National Departments & Entities Q1 deviations & expansions: National Treasury briefing (postponed)

Meeting report

Opening Remarks by Chairperson
The Chairperson welcomed officials from National Treasury to the meeting and explained the importance of the meeting in monitoring deviations and expansions, which had become a pertinent and troublesome phenomenon. In the Committee’s quest to tighten the management of public funds, areas of leakage had been identified which spoke to the importance of internal controls. Deviations and expansions had been introduced to cater for emergencies but they had unfortunately become the norm. It was against this backdrop that the Committee was exercising its oversight responsibility to hold Treasury accountable and other departments and entities.

The Committee was interested in understanding National Treasury’s internal processes on how it approved deviations and expansions to satisfy that deviations were justifiable. It was also interested in the actual deviations in terms of Rands and Cents to gauge their relevance, while also comparing progress from quarter to quarter. Judging from the Department’s presentation, there was no information on quarterly progress of deviations, and therefore did not help the Committee in comparing changes per department and entity. It also lacked information on the amount of Rands and Cents, therefore the process of looking at deviations could not be exercised. The Department should however present on its internal processes of approval and legislation and then later give a presentation on the figures for deviations.

Discussion
Mr M Booi (ANC) asked where the DG or executive was and if the Chairperson had received any apology.

Mr Willie Mathebula, Acting Chief Procurement Officer, National Treasury, apologised on behalf of the DG who had commitments elsewhere. He agreed with the issues raised by the Chairperson.

Mr Booi insisted on finding out where the DG or executive was. Parliament was supposed to receive an apology in writing. Did the Chairperson receive such a letter?

The Chairperson confirmed that he did not receive any letter.

Mr M Hlengwa (IFP) asked members not to complicate the matter or make assumptions on where the DG was but instead work on the basis of not receiving an apology.

Mr D Ross (DA) appealed to the executive to make SCOPA meetings a priority because members were looking forward to engage with the new Minister of Finance on expansions and deviations, which had the potential of leading to corruption and fiscal waste.

Mr E Kekana (ANC) stressed the importance of the DG’s presence to follow up on the commitment he made, of implementing issues previously raised. There was a clear process to be followed if the DG was not going to be present, which raised doubt as to whether the DG was aware of the meeting. The matter was very serious because it was dealing with the public purse but the Department seemed not to be worried of the implications. Could the Chairperson make a ruling?

Ms N Khunou (ANC) emphasised the importance of sending a clear message to accounting officers on the seriousness of Parliament. Deviations and expansions were very problematic and the Committee was nowhere near solving the problem. If the DG was not present, the meeting would not proceed.

The Chairperson requested members to at least listen to the first part of the presentation because it spoke to the legislation of deviations and expansions. Based on recommendations from the December 2017 meeting, members would be able to know what internal arrangements had been made on how the Department managed deviations and expansions.

Mr Booi asked the Chairperson to make a ruling on the absence of the DG. It was not that members did not want to listen, but the Public Finance Management Act (PFMA) required the DG to be present. There was also no formal apology from the DG to the Chairperson. What did the Chairperson have to say about the absence of the DG? If other Departments were sent away because of the absence of their DG’s, why should the same not apply to Treasury?

The Chairperson understood the concerns raised by members, but in a bid to provide guidance, he requested the Department to present on the process of approving deviations and expansions.

Ms Khunou sought clarity on the issue of Mr Solly Tshitangano signing the Department’s deviations when he was not the Chief Procurement Officer. Could the Department clarify if this was still the case?

Following Ms Khunou’s concerns, Mr Kekana insisted that this was the reason why the presence of the DG was important. He had made a commitment to change the process and members wanted to engage him based on that commitment.

Mr Ross further highlighted the importance of the presence of the DGs. He had no problem with the Chairperson’s guidance on allowing the Department to make its first part of the presentation, but he had proposals to make on legislation and would have wanted to engage the DG.

Mr Hlengwa was almost convinced with the Chairperson’s proposal but the Committee must apply a level of consistency. Whether Mr Solly Tshitangano was still signing documents or not, responses given would not satisfy the Committee's concerns, because those responses needed to come from the DG. The Committee therefore had no business holding a meeting and continuing with the meeting would be setting a precedent for DG’s not to be attending Parliament.

Mr T Brauteseth (DA) understood members concerns but it was important for Parliament to be productive. If the officials present could answer questions on deviations then they could speak on behalf of Treasury

The Chairperson agreed to allow the officials to respond to questions on deviations and expansions but asked Treasury to provide a report with information on the quantum and amount of deviations for each department. The report should also provide quarterly information to be able to give a comparison and give sense of whether progress was being made or not. The DG had set up a task team and it was only fair for the DG to be present. Could the report be provided in a week?

Treasury agreed to send back information in two weeks.

Mr Booi asked Mr Brauteseth not to shift the blame to members because the Committee was interested in being consistent. The Department should be sent away because they were not fit to answer the concerns of members as it was the DG who had given a commitment. The Committee was not against officials or treasury but it was about how officials conducted themselves. Giving two weeks to Treasury to provide a report was not fair because it was going to disrupt the process of holding other departments accountable. What was so important about Treasury?

Mr Hlengwa made a proposal for consequences and cost recovery where the absent DG would be held liable. Taxpayer’s money could not be responsible for manufacturing junkets and as such the DG must spell out to the Committee what he will do to pay back tax payers money.

Ms Khunou said that if the meeting was going to be cancelled it should be cancelled in totality. By allowing Mr Brauteseth to ask questions, the Committee was contradicting itself. They all had questions for the DG on commitments he made on deviations and expansions.

Mr Kekana stressed the importance of consistency within the Committee. Allowing one member to ask questions would show that only one person was prepared for the meeting and not others. He was not sure if the delegation was mandated by the Department if the leadership was not present. Treasury must respect Parliament. If they made a commitment to be present, they should be present.

Mr Ross said that the Cmmittee needed a partnership with Treasury, which was based on excellence but it was clear that was not the case today. He supported the cost implication proposal and requested Treasury to come back with a thorough report on expansions and deviations, which would assist in making comparisons. Let the committee set an example today with National Treasury then work towards a relationship and partnership that had the characteristic of excellence.

Mr Brauteseth fully agreed that the Department needed to be censured for their actions that morning. He apologised to his colleagues for coming in late and not being aware of the decisions they had made earlier, as he was just trying to make do of the situation.

The Chairperson asked the Department to provide other timelines because of the concerns raised by members.

Treasury proposed to provide the report within two weeks or less.

The Chairperson asked to have the report by 18 May 2018. The cancellation of today’s meeting meant that members would have to meet Treasury in the evening.

The meeting was adjourned.