DPSA, PSC, NSG, CPSI 2017/18 Annual Report, with AGSA input & Deputy Minister present

Public Service and Administration

10 October 2018
Chairperson: Mr J Maswanganyi (ANC)
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Meeting Summary

Annual Reports 2017/18 

The Auditor-General of South Africa (AGSA) reported that the National School of Government Training Trading Account (NSG TTA) and NSG Vote has a regression on the usefulness of performance indicators and targets. On financial health, there are no material uncertainty in any of the entities to continue as a going concern. NSG TTA realised a deficit in the 2017/18 financial year.  Furthermore, it has negative cash flows. The Department of Public Service and Administration (DPSA) is in a net liability position and this highlights financial challenges and likely liquidity problems. The Public Service Commission (PSC) realised an accrual adjusted deficit in the 2017/18 financial year. Unauthorised expenditure amounts to R13.7 million, 97% of which was a result of contraventions of Supply Chain Management (SCM) legislation. Fruitless and wasteful expenditure was a result of the cancellation of an event by DPSA and an SCM process prejudiced by concealing a quotation with a lower amount amounting to R9000. The 16% or R1.2 million of irregular expenditure was payments/expenses in previous years only uncovered and disclosed for the first time in 2017/18. Irregular expenditure incurred in the 2017/18 financial year was due to procurement processes not being followed as well as contracts being extended or modified without the approval of the Accounting Officer (AO).

The Committee asked what is being done to ensure that contracts are not amended without approval.

DPSA received an unqualified opinion with findings from the AG. The AG did not raise any material findings on the usefulness and reliability of the reported performance information for Programmes three to six which were selected for auditing. For programme two, 80% of the targets were achieved. Because of a change of approach – a concept document – instead of the originally planned Draft White Paper for Public Administration Transformation and Modernisation has been developed. For programme three, from 2015/16 to 2017/18 financial years, a total of 96 913 youths was appointed. 11 316 youths were appointed permanently, and 12 464 were appointed on contract. The remaining 16 273 learners were recruited on contract in the National Rural Youth Service Corps. No payment exceeded the 30-day period during the 2017/18 financial year. No unauthorised expenditure was incurred during the 2017/18 financial year. Two cases of fruitless and wasteful expenditure amounting to R3 240 were identified.

The Committee asked what gender the acting HODs are, how the problem of public servants doing business with the state is being combatted, and which jobs the appointed youth are doing.

During the 2017/18 Financial year the Centre for Public Service Innovation (CPSI) had 24 Targets, of which nine were in programme one and 15 in programme two. By the end of March 2018, 84% of the targets as per the 2017/18 Annual Performance Plan were achieved. For targets not achieved, the CPSI had undertaken to upload 1300 content items on innovation, public administration, and finance onto the United Nations Public Administration (UNPAN) portal, however, 1278 items were uploaded. The department was supposed to identify two projects for facilitation, however, only one was replicated and that is the Pharmacy Automation Project: Alexander PDU. Another target was to have at least four projects per category identified and recognised through the CPSI awards programme, but some categories have two projects, and some have three, but not the targeted four. The CPSI exceeds the minimum targets of 50% woman on Senior Management Service (SMS) level with 67.67 % or four women. And in terms of the minimum target of 2% for disability, the CPSI is at 5.88% with two disabled employees.

The Committee asked what the ambulance response time is and whether CPSI is independent.

The PSC has achieved 91% (93 of 102) of its planned targets. During the period under review – 2017/18, the PSC concluded 559 or 85.5% of the 654 grievance cases – 510 cases for level 1-12, of which 416 were concluded within 30 working days of receipt of relevant information, and 49 cases for SMS members of which 45 were concluded within 45 working days of receipt of relevant information. There is a decrease of 9% of grievances handled during the reporting period compared with the total of 709 cases that were handled the previous financial year. During 2017/18, the highest number of grievances handled related to unfair treatment of employees for levels 1-12.

The Committee asked whether the Commission has approached business leaders for assistance.

The NSG has exceeded its planned training targets by 9%, training a total of 52 557 or 109% learners in all training streams. This resulted in own revenue generation plus interest accrued from training activities during the current financial year to the amount of R116.7 million. For programme one, revenue generated for the year amounted to R116.7 million by 31 March 2018. The average number of days for debt collection reduced to 45 days by the end of the financial year. 100% of suppliers paid within 30 days. The NSG vacancy rate was at 10% by the end of the financial year. For programme two, 65 evaluations were carried out and four Application of Learning studies were undertaken. Six research projects were completed by the end of this financial year. Nine leadership platforms were held due to collaboration with higher education institutions

The Committee asked why retired public servants are being hired and which departments are still indebted to the NSG.

Meeting report

Briefing by Office of the Auditor-General of South Africa (AGSA)

Mr Carl Wessels, Manager, Auditor-General of South Africa (AGSA) took the Committee through the presentation.  For the National School of Government Training Trading Account (NSG TTA) and NSG Vote, there was a regression on the usefulness of performance indicators and targets.  The Centre for Public Service Innovation (CPSI) audit outcome was unqualified with no findings and has improved, while the Department of Public Service and Administration (DPSA), Public Service Commission (PSC), and NSG TTA’s audit outcomes are unqualified with findings. The CPSI in terms of senior management provides assurance, and other entities provide some assurance. On audit committees and Executive Authorities, all entities provide assurance.

On financial health, there was no material uncertainty in any of the entities to continue as a going concern. NSG TTA realised a deficit in the 2017/18 financial year.  Furthermore, it has negative cash flows. DPSA is in a net liability position and this highlights financial challenges and likely liquidity problems. PSC realised an accrual adjusted deficit in the 2017/18 financial year. Furthermore, accrual-adjusted net liability position was realised. Total liabilities exceeded total assets.

Unauthorised expenditure amounts to R13.7 million, 97% of which was a result of contraventions of Supply Chain Management (SCM) legislation. Fruitless and wasteful expenditure was a result of the cancellation of an event by DPSA and an SCM process prejudiced by concealing a quotation with a lower amount amounting to R9000. DPSA incurred R6000 and CPSI R3000.

The 16% or R1.2 million of the irregular expenditure was payments/expenses in previous years only uncovered and disclosed for the first time in 2017/18. Irregular expenditure incurred in the 2017/18 financial year was due to procurement processes not being followed as well as contracts being extended or modified without the approval of the Accounting Officer (AO)

AGSA recommends that there must be timely consequences for officials who deliberately or negligently ignore their duties and contravene legislation. A list of action taken against transgressors must be provided quarterly to the Committee for a follow up of all irregular, fruitless and wasteful expenditure incurred. The Committee should monitor implementation of commitments by accounting officers/authorities and Executive Authority. The Committee should request management to provide feedback on the implementation and progress of action plans to ensure improvement in the audit outcomes of the portfolio.

Discussion

Mr D Khosa (ANC) asked for clarity on the inadequate capability of the authors of annual financial statements and annual performance reports to prepare credible sets on slide 24.

Mr M Ntombela (ANC) said that contracts amended or extended without approval by a delegated official is something that occurs yearly, and investigations are done to curb such problems. There is a demonstration that this problem ensues repeatedly.  He asked what is being to ensure that this does not persist. The Committee’s contention is to try to make governance better.

The Deputy Minister, Dr Chana Pilane-Majake apologised on behalf of the Minister.

Deputy Minister Pilane-Majake said they must work together with the Chief Financial Officer (CFO) to curb the problems on slide 21. AGSA indicated the irregular spending, and it is noted.

Deputy Minister Pilane-Majake said she regrets that there has been a regression, however irregular spending does not mean that work has not been done.

Briefing by Department Minister of Public Services and Administration (DPSA)

Prof Richard Levin, Director-General (DG), DPSA, took the Committee through the presentation. The Department received an unqualified opinion with findings from the AG. The AG did not raise any material findings on the usefulness and reliability of the reported performance information for Programmes three to six which were selected for auditing.

For programme one, all targets were achieved. For programme two 80% targets were achieved. Because of a change of approach – a concept document – instead of the originally planned Draft White Paper for Public Administration Transformation and Modernisation has been developed. The White Paper will be aligned to the National Development Plan (NDP) and provisions of Public Administration Management Act (PAMA) of 2014. As at September 2018, a briefing session on the approved concept document was conducted with the DPSA Technical Working Group (TWG) and a write up of version one of the Draft White Paper was initiated. For programme three, 37% of the set targets were not achieved. In response to the recommendations of the NDP that to achieve a professional public service, the state needs to be a career of choice by attracting the best graduates and youth with potential to its employment service. The Public Service Graduate Recruitment Scheme was approved by Cabinet in November 2017. The Minister has launched the Public Service Graduate Recruitment Scheme and the Department will commence with the piloting of the Scheme in selected departments during the 2018/19 financial year.

For programme three, from 2015/16 to 2017/18 financial years, a total of 96 913 youths was appointed. 11 316 of these youth were appointed a permanent basis, and 12 463 were appointed on contract. The remaining 16 273 learners were recruited on contract in the National Rural Youth Service Corps.

No payment exceeded the 30 days period during the 2017/18 financial year. No unauthorised expenditure was incurred during the 2017/18 financial year. Two cases of fruitless and wasteful expenditure amounting to R3 240 were identified. One case to the value of R1 440 was written-off before 31 March 2018.  Cases identified as irregular expenditure during the 2017/18 financial year amounted to millions of Rands. These cases will be investigated during the 2018/19 financial year.

As at September 2018, the department had a vacancy rate of 13.08% or 64 vacant posts. The vacancy rate fluctuates because of transfers and resignations. Due to the reduced compensation budget because of cuts by National Treasury (NT), the department has prioritised 33 posts to be filled within the available budget. 11 of the 33 vacant posts have been filled to date, and recruitment processes continue to fill the remainder of the vacant posts. Approval has been sought to remove posts that cannot be filled from the PERSAL system. The vacancy rate is projected to be less than 6% after approval to abolish posts has been granted.

Discussion

Ms D Van der Walt (DA) asked on provincial and national HOD’s whether the ones in Acting positions are only female. The number of years that HOD’s spend in their positions is concerning because it is less than four years. She asked how many employees DPSA has in provincial and national departments, and what happens to HOD’s who do not sign their agreements The Thusong centres are not ‘Batho Pele’ centred. She has never seen a perfectly run Thusong centre.

Mr Khosa asked what kind of jobs the 4052 youth who have been appointed do. He asked what the reasons are for not taking reasonable measures to curb irregular expenditure. Slide 24 shows underperformance due to unfilled posts, this means that they are not budgeted for. The non-payment within 30 days matter needs to be resolved because service providers suffer due to this. He asked if they listen to the advice of service providers on fruitless and wasteful expenditure.

Mr Ntombela asked how the matter of public servants who conduct business with the state is being combated, how effective is whistle blowing, who do service providers talk to when they have not been paid within 30 days, and how will the department ensure that the youth will be employed without having any experience.

Responses by DPSA

Mr Levin responded that the department would provide the exact figure of gender statistics and vacancy.

Mr Levin said irregular expenditure relates to the procurement of goods and services. The Department will later provide a further breakdown with figures on HOD’s who do not sign.

Mr Levin said the Thusong centre in Maponya mall is very efficient. This is but a single example, but the department will investigate the others.

Mr Levin said in the previous financial year, but both were under control and the department has listened to the AG. The cases amount to just over R1000 and this is because Committees had cancelled in the morning of the scheduled meeting and refreshments had been bought.

Me Levin said the department usually pays within 12 to 13 days.

Briefing by Centre for Public Service Innovation (CPSI)

Ms Qinisile Delwa, Acting Executive Director, CPSI, took the Committee through the presentation. During the 2017/18 Financial year the CPSI had 24 Targets, of which nine were in programme one and 15 in programme two.  As at the end of March 2018, 84% of the targets, as per the 2017/18 Annual Performance Plan, were achieved.

During the year under review – 2017/18 – the CPSI prepared and submitted annual and quarterly Financial Statements free from material misstatements to AGSA, DPSA and National Treasury.

For programme one, 100% of all undisputed invoices issued were paid within 30 days. The average payment period in the year under review was 5.63 days from receipt of an invoice. The amount received in programme one was R18.6 million for the period 1 April 2017 to 31 March 2018. The spending for the same period was R18.3 million. The amount received in programme two: Public Sector Innovation amounted to R15.3 million for the period 1 April 2017 to 31 March 2018.  The spending for the same period was R14 million. 

The CPSI exceeds the minimum targets of 50% woman on SMS level at 67.67 % and in terms of the minimum target of 2% for disability; the CPSI is at 5.88%. All employees including Executive Director’s performance agreements for 2017/18 were signed before 31 May 2017. Officials were trained and developed in areas of need as identified in their Personal Development Plans.

For targets not achieved, the CPSI had undertaken to Upload 1300 content items on innovation, public administration and finance onto the United Nations Public Administration (UNPAN) Portal. However, 1278 items were uploaded. The department was supposed to identify two projects for facilitation, however only one was replicated and that is the Pharmacy Automation Project: Alexander PDU. Another target was to have at least four projects per category identified and recognised through the CPSI awards programme. But some categories have two projects some have three but not the targeted four.

In 2017/2018 financial year the department saw for the first time the recognition of Public Sector Innovation Trailblazers, ordinary public servants who develop in-house innovative solutions instead of procuring expensive off the shelf solutions.

On piloted projects, the CPSI successfully established a hospital-based Innovation Hub to enhance service delivery at Bertha Gxowa Hospital. The idea of an Innovation Hub has provided the opportunity for hospital staff to be innovative around service delivery challenges that they experience in their own work environment and motivated them to come up with solutions.

During the period under review, one of the solutions implemented as part of this initiative was the Optimisation of Patient Flow to minimise the waiting time of patients for admission and increase bed availability. Furthermore, the 2017 Public Sector Innovator of the Year, Mpumalanga Department of Health developed an innovative in-house solution to optimise the dispatching and the tracking of ambulances. This solution saved the department at least R60 million whilst significantly improving the response time.

Discussion

Mr Khosa asked for an outline of the extent of improvement fo the response time of ambulances.

The Chairperson asked whether the CPSI is independent.

Responses by CPSI

Ms Delwa responded that the CPSI collaborates with other entities under the information hub which is a provincial entity of Gauteng.

On ambulance response time, there is an under supply of vehicles it used to be an hour but now there is a fourfold reduction in response time.

Briefing by Public Service Commission (PSC)

Dr Dovhani Mamphiswana, DG, PSC, took the Committee through the presentation. The PSC has achieved 91% or 93 of 102 of its planned targets.

During the period under review, the PSC concluded 559 or 85.5% of the 654 grievance cases, 510 cases for level 1-12, of which 416 were concluded within 30 working days of receipt of relevant information, and 49 cases for SMS members of which 45 were concluded within 45 working days of receipt of relevant information. There was a decrease of 9% of grievances handled during the reporting period compared with the total of 709 cases that were handled the previous financial year. During 2017/18, the highest number of grievances handled related to unfair treatment of employees for levels 1-12.

The PSC continues to play a key role in enhancing public administration practices in the public service through conducting public administration investigations and producing reports that comprise of findings, advice and recommendations made to Executive Authorities or HODs. In the 2017/18 financial year, the PSC produced a factsheet on completed disciplinary proceedings on financial misconduct for the 2016/2017 financial year. The PSC finalised the investigation and evaluation of the awarding of higher salaries in the national Departments of Basic Education and Home Affairs. In relation to complaints lodged with the PSC, as at 31 March 2018, a total of 306 complaints/requests for investigations were received. Of the 306 complaints, 211 were finalised, and 95 were in progress. For the year under review, critical Senior Management Service (SMS) posts were filled, however, the target of 50%women in the SMS in the Office was not achieved. The vacancy rate was maintained below 10%.

Discussion

Mr Ntombela asked whether the Commission ever considered approaching the office of the leader of government to request assistance.

Mr Motau asked what the Commission’s experience was on commission inspection.

Dr Mamphiswana said that the Commission reports twice to the President, and it takes its legislation and governmental issues directly to cabinet so there is no need to seek assistance from government business leaders.

Briefing by National School of Government (NSG)

Mr Botshabelo Maja, Acting Principal, NSG, took the Committee through the presentation. The NSG has exceeded its planned training targets by 9%, training a total of 52 557 learners in all training streams. This resulted in own revenue generation plus interest accrued from training activities during this financial year to the amount of R116,7 million. This was achieved through a concerted team effort and commitment by NSG employees. In terms of the Annual Performance Plan targets, programme one achieved all seven targets, and programme two achieved 14 out of 15 targets representing an overall achievement of 95%. The NSG achieved all the three projects it set out in the programme of action for Outcome 12 of the Medium-Term Strategic Framework (MTSF).

For programme one, Revenue generated for the year amounted to R116,7 million by 31 March 2018. The average number of days for debt collection reduced to 45 days by the end of the financial year. 100% of suppliers paid within 30 days. The NSG vacancy rate was at 10% by the end of the financial year.

For programme two, 65 evaluations were carried out, and four Application of Learning studies were undertaken. Six research projects were completed by the end of the financial year. Nine Leadership platforms were held due to collaboration with higher education institutions.

The NSG improves corporate governance through implementing the following efforts; oversight meetings including the Audit, Risk and departmental management to ensure operational efficiency; Management Performance Assessment Tool (MPAT) is being closely monitored and managed to ensure institutional compliance; strategic risk assessment was adopted by the Risk committee. The operational risk register continues with the monitoring of the risks implemented; the Annual Audit Plan monitors the implementation of the audit matters raised by AG as well as internal audit

The NSG continues with the implementation of the ‘Rutanang Ma Afrika’ campaign of utilising serving and retired public servants, contracting independent individual contractors (IICs) and partnering with universities. They continue with work on international relations and strategic partnerships. This includes work with AMDIN and the Chinese Academy of Governance, amongst others

Discussion

Ms Van der Walt said NSG also must look at quality. The training they do must be measured and be outcomes based so that departments do better. She asked why departments do not pay their debt in 30 days, and which departments are these.

Mr Ntombela asked whether the NSG realises student success, what is been done to address the 10% vacancy rate, and on which levels.

The Chairperson asked what the rationale behind employing retired public servants is, and if there no younger people who can do the job.

Mr Maja said that they lack mentors, and an intervention is to give them mentors to improve the efficiency of the students.

Mr Maja said this is a living debt and it includes new debt. Some of it is below 30 days, and some is over 30 days.

Mr Maja said online enrolment is successful which is unusual when they benchmark it against international standards. Most of the 7000 that enrol for the course complete it.

Mr Maja said the 10% vacancy rate is fluctuating, and the department is working on it. In quarter four it was 7.5%.

Mr Maja said hiring retired public servants is linked to the monitoring issue because of the knowledge and skills that they have acquired over time and cannot be obtain through the book. They help equip the novices.

The Chairperson thanked the members and the meeting was adjourned.

 

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