Quarter 1 performance 2018/19 of departments

Standing Committee on Appropriations

24 August 2018
Chairperson: Ms Y Phosa (ANC)
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Meeting Summary

The Standing Committee on Appropriations received a briefing from Parliamentary Committee Researchers on the analysis of the First Quarter Expenditure Report for the 2018/19 financial year. Most of the departments’ expenditure reports indicated either overspending or under-spending of the funds allocated to them.

There were numerous vacant positions in most of the Departments, giving rise to the following questions:

  • How many were critical vs non-critical;
  • How many were funded positions in terms of total staff establishment?
  • What was the breakdown of senior positions vs other positions?
  • What was the duration of the vacancies, i.e. those still complying with Public Service regulations, such as acting for six months?
  • What was the effect on the department’s delivery capacity?

There were various cross-cutting issues which affected most, if not all, of the departments that had over or under-spending. These included poor planning; vacant positions (slow spending on the Compensation of Employees (CoE); non-implementation of the cost of living adjustment; slow payment for office accommodation; late receipt of invoices; and delays in transfers and subsidies.

Members sought more information on what the Human Settlements Development Bank was, and what services it offered; the state of strategic planning and consequence management in the various departments; vacancies that never filled, and why a vehicle was being purchased for a former Minister by a Department.

Meeting report

The Chairperson asked Members to observe a moment of silence or meditation in honour of Mr Sibusiso Radebe, Member of Parliament for Mpumalanga, who had passed on in June.

First Quarter Expenditure Report Analysis

Mr Phelelani Dlomo, Committee Researcher, briefed the Members on the expenditures by the various departments. Most of the expenditure reports indicated either overspending or under-spending of the funds allocated to the departments.

In the Department of Water and Sanitation, there was both over and under-expenditure. There was a deviation against the projected expenditure of R1 billion. The overexpenditure was attributed to the purchase of a vehicle for the former Minister; payment of invoices for leases; the ‘War on Water Leaks’ programme; travelling to the regional offices; audit fees; payment of accruals; and the payment of leave and gratituities to the ex-employees. Under-expenditure was due to vacant posts; transfers to the Amatole, Magalies and Sedibeng water boards; the Water Trading Entity; unpaid invoices for regional bulk infrastructure and the Water Services Grant; a mine water management feasibility study; and the appointment of professional service providers.

An example was given of an engineer claiming through an invoice, the payment for his work as an engineer on a project, and then the presentation of another invoice claiming further remuneration as the project leader for the same work hours. This constituted to double payment. There was, therefore, a need to recover those funds back to the Department and to reprimand the individuals involved as part of consequence management.

In the Department of Human Settlements there was under-spending, with a deviation of R114.5 million against the projected expenditure. This was mostly due to the lack of spending on the compensation of employees (CoE) due to vacant positions; slow payment for Habitat Foundation membership; the lack of transfer payment for the Chair of Human Settlements at the Nelson Mandela Metro University; and the lack of transfer payments for the Deeds Restoration Grant due to a lack of adequate information.

Delays in the title deeds grants impacted negatively on property ownership. There had been progress on the Human Settlements Development Bank, which was being established through the consolidation of the existing human settlements development finance institutions (DFIs) – the National Housing Finance Corporation (NHFC), the National Urban Reconstruction and Housing Agency (NURCHA) and the Rural Housing Loan Fund (RHLF).

In the National Treasury, there had been under-spending of R100 million. This was because of a lack of spending on CoE due to the high number of vacant posts; office accommodation; outsourced services for cleaning; lack of spending on the stationery and printing; the application lifecycle management (ALM) back office system; the Integrated Financial Management System (IFMS); and computer systems. The lack of spending was also due to the replacement of obsolete assets; the rescheduling of the BRICS (Brazil, Russia, India, China, and South Africa) event; political office bearers’ pension funds; injury on duty; and the Government Pensions Administration Agency (GPAA). Further under-spending had been caused by the unspent budget for cities’ support programmes and infrastructure delivery improvement programmes.

There was also need for clarity on the R59 billion bailout for the following state-owned enterprises (SoEs):

  • South African National Roads Agency (SANRAL);
  • South African Broadcasting Corporation (SABC);
  • South African Airways (SAA); and
  • South African Post Office (SAPO).

There were numerous vacant positions in the Departments of Agriculture, Fisheries, & Forestry; Energy; Sport & Recreation; Cooperative Governance & Traditional Affairs; and Rural Development & Land Reform.

The following questions arose, reflecting on these vacancies:

  • How many were critical vs non-critical;
  • How many were funded positions in terms of total staff establishment?
  • What was the breakdown of senior positions vs other positions?
  • What was the duration of the vacancies, i.e. those still complying with Public Service regulations, such as acting for six months?
  • What was the effect on the department’s delivery capacity?

In the Department of Environmental Affairs, there was both over and under-spending. There was a deviation of R332.6 million against the projected expenditure. Under-expenditure was due to no instalment on the Public Private Partnerships (PPP) agreement; delays in receiving invoices from ports of entries (OR Tambo); slow progress in Expanded Public Works Programme (EPWP) projects; and delays in the delivery of Waste Management Bureau baler equipment.

Over-expenditure was due to payments to African Marine Solutions: the SA Agulhas and Algoa research vessels and helicopter, South African National Parks (SANParks); combating wildlife trafficking; and air quality monitoring stations ordered previously. There were delays in the transfer payment of earmarked grants to the University Education programme, non-profit institutions, and the technical and vocational education and training (TVET) colleges.

Mr Musa Zamisa, Committee Researcher, Parliament, took the Members through the various crosscutting issues affecting most, if not all, of the Departments that had over or under-spending. These included:

  • Poor planning;
  • Vacant positions (slow spending on CoE);
  • Non-implementation of the cost of living adjustment;
  • Slow payment for office accommodation;
  • Late receipt of invoices;
  • Delays in transfers and subsidies.


Mr A Shaik Emam (NFP) asked what the Human Settlement Development Bank was, and what services it offered.

Mr Zamisa responded that the bank was a consolidation of institutions in the Human Settlements portfolio as part of the National Housing Corporation, and was meant to ensure the poor had access to housing finance.

Mr Shaik Emam added that the reason for his question was that the government could not provide housing for all the citizens of South Africa, but a development bank which was not driven by profit -- or just breaks even -- could do that by providing loans at very low interest rates to the poor.

The Chairperson asked the Members to take into consideration the departments they wished to call to appear before the Committee, because time was limited in light of the looming Parliamentary recess starting on 17 September.

Mr Shaik Emam complained that they said and repeated things, but nothing ever happened or changed. He said strategic planning was lacking or non-existent, and that was why communities were not buying into the various plans of the departments, and this led to service protests.

Mr A McLaughlin (DA) agreed that “we seem to be going round and round, but there was no improvement”. He added that there was no consequence management, and that was why people were not doing their jobs -- there was no pressure to perform, since one was not at risk of losing one’s job.

Ms D Senokoanyane (ANC) complained about vacancies that were constantly there and never filled. She asked for some form of reporting on transfers in the first quarter. She asked for clarity on why a vehicle was being purchased for a former Minister by a Department.

Ms M Manana (ANC) proposed calling the Departments of Energy, Cooperative Governance and Traditional Affairs (CoGTA), Public Works and Defence, to appear before the Committee before the recess on 17 September 2018.  

Mr B Martins (ANC) asked for a joint meeting with the Standing Committee on Public Accounts (SCOPA). He commented on the unnecessary spelling errors in the report presented by the Parliamentary Committee Researchers, and asked that they spell-check their work in future, as this could affect the perception of the quality of their work. 

Mr N Gcwabaza (ANC) commented that people needed to think and act differently going forward into the future.

Mr Zamisa responded that they had taken the Members’ comments and suggestions into consideration and would implement them in the future. He added that there needed to be a definition of what consequence management should entail. It needed to be defined for Parliament, as the supreme oversight authority in the Republic.

The Chairperson proposed having a meeting with the Auditor General (AG) to get direction on referring the matter to SCOPA.

Ms Senokoanyane queried why the matter had to be referred to SCOPA, instead of having SCOPA present at the meeting with the AG instead.

Mr Shaik Emam suggested that the outcome of the meeting with the AG should be what determined whether the matter would be sent to SCOPA.

Committee minutes

The Chairperson proposed a page-by-page review of the minutes from the previous session, to identify and correct any errors.

Mr Gcwabaza complained that he was indicated as absent in the minutes of the previous meeting, yet he had been referred to a different Committee.

The Chairperson agreed, and directed that this should be corrected.

Ms Manana commented that the attendance list from the minutes suggests that there had been no quorum in the session.

The Chairperson recalled that when they had not reached a quorum, they had informed the chief whip, who had then referred an additional Member to the session. This should be reflected in the minutes.

Ms Senokoanyane raised an issue, where her seconding of the report had not being reflected.

The Chairperson accepted the correction.

Mr Martins proposed the adoption of the minutes as amended.

Ms Senokoanyane seconded the adoption.

The minutes were adopted.

The meeting was adjourned.  

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