Department of Social Development replies to questions on quarter 3 and 4 2015 performance; 1st quarter 2016 performance briefing

Social Development

21 September 2016
Chairperson: Ms R Capa (ANC)
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Meeting Summary

The Department of Social Development firstly answered questions outstanding from a previous meeting, relating to spending in the third and fourth quarters of the 2015/16 financial year. It was explained in answer to those questions that R13.8 million was spent on domestic travelling and accommodation for both the Minister and the Deputy Minister, and R7.3 million was spent on foreign travelling for the Minister and the Deputy Minister. This represented in total 41% of the Programme 1 allocation. In the Programme: Corporate Services  R8.6 million was spent on marketing, while R13.4 million was spent on promotional materials, which, in total, represented 17% of the total the allocation to the programme. Members asked for further breakdowns on the travelling figures, indicating how much was spent on each aspect of travel, and stressed that in future the Department must come with all the figures fully prepared.

The Department then presented its financial and performance report for the first quarter of the 2016/17 financial year. There were 103 targets, of which 65% were fully met, 19% were in progress and 16% were not achieved. Under Programme 1 details were given of the community care centre construction, integration of gender aspects into four policies, increased communication through social media, and development of indicators aligned to the outcomes-based framework. New frameworks and prototypes had been developed for the National Integrated Social Information System, the Child Protection Register and the Alternative Care. In the Social Assistance programme, not all the set targets were met. Programmes for Social Security policy and administration, and Welfare Services, all were fully met. Speaking to the spending, the Department explained that in Programme 1, 30.8% of the total yearly allocation was spent, with high expenditure relating to IT licences and services, an office lease and Auditor-General's fees. Programme 2 saw 24.4% of yearly spend, and Programme 3 had spent 22.5%, with the lower spending explained as projects that were only due for finalisation later in the year, plus lower-than-expected litigation costs. Programme 4 had only spent 8.6% of voted funding. There were delays in setting up substance abuse centres in Northern Cape and Free State. Older persons and youth initiatives would only see spending in the third quarter. Transfer payments for the HIV and AIDs organisations were due in the third and fourth quarters. In Programme 5, there was spending of 41.3% of voted funds, but there was lower than expected expenditure on community development because of non-compliance by the Food Relief agents in provinces who therefore did not receive their transfers and subsidies. DSD said that the percentages were in line with usual spending by this Department as most transfers would usually occur only in the second quarter.

Members questioned the statements on the lower spending in this quarter and the reasons why NPOs were not getting their grants, particularly since they probably were dependent on funding for their operations. They asked what prototypes the DSD had used in the past and why new ones were now proposed. They particularly questioned the spending on Ministry expenses and commented that they were not happy with the numerous virements seen in the past, with one Member suggesting that any changes in the budget should be overseen and approved by the Committee, and the same should apply also to changes in policies. They stressed that the core functions of the DSD must never be allowed to suffer through virements. They questioned if the DSD was meeting strategic targets, asked if the Gender Based Violence Command Centre would be replicated in other provinces, asked what the DSD had actually done to help the NPOs to become compliant, and how effective the training was.

The Committee adopted minutes of meetings between 24 August and 14 September.


Meeting report

Department of Social Development Quarterly Performance reports
Previous briefing on 3rd and 4th quarters 2015/16: responses
Mr Thokozani Magwaza, Director-General, Department of Social Development, said that the delegation would firstly provide responses to questions asked during a previous analysis of the Quarter 3 and 4 report.

The Committee had asked for a breakdown of the amounts spent on “Ministry” under Programme 1 and a breakdown of what was spent on communication in the Corporate Services  division.

Mr Clifford Appel, Chief Financial Officer, Department of Social Development, took the Committee through the response. Under Programme 1, for the Ministry, R13.8 million was spent on domestic travelling and accommodation for both the Minister and the Deputy Minister. R7.3 million was spent on foreign travelling for the Minister and the Deputy Minister. Altogether, the total percentage of spending was 41% of the allocation for the programme.
Under Corporate services: Communication, R8.6 million was spent on marketing while R13.4 was spent on promotional materials. Altogether, the total percentage was 17% of the allocation for that programme.
Ms S Tsoleli (ANC) wanted clarity on the period in which these amounts were spent.

Mr Appel said it was for the full 2015/16 financial year.
Ms H Malgas (ANC) asked that a further breakdown be given. The figures given already did not specify what was spent precisely on what aspects.

Ms E Wilson (DA) asked how the amount is justified and how it was spent.
The Chairperson asked that the Department of Social Development (DSD) officials should try to give more clarity and if not, then the Minister would be asked to answer the questions in full. She clarified that the Committee wanted to know, for example, how much was spent on delegates who accompanied the Minister.
Mr Magwaza requested that the Department then be given more time to get the exact breakdown of all amounts as he did not have it with him.

Members were happy to do so on this occasion, although Ms D Tsoleli (ANC) asked that a specific date be mentioned by which the DSD must reply, and the Chairperson asked that in future the Department must be prepared to account fully.
Department of Social Development 1st quarter 2016 performance report
Mr Thabani Buthelezi, Chief Director: Monitoring and Evaluation, DSD, took the Committee through the presentation on the 1st quarter 2016 performance. The Committee had requested that when reporting, the Department must provide the total number of targets for the reporting period. Therefore he wanted to state that the total targets for the period under discussion were 103. He then went on to describe the specifics as follows:
Programme 1: Administration
An annual target of constructing 18 community care centres was set. Five (5) were set to be constructed in the first quarter and that was achieved.
- Annual target of integrating gender into four policies was set. One integration was set for quarter 1 and that was achieved.
- Annual target of getting 20 000 followers on social media account was set. 5 000 followers were expected to be included in quarter 1 and the DSD had 1 511 139 followers.
- Annual target of hosting 24 public participation events for the Minister and 24 for the Deputy Minister. For quarter 1, twelve public participation events were planned. A total of 23 public participation events were conducted, 13 for the Minister and 10 for the Deputy Minister.
- Annual target of developing a common set of indicators aligned to the outcome based framework, with one target in this quarter for consulting programme managers at National office on indicators. Consultation took place and a draft set of indicators for the sub-outcomes was developed.
- Annual target of developing and vetting 98% of contracts through the contract management system was set. 19 contracts were received and vetted through the contract management system.
- The target of submitting the Annual Financial statements for 2015/16 for year-end audit was achieved.
- The target of designing and developing prototypes for National Integrated Social Information System (NISIS) in this quarter was set and achieved.
- The target of designing and developing prototypes for the Child Protection Register and Alternative Care was set and achieved in quarter 1.
Programme 2: Social Assistance
The set targets were not fully met.
Programme 3: Social Security policy and Administration
The set targets for the quarter under review were fully met
Programme 4: Welfare Services Policy Development and Administration
All of the set targets for the quarter under  review were fully met.
Programme 5: Social Policy and Integrated Service Delivery
The set targets for the quarter in review were fully met. (see attached presentation for full details)
Financial matters
Mr Appel took the Committee through the expenditure of the Department for the reporting period.
Under Programme 1, 30.8% of the voted fund was spent. The high expenditure on IT under this programme related to invoices paid for IT licences and State Information Technology Agency (SITA) services for the financial year.
The high expenditure on goods and services under Programme 1 related to invoices paid for information technology licences, the first quarter leasing agreement for office accommodation as paid to the Department of Public Works, the Department fleet services and the Auditor-General's fees that had been invoiced for the audit of the 2015/16 financial year.
Under Programme 2, 24.4% was spent out of the total annual voted funds.
Under Programme 3, 22.5% was spent. Low spending in this programme related to projects being finalised in the 3rd quarter of the financial year. In addition, very few litigation cases had been reported in the first quarter of the financial year, and this was something difficult to predict.
Under Programme 4, 8.6% of the voted funds were spent. Low spending on substance abuse was linked to delays being experienced in the construction of the substance abuse centres in the Northern Cape and Free State provinces,  in terms of the conditional grant allocation of R85 million for the 2016/17 financial year.
Low spending on older persons was linked to the fact that the planned ‘Older Persons Games’ was only scheduled for the 3rd quarter of the financial year.
Low spending on youth was similarly explained by the fact that the planned ‘youth camps’ were scheduled for the 3rd quarter of the financial year.
Low spending on HIV/AIDS related to the transfer payment to the HIV and Aids organisations, and that too was only scheduled to be released in the 3rd and 4th quarters of the financial year.
Under Programme 5, 41.3% was spent out of the voted funds. Low spending on community development was affected by issues around compliance by the Food Relief agents in provinces, who were contracted to provide for the Food Relief sub-programme.

There was also lower spending than expected on transfers and subsidies to Non- Profit Organisations (NPO), again attributable to the compliance issues by the food relief agents.
Mr Appel also wanted to stress that in general, transfers happened during the second quarter, and usually the only transfer in the first quarter of a financial year would relate to the Social Security Agency of South Africa (SASSA). The lower spending in this quarter was quite usual for the Department.

Ms Wilson wanted to question the expenditure on Programme 4. It had been said that the reason for lower spending was that NPOs had not been funded. However, she wanted to point out that many of the NPOs were reliant on the quarterly payments in order to function effectively. Without those payments they could not function effectively and she asked whether the DSD was not therefore jeopardising them. She asked why the DSD was developing a new prototype for the NISIS and Child Protection Register, what existed before and what the DSD had been using to now? She pointed out that already 47.58% of the allocation had been spent on the Ministry, and wondered if the DSD was expecting another virement?
Ms P Sonti (EFF) asked her question in her vernacular language without an interpreter.
Ms Tsoleli asked what Mr Appel had meant by ‘low spending in quarter 1 as per the norm’. She asked why the transfers were not being paid on time? She questioned whether the DSD was meeting its strategic priorities, since it was already mid-term. She also said that the DSD should reflect upon its strategic priorities in all of its reports.
Ms Malgas asked when the Gender Based Violence Command Centre will be replicated in other provinces, such as the Eastern Cape. She wanted to know the exact reasons behind the over spending in Programmes 1 and 5. She also questioned the deviation under compensation of employees.

Ms C Dudley (ACDP) said that the lack of payments to the NPOs was of concern and she asked if this had only to do with non-compliance. She asked what the DSD had actually done to help the NPOs to become compliant, and how effective was the training that the DSD was doing.

The Chairperson asked that the Department submit any new plan or policy to the Committee for purposes of oversight.
Mr Appel responded that the DSD would usually assist the NPOs with compliance. The Department had issues with the social services professional councils, but this was now being resolved so that transfers can be done.
He noted that the Gender Based initiative could not be replicated in each province as it was a national line.
The Chairperson asked if there was monitoring being done in Programme 1.

Mr Appel spoke to the question raised on the virement by telling the Committee that the Department was trying to work on fixing the baseline to stop any future problems.
Ms Tsoleli asked if the Department did follow due processes when moving funds which had been allocated for one project to another.
The Chairperson expressed dissatisfaction about the use of virements, which she said was almost being treated as a norm in the Department.
Ms Malgas said the reason for this was that there was no proper baseline and no proper budgeting. She urged that the Department must try to budget properly.

Ms Tsoleli advised that the core functions of the DSD must never be allowed to suffer when virements were being used. She asked what exactly was being done in the Programme 1 on administration that was causing the DSD to use so much money there.

The Chairperson said the Department must work on improving its irregular expenditure.
Mr Magwaza said the Department will budget properly in the future.

Ms Wilson suggested that because the budgets came before the Committee for approval, any changes to those budgets should similarly be brought back to the Committee if there were any changes.

Ms B Masango (DA) asked where the refund in respect of the illegal deductions came from.
Ms Musa Ngcobo- Mbere, Acting Deputy Director General: Welfare Services, Department of Social Development, said that the IT department was in the process of changing the programmes on the Child Protection Register because of the problems discovered. There had never been any programme for Alternative Care in existence to date, which was why one was now being developed. IN relation to the Foster Care Grant, she explained that there was always a drop in December because the children ended the school year then.

She confirmed that the Early Childhood Development (ECD) policy was approved in December. The Department had been doing capacity building with the provinces. The Department is aligning its programmes and also developing an implementation programme on the policy. It was working on the financial issues with the National Treasury so that more children could access ECD.
Ms Raphaahle Ramokgopa, Acting Chief Executive Officer, SASSA spoke to the question on the illegal deduction, noting that it had been seen to happen against certain grants given to individuals. The refund had now come back from those who had effected the deductions in the first place.

Ms Wilson also wanted to see the policies that were reviewed being brought before and monitored by the Committee.

Mr Peter Netshipale, Deputy Director General: Community Development, DSD, said that transfers to NPOs happened in  the second and fourth quarter of the financial year.
Mr Appel repeated that in future, a baseline would be fixed.

Other business: Adoption of minutes
The Committee adopted, without any changes, the following minutes of meetings:
- 24 August 2016
- 31 August 2016
- 7 September 2016
- 14 September 2016
The meeting was adjourned.


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