Home Affairs Quarter 2 & 3 performance; National Treasury on funding pressure in DHA

Meeting report

Opening of the meeting
The Chairperson stated that there was no quorum. The meeting would start a bit late because he was waiting for other members to arrive.

When they arrived, he stated that there were only two items on agenda, namely, a briefing by the Department of Home Affairs on its quarter 2 and 3 performance and a briefing by National Treasury on the funding pressure facing the Department.

The Chairperson noted apologies from Ms D Raphuti (ANC), Ms N Mnisi (ANC), Ms S Nkomo (IFP) and Ms N Ndongeni (ANC). 

Briefing by the DHA on Quarter 2 & 3 performance
Mr Mkuseli Apleni, Director General, DHA, took the Committee through the presentation. He noted that he would provide a report on the two quarters.

The Department had a total of 36 targets planned for quarter 2 of 2016/17 financial year. 28 targets were achieved representing a 78% achievement rate, and 8 (22%) targets were not achieved.

The Department had a total of 34 targets planned for quarter 3 of 2016/17 financial year. 24 targets were achieved representing a 71% achievement rate, and 10 (29%) targets were not achieved.

The Department experienced the following challenges in Quarter 2:

-The challenges experienced at Marabastad have included limited human resource capacity, slow IT infrastructure, inadequate filing systems, poor management practices and a working environment not conducive for clients and staff.
-Non-integration of MCS and eMCS in removing / preventing false hits has also contributed to the Inspectorate experiencing a high number of overstay appeals.
 -Information Systems – Generally aging infrastructure and limited capability to integrate data platforms is deficient and represents a risk to the integrity of some of our business processes and performance.
-COE - A diminishing capacity through attrition of key immigration officials in management and operational environments holds a high level of risk to business.
The Department experienced the following challenges in Quarter 3:

-Birth occurrences after hours, weekends and public holidays are not registered within the prescribed time period as this is outside the official working hours.
-Moratorium on posts creates a shortage of officials at front offices and health facilities (capacity).
-Delay in dispatching smart cards and passport consignments by courier between the 23rd and 31st December 2016.
-Accumulation of manual document verification at back office.
 -General system downtimes.
-The assessment of online adjudication and interventions where there are system challenges played a major role to achieve the targets. Some of the online challenges relate to “near empty VAS queues”, which refers to a situation wherein applications could not be retrieved on VAS for adjudication process.
-Refugee Travel Documents ,production was affected by the deployment of new NIIS infrastructure, merger of TIRRO to Marabastad and the rationalisation of personnel within the Marabastad office that account for 70% of production.
The Department provided a breakdown of the target and performance for each programme, and included a comparison between quarter 2 and 3.

Mr Gordon Hollamby, Chief Financial Officer, DHA, noted that, in terms of the linear projections, the DHA should be spending at 75% as at end of December 2016. At the end of December 2016, the VOTE was spending at 87.3% against the linear projection of 75% and this was mainly due to spending related to Self Financing Expenditure and legal services. Spending excluding self expenditure was 77%. That implied that 77% of the allocated budget of 7 193 480 000 was spent. The DHA had during the 2016 Adjusted Estimates of National Expenditure (AENE) requested additional funding of which approval had been granted to cater for shortfall experiences. Compensation ofemployee spending was at 0.8% lower than the linear projection. The 0.8% variance was due to resignations, transfers, and terminations of services of the officials which had been filled.

Programme One: Administration – Spending at the end of December 2016 is 69.7% which is 5.3% lower than the linear projection, however there are areas of overspending and this is mainly due to the following:
-Legal Services (91.2%) – This is mainly due to the Directorate: Litigation in respect of high volumes of the previous financial year invoices that were received from the Department of Justice for Litigation cases.
-Property DHA (89.9%) – High spending is as a result of the payment of previous financial year invoices on private leases.
-Minister (82.5%) – High spending is mainly due to travel related expenditure.

Programme Two: Citizen Affairs - Spending at the end of December 2016 is 99.8% against the linear projection of 75.0%. The higher spending is as a result of the following:
-The Sub-programme: Status Services is spending higher and this is due to payment to Government Printing Works for Self Financing expenditure. The Department has, during the 2016 Adjusted estimates of National Expenditure (AENE) request additional funding of which approval has been granted to cater for the shortfall experienced in Self Financing.
-Furthermore, the overspending on Public Entities is as per the Entities’ cash flow projection.

Programme Three: Immigration Affairs - Spending at the end of December 2016 is 77.9% which is 2.9% higher than the linear projections. The 2.9% variance is mainly due to deployment of officials at the Ports of Entry during the festive seasons.

Discussion
Ms O Hlophe (EFF) sought clarity on several issues:

What was DIRCOs role in terms of collection of revenue and problems connected therewith? What measures were taken by the DHA to prevent further decline in terms of performance?

What was the progress of the 21 health facilities with 3G’s that were replaced by ADSL lines?

What might be the reasons why certain airlines were not complying with the board advice issued by the Advance Passenger Processing?

How many Lesotho Special Permits were issued?

What was the update on moratorium on new post that caused a shortage of officials?

Why were improvements to workstations only done at OR Tambo and not at other airports?

Why were clients of the DHA being stopped by security guards from accessing the DHA offices during working hours when there was no single client inside these offices?

What could be done to address challenges at Marabastad?

What were the challenges around the issuing of smart cards?

How was the DHA dealing with the challenges arising from expenditure ceilings on compensation of employees?

What litigations was the DHA involved in?

Why did the DHA not build or buy its offices given that leasing property seemed to be high?

Ms T Kenye (ANC) sought clarity on the reasons for the decline in the performance; and why it had been an issue to meet its own targets. Secondly, she expressed concern about the issuance of smart cards that seemed to be slow. In addition, she voiced distress about the working environment in Marabastad and asked how these challenges could be addressed. She also expressed her concerns about general system downtimes and sought clarity on why the DHA was only the Department experiencing IT problems. She sought clarity on what was a real problem between DIRCO and DHA and whether attempts were made to provide a report on immovable and movable assets on one hand and used and unused assets.

Mr A Figlan (DA) sought clarity on how the DHA was dealing with the question of corruption and security vetting; how much could be spent on establishing asylum-seeker centres; why people were registering their marriages or deaths of their beloved ones but they could not get their certificates within three months period; and on what was causing problems in rolling out biometrics solution.

Mr D Gumede (ANC) remarked that a lot was happening in the DHA and a lot more needed to be done. From a National Development Plan perspective, the DHA would not contribute to having a capable state. The DHA lacked professional attitude and ability. Why were people spending the whole day standing in a queue without receiving services and without talking to the DHA officials but security guards? This ought to be stopped and the DHA should improve on its operations to function in a professional manner. The State Information Technology Agency (SITA) was conceived in terms of the principle of monopolisition of the state technology operation. There was no other body that was given mandate to monitor and check on the work of SITA. The consequence was that people could not get administrative services on the ground that computers were not functioning or the system was down or there were no network connections. The SITA had no competitor or competitors. Its poor work was tarnishing the image of the DHA which was the heart of South Africa and a true reflection of the image of South Africa. The issue of SITA needed the Committee’s attention. He sought clarity on what was causing delays in the biometrics and enhanced system.

Mr Gumede was happy with the provincial performances and said that the performances were encouraging regardless of the IT problems. There was however no report on how small business was performing. Small business – which was seen as a pillar to economic growth – ought to be paid within 30 days as per the President’s statement. It would therefore be a problem if the DHA was not complying with the master plan, that is, the National Development Plan. He sought clarity on whether the Border Management Authority Bill was aligned with both the Refugees Act and the Green Paper on International Migration Policy.

The Chairperson noted that SITA was a problem. He suggested that he would sit with SITA and find out what the problem was. The issue of security vetting was crucial and should be done because people should not be put in high positions when their problems relating to security matters were unknown. He felt that refugees should be monitored when they were given travel documents to determine whether they were not going back to their home countries and, if they were going to other countries, what were the reasons for this. And if they went back home, they should then no longer be considered as refugees.

Ms Kenye sought clarity on those economic migrants who arrived in South Africa by means of a visa and later sought to stay as refugees in the country.

Ms Hlope sought clarity on the lady who was told that the system was indicating that she was dead and due to such shocking news, ended in the hospital, especially, because of the conduct of the DHA officials. What was the DHA doing in respect of that problem?

Mr Apleni replied that it would cost the Department R1million to post one person abroad. The government took a decision that DIRCO was the only entity that was allowed to recruit employees to work in administration abroad. The DHA could not do that. It could not appoint people around the world to collect revenue. DIRCO collected the revenue and then deposited the money in the Department’s account. The question was why DIRCO did not deposit the collected revenue in the National Revenue Fund to be audited there. When the Auditor-General went abroad to audit DIRCO and founnd that there was a problem pertaining to the collection of revenue, this problem was registered under the responsibility of the DHA, but these revenue problems were matters beyond the control of the DHA. DIRCO ought to be given power to collect revenue and to be audited in that capacity. These matters should not be seen as belonging to DHA when problem arose. The DHA staff who were posted abroad dealt with visa applications only. There was an agreement between the DHA and DIRCO that the revenue should be deposited in the National Revenue Fund but not in the DHA’s account.

On the amelioration of achieving targets, Mr Apleni said that a new plan was drafted but there were three targets that could not be changed. There was an improvement because the DHA started at 25% and it was at 78% of achieved targets. On the question of launching the BMA launch, the DHA was struggling to finalise the Bill because it was still sitting with the Committee for finalisation of essential aspects. Although the Bill was submitted to Parliament, the target was not achieved.

On the question of delays in biometrics, Mr Apleni responded that the main problem was the integration of processes. Biometrics was being used at ports of entry but not to that level which was desired by the DHA.

On the question of refugees’ possibility visiting their home countries, he responded that the travel document was issued on the basis of the 1951 Convention relating to the Status of Refugees, which stated that a refugee could not go back to his or her home country. Should a refugee go back to his/her country, he/she could no longer claim to be a refugee. That was the reason why the DHA was contending that people from SADC countries were abusing the asylum system. It was contending that because during the Easter, the DHA recorded many people from SADC countries who were returning home. The Beitbridge port of entry, for example, processed 29 000 people per day. Where were they going? To address this problem, the Green Paper talked about the SADC visa for economic migrants. Most of the people who came to the country were economic grants. The immigration framework did not permit economic migrants to enter because they could not meet immigration requirements.

Mr Apleni said that the DHA was working to improve its target because it had a good plan in place.

On the question of birth registration, Mr Apleni noted that the target set was 95% for the 2017/18 financial year.

On the question of the SITA, he noted that there was also the problem of the network which was provided by Vodacom. He had approached the Committee in the past on this matter. The Committee had called SITA and there was agreement on certain things that it ought to deliver. Still, it was not delivering. This problem was beyond his control because he could not go to SITA and give orders and could only complain.

On issuing certificates, due to the IT system problem, people would go to the DHA fill in forms and hand in; but these forms would not be captured on the system. If information was not appearing on the system, it meant that a client was not yet served. The problem was indeed SITA and Vodacom and not the DHA. The South African Revenue Services (SARS) was seen as an effective body because it was not technologically empowered by SITA. He appealed to the Committee to assist in finding an effective network connection. The question of monitoring travellers was connected to the question of the network and IT system. If the system was down or there was no network, monitoring a traveller would be difficult. 31 000 Basotho Special Permits had been issued.

On the question of the lady who ended up in hospital, Mr Apleni responded that the case was investigated. The DHA found that there were two IDs issued. There were an ID number of the man who died and an ID number of the surviving female, Ms Andiswa. This problem could be solved through the demand made by the DHA to register births and deaths within three months. People could not show up to the DHA with a child of 15 years old to register his or her birth. When people registered deaths they ought to be careful when this was done through undertakers. Undertakers were receiving death registration through bribing officials for them to carry on with their work. These death certificates were not captured on the system. He noted that security officers were not employees of the DHA and all these problems could be dealt when the DHA was well-resourced. Prevention was the best cure and the prevention could occur through sufficiently funding the DHA.

Ms Hlope said that the issue of security controlling and managing the line should be resolved. She was not happy with the response regarding the lady because the problem had an impact on her health and was not about registration of births or deaths. These issues ought to be looked into carefully and responded to accordingly.

Briefing by National Treasury (NT)
The Chairperson remarked that the DHA was a security department in charge of national security because it dealt with citizens and non-citizens at the same time. The DHA should financially be capacitated and empowered to deal with its mandate. The DHA had to be stable and to have personnel in each and every of its offices. How could NT assist the DHA to ensure that those foreign nationals who were not supposed to be here were restricted?

Ms Gillian Wilson Chief Director: Administrative Services, National Treasury, took the Committee through presentation. The DHA was one of their client departments which had sound financial management and received an unqualified audit. National Treasury recognised it as a security department and as a contributor to economic growth. The DHA maintained efficiency in its operations and in this respect money was granted to support its IT system and, on the other hand, it had to maintain expenditure ceilings.

Ms Wilson stated that during the 2016 Medium Term Expenditure Framework (MFTE) budget process, the National Treasury set expenditure ceilings on compensation of employees and for the DHA. The following amounts were set: R 3 146 billion in 2016/17, R3 233 billion in 2017/18 and R3 328 billion in 2017/18. The DHA were equipped to manage their establishment within the allocations provided and the compensation of employee expenditure might not exceed those amounts. The compensation of employees’ budget was reduced by R 253.9 million in 2017/18 and R396.9 million in 2018/19. As a result of these reductions the DHA had to put on hold the filling of 687 vacant positions. The above mentioned reductions were circulated using the 2015/2016 preliminary expenditure outcome as at 30 September 2015 and also projected as at 31 March 2016. The shortfall in the ceilings were mainly funded by vacant positions already budgeted for and also when existing positions became vacant they were also not filled until the DHA achieved the ceilings thresholds. The DHA was therefore feeling the effects of not filling the vacant positions as the situation was negatively impact on the DHA’s ability to deliver services efficiently and effectively. The shortage of immigration officers at O R Tambo International Airport was just a case in point. In order to address the capacity at OR Tambo International Airport, the National Treasury allocated additional funding of R17 million in 2018/19 and in 2019/20 financial years. In order to sufficiently deal with capacity at the DHA, additional  funding would be required as other measures such as retirements and non-core vacancies which a redirected were not yielding the required results because the numbers were significantly low to make any impact.

She noted that there had been engagements between National Treasury and the DHA as from 2016 in which the National Treasury was informed of the compensation ceilings to be inadequate, shortfalls in the budget, and the need to fill critical positions.

Ms Wilson noted that National Treasury would continue to engage the DHA on alternative means to address the funding pressure with respect to the compensation budget. It would also consider additional funds in future budget process when fiscal space allowed hence the existing fiscal space was constrained.

Discussion
The Chairperson remarked that the presentation did not speak to all concerns. The fiscal space was constrained and increasing the budget was impractical. Members should note that the there was an expenditure ceiling on compensation that the DHA should comply with. It was apparent that funds could not be adjusted on basis of meeting certain requirements that were laid down in pieces of legislation. There were various factors to be taken in order to fund the DHA. He sought clarity from the National Treasury on how the DHA could be adjusted to become a security department without, at the same time, an adjustment in its budget. A technical decision was taken to adjust the DHA and a technical decision was needed to adjust its funding in order to meet its security mandate. The allocation of budget was an illustration that National Treasury was not conscious on the work of the DHA.

Mr Kekana remarked that he could not understand why the principle of security was not given an adequate attention. There was a need for the DHA to fill those critical posts related to security. The Committee’s oversight power should be used to ensure that National Treasury did what the Committee found to be lacking and this be addressed urgently.

Ms Kenye said that “our borders were porous” and the DHA is seeking to address the problem through enacting the BMA Bill. People were crossing the border to come and have access to social grants designed for the poor of this country. However, the National Treasury was not allocating adequate budget to address this.

Mr Figlan said that it was not disputed that the DHA was a security cluster. He suggested that when the Committee goes on oversight, NationalTreasury should be there to see things for itself. If not, the DHA would keep complaining about employee shortages. The voters out there were thinking that this government has failed them because the DHA could not deriver due to the lack of employees. He expressed concern about the BMA Bill that was before the Committee which, if passed, would require human resources for its implementation. Where would money to implement it come from?

Ms Hlope commented that the Committee should be updated on the BMA and whether National Treasury would fund the programme so that the Committee should be in a position to know whether it was wasting its time. This remark was not made due to the fact that she supported the BMA Bill but because she was, as a Member, entitled to know the progress of the BMA Bill. Given the financial challenges, the Director General of Home Affairs could not even afford to appoint a floor walker. This was very bad. In the presentation, the DHA illuminated on critical posts that were prioritised but the major concern was where money could come from to fund these positions. She was expecting to hear from National Treasury that the reason not to fund the DHA was related to lack of funds or the DHA’s poor performance, or corruption or employing relatives (nepotism). National Treasury’s presentation was silent on all these issues. Rather, the presentation noted that there had been engagements and there would be further engagements but failed to point where money could be raised.

Mr Gumede said that Committee understood the DHA’s funding challenges which were combined by the need to cut and minimise costs. There were cost drivers that were critical to the work of the DHA and of which costs could not be reduced. Engagements were needed on these cost drivers. He felt that there should be long and short term funding programme. The absence of revenue had an impact on the capacity of human resources which also impacted on tourism. If the tourism was affected, it meant that the national revenue was affected, too. The Director General should also do his best to ensure that his workforce did not lose morale due to reduction in the compansation.

The Chairperson said that non-citizens were impacting on social grants and RDP houses. National Treasury could play a major role to ensure that the DHA was capacitated to respond to these social and immigration problems. Section 38 of the Public Finance Management Act obligated an accounting officer to stop spending money on inappropriate things. The issue before the Committee seemed to be technical hence the DHA was adjusted to be security cluster without considering the consequential results of such adjustment.

Ms Wilson welcomed the inputs and comments from Members and reiterated that the National Treasury would continue to engage with the DHA. However, because the DHA was facing a major funding problem, she would communicate Members views to her seniors. On the BMA Bill, she noted that she was aware of the development but there was no money allocated to the BMA yet. National Treasury would discuss how certain resolutions could be taken on the basis of short and long term needs. In future allocations, it would be noted that DHA was developing as a security department and would therefore be given a priority as such.

Mr Apleni informed the Committee that he was anticipating to make appointment in the two posts advertised for 2017/18 financial year.

The Chairperson said that the crucial point was to work and engage with National Treasury, not in a theoretical context but in practical context. The DHA was always asked why there were many (illegal) migrants in the country and it had to find ways to explain that every time. However, it appeared that inadequate funding was one of the problems. National Treasury should note that migrants were impacting on South Africa’s economic growth.

Mr Kekana said that in the Committee’s future engagement, it should work together with National Treasury when undertaking certain oversight.

The Chairperson stated that when Ms Wilson goes back to her office, she should communicate the position of the Committee on the issue of funding and should defend points made by Members.

The meeting was adjourned.