The Committee dealt with several internal issues, such as changes to its future programme, the adoption of minutes, and its reports on the Military Hospital and the Silvermine Naval Base. The Silvermine report elicited concern over security at the base, following a further break-in since the Committee’s oversight visit, and the Department was urged to work closely with the local authorities to ensure that the security of the base was not compromised.
Presenting its first quarterly report, the Department said that it had achieved seven of its 12 performance targets. The key issues with the Department’s spending involved the six-month backlog in the payment of invoices owing to the use of the accrual system, and the underspending of funds allocated by National Treasury. The report focused on the Department’s spending on housing, pensions, educational support, burial support, administration and healthcare support.
The Committee responded constructively to the report, providing comments and suggestions on the key areas where the Department could implement changes, and giving advice on how they could administer the changes. The Department acknowledge it had a duty to take these proposals into consideration, and it would report on how it had progressed at the next meeting with the Committee.
The Chairperson advised Members of an adjustment to the Committee’s programme. On 29 and 30 August there would be a workshop on the International Women’s Conference, and the Chair of Chairs had requested meetings should be cancelled on these days to accommodate it.
Mr S Esau (DA) said that the day’s agenda mentioned a discussion on the Public Protector’s report. However, that report had not been seen so the day’s programme should be amended.
Mr J Skosana (ANC) proposed this amendment, seconded by Ms B Dambuza (ANC), which was adopted.
Adoption of Minutes
The minutes for the Committee’s meetings on 15 February and 22 February were adopted without amendment.
The minutes of 22 March required one amendment -- a change to the spelling of Dr Gulube’s name.
The minutes for the meetings of 10 May, 17 May and 24 May, were adopted with no amendments.
Report on Military Hospital
Mr S Marais (DA) and Ms N Mnisi (ANC) voted for the adoption of the report without any amendments.
The Chairperson suggested that a recommendation be put on the table to do a follow up on this report.
Report on Silvermine Naval Base
Mr Esau called for serious consideration of this report.
Mr Marais commented that following the Committee’s last visit to the naval base, there had been a second break in.
The Chairperson asked for recommendations on how to solve this problem.
Mr Esau said that this posed a risk not only for South Africa’s navy, but for any other navies that made use of this base.
The Chairperson suggested a presentation on this report after consideration of the minutes at the next meeting.
Mr Skosana asked what Members should do when they moved around and saw matters that needed urgent attention. He suggested it was the responsibility of Members to report them to the administration responsible for those areas.
Mr. Marais also called for a follow-up on a previous report which had highlighted some major security issues which needed to be addressed by the Committee.
The Chairperson said that this report would be presented in the joint committee. If any other issues arose, Members were encouraged to send communications to his office, which would conduct a follow-up.
Military Veteran’s Department: Quarterly Report.
Ms Nontobeko Mafu, Deputy Director General: Empowerment and Stakeholder Management, Department of Military Veterans (DMV), said the Department had achieved seven out of 12 targets in the first quarter. These included indicators aligned to the national imperatives of government. The Department was introducing internal controls of indicators in the form of an action plan. The financial performance had been 18%, against the threshold performance of 25% determined by the National Treasury.
Mr Sibongiseni Ndlovu, Chief Financial Officer (CFO): DMV, said the Department managed to spend 18% of the targeted 25% of its budget. There were some key issues around areas where the Department had underperformed. The department had used an equal phasing over the quarters, which had assumed 25% spending across each quarter during the year, so the variance on actual spending was 7%.
There had been an increasing demand for bursaries for education support. Under-spending was seen in the administration department. The key challenges were around the payments for computer services and for the g-fleeT vehicles, and payments to the Department of Public Works (DPW). The problems had been addressed and in the second quarter report, changes and improvements in performance would be seen.
Social economic support services include health, healthcare and education support, where the overall spend on key benefits was behind budget. However, education support was ahead of budget. Payments had been executed, but were behind due to administrative problems. The Department was addressing this gap by making payments to the National Student Financial Aid Scheme (NSFAS) for public education.
There had been a backlog on payments because the Department had closed the financial year with an accrual of R33 million owing to a backlog of up to six months on receiving invoices for payment. This matter was being addressed by senior officials, who were working to reduce the bcklog.
In the area of skills development, the Department had started to identify key programmes to be given to beneficiaries, and the payments that would go through for this would be seen in the second quarter.
R133 million had been budgeted for the compensation of employees.
There had been a prediction that the budget would be overspent in the next financial year, so funds had had to be reprioritised. More efforts would go towards a proper skills development programme, because it was necessary to empower veterans and ensure they became self-sufficient. The backlog in education support spending had been because of the lack of correlation between the financial year and the academic year.
R33 million had been budgeted at the beginning of the financial year for healthcare, but only R9.3 million had been spent. The balance was yet to be processed, and the figures would change in the second quarter. In the area of housing and the bond rescue, nothing had been paid out for the provision of new houses. The R7.8 million indicated in the report was related to the houses already allocated. The Department was waiting for invoices to process payments. The area that was taking the majority of the budget was skills development. The Department had also set aside R22 000 for tombstones. The budget would be changed to cover the risk expenditure against key benefits.
Mr Ndlovu said that in terms of overall spend, looking at economic classifications, the costs of employment were marginally ahead of budget due to the use of contractors and interns, despite the vacancy rate of 21%. This would be addressed through changes in the proposed organizational structure. The Department of Public Service and Administration (DPSA) and National Treasury had agreed to meet to address the issue of compensation.
Goods and services had been underspent mainly because of less than expected activity in benefits management. Not much had been spent on care packs. Despite the underspend in transfers and subsidies, education support cost pressures were persisting due to accruals from the previous financial year and an increase in the number of beneficiaries
There had been a stark difference between the spending and the budget set aside for administration. National Treasury had approved an allocation for statutory organizations, but at the moment it had not disclosed how much had been allocated. There was a hope that in the next financial year there would be clear allocations for the different organisations that fell under the Department.
Mr Marais referred to the cutbacks on cellphone spending by the Department, and asked who the cellphones were for, what they were for, how much had been spent, and whether this had been declared to the South African Revenue Service (SARS).
Mr. Esau asked for details about the spending on transport and pensions. What had been achieved in this regard? Had the policies been finalised? He called on the Department to report on the South African Military Veterans’ Association (SAMVA), as there was no budget and no information on what was taking place in this area. In regard to supply chain management (SCM), he asked why there was an issue in processing payments, considering the effect this had had on the Department’s backlog. The Department should clarify why it used the system of accruals if it was not as effective and was causing problems in accounting.
Ms Dambuza asked the Department to give more information on how its information techology (IT) system operated and whether it was aligned with the State Information Technology Agency (SITA).
Ms Mafu asked Mr Mbulelo Musi, Chief Director: Communications, to answer on the matters relating to transport.
Mr Musi said there had been significant progress. A memorandum of understanding (MOU) had been created with the Department of Transport and there was a task team working not only on transport, but also on providing opportunities. A report would be presented next week. The current budget for this was R22 million.
In response to the query about SCM issues, he said that the issue was about invoicing and was related to IT systems. The Department was aware that accruals had led to the backlog, and a meeting with the Director General (DG) had been scheduled to address the matter. The situation had been aggravated by the fact that there were invoicing issues on the SCM side. The DMV was currently working towards building systems to deal with the financial systems’ challenges because they had had an impact on the progress of the Department.
There had been problems with capacity building in the Department. Three programmes had been launched where these problems had been raised. The DMV would be reporting soon on addressing how it had dealt with capacity and health service issues. Most of the queries raised would be sufficiently addressed by the end of the financial year.
Progress on challenges relating to pensions had been slow. It was a process influenced by an attempt to make a rational pension regime. This was an area highly dependent on stakeholder involvement and policy development. The Department hoped to report better progress on this, because it was a critical area.
Mr. Esau commented that in regard to the pensions, he had received a hard copy of the details and the main query still remained about the payments of these pensions.
Mr Musi responded that the Department would follow up on this and would report on it at the next meeting.
The Chairperson asked Mr Esau for a copy of the letter regarding the query about pensions.
Mr Musi said the cellphones were an expense for the Department, because they were a tool of trade for officials. They required cellphones for work purposes. The main purpose was that they needed to be reachable beyond the office. The Department was rationalising this expense. There existed a Vodacom contract within National Treasury, and the Department hoped become part of it so as to minimise costs.
SAMVA’s budget was administered through the DMV, and if it was done separately it would have to be registered as a state organ, which was highly unlikely at this point. SAMVA’s reporting was its individual responsibility, and it had a duty to report to the executive authority.
Regarding the use of accruals and budget alignment, there was an effort to create an interface with the systems. National Treasury was currently working on a budget to create an integrated system, because SITA provided merely a database system.
The Chairperson asked about the burial support programme for which the Department had set aside R20 000. Why was the DMV spending this amount on head stones?
Mr Musi replied that this service was not mandatory, but was available if families wanted to erect a headstone for their loved ones.
The Chairperson also asked when the vacancies in the Department would be filled.
Mr Musi said the Department was targeting to fill 34 vacancies by 1 January 2018.
Mr Esau suggested the Department should dedicate efforts in the next financial year to addressing the under-spending, as it was a constant issue that the report was highlighting. With regard to service delivery on benefits, there was slow progress and it was lagging because it was being outsourced. The MOUs therefore needed to be taken up more vigilantly to ensure the benefits were provided timeoudly. Skills development had been underspent, and there had to be parallel processes, so budget cuts in some areas for the benefit of funding other areas were necessary. The budget for housing needed close monitoring. The budget set aside for headstones was too large and should be cut back. The Department should look into finding more affordable sources of headstones. Attention also dedicated to the bond rescue programme, because there had been growing issues with housing.
Mr Tlhaole recommended that the Department should reach out to local newspapers when doing events. This would make the work of the Department more visible and transparent. The Department and the Committee must also work collectively to identify beneficiaries, especially with regard to housing distribution. This process was slow and people were not getting their housing. Joint efforts were required, as people would potentially rebel if they did not receive their benefits.
Mr Skosana commented that the pace of delivery in the Department needed to be addressed, and so should the issue of spending. The Department needed to start spending within their forecast periods.
The Chairperson said that the Committee’s comments and feedback were meant to assist the Department in improving their work. At their discretion, the Department should take on the tasks that they were able complete and report back to the Committee on which points they had considered, and their progress in implementation.
Ms Mafu acknowledged all the comments and feedback from Committee Members, and said that the Department would report at the next meeting on what had been achieved. It still needed to report on the skills programme and organisational structure, and there had been a request to provide a report in 14 days.
Mr Gamede recommended that based on the report, a meeting with NSFAS was necessary.
The Committee supported this proposal, and suggested that NSFAS should be invited to the next Committee meeting as a matter of urgency.
Mr Musi, in conclusion, said that the Department had taken their imbizos on a road show and the last one was expected to be on Saturday 26 August in Mpumalanga. Regarding overall communication within the Department, there had been some notable progress. An issue had arisen with regard to housing in Sedibeng, where the community also wanted the houses that had been provided for the veterans, and this had created conflict between the veterans and their communities. The Department needed to intervene in this matter to ensure the successful reintegration of the veterans into the community. This would require the DMV to work with municipalities and provinces to address this issue.
The Chairperson adjourned the meeting.
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