DPSA, NSG, CPSI, PSC, DPME, NYDA, Stats SA 2016/17 Annual Report: AGSA input; DPSA progress on Committee recommendations

Public Service and Administration

10 October 2017
Chairperson: Ms R Lesoma (ANC)
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Meeting Summary

Annual Reports 2016/17

The Auditor General of South Africa (AGSA) briefed the Committee on the audit outcomes and performance of the various entities in the Department’s portfolio.

AGSA reported that the Department of Public Service and Administration (DPSA) and Centre for Public Service Innovation (CPSI) had received unqualified findings in the current financial year. The National Youth Development Agency (NYDA), the Department of Monitoring and Evaluation (DPME), Statistics South Africa (StatsSA) and the Public Service Commission (PSC) had received clean audit opinions. AGSA said the common problem that the departments had was with their senior management and a lack of proper oversight.

The NYDA had spent 100% of its budget, while other departments had utilised most of their funds. The DPSA and CPSI had not complied with procurement and contract management requirements, as well as expenditure management, with the DPSA being the largest contributor to fruitless and unauthorised spending. The AG proposed that the entities should implement and monitor commitments, take action against transgressors, and must report regularly.

Questions were raised about the fruitless and unauthorised spending, and when cases would be opened against transgressors. There were concerns about the DPSA’s supply chain department. Members also opposed the view that certain transgressions were insignificant, as all wrong doing was significant with regard to state funds.

The National School of Government (NSG) reported training a total of 64 500 learners. It had implemented three projects as set out in the programme of action. It had reached its employment equity targets and achieved a clean audit report on financial performance. Members raised questions about the 12 memorandums of understanding (MoUs) that the Department had signed, when there were over 40 departments. They were also concerned about the NSG’s revenue generation plans and the failure to meet employment equity targets..

The Centre for Public Service Innovation had set 28 targets and achieved 27 of them. It had developed four pilot programmes, exceeded its employment equity targets and had no fruitless and unauthorised spending.

The Department of Public Service and Administration reported that it had missed most of its targets. Only 70% of disciplinary cases had been finalised, it had missed the deadline for submitting reports and the performance management and development system had not been finalised. It had not developed information communication technology (ICT) security guidelines as instructed.

The members were not impressed by the DPSA’s performance on discipline, and asked why it did not seek help from other departments. It was concerned about the amount of money spent on labour relations, and asked why targets had not been met in that area.

The Public Service Commission had achieved most of its targets. It had no fruitless and unauthorised funding, and had utilised 99.99% of its budget. It was asked whether the budget changes would affect the core functioning of the department, but it indicated it had sufficient funding.

The NYDA highlighted its achievements on economic participation, where all objectives were exceeded for community development, business support services, career guidance, education and skills, as well as the jobs programme. It had used 100% of its budget.

Members asked whether leadership changes had impacted on its performance. They asked about its satellite offices its plans to open more country wide.

StatsSA report highlighted the risks that it faced because of budget cuts, such as not being able to afford to employ necessary personnel, building intellectual capacity, and placing important surveys like Census 2021 at risk. Members were concerned about the loss of skills at StatsSA and the impact of budget cuts on the turnover rate. They also asked what it was doing to curb fruitless spending.

The Department of Planning, Monitoring and Evaluation highlighted that it had completed 59 evaluations of research, and seven provincial evaluations were in place. Out of 61 targets, 52 were achieved, six were partially achieved and three were not achieved. Capacity building for newly appointed DGs had not been achieved yet. Members questioned the Department’s use of consultants, because a lot of money was spent them. They were concerned about the DG vacancies not being filled, and suggested that help should be provided to employees to better their performance. 

Meeting report

DPSA Annual Report: AGSA briefing

The AGSA, said that from 2013 to 2014 the Department of Public Service and Administration (DPSA) had an unqualified audit opinion in terms of their findings. From 2015 to 2017 there had been an improvement in the performance information area. There were no material findings in the current financial year at any of the entities in the DPSA portfolio. The issues from 2015/16/17 involved the quality of information that the Department had submitted for audit, and corrections had to be made as a result of this audit report.

The DPSA and the Centre for Public Service Innovation (CPSI) in the current financial year had unqualified findings. The National School of Government (NSG) in the previous year had had an unqualified opinion, and had a clean audit opinion this year.

There were no concerns with DPSA’s internal environment, but it needed to be constantly monitored. The same went for the CPSI. NSG needed to monitor its internal environment to sustain its clean audit opinion. A breakdown of its internal environment showed that leadership, financial and performance management, and monitoring activities that focus on the entity’s response to change, as well as key legislation, should be well monitored because that was where its non-compliance emanated from. The financial statements of the NSG trading and the performance reports of the DPSA energy, need proper oversight.

In the area of assurance providers, the only concerning issue in all entities was senior management. All the entities had findings that had audit outcomes, and proper oversight in that area was very important.

For the DPSA, programmes three, four, five and six were audited and material adjustments had to be made in these programmes. The NSG programme two was audited, and material adjustments needed to be made as a result of the audit process. For the CPSI, no material adjustments were made. In the Public Service Commission (PSC) programmes two and four, material adjustments were made.

Regarding compliance with legislation, the DPSA did not comply with expenditure management and procurement and contract management. However, this issue could be addressed. The CPSI procurement and contract management area was non-compliant, but the AG advised that it was an oversight issue that could be fixed. The PSC had a lot of intricacies that it needed to be aware of. He added that the largest contributor to irregular expenditure and fruitless spending was the DPSA.

The AG proposed that these entities must have action plans and report regularly. He added that immediate action should be taken against transgressors and that commitments should be monitored and implemented.

Audit Outcomes

Mr Rehaan Mohamed Ali, Audit Manager, AGSA took the committee through the audit outcomes for the DPME, the National Youth Development Agency (NYDA) and Statistics South Africa (StatsSA)

He said the quality of performance information of annual performance reports submitted by the entities showed that the NYDA and StatsSA quality was up to standard. Material adjustments needed to be made to the DPME’s report.

Regarding internal control and assurance providers, the DPME was not assessed because its action plans had been drawn up but not yet implemented. The NYDA had instances of non-compliance, but they were not very significant, and the AG would follow up on this. The DPME had provided good reports in respect of assurance providers and procurement management.

The DPME had spent most of its budget funds and most targets were achieved. The NYDA had achieved all of its targets, including economic and skills development targets. StatsSA had achieved 92% of its targets in terms of public information, and utilised most of its funds. The quality of financial statements was sustained by all three entities.

The NYDA had R500 000 of fruitless expenditure and unauthorised use of the NYDA credit card. It was in the process of recovering the money.

Discussion

Mr S Motau (DA) asked a procedural question regarding the DPME’s material adjustments. He asked whether it had been negligence on an official’s part, or were they just incompetent.

Ms D van der Walt (DA) said that overall the departments did well and must improve oversight. She asked when the NYDA would open a case against the person/people who had spent the R500 000. She added that the DPSA’s supply chain management (SCM) should be more competent. She also asked for the AG’s opinion of the value for money of the imbizos.

Mr M Ntombela (ANC) asked why the AG looked at certain transgressions as insignificant, because all transgressions should be significant.

The Chairperson asked whether the AG checked on whether issues from previous years had been addressed. She also asked if the AG the departments had been introduced to the new methodology, lest they gave excuses in terms of performance.

Response

In his response to Mr Motau’s question, the AG stated that it was not a competence issue, it was just that more care needed to be taken and oversight needed to be improved.

With regards to the R500 000 matter, the AG had recommended to management it should take action if the money was not returned in due time. Furthermore, if the money was not returned, it would not be written off as a bad debt, but rather as a loss through criminal activity.

The imbizos value for money would depend on whether they had been budgeted for and approved.

He said that the audit outcomes were not a result of the change in methodology. The audit methodology had been communicated with senior management.

National School of Government: Annual Report

Professor Richard Levin, Principal: NSG, said the school had exceeded its training targets, and had a 123% achievement rate. A total of 64 500 learners had been trained. On the annual performance programmes, in Programme One 14 out of 17 targets were achieved, and in Programme Two, 17 out of 19 were achieved. The overall achievement was 86%.

The Department had implemented three projects set out in the programme of action for outcome 12. On revenue generation, the Department had generated R137 million against a target of R152 million.

The average number days for debt collection had been reduced to 48 days, and suppliers were paid within 30 days. The vacancy rate was at 7.5%, against the set 8% target. The NSG had also finalised its budget for the European Union (EU) programme.

The NSG had up-skilled 70% of its employees, against a target of 80%. Over three years, it had improved its impact scores.

In Programme Two, 29 training needs analysis were conducted. 63 quality evaluations were carried out and four applications for learning studies were taken. It piloted six executive induction programmes with mentoring to learners. It developed six NSG courses, as well as a number of online courses to support self-paced learning.

The NSG improved its vacancy rate and achieved its employment equity targets. It had met its females in management targets, but the number of people with disabilities was lagging.

Corporate governance, monitoring, and impact in terms of impact tools, were compliant with risk management.

Discussion

Mr Ntombela said that it was concerning to realise that only 12 memorandums of understanding (MoUs) had been signed when there were over 40 departments, and he sought clarity on that.

Ms Z Jongbloed (DA) asked what the NSG’s plan was for the generation of revenue, and what its plan was to ensure that people with disabilities were easily employed.

The Chairperson asked whether there was value for money in the training that the NSG provided.

Mr Motau asked what the new funding model would do for the NSG’s debtors’ book.

Response

Professor Levin responded that the MoUs were forged through the relationships that took place at a junior level. The NSG did not go to meetings with departments to sign these MoU’s, but the departments should have open communication channels between each other.

Revenue generation would be done through the use of compulsory programmes which would be advertised. This was done in partnership with universities.

On the question about debtors, a prepaid model had been introduced.

On value added, Prof Levin said that this was not about numbers, but rather the impact on individuals.

In the planning phase, the Department entered into partnerships with organisations that worked with people with disabilities, and recruited them through those organisations.

Mr Ntombela asked whether the programmes offered were accredited or not.

Prof Levin said that 90% of the programmes were accredited, and the NSG was an accredited organisation.

Centre for Public Service Innovation: Annual Report

Ms Thuli Radebe, Chief Executive Officer, CPSI, said the entity had achieved 27 targets out of 28. In Programme One, which was about administration, compliance, submission of reports, its targets were achieved and statutory requirements were met. In Programme Two (Innovation), the target was to identify and confirm service delivery challenges, and find solutions. The Department had identified the Home Affairs reporting tool which would be constructed to help with knowing what was happening at service delivery points, as well as the anti-microbial resistance in state hospitals, as there was abuse of anti biotics.

Five case studies had been developed:

  • Revenue information management systems;
  • Fore sighting as a tool for development in the SADC region;
  • Diepsloot community alarm system;
  • Operation Sukuma Sakhe;
  • Workplace service delivery of medication.

 

The Department had the following pilots:

  • Developed a model that localised innovation in hospitals;
  • Patient flow system;
  • A model that helps hospitals save money;
  • School alarm system in informal settlements.

The Department managed to achieve two out of the three challenges and solutions tasks that it had.

It had had an 11% vacancy rate, but all positions had been filled. It had complied with employment equity requirements, with 67.65% females and 5.88% of people with disabilities. Payment was done within 5.2 days upon receipt of invoices. There was also no fruitless and unauthorised spending.

Discussion

Mr Motau asked whether there was innovation, especially in the medical field, that was now a common practice in the country.

Ms Thuli answered that the programme, “saving blood, saving lives”, was one such innovation. There was also a programme that prevented individuals from getting the same medication from different hospitals and clinics.

Department of Public Service and Administration: Annual Report

Adv Takalani Nematswerani, Director: Cabinet and Parliamentary Affairs, Ministry, presented the report. The areas of concern in this Department were the irregular expenditure. An action plan to resolve this was already in place. There was fruitless spending amounting to R7 000 as a result of no shows. Some of this money had already been received. The DPSA had also taken steps to improve its information communication technology (ICT).

In terms of performance, the Department had finalised 70% of its disciplinary cases. It had missed the deadline for submitting reports. In relation to strategic and HR management, as well as the filling of vacancies, the Department had not reached its target because of lack of funds.

On performance management and development systems, the Department had not completed the process of ensuring that the system was approved.

In the graduate recruitment scheme, research had been done, but during the consultation phase more work needed to be done. The Department had also failed to develop ICT security guidelines.

On employment equity, the Department had 35% females and 2.1% of people with disabilities.

Discussion

Mr Ntombela suggested that the Department get other people to assist it with disciplinary matters.

Ms Van der Walt asked what the Department was doing to achieve its targets, and suggested that it should set achievable targets.

The Chairperson said that the Department put a lot of money into labour relations, but that area made no progress. In addition to that people, should not be on suspension and the human resources (HR) department needed to do better.

Dr Dovhani Mamphiswana, Director General, PSC responded that in terms of discipline, the Department worked with other departments and that this process would continue.

To meet its targets, the Department already had a system, and it was being evaluated.

In response to the Chairperson’s question about people on suspension, he said that the Department was dealing with the situation.

Public Service Commission: Annual Report

Dr Mamphiswana said the Commission’s overall achievement against its targets was 94%. Total expenditure was at 99.9%, and the adjustment to work plan had a non-achievement of 6%.

The key achievements were:

  • The Department received a qualified audit opinion.
  • The vacancy rate was at 6.8%, there were six officials with disabilities, and 20% of employees were females.
  • Establishment of the data warehouse was completed.
  • Establishment of an online grievance and complaints site.
  • 87% of grievances were completed and 303 out of 316 complaints were attended to.

On irregular expenditure, R157 000 was due to the reduction of local content, and R36 000 was due to the non-completion of the declaration of interests. However, there was no fruitless and unauthorised expenditure. Programme Two had an achievement rate of 100%. Only one target was not achieved in Programme Three, and Programme Four had an achievement rate of 90%.

80% of investigations were not finalised within 45 days because further research needed to be done.

Discussion

The Chairperson asked whether the budget cuts would challenge the Commission’s core function.

Dr Mamphiswana said that the Department had funding to fulfil its mandate.

 

National Youth Development Agency: Annual Report

Mr Waseem Cassim, Chief Financial Officer (CFO): NYDA, said the Agency’s objective was to enhance the participation of young people in the economy. The target for the number of youth-owned enterprises had been 629, and 698 had been created.

Aspiring entrepreneurs were supported through business development services such as market linkage programmes. It had targeted 56 000 young people and had reached 63 400.

Ten community development projects were funded through the grant funding programme, exceeding the target of nine. Community development projects such as forestry and furniture making thrived.

On education and skills, the NYDA had partnered with the Department of Education. The Solomon Mahlangu Scholarship programme funded had 444 students against the targeted 440.

On career guidance, an achievement of 981 was made from a target of 899. A target of 500 was set for the technical skills programme, and 745 was achieved. The Jobs programme helped 71 300 youths exceeding the targeted 61 200.

Employee costs had been reduced by 34%, and the Department hadspent 100% of its budget. The amendment of the NYDA Act still remained a priority.

Discussion

Mr Y Cassim (DA) asked whether the NYDA had experienced any changes since the leadership had changed, and if it anticipated any changes.

Mr Ntombela asked how the Agency envisaged opening so many satellites countrywide, how had been opened and what the target was.

The Chairperson asked why the Solomon Mahlangu recipients seemed to be only from the Northwest and Northern Cape.

Response

In terms of leadership, the new board was committed to sustain current performance and ensure that there was no regression.

The target was to have a satellite office in every district municipality. 110 satellite offices were currently running.

On Solomon Mahlangu, the Department had partnered with universities all around the country so the onus was on the students to apply for the scholarships after they have been accepted by the institution.

 

Statistics South Africa: Annual Report

Mr Resinga Maluleke, Deputy Director General: StatsSA, said 77% of the entity’s performance targets were achieved on schedule, 4.6% were achieved early, 4.3% were achieved late and 13.3 % were not achieved.

On spending, 97% of its budget was spent, due to unfilled vacancies and reprioritisation. The vacancy rate was 10.9 %, and on employment equity, women made up 40.6% and people with disabilities 1.2%.

The Department was faced with the following risks:

  • Budget cuts from 2017 until 2020;
  • It could not afford ‘warm bodies’ and would have inadequate money for salaries;
  • It would struggle with building intellectual capacity;
  • Census 2020 was at risk;
  • In the long run GDP, income and expenditure surveys, fertility and mortality rates would suffer;
  • Geographic referencing of information was at risk because of the lack of funds.

StatsSA had set the following priorities for 2017/18:

  • Legislative reform;
  • Maintenance of basic statistics integrated indicator framework;
  • To modernise and improve technology.

He said that as a result of changes in leadership, data and digital revolution, intergovernmental projects as well as computer-assisted and personal interviews would be challenging for the entity.

Discussion

Mr Motau asked whether the Department was aware of the kind of skills it was losing due to budget cuts. In addition, what was the Department doing about the 12 cases of fruitless spending mentioned by the AG, which were worth R22 000.

Ms Jongbloed asked whether the budget cuts had affected turnover rates and whether this would affect the quality of work. She asked what the strategy was to solve the employment equity problem.

Mr Ntombela asked about the outcomes of financial statistics in municipalities. He asked whether StatsSA collaborated with Statistics USA to improve the Kiyoto protocol situation.

The Chairperson mentioned that sick leave was being abused, and asked how the it was remedying that problem.

Ms Akhtari Henning, DDG: Corporate Services: StatsSA, responded that every Department was required to identify the skills it was losing. On fruitless expenditure, she said that such incidents had decreased because the Department saved on small things and negotiated all quotations to save money. The R22 000 amount was being recovered.

She said the government monitored the turnover rate, which was currently at 4.4%.

She said sick leave was not being abused -- the law allowed it. Staff was overworked because people in the department were being redeployed to do more projects on top of what they were employed for. She added that the vacancy rate was adversely affecting employment equity plans.

Department of Planning, Monitoring and Evaluation: Annual Report

Ms Mpumi Mpofu, Director General: DPME, said that 59 evaluations of research had been completed, and seven provincial evaluations were in place. On institutional performance, two targets were not achieved, four were exceeded and eight were achieved because the DG’s performance agreements were not assessed within 30 days of being received. However, they were subsequently achieved within two months of the originally set date. The capacity development programme for newly appointed DGs was set for a date in March but was not achieved because of the unavailability of directors.

There had been100% achievement for invoices paid within 30 days. On finance, 14 out of 16 targets were achieved, but two were not achieved because of procurement delays. On youth development, all three targets were achieved. The Department had a 16.7% turnover rate and a vacancy rate of 10.3%. On employment equity, the category of people with disabilities rates was at 2.3%. With regard to the compensation of employees, it had made adjustments to the budget for the current year. It had advertised 11 posts, 19 candidates were shortlisted, seven were awaiting interviews, two were awaiting references, 11 were awaiting assumption of duty and 46 vacancies had been filled.

On the Department’s performance, it had produced a three-year strategic plan. 100% of senior management service (SMS) members had disclosed their financial interests via the eDisclosure system. It had exceeded its executive visits target of 80% by 8%, and the workplace skills plan had achieved 80% of its targets.

Issues Raised

Ms Mpofu confirmed that the development of planning-monitoring legislation had been done. Budget allocations for key departments had been prioritised and the mandated paper had been approved. Collaboration with StatsSA to strengthen the use of data and planning was in progress, as the Department was developing a data centre to create a knowledge hub for long-term planning. The Department was supporting local government to improve service delivery, and it was enhancing the use of the provincial hotline.

Discussion

Mr Motau commented that the Department should look at whether it needed consultants, because a lot of money was spent on them. It should get the National Planning Commission to help it with its plan. He made a reference to the AG’s report about material mis-statements which were subsequently corrected, and brought up the matter of competence or the lack thereof in the Department.

Ms Van der Walt mentioned the matter of Director Generals, and suggested that the DGs should have a performance agreement, be evaluated and get bonuses. This matter should not be delayed.

The meeting was adjourned.

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