there had been a downward trend in the cost of suspensions, from R45 million in the 2012/13 financial year to R32 million in 2014/15, although it was notable that any suspensions still did cost the public service a lot of money.
Ms Domingo was able to give “a global snapshot” on vacancies. There had been an increase in the number of posts and filled posts within the last two years. Departments seemed to be managing their vacancy rates, but there were posts additional to the establishment being created. For instance, while the vacancy might be below the 10% norm, the number of posts additional to the establishment had almost doubled between 2013/14 and 2014/15.
Staffing numbers were of particular concern in the Department of Public Works (DPW), which now had 48.2% staffing, a rise from 21.6% in 2014/15. These figures mainly resulted from the 29.2% in Programme 3 (Expanded Public Works) and the 53.4% in Programme 4 (Construction and Property Policy Regulations). Programme 3 had less than half its staff complement and one might ask how it kept running.
The Department of Communication numbers were now at 26%, up from 11.5% in 2014/15, and this was attributable to the 40.6% staffing at levels 13-16 and the 40% at levels 6-8.
The Department of Human Settlements was now at 21% from 14.5%, impacting mainly SMS and MMS levels 9-16.
Ms Nzimande said that the PSC had an important task. The value of human resource management and the impact of the Committee’s oversight cannot be underestimated. Three out of the four departments which had not performed well in managing costs and improving their implementation also had problems in filling vacancies and most particularly the HoD posts, which created instability at the level. The Committee had also recommended that attention be focused on payment of invoices, and the issue had been moved from National Treasury to the Presidency, with dedicated resources, and this initiative was becoming successful.
The opportunity presented by the review of the PPILIHR was quite significant, and it was an area where resources could be saved. She suggested that it made no sense to delay matters such as decisions on claims and payouts, if another official in another department would be equally competent to make a decision; it would not be necessary to get in a consultant. PSC was recommending that specialists in the system should be used to provide advice across departments wherever possible and they could also have a far-more hands on approach than consultants.
Ms LV Sizane, Commissioner: Leadership and Management Practices, Public Service Commission, suggested that this presentation presented useful information for Members when exercising their oversight function. The PSC suggested that committees should call in departments to present their plans before their budgets were approved, to ensure that they would then do what Parliament had approved. She noted that money was being lost – not stolen – by being used on ad hoc projects, which meant that the real targets were not achieved. Parliament should also be looking carefully at the wage bill, since departmental structures could be very heavy and consume a lot of the budget. When so much went on salaries, the people in the posts actually had little to do because no money was left for implementation of projects.
She noted that the Performance Management Development System is very weak in government and that was why officials would outsource to consultants. They were unable to do the work themselves, and this happened even at Head of Department (HoD) levels. Very few HODs had submitted their performance agreements and have had their performance managed, despite their high salaries.
She also noted that the figures presented on suspensions were under-stated. There is another category where Departments hide suspensions, under what is termed “special leave”. Special leave was actually ruled as unlawful by the Labour Court, and in addition to that the direct costs of this leave were not being reported. She strongly urged that Members should put direct questions to departments on how many people were on “special leave” in addition to being suspended.
Another point related to posts additional to the establishment, as in the area of Human Resource Management or KPA 3, departments are very weak. Instead of following the somewhat complex rules around appointments, some departments would appoint people additional to establishment. This resulted in continuing high vacancy rates and high wage bills, particularly since many of the people appointed came in at levels 14 or 15.
She wanted to speak also to sharing of skills between departments. The Department of Correctional Services(DCS) obviously had a core function of corrections, but was faced with overcrowding and too few staff, because a large amount of money was being spent on other personnel like doctors, nurses, trainers. In the PSC’s view, the Departments of Health and Basic Education should be providing those services, and it would seem to make sense rather to second people from the other departments to DCS. Another point was that health professionals in prisons were aggrieved as their supervisors are correctional officers who were not able to assess their performance with knowledge of their particular skills. She urged Members to approach the Minister of Health as a first step, so that health professionals can be seconded to DCS. Similarly, it would make sense for the various lawyers in government to be appointed through the Department of Justice and Constitutional Development, so that they would actually be able to keep up their practising skills. Many lawyers in the Office of the State Attorney and Chief State Law Advisors were instructing private advocates; meaning they too were effectively managing consultants instead of using their own skills.
Mr A McLoughlin (DA) was pleased to see the tables on performance and expenditure. He asked for a breakdown of the “other services” figures on slide 22, and the reasons for the substantial drop in financial misconduct on slide 26, so that lessons could be learnt and applied to other situations also. He also needed the amounts not recovered on slide 27. On slide 29, he asked for clarity whether the amounts highlighted were paid after 30 days, and the rest of the payments were made on time.
Ms Domingo confirmed that the rest of the payments not highlighted were made on time.
Ms C Madlopha (ANC) appreciated the quality of work done by the PSC and advice given, which will strengthen oversight. She reminded Members of the call by the President in 2012 to reduce consultancy but asked for an indication of those departments relying heavily on consultants. On slide 17, on the MPAT scores, a challenge with finalisation of disciplinary cases was identified, and she asked who was responsible for concluding these cases and whether these included cases referred to other bodies also. If the figures were not disaggregated, then she asked that this should be done in future. The presentation indicated that there was improvement, but she wondered how far are Departments with finalising performance agreements and what advice the PSC would give on this point. Perhaps the Ministers ought not to be responsible and dedicated staff with expertise used. A problem was that even when people were taken to disciplinary hearings, it was difficult to sanction if there was no performance agreement. She suggested that the Committee should call in the Department of Telecommunications and Postal Services, to explain how it spent 97% of its budget and achieved only 24%. She asked that the PSC name the departments who were not imposing consequences for non-performance by their officials.
Ms M Manana (ANC) requested the departments which are not complying with financial disclosure to be identified, so that Members may take this up. The same applied to departments which were not paying their invoices within 30 days, or who were engaging in financial misconduct. Members needed specifics, so that they can call departments to account about why they are being defiant.
Ms D Senokoanyane (ANC) said the underachievement by the identified Departments is far below 50% and she would be interested to know what they spent the money on. To achieve such a low percentage and yet spend so much money was a great concern. The use of consultants was another major challenge, even at provincial level, particularly consultancy increase in the IT services, which she would have expected to decline. Senior management were all supposed to sign performance agreements, and she thought that the 18% compliance figure in 2013/14 was indicative that the managers really did not seem to care; and if they did not care, they would probably not ensure that lower levels were held to account. She was horrified that so much money was being paid to those suspended, in addition to paying those acting in their posts and even though the suspensions had dropped, they were still too high. She was also dismayed to hear about the “special leave” which indicated that people were not reporting correctly. She was also for the first time being made aware of people being appointed additional to establishment and asked who was supposed to monitor this, and how it could happen that more than 16 000 people were not properly in posts. She asked which departments were involved in this.
Ms S Shope-Sithole (ANC) congratulated the PSC for an excellent report, which was certainly speaking directly to how Members could conduct oversight. She noted the ANC move to “change gear” and suggested that this report would arm the Members with the tools to address the issues directly on oversight visits. She suggested that the Committee should now study this report, map out a strategy and perform specific oversight to show departments that Members knew precisely what they wanted and were aware of what departments were doing.
Dr M Figg (DA) noted that the PSC had provided a good tool, and he thought that some of the information was quite damning of the departments. He felt that the Committee should not be passive with the information, but use the information seriously, and he appreciated the hard facts presented. He requested if the PSC could provide information up to 2016.
Ms Nzimande said the PSC has taken note of areas where the Committee needs more information and expressed gratitude for the positive comments on the presentation.
Ms Sizane answered the question on the finalisation of disciplinary cases, saying that the report did not cover cases which were to be finalised by other bodies, such as the Special Investigating Unit (SIU) – for there, after the SIU investigation had been commissioned, the department would have to await its report before taking any further action against those who might be implicated. It was tricky if departments did jump the gun and suspend people on mere suspicions – there had been one case, to the dismay of the PSC, where an official had been on suspension for 12 years.
Ms Sizani said that she could provide information on which HoDs had not signed their performance agreements, and she agreed that where the HoD was not compliant, it was likely that the entire department was not compliant. The nature of the Performance Management and Development System ran from the top, down. If there was lack of understanding of the HoDs they could approach the PSC for assistance.
On the question of suspensions or special leave, she again urged that Members should follow up on officials who are put on special leave. Commenting on the questions around posts additional to the establishment, she conceded that sometimes these posts might happen as a result of a reconfiguration of a department or lack of organisational design. When a department restructured, a list of all surplus posts should be sent to the Department of Public Service and Administration, and it was possible to absorb the excess personnel instead of advertising again – particularly for those in support functions like supply chain or finance, because they are not speciality positions. A new trend which is emerging is that if a department sees that a person is additional to the establishment, some have suspended that person, although there has not been any misconduct, or advertised without trying to absorb.
Ms Nzimande said the PSC has done some work on the use of consultants, and had specifically looked at this when the use of consultants was raised in the State of the Nation Address. A report would be shared with the Committee.
Ms Domingo answered questions on consultancy as well. A consultant was defined in Auditor-General reports as expert evaluating services. At times, consultants were contracted to value property or define benefit plans, but consultancy charges should exclude legal costs and payments to the audit committee members. The PSC will need to look at the specific Annual Reports to get more detail on departments but could forward the information.
The Chairperson said that Members were essentially making the point that some issues required an immediate follow up. In relation to the audit outcomes, the four departments with repeat poor audit findings needed to be followed up. Members also need to have a look at performance management, financial misconduct and special leave. In addition, there were other recommendations that came from the Committee’s meeting with the PSC in 2015 that still needed a follow-through.
Election of the Chairperson of the Committee
The Acting Chairperson said the Committee has a new Member, Ms Y Phosa (ANC), who needed to be formally elected as the new Chairperson of the Committee, in order to stabilise and provide full-term leadership for the Committee.
He relinquished the Chair, and the Committee Secretary formally called for nominations for a new Committee Chairperson.
Mr N Gcwabaza (ANC) nominated Ms Phosa as Chairperson, seconded by Ms Shope Sithole, and with approval indicated from other Members.
There being no further nominations, the Committee Secretary asked Ms Phosa whether she accepted the nomination and she confirmed that she did. .
Ms Y Phosa then thanked Members for showing confidence in them, and noted that she knew Members and looked forward to a good and productive working relationship with them. She was aware that all Members were united in their desire to work together and that was the reason for the success of this Committee. She looked forward to heading a formidable team in pursuit of its mandate; the Members were the real key to success and she would merely be the driver. She also urged Members in their work to above political ideologies, because the important work required that they walk together; whilst they would of course be able to express their views, they should attempt to avoid politicisation of issues in order to work for those whom they represented.
Dr Figg thanked Mr Gcwabaza for the sterling job he did as an Acting Chairperson. He confirmed that the new Chairperson would be able to see that in this Committee Members indeed did work as a strong team. The DA wished to congratulate Ms Phoza on her election and looked forward to working well with her.
Ms Madlopha, on behalf of the ANC, welcomed the Chairperson and pledged to work together with her took and thanked Mr Gcwabaza, as Whip, for taking over as Acting Chairperson. Members were appreciative of how Mr Gcwabaza treated all Members equally and worked tirelessly as both a Whip and Chairperson.
Ms Shope Sithole also wished to express her welcome and support and quipped that she was hoping that the new Chairperson would not make Members work as hard as Mr Gcwabaza had done.
The meeting was adjourned.
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