2018 MTBPS: Public Service Commission input

Standing Committee on Appropriations

06 November 2018
Chairperson: Ms Y Phosa (ANC)
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Meeting Summary

The Public Service Commission observed that a detailed and integrated planning across departments was needed for economic recovery. Stronger oversight of state-owned entities (SoEs) was needed. There had to be better support systems for underperforming departments, through better alignment between planning and performance management systems. Informed decisions had to be made about right-sizing government. Service delivery departments had to clearly show cascading of the budget to different levels. Executive authorities had to hold defaulting heads of departments (HoDs) accountable for failure to comply with the financial disclosure framework. There was excessive reliance on consultants for governance issues like project management and financial reviews, and a lack of skills transfer. Reconfiguration of SoEs was called for, with the option of merging entities into departments as components. Public-private partnerships had to be based on clear service delivery models. It had been asked if it was time for the government to place some national departments under administration.

In discussion, Members put forward remarks and questions about a breakdown of the Department of Health’s personnel structure; whether there could be automatic disqualification from notch increases if performance agreements were not lodged on time; consequences for failing to comply with the financial disclosure framework; the economic stimulus recovery plan; public participation and consultation; budget amendments by the Standing Committee; natural attrition and the public service wage bill; cascading of budgets to different levels of government; accommodation of vulnerable groups in the medium term budget policy statement (MTBPS); and measures to combat inefficiency, especially in the SoEs.

Meeting report

Chairperson’s introductory remarks

The Chairperson said that the objective of the day’s meeting was to receive information from the Public Service Commission (PSC), and to enter into a discussion about the Medium Term Budget Policy Statement (MTBPS). She had been informed that the PSC’s presentation was received on time, so that all Members had had a chance to study it, and to prepare to interact with the PSC. The main role of the Committee was to solicit inputs from stakeholders in order to take informed decisions on behalf of 57.7 million South Africans. The PSC had a critical role to play in assessing the quality of government and management in the public service.

Public Service Commission: 2018 MTBPS

Mr Ben Mthembu, Deputy Chairperson: PSC, and Ms Carmen Domingo-Swarts, Director: Monitoring and Evaluation, PSC, delivered the Commission’s presentation. They said detailed and integrating planning across all spheres of Government was needed for implementation of the Economic Stimulus Recovery Plan. Stronger state-owned enterprise (SoE) oversight was needed. Government had to work with the private sector in its planning. There had to be better support systems for underperforming departments in sectors like education, health and social development, to be facilitated through better alignment between planning and performance management systems.

Human resource (HR) management processes had to focus on getting the right person for the job. Informed decisions had to be made about right-sizing government. Managers had to deal with the management of poor performance. Service delivery departments had to clearly show cascading of the budget to different levels. Executive authorities (EAs) had to hold defaulting heads of departments (HoDs) accountable for failure to comply with the financial disclosure framework. Financial misconduct challenges could be attributed to lack of prioritisation and capacity to deal with cases. There was excessive use of consultants for governance issues like project management and financial reviews, and a lack of skills transfer. Reconfiguration of SoEs was called for, with the option of merging entities into departments as components. Public-private partnerships had to be based on clear service delivery models. It had been asked if it was time for the government to place some national departments under administration.

Discussion

Mr A McLoughlin (DA) referred to the number of people employed by the DoH, and asked if it would be possible to provide a breakdown in terms of nurses, doctors, and administrative personnel. The PSC had stated that out of 36 eligible Directors General (DGs), 30 had submitted performance agreements on time, and that four departments had not submitted by the due date. The arithmetic did not add up. He asked if the PSC had conducted a study on automatic disqualification from receiving a notch increase if a performance agreement was not lodged on time. How it was dealt with if EAs did not follow through on holding defaulting HoDs accountable for failure to comply with the financial disclosure framework?

Ms D Senokoanyane (ANC) commented that she thought that the focus would have been on the Division of Revenue Bill and the Appropriations Bill. She had expected that the PSC would give the information and express its view on them. The Committee was interested in the midterm allocation of funds, adjustments and reprioritisation, and the implementation of the economic stimulus recovery plan. Plans and policies reduced uncertainty. There was lack of trust between government and society, and it had to be asked if the public participation had been adequate. Government and the private sector had to cooperate in planning.

Ms M Manana (ANC) said that mention had been made of investigations into Health and Education, and asked if the Committee could have the report. It had been stated that the DoH would most probably find it difficult to deliver on the prioritised R150 million to purchase beds and linen -- how could the Department be helped? She had talked to the Chairperson of the Portfolio Committee on her way to the meeting, as the situation in hospitals was shocking. The Chairperson had concurred that the current system was flawed. People who were in a position to use money were failing dismally -- and then received more funding. There was evidence of corruption in the Department of Military Veterans.

Mr N Gcwabaza (ANC) referred to the MTBPS, and remarked that budget shifts occurred during the course of reprioritization, and their unintended consequences were not properly considered. It was possible that the National Health Insurance (NHI) scheme would not be implemented, as the Minister of Health had implied. Within the context of budget shifts and cuts, the Standing Committee was mandated to effect budget amendments through shifts in the budget, and to propose what would be different to what was on the table, as it had done with the R100 million granted by National Treasury to Home Affairs.

Right-sizing of government had been referred to, and in the previous year there had been a suggestion that the wage bill could be managed through natural attrition. It had caused some discomfort, as there could be unintended consequences such as the loss of critical managerial staff, and frontline service delivery personnel. The PSC had suggested that the financial planning and management model had to ensure that service delivery departments clearly showed the cascading of the budget from national down to district/ward levels. This had to be explained further. The PSC had proposed that the equitable share and the grants were not adequate. Something tighter and more focused was needed.

The Chairperson asked that a working relationship be established between the Committee and the PSC. When the PSC presented a quarterly performance report to the Portfolio Committee, it could also forward a copy of the report to the Standing Committee.  She asked how the PSC would rate the extent to which the MTBPS proposals accommodated vulnerable groups like women, children, rural communities and the disabled. She asked if planning, coordination and performance in government departments had improved over the preceding five years. It was clear that there could be improvement in alignment and coordination. All challenges and issues raised by the PSC pointed to the prevalence of inefficiency, including those related to the SoEs. The question was how the impact of budget use could contribute to effective and economical use of resources. SoEs were performing poorly. There had to be greater efficiency in programmes and budget implementation. She asked what the Standing Committee could do to help effect a turnaround in efficiency.

PSC’s response

Ms Domingo-Swarts responded to the call for a breakdown of personnel figures in the Department of Health, and said that the Treasury and the Department of Public Service and Administration were the agents who did the research on that. The breakdown could be obtained from them.

There was no one who checked on automatic disqualification from notch increases if performance agreements were not lodged on time. The PSC was not in a position to check up on that, but it had been important to bring it to the attention of the Committee. Some performance agreements submitted had been signed by the DG/HoD, but not by the Minister, which had scrambled the data. At a future meeting it could be disclosed which agreements had not been signed by the Minister.

Accountability was a constitutional value. The Standing Committee could contribute to the process of calling people to task, especially with regard to financial implications. She answered Ms Senokoanyane that the brief given to the PSC was to point out links between the information it presented and the MTBPS, and to highlight achievement against governance issues. There was a lot of work to be done with and by departments in the economic and social sector.

Allocations in themselves were no guarantee -- processes and systems had to be in place to put them to good use. Departments that used money effectively had to be supported. Departments had to show how money was spent. It was not enough to say that money was spent on an imbizo. It had to be shown what the impact was. The President’s economic stimulus recovery plan could be developed by learning from other plans and programmes. It had to be understood how the medium term strategic framework (MTSF), the NDP and the recovery plan could stimulate each other. There was the experience of Operation Phakisa and other programmes to draw on. There was much investment in the process of determining how economic and social development could be contributed to. Previous programmes could be learned from, to develop a successful recovery plan.

As for the status of public participation, the PSC was evaluating 100 departments against the nine principles under section 195 of the Constitution, according to the PSC mandate. Principle 7 looked at public participation, which had become compliance driven. If guidelines and policies were in place, it created the impression that there was consultation. Initiatives had to be cascaded into interventions and programmes. Policies and guidelines occupied a lot of paper, but the question was what impact they had at ground level. A lot of private sector programmes were already in line with government interventions. There had to be coordination and trade-offs. The private sector could pay for things that government did not necessarily have to pay for. There could be a trade-off between government resources and private sector finance. It was necessary to involve the private sector in planning from the outset, by stating the government’s plan and asking what the private sector could bring to the party, instead of asking what the private sector could do to achieve an already formulated government plan. Plans had to be developed collectively, with consultation at ground level from the start. There had to be working together to achieve a common goal.

Mr Mthembu responded about health, and said it was a critical matter. Trust was lost in government when people believed that one went to a hospital to die. National and provincial health portfolio committees had to conduct strict audits of money sent to health departments. Facts were needed for urgent interventions. Tenders had to be awarded to agencies that were skilled and competent. Right-sizing had to be linked to value for money, rather than the amount of money. A way had to be found to determine the number of people necessary for government service. Natural attrition was not a solution. When efficient people who added value died, the gap had to be filled. Policing and nursing, for instance, was labour intensive work, and the ratio of personnel to people served was low. The same applied to education, where a single teacher sometimes had to cope with a class of 70 learners.

He replied to the Chairperson that the PSC would gladly furnish quarterly reports, and suggested that the format of the quarterly reports be changed, to make them more user friendly. It had to be clear how the targets achieved were aligned to the strategic plan and the NDP. Mere compliance was not enough -- there had to be a focus on effective outcomes. Planning had to be cascaded through into performance. It was necessary to be clear about how the MTSF was linked to the NDP.

Over the preceding two years, challenges like low economic growth of less than 1%, and corruption had come to the fore. Economic stimulus might require short term interventions. Departments could make amendments to strategic plans, which also had to be reflected in the the annual performance plan (APP). Such interventions might result in detours, but long term planning was not to be lost sight of.

The Chairperson requested that further questions from Members be sent to the Secretariat, to be forwarded to the PSC. She assured Ms Senokoanyane that the PSC had analysed the briefing it had received from the Committee, according to its mandate.

The Chairperson adjourned the meeting.


 

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