Department of Women on its 2015/16 Annual Report; Auditor-General on Department & Commission on Gender Equality audits, with Minister in attendance

Meeting report

Department of Women in the Presidency: 2015/16 Annual Report Analysis

Ms Jen Thorpe, Parliamentary researcher, reported that the Department of Women in the Presidency (DWP) had detailed its performance against targets determined in two annual performance plans (APPs), and the results revealed that 34 out of 72 targets had been achieved (47.22%), while the Department had spent 99.6% of its budget allocation.

The DWP had received a budget allocation of R189.1 million in 2015/16 and had also received a transfer from the Commission for Gender Equality (CGE) of R67.7 million, and therefore had R121.4 million for expenditure. Virements had been implemented in order to cover the shortfall in expenditure. The Department had received funding support of R8.3 million from National Treasury and had reported to have spent R3.9 million. However, it had not provided details of this spending and had earmarked only that the balance of this amount for promoting awareness of the 16 days of activism.

The DWP was setting targets that it was failing to achieve and was under-performing, as it was failing to even simply start the projects. There was a potentially strained working environment in the Department, as workers were being suspended for over three months. This was also of concern, as it was costing the DWP financially.

She also raised concerns that the Department was spending heavily on traveling expenses, yet was failing to meet its targets.

Commission for Gender Equality: 2015/16 Annual Report Analysis

Ms Tasneem Sterris, Parliamentary researcher, reported that the CGE had received a budget allocation of R67.7 million and an additional grant of R2 million, bringing their total funding to R69.7 million. 32% of the budget had been allocated to expenditure on goods and services, while 68% had been spent on employee salaries.

In terms of targets per strategic objectives, objective one had nine targets, of which eight had been achieved. The CGE had conducted two dialogues, one provincial and one national. However, the overall target of four dialogues had not been achieved in the year under review. The Commission said the reason for not hosting the other two dialogues had been the failure to secure a date, which was a reflection of poor planning.

Strategic objective two had eight targets, of which six had been met. She suggested that the Committee should question the Commission as to how many of the 1 235 cases that were closed had been carried over from the 2014/15 period.

All targets under strategic objective three had been met. Strategic objective four had a total of 24 targets, and 21 of these had been met. The three unmet targets were related to the 20-year review of the Commission on its achievements and failures since its inception, the organisational culture audit which had been partially met, and the link between the information communication technology (ICT) business applications to the revised business plan, which had also been partially met. 

The CGE had 102 employees in the period under review and their personal expenditure had amounted to R48.7 million. The research department and the human resources departments had the highest vacancy rates, at 50% and 33% respectively. She prompted the Committee to question why this was the case.

The Commission had recorded no irregular expenditure in the period under review. R32.7 million in irregular expenditure from the 2008-2011 financial years had not yet been condoned by National Treasury, however, bringing irregular expenditure to R33.7 million. Fruitless and wasteful expenditure, incurred as a result of interest and penalties paid, had amounted to R245 694.

Key issues for consideration: briefing

Ms Kashifa Abrahams, Committee Content Advisor, briefed the Committee on the key issues to be considered in assessing the DWP. She highlighted the fact that the Department was new and had been established in 2014. She pointed out the restructuring that had taken place and the need to give time for the adjustment of the structure and allocated staff.

Some challenges in the DWP included name changes of programmes, making it difficult to compare year on year performances, as well as the Department’s failure to meet targets and therefore carrying them over into the following period.

She questioned how the DWP’s mission and vision would allow it to meet its strategic priorities in the coming five years.  She suggested that the Committee should request the Department to present its findings on all analysis, monitoring and evaluations undertaken, and the reports compiled should be referred to the Committee for consideration. The Department should be urged to finalise the monitoring and evaluation frameworks, including indicators, and present them to the Committee within a stipulated time frame.

The DWP should also inform the Committee of the initiatives it intended undertaking timeously in order for the Committee to conduct oversight at these events where possible. Reports of such initiatives should be referred to the Committee, clearly outlining the outcomes, the number of beneficiaries, stakeholder partnerships entered into and the costs incurred.

The Department’s performance had been poor in Quarter 1 of 2016/17, as it had managed to achieve only 16 of its 34 targets (47%). However, based on what the DWP had reported on as targets achieved for the first quarter within its core programmes, there appeared to be less synergy between what the Minister had identified and the actual deliverables which had been presented to the Committee. She therefore recommended that the Committee ask how the Department intended to deliver on the priorities it had identified, and also how it intended to influence all government departments to adopt gender sensitive planning in the absence of a finalised monitoring and evaluation framework and a gender responsive budgeting framework.

The Department had spent almost its entire budget and had achieved less than half of its targets. The key reason cited for not achieving 39 of its 73 targets (53%) was attributed to targets that were not SMART or achievable, hence the revision of the APP for the last two quarters.

Of the significant achievements pointed out by the Department, eight were related specifically to human resource (HR) matters, five to finance matters, 12 to events, and five to producing a report/document, one of which was still a draft strategy, and another the tabling of the Strategic Plan and APP, which were compliance matters. Thus, of the 30 notable achievements, just about half wererelated to administrative matters and the rest to events with reports.

Notwithstanding the achievements which the DWP had cited in the administration programme, the Auditor General of South Africa (AGSA) had raised key findings, many of which were repeats from the previous financial year. According to the audit committee’s report in the annual report (AR) of 2015/16, its view was that risk management in the DWP required the immediate and serious attention of management. She called on the Committee to ask the AG what the audit and risk committee had specifically recommended to management.

DWP and CGE audit outcomes for 2015-16

Mr Rehaan Mohamed Ali, Acting Senior Manager: AGSA reported that the CGE had achieved a financially unqualified audit outcome with no significant findings on compliance with legislation and predetermined objectives for the 2015/16 financial year, while the DWP had achieved an unqualified audit outcome, with findings on predetermined objectives and compliance with legislation, over the previous three financial years. The portfolio’s overall audit outcomes, however, were found to have improved.

During the 2015-16 financial year, the DWP non-compliance had been related to the internal controls having failed to prevent, detect or correct material misstatements in the financial statements; and having authorised irregular or fruitless and wasteful expenditure and transactions, where the procurement processes were not followed. No significant non-compliance with key legislation had been identified at the CGE.

The quality of annual performance plans had stagnated due to the Department’s report in the Annual Performance Report (APR) on strategic objectives, which had not been included in the annual performance plan (APP) in the 2015/16 financial year. No material adjustments had been made to the submitted annual performance reports for the last three financial years.

In order to maintain or improve the current status of the overall audit outcomes, focused interventions and commitments were required, including the implementation of internal controls that would prevent and detect non-compliance.  Management was required to strengthen the review processes to ensure the controls were working as intended.The action plans of the DWP and CGE needed to be implemented and intensified to address internal and external audit findings and recommendations.

At the DWP, limited assurance had been provided by the senior management, the accounting officer and internal audit. This was due to the lack of review and monitoring processes, as well as consequence management processes.  Internal audit processes had failed to identify the material non-compliance. Assurance had been obtained from the audit committees, the Minister and the Portfolio Committee for their support to drive clean administration and improved audit outcomes.

The root causes of stagnation in the audit outcome of the Department had been the slow response by the management to fully address audit findings, inadequate supervision and review process implementation, and the lack of a consequence management process for poor performance and transgressions. Although the CGE had a clean audit, this outcome might not be sustainable as there were repeat issues.

The AG had met with the Minister on 22 July 2016 to discuss the audit outcomes for the Department and the status of the implementation of commitments. New commitments were to be solicited from the Minister during the new financial year, but certain prior year commitments were reinforced.  The Minister had requested the audit team to continue with the quarterly engagements regarding the status of key controls in the portfolio.

He suggested that the Portfolio Committee should request that management report quarterly on the implementation and progress of the action plan, the status of key controls, as well as receive a list of action taken against transgressors to hold them accountable for their actions.

Discussion

Ms G Tseke (ANC) asked the AG what their reason was for not putting a disclaimer on the poor performance of the Department. The DWP’s monitoring and evaluation was said to be the worst performing of all departments in the country.

Ms M Chueu (ANC) stated that the Department needed to implement strategies to deal with non-compliance. She called on the Director General (DG) to take responsibility. If the internal auditors were not doing their jobs, they should be fired.

Ms N Tarabella-Marchesi (DA) asked who the people in the Department were, and whether they were qualified, particularly the audit committee. Why was the Department underperforming, and why were they constantly changing the programmes they ran, questioning what privileges they had to change the programmes? What governed a report to be deemed unqualified?

Mr Ali replied that a qualified report was determined by the materiality of the financial statements, based on the opinions of the users of the statements. A report was therefore deemed unqualified if the auditors found errors in the report. The issue of unauthorized expenditure had been a problem within the Department for a while, but the AG was not responsible for determining how the Department spent its budget, and could only advise them.

Ms D Robinson (DA) asked the AG who took over in advising the Department, beyond what the AG was authorized to do.

Mr Ali replied that a disclaimer could be given only in the case where the AG got an audit. If there was a misrepresentation report in the financial statement, they would correct the financial statement and receive an unqualified report. In dealing with the irregular expenditure, it was necessary to investigate the irregular expenditure and figure out who was responsible.

Ms Wilma Joubert, Manager: AGSA, said that in terms of legislation, the concerns of the audit committee should be escalated to the Minister

The Chairperson asked if the AG was doing all in its power to ensure that the Minister and the Department fulfilled their roles.

Ms Chueu said that there was creation of structures that were not assisting the DWP to perform optimally. The AG was providing information that was only financially related, and not performance related. She expressed concern that the AG was not concerned with the accuracy of the receipts they got from the Department and was focused only on getting the receipts.

Ms Tarabella-Marchesi  expressed concern that the report given by the DWP had not been accurate and was a copy paste of previous reports, not a true reflection of what was happening.

Ms Robinson supported Members’ observations on the inaccuracy of the report, and said that the Department was auditing itself.

Ms Abrahams said there was need for the DWP to provide more specific details about the irregular expenditure, such as which manager was involved and in what specific programme. She recommended that the audit and risk committee be invited to present to the Committee .The issue of oversight should be more specific and oversight recommendations should be stringent.

Ms Chueu said that recommendations had been made to the DWP and the CGE, but only the CGE had complied. The new management in the Department and the new DG needed to be hammered.

Ms M Khawula (EFF) said that it was a waste of time, as money given to the Department was being wasted on fruitless expenditure. She asserted that the Minister was not taking the DWP seriously, as there was a budget but women were not benefiting from it, or being empowered. There was a need for the Department to intervene in the “fees must fall” issue, as it also affected women.

Ms Chueu commented that the Department kept changing its three-year programmes into five-year programmes. A lot of programmes were being started but were not completed, and ended with unachieved targets.

Ms Robinson asked how involved the Minister was with the programme, and whether she was going to attend the meeting.

The Chairperson asked the researchers to advise the Committee on how it could best to address the presentation that was to be given by Department. She said that the failure of the Department would be reflected as a failure of the Committee. It needed to know what the DWP was doing to alleviate the challenges that women in the rural areas faced, and was concerned that most of these women were not even aware of the existence of the Department. The Committee did not want women to be dependent on grants alone -- they needed to be self-sufficient.

Ms Abrahams suggested that in future, the Committee should hold two-day meetings, where the first day would be for general briefings and the second would be for briefings from the Department on specific programmes. These meetings should not be held with only the DG and the chief financial officer (CFO), but with the actual workers on the ground. She recommended that the Committee address the issue of the DWP’s traveling expenditure and 100% budget consumption, yet no targets were being met. The Department was spending a significant proportion of its budget on salaries, and not on projects.

Ms Tarabella-Marchesi  commented that there was need to look at the human resource management, as the DWP’s failure to meet targets could be due to the incorrect people being hired. She expressed concern that R37.1 million was being spent on the salaries of senior management in the Department. She also noted from the Department’s annual report that only 11 skills evaluations had been conducted out of 111, and could not reconcile this.  

Department of Women in the Presidency: Annual Report

Ms Susan Shabangu, Minister of the Department of Women in the Presidency, highlighted at the outset that she acknowledged the existence of gaps and weaknesses in the DWP due to the restructuring process that had taken place. It was the first stage of the Department trying to redefine its mandate and also the first tier of an approved structure for the DWP.

Ms Jenny Schreiner, DG: DWP, reported that of the 73 targets planned in both the APPs of 2015/16, 34 targets had been achieved (47%), while 39 (53%) had not. In Programme One, out of 26 targets planned, 20 (77%) targets had been achieved, while six (23%) had not.

The significant achievements of Programme One included the start-up of an organisational structure based on the new mandate and revised strategic intentions. Posts had been reprioritised, including the downscaling of corporate management from a branch to a chief directorate in favour of the creation of an additional core branch. Job and competency requirements of the new structure had been unpacked, consulted and approved.

A skills audit process had been launched by the DG at a staff imbizo, and a dedicated intranet webpage had been created to communicate the processes. The Department had also embarked on the development of a business case to present its funding requirements to National Treasury. The audit function, including the audit and risk committee, had become operational, and the fraud and risk management framework had been approved.

The achievements for Programme Two included the Department’s participation in the Nine Point Plan project management unit, to engage departments on the implementation of the Presidential directive and the recommendations of the Status of Women in the Economy Report. The discussion paper on increasing women’s participation in formal employment had been initiated and reported in the annual report as work in progress, due to the extensive consultation it required. This target was part of the financial inclusion discussion

The targets that were not achieved in Programme Two since they had been revised as part of the strategic review that informed Q3 and Q4, included the intervention plan for women’s access and participation in the infrastructure value chain, and the intervention plan developed for women’s access to funding opportunities.

For Programme Three, two of the 11 targets planned had been achieved, while nine (82%) had not been achieved. The significant achievements in the programme included the launch of the report on the Status of Women in the South African Economy at the National Women’s Day commemoration, and the clearing and finalisation of a backlog of country reports on international instruments.

Areas of non-achievement in Programme Three included the discontinuation of the research report on access and participation of young women and girls in Science, Technology, Engineering and Mathematics (STEM) fields, as well as the discontinuation of the gender policy brief on the black industrialist programme, among others.

In Programme Four, 11 of 19 targets (58%) had been achieved, while eight (42%) had not. Some of the significant achievements had included the commemoration of National Women’s Day with 20 000 women in Sasolburg in the Free State, where 20 caterers facilitated by 20 women had been appointed to cater for the crowd. There had also been a march against trafficking and exploitation by women from South Africa and Lesotho at the border of Maseru, and the unveiling of a tombstone of a 13-year-old girl who had been raped and brutally murdered as a result of gang violence in the Free State.

The DWP had implemented strategies to improve areas of underperformance. These included the development of a three-budget programme structure, aligned to the organisational structure, to enable it to achieve its strategic objectives and enhance its performance for the 2016/2017 financial year. There was also improved strategic, annual performance and HR planning that would enable the Department to secure adequate financial resources, and the implementation of a Performance Information Policy which contained consequence management for non-compliance.

In terms of governance the DWP had formed an audit and risk committee, and was working to ensure that risk mitigation was a standing agenda item during committee meetings. In line with National Treasury regulations, the Department had conducted a strategic risk assessment pertinent to the five-year strategic plan. It had also conducted an operational risk assessment in line with its APP.

The audit and risk committee had met and held discussions with the AG to ensure that there were no unresolved issues. It had noted with concern that there had been an increase in the number of findings that had not been resolved adequately by the Department of Women in the previous financial year. Management had assured the audit and risk committee that all findings raised in previous financial years and the current financial year would be addressed.

The Department’s HR expenditure had amounted to R120.7 million in the 2015/16 period, with most of the spending being in administration (R84.9 million). Most of the total personnel expenditure of R63.6 million was on senior management (levels 13-16), who received an average annual salary of R1.02 million each.

The Department had received a final appropriation of R189.1 million for the 2015/2016 financial year. The appropriation included a transfer amount of R67.7 million for the Commission for Gender Equality. The expenditure incurred during 2015/2016 had amounted to R188.4, which was 99.6% of the final appropriation. The under-spending of R736 000 was mainly on payments for capital assets.

Irregular expenditure of R5.2 million in 2014/2015, and R8.6 million in 2015/2016, was incurred mainly as a result of partial compliance with supply chain management (SCM) processes. Fruitless and wasteful expenditure of R2.02 million was due to staff-related matters, as part of the restructuring process that the Department had undergone during these periods. R3.3 million of irregular expenditure had been condoned by National Treasury, of which R2.1 million had been spent on SCM and R1.2 million on the compensation of employees.

The Department was embarking on a major drive to ensure compliance with SCM processes. The transactions reported on in connection with irregular, fruitless and wasteful expenditure would be investigated and remedial action would be taken.

The DWP had spent R3.9 million on various international trips in the 2015/16 period, R7.9 million on Women’s Month, and R3.4 million on the 16 Days of Activism, which had been funded from general budget support (GBS) funding, not the Departmental vote.

The DWP was taking various measures to improve its financial management, including ensuring that in-year monitoring (IYM) on budgets was done monthly, where spending pressures would be identified, and reprioritising of funds would be made through shifting. The Department had also embarked on a major drive to ensure compliance with SCM processes in respect of other transactions. The transactions reported on in connection with irregular, fruitless and wasteful expenditure would be investigated and remedial action was to be taken. No cases of financial misconduct had been reported during the 2015/16 financial year.

Discussion

The Chairperson said that more information should be provided on the actual impact and outcomes of the events that the DWP hosted for the sake of measurement and performance reviews. She asked that the Committee be briefed on the progress made by municipalities in assisting women.

Ms Tseke said that despite agreeing with the Minister that the Department was new, she was not entirely convinced with its performance, as the management in the Department was the same people who were aware of the DWP’s mission and vision. It had spent its entire budget, but only 34 of the 74 targets had been realised. Despite the revision of the APP, even the revised targets had not been achieved. She requested a progress reports on the status of the women’s financial inclusion paper which, according to the DG, was waiting for approval by the Minister.

Ms Tarabella-Marchesi asked what steps had been taken to deal with the issue of continuous fruitless expenditure, which had been a consistent issue since the 2014/15 reports. She asked why only 11 skills audits had been done when there were 111 staff members. She expressed concern on the administration issues, and asked if staff could be allocated to other programmes. She asked why five staff members had been moved to the public service department, and whether this had been due to disciplinary action. She was concerned that staff were being suspended for more than 296 days, as this would result in high costs for the Department. What was the DWP was doing to reduce the high costs associated with hiring external consultants? She expressed concern that a manager in the Department, managing only three projects, was receiving an average of R1 million annually while the DWP was failing to meet its targets.

Ms Robinson asked why the DWP was failing to meet its targets, and what the significant achievements from Women’s Day were. She requested more details on the discussion paper of women in financial inclusion. Pressure had to be put on the Justice Department to ensure that the issue of rape culture was dealt with.

Ms Khawula thanked the Minister for attending the meeting, as the Committee had been constantly requesting her presence. She asked the Minister why the Committee had not been involved in the activities of the DWP. What had the Minister done about people advertising abortions in public areas such as trains, and also the issue of human trafficking? What were the Minister and the Department doing to assist in alleviating the challenges of “fees must fall.”

The Minister replied that “fees must fall” was a societal problem, not just a departmental one. The policy of government was to serve the poor child with education and its mandate was to serve all children, not a specific gender. Government could not provide all children with free education.

She said that abortion was a concern and was an issue of policy. The responsibility for this issue was shared with the Department of Health, but the challenge was that abortion was legal in SA.

Results had been achieved in dealing with human trafficking. The women of Lesotho who had previously been abused as cheap labor were now required to obtain a work permit, which ensured them of protection.

The issue of small traders being taxed heavily at the Zimbabwean border was a problem with the Zimbabwean side. Dialogue had been entered with Zimbabwe to deal with this, as the South African economy benefited from this trade.

The Minister said that the Committee was always invited to the DWP’s events, and suggested that when events occurred in particular provinces, Committee Members from those provinces should attend to represent the Committee.

Women’s Day was a historical event that would continue to occur .The Women’s Day and Women’s Month should not be viewed from a political standpoint.

Ms Robinson commented that if Women’s Day was not to be viewed from a political standpoint, speakers from all parties should be allowed to speak on the day.

The Minister said that progress had been made in dealing with rape. A tombstone had been unveiled for a 13-year-old girl who had been brutally raped and murdered. The Department was engaging ex-offenders to help clear potentially dangerous areas, and had received a positive response from the communities.

When she had entered into office, there had been an influx of people who had been fired incorrectly, and she had worked to normalise the situation, and so had dealt with the issue of high staff turnover.

The irregular expenditure had occurred as a result of the restructuring of the Department. When the restructuring had occurred, some people had lost their jobs and so had been put on a special leave until they could be reallocated to other positions.

The Department was working on producing the draft of the financial inclusion document and had engaged other departments to assist, as it was a challenging task that was not easily accomplished by anyone.

The CGE was currently working on filling the positions which had terms due to end in the near future. She assured the committee that it was not an area of concern, as the term contracts were also renewable.

Ms Tseke asked about the skills audit, and how many people had been suspended or were on the special leave.

Ms Schreiner replied that a skills audit had been done on all the staff in the Department, and the 11 that the Committee had been referring to had been job evaluations aimed at determining at what level a job was to be pitched.

Ms Tarabella-Marchesi asked what had been done about the people who had been put on special leave, and where it was the best to place these people in the new system.

The Minister said that investigations into the irregular expenditure were under way, and a completed report would be submitted to the Committee. Regarding external consultants, the audit committee was a mandatory compliance team, and competency assessments carried out by external consultants were a statutory requirement. The forensic investigator had been a once-off hire, and would not be recurring. The health risk manager was an external expert who was also regulated to be used.

Ms Tseke said that she did not see the value for money in having the audit committee, as the audit outcomes presented by the audit committee had not been convincing.

The Minister replied that although there were challenges, she was convinced that the audit committee team was good. The poor performance of the Department was reflecting negatively on the audit committee. She suggested that the Portfolio Committee should call the audit committee to come and speak for themselves on the challenges they were facing.

Ms C Majeke (UDM) commented that the internal audit team was not very strong in the current year.

Ms Schreiner replied that the internal audit team had not existed previously, but its performance capacity had significantly improved.

Ms Tarabella-Marchesi asked what was being done about the decriminalisation of sex workers, as well as sanitary pads being provided to young girls. She asked the AG why the DWP kept changing its programmes, as this was making it difficult for its performance to be evaluated.

The Minister replied that the programme changes were an alignment issue, and that there was a need to be more strategic. The issue of sanitary pads was being resolved and a task team from the relevant department was on the job. Sex work was allowed by law, and systems were being created to protect sex workers from abuse by police and clients. Steps were being taken to deal with the financial irregularities, and a report would soon be made and presented to the Committee.

The chairperson thanked the Members and the Minister for attending the meeting.

The meeting was adjourned.