Adjustments Appropriation Bill: hearing with Department of Home Affairs + National Treasury

Meeting report

Ms Fatima Chohan, Deputy Minister: Department of Home Affairs (DHA), said the automated processes of “Who Am I Online” (WAIO) had led to the Department leaping into the next century insofar as efficiency was concerned. For example, the turnaround time for Identity Documents (IDs) had drastically improved, from 90 days to 14 days. It laid a firm foundation for a developmental economy and benefits to the state in terms of governance, particularly in the area of processing social security grants, and would also reduce corruption. This was the background to why the DHA was anxious about WAIO. She hoped there would be an opportunity to discuss WAIO in more detail later.

2017 Adjustments Appropriations Bill: DHA concern on budget cut

Mr Mkuseli Apleni, Director-General: DHA, said that around 2009, the Department had been completely bankrupt and had unauthorized expenditure of about R1 billion which had been cleared only in 2016/17, with the help of the National Treasury.

The modernisation process had transformed the DHA to where it was today. Systems of the DHA were at the core of any government, which was why it was critical for the Department’s processes to be efficient.

For 2017/18, R518 million was earmarked for the DHA. Earmarked funds were not based on a linear projection, but depended on the point at which a project matured. The bulk of the money was more on maintenance and support. This was where fault had often been found in the DHA’s planning processes. The Department had already incurred expenditure of R244 million and looking at commitments of R128 million. This left R145 million for issuing orders.

The DHA would conclude a contract with the banks which would see the Department feature in banks across the country. When the announcement was made that in 2018, the green ID booklet would no longer be in use, it had caused considerable panic as only 178 offices out of 415 were equipped with the system. The answer was a mobile solution to enable the DHA to travel to people. The issue of IDs was the most challenging. All the systems of the country should be amalgamated into one system. Regarding asylum seekers, a passport for refugees was being arranged.

The Committee may be aware of the protocol, which was due to be implemented by 2018, that there should be no borders within Africa, to allow people to travel on one passport throughout the continent.

The Department did not have a history of under-spending. From 2013/14 to 2015/16, the Department’s expenditure had been at 100%. In 2016/17, the R12 million that was unspent was because the money was given to the Department during the 2016 adjustments estimates specifically to deal with video conferencing. The money was, however, not granted to the Department at the beginning of the budget allocation and Treasury had already rolled over the money to the Department for 2017/18 because it was not spent. The Department had been consistently spending its budget to the last cent.

With WAIO, it was unreasonable that R100 million had been taken from the Department under the impression that it would go unspent, although the DHA had consistently made use of its complete budget.

With regard to its annual performance, the Department had achieved 70% of its targets in 2014/15, a figure which had risen to 84% in 2016/17. In the first quarter of 2017/18, 75% of targets were achieved, and in the second quarter, 69% were achieved. In terms of the linear projection, by the end of September the Department should have spent 50% of its budget, but it was at 55% because of the issue of self-financing, which meant it had spent money before it received it. The money for self-financing was, among other things, for the smart card rollout and passports, which was why the expenditure for “citizen affairs” was high, at 80.8%. The figure the DHA had submitted to Treasury had been approved and would appear in the DHA’s books for October when the 2017 Adjustments Appropriations Bill had been approved.

A letter had been written to Mr Dondo Mogajane, Director-General: National Treasury, to seek an explanation for the R100 million taken from the budget. The DHA was capturing biometric data in all ports of entry to ensure that all potential criminals were tracked. Nearly R165 million per annum was being spent to maintain this data system.  An additional R264 million was acquired from the South African Police Service (SAPS).

The Chairperson reminded Mr Apleni that the Committee had a plenary they needed to attend, so the presentation should be summarised to allow the Treasury to respond. The DHA did not want to find itself back in bankruptcy.

Discussion

Mr A Shaik Emam (NFP) agreed on the improved service of the DHA. There was a clear dispute between Treasury and the DHA that would affect DHA’s output. What was the way forward? If the DHA did not get this money, there would be a serious problem because they had already made their commitments and had to pay the money for the goods and services obtained. He asked what happened to the vast number of people coming into the country illegally in terms of the fingerprinting system? If the R264 million had already been allocated, it could not affect the R100 million.

Mr N Gcwabaza (ANC), questioned the exact details behind the R100 million.

Ms M Manana (ANC) welcomed the straightforwardness of the presentation, and urged the Treasury to respond to the issues raised so that a way forward could be determined.

Mr A McLoughlin (DA) said that he had had a negative experience with service delivery from the DHA. It had taken the Department from 13 July to 8 November to communicate the rule that only people who had both parents born in South Africa could apply for a smart card. These rules were not readily known to the public. A database for the entire population was a brilliant idea.

Ms S Shope-Sithole (ANC) agreed with Ms Manana that Treasury must be given an opportunity to engage. It would be ideal for the DHA to be granted the money, as the lack of offices required people to travel long distances for service.

The Chairperson urged the DHA to respond to the gap in the system, as indicated by Mr McLoughlin, and to consider the response of National Treasury. A decision would not be made presently, and these issues would be discussed further.

National Treasury

Mr Mogajane began by describing the elaborate budget process that dictated the operations of theTreasury. In this case, as part of the process of engaging, when Departments apply for roll-overs and look for adjustments, there were many considerations. In this process, when the assessment was made at the time, Treasury knew that the DHA would receive R264 million, but that it would not receive this money until the President had assented to the Bill, which would give the DHA authorisation to use the R264 million. The estimation had been that the money would start being spent in January. Treasury had noticed that at that point, there was R100 million available. This meant he DHA had R364 million which realistically could not have been spent.

One expected that there would have been close collaboration between the Departments. The Adjusted Estimates of National Expenditure (AENE) was compiled by the Treasury. It was normally an interactive process, whereby the DHA would be expected to confirm all the figures. In this case, the DHA had signed and confirm. As soon as the DHA realised that the R100 million had not been highlighted, Mr Apleni had written to the Treasury.

This was the first time that a department had intercepted the appropriations process in this fashion. This was therefore uncharted territory. The letter had been received at the end of October. It could have been that there was an engagement and a communication failure between a budget analyst and the finance department in the DHA. It was likely that the DHA had signed off for the adjustment, and the issue may have to be corrected outside the meeting. The R100 million must be reversed.

DHA’s response

Mr Apleni responded that the strategy for rolling out smart cards was clear -- the goal was to give them to 16-year-olds and the elderly. South Africans between 17 and 59 years were not meant to receive a smart card. People who had obtained citizenship through naturalisation were not to receive it either.

A letter to Treasury would not have been written if there had been evidence presented that the R100 had been signed off by one of the officials within the DHA.

Mr Shaik Emam felt that Mr Mogajane was very progressive in the interests of the state and the people, and in offering to make amendments and investigating any miscommunication.

Ms Shope-Sithole emphasised that there was one government. The Committee should not have to resolve this matter.

The Chairperson, in agreement, added that cooperative governance was a constitutional prescript.

Dr C Madlopha (ANC) welcomed Mr Mogajane’s explanation, and emphasised that the Committee was there to make sure the departments were enabled to perform their services well. It was not a fault-finding Committee, but was there to assist.

Mr Gcwabaza suggested that the two Directors General resolve the matter by 30 November.

Ms Chohan thanked Mr Mogajane for his approach. Mr Apleni resolved to return to the Department and check whether the Department had declared any unspent funds. He also would report back to the Committee by Monday on the resolution of the matter.

Mr McLoughlin was concerned about the Committee’s right to sort out this problem, as the money had been allocated to another Department.

The Chairperson rounded off the discussion. The aim of the meeting had been to attempt to resolve the issue in the presence of both departments, and it was crucial that there was a resolution within the next few days. It was unfortunate that the meeting had to end, considering the time constraints, and it may be necessary to meet again if the matter was not concluded in due course.

The meeting was adjourned.