2017 MTBPS: Public Service Commission submission

Standing Committee on Appropriations

08 November 2017
Chairperson: Ms Y Phosa (ANC)
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Meeting Summary

The Public Service Commission commented that the high turnover of departmental leadership was a risk area. The Commission advised that legislative frameworks be amended to curb the excessive independence of State Owned Enterprises. Departments had to exercise their oversight function over State Owned Enterprises. Departments tended to not fill vacancies or to place moratoriums on the filling of posts, which resulted in critical service delivery posts not being filled. Measures had to be put in place to ensure that Strategic plans were translated into feasible implementation strategies and performance targets, supported by effective financial management. There had to be clearly articulated milestones for achievement of the National Development Plan, with integrated planning to achieve priority area targets.

Adequate capacity was needed to set proper targets, aligned to the budget. Annual reports had too much detail on the activity level, the focus had to be on service delivery objectives and outcomes. There were Human Resource management challenges related to compliance with the legislative framework and prescripts governing public administration. The SA Police Service and the Department of Rural Development and Land Reform headed the list of potential conflict of interest cases. Precautionary suspensions and professional ethics were a challenge in the public service.

In discussion, Members pointed out that the presentation was not directly linked to the Medium-Term Budget Policy Statement. The Chairperson defended the Commission’s approach, saying that the Commission’s concern with human resource management was of direct relevance to budgetary matters. There were other remarks and questions about State Owned Enterprises and their developmental mandates; headcounts; officials doing business with government; the code of conduct and professional ethics; the freeze on posts, vacancy rates and the rising wage bill; target setting and lack of capacity; leadership changes; performance agreements; irregular and fruitless expenditure; consequence management; precautionary suspensions, and rewards and bonuses.

Meeting report

Introduction by the Chairperson
The Chairperson asked for a moment of silence for prayer or meditation. She welcomed the Public Services Commission (PSC), staff, stakeholders and guests. The presentation of the day was to be by the PSC, a valued partner of the Standing Committee. Concerning the Medium-Term Budget Policy Statement (MTBPS), there had to be decisive action to embark on a new course. The country was in a cycle of weak growth and increasing debt, with a shrinking budget and rising unemployment. Policy choices had to contribute to effective implementation. Hard choices had to be made to return public finances to a sustainable position. The PSC could assist the Standing Committee to ensure robust engagement towards an improved public service. Human Resource (HR) planning and performance, governance and the attainment of performance targets needed urgent attention. Policy options for utilisation of limited resources had to be explored. The public service had to be responsive to the needs of the people. She hoped that there would be robust engagement on such matters.

Comments by the Public Service Commission on the Medium-Term Budget Policy Statement
The briefing was presented by Ms Irene Mathenjwa, DDG: Monitoring and Evaluation.
The high turnover of departmental leadership was a risk area in the public service, which impacted negatively on continuity and stability in departments. The PSC advised that legislative frameworks be amended to curb the excessive independence of State Owned Enterprises (SOEs) so that the developmental mandates could become the dominant purpose of their operations. Departments had to exercise their oversight function over SOEs. Departments tended to not fill vacancies or to place moratoriums on the filling of posts, which often resulted in critical service delivery posts not being filled.

Accountability in the public service had to improve, performance information had to be reliable and useful. Measures had to be put in place to ensure that strategic plans were translated into feasible implementation strategies and performance targets, supported by effective financial management. There had to be clearly articulated milestones for achievement of the National Development Plan (NDP), with integrated planning to achieve priority area targets. Adequate capacity was needed to set proper targets, aligned to the budget.

Annual Reports had too much detail on the activity level, the focus had to be on service delivery objectives and outcomes. There were HR management challenges related to compliance with the legislative framework and prescripts governing public administration. The SAPS and the Department of Rural Development and Land Reform (DRDLR) headed the list of potential conflict of interest cases. Precautionary suspensions were a challenge in the public service, as well as professional ethics.

Discussion
Mr B Topham (DA) remarked that it was a good presentation, although there was no direct correlation with the MTBPS. He asked if the PSC in its overview of the public service gave thought to the ability to reduce the headcount of public services over the long term. By international standards the head count was too high, and had to be reduced. He asked if municipal employees were counted as part of the public service. He asked for further clarity about the bar on State employees doing business with government, the public and municipalities.

Mr N Gcwabaza (ANC) said he appreciated the briefing, although he had the same sentiments as Mr Topham about it not correlating with the MTBPS. Mention was made of the code of conduct and matters related to that. The PSC seemed reluctant to refer to the Auditor General of SA (AG) remarks about officials that continued to do business with government, even after the law barring that had come into effect in the current year. Some officials not only continued with such practices, but entered into new contracts after the Act came into effect, which went against the spirit of what the PSC was saying.
He referred to the freeze on the filling of posts as a part of cost containment. The freeze was partly a response to the rising wage bill. A counterargument was that the wage bill was not really the issue, but what was essential was the employment of appropriately qualified persons, especially at the level of frontline service delivery, if a capable State was to be built in terms of the NDP. Some saw the matter as a wage problem, and others did not. It was more a question at the manner and level at which people were employed.

Ms N Senokoanyane (ANC) was concerned about the fact that most of the challenges raised had been ongoing for years. She asked if departments were being serious. The PSC was obliged to raise certain matters all the time. Little progress was being made. There were challenges around target setting and lack of capacity. Constant changes in leadership was referred to. She asked what could be done about that. Lack of capacity was referred to year in and year out. There had been problems around the signing of performance agreements by senior managers as long as she could remember, and the figure was still only 74 percent. People had to respond, the matter was not being taken seriously. There had always been a code of conduct. Senior managers knew how to conduct themselves, but did not do so.
It was mentioned that Annual Reports could not provide information on service delivery objectives and outcomes, and that the Performance Management Development System (PMDS) had been reduced to a reward system. She asked for further explanation. People were getting bonuses and rewards they did not deserve.

There was no change or improvement in the matter of DGs and conflict of interest. If people were not prepared to comply, a losing battle was being fought. The number of Directors General with a potential risk of conflict of interest was worrying.
She referred to the vacancy rate. It was a tricky area. Granted, there was a cost saving moratorium, but not filling of critical posts had to be guarded against. When a person employed in a critical post left and the post was not filled, it could not be justified in the name of savings. Work had to be done.
It was mentioned under measures to ensure effective and efficient performance in the public service, that the developmental mandate of SOEs had to become the dominant purpose for their activities and operations. She asked what the mandate of the SOEs was.

The Chairperson took note of what had been said about linkage to the MTBPS, but it had to be acknowledged that the PSC was a strategic partner. Its mandate was to promote the achievement of government programmes, and to promote measures for effective and efficient performance in the public service. SA needed a capable and developmental State to intervene to redress historical inequality. There was relevance in the fact that the PSC addressed HR challenges. Without adequate human resources the Budget could not make an impact. The PSC identified the gaps. The briefing was about identified inefficiencies, and some recommendations were made. It had to be known how irregular and fruitless expenditure and missed targets impacted on expenditure.

She referred to the application of consequence management. She asked if any DDGs had been demoted, and if practical steps were demanded of executives. It had to be done to build confidence. The AG was being taken to court. It was an independent body that had always assisted Parliament with analysis of expenditure reports. It could identify gaps in expenditure. The question was how to bring ethics back into the public service. There were leakages due to precautionary suspension. People remained under suspension for years, and still received a salary. It amounted to fruitless expenditure. She asked what was being done to correct it. The recruitment turnaround period was 180. To take longer than that was non-compliance with the law. In the event of disciplinary cases the period was 80 days. If precautionary suspension took longer than that, there was wastage. The mandate of the Committee was to follow the money. If precautionary suspension turnaround periods were too long, there was no value for money. There were budget constraints, and valuable resources were not to be allowed to leak.

Ms Phumelele Nzimande, PSC Commissioner, thanked the Chairperson for explaining the link between the PSC mandate and Committee oversight over what happened in the management of human resource space. The country had to revisit SOE challenges. There had to be an opportunity at the outset of democracy to corporatise SOEs through not inserting mechanisms that would tie them to bureaucratic red tape. However, there was also not a framework provided for government to oversee whether they were delivering on government objectives. The DDG had mentioned that the PSC looked at its role in that regard, by making comparisons to countries like Mauritius. In that country there had to be a senior government official on an SOE board to see that it acted in line with government objectives. In SA there was no such precaution to ensure compliance with developmental objectives. Some SOEs were overseen by the Portfolio Committee on Public Enterprises, and others not. Some were merely overseen by policy departments. There were attempts to make a compact with the shareholder in some SOEs, and in others not. The situation had to be revisited, through asking what SOEs had to deliver, what worked and what not, by going through the SOEs one by one. Parliament could contribute by having a serious conversation with the Portfolio Committee on Public Enterprises about its role in that space, and what it was doing. It was currently a haphazard situation.

She replied about headcounts, that there was no magic formula for determining how many were needed to service a population of 55 million. There were 1.2 million national and provincial public servants. Whether that was enough was perhaps not the question. It had to be looked at in terms of sectors. Education and Health needed warm bodies in the classroom or clinic. The crucial question was which areas needed people. There were too many people in administration, and not enough at the coalface. There were too few professionals on the ground. Another question was whether people were sufficiently qualified. The right questions had to be asked, not merely questions about numbers. It was alleged that the civil service was bloated, but the right approach was to drill down to determine if there were properly qualified people in a sector. The debate had not to be about the rising wage bill, but about whether there were properly qualified people in the right places. Drilling down had to happen not so much at national level, as at the sectoral level. For example, the police needed more people at station level, and not so much at high office levels.

The PSC had made recommendations about conflict of interest, and barring public servants from working with government. The question was what was happening in that space. The legal framework did not reflect what was happening in reality. The PSC did analyses and wrote to executives of departments. Senior officials who were not complying were mentioned by name. it was asked what could be done to bring them to book. A breakdown of reports could be made available. There were real examples of consequence management. Although no DDGs were demoted, there were examples of actions taken. It was worrying that such actions sometimes took long, but there were actions taken as a result of PSC reports. Precautionary suspension was a major problem. She advised that when government departments appeared before portfolio committees, the extent of suspensions had to be reported as a matter of course. It had to be asked if there was compliance with the law. In terms of the law an official could not be suspended for failure to perform a task. Officials were sometimes suspended because their superiors did not like them, and would look for a reason to suspend them. Departments had to declare who was suspended, why, and for how long. An example was what had happened to the DG of the Department of Home Affairs, who had since been reinstated. Ethics had to be brought back by going back to basics. The PSC promoted section 195 and Chapter 1 of the Constitution in the public service. There was a drive to promote ethical values in the public service. Public servants did not adhere to Constitutional values.

Ms Mathenjwa responded about officials doing business with the State. When scrutiny was done, one of the sources over and above eNaTIS was the central supplier base of the National Treasury. Through PERSAL and IDs information could be picked up about suppliers doing business with the State. The scrutiny could disclose whether there was actual or potential conflict of interest related to individuals in a department.

The PSC looked at developmental states. What emerged was that such states invested in the capacity of institutions. People were trained to know what they were supposed to do. Examples could be drawn from that about what kind of professionals were required locally. Training for performance meant that people had to know what was expected of them. The challenge related to strategic plans and annual performance plans was that there was a repetition of previous years. There were no major shifts that indicated that a department acknowledged that it faced serious economic challenges and attempted to adapt to that.
Annual Reports had too much detail on the activity level and not enough focus on service delivery objectives and outcomes. The PMDS was reduced to a reward system because officials were quick to award themselves inflated scores. A score of 3 meant that the official was effective, 4 was a cut above that, and 5 meant that the official had done exceedingly well. Officials would score themselves 5, in the hope that it would be brought down to a 4. But in terms of real outcomes the stated level was not achieved. Even those who rightfully only deserved a 2, would award themselves higher scores. It did not correspond to what was happening on the ground. It was raised with the Department of Public Service and Administration (DPSA) that the system had to be tightened up and reviewed so that it could be linked to unit and organisational performance, to avoid officials getting bonuses while targets were not being achieved. The PMDS also had to be capable of evaluating HODs, in terms of their accountability. The system was taken to the DPME around 2013, but was not yet a policy system to guide evaluation. There was a need to fast-track systems so that HODs would be able to evaluate their own performance, which could then be cascaded down to other officials. The Commissioner had answered questions about SOEs and consequence management.

The Commissioner replied about the AG being taken to court. Parliament had to put its foot down. The AG was not to be taken to court until it was known what it was all about. It was a case of the train being on the wrong rail track. She did not know which committee was to be responsible, but the fact remained that the matter first had to receive Parliamentary attention.

Ms Senokoanyane commented that the Standing Committee had raised the same issue at a joint meeting. It was an unacceptable position, and it was becoming a new trend.

The Chairperson thanked the PSC for its contribution. The information presented would be put to use in interaction with departments on quarterly reports. The Committee wanted to see improvement in the area of HR. Vacant posts had to be filled. There had to be assessment of those in charge of HR matters. Improved non-financial performance would also lead to better financial performance. Strategic plans and policy implementation had to be about people who could implement plans. When there was deviation, there had to be consequence management, in the interest of accelerated economic transformation.

Mr Gcwabaza remarked that it was part of the PSC mandate to look at the mandate of the office of the Chief Procurement Officer. The PSC had to look at the capacity of that office and the work it did. Not much was currently happening. If that office was left weak, not much could be achieved. He encouraged the PSC to look into the matter.

The Chairperson thanked the PSC for a quality engagement.

The Chairperson adjourned the meeting.
 

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