Home Affairs Department 2001/2002:hearing

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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report

21 May 2003

Chairperson: Mr F Beukman (DA)

The Committee hosted a hearing and posed questions to delegates representing the Department of Home Affairs, Government Printing Works and the Independent Electoral Commission. Their main point of referral was the Auditor General's Report for Home Affairs for 2001/2002.

Regarding the Home Affairs Vote, the issues under discussion included the absence of a contract for the previous Director-General of the Department and its classification according to the PFMA ; and the filing of vacancies in the Department. Government Printing Works was questioned about the interest it charges on outstanding levies incurred by government departments, the filling of vacancies and its conversion into a Public Enterprise following a Cabinet decision. The conversion was supposed to have taken place by April 2003. Questions posed to the Independent Electoral Commission centred on their financial and material preparedness with regards to the 2004 National Elections.

The Chairperson noted that the Committee would be dealing with the 2001/2002 Votes of Home Affairs and the Independent Electoral Commission. He explained the process for deciding on which department is called for a hearing is based on the consensus of the committee. The decision is mainly influenced by the findings documented in the Auditor General's Reports. He handed the discussion over to the Convenor of the Hearing, Ms Mothoagae (ANC).

Ms Mothoagae stated that she wanted to make it clear to the Department of Home Affairs that the committee was not only concerned with issues of corruption but also with those issues documented in the Auditor General's Report. As Home Affairs was concerned with service delivery, this had also informed the choice of issues that they would be querying them on. Questions would be posed on the following issues: (I) The previous Director General, (ii) The Financial Management of the Department, (iii) Vacant posts within the Department, (iv) Government Printing Works and (v) The Independent Electoral Commission (IEC). She then handed over to Mr Smith (ANC) to commence with the questioning.

Mr Smith noted that the report that was under review that day was a qualified report which was qualified by the Auditor General on the basis of uncertainty. He requested that a representative from the Department of Public Service and Administration (DPSA) explain to the committee what the developments had been following the resolutions made the last time they met with the Standing Committee on Public Accounts (SCOPA) and the Portfolio Committee on Home Affairs. These were resolutions regarding the former Director-General of Home Affairs.

Dr Rapea (Director-General, DPSA) said that they were not in a position to respond. The task had been given to them for investigation but they did not have a representative present to respond on that specifically.

Mr Smith stated that it might in fact be better to rephrase his question. He asked what the DPSA's understanding was around the whole issue.

Dr Rapae said that he would focus on the 14 April letter which the DPSA had received from the Department of Home Affairs in response to DPSA's request for a letter of employment of the previous Director-General of Home Affairs. He read from the letter. Thereafter, he explained that only the Heads of Department that were appointed on or after July 1999 were required to sign the said contract. The Director-General in question was appointed from 4 December 1999. He explained that the Director General did conclude his contract, according to their knowledge, but that there was only one document missing from those that were necessary. He stated that they did not believe that the absence of a single document meant that there was no contract.

Mr Beukman stated that he would have liked to hear a response from the Public Service Commission, but unfortunately they could not attend.

Mr Smith referred to Section 36(5) of the Public Finance Management Act (PFMA) and stated that here it is clear that the employment contract must be in writing. Influenced by that clause, the Auditor General, who is of the view that there was no contract in writing, stated that it was very clear that this was not unauthorised expenditure. It could then, at worst, be defined as irregular expenditure. Mr Smith asked what the opinion of the Treasury was in this regard.

Mr Mmakola (Public Finance, National Treasury) replied that, notwithstanding the provision of Section 36(5) of the PFMA and also taking into account the opinion of DPSA, they as Treasury had deliberated on this matter. He confirmed that this case would be regarded as 'irregular expenditure'. He stated, however, that this classification did lend itself to interpretation problems, and for this reason it was one of the issues to be brought up in the coming PFM Amendment Bill, which proposes to amend certain sections of the Act. He explained that in the Act prior to this one, the Exchequer Act, instances were described where expenditure could be considered irregular. What the PFMA tries to achieve is to separate unauthorised and irregular expenditure. Unauthorised expenditure dealt with over-spending and irregular expenditure referred to expenditure which was not just unauthorised, but was in contravention of relative laws. However it was not the intention of the PFMA to regard the lack of signing of contracts as falling under 'irregular expenditure', therefore a different course of action may have to be followed.

Mr Smith also prescribed that a different procedure be followed so as not to land in the situation of 'irregular expenditure'. He hoped that the prescribed amendments to the PFMA could also help in resolving the issue. He asked when the amendments were going to be forwarded to Parliament. The sooner they have clarity on the issue the better. He also asked if there was a procedure to be followed with regards to acting on the 'missing' contract, seeing that the PFMA classification owed itself to interpretation problems.

Mr Mmakola replied that with regards to 'irregular expenditure', after such a case is discovered, the relevant authority has to institute an investigation, so there was a procedure to be followed.

Dr Rapea added that once the Accounting Officer realises that there has been an irregular use of funds, he has to institute a disciplinary process. Similarly, in this case, if he saw that there was no contract signed, he should have instituted a disciplinary process.

Mr Marais (Treasury) noted that the amendments to the PFMA should be presented to Parliament in the third quarter of the year.

A representative from the Office of the Auditor General stated that he was just trying to get clarity on the issue. He requested a suggestion on how it could be normalised.

Mr Smith commented that had the disciplinary action been taken, there would not be such a situation. He said that the committee would deliberate and come up with a solution.

Mr Kannemeyer (ANC) stated that the Standing Committee on Public Accounts (SCOPA) had passed a resolution in 2001 in its tenth report. Under Section E of the report, the committee indicated concern about the status of the then current DG. He understood the argument that the absence of one document does not mean that there was no contract entered into. However, if all the relevant departments had acted timeously to resolve the issue, the level of uncertainty would have been curtailed.

Mr Beukman asked if it was the insistence of DPSA or the PSC that led to the attempts to conclude the matter, and how far they had gone in resolving it.

Dr Rapea answered that the PSC was tasked to perform the investigation, yet they were told to halt it temporarily following the parliamentary process. This was as much as he knew.

Ms Mothoagae stated that it seemed to her that the DPSA had no obligation to have the contract of the DG. She expressed grave concern over this and asked what this implied.

Dr Rapea replied that the fact that the PSC was tasked to investigate the process was enough. He stated that they as the DPSA were also following it up as well.

Weakness in internal control measures
Mr Beukman called on Mr Mofokeng (ANC) to commence with the questioning.

Mr Mofokeng referred to the Internal Audit of the Department. He asked the Department to indicate their plans for the current year and for the next three years.

Mr Gilder (Designee Director-General, Department of Home Affairs) explained to the committee that he was new in the position and his own contract was still in the pipeline. He thus handed the responsibility of responding over to Mr Lambinon, Assistant Director-General.

Mr Lambinon replied by firstly stating that they did have a charter and audit plan. The internal audit capacity will be increased by the filling of five posts. There was a further instruction to fill another 7 posts. The risk profile of the Department was increased and several relevant documents were finalised, including reports on : Risk Management, Fraud Prevention and an Annual Audit Plan. He added that the Audit Committee of the Department was also in operation.

Mr Mofokeng asked if the Department had received any response from Treasury regarding the issue of 'unauthorised expenditure'.

Mr Lambinon confirmed that they had received a response from Treasury confirming that the issue regarding the 'missing' DG contract would not be regarded as 'unauthorised expenditure'.

Mr Mofokeng asked the Department what measures had been put in place to reduce losses, including expenditure, and what disciplinary procedure had been taken on the issue of the DG's contract.

Mr Lambinon responded that they have appointed Programme Managers under four programmes of expenditure, and their specific tasks are related to the management of spending. They also have Responsibility Managers to make sure that expenditure is equal to service delivery. Any expenditure exceeding the necessary will be picked up by the Chief Financial Officer (CFO) and the Department would then have to ensure that approval from Government is received.

Mr Mofokeng, on the subject of Labour Relations, stated that in the latest Department of Home Affairs Annual Report, there were 443 cases of misconduct that were currently under investigation in the Department. It was not clear how many of the implicated officials were suspended with full pay. He asked for an indication from the Department.

Mr Lambinon replied that it was difficult to respond to the question since they did not have such details on them. He admitted that the figure mentioned by Mr Mofokeng did seem to be correct. He went on to explain that if they did suspend someone in the Department, it would be with full remuneration. They did try to finish the process as soon as possible. He said that they could provide the committee with full details of the present status of those cases at a later date.

Mr Mofokeng expressed concern over the fact that a large amount of money was spent on court cases. He asked for an explanation for this.

Mr Lambinon explained that with regard to court case expenditure, their spending was on the increase and would continue to be on the increase. Clarifying his assertion, he stated that "we live in the times of the protection of Human Rights" and the nature of the work done by the Department lends itself to legal challenge because of this. He asserted once more that they would carry on spending in this regard. Such spending on court cases was not uncommon in Home Affairs departments. He mentioned that in Australia, the home affairs department has more than 100 people employed in their legal section alone.

Mr Mofokeng noted that the Auditor General reported on the transportation of deportees, and here a figure of R4-million was quoted. He asked for an explanation.

Mr Lambinon responded that the figure quoted by Mr Mofokeng deals with the cost incurred by the removal of illegal aliens from South Africa back to their countries of origin. He expressed concern over the fact that the cost of the exercise was spiralling upwards. He said that they could not at that moment give an indication of a solution. He stated that the question was: what do they do in this situation? He made the comment that if they wanted to remove the illegal aliens, they had to incur the costs.

Ms Mothoagae referred to the fact hat the Department had spent some money on the acquisition of driver's licences by employees. She asked for comment in this regard, and inquired as to whether the acquisition of a driver's licence was not the responsibility of the individual, as opposed to that of the Department.

Mr Lambinon replied that he also felt that the obtaining of a driver's licence was an individual's own responsibility. However, he added, a very small amount was spent on this.

Ms Mothoagae, referring to the Department Spending on court cases, stated that she could understand that we live in a time where Human Rights are protected. She expressed concern over the fact that this justifies the Department's involvement in these court cases. She inquired, therefore, as to whether the Department didn't think it would be better to invest some money in training and other relevant programs for staff so as to avoid such cases.

Mr Lambinon stated that he appreciated the point raised by Ms Mothoagae regarding training. He mentioned that with the advent of the new Immigration Act, more or less 3000 people were trained. He said, however, that each application had its own merit.

Mr Bell (DA) commented on the subject of driver's licences. He questioned the Department spending money on paying for the acquisition of licences by the employees, stating that the issue was not the amount, but rather the principle.

A representative from the Office of the Auditor-General explained the issue of drivers' licences, stating that it was only the Department drivers for whom the Department paid, and not the rest of the staff.

Mr Bell then turned his attention to disciplinary issues. He asked for the number of cases that were currently being heard and how long it would take to resolve them, stating that there were rules that had to be followed in relation to this.

Mr Lambinon replied that the figure was on and around 400 cases, yet he could not provide them with a proper answer because they did not have the statistics with them.

Mr Beukman indicated that the meeting would now move to the next subject of discussion, which was the filing of vacancies in the Department. She asked Ms Mothoagae to commence with the questioning.

Ms Mothoagae asked what the Department had done to address the challenge of filling vacant posts in critical positions within the Department.

Mr Lambinon expressed his pleasure at presenting to the committee the new Chief Financial Officer of the Department, Mr Nkambule, who was siting to his left. He stated that this was one of the vacancies they had aimed to fill.

Ms Mothoagae stated that there were other key positions that were not yet filled by the Department. She said that they wanted to know how the Department had progressed since 2001, because the failure to fill these positions could impact negatively on service delivery.

Mr Lambinon concurred that there were other positions that were not yet filled, but stated that they had been filled in an acting capacity to enable the structure to be intact. He commented that these employees had done a wonderful job. He listed the positions of Director, three Deputy Directors, a Chief Director, and an Information and Technology Officer as being vacant. At the lower Director level, he said that eleven of these posts were vacant and were filled in an acting capacity. Five of these posts were advertised, he said, and the recruitment and selection process had begun.

Ms Mothoagae asked what the position of Government Printers was with regard to the filling of posts.

Mr Lambinon replied that Government Printers was a very unique situation. He explained that if one starts at the top and looks at the Chief director / Accounting Officer post, the problem is that it was intended to be a package post. Such a post cannot be filed, he stated. Then there are a number of vacancies in the lower levels, he continued. The salary structure in these reaches is in terms of the Public Service dispensation. He commented that the salaries were quite bad, to say the least. He explained that the Government had decided to make Government Printing into a Public Enterprise. He stated that this meant that they would focus on the filling of the vacancies only after this had taken place.

Ms Mothoagae commented that they were also aware that the public sector is normally seen as 'breeding ground' for prospective employees by the private sector. She then inquired about the training performed by the Department on staff. She expressed surprise at the fact that there were no financial skills courses included in the training. She then inquired as to how relevant the training was.

Mr Lambinon replied that training in financial skills was important because public accounting is a serious concern. He said that for their Programme Managers and Responsibility Managers , their training is done by the Treasury Department, because the training is specialised. He explained that they did not have the capacity in their human resource department to provide such training. With regards to the Printing Works Department, Financial training was a different kettle of fish, he said. He explained that in Government Printing Works, the process was different and very practical. There could be no training to cater for the type of environment that exists in this particular department, he said. Financial training there is done on the job, he stated.

Ms Mothoagae asked whether the Department found the Auditor General's findings of financial mismanagement disturbing, especially in light of the fact that there head been posts which had been vacant there for a long time.

Mr Lambinon concurred that the filling of posts was an important matter. He explained that the concern of the Department was in finding the adequate personnel to fill the posts. He reiterated once more that the matter of the filling of posts in general was one of grave concern. Home Affairs transgressions occured everyday, he continued, and the necessary staff is needed to perform the everyday tasks of the Department. He stated that the Minister of Home affairs had also taken up this issue.

Ms Mothoagae said that she could accept that plans for managing a working internal audit system were in place, but asked how the Department would perform this function efficiently when it claims to have only filled five of the possible fifteen positions in the Audit Committee. She asked the Department how far it had gone in attempting to fill these positions.

Mr Lambinon answered that there were a further seven posts that still were being advertised this month. He reiterated that they did see this as a matter of concern.

Ms Mothoagae followed on from her question by firstly asking how the committee expected to be effective in the absence of personnel in key posts, and then stating that the situation could impact negatively on the Department. She asked what the Department's plan of action was to resolve this issue.

Mr Lambinon answered that the filling of the relevant posts was crucial. He explained that with the organisational structure of the Department at the moment, the Accounting Officer holds the most responsibility. He explained further that the Accounting officer liases directly with the Audit Committee and vica versa. He stated that the situation was improving.

The Committee adjourned for a tea break.

Upon returning, Mr Beukman announced that the matter under discussion would be the Government Printing Works. He requested that Mr Kannemeyer begin the questioning.

Mr Kannemeyer requested that a representative from the Government Printing Works explain the process regarding interest received by the department on income generated by providing printing services to Government Departments.

Mr Quist (Government Printing Works) responded that Government departments are charged for the services provided to them by the Printing Works. Of the outstanding debts, he explained further, they have to charge interest until such time that the debts have been cleared. On the other hand, they themselves accumulate interest on money received by the rendering of the printing services. As a matter of policy, he continued, they then have to return the interest that they charged on outstanding debts back to the Government.

Mr Lambinon expressed the sentiment that the situation of the interest incurred by outstanding levies really made no sense, especially considering the fact that they have to give back to the Government money that was charged on Departments for the late payment of levies. This, as opposed to not charging the interest in the first place.

Mr Kannemeyer expostulated and rhetorically asked that if Government requests that a Department carry out a prescribed instruction, does it really make no sense. He stated this would then imply that Government Departments could pay Printing Works whenever it suited them. Seeing from the angle of Financial Management as well, he continued, this view certainly does create a bit of a problem. He asked whether the Treasury had any comment regarding this issue.

A representative from the Office of the Auditor General stated that the discipline was prescribed and widely accepted.

Mr Mmakola concurred.

Mr Kannemeyer then stated that the issue was thus clear. He explained that the process was not about Rands and Cents, but rather about Financial Management.

Mr Bell then raised the issue of the bank overdraft. He stated that he could not find proof that they had been approved a bank overdraft. He asked if this had been rectified, meaning, had they gained approval.

Mr Quist replied that they had been granted approval of the overdraft.

Mr Bell then asked if they were paying interest on the overdraft.

Mr Quist stated that they were not paying interest on the overdraft.

An ANC committee member asked how soon Printing Works' accounting practices would conform to general accounting practices.

Mr Quist stated that the underlying issue was the lack of personnel, but the process of finding proper staff would be completed within the next two to three months. He added that the staff to be hired would be capable personnel.

Mr Kannemeyer revealed that he had read somewhere that it was Cabinet's decision to turn the Government Printing Works into a public enterprise. He asked when this process was going to be finalised.

Mr Quist replied that the target was for April this year (2003). He stated that this had not happened but they could not give a timeline now on the progress but would provide the committee with a timeline within the following week.

Mr Kanemeyer stated that Cabinet had taken the decision on the 20th of October 2000. He asked what the reasons were for the delay. He also asked if they could be informed of the progress of the evaluation process.

There was no reply to this question.

Mr Kannemeyer suggested to the Printing Works Department that they could forward the names of those Government departments that were not complying with the payment of levies. He said that they could mention them right then in front of the committee so that they could be addressed or choose to protect them by not mentioning their names.

Mr Quist did not mention the departments. He stated that they do have a monthly list available and that some departments were a greater problem than others.

Mr Kannemeyer then confirmed that Printing Works had chosen to protect them.

Mr Kannemenyer then highlighted section 5.1 on the Auditor General's report, referring to the use of former employees as consultants within Printing Works. He asked whether this practice was still in place. He noted that it cost the Department R220 000. He asked what their standpoint was on this issue. He asked why they decided that this was the best practice to utilise.

Mr Quist replied that they were using this practice only on a limited scale, yet the instances of success had been with the calling of people who have the experience of dealing with books.

Mr Bell asked what measures the Department was taking to resolve the financial management challenges they were facing, besides the ones they had mentioned, which did not seem to be working.

Mr Lambinon stated that they were going to do everything possible to resolve these issues. He stated that they were still trying to bring in new staff. He stated that they were also aiming to combine the efforts of the Internal Audit sections of the Department of Home Affairs and Government Printing Works, which meant that there would be more focus.

Mr Kannemeyer asked how the personnel expenditure could be as high as R9-million, given the number of vacancies that existed in the Department.

There was on reply to this question.

Mr Nair (ANC) referred to page 57 of the Auditor General's Report. He commented that the Departmental records seemed to be in disarray. He stated that it also appeared that the internal control component of the Department is also non-functional. He said that this meant that they had quite a problem. He asserted that it seemed as if Government Printing Works was not functioning in a business sense. He stated that something had to be done. He then suggested that they work on their business plan, or otherwise close shop.

Mr Beukman then asked the Convenor of the Working Group, Ms Mothoagae, to sum up and conclude the discussion under the Department Of Public Works.

Ms Mothoagae thanked the Home Affairs Department for their time and asked that they forward relevant information to the committee as soon as possible.

Mr Beukman then called on Mr Smith to start forwarding questions to the Independent Electoral Commission (IEC)

Mr Smith made an introductory remark. He stated that they would be asking questions that are not only related to the procedure of Financial Management in the IEC, but also ones that are aimed at providing the committee with a picture of how prepared they are financially to carry through the 2004 elections. He said that he would not be taking long.

Mr Smith then proceeded to ask a question around the surplus funds of the IEC. He referred to the Auditor General's request that they return R45 million back to the National Fund. He asked if the IEC had done so and, if not, he asked whether they had received approval from Treasury to retain the funds.

Adv Tlakuka (Chief Electoral Officer, IEC) replied by firstly stating that in 1998 they had submitted a budget of one billion Rands to Treasury, yet they were only allocated R500 million. The funds fell short, she continued, and in October 1998 they approached the Treasury Committee for additional finds. She stated that an additional R100 million was subsequently allocated. After those negotiations, she explained further, the Committee then granted them R38 million in addition to this. They then wrote to the Director General of Treasury to get a written confirmation of the grant. They did not receive a response, she stated. Nevertheless, they were told not to use the R38 million, she stated. However, she concluded, it was decided that the amount should be fully accounted for, leading to its mention in the Auditor General's Report.

Mr Smith then referred to page 26 of the Auditor General's Report, where it lists four important internal control weaknesses. He asked whether these areas had been addressed and, if so, how.

Adv Tlakuka stated that they had put in place an electronic system to ensure that no expenditure occurs without a record. She continued and stated that the problem was also a lack of training and skills, and they had thus embarked on a massive training programme because of this. They had thus addressed the concerns, she concluded.

Mr Smith then requested that the IEC give this to the committee in writing. He explained that this was going to be the last time that they would be interacting with them before the elections. He stated that they would use this for their resolution and as a base for their interrogation next time.

Mr Smith mentioned that the Auditor General had commented that the Internal Audit component of the IEC could not be relied upon. He stated that if the internal audit is done at the same time as the external audit, he could understand how such a problem could arise. He then asked whether their Audit Committee was doing what it was supposed to do.

Adv Tlakuka explained that the instance when the internal audit was done at the same time as the external audit was a once off event and would not happen again. She stated that the Audit Committee was set up and appointed and meets three times a year. She apologised for the absence of Mr Maqhubela at the meeting, who was the Chairman of the Audit Committee,

Mr Smith asked how the IEC donor funding was managed.

Adv Tlakuka replied that the Accounting Officer of the Department managed their donor funding.

Mr Smith then asked if they could get a sense from the IEC of their ability of running an effective election, especially in terms of personnel and equipment.

Adv Tlakuka stated that when they had submitted a budget to Treasury, they had made provisions for all the equipment and personnel that they would need. She reported that Treasury had subsequently cut their budget by 10%, making it stand now at R640 million. She explained that they as the IEC did not have a long organisational history, so they could not really benchmark the actual amount that would be perfectly adequate for these upcoming elections. She said that they were hoping that the amount would be enough to see them through. She stated that they had to add 2000 new voting stations, yet they were not budgeted for. She explained that they had not foreseen the need for these stations at the time of handing in the budget. More people were needed to man the stations, she said, but they would try to work within the budget.

Mr Smith then asked whether the R640 million that they had been granted came directly from Government. He also asked what donor funding the IEC was looking at, expressing a desire to know whether there was a conscious strategy for getting these funds.

Adv Tlakula replied that there was a conscious strategy at getting donor funding and that they made it a point that those funds are used for voter education. She stated that if they also needed funds over and above those allocated to them, they would also approach donors. She said that they do not encourage a situation where their employees do their fundraising for them, explaining that fundraising was controlled internally. She stated that employees could fundraise for the IEC if the amount was R5000 or less.

A representative from the Office of the Auditor General stated that they could not express an opinion on donor funding because it had been excluded from the income statement.

Mr Bell asked a question about Municipal Stations of the IEC. He stated the officers working in these stations get allowances. He stated furthermore that these officers are employed by the municipality and get their allowances from the IEC. He asked if there was any compensation provided by the IEC to the Municipalities for use of their equipment.

Adv Tlakula confirmed that the officers received no salary but were given a stipend of R1000 because they performed their functions temporarily. She replied that they did pay the municipalities for the use of equipment.

Mr Smith then asked how many meetings their Audit Committee had held .

Adv Tlakula replied that until the present moment, the Audit Committee had held three meetings.

Ms Mothoagae then suggested that the IEC must encourage people to vote now. She said that they did not want a situation where people were registering during elections.

Adv Tlakula replied by firstly stating that Electoral Officers are assisted by Electoral Project Co-ordinators. She stated that they were responsible for the registration of voters. She stated that the process of registration was still ongoing.

An ANC committee member referred to the figure of R640 million given to the IEC. She asked if the increase in the funding was a decision partly based on fact that the parties contesting in next year's elections would have increased.

Adv Tlakula denied this. She that at the time they had applied for the funding the floor crossing legislation had not yet come into effect.

Mr Beukman asked Ms Mothoagae to conclude the discussion.

Ms Mothoagae thanked the IEC delegation for appearing before the committee.

Mr Beukman closed off the discussion by stating that the IEC was a Chapter 9 institution and they were looking at it to set the example for other Chapter 9 institutions.


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