DoDMV Annual Performance Plan and Budget; Quarter 4 performance

Meeting report

Analysis: Department of Defence 2017/18 budget allocation

Mr Wilhelm Janse van Rensburg, Parliamentary Researcher, presented an analysis of the 2017/18 budget allocation of the Department of Defence (DOD). He started by stipulating the objectives of the Department of Defence and Military Veterans (DODMV), which included defending and protecting the country, its territorial integrity and its people. This was followed by an overview of the 2016/17 financial year in which, by the third quarter, 72% of the budget (R34.004 billion) had been spent.

In his budget analysis, he said the DOD’s budget was compiled by taking into account the prevailing domestic and regional political, economic and social environment. For the 2017/18 financial year, the DOD had been allocated a sum of R48.619 billion, an increase from R47.237 billion in 2016/17. A reduction in personnel, from 78 345 in 2016/17, to 69 609 in 2017/18, was envisaged and would enable the Treasury to save close to R1 billion. Nonetheless, it had been noted that it was be highly unlikely that the DOD would be able to reduce its staff by close to 10 000 members in one year.

Administration:

There was a noticeable increase in the use of consultants, as the amount allocated for them rose from R49.9 million (2016/17) to R62.4 million (2017/18). The allocation for machinery and equipment experienced a significant decrease, from R42.8 million (2016/17) to R26.6 billion (2017/18).

Force Employment:

Mr Janse van Rensburg indicated that there would be a 12.69% real increase in the budget for the regional security programme, despite the South African National Defence Force’s (SANDF’s) withdrawal from the United Nations/African Union Mission to Darfur. Much of the resources would now go towards SANDF battalions fighting in the Democratic Republic of Congo. Conversely, there was a 17.89% reduction in the amount granted to the ‘Support to the People’ sub-programme, which incorporated border safeguarding. Given this reduction, it had been asked how effective border safeguarding operations would be in the near future.

Landward Defence:

This was the largest defence programme, and notable budget reductions had been carried out in the domain of general training capability (23.86%) and operational intelligence (11.81%). He questioned how these budget shortfalls would affect the overall training and intelligence capacity of the SANDF. Moreover, the rationale for a R100 million increase in travel assistance was also questioned by the presenter, and it was suggested the Committee should seek further clarification on this matter.

Air Defence:

While the air force would experience a 10.56% budget reduction for the 2017/18 financial year, there would be a significant increase by 2019/20. There would be a reduction in the number of air force personnel who were trained, and air force personnel may not also meet the number of flying hours required (5 000 hours) due to budgetary constraints.

Maritime Defence:

This sector witnessed a 13.41% real increase for the Maritime Combat Capability sub-programme, but also saw a 9.87% shortfall in the allocation for base support. The presenter was of the opinion that this scenario could negatively affect the proposed plan to renovate the Durban naval base.

Military Health Support:

Mr Janse van Rensburg raised a concern regarding the increased amount being provided for outsourced services, which rose from R283.6 million (2016/17) to R433.5 million (2017/18). In contrast, the amount allocated for medicines decreased from R235.1 million (2016/17) to R155.1 million (2017/18). The questions put forward included why there was the high level of outsourcing, unless military hospitals were fully capacitated, and how the reduction would affect medicine stock levels.

Discussion

Mr S Marais (DA) raised issues in relation to the assessment of the real value of the DOD’s financial challenges, and secondly expressed his concerns about the lack of training which soldiers in the air force were receiving.

After this intervention, the Chairperson adjourned the session.

Budget Analysis Vote 19: Department of Military Veterans

Mr Calvin Manganyi, Committee Researcher, presented the budget analysis for the Department of Military Veterans (DMV). He outlined the mandate of the DMV before providing an overview of the 2016/17 financial year, in which the Department had received an adjusted allocation of R597.6 million. However, it was noted with concern that by the end of the third quarter, only 49% of the budget had been spent in contrast to the planned amount of 75%. Mr Manganyi said that failure to spend the budget would jeopardize achieving the set target of 90% goal completion, especially within the context of a 15% budget reduction. Some of the important targets not met included:

• Only 40% of legitimate invoices being paid against the planned 90%;
• 34 houses were supplied to veterans by the end of the third quarter, although 250 had been the target set;
• The number of military veterans having access to relevant training and skills development was 494, against a quarterly target of 1 000’
• The DMV was able to establish a partner with only one private sector company or state organ, while the quarterly target set had been 14.

Overall, by the end of the third quarter of 2016/17, only 63% of the targets had been achieved 

Mr Manganyi raised an issue over the credibility of the military veterans’ database. He said there had been a decrease in the database management, and this could be attributed to the fact that the database had never been verified. He stressed the importance of having an up to date database of military veterans, because it was through information from the database that various benefits were provided to them. He acknowledged that presently there were 67 000 military veterans in the database, of which 35 000 were members of the South African National Defence Force and thus did not qualify for DMV benefits. Nonetheless, his great concern was the presence of 3 900 military veterans on the database who were aged 35 and below. The presenter pointed out that this would entail these veterans having been eight years old when the armed struggle came to an end in 1990, and would have been child soldiers. The more likely scenario was that the database had been contaminated and therefore needed to be updated.

Subsequently, the problem of housing provision for military veterans was brought up, as 1 000 houses were supposed to be allocated to military veterans.  The presenter acknowledged the figure should be higher, but due to the inability to meet earlier set targets -- 130 houses had been delivered in the previous financial year -- it would not be feasible to raise the target number.

Mr Manganyi stated that in the area of training and skills development, there were 4 000 military veterans and beneficiaries who were eligible to take part in the programme, but a decreased budgetary allocation, from R71.3 million (2016/17) to R66.4 million (2017/18), would make attaining the objectives of the empowerment programme more difficult.

After the end of the presentation, the Chairperson adjourned the session as there were no questions from the Members who were present.     

Department of Military Veterans: 2017/18 Annual Performance Plan

Mr Max Ozinsky, Acting Director General (ADG), DMV, provided a strategic overview of the DMV, described the Department’s vision and mission, outlined its legislative mandates and frameworks, and detailed its organisational structure..

The strategic objectives were focused on improving the livelihoods of military veterans, providing comprehensive delivery of benefits to them, ensuring a smooth transition from military service to civilian life, and assisting them in being part of the nation-building and reconciliation process.

The achievement of these objectives was broken down into eight priority areas which included:

• Ensuring a fully functional DMV with an independent budget vote and systems.
• Provision of immediate social relief of distress to the most vulnerable military veterans.
• Providing comprehensive support services to military veterans and where applicable, to their dependants.
• Promoting empowerment programmes for military veterans.
• The promotion of military veterans’ heritage, as well as memorialisation and honouring.
• Strengthening governance and oversight protocols to give effect to the provisions of the Act.
• Maintenance of a credible and secure military veterans’ database.
• Implementation of a high impact communication and marketing strategy plan.

Mr Ozinsky explained how the DMV’s annual performance plan had been framed in line with the National Development Plan (NDP). The financial allocation towards the DMV for the 2017/18 financial year amounted to R622.1 million. The presentation was rounded off by provided the statistics for the estimated number of military veterans who were to receive various benefits from the Department in the areas of housing, healthcare and bursaries.

Discussion

Mr S Esau (DA) raised a number of points over a period of about 30 minutes. He commended the ADG for an honest report, but said that the reduction of the budget allocated to the DMV would make realising some of the APP objectives hypothetical.

He wanted to understand why the area of financial management had received a budget increase. He raised a query about the state of the DMV database, saying that the database must be secured and that he was satisfied that the issue had been raised during the presentation. With regard to the database, he believed that the percentages and other types of information being put on the database were being incorrectly reported, pointing out that this would have an effect on who did and who did not receive benefits from the Department. In the area of human resources, he suggested that there was a need for the DMV to have more permanent staff, and to streamline the number of contract staff and interns.

Mr Esau spoke about the skills training and empowerment provided to military veterans, and expressed dismay at the 5% reduction in the number of skills development beneficiaries. He said that the Department should obtain follow-up information about bursaries which had been awarded to military veterans and their beneficiaries, as a way of tracking how beneficial or not these allocations were. In the area of healthcare, he was very concerned how the reduction in the amount of money dedicated to the medicines would affect their ability to access this aspect of healthcare.

Mr J Skosana (ANC) raised a point of order regarding the lengthy discourse undertaken by Mr Esau, which was taken into account by the Chairperson.

In response, Mr Esau agreed that a lunch break was needed, and that he would continue later, because the session was to run until 5 pm.

However, the Chairperson corrected Mr Esau and said that the day’s session would not last until 5pm.

Mr B Bongo (ANC) indicated that the identification of beneficiaries should be accompanied by percentages and not just numbers, as they would be a better indicator of how many veterans and beneficiaries were obtaining skills training and healthcare from the Department.

The Chairperson made an intervention in relation to expenditure. He noted that while over-expenditure should be avoided, the worst case scenario occurred when a department under-spent, and such a situation needed to be avoided.

The Chairperson also conveyed his worry that the DMV was overstretching itself by providing education-related bursaries.

In this regard, various members of the DMV, including the Chief Financial Officer and Acting Deputy Director General, made clarifications to the Chairperson on his point.

The meeting was concluded with Mr Ozinsky assuring the audience that more would be done in order to create a verified database, especially since there was an issue with purportedly underage recipients on the military veterans’ database.

The meeting was adjourned.