The Department of Military Veterans briefed the Committee on its turnaround strategy in the presence of the Minister. The Department highlighted that the terms of reference for the Turnaround Strategic Initiative would focus on procurement and the Department aimed at putting in place a fair and transparent procurement system to avoid unauthorised, irregular and wasteful expenditure and establishing a contract management system. The focus would also be on ensuring that the Department’s Supply Chain Management policy and Standing Operating Procedures Manual were aligned to the relevant National Treasury practice notes and the relevant provisions of the Public Finance Management Act. The Turnaround Initiative Strategy would put major focus on the organisational structure of Department by assessing whether its organisational structure enabled it to meet its legislative mandate. There would also be an evaluation of all staff to establish whether they were competent to fulfil their assigned tasks and, if not, recommend remedial action. In relation to the legislative mandate, this would be to determine whether the DMV Act and Regulations enabled the Department to deliver the necessary services and benefits to military veterans.
The Turnaround Strategic Initiative Policy was divided into three phases and phase one was primarily focused on arresting the decline within the Department, which had already started from January 2016 to March 2017. Phase two was aimed at dealing with challenges within the Human Resource migration plan, skills audit and upskilling plan and implementation, and this was to last from March 2017 until April 2018. Phase three was essentially on sustainment of the plans that had been implemented and this was to be effective from March 2018 onwards. There was a consultation of various stakeholder engagements that took place in the implementation of the Turnaround Strategic Initiative and these included Members of South African Military Veterans Association Department senior management, uMkhonto we Sizwe Military Veterans Association and other relevant stakeholders. The Military Veterans Act was established by Department but the structure of the Department did not follow its function.
It was recommended that powers and duties were omitted and must include local government. The statements of relationships must be prescriptive – instead of ‘may’. The challenges with the Department’s service delivery mainly stemmed from how the Act defined beneficiaries as the definition was ambiguous, too broad and therefore all inclusive. The Act excludes serving members and the distinction between statutory and non-statutory forces was absent. The Department also noted that the challenge with benefits was that they were not categorised, ashealth and pension benefits excluded dependants of Military Veterans. The benefits were not categorised according to veterans’ categories. The Department recommended that there should be an inclusion ofdependants in health and pension benefits, implement a benefits allocation criteria and migrate towards a means based policy.
There were three critical success factors to the Department’s service delivery and these included funding model, verified database, and benefits classification and prioritisation.The Department was challenged with a gap between funds received and the expected output in terms of benefits. There was a requirement for an innovative funding mechanism, in which additional funding could be sourced to promote and fast-track service delivery. The Department required a verified database to quantify the actual requirement. A process of classifying benefits for the different categories of military veterans and prioritising them according to funding was required to determine the scope of benefits that could be offered. It was noted that the range of benefits offered by the Department exceeded the funding the Department received. Therefore, the classification of benefits should always consider available funding, beneficiary requirements and the Department’s capacity and ability to deliver. It was crucial that the Department had a robust communication plan in order to manage expectations.
Members wanted to know if the implementation plan of the Department was similar to the action plan that Members would need to do an oversight to the Department. The action plans and the targets of the Department were very clear and the Committee would need to take these action plans into consideration in the planning for the programme of the Committee. The Committee would need to be provided with exact timeframes for the achievement of the stipulated targets and the implementation of the action plans. It would be important to know if there was any particular reason that was causing this contamination of the database. It was clear that the contamination of the database was affecting its legitimacy and credibility. It was unclear if the Department would exclusively or inclusively provide for the needs and recognition of non-statutory forces. The Committee should be briefed on the cost of the Turnaround Strategic Initiative and where the Department would get the funding for this initiative.
A Member pointed out that the Annual Report of Department was misleading when it stated that 98% of the database had been verified as this was in contradiction to the statement that was made by the Minister that there were serious matters that still needed to be addressed in the database. Members suggested that the Department would need to intervene and deal harshly with those people who were fraudulently on the database. The Department had access to the South African Revenue Service and Department of Home Affairs to actually assist in the verification of the database of military veterans.
Minister’s opening remarks
Ms Nosiviwe Mapisa-Nqakula, Minister of Defence and Military Veterans,said she appreciated the opportunity to share with the Committee on the Turnaround Strategic Initiative (TSI) that was initiated by the Department of Military Veterans (DMV). The Department also thanked the co-Chairpersons of the Committee for allowing the Executive to be present at the presentation. There was an understanding that Parliament’s programme and the programme of this particular Committee was already pressurised and therefore the Department submitted an apology for a slight delay or rescheduling in this regard. The Department was supposed to come and account directly to the Committee about the work that had already been done since this was an Executive led initiative.
The Minister introduced Mr Max Ozinsky, Acting Director-General of DMV. Members would remember, the Department concluded the process of appointing a permanent Director General (DG) in March 2015 and that process identified Mr Ozinsky as the most suitable candidate after a selection and interview process. As required by Cabinet directive, the name of the candidate was submitted to the Department of Public Service and Administration (DPSA) for his appointment to be finalised through Cabinet. The Department was confronted with some challenges owing to a directive issued by the DPSA regarding changes in the determination of generic requirements for filling of positions for heads of department and DGs. This directive was issued during the time of appointment of a DG of DMV. The Minister of DMV and DPSA had already met and discussed the issue with a view of resolving it going forward. The matter of generic requirement was also discussed for review by Cabinet last year. There was confidence that both Ministers would resolve this matter so that the appointment of Mr Ozinsky could be finalised.
The Minister highlighted that the Department was fortunate to have a person of the calibre of Mr Ozinsky as he had good leadership qualifications, experience, and was also a military veteran. An announcement was made by the Department in May 2015 during the Department’s Budget Vote that there was an intention to establish the turnaround strategy of the Department. There was also an indication that the turnaround strategy would address the structural, operational challenges and policy challenges that were affecting the Department’s ability to fulfil its mandate. The Ministry engaged in various consultations both within the Department, as well as amongst the formations and associations representing military veterans across the country. These discussions culminated into the National Military Veteran Indaba that convened in June 2015 in order to have a more structured approach on the challenges and inform the content and the approach of the turnaround initiative. The Indaba was the first real opportunity for government and military veterans to develop a common integrated approach on how to address some of the challenges.
The Department had noted growing frustrations within military veterans themselves and this at the time was leading to protest actions aimed at highlighting these challenges. The Department was aware of these frustrations as it was based on the expected service delivery for military veterans following the establishment of the Department in 2010. The background to the challenges of DMV both in terms of its business model and its operations could be traced back to the decision to establish the Department. The formal establishment of the Department through a presidential proclamation preceded the work of a task team that was dealing with its mandate and the finalisation of the Military Veterans Act. In order words, the Department was established, structured, and the budget was decided before the mandate could be determined and the Act could be promulgated. Naturally, this resulted in a misalignment between the organisational design, its missions and the capacity that was required to fulfil its mission. This was regarded as one of the fundamental challenges facing the Department today.
The Minister emphasised that the Department had been plagued with many challenges since its establishment and this was linked to lack of proper financial systems in place, and this led to the Auditor-General of South Africa (AGSA) issuing a disclaimer audit opinion in 2013/14 financial year. The internal audit of the Department had also highlighted serious risks associated with Supply Chain Management (SCM) and contract management. The organisational structure of the Department was not fully populated at the time of the establishment and its design was based on any functional analysis without job evaluation. Many of the funded posts at leadership level were vacant including the post of the DG. The turnaround strategy was established in order to support the Department to address these challenges. The first stage of the initiative started with effect from 21 September 2015 and it was structured as a project and was supposed to be managed in accordance to the project management principles and methodologies. The governance structure was appointed comprised of the steering committee and the establishment of the Programme Management Officer (PMO). Even though the Department did not have adequate leadership especially at DDG level, the steering committee comprising of selected military veterans and people from other government departments and South African Defence Industry were appointed to form part of the steering committee.
In conclusion, the Minister stated that the report of the turnaround strategy would indicate that a changed programme was neither easy but it was implementable. The expectation was that there would be quick fixes to the inherent problems within the Department. However, for the turnaround strategy to be implemented properly there should be a programme in place that would completely change the way the organisation was functioning. The involvement of military veterans themselves in the project proved that this was a project that had to be managed with its own special dynamics and it could not just be “business as usual”. The Acting DG would lead the presentation together with other delegates that had been appointed during the period of the TSI. The presentation would highlight the diagnostic that was done, its findings and the recommendations and where actions had been taken to address shortcomings. The presentation would also address the implementation plan for the next phases of TSI and this would be important going forward. It was the responsibility of society to give due recognition and take care of the well-being of those who unselfishly fought for our democracy and freedom and this could not be compromised. The Department would need to match the commitments to service delivery to the military veterans with the requisite capacity.
Briefing by the Department of Military Veterans
Mr Max Ozinsky, Acting Director-General, DMV, said the presentation outlined the results of the intervention of the Turnaround Strategic Initiative.It reported on the terms of reference that guided the TSI in executing its mandate. The presentation would also highlight challenges found in the department by TSI in collaboration with the DMV management team. Finally, the report presented a roadmap for implementation to improve service delivery to the Military Veterans community.Since inception DMV had lacked the necessary financial systems to enable it to become a proper stand-alone Department, with its own vote in Parliament. The Auditor-General of South Africa (AGSA) had issued a disclaimer for the financial year 2013/14 and a qualification with five findings for the financial year 2014/15.DMV internal audit had highlighted several risks associated with supply chain management (SCM) and contract management. The rate of service delivery to Military Veterans and lack thereof in certain instances, had led to widely recorded frustration amongst veterans and their families.
Mr Ozinsky indicated the terms of reference for the TSI. The focus would be on procurement and the Department would aim at putting in place a fair and transparent procurement system to avoid unauthorised, irregular and wasteful expenditure and establishing a contract management system. The focus would also be on ensuring that the Department’s SCM policy and SOP Manual were aligned to the relevant National Treasury practice notes and the relevant provisions of the PFMA. The TSI would put major focus on the organisational structure of DMV by assessing whether the organisational structure of DMV enabled it to meet its legislative mandate. There would also be an evaluation of all staff to establish whether they were competent to fulfil their assigned tasks and, if not, recommend remedial action. In relation to the legislative mandate, this would be to determine whether the DMV Act and Regulations enabled the Department to deliver the necessary services and benefits to military veterans. In other words, identify any shortcomings which may be hampering service delivery.
Mr Ozinsky stated that the TSI was divided into three phases. Phase one was primarily focused on arresting the decline within the Department which had already started from January 2016 to March 2017. Phase two was aimed at dealing with challenges within the Human Resource (HR) migration plan, skills audit and upskilling plan and implementation, and this was to last from March 2017 until April 2018. Phase three was essentially on sustainment of the plans that had been implemented and this was to be effective from March 2018 onwards. A consultation of various stakeholder engagements took place in the implementation of the TSI and these included Members of South African Military Veterans Association (SAMVA), DMV senior management, UMkhonto weSizwe Military Veterans Association (MKMVA) and other relevant stakeholders.TSI reviewed the Military Veterans Act in relation to the DMVs mandate, beneficiaries and benefits. The DMV was required to provide national policy and standards on socio-economic support to military veterans and their dependants, including benefits and entitlements to help realise a dignified, unified, empowered and self-sufficient community of military veterans.The Act’s intent was to provide for the needs and recognition of non-Statutory Forces.
Mr Ozinsky highlighted that The Act established the DMV but the structure of the DMV did not follow its function. It was recommended that powers and duties were omitted and must include local government.The statements of relationships must be prescriptive – instead of ‘may’. The challenges with DMV service delivery mainly stemmed from how the Act defined beneficiaries as the definition wasambiguous, too broad and therefore all inclusive.The Act excluded serving members and the distinction between statutory and non-statutory forces was absent. The Department also noted that the challenge with benefits was that they were not categorised ashealth and pension benefits excluded dependants of MVs. The benefits werenot categorised according to veterans’ categories. The Department recommended that there should be an inclusion ofdependants in health and pension benefits, implement a benefits allocation criteria and migrate towards a means based policy. It was also recommended that local government support for delivery of benefits and determine benefits categorisation and prioritisation.
There was sufficient evidence to suggest that the Military Veterans Act No 18 of 2011 and related legislation should be reviewed or revised to provide substantial guidance to the DMV. There were three critical success factors to the department’s service delivery:
- Funding Model: The DMV was challenged with a gap between funds received and the expected output in terms of benefits. There was a requirement for an innovative funding mechanism, in which additional funding could be sourced to promote and fast-track service delivery.
- A Verified Database: The DMV required a verified database to quantify the actual requirement.
- Benefits Classification and Prioritisation: A process of classifying benefits for the different categories of military veterans and prioritising them according to funding was required to determine the scope of benefits thatcould be offered.
- The range of benefits offered by the DMV exceeded the funding the Department received. Therefore the classification of benefits should always consider the available funding, beneficiary requirements and Department’s capacity and ability to deliver.
- It was crucial that the Department had a robust communication plan in order to manage expectations.
Mr Ozinksy explained that in order to improve service delivery, a number of activities must be prioritised during implementation and these included the development of adatabase verification process (key enabler), development, approval and implementation of benefits categorisation and prioritisation process. There were also plans in place to develop an innovative funding model that would fund service delivery to the military veterans. AGSA had noted that there were findings within the leadership of DMV and these comprised the inability to exercise responsibility regarding financial and performance reporting and compliance and related internal controls. There were also concerns in the inability to implement effective HR management to ensure that adequate and sufficiently skilled resources were in place and that performance was monitored. AGSA was also particularly concerned about the absence of management systems, financial controls, policies, procurements policies & regulations not adhered to. There was also failure to implement appreciation risk management activities to ensure that regular risk assessments, including consideration of IT risks and fraud. prevention, were conducted and that a risk strategy to address the risk was developed and monitored.
Failure to ensure that there was an adequately resourced and functioning internal audit unit that identifies and recommends corrective action effectively.
TSI started attending all DMV Senior Management meetings to assist management in aligning strategic outcomes to implementation as well as to attend to the closure of all risk related gaps. An HR workshop was held on Performance Management. The performances agreements were already updated. There was also a concerted effort for delegationswere now formally decentralised. The Chief Financial Officer (CFO) position was vacant and on TSI recommendation a CFO was appointed. The structural discrepancies were rectified within the proposed structure. The Stakeholder & Empowerment and Socio Economic Support Services Branches had vacancies for DDG’s, adversely affecting planning and expenditure. Both posts had since been filled. The original structure did not cater for provisional coordinators at Senior Management Level (SMS). A regularisation process was in progress. After consulting with the Directorate Information Communication and Technology (ICT), the TSI met with State Information Technology Agency (SITA) to establish the Service Level Agreements in relation to the call centre services and to get more detail on obligations, management, interaction and accountability levels of both SITA and DMV as a client, including checking the quality of service to military veterans.
The Chairperson wanted to know if the implementation plan of the Department was similar to the action plan that Members would need to do an oversight to the Department. The action plans and the targets of the Department were very clear and the Committee would need to take into consideration these action plans in the planning for the programme of the Committee. The Committee would need to be provided with exact timeframes for the achievement of the stipulated targets and the implementation of the action plans.
The Minister agreed with the approach that would be taken by the Committee as it was particularly important for the Committee to know timeframes for the achievement of targets. She highlighted that one of the biggest challenges of the Department was on the database which was contaminated. There were people who were already talking about lack of service delivery and benefits to the military veterans but it must be taken into consideration that the rollout of the benefits should be to those who were legitimate military veterans. There was currently no proof at the moment that the people who were on the database were really military veterans and one of the work-stream of the TSI was on dealing with the verification of the database. The Department was yet to be convinced that everyone who was accessing these benefits for military veterans was indeed legitimate and qualified for those benefits. The Department would continuously have challenges as long as all the people who were on the database were not verified. The truth of the matter was that the database was contaminated and therefore it was difficult for the Department to be expected to efficiently rollout benefits to the military veterans.
Mr S Marais (DA) added that the problem of the database was clearly affecting a large number of military veterans and it would be important to know if there was any particular reason that was causing this contamination of the database. It was clear that the contamination of the database was affecting its legitimacy and credibility.It was unclear if the Department would exclusively or inclusively provide for the needs and recognition of non-statutory forces. The Committee should be briefed on the cost of the TSI and where the Department would get the funding for this initiative.
Mr S Esau (DA) appreciated the presentation that had been delivered to the Committee as it was comprehensive and covered a number of very important issues to be implemented. The Department should be dealing with military veterans across the board and poverty was affecting most military veterans and this was not limited to race or ethnicity. It was clear now that there was a backlog that needed to be addressed. The special pension was for all those non-statutory force members and this was received in addition to other benefits. This was one of the compromised and agreement that was reached when South Africa changed to democracy. In short, there was a special pension and that special pension would still be the same and there would be a military pension that would follow. There was a need for transport in order to access health and education and transport should be considered as a key enabler for military veterans to be able to access those services delivered to them.
The Annual Report of DMV was misleading when it stated that 98% of the database had been verified as this was in contradiction to the statement that was made by the Minister that there were serious matters that still needed to be addressed in the database. The youngest military veteran to be a beneficiary of housing in KZN was born in 1987 and this was clearly a “smack in the face” and undermined those military veterans that had risked their lives for the protection of this country.
Mr Esau suggested that the Department would need to intervene and deal harshly with those people who were fraudulently on the database. The Department had access to the South African Revenue Service (SARS) and Department of Home Affairs (DHA) to actually assist in the verification of the database of military veterans. There was no problem with people applying and being registered as military veterans but these people must qualify for those benefits. There were examples of military veterans who were living affluently but suddenly became poor and now were living in shacks or small room somewhere and they were suffering. The Committee was not in any way suggesting that the Department should deploy military veterans in positions where theywere incompetent and go through a proper recruitment process. It would be important for the Committee to be provided with the report on the skills audit conducted, this would reveal a number of important matters.
He expressed concern to see that the benefits for those registered military veterans or those on the database would be expanded while those who had not been verified would continue to suffer because of the problem of inaccurate database. The database should be sorted out as a matter of urgency and priority as it was impacting on a number of issues. It was pointed out that there wasa 21% vacancy rate within the provincial offices of the Department and the Committee would need to be provided with information on the organisational review and the number of people still to be employed. The Committee appreciated that the Department now had an Acting DG that was hands-on and willing to directly address the challenges that had been flagged.
Mr B Bongo (ANC) firstly appreciated the presentation that had been made by the Minister and supported the approach being taken that there should be a dashboard against the action plans. It was clear that there was a lot of improvement within the Department in achieving its mandate of service delivery to the military veterans. The Department would need to move faster and urgently in delivering benefits to the military veterans on the database whilst also dealing with the issue of those that had been excluded because of a contaminated database.
Mr D Gamede (ANC) commended the fact that the Minister was able to be available, as she had always done whenever when called by the Committee. There was a need to be sensitive to the fact that there were also children or orphans of the beneficiary that were on the database and this did not imply that the child might have been involved in the defence or military veteran. This was not disputing the fact that the database might be contaminated and there were people who were illegitimately on the database. There was hope that the TSI would be able to deal with challenges surrounding the database so as to know exactly who was benefiting.
The Chairperson wanted to make it clear to the Department that the inputs and comments of Members in the Committee were not for political grandstanding as this Committee was taking the portfolio very seriously and this was proven by the fact that the Budget Review Report (BRRR) was adopted unanimously.
The Minister responded that the Department was only established in 2009 and this was almost after 17 years that the country had acquired democracy. This meant the country took very long to establish the Department that would look after the needs of military veterans. The non-statutory forces were not entitled to any other benefits other than the special pension and therefore they were not entitled to medical aids and housing subsidies. The reality was that there were people who had found other means of making it into the database. It was a good move by the country to establish the Department that would deal with the delivery of services to military veterans. Some countries had established departments that would represent those who never went to the military but were significantly impacted by the war that was taking place. The Department was dependant on the associations to verify the database and if the various associations were not giving the Department a credible register then this was a problem that was negatively impacting on the Department. There were also people on the ground thatwere destitute who sometimes ended up being on the database of military veterans and this was a very tricky situation. The health beneficiary was the main cause attracting people to sometimes end up being fraudulently on the database.
The Minister emphasised that there was a need to move with speed in ensuring that the military veterans weregetting the services being rendered by the Department, but the question was how to do this when the database was contaminated. It was difficult at the moment to say with certainty that the database was credible. The provision of services to the people on the database was likely to benefit military veterans but also those who were illegitimately on the database. The Department would need to decide on the amount of money to be dispersed for bursaries. There should be a limit on the beneficiary for bursaries that were legible for military veteran families and this was to ensure that everyone was able to benefit from these bursaries. It was impossible for the Department to close the registration of bursaries for next year as this was a political decision and unjust to the families of military veterans.
Mr Ozinsky reiterated that there were about 71 000 individuals on the database and this was made-up of people who were on the Certified Personnel Register (CPR) and these were accepted as verified military veterans. However, there had been other names added on the database since the CPR and there were still some questions to the names that had been added to the database and this was less than 10% of what was on the database. There were also new applications of the individuals that had not been added to the database and they were also waiting to be verified and added to the database. The Department was also providing services to the people who were currently on the database and not the applications that had not been processed. It was already indicated that KZN was not using the database in the provision of housing benefits for military veterans and this was particularly frustrating for the Department. There were indeed people who were given housing benefits although theywere not legitimate for those benefits. It must also be cleared that it was provincial money that was being used to provide housing benefits for people who were not on the database.
Mr Ozinsky also highlighted that there were instances where the Department would be expected to pay for funerals for individuals who were not on the database. The Department would be having a meeting that would be focused on the criteria for applicants to be included on the database as well as the process to be followed. The Department would also be consulting with DHA and SARS to assist in dealing with the contamination of the database and there was a team that would be reporting to the Department on the recommendations to be taken on board. There was still an imbalance in terms of access to services that were being offered to military veterans.
He clarified that there was a problem with the special pension process and the initial cut-off date excluded a number of people. The special pension was not being managed by the Department but the Department of Finance and Government Employees Pension Fund (GEPF). It was not enough to say that there was a special fund and imply that everyone should be getting it. The majority of former members of the non-statutory forces that were in the South African National Defence Force (SANDF) were not receiving the pension. The skills audit was a recommendation and was not done as yet, this was something that was being looked at. The issue of the vacancy in the provincial offices was something that would need to be contemplated as soon as the Department reached an agreement on the dashboard.
The meeting was adjourned.
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