Department of Military Veterans 2016/17 Annual Report

Meeting report

Presentation to PCD & MV Department of Military Veterans Annual Report for 2016/17 FY

Mr Max Ozinsky, Acting Director-General (ADG), DMV, said the unqualified audit with findings was a milestone as the audited outcomes largely said that the DMV had given the Auditor-General of South Africa (AGSA) confidence on what DMV had been reporting on.

Appropriation Statement…2
The expenditure of DMV had improved significantly from under 60% in the previous financial year to 84.4% in the year under review. The Department generally did most of its work through transfers and subsidies where payment of benefits had been captured in the report, and expenditure had also improved
significantly compared to the previous financial year.

Contribution to the Executive Authority’s Priorities (1)

Comprehensive support services to military veterans and their dependants was putting huge pressures on DMVs budget as the number of bursars had increased to 7 146 from just a little over 4000 in the previous financial year.

The Department was particularly worried about its massive underachievement on mortgaged house rescues as the target for the previous year and year under review had been 1000 with only just over 100 rescues achieved in both financial years.

Discussion

Mr D Gamede (ANC) said that not only the AGSA identified beneficiaries that had received educational support without approval but that had been discovered by others; how had that happened?

How was it that suppliers had been paid without rendering any services: what happened to the approving officials of DMV?

Since being supported by Armscor with Information Communication Technology (ICT) functions, it seemed that DMV had no plan of its own going forward, since Armscor had similar challenges as the DMV regarding ICT.

When would the DMV regulations be amended to include educational support to veterans?

How best could the Department improve its payment of suppliers within 30 days, as that seemed to be a perennial challenge?

Mr S Esau (DA) asked why 1849 veterans had been trained and taken through skills development and 179 military veterans provided with general advice on business support and development, but yet had not been placed?

There also seemed to be contradictions as the one report said 1849 but another page in the same report quoted 1908 out of 3500 whereas the AGSA said the audited evidence showed that 2480 people had received skills development and training.  Why was there no certainty on the number of people having received training and skills development if people had been captured on a system of the DMV?

What was the actual nature of a letter of support for the military veterans run businesses and the purpose of the DMV giving out such a letter?

Why had Deputy Minister (DM) Mr Kebby Maphatsoe said that DMV had assisted registration of 100 new businesses in contradiction to the 132 reported by the Department.

Mr Esau said he received regular calls from people complaining that they had not received the Social Relief of Distress (SRD) parcels/ received them inconsistently. Therefore, though there had been an increase in the number of recipients which was commendable; the Committee had also noticed the shift of funds from the Empowerment and Stakeholder Management (ESM) to Socio-Economic Support (SES) but the under expenditure from ESM seemed to have also occurred at SES as well, which was troubling. If there was a demand which became oversubscribed; had there been sufficient planning to deal with that demand?

All the questions asked on the numbers quoted could be reduced to a database which was not reliable and verified properly, therefore the Department would not be able to plan effectively and accurately for the increasing number of military veterans and the actual budget for DMV.
He appreciated what Mr Ozinsky had said about the Human Resources (HR) being underestimated for the services that DMV had to deliver.  If the DMV structure had been approved by the Department of Public Service and Administration (DPSA) and the National Treasury (NT) considered it, then Mr Esau wanted to know what had been considered to approve such an establishment; which was underperforming and too under staffed to deliver.

What was the actual status of the database and the verification percentage reached to date as the numbers of military veterans had increased? When was it planned for completion?

Although the housing of veterans had increased in the year under review, which was commendable, the AGSA seemed to be mistaken when quoting 298 as it said that number had been since the inception of the housing programme by DMV. That could not be correct as two houses had been delivered the previous year and a number of municipalities had also delivered housing discarding the fact that the houses delivered by Western Cape municipalities having not been recorded to date.  Additionally, houses in Sedibeng and Durban Municipalities had not been recorded. Therefore, possibly the information submitted as audit evidence to AGSA had been inaccurate, the Committee would have to be made to fully appreciate all the military veteran housing that had been delivered across the country at the next engagement with DMV including housing by local Government and the Department of Human Settlements (DHS) in that regard.

Though the number of home rescues had increased, which was commendable, Mr Esau was concerned about the quantum if it went beyond R78 000 which was the top-up; as the risk remained if those being rescued did not pay the balance to settle the debt monthly. How was the top-up managed?

The Committee was aware of the two litigation cases where veterans had demanded the full R175 000 where the settlement reached had been R165 000; the Committee had previously asked whether the policy had been aligned to avoid further litigation.

With a complete database the risk of bursaries for veterans and their dependents had the potential risk of overriding all the other benefits from DMV, which meant that the budget of DMV needed to grow at a faster rate compared to how it was growing to date. He was concerned that justice would not be done to beneficiaries in that regard.

The issue of the numbers of recipients of bursaries also spoke to the contestation that there had been beneficiaries that had not been taken from the database. As had been earlier intimated; was that not an act of fraud?

Would DMV remain only with the National Student Financial Aid Scheme (NSFAS) as there were other disbursement suppliers at tertiary institutions that could do the work since NSFAS had experienced problems in the recent past?

Accruals on any benefit that veterans and their dependents received were worrying as on a cash basis meant that the interest returned to NT, meaning the following financial years (FY) budget would have to pay for that interest from the previous FY, meaning less money for the year under review. Internal, credit and debit controls and the audit Committee had to be better capacitated and it had to be insisted that those officials had to perform as money could not be returned to NT as that limited benefits for veterans.

Was provision for burial support an approved policy of the DMV or rather where the benefits derived from DMV approved policies, as the Committee had not had any sight of such policies; though it understood that policies had to be amended accordingly?

How far was the pension framework issue of veterans and what had been considered by NT to date in having a single military veteran’s pension?

What progress had been made with the transport issue as well, that was the second issue which had not been mentioned in the presentation.

As the ADG had indicated that DMV were rolling out a provincial programme for the once-off compensation and Mr Esau knew that there were challenges as some people had not been paid out. As people were applying and hopefully would be paid out; he had not seen anything about contingency funding having an allocation, therefore he wanted to know how that compensation would be managed together with what the quantum was?

On the 61 days to register and update of personal records of veterans, AGSA had reported that it had been unable to verify that. For that to be reported on as a target created doubt as it was unreliable owing to the fact that it had been unverified. Mr Esau’s experience was that of the registrations which came to him and which he forwarded to DMV; it took longer than two months and up to a year in particular cases.

Though the DMV had in previous years achieved on partnerships with Government and private sector players, in the year under review it had been found that a target of 60 partnerships had been targeted with zero achievement.  Why had nothing happened there and why had nothing occurred with continental and International agreements as well?

AGSA had reported that there was no evidence supporting the existence of two memorial additional sites. Could the DMV clarify that matter?

The Committee knew there was an underspending regarding the nine provincial coordinators of DMV where only three had offices that were furnished. Why had there been a delay when the Committee had suggested that local Government facilities could be used.  Why did that programme remain under-expenditure?

Mr Esau said he had specifically sent to DMV a list of companies dealing in marble and granite for tombstones at reasonable prices as an additional burial benefit; because the current amount incurred for a tombstone as indicated by Minister Nosiviwe Nqakula would have a big impact on HR and the budget. He felt that DMV were losing sight of their core mandate in that regard because those who were living had to be a priority because though the dead had to be honoured it could not be that they overtook those who were alive, and that had to be sorted out.

The DMV was moving in the right direction and with a few policy issues sorted and underspending fixed the Committee would push for an independent budget vote for DMV.

How had the DMV coordinated the involvement of the advisory council and appeals board in assisting with policy formulation? Why was that environment still lacking so much?

What were the current statuses for the Memorandums of Understandings (MoU’s) and Service Level Agreements (SLAs)?

Mr Esau said the Committee also required the Management Performance Assessment Tool (MPAT) outcomes report of the DMV.

What was the status of the investigations and litigation against the six officials at DMV and what consequence management had been followed with officials who had been found guilty?

The Committee had not heard anything about how far the liabilities and contingency of the court case regarding R198 million.

He would also like to know the status of debt recovery regarding external debt.

What had happened to the investigations in Supply Chain Management (SCM) and procurement and what was the progress with NT capacitating the official within the SCM unit at DMV?

Mr Esau also wanted an update on progress in updating of the asset register of DMV.

When would the communication and marketing strategy be targeted for 100% and how far would it stretch in reaching the rural areas?

What did the use of contractors and business advisors actually entail? The constant worry was travel and subsistence where officials and veterans that had not cancelled their bookings incurred debt for DMV; but he understood some individuals were being pursued to repay the debt, and he wanted an update in that regard. Was there a confirmation form that people signed where monies could be recovered?

There were some further contradictions within the same report as some pages indicated that there were no disciplinary cases whereas other indicated a dismissal and four withdrawn disciplinary cases. Mr Esau wanted clarity on the matter and what consequence management had been followed.

According to the salary band there were 240 individuals on the roll but DMV reported only 207 employees. The average number of employees according to the notes was at 231; and in terms of employment equity demographics Africans were at 93%, whites at 4.5%, coloureds at 1.5 % and Indians under 1% and the contradictions in all the figures were misaligned with national Government. Mr Esau wanted some elaboration on those figures.   

There were two figures on vacancy rates which were contradictory which Mr Esau needed clarity on. He also understood that only 102 employees had been skills audited, but within that 27 people qualified for learnerships and 30 for short courses and upskilling. Worrying was that those going on short courses and capacitation increased by 100 to make the number 130. How had that been managed, seeing that it would mean a multiplication of the cost for capacitation for the DMV? More disturbing was that there had been an underspending on the training that DMV had rolled out.

Had the budget for The South African National Military Veterans Association (SANMVA) remained R6 million and were the appeals board and advisory council fully capacitated? Had SANMVA ever submitted a report to the Minister as the Committee was yet to see one?  Had there been any complaints from the Military Ombudsman or the Human Rights Commission (HRC) originating from military veterans.  

Mr Esau saw that 74 employed contracts had expired; could the DMV explain that?

Would the 27 graduates which would be absorbed be additional staff instead of contracted employees?

On irregular expenditure the delegations had been signed on 12 August 2016 where the ADG had to condone about R19 million of the R106 million in irregular expenditure; could the ADG elaborate for the Committee about the condonement and how the delegations had been actually executed.

Mr Esau wanted to know what the dental invoice of over R800 000 pertained to?

The DMV had to knuckle down and get to grips with what NT required in terms of pre-determined objectives and that they followed the specific, measurable, achievable, relevant and time-bound (SMART) principle.

Deputy Minister Maphatsoe noted that the DMV had assisted the Umkhonto we Sizwe Veterans Association (MKVA) to commemorate its 55th year; Mr Esau asked whether that was not supposed to be under SANMVA as part of that budget. If not, had that support been extended to other military associations?      

The Committee was looking forward to the new draft organogram and what was required under HR to run the DMV.

Mr Esau noted a few other errors on the report.

The Chairperson said the Department only had to respond to the questions from Mr Esau rather than dealing with the comments.

Mr Ozinsky replied that the Department was not getting ICT support from Armscor, rather DMV were working with the State Information Technology Agency (SITA) where DMV had implemented its ICT project through development work done by SITA. The work involved the database and the benefits management system linked to the database. The project was due for delivery by the end of 2017. If everything went well and the database was developed to the correct specification, certainly it would make a big difference to the workflow at DMV.

The Defence Decision Support Institute (DDSI) had been assisting DMV with verification through a desktop analysis but it had become apparent to Mr Ozinsky that the verification of the database could not be simply done by analysis of a desktop. What was required was to look at the people who had been added to the database after the certified personnel registers (CPRs) had been adopted and to re-verify said people.

Regarding regulations on education support; as AGSA had raised the issue of education support not being covered in the regulations, Mr Ozinsky said he thought it had been an oversight of DMV when the regulations had been drawn. DMV had instructed SES to develop a regulation in that regard. DMV had also previously drawn-up an education policy and was about to implement it; DMV had been requested to do more consultation on the policy. DMV had budgeted for four meetings where the advisory council and SANMVA would interrogate the education and housing policies together. DMV was awaiting from that panel the signed off comments on that as the matter was urgent, since NT and AGSA had told DMV that it could not process the bursary applications which had been submitted before and on 30 September without there being a clear education policy. The biggest challenge with the policy was the unhappiness from some of DMV’s stakeholders about the means test, as required by the Military Veterans Act.

In terms of policy, DMV had taken steps to ensure all other benefits were policy driven so as to regularise matters.

It was actually the travel agent and the phone contracts instead of the small businesses which bemoaned the challenge of payment within 30 days.

In the year under review and historically, the current leadership were dealing with how targets had been set by DMV historically. Some of the targets had not been useful as management tools which had created anomalies, for example, on MoU’s there had been a target to sign 60 MoU’s and Mr Ozinsky had asked how 60 MoU’s would help DMV with its service delivery and strategy if indeed it had signed 60 MoU’s? Was there some alignment between the MoU’s and improving of service delivery? Mr Ozinsky had files on MoU’s signed by DMV and most of them assisted with nothing in delivering education support, skills training or any of the benefits that DMV was meant to deliver on. Going forward DMV had changed targets for signing of MoU’s and had asked ESM to develop an MoU signing strategy so that officials would have guidelines for signing of MoU’s. That also related to continental and international agreements.

The correct number of individuals which had undergone training and skills development had been 1908 however; the first evidence DMV had presented had been 2400 but when AGSA had audited errors had been found which had brought the number down. The 1849 reported in the annual report booklet had been an error as well.      

Mr Ozinsky said the problem with SRD was that it had been implemented from a Ministerial directive as it had not been a benefit listed in the MV Act; additionally, there had not been proper procedures in place. In 2016 the payment procedure had changed as it had originally been done by the Department of Social Development (DSD), then it had gone to ABSA, to date it was being handled by DMV. All that had created problems regarding the availability of the benefit as there was quite a huge demand for the benefit however; the terms of the benefit came out of a policy from DSD. DMV had decided to develop its own policy where the main difficulty, besides sorting out the timeous payment of the benefit, had been that under DSD it was only available for three months whereas DMV guidelines extended the benefit for six to 12 months, whereby DMV needed a process to terminate the benefit for people that still required it. Also discussed had been that everyone receiving SRD had to also get skills training so that they could sustain themselves; to date SRD was with SES whereas training was under ESM, therefore DMV had to coordinate that better internally.    

Regarding bond rescue DMV was implementing the regulations as it was but the crux of it was that the payment which had to be done by DMV had to terminate the mortgage. That meant the outstanding amount on the bond could not be more than R188 000. DMV had submitted a housing policy for consultation but Mr Ozinsky was concerned about the long time it took for DMV to get responses on consultations.

The challenge had been created by the huge increase of applications for educational support plus the fact that there had been no policy to regulate said support. DMV had engaged NT around the shifting of funds to cover bursaries. Going forward NT had raised conditions about the need for a policy and the implementation of the means test. To date DMV had no money to cover those that it had covered in the previous year let alone new applicants for bursaries in the year under review. The matter had been highlighted in the Medium-term Expenditure Framework (MTEF) process with NT and it had been adopted by the cluster of Departments that DMV fell under.

Mr Ozinsky pleaded with the Committee to assist DMV with MVA’s regarding the means test for bursaries that was from the MV Act which was not passed randomly.

The Chairperson said Parliament had made the MV Act and what he understood was that ‘means test’ had not been well explained to stakeholders as the Committee was aware that MVA’s saw the test as an impediment. The means test was there to also protect them as military veterans because without the test the military bursaries had the potential to be a free for all, because part of the test required that there be a military veteran.

Mr Ozinsky said that DMV was aware of the issues around unrecorded houses but there had to be a process between DMV and provincial DHS’ to record houses for a particular financial year. The delivery of houses had to correspond to expenditure and the DMV had not spent any money in the instances that Mr Esau had indicated, therefore the houses could not be recorded as an achievement for DMV. In some of such cases there were disputes where DMV was engaging.

DMV had used Edu-loan and other suppliers besides NSFAS to make payments before, and were looking at whether to expand that supplier list. DMV’s problems though stemmed from verification of bursars.

DMV had been seized with strengthening internal audit, controls and monitoring and evaluation capacities separately respectively.

Essentially the asset register had been the biggest issue in hindering DMV from achieving an unqualified audit and the Department had since been assisted by the Department of Defence (DoD) to finalise its asset register and other issues. That process however had not comforted DMV because there had been challenges between the team drawing up the register and the DMV, and in the end when the financial statements were supposed to be submitted that team had still not given DMV the statements. The Chief Financial Officer (CFO) with some of his officials had been forced to reconstruct the asset register in the period after the financial statements had been submitted. That was possible to the extent that AGSA was satisfied in terms of confidence. DMV were busy developing the capacity to maintain the asset register on a monthly basis. Key on that asset register which was challenging were the opening balances because when DMV was established and assets moved, there had been no proper controls in place.

Mr Ozinsky said there was still SANMVA National General Council (NGC) which DMV were trying to process urgently. He had referred the matter to the appeals board and hoped to receive a response soon, so that he could decide. The matter had led to SANMVA not functioning properly. He had talked with SANMVA about submitting the report to the Minister as it had not been submitted.

There had been a number of complaints from the HRC about housing for military veterans and the DMV, to Mr Ozinsky’s knowledge, had responded to all those matters. The military ombudsman was not part of the governance structures of the DMV though there were issues that were referred to it and the DMV had engaged the ombudsman on procedures where a MoU was being finalised.

As per all MVA’s the assistance of MKVA on its 55th anniversary had been through a request by SANMVA. MKVA had written to SANMVA who in turn wrote too DMV to support their event.

The Chairperson asked whether DMV were encountering any challenges in terms of its Human Resources Development (HRD) Plan as he had noted that HRD reports were not compliant, reliable and accurate; was that an issue of capacity?

Were those whom had received educational support without being on the database similar to people that were ineligible to receive bursaries so that the Committee could understand whether it was fraud or maladministration?

Mr Ozinsky said that key for DMV was that everyone who benefitted had to be on the database whether veteran or their dependents.

General Lifeni Make, DDG, Corporate Environment, DMV, replied that in terms of HR capacity the DMV was currently undergoing restructuring and on completion of that the DMV would be able to say whether particular divisions or units were capacitated or not. Currently there was an HR Director and two deputies but when one looked at the entire gamut of HR those officials could not encapsulate all that was HR.

The Chairperson interjected wanting to know whether DMV was saying it could not complete a skills analysis to date?     

General Make replied that a report in that regard had been compiled by the DG, which DMV was requesting to submit as a written response. The DMV was also requesting that the MPAT report be sent through as a written submission.

The amendment of the regulations and even the Act would be ready for gazetting quite soon as the DMV had been ceased with that work for quite some time.

33 members were detached from the DoD and General Make was not certain how they had been captured wrongly on the payroll of the DMV but the details would be submitted to the Committee in writing in that regard.

He was aware that there had been a meeting which was supposed to be scheduled with the National Department of Public Works (DPW) together with the Committee regarding provincial offices of DMV; the DMV was requesting the Committee’s assistance in fast tracking that engagement as the DMV on its own had been trying for more than 12 months to engage DPW on the matter of offices. The applications were sitting with DPW.

Mr Esau said generally when someone was seconded from another Department to somewhere else, that individual remained on the payroll of their original Department; therefore, the additional members from DoD on the salary band of DMV, as he had enquired earlier, did not mean that DMV had to be paying them. The fact that they were being paid by DMV had not been added in the notes, the Committee had been concerned about the fact that they simply disappeared.

Mr Mbulelo Musi, ADDG, DMV, said all the challenges with benefits related to two categories; policy regulatory regime, procedures and programmatic issues. In terms of education, hopefully before the end of the third quarter of the 2017/18 FY the regulations around education policy would be concluded. Though consultations had taken too long on the education policy, it was comforting that as late as 5 October 2017 there had been a workshop with all stakeholders with Minister Nqakula which had included the appeals board and SANMVA, and DMV hoped that the process would also be concluded in October the same year. There were issues of people that had illegitimately benefitted from educational support and DMV was investigating the matter as the margin of error was not significant as it was less than 5% however; DMV did not want any margin of error. In that regard DMV was investigating whether the issue was administrative, negligence or lack of capacity, so that if it fraud DMV could solicit the assistance of law enforcement agencies.

Since the profiling of educational support many veterans and their dependants were coming on board resulting in a mismatch between what was available and the increasing numbers of applicants.  DMV were pleading with Parliament to start engaging NT on the insufficiency of the DMV budget to roll-out the benefit to all deserving beneficiaries. The latest statistics at that time where continuing and non-continuing applications of both basic and higher education numbered at 9990, the 7146 reported beneficiaries from which the increase to over 9000 meant 2000 more applications had been received. The matter was far beyond DMV as it required advocacy at another level of Government to see how DMV could proceed. However; there was some relief from initiatives like that in Mpumalanga where the Government in that province had committed to absorbing some of the pressures. If other provinces could follow suit the pressure could decrease and DMV wanted to invest time in that alternative approach. Intergovernmental relations (IGR) framework required that even the private sector come on board to ensure that military veterans were not disadvantaged in receiving education.

Regarding the correlation between a reliable database without which no benefit could be provided including education and DMV was seized with the matter as it was easy for people to filter into the system if the data was unreliable.

DMV had engaged with NSFASA and were looking at establishing a steering Committee as Members would know NSFAS had far bigger problems than DMV had and DMV wanted to minimise risk from NSFAS exposure. However; the internal debate at DMV was to move towards building internal capacity in the roll-out of benefits, which would minimise risk and enable development of mitigation strategies.

Mr Musi said that DMV had budgeted over R16 million for SRD and were supporting over 2200 but the actual applications for SRD were over 5000. DMV had employed social workers, guided by a policy guideline from DSD to do assessments, because DMV needed policy certainty to be better able to manage how people would be phased-in and out of SRD. A lot of beneficiaries had gone beyond the six months of beneficiation because of the lack of integrated beneficiary support approach. In the long terms DMV felt that there had to be dependents of SES delivery with ESM for job creation as well as business support so that people could migrate properly from SRD.

There had been elements including regulations that needed tightening including bond rescue and refurbishments and how top-up would be optimally used in the housing situation; the record of those houses provided to military veterans by local Government was an area DHS and DMV acknowledged as there had been many veterans that had received Reconstruction and Development Programme (RDP) houses prior the establishment of DMV where the records had not been properly collated and integrated into DMV’s database. Some veterans did not need the top-up, rather they needed enhancements to houses they had built for themselves or RDP houses. The Minister had set-up a task team at national level to quantify those numbers and DMV was beginning to interact with provinces and had started to get a sense of the numbers. DMV had set a target of 100 for 2017 but the pace which various provinces were moving was not consistent but DHS, DMV engagement was much better to date than it had been. The biggest challenge in that programme had been lack of effective monitoring and evaluation: Specifically monitoring of the performance of the contractors that DMV worked with.

Originally DMV had eleven databases where fragmentation was enormous, which opened DMV up to a range of possible risks and fraud. A process of consolidation was underway where DMV were moving from diagnosis towards actual solution. There was a business re-engineering element to the ICT component of DMV. The second challenge regarding the database was that DMV were discovering through the analysis that members on the Military Skills Development System (MSDS) who were on the database. Therefore, who got on the database also was complicated by the definition of a military veteran as the data to date had members from the MSDS, conscripts and a wide range of people where DMV had to determine whether they were in the purview of the database. DMV had sent the data available to it to the various MVA’s so that they could assist DMV with the verification of their members, especially the non-statutory forces representatives that were under SANMVA.

DMV had made a breakthrough on transport as it had a draft MoU with the Department of Transport (DoT) with DMV planning to mainstream the MoU at its Executive Committee (EXCO). Hopefully that would assist with job creation for military veterans and business development and alongside that DMV hoped that a SLA with entities of transport would give access to military veterans. There currently was no transport policy but DMV had set-aside R2 million for development of a transport policy.

The Committee would recall that there had been a process led by NT to amalgamate the pension schemes for military veterans as DSD had a pension for military veterans; the JGEF and there also had a pension for veterans residing with DMV, consolidation of which would have culminated into one military pension. Seeing that the matter had stalled for some time DMV had decided to take the initiative to resuscitate the process but the work was an interagency, Intergovernmental operation as DMV wanted to consolidate the entire pension schemes across Government to create one meaningful income for military veterans.          

Regarding communication DMV’s interaction with military veterans was much better as DMV would be completing roadshows across the nine provinces.

Ms Nontobeko Mafu, DDG-ESM, DMV, acknowledged the contradictions by the DM but noted that according to the register at DMV 132 businesses registered.

On the letters of support; when military veterans participated in tenders or invited to participate in any business venture; they approached DMV for a letter of endorsement to validate whether the individual was a military veteran or not and also to state the current business said veteran already ran.   

DMV had been advised to not pay for burial support retrospectively by the Committee previously and indeed the DMV had amended its burial support policy and to date were paying within a reasonable time.

What AGSA had disputed about memorial sites had been the expenditure towards the Delville Wood memorial site. DMV had tried to demonstrate the amount versus the site improvement which AGSA rejected. Going forward DMV would choose memorial sites where the portfolio of evidence would satisfy AGSA.

DMV acknowledged receipt of the list of tombstone makers which Mr Esau had submitted but it was a challenge to engage in matters of SCM in that manner. Going forward Ms Mafu could discuss with the CFO on how best to utilise quality suppliers that charged less.

Mr Sibongiseni Ndlovu, CFO, DMV, said that SANMVA was allocated R15.6 million for all logistics of all recognised MVA’s but requests for assistance came through SANMVA.     

The appeals board and advisory council were managed through the office of the accounting officer whereas SANMVA was managed through ESM.

He asked that DMV be allowed to complete the process of cases against the officials being investigated for irregular expenditure so that it could report in future. Indeed, R106 million had been incurred through financial delegations. At some point when the then CFO had been placed on special leave there had been a lapse in formalising the delegations. That had led to management at the time taking decision for continuity because at that time delegations had been centralised to the CFOs office which meant only he could sign for payments. As that was an impediment management had decided to decentralise but because there had been no formal signed-off document regularising that decentralisation DMV had extracted all payments that had occurred during that time until the formalisation of the delegations and disclosed them as irregular. However; those payments had been mainly for provision of benefits, predominantly in education support and health. Though there were instances of procurement of goods and services DMV had confirmed that there had been no anomalies in the SCM. Linked to that the balance had been predominantly around contract management, specifically provision of telephonic services through Vodacom, provision of landlines through Neotel; DMV were preparing to migrate all those contracts to the NT RT contract, so irregularity could be eliminated. That balance had simply been because of non-adherence to SCM processes driven by poor planning at that time.

DMV had disclosed R3.2 million as fruitless and wasteful expenditure where there had been R950 000 payment related to one military veteran for dental services. That error had not been picked up at the time of preparing the payment advice in terms of validation process. DoD had been advised of the error and had responded that they had picked up where the error had occurred where it had been a punching error and DoD had committed to reimburse DMV the difference from the original R3003 00 that DoD was supposed to have charged. That spoke to the accuracy of billing from SANS through to DoD and the DMV

DMV were working with SANS to formalise a proper billing system that would talk to all electronic systems in all SANS facilities with SITA’s.

The biggest expenditure creating accruals was for education, mainly because of the timing difference as the academic year started in January and February for basic and higher education respectively. A big challenge for DMV was collection of all the invoices and processing them before the year-end, thus the higher value of accruals. Connected to that was the matter of SANS invoices, as DMV had closed the FY with R33 million worth of accruals related to health services rendered by SANS.    

Regarding payment of suppliers within 30 days, there had been very few cases where small businesses had not been paid on time. The amount of R15.5 million had been from SITA invoices from the previous FY which had been brought forward. DMV had to catch-up such that noticeably it had shifted funds from programme 3 to programme 1 to close that previous year’s gap accruals. Secondly there had been issue on payments of the operating lease between DMV and DPW where there had been a breakdown in terms of submission of invoices. DMV had since submitted invoices directly to logistics rather than corporate services. In terms of training and development payments suppliers would either not be accredited in Corporate Social Development (CSD) or would not have tax clearance certificates as DMV committed to providers rendering services. That would cause a delay in payments as well.

The elephant in the room was around travel as DMV had huge volumes regarding logistical arrangements which were mainly driven by the logistical support given to the advisory council, appeals board and mostly SANMVA as all members of SANMVA who were eligible for support received logistical support. Additionally, DMV also submitted invoices manually to TWF, which were manually handled within DMV since the Department had not yet implemented the Logis system, processing invoices, became a challenge.     

The Chairperson said that all the remaining challenges would be put on the Committee’s dashboard so that every quarter the DMV could report on progress; as the Committee would be following up each time during quarterly report briefing. On challenges needing budget intervention the Committee was about to do its Budgetary Review and Recommendations Report (BRRR), where it would put those challenges as recommendations.

The meeting was then adjourned.