The Committee met for a briefing by the Auditor-General of South Africa on the audit outcomes of the Department of Home Affairs, the Electoral Commission, the Government Printing Works and presentations of the Annual Reports for the 2017/2018 financial year by the Department of Home Affairs, the Independent Electoral Commission and Government Printing Works.
Officials from the Auditor-General’s Office informed the Committee that the Department of Home Affairs, the Independent Electoral Commission and Government Printing Works had all achieved unqualified audit opinions with findings in 2017/18.
The major concern was that, for the next three years, 81% of the operational budget for the Department of Home Affairs would be utilised by the Department to settle obligations that the Department had already committed to by the 2017/18 year-end. The Department would have 19% of its operational budget for the next three years to fund its future operations and to maintain future service delivery. As a result, future service delivery might be compromised and the situation could result in future cash flow problems.
The Department and the two entities had reduced the irregular expenditure from R 333 million in 2016/17 to R 184 million for the 2017/18 financial year. The Independent Electoral Commission was the biggest contributor to irregular expenditure in the 2016/17 financial year with irregular expenditure of over R83 million, the majority of which related to payment on the lease for the head office building.
The Auditor-General noted that it was still experiencing the same issues from the portfolio: declarations of interest not submitted while officials were doing business with the state or with other private business. The slow response by the accounting officers and senior management was considered the root cause of the irregular expenditure and, again, there had been inadequate monitoring of action plans to deal with previous audit findings.
Malusi Gigaba, Minister of Home Affairs, noted that the Department of Home Affairs continued to improve year-on-year. There had been an 86% achievement of targets as a result of more realistic planning and stronger governance, and a continued focus on meeting targets in the Annual Performance Plan. He noted that there were several challenges, one of which was the closure of front offices on Saturdays. It had left the Department operating only in those offices where staff volunteered to work on Saturdays. The second challenge was the IT downtime which had been an enormous headache for the Department for years, and which was often not the fault of the Department. The Minister referred to the challenge experienced with the budget as a result of the fiscal cuts made the previous year that had impacted by about 5% on all government departments. Progress had been made in terms of the Border Management Authority (BMA) which he considered critical to securing the borders of the country. The legislation had been approved by the National Assembly some time ago but was still in the National Council of Provinces.
The improvement in terms of immigration management and the drop in the number of asylum seekers following improvements in asylum seeker management were significant. Requirements for people travelling with children had been eased for some countries but South Africans were still required to carry a child’s unabridged birth certificate and a letter of permission as stipulated in the Children’s Act of 2005 and which the Department was obliged to implement. In that regard, the Department was piloting a children’s passport. The Department had also improved the skills of officials, especially managers, and would be introducing more biometric tests at borders and live capture applications in rural areas via a fleet of mobile offices. The Department of Home Affairs was going to be the centre of e-government.
Government Printing Works had also made significant progress in the roll-out of its new infrastructure. The governance of GPW was a challenge. Some government departments had Advisory Boards but the Government Printing Works Advisory Boards had been allowed to lapse by the previous Minister. It became precarious because Government Printing Works managed billions of Rand but governance was lacking and they were expected to account directly to the executive authority. He did not say much about the Independent Electoral Commission because it was a Chapter 9 entity.
The Department of Home Affairs briefed the Committee on its Annual Performance Plan. The Department had achieved a total of 24 out of 28 targets for the 2017/2018 financial year, which was a 2% improvement against the achievement of 84% of the previous year.
The Department noted that during the 2017/18 financial year, the Department had spent 99.99% of its allocation and there would be no rollover of funds. Challenges faced during the 2017/18 financial year including the closing of offices on Saturdays which reduced the working week from six to five days, network downtime, long queues, office accommodation, and human resource capacity constraints.
Members asked why the Department had engaged EOH to manage the data systems at Home Affairs when the company had links to Keith Keating who had been involved with corrupt officials in the South African Police Services and had held government to ransom when he withheld data belonging to the Police Service after a dispute over irregular and exorbitant contracts. Members also wanted to know why the Department was extending its contract with Visa Facilitation Services (VFS) yet again when the Department had known it was due to expire at the end of October? Was the Department deliberately creating a crisis so that it could extend the contract of VFS? Why was the Department working with a company based in Dubai and which, according to a report by the Auditor-General, was issuing huge numbers of visas to people in Nigeria and India without all the necessary documentation?
The IEC stated that the audit outcome for the IEC on the 2017/18 annual financial statements was an unqualified opinion on the annual financial statements, and two emphases of matter paragraphs on the annual financial statements. The IEC had incurred irregular expenditure of R 71.2 million. R40.2 million was the current year irregular expenditure in relation to the Riverside Office Park transaction. The total amount incurred had been condoned and a process had been implemented to prevent further irregular expenditure from being incurred. The appointment of a fully qualified CFO was imminent.
The IEC had asked the court to allow people to use the same addresses for the coming election that they had used in the previous elections as not everyone on the electoral roll had provided addresses as required by the court judgement, and that included people in smart suburbs as well as informal settlements. The IEC would capture their new addresses when they voted. The court had not yet given a judgement on the matter. The IEC was attempting to acquire fingerprint with biometrics for the elections. Two Commissioners had reached the end of their term of office. The IEC could not quorate until they were replaced.
Members asked if the Commission had educated the public in its outreach plan, especially those living in shacks, about the importance of registration. Why had it taken so long to appoint a permanent CFO? Had the IEC considered using the Home Affairs fingerprint device to prevent voter fraud? Did irregular expenditure not put the integrity of the IEC in question?
Government Printing Works had also achieved an unqualified audit opinion for the 2017/18 financial period but with findings in terms of the irregular expenditure. The entity had, for many years, been performing very well with a limited budget from the state. It was reported that the organisation had a total of 25 planned targets for the 2017/18 financial year. The organisation had achieved 23 targets. Government Printing Works reported that it had submitted documentation for it to be established as a State-Owned Company to Cabinet but Cabinet had indicated that government was experiencing governance issues and was not prepared to create another State-Owned Company. The Printing Works was to be retained as a government component working closely with National Treasury. Government Printing Works had experienced immense difficulties in getting the Department of Public Works to complete the printing facilities and to begin on its head office, even though it currently had the funds available. In its presentation, the component called for the reinstatement of an Advisory Board to ensure good governance.
Members asked how far Government Printing Works had progressed in its efforts to expand its business to foreign countries and whether invoices were being paid within 30 days. Members were concerned about the physical security of the building because, although the entity was a national key point and printed national examination papers, it was guarded by a private security company.
Opening and welcome
The Chairperson noted that officials from the Office of the Auditor-General of South Africa (AGSA) would present the audit outcome for the Department of Home Affairs (DHA), the Independent Electoral Commission (IEC) and the Government Printing Works (GPW). The DHA, IEC, and GPW would be presenting on their Annual Reports for the 2017/2018 financial year. He welcomed the delegates, and the Minister and Deputy Minister.
The Chairperson informed the Committee that he would have preferred the AGSA report to be presented separately from the meeting with the Department because he did not want a dialogue between the AGSA and the Department or entities. The Committee had not had much time to engage with the report by AGSA as it had been busy with other matters, as everyone well knew but the Research Unit had prepared a document for Members to clarify the situation.
After the presentation by AGSA, Members would be welcome to ask questions of clarity on the presentation. The Department and the entities would comment or respond when they were presenting their Annual Reports.
The meeting was scheduled to finish at 19:00 so he did not want people leaving for afternoon flights. The Committee had changed and things were not going to be dealt with quick-quick. The Committee was going to engage. He was the new Chairperson of the Portfolio Committee on Home Affairs. He introduced himself and asked Committee Members to introduce themselves.
He invited AGSA to present on those issues that AGSA had discovered in auditing the books of the Home Affairs portfolio.
Briefing by the AGSA
Ms Zolisa Zwakala, Business Executive, AGSA, gave a brief overview of the presentation to the Committee. She noted that the annual audit examines three areas:(i) fair presentation of the state of affairs in terms of performance, in terms of the financial position; (ii) compliance with marked criteria, measurable and time bound of predetermined objectives and (iii) compliance with all key legislations and regulations governing financial matters.
Mr George Goche, Senior Manager, AGSA, took the Committee through the outcome of the Department and the entities. He noted that Home Affairs, the Independent Electoral Commission and Government Printing Works had each achieved an unqualified audit opinion with findings in 2017/18. The Department and the two entities received unqualified audits of the financial statements. The Department and GPW had unqualified Annual Performance Reports while there were findings on the IEC Annual Performance Report. All three had findings on compliance with key legislation. There had been improvement in the irregular expenditure with a decrease from R 333 million in 2016/17 to R 184 million for the 2017/18 financial year.
Supply Chain Management compliance was unchanged from the previous year with findings for the Department and material findings for the two entities. AGSA noted that it was still experiencing the same issue of the declarations of interest not being submitted. Officials were not declaring their interest where they were doing business with the state or with other private businesses. R47 555 had been expended in prohibited awards to other state officials. Two suppliers had made false declarations of interest; and uncompetitive and unfair procurement processes were found at two of the three auditees. The most common findings were that three written quotations had not been requested and that competitive bidding had not been invited.
Mr Goche noted that the slow response by the accounting officers and senior management was the root cause of the irregular expenditure, as well as the inadequate monitoring of action plans.
Mr Goche made a number of recommendations:
-There had to be timely consequences for officials who deliberately or negligently ignored their duties and contravened legislation. A list of actions taken against transgressors had to be provided to the Portfolio Committee quarterly for the Committee to follow up of all irregular, fruitless and wasteful expenditure incurred.
-The Committee should monitor implementation of commitments by accounting officers and authorities and the 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.
The Chairperson welcomed the presentation by AGSA and asked a question on the issue of the action plan. Had the AG made time to engage with and evaluate the action plan with the Department and the entities? What was expected of them?
Mr Goche said that AGSA had had weekly steering committee meetings with the relevant entities and had tracked the action plans. Although the Department and the entities had the action plans, the response was slow. They were not acting on the existing plans, were not meeting set dates or set targets and the issues that should have been addressed were being repeated at the next audit check.
The Chairperson noted that the report showed that there was no improvement, movement was stagnant and amounted to the failure of leadership, failure to comply, and failure to implement the action plan. No improvement or moving forward indicated that no action had been taken.
Mr Goche said that the Department and entities had action plans to improve in the areas where they had not done well but, as the report pointed out, those plans needed to be monitored adequately on a timely basis, or on a quarterly basis, depending on how management had decided to structure the plans or how management wanted to approach the implementation of their plan. Mr Goche also said that there were some new issues that had arisen and which were part of the internal audit.
The Chairperson asked Mr Goche to elaborate on slide 10 of the presentation, i.e. the little improvement in the plans, so that he would be able to evaluate the recommendation. He asked Mr Goche to further outline the issues for the various entities.
Ms Zwakala said that the challenge for the portfolio was that it had not been able to jump out of that yellow space, i.e. an unqualified audit with findings, tracking back to the last four years. Home Affairs was qualified and had improved over time but it had issues around assets, although they did impact on the financial statements. Time was a factor because some things could not be fixed in a short time. Irregular expenditure had fallen from over R 300 million to under R 200 million for the portfolio, but it still had not made the portfolio jump into a clean audit. The IEC had had quite a few categories of an irregular expenditure in the past and it was showing a willingness to reduce irregular expenditure. The plans were there, but discipline was required to keep at it and not be caught out with new things. The slow movement did not allow them to jump out of the yellow category into a clean audit.
Ms B Dambuza (ANC) welcomed the presentation by AGSA. She asked about the current IEC leases and whether they were still going to cause irregular expenditure. What could be done to remedy the situation? She also asked about the implications of the financial commitments in terms of service delivery for the DHA. Regarding consequence management, what were the expectations, and what corrective measures had not been undertaken by the Department, in terms of the law?
The Chairperson asked the AGSA to explain the committed expenditure that it had referred to. What had the Department committed itself to? What did it mean for the Department to operate with 19% of its operational budget because the rest of its budget was committed? AGSA had said that action had been taken on the irregular expenditure, which showed improvement. The Chairperson stated that improvement would have been informed by actions taken, investigation and recovery. There had to be a report to show an investigation had been undertaken.
Ms T Kenye (ANC) raised her concerns about why three quotations had not been invited since it related to compliance, i.e. measures that had to be taken for clean audits. She also asked about disciplinary measures for not submitting a declaration of interest. She asked the Auditor General’s Office to advise whether the monitoring and evaluation unit that had not done its job adequately and whether AGSA had measures to help the entities.
Mr M Hoosen (DA) referred to slide 22 of the presentation, and asked AGSA to explain the fairness of the process when AGSA had said two-thirds of the procurement processes were not fair and competitive bidding had not been invited. What did ‘fair’ or ‘not fair’ mean? He asked for further clarification of slides 22 and 24. It was not clear if there were timely consequences for officials who deliberately or negligently ignored their duties and contravened regulations. It seemed, on slide 24 to say there was follow-up, and on slide 22, it stated that there was none.
Mr A Figlan (DA) noted that the Department internal control had provided assurance and asked for clarification. He asked about the cause of the poor performance management. How much was it to do with the acting positions? And how much support had the Auditor General’s Office had given to the Department and entities?
Mr D Gumede (ANC) thanked AGSA for a clear presentation. His questions related to slide 23. Did the vacancies in key positions have an impact on the low response to consequence management and performance management? Were the vacancies a result of a reduction of budget or could the Department have made different choices and filled the positions? He also asked if the 30-day invoice payment had been included and, if so, was there full compliance?
Response by AGSA
The Chairperson requested AGSA to answer the questions.
Mr Goche responded to the question of how long the leases payments on the IEC building would run. He stated the lease would expire at the end of August 2020, but the contract had been awarded irregularly. Unfortunately, all the payments that followed would be irregular as well. In terms of the support that the Office of the Auditor General gave before the official audit had kicked off, Mr Goche said that AGSA did what it called it a ‘status of records review’ to check if key findings from the previous audit had been addressed before it undertook an audit.
On the question around slide 22 contradicting slide 24, he explained that slide 22 showed that, based on tests done in the prior year, some steps had been taken to address the irregular and fruitless expenditure. Some investigation had been done around who was behind it, and what actions could be taken to try to prevent it. Slide 24 showed the recommendations given to the Department when the presentation was concluded. It pointed out that the Department needed to continue to monitor the implementation of commitments made by accounting officers. The Committee should continue to request management to provide feedback to assess its oversight of the audit outcomes.
AGSA had asked Home Affairs was asked why there were long queues. It had come down to money. The Department did not have the money to fund some of the posts, or to be able to operate on a Saturday. The Department dealt with each and every person in the country, dead or alive, and when looking at the budget of Home Affairs compared to other departments, it raised questions about the adequacy of the budget.
AGSA explained that the Department was undergoing a modernization process to reduce manual applications and to become more IT-driven. Something had to change for the DHA to be able to provide service delivery in the modern world. One needed to be able to apply for an ID or passport online or from the comfort of one’s home and those things required money. The Department was moving to be more IT-driven and more money was going into IT development. IT was the solution to most of the problems the Department had but the question was about where the money would come from. There were a whole lot of underlying issues that needed to be addressed.
Mr Goche stated that, on the question on the three quotations, officials were not following the supply chain prescriptive that stated three quotations had to be obtained. That was why the messages were for management oversight and consequence management.
On the issue of declarations of interest, AGSA ran a programme called CAATS on the identity number of each and every employee and the list of officials with companies doing business with the state was picked by the programme. The list had been given to the Department to follow up whether those officials had declared their interest in the companies.
The Chairperson asked the Department to provide the Committee with the list within the next seven days.
Concerning the monitoring and evaluation of action plans, AGSA informed the Committee that it had weekly steering committee meetings with management where the action plan was one of the items on the agenda. Management was encouraged to interact with AGSA and the team made itself available to management for assistance or for more clarity.
The issue of timely consequences in the light of irregular expenditure had been identified as a challenge. An investigation had to be done, and then, if any officials needed to be disciplined, disciplinary processes should follow, and should any money to be recovered, then that process needed to flow. When the audit investigation process had been concluded, it was found that management had done something, which was better than the previous year when nothing was done.
In response to the question asking if vacant posts impacted the slow response, Mr Goche stated that the vacant posts were not the cause of the slow response. People were acting in the key vacancies. There had been an improvement on the 30-day payment. Compliance with a 30-day payment had been an issue in the past, but the entities in the portfolio had done well to ensure that there was compliance in terms of paying suppliers within 30 days.
Mr Goche stated that AGSA interacted with the internal auditors of the various entities. AGSA worked hand-in-hand with internal audit and, as well as sharing some ideas. It was a free service. But, the internal audit Committee had to check contracts before the Auditor-General raised issues. The audit committee undertook evaluations once every quarter or according to the needs of the audit committee.
The Chairperson asked about the action plan that AGSA had spoken of. Could Mr Goche tell him more about it?
Mr Goche replied that the action plan was the responsibility of the Department which had to draw up the plan and implement it.
The Chairperson commented that the Committee would need a copy of the plan in order to monitor its implementation. In the Committee’s engagement with the Department, Members should follow up on it and also include it in the oversight visits so that, by the end of the financial year, the Department could get a clean audit. Members had to understand the issues so that the Portfolio Committee became a robust working Committee. The sweetheart Committee had to come to an end.
Mr Hoosen was trying to ascertain the quantum of the problem of not getting competitive bids because it seemed that the propensity for corruption was much greater if the processes were not followed. He was not saying that all the cases were a result of corruption but the possibility was there. The Committee would follow up when it engaged with the Department.
The Chairperson asked AGSA to elaborate on the supply chain management so that the Committee would be able to ask the right questions of the Department and entities. The PMFA was very clear about procedures to be followed when it came to supply chain management. There were no shortcuts. The entities and the Department would have to give the details of their supply chain management processes.
Mr Goche started with the question about competitive bidding. Of the R38 million irregular expenditure incurred by the Department, R31 million related to prior years and R7 million related to the 2017/18 financial year and specifically to a cleaning service that the Department was acquiring through a quotation process. The contract had been renewed every six months and totalled over R5 million. That meant that the cleaning service had been paid over R5 million, but the Department had never gone out on tender. That was one example of where the competitive bidding process had not been followed.
He added that the portfolio had received fewer findings than previous years. However, only material matters made it to the audit report and the Committee would come across more findings in the management report. Those findings had to be addressed as well as the ones in the audit report.
In respect of the false declarations, or lack of declarations, Mr Goche informed the Committee that management was always informed of any person that AGSA came across who might have been doing business with the state. The Department had to do follow-ups and check. AGSA provided that information on a six-monthly basis.
Mr Hoosen stated that the cleaning contract example was very helpful but asked if there was a list of the cases where procedures were not followed.
Mr Goche explained that irregular expenditure was a combination of issues that AGSA had picked up and cases that the Department or entity had picked up itself. The Department would have to provide the Committee with a comprehensive list.
The Chairperson thanked AGSA for the report. It had highlighted issues of management and issues of improvement as well as those places where there had been no improvement. There was a problem if there was regression. The areas that were stagnant and where there was regression had to be dealt with via a clear plan from the Department had to provide to the Committee which would monitor. Issues in the management report would also have to be included in the plan. He was confident that, under the Minister and Deputy Minister, the Department would attain a clean audit the following year.
The Chairperson asked the Acting Director-General of Homes Affairs, Mr Thulani Mavuso, to present the Department of Home Affairs Report. He explained to Mr Mavuso that it was not that the Committee did not like him but the Committee was very robust at times. He had to understand that the Committee was dealing with a National Key Point, the Department of Home Affairs, so it had to take matters seriously. He also spoke of how the world was closing up and looking inward, especially Europe and the United States, and the only continent that remained open was Africa and in that continent, it was South Africa that remained open. There was stability and democracy and the country was moving forward but it was overwhelmed by foreigners infiltrating the country. The borders were open but that did lead to the influx of people. The level of unemployment was very high. What did that tell the Committee about immigration? What did the laws of immigration tell the Committee?
What was best for South African and how did the Department do what was best for South Africa. There were 600 enforcement officers. What could they do? There was xenophobia because there was no control of immigration. There were so many undocumented people in the country and there was no control. Maybe the re-arrangement of IT and Home Affairs would do better. Better monitoring was needed. How did it happen that people from Pakistan were living in Giyani? How did the country prepare itself for the African Trade Agreement that some countries in Africa had already signed?
He asked the DG to present, but, before he did that, he asked the Minister, Malusi Gigaba, to make his opening remarks. The Chairperson had spent so much time with the Minister that he had forgotten that he was there. He also welcomed the Deputy Minister, Ms Fatima Chohan.
Remarks by the Minister of Home Affairs
Minister Gigaba greeted everyone in the room. He committed to engage the Auditor-General on the report so that the issues could be addressed as he had been away for 11 months of the time in question. He noted that the Department continued to improve year-on-year. There was an 86% achievement of targets as a result of more realistic planning and stronger governance and a continued focus on meeting targets in the Annual Performance Plan (APP).
He noted that there were several challenges, one of which was the closure of operations on Saturdays. It had left the Department operating only in those offices where staff volunteered to work on Saturdays, even though it was not mandatory. He paid tribute to those staff members and to the youth volunteers who volunteered services in the rural areas and even on public holidays.
The second challenge was the IT downtime which had been an enormous headache for the Department for years. It seemed to be subsiding but there were still reports of downtime generally, and at particular offices. The department was working hard to deal with it and the report would indicate what had been done. At the commencement of the term of office of the Fifth Parliament, he had given the Department the task of achieving zero percent downtime by the end of the term. It had been reduced and the Department was making progress towards the target. He wanted the network to be available 24/7.
The Department had experienced exceptionally long queues since the beginning of the year. The queues were being managed in a number of offices, given the interventions that had been undertaken. The Department had looked into the matter to understand the problem, especially why it affected certain offices so severely, and how to resolve the matter. In a number of offices, there had been immediate interventions. There were still reports of people being turned back because it was evident, looking at the number of people inside the offices, that those outside would not be served that day. When trying to be helpful, some officials had tried giving numbers to people in the queue for the next day. Officials who used to serve 20 people a day were serving 40 people a day from January. Some offices would close the front door at closing time but work until 18:00 to clear the queues of people inside the office.
The Minister referred to the challenge experienced with the budget as a result of the fiscal cuts the previous year that had impacted all government departments by about 5%.
The footprint of 420 offices was inadequate for 57 million South Africans and many of the offices in outlying areas were inadequate for conversion to smart offices. Those were often one- or two-person offices. In Umtata, the municipality had offered a building across the road for those who were waiting outside in the queue. It was a better arrangement, but not satisfactory.
Vacancies, including that of the DG, had been a challenge. DDGs were acting across more than one post. Interviews would start the following day so the Minister was hoping to make two appointments soon. The post of DDG: Corruption had been re-advertised. It had been advertised in 2016 but was never filled. The President did not want the post of DG filled because he was re-structuring government. By the end of the year, the posts would have been advertised, applicants interviewed and appointments pending.
Under the Acting DG, the Department had continued with its programme. Home Affairs was going to be the centre of e-government and there would be many benefits for government and society. Home Affairs stood at the interface of government and society. The introduction of the biometrics system would provide a long-lasting solution to government in terms of identity. A number of private sector organisations were working with the Department on the identification of their clients and together they had saved the economy more R 3.2 billion in identity fraud.
Progress had been made in terms of the Border Management Authority (BMA) but there had been legislative problems. The legislation had been approved by the National Assembly a long time ago was still lying in the National Council of Provinces (NCOP). No one knew where the Bill was. He, as Minister of Home Affairs, had absolutely no idea where the Bill was and whether it was not being processed or not. He had taken the matter above the line and below the line but he had got absolutely no answer. No one was saying anything. As he sat there, he could not say whether there would be a BMA or not. If the NCOP told him that there would be no BMA, that would be fine because then whoever wanted to walk over South Africa’s borders could do so. Whoever wanted to steal South Africa’s livestock and cars could do so. People could come in and commit crimes and just walk back over the border because the BMA was fundamental to the protection of South Africa. But he did not know what was going on. However, the Department continued to do work in case it should happen someday.
There had been progress in the six ports of entry and the Department had met the neighbouring countries to discuss plans with them. He had had discussions with the Minister of Home Affairs in Lesotho. He would meet with the Minister of Home Affairs in Swaziland once the new Minister had been appointed. He would also meet with his counterparts in Mozambique and Botswana. It would be futile to revamp the six border posts and have a two-step process. The two countries at each border post had to work together. The Minister stated that the International White Paper had been adopted and the process of preparing legislation had begun.
There had been significant progress in financial matters. Home Affairs had achieved two consecutive unqualified audits. It was a mammoth achievement for Home Affairs and had taken Home Affairs a mammoth amount of work to get there. The previous time that DHA had got an unqualified report, the following year, DHA had immediately dropped to a disclaimer. A clean audit was in sight.
The Auditor-General’s report had raised the issue of officials who were doing business with government. None of them were doing business with DHA but they were not disclosing that they were doing business with the state. DHA was taking action against those officials.
Despite the challenges that he felt he should mention, DHA had made significant progress. The improvement in terms of immigration management and the drop in the number of asylum seekers because of the improvements in asylum seeker management were significant. The current year would see a record low number of asylum seekers. DHA had also improved the skills of officials, especially managers.
Government Printing works had also made significant progress in the roll-out of its new infrastructure. The challenge at GPW was to market abroad, in the continent and, particularly, in the region. It had to reduce its dependency on the Department of Public Works to ensure that it could tilt its human capacity more towards artisans and operators than administrators. It had to be able to keep its artisans so that it could deliver on its mandate. He was working with the Minister of Public Service and Administration. The governance of GPW was a challenge. Government departments had Advisory Boards which did not have the powers of non-executive directors. It became precarious because a number of the government components managed billions of Rand but the governance of those components was lacking and they were expected to account directly to the executive authority who lacked the capacity to undertake the oversight required. National Treasury had been alerted to the issue. The Minister him or herself actually had to sit on the interview panel for General Managers in those components, so if the Minister was busy, the posts could not be filled. There were gaps in financial oversight. Financial statements were submitted directly to the executive authority who had to check the financial statements. Nevertheless, the idea of GPW as a state-owned company had been rejected and it would be retained as a government component. He was seeking an oversight body between GPW and the executive authority.
The Minister had not said much about the IEC because it was a Chapter 9 entity but the Deputy Chairperson would be taking leave of absence from November and the Minister wanted to thank him for his twenty years of service.
The Chairperson thanked the Minister. He thought that the Committee should have an opportunity to comment before the DG presented.
The Chairperson suggested that one of the things that the Committee should look at was the instability of accommodation as that came with a cost when offices hopped around the street. That was not a national key point. Accommodation became paramount when talking about the new vision of the digital Department. Together with stability went leadership positions. The issues that the Minister was confronted with could be managed if the Department and the Portfolio Committee worked together as the Committee could strengthen the political side of things. He agreed that issues of governance at GPW needed to be addressed. When would there be a stable DHA? He suggested that DHA worked out when it would have stable leadership and capacity and a plan be developed so that DHA could work towards that targeted date. It would be important to have permanent offices for Home Affairs. The cost of rentals and the cost of moving needed to be considered in comparison to DHA having its own permanent offices.
The Chairperson added that the Committee would follow up on the Bill that was in the NCOP as having to wait for that Bill posed challenges for border management. Parliament would be going into recess soon and after that it would only come back to pass the budget and then the fifth term was done. The IEC also had a Bill that should be passed but the Committee had not yet seen it and if it was not with the Committee by the following day, the Committee would not have time to get it through Parliament in that term. The IEC would then have to find another way. If that Bill was not passed, the IEC might be challenged and have to go to court. The 2019 election might even be stopped.
Another challenge was government employees doing business with the state. The Committee wanted a list of those people, within seven days, because it had to be stopped. Some of the people who had appeared before the Committee were running businesses. Parliament would recommend that they be fired.
The APP was going to be important. A clear APP had to be developed that everyone could understand it.
The Chairperson invited comments from Members before the DG made his presentation.
Mr Hoosen agreed with the Chairperson that many South Africans were suspicious of foreign nationals that they met as they did not know if the foreign nationals were in the country legally. The suspicion was there because people did not have confidence that government was managing the inflow of foreign nationals into the country. That spoke to two broader things. One of them was finance and all the Committee Members had constantly called for an increase in the funding of DHA. It was unfair to hold officials accountable to do a job without giving them the proper resources. Until National Treasury intervened, the problems would continue for years to come. Aligned to that was management. Resources would never be enough but paying R5 million for adult basic education and training when services were not rendered was a problem. Setting aside R 2 billion as a contingency for claims against DHA was really problematic. It was a waste of money.
Mr Hoosen complimented the Minister on his input because it was clear that the Minister was involved and knew and understood what was happening in his Department, as did many officials, and that gave one confidence that they were involved in solving the problems. However, there was a lack of innovation in management. There had been an attempt to reduce the long queues, but people on the ground did not see any results. DHA should use the allocated resources in a more innovative way, and it did not mean more staff. The implementation of a simple appointment system would alleviate queues. Why should people have to stand in queues when appointments could be diarised? If the banks could deliver a card to one’s house, why could DHA not deliver a smart card to one’s house, even at a small fee? It should not be difficult to change DHA’s reputation as the ‘Department of Horror Affairs’. If the Annual Report and APP did not contribute to a person being able to walk in and out of a DHA office to get an ID document in ten minutes, then it was not worth anything.
Mr Hoosen supported more resources for DHA but he insisted that management had to be more innovative in managing services.
The Chairperson stated that DHA had said that the number of asylum seekers had declined, but South Africa’s border were so long and wide open that people could just walk across the borders. Some people wanted to open all borders and to disband the inspectorate. One could not allow people to think that South Africa was a banana republic and one could just go into the country and stay there. All over the country, there were illegal people, and most of them were from Pakistan. That was why the Bill about the BMA was so critically important. There were many things that the Committee could engage on. The Committee should arrange an engagement with everyone who was involved in the situation, including the Human Rights Commission.
Ms Kenye thanked the Minister for the information. People were just moving out from Lesotho. Students from Lesotho went to school in the Free State. Who paid for them? Pensioners came across the border to collect pensions. Who paid for that? People came across Tele Bridge with parcels as if there was no difference between one country and the other. When the rivers were dry, people crossed at will. The BMA Bill was crucial.
Secondly, was the issue of downtime. The Minister had said that it had been reduced, but there was the problem of over-crowding where people had to queue in the streets. The number of stairs to get into the offices, especially in Pretoria, was a barrier to old people. The Minister spoke of Umtata but the office in Pretoria was worse. Mobiles were needed in some of the vast areas that had no DHA offices.
The Committee did not know what to do about the White Paper now that it had been adopted.
Mr Figlan also had a question about the office that was too far from everywhere and was a white elephant. The office in Burgersdorp was far too small. He asked about the role of the Department of Public Works (DPW). The IT system was the big problem. What could be done? The issue of the inspectorate was very bad. The Committee should fight for more money for DHA.
Ms Dambuza suggested that the Committee engage National Treasury as soon as possible so that National Treasury could understand the problems. Secondly, the Committee had wanted to hold a seminar where the problems of foreign nationals and immigrants had been discussed. DHA should follow up on some of the issues from that seminar.
Ms Dambuza referred to the Minister’s comment on fast tracking visa applications. She stated that the Committee needed a copy of the Minister’s presentation on that matter because sometimes the Committee had a different understanding from that of the Minister. She agreed with the Chairperson that the country’s sovereignty was very important. Secondly, the Minister had spoken of the volunteering of the staff. Did the Minister have a programme to motivate those volunteering their services on a Saturday? She did not mean salaries or bonuses but some other motivational incentive. Thirdly, the Minister had referred to the Youth Service Programme. That should be a standard for the rural areas. Lastly, government was sometimes discredited by the unacceptable behaviour of some of the staff. For example, people were chased away and not allowed toilet services in the Eastern Cape.
The Chairperson noted that the Minister had raised key issues. He could respond but he also wanted him to talk about the announcement that the Minister would soon be making. He also suggested that the Committee try to arrange the planned seminar on foreign nationals early in the new year. He reminded Members that the Committee was not going to meet for ten minutes and walk away. The Committee was going to ensure that things happened.
The Minister was waiting for a visit from the President but he had spoken to him on the occasion of the opening of offices in Kokstad. He had told the President that DHA was totally dependent on two Departments, DPW and the State Information Technology Agency (SITA) and that caused DHA huge headaches. In 2015, DHA had asked Cabinet for approval to manage its own network because SITA did not understand the urgency of DHA, nor did it care. Even the Minister of Communication had agreed that DHA should go to a private provider. 20 hours were lost per week when the system was not operating and that exasperated the queues. Hopefully the President would assist.
The vacant posts would be filled. There was a problem with the DDG: Communications because the Department of Public Service and Administration (DPSA) said that the post level was too high for Communications. DHA had tried to explain that DHA was different from other departments. GWP did not have a communication unit because people did not need to know about GPW. The IEC had its own communications system. If DHA’s last approach to DPSA failed, the post would be advertised as a chief director post. DHA was working on the digital framework. It had to be recorded with milestones to assist in developing an ICT sector in South Africa that could provide solutions and was South Africa-owned.
The inflow was a matter of concern. What could 750 immigration specialists do? They needed that number in Gauteng alone. He had also heard about pensioners waiting in queues. The Minister stated that he wanted to hide every time he drove past the DHA queue in Pretoria. The policy was that pensioners and school kids in uniform had to be served immediately. Some offices, such as Randburg, allowed appointments and had special queues for people who had started the process online. The same applied to a number of offices in the Western Cape. DHA had arranged a seminar with front office managers so that they could redesign the workflow process and standardise processes. The offices with more creative managers were being identified as centres of excellence that could demonstrate to others how it could be done. The Chief Whip of the NCOP was apparently meeting about the Bill but the Minister had received that same answer every time.
The banks had given DHA 25 more sites which would provide Home Affairs services. However, DHA was still waiting for SITA to connect those sites. The legislation to effect the White Paper was being worked on. He agreed with Mr Figlan that DHA had to deal with dilapidated offices but was waiting for DPW. The banks would help in urban areas and DPW could focus on rural areas.
He confirmed that there had been an incentive for staff working on Saturdays, but it had fallen away. He tried to praise staff in the media instead of bashing staff. DHA was short of 8 000 staff but DHA was serving more and more people. The more DHA improved, the more people complained. He assured the Committee that he intervened in offices on a daily basis.
The Minister informed the Committee that visa requirements were being eased for people with children coming from visa-free countries but a strong advisory would be issued that those travelling with children might be asked to provide evidence of the relationship between the child and adult. The border officials were being trained in how to deal with adults travelling with children. Biometrics were also taken of the adult and child. However, the stringent requirements would be retained for South Africans travelling with children because that was required by the Children’s Act, 2005. DHA had successfully piloted a passport for children which could be used instead of the unabridged birth certificate. Only the letter of approval to travel would be required. DHA was also easing visa requirements with some countries. The e-visa would be piloted in New Zealand next year. e-Passports would be issued soon and e-Gates would also be introduced in South African border posts at the three main airports in the following year.
The Chairperson asked the Minister to address a joint meeting with the Portfolio Committee on Tourism before the end of the term of office. He invited the Deputy Minister to speak on the IEC Bill.
Input by the Deputy Minister
The Deputy Minister, Ms Fatima Chohan, informed the Committee of the process around the Electoral Amendment Bill. Six weeks previously, after Cabinet had approved the Bill for tabling, the Minister sent the Bill to the Speaker for tabling. At the same time, it was also sent to the State Law Advisor for certification that it was broadly constitutional. The Bill had been delayed at the State Law Advisor’s offices where they had difficulty in understanding certain provisions in terms of the practices of the IEC. Three weeks ago a meeting was held between DHA, IEC and the State Law Advisor and the matter was clarified.
Once the previous problem had been resolved, the State Law Advisor had proposed that a certain clause be included in the Bill, and not in the Regulations as proposed by the IEC. That was highly irregular because whether the clause was in the Bill or in the Regulations, it did not affect constitutionality. DHA did not have a problem with the clause being put in the Bill, but it should be done by the Portfolio Committee. She had instructed DHA legal advisors to insist that the Bill be sent to the Committee unchanged. If changes took pace before it went to the Committee, the Bill would have to go back to Cabinet for approval which would delay the process for a simple amendment.
That morning she had received a letter from a person named Williams at the State Law Advisor’s Office, addressed to the Acting DG. She read the conclusion which stated that the proposed amendment should be captured in the Act, and the Municipality Election Act had to be amended similarly, in order to make for legal clarity. The Office was waiting for approval to include the clause before certifying it. The Deputy Minister stated that that was not the job of the State Law Advisor who simply had to advise on constitutionality. She had been a Committee Chairperson and knew that the State Law Advisor was acting beyond the scope of that Office.
The Deputy Minister suggested that the speaker should be prevailed upon to ATC (Announcements, Tablings and Committee Reports) the Electoral Amendment Bill and send it to the Committee. The certification could be done once the Committee had made the required amendment.
The Committee had postponed the Private Members’ Bill by Mr Waters because it had been waiting for that Bill. The matter was between the executive authority of DHA and Parliament and not the Committee. The Chairperson repeated that he was giving DHA until the following day to resolve the issue, otherwise there would be no time to do it. It was frustrating the IEC.
Mr Hoosen suggested that the Committee attempt to get the Speaker to ATC the Bill.
The Chairperson agreed to write to the Speaker asking that the Bill be ATC’d. He wanted an answer by the following day. He adjourned the meeting for a lunch break.
Briefing by the DHA
Mr Thulani Mavuso, Acting Director-General at the Department of Home Affairs began by acknowledging the work done by the previous DG of DHA, Mkuseli Apleni, who had laid an excellent foundation, particularly in relation to financial management. Mr Mavuso took the Committee through the DHA presentation. He noted that the DHA had a total of 28 targets for the 2017/2018 financial year. A total of 24 targets had been achieved representing an 86% achievement rate, which was a 2% improvement against the achievement of 84% of the previous year.
The CFO at DHA, Gordon Hollamby, committed that, in the light of the prior discussion with the Minister, he would provide the Portfolio Committee with the following documents: the Auditor-General Management Report for 2016/17; the Audit Action Plan, which had been developed in the light of the management report and was monitored at exco and ministerial level; the Irregular Expenditure Status Report, and the list of officials doing business with the state.
The CFO stated that DHA would continue to keep the supply chain under the spotlight. The aim for 2018/19 was a clean audit. One of the problems in 2017/18 had been the Department of International Relations and Cooperation account. He noted that during the 2017/18 financial year, the Department had spent 99.99% of its allocation; there would be no rollover of funds. The 30-day payment of suppliers was no longer an issue at the Home Affairs and that process would be maintained. The Department was facing severe budget pressure. The budget for 2017/18 had been spent and the only amount surrendered to the National Treasure was R660 000 incurred in unauthorized expenditure.
He reported that the main challenges faced during the 2017/18 financial year was a reduction of working days from six to five, network downtime, long queues, inadequate office accommodation, and human resource capacity constraints.
The Chairperson asked the CFO to elaborate on the contract of VFS since it was not included in the Annual Report presentation.
The CFO stated that the contract of VFS was ending on 30 November 2018 and DHA was seeking guidance from National Treasure as to the appropriate procurement process to be followed. The original contract of VFS was an appointment on a partnership basis so that the Department did not incur any expenditure. The clients paid directly to the service provider for the service provided. The fees were agreed upon by both the service provider and DHA. Processing was done at a central office but some processes could be done by the service provider. There was a question as to whether it should be a Public Private Partnership or whether an open bid process should be followed. National Treasury would have to provide guidance on the appropriate process.
Mr Mavuso provided an update as the CFO had been on leave. DHA had decided to use a visa facilitation service as visas had previously been processed in each of the Home Affairs offices. Management wanted to create a distance between those who received the applications and those who processed them. In addition, there was global trend to ensure that the tax payer did not fund those who needed visa to visit the country. That cost had to be carried by those applying for a visa.
The Chairperson asked who owned VHS. DHA had to account to the Committee for the contract, even though it did not cost DHA anything. The Committee had picked up that there were other problems surrounding the contract. Other players want to get involved so the Committee wanted transparency and fairness. The Auditor-General was already busy with a report on the foreign missions. They had to wait and see what was in that report.
Mr Mavuso stated that DHA already had the Auditor-General’s report on Foreign Missions. He did not know who owned VHS, but the information was at the office and would be provided to the Committee. So that the Department did not incur any expenditure, the clients paid directly for the service provided. He pointed that the contract would be extended since the Department did not have the capacity and it had sought two legal opinions on the matter. The engagement with National Treasury had begun at the beginning of the year and, in his acting role, he had contacted National Treasury two weeks previously and a meeting had been arranged. The advertisement for the service to go out on tender had been ready in January but, because of the legal opinion, the tender could not be advertised.
The Chairperson was unhappy and saw a deliberate attempt to extend the contract for another five years. He saw corruption. He was going to take the matter further. He noted that the DHA had not addressed the question of capacity in the Department because it just used other conduits.
Mr Mavuso said that DHA was not tied to the service offered by VFS but, at the moment, the Department could not even service the front offices because of capacity issues. It had preceded his acting appointment but he had to look at testing the market and determining a way forward. Nothing had been brought to him to suggest that that there was anything untoward in that contract. DHA was re-positioning itself. It had been re-positioned in the security cluster. The banks were in a partnership with DHA to provide a service in respect of providing ID documents etc. National Treasury wanted DHA to go out on open tender for that service, although DHA had worked with banks because of the secure environment of a bank. DHA would continue with the modernisation process.
Mr Hoosen expressed his concern over the monopoly of VFS. Prior to VFS there were hundreds of immigration companies across the country providing the same service to Home Affairs. They had created jobs. However, by the stroke of a pen all those companies had been closed down and a contract given to a Dubai-based company. Mr Hoosen pointed out that the principle was wrong. An international company had come to South Africa and given very little benefit to the local economy when there was a massive problem with unemployment in South Africa and VFS extracted millions of Rand from the country. At a later point he would deal with his suspicions about the company. He pointed out that DHA had known the contract with VFS was coming to an end in December as the contract had been renewed several times. He asked Mr Mavuso why DHA had waited until then to go to National Treasure for their guidance. If DHA had gone the open tender route, there would have been nothing wrong. When Mr Apleni had been asked about the contract, he had said that he had not discussed it with National Treasury because there was no cost to the Department. DHA had deliberately created a sense of urgency so that DHA could extend the contract. He thanked the Chairperson for obtaining the contracts.
Secondly, he wanted to make a point about the switch-over that was coming at the end of October. Was the new service provider a company called EOH? DHA confirmed it. Mr Hoosen stated that it was a problem for him. He wanted DHA to go and look into EOH and a gentleman called Keith Keating who had appeared before the Standing Committee on Public Accounts (SCOPA), and who had held a gun to the head of government because his company was holding all the records of the South African Police Services (SAPS). DHA was getting involved with a company that other government departments had given the boot to. Mr Keating’s home had been raided by IPID because of the corruption between Mr Keating and SAPS officials. It was extremely concerned that the records of every person’s details in the country would be in the hands of Mr Keating’s company.
The Chairperson noted that when the Committee had met with SITA, and the Deputy Minister, the concern had been raised about state information being in private hands. The Committee had stated that it would not be allowed. The modernisation and the commitment of 89% of the budget was a problem. It was going to be a national crisis. If Mr Hoosen was correct, DHA had to come back and explain all of the issues, including that contract. The Committee did not accept the contract. The matter might have to be raised to the level of the President. One could not have a company that threatens to shut down the system. Parliament and the state had to protect the citizens.
The Chairperson had raised his concerns with VFS and now he heard about EOH. If DHA was a national key point, how could the information be given to a private company? He wanted a full explanation in writing of how the company had been appointed and what its responsibilities were. Mr Hoosen had warned DHA that the Department was going to regret that appointment. The recommendations that the Committee was going to make following the report were going to be presented to Parliament.
Mr Hoosen asked when the switch-over would happen. What were the consequences of the end of the previous system if there was not a service provider to take over?
Ms Dambuza noted that the issue of planning was a key problem when it came to the advertising of a new contract. If the Department had done adequate and timeous forward planning before the contract had expired, DHA would not sit with the problem that was being discussed.
Ms Kenye asked the Director-General about the piloted Live Capture Mobile Solution. When would it be rolled out to improve mobile services in provinces? Her other issue of concern was the Auditor-General’s report on procurement and contract management that fell under the CFO. It was critical that the matter was unpacked and there was a commitment to ensure that it was not repeated. She wanted further explanations of why effective and appropriate measures had not been taken to prevent irregular expenditure, and why there were problems of compliance. The leadership had not monitored the action plan to address the internal control systems. Why had management not monitored it? Why was management not doing its duty? She requested that the National Treasury feasibility report be explained to the Committee. What were the findings of the research by counter-corruption security services on vulnerability to fraud?
The Chairperson asked DHA to submit all IT-related contracts to Parliament by Friday, 12 October 2018 so that Committee Members could have a full understanding of the new IT approach. The Committee would arrange another meeting with DHA, the Minister and the Deputy Minister. He continued to complain about the contract with EOH.
Mr Gumede proposed that DHA initiated a stakeholder security workshops, starting with DHA and then extending to the security cluster. If security was dealt with incidentally, it was not going to happen. His second issue was related to an alternative to the BMA (Border Management Authority). There was a good reason for it but BMA was moving at a snail’s pace. The intention was to bring all forces of government to the process. The need was ever-increasing in the current state of the world.
Mr Gumede asked how far the Department was with the biometric system at the points of entry. The performance of the counter-corruption security services could reduce the problems before they ended up in court. What plans were there in that regard? He asked for a breakdown of what irregular expenditure had been condoned and what irregular expenditure had not been condemned. Was it in line with Supply Chain Management policies or not and, if not, what was the reason? The Committee wanted the details of all irregular expenditure, if not at that moment, then by correspondence.
The Chairperson said that the DHA should proceed to answer the questions
On the question of switch over, Mr Mavuso said that the projected switch-over was 16 November 2018. EOH had been appointed the previous year. SITA had recommended the appointment of EOH. Two things had delayed the project. Firstly, the data migration was encrypted in such a manner that it was not easy to move into another system and had taken longer than the Department had anticipated. There was currently a four-month delay. Secondly, the new system required a tier three data centre to host the data and there was no a single government Department that had a tier three data centre host. Telecom was going to provide DHA with the environment to host it. He would look into the difficulties that SAPS had experienced.
Mr Mavuso informed the Committee that there were only eight IT specialists in DHA. DHA did not have IT capacity because there were no resources. DHA would have to rob the front offices to appoint IT staff. The Department needed IT developers, application systems managers, and project managers. The posts had been advertised but DHA had not found qualified candidates. Currently the Department was headhunting through recruitment agencies. An interview would be arranged for three shortlisted candidates. DHA had brought SITA and National Treasury to the Committee to explain the Department’s pain. He was concerned that the current leadership was going to pay the price of not having the resources.
The Chairperson told the Acting DG not to take the matter personally. The intention was to remedy the situation. It was just that government could not appoint a company that SAPS was taking to court. The Committee was going to take strong action. It was the duty of Parliament in terms of its oversight work.
Mr Mavuso stated that the consequences of not appointing a service provider to maintain the data system would be that no person in the country would be able to be verified and that would affect banks, finance companies, cell phone providers, applications for documents from DHA would not be issued, etc. It would effectively close the country down. On the question of planning, Mr Mavuso said that there was procurement plan to look at contracts that were expiring, and the relevant managers brought the procurement plan for approval before it was sent to the National Treasury. There were managers who had not followed the bid processes, but that was not a planning problem.
On the question of a mobile solution, Mr Mavuso said that the trucks were at DHA and the equipment had been procured, but there was a delay with the camera used in the Capture Lab offices because the system was developed with particular model that had since been discontinued and the new cameras did not function with the old system. The Department was pushing to have the system working by the end of the financial year.
Mr Mavuso asked for time to come back to the Committee on the issue of the IT-related contracts.
He mentioned that the one- and two-person offices were a cause for concern because when one or two people completed all the processes, there was an opportunity for corruption. However, if the offices simply closed, there would be an outcry from the community that services were being taken away. The hope was that there could be close monitoring of those small offices. DHA had, for example, found that at a particular hospital, all the women had twins and were entitled to two social grants but when DHA checked the situation, it was a case of corruption. There were some systems in place to monitor and check what was happening.
On the question of the biometrics system for the points of entry, Mr Mavuso said that currently there were 10 biometric border check points. There are some delays from SARS but DHA was pushing to procure the equipment to ensure the set target of 62 was met before the end of the current financial year. The new system would be tested in the current financial year and rolled out in the next financial year. It would be an integral part of the IT system.
Input by the Deputy Minister on VFS
On the question of the VFS monopoly, Ms Chohan, Deputy Minister, said that the Deputy Ministry did not get involved in contracts and procurement but she could paint a picture for the Committee of how VFS was originally contracted.
When she had become the Deputy Minister in November 2010, the Department had had a backlog of applications and lost applications. It was an epidemic. It was called the Department of Horror Affairs. People would tell her that they could only get a passport if they paid someone. At that stage the immigration companies would charge people huge amounts of money to get documentation from DHA. Those immigration companies had gone to the front offices to submit applications directly to the corrupt front officials who, at that stage, were authorised to adjudicate applications. There was huge corruption and some of the officials were getting a second salary from different immigration companies. When individuals themselves applied, the application forms went conveniently missing. As a solution to that corruption, the adjudication power was taken away from the front officers and centralised but that had led to a backlog of adjudication of applications. Head Office did not have sufficient posts to undertake the adjudication.
The problem at the front office had not been resolved. Officials at the front office who received the applications, would delay, or not pass on, applications. The intention was to make use of the backlogs to reverse the process of adjudication so that they could, once again, get their second salaries. DHA had realised that it was on a losing wicket.
It was in that context that VFS was considered. It was important that DHA did not pay VFS a cent as that was important to the procedures for appointing the company. It was completely different from the SASSA situation. There was no cost to government. The procedure was not out of compliance as the Auditor-General would have indicated that. The companies being put out of business were those that had friends in the front office and were paying those officials. But, there were still hundreds of other companies doing similar work and they still functioned to that day. The only difference was that they took clients to VHS and because VHS did not have the power to adjudicate, VFS had to accept the application and put it on the electronic interface with DHA. DHA could now track any applications submitted.
The Department was flooded with litigation and visas had to be issued regardless of whether the application form could be found or whether the person was legally in the country.
VFS had sorted out a lot of that stuff. Viewed from DHA’s perspective, it made a lot of sense to have such a company. But it was wrong to say that DHA had put people out of business.
The Deputy Minister would be attending a conference of the immigration practitioners of South Africa and she hoped that DHA could work more closely with them as they wanted to work out, with DHA, a code of conduct for the sector.
The Chairperson pointed out that the report he had received from the AG on VFS contradicted what the Deputy Minster had said. The Foreign Office had commissioned the Auditor-General to investigate VFS. The Auditor-General’s report cited two areas, Dubai and New Delhi as concerns. AGSA had found volumes and volumes of documents without even the correct documents in India and Nigeria where a large number of visas were issued. He added that the Minister needed to go over the report and to make time for a further engagement on the issues relating to VFS before DHA extended the contract with VFS. The report showed the problems with the company and DHA could not ignore those issues.
The Deputy Minister stated that the company had resolved a domestic problem but DHA would study the Auditor-General report in the light of the international problems that had arisen.
Mr Hoosen commented that there VFS had a good business model that could be replicated to allow South African companies to provide the same services with the same service agreement, which would create more employment opportunities. The Department should break the monopoly of VFS and allow nine or ten South Africa companies to share the hundreds of millions of Rand that VFS, a company in Dubai, was making. DHA could regulate what the companies could charge for services.
The Chairperson stated that the Immigration Act had been amended to accommodate VFS. DHA was not going to extend that contract. Perhaps DHA could use the money to employ people.
On the question of condemned irregular expenditure, the CFO said that DHA did have details of the amounts condoned and proposed that DHA submit the details in writing. Irregular expenditure could only be detected or identified after it had happened. One could not identify irregular expenditure before it happened. He added that the Department needed to strengthen the internal controls to be able to prevent and detect irregular expenditure.
Briefing by the IEC
Mr Terry Tselane, Vice Chairman of the IEC and Ms Ester de Wet, Acting CFO, took the Committee through the presentation.
Mr Tselane stated that the audit outcome for the IEC on the annual financial statements was an unqualified opinion on the annual financial statements, and two emphases of matter paragraphs on the annual financial statements. As disclosed in note 33 to the financial statements, the corresponding figures for 31 March 2017 were restated as a result of an error of the institution at, and for, the year ended 31 March 2018.
Mr Tselane said that during the 2017/18 financial year, the opening balance of the irregular expenditure was R225 million and the IEC had incurred irregular expenditure of R71.2 million of that amount. R40.2 million was current year expenditure in relation to the Riverside Office Park transaction. The total amount incurred had been condoned and a process had been implemented to prevent further irregular expenditure from being incurred. He added that note 28 to the financial statements, indicated that the institution had incurred irregular expenditure of R71 247 803 due to non-compliance with the procurement process and entity specific legislation.
Mr Tselane noted that there was fruitless and wasteful expenditure amounting to R1 292 454 during the 2017/18 financial of which R1 100 745 had been incurred in the previous financial year and identified in the current financial year. The fruitless and wasteful expenditure was due to the misuse of a petrol card, which had been investigated and corrective action had been taken.
Discussions with IEC
The Chairperson asked if the IEC had audit action plans, and wanted to know if its audit and risk committee was functioning well.
Ms Ester de Wet, IEC Acting CFO, stated their audit and risk committee was fully functional and that their actions plans had been updated
.Ms N Dambuza (ANC) wanted to know what those issues were that formed part of the research conducted in the outreach programme. She also asked how the IEC was managing with the deficit of R21m. She asked for clarity on the condonation of irregular expenditure based on invalid tax clearances
.Ms de Wet replied that the IEC did not have a deficit of R21m, but a surplus of R21m. What was shown in the report was a typing error. She further indicated that the irregular expenditure went back many years. A letter had been sent to National Treasury regarding the irregular expenditure and the IEC did not know how Treasury was going to respond. The IEC had an agreement with the AG and National Treasury regarding the tax clearance certificates where it was indicated that the certificates should be valid before awarding bids to suppliers. Ms
Ms Janet Love, IEC Commissioner informed the Committee that the research was conducted with political parties, and the IEC had held a seminar with Student Representative Councils in higher institutions of education to understand how they were contributing to the democratisation of the country. She added that the final draft of the report would be delivered to the Committee before the elections.
Mr D Gumede (ANC) asked if the IEC had, in its outreach programme, educated the public, especially those living in shacks, about the importance of registration. Had a permanent CFO has been appointed? He commented it was good for the entity to improve on the liquidity ratios that had been problematic in the previous year.
Ms Kenye asked about the addresses of voters because the majority of people stayed in informal settlements. She wanted to know if there was going to be a follow-up. Were people in those areas going to be encouraged to submit their addresses? She asked about the condonation of the R11 million for invalid tax certificates. What was wrong with the tax certificates? Had they expired?
Mr Terry Tselane stated there was a perception that it was only for people who lived in informal settlements that the IEC did not have addresses, but the IEC did not have the addresses of some of those staying in posh suburbs. The IEC had embarked on a number of campaigns to encourage people to make their addresses available. In going forward, the IEC had asked the court to allow people to use the same addresses for the coming election that they had used in the previous elections. The IEC would capture their new addresses when they voted. However, the court had not yet given a judgement on the matter.
He indicated that a letter had been drawn up for the person to be appointed as a CFO because the first two candidates had turned down the offer as they had been appointed elsewhere. He said they hoped the current candidate would not disappoint them because they were looking for a CA with experience. A few years back, the IEC had a CFO but there were issues with the competency of the person so the IEC had made a decision that the person had to have a CA.
Mr H Hoosen (DA) wanted to understand what the view of the Constitutional Court (Concourt) was regarding the five million people who did not have addresses. He also asked if the IEC had considered using the Home Affairs fingerprint device because there was a possibility of voters using another person's ID to vote. He remarked that when the IEC had an irregular expenditure, it damaged its reputation. People had to have confidence in the IEC.
Mr Tselane indicated there were actually 900 000 people that the IEC had an obligation to, especially those registered after December 2003. That was what the Concourt had said to the IEC. He stated that the fingerprint device they were trying to acquire had biometric processes. It was possible that people could use other people's IDs. In reality, the IEC had never received a complaint of that nature, though it could happen theoretically.
The Chairperson encouraged the IEC to work on the minor challenges regarding irregular expenditure in order to have a clean audit. He indicated that the Committee was satisfied with the work done by the IEC and what it had achieved. He noted the President still had to appoint a judge for the elections, and the Committee would like to see that process speeded up.
Mr Tselane pointed out that two Commissioners were coming to the end of their term of office and if the President did not appoint two new Commissioners, the IEC could not quorate and therefore would not be able to take any decisions.
The Chairperson took note and thanked the IEC for the presentation. He wished the IEC well for the upcoming elections.
Briefing by Government Printing Works (GPW)
Ms Thandi Moyo, GPW Acting CEO, committed to submitting the GPW Action Plan and the Auditor General Management Report. She explained that Minister Gigaba had established an Advisory Board but Minister Mkhize had believed that the Board was not necessary and had allowed it to lapse. GPW had compared the GPW situation to that of Umalusi, which was also a government component, and which had a Council, but Umalusi had its own Act under the Department of Basic Education. She explained that GWP was involved in strategic planning and so on and having a governing structure had been very helpful to them.
The Chairperson suggested that GPW send a submission to Parliament and the Committee would look at the possibility of assisting GPW to get a governance structure.
She reported that the GPW had a total of 25 planned targets for the 2017/18 financial year. The organisation had achieved 23 targets, representing an achievement of 92%. With regard to operations and production, 100% of identity documents or cards had been distributed and conformed to the clients' specifications; 100% of travel documents had been delivered and had conformed to the clients' specifications; 100% of examination papers were delivered and conformed to the clients' specifications; and 100% of Government Gazettes were published to conform to quality and timeline specifications.
The remaining 10% of the construction of the GPW Visagie Street site would be completed. Final plans had been approved by the Department of Public Works (DPW). GPW had signed proposed plans in 2016 and had submitted them to DPW. The DPW Sketch Plan Committee had approved the plans in April 2018. The GPW Tender was issued on 31 August and would close on 12 October 2018. The process would be led by the DPW. The GPW was dependent on the DPW for the completion of the Visagie Street site. The new head office building plans had been completed. The final plans had been completed in December 2017 and submitted to the City of Tshwane Municipal Council for approval. The approval by the City of Tshwane Municipal Planning Department was still outstanding. Continuous follow-ups were being made.
On strategic management issues, Ms Moyo said all the required documents for the establishment of a State-Owned Company (SOC) had been submitted for tabling to Cabinet through Home Affairs. However, the documents were referred back to the GPW to come up with a different strategy or approach. The key concern that was raised was that the government could not add to the list of SOCs, considering current governance challenges. The GPW was advised to find an alternative approach to addressing its institutional and operational challenges. The proposal was that the GPW should be retained as a government component that worked closely with National Treasury, the Development Bank of South Africa, and DPW.
Ms Moyo said that 90% of the Annual Internal Audit Plans had been implemented. 100% of the Annual Risk And Compliance Plans had been approved by the Risk Committee. Ms Moyo indicated the entity had maintained an unqualified audit opinion since 2016/17.
The GPW had concluded Service Level Agreements with 10 additional external customers and 10 suppliers. 18% of operating cost as a percentage of revenue had been attained. There had been a 19% return on capital investment, and a 28% gross profit margin had been achieved.
Pertaining to human resources matters, she stated the entity had to implement 100% of the revised Human Resources (HR) staffing plans and would fill 85% of positions identified in accordance with the HR staffing plans. 89 out of 105 positions had been filled. Three GPW training and development programmes would be developed: graduate programme, apprentice, and supervisory training programme. Two training interventions, based on organisational and employee developmental needs, had been conducted.
Discussion with GPW
Mr Gumede wanted to understand how far the progress was regarding GPW's efforts to expand its business to foreign countries to get more work. He asked how the organisation was doing in terms of paying invoices within 30 days.
Ms Thandi Moyo explained that GPW had employed a marketing director to look at marketing matters because GPW wanted to engage Swaziland, but the problem had been the continuous changing of Ministers of Home Affairs. She stated that GPW had to convince Botswana as well because Botswana was printing its national Grade 12 examination papers in Britain. The problem seemed to be that there was no political will and that was what they needed at marketing level. A lot of lobbying still needed to be done. The GPW was interested in doing business with Lesotho, Mauritius, DRC, and Tanzania. She indicated that Lesotho had just signed a contract with an overseas company and that had not gone down well with them.
Ms Josephine Meyer, CFO, informed the Committee that GPW paid invoices within 11 days, not 30 days, especially to level 1 to 3 companies.
Ms T Kenye (ANC) commented that the request the GPW had put forward to the Committee regarding irregular expenditure would be considered to see how the Committee could intervene. She pointed out there was no reason why municipalities could not utilise GPW services. For example, the eThekwini Municipality had a printing unit.
Mr Hoosen remarked the entity had been consistent over the years, but the irregular expenditure was an unfortunate thing.
Ms Dambuza also commented that the entity was an inspiration to the Committee in many ways because, for years, it had been performing very well with a limited budget from the state.
The Chairperson asked if the GPW had a strategy in place to expand its business because doing work for other countries would create more jobs for the country
.Ms Moyo said that, in addition to the National Treasury database, GPW had created its own database as well. She stated that she would forward the Committee a list of new government entities that had signed contracts with GPW. She extended an invitation to the Committee to see the capacity of the state-of-the-art machinery it was using. She said GPW was trying to employ qualified artisans who would be able to operate the machines. She noted the GPW had no mandate to draft the Security Printers Bill. It should be drafted by Home Affairs. She said there had been disagreements between state law advisers and Home Affairs legal unit on the services that GPW had to ring-fence.
Mr Gumede remarked that his concern was the physical security of the building because the entity was a national key point that printed national examination papers, and yet it was guarded by a private security company.
Ms Moyo explained that the contract with Fidelity Security Company was coming to an end at the end of March 2020 and the company had been vetted. GPW had benchmarked itself against other national key points which had shown an interest in helping with their security matters to ensure a smooth transition.
The Chairperson commented that it appeared there were people who wanted to protect their own personal interests because the GPW was creating capacity for the state. The Committee should try find a way of engaging with Home Affairs and the Minister, including the state law advisers and the legal unit of Home Affairs, on what the GPW raised regarding its services.
He stated that the entity had a clear strategy for expanding to international markets, even if that meant it had to create a unit to look at its international markets. He added that GPW should not be afraid to do roadshows to provinces. For instance, most provinces had a challenge when it came to archiving. He pointed out when he was an MEC in North West, there was a building that had archives of former Bantustan leaders like Chief Mangope, but there had been no archiving in the new dispensation since 1994.
The Chairperson stated that the Committee would want a presentation by the IEC on the preparations for the elections. GPW wold also have to present on its preparations for the elections. The Committee would take GPW first and the IEC the following day and that the meeting would have to take place before the parliamentary recess.
He apologised for keeping everyone for so long but it had been an important meeting, and the Committee appreciated all the hard work that was being done. He invited all the presenters to be in the gallery on the day that the Committee presented its report to Parliament.
The meeting was adjourned.
- Department of Home Affairs, IEC & GPW outcomes: Auditor-General briefing; Department of Home Affairs, IEC & GPW 2017/18 Annual Reports 2
- Department of Home Affairs, IEC & GPW outcomes: Auditor-General briefing; Department of Home Affairs, IEC & GPW 2017/18 Annual Reports 1
- Department of Home Affairs, IEC & GPW outcomes: Auditor-General briefing; Department of Home Affairs, IEC & GPW 2017/18 Annual Reports 4
- Department of Home Affairs, IEC & GPW outcomes: Auditor-General briefing; Department of Home Affairs, IEC & GPW 2017/18 Annual Reports 3
Download as PDF
You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.
See detailed instructions for your browser here.