Parliament Quarter 1 Performance

Meeting report

Parliament Quarter 1 Performance
Ms Penelope Tyawa, Acting Secretary to Parliament, informed Members the Parliament has a total approved budget of R2. 4 billion for the 2017/18 financial year, of which R509.7 million was spent in the first quarter.  This expenditure was less than the R527.9 million spent in the first quarter of the previous financial year.

The underspending on Strategic Leadership and Governance, Administration, Core Business, and Support Services was due to the fact that general salary increases for the 2017/18 were not yet paid by the end of the first quarter as well as delayed activities that were postponed to the second quarter. The Strategic Leadership and Governance programme has spent 88% of the budget for the quarter, resulting in under spending of R3.1 million.

The overspending of 5% under Associated Services was as a result of underfunding of transfers to political parties represented in Parliament as well as medical aid contributions for former Members of Parliament and Provincial Legislatures, which were always funded from retained earnings which have been exhausted. National Treasury would be engaged to address the shortfall during the Medium Term Budget Policy Statement.

The underspending of 23% on direct charges was due to the fact that the budget for direct charges has been overstated since 2009/10 financial year as a result of the of loss of office gratuities to non-returning members. Indications are that there would be under spending of R104.7 million at the end of the financial year which would be surrendered to the National Revenue Fund.

The underspending of 9% on compensation of employees was temporary due to the delay in the implementation of the general salary increases for the 2017/18 financial year effective 01 April 2017 which were implemented in July 2017. Under spending has also been attributed to member resignations.

Underspending of 49% on Goods and Services was as a result of payment of the first quarter insurance for the personal insurance which was paid in July due to the fact that the insurance broker only submitted the invoice in July. Payment of the June 2017 audit fees invoice which was received and paid during July and delays in the finalisation of the procurement of tools of trade for officers in the Speaker's Office also contributed. The under spending was temporary and indications are that Parliament would spend the full budget of goods and services by the end of the financial year. The overspending of 6% on Goods and Services relating to members' entitlements was due to the budget not being enough to cover members' entitlements in terms of the Members Handbook. Indications are that there would be an overspending of R23 million at the end of the financial year.

The overspending of 2% for the quarter on transfer payments was because the budget for transfers to political parties represented in Parliament has been less than the transfers made over the years and the shortfall was always funded from retained earnings which have been exhausted. Indications are that there would be an overspending of R19 million at the end of financial year. National Treasury would be engaged to address the shortfall during the Medium Term Budget Policy Statement.

The under spending of 75% on capital expenditure was ad a result of delayed purchases and completion of capital projects which would be done and completed during the second quarter. The under spending on capital expenditure was temporary and indications are that Parliament would spend the full budget by the end of the financial year.

The Secretary's Office has spent 105% of the budget. This was due to salaries for some employees under Strategic Management & Governance which are paid from the Secretary's Office and this would be corrected. The Finance Management Office, Internal Audit, Registrar of Members Interest, Legislative Sector, and Projects have spent 75%, 75%, 84%, 53%, and 70% of their budgets for the first quarter, respectively.  The Strategic Management and Governance has spent 66% of the budget due to the fact that some employees under the division are paid from the Secretary's Office cost centre and this would be corrected.

 Core Business has spent 82% of the budget for the first quarter and this resulted in an underspending of R24 million, and the variance was temporary. The National Assembly, National Council of Provinces, International Relations, Core Business Support, and Knowledge and Information Services have spent 78%, 79%, 90%, 78%, and 90% of their budgets, respectively. The underspending could be attributed to delays in the implementation of the 2017/18 salary increases, delivery of ergonomic chairs for the committee section, and delays in receiving invoices from DIRCO for international traveling.

The Acting Secretary stated the Parliament budget for 2016/17 was reduced by R33 million on Goods and Services following the Medium Term Budget Policy Statement. This would affect the Parliament's ability to meet its deliverables as per the Annual Performance Plan R342 million is the total budget reduction over the medium term expenditure framework (MTEF).

(Graphs and tables were shown to illustrate budget allocation per programme and budget allocation by economic classification)

Discussion

The Chairperson wanted to know why there was underspending on compensation of employees and why salary increases were implemented after quarter 1. He thought Parliament never budgeted for increases and that was why there are fights with labour unions.

Ms Tyawa replied that negotiations usually started a year before for salary increases. At the time of compiling the documents for presentation they were having discussions on percentages. Discussions were around 9 or 10%. The institution also had to refund the no work, no pay that was instituted last year.

Mr C De Beer (ANC) indicated that the 2016/17 budget cuts for Parliament are going to have an implication for the 2017/18 budget. He proposed that Parliament should engage with the Minister of Finance regarding Parliament's core business.

Mr N Gcwabaza (ANC) wanted to know if compensation of employees was located in one programme or in each programme.

Ms Tyawa said the personnel budget was for each division although it should be with the HR division

Mr J Steenhuisen (DA) asked if all political parties met the requirements for funding.

Mr Manenzhe Manenzhe, Chief Financial Officer, Parliament, replied that five political parties did not comply with the requirements during quarter 1. They were not given funds and correspondence was sent to those parties to query matters. Most political parties complied with the requirements.

The Chairperson said the Committee should be given a picture of serial offenders.

Mr Steenhuisen said information on this matter should be given to the Committee regularly so that it was known why those political parties are not complying because that was public money. As a result, there are no consequences.

Members agreed these reports should be given to the Committee every six months.

Mr M Waters (DA) asked what the value is of the five political parties that were not funded.

Mr L Gaehler (UDM) stated the Committee should not confine itself to the issue of the value but rather it should not put too much burden on the administration. This matter should be taken to the forum of leaders of political parties. He noted that the UDM was not part of the five affected political parties.

The Chairperson said the Committee should be given the names of the five political parties that did not get funding and those that got funded so that it could see who got over-funded and under-funded.

Mr Waters wanted clarity on over spending to political parties.

The Chairperson said it was not the prerogative of the Acting Secretary and it should be consulted with the Speaker.

Mr Gcwabaza wanted to know why on information requests the Parliament has scored 100% yet when you go to the library, you do not get the information you need.

Ms Tyawa said they did reach the target and tried to respond to every request. There are areas that indicate that information has not been given in time, especially archival material. She he would responding in writing to questions on increases on travel entitlements; expected over-spending on members' entitlements; and costs of medical aid contributions for ex-members of NA and provincial legislatures, and for members who came before 1994.

Adoption of the Strategic Plan

The Committee adopted the draft document with minor amendments.

The meeting was adjourned.