The Committee on Environmental Affairs met with the South African Weather Service (SAWS) Board and management to be briefed on the entity’s third quarter performance for the 2018/19 financial year. The briefing said the third quarter performance of SAWS was not good but management assured the Board it was taking steps to ensure improvements were seen. SAWS was doubtful it would not meet up with two of its targets - this was in the area of employment equity due to the scientific nature of SAWS. Also SAWS has not been able to raise funds to get started with the new building. The presentation comprised of an overall summary of the third quarter, achievements and financial performance. In the third quarter 59.4% of projects were fully achieved.
Questions were raised on the parity exercise for staff salaries. The Committee requested that more than a summary of the financial performance be presented in future especially administrative and operational expenditure. The Committee notes the performance on the quarterly report as presented but would only encourage SAWS to improve as the fourth quarter would end soon.
The SAWS Board then updated the Committee on the suspension of the CEO – an investigative report has been sent to the Minister and communicated to the CEO where the CEO denied the outcomes of the investigation. Presently, the Minister has appointed an investigating team to do an in-depth investigation so the Board would wait for the outcome
The Committee wanted to know when it was anticipated that the matter would be resolved. The Committee was informed of the cumbersome processes governing the matter in terms of the SAW Act – it is unlike any other employee which would fall under ordinary labour law. The Committee would call the Minister to engage on the suspension of the CEO. The process must be speeded up so that the agency would have certainty on whether the CEO is exonerated or if something is found to ensure the CEO is sent out of the agency. The Committee requests that the matter be speeded up by the Minister to ensure there is certainty on what should happen to the CEO and give stability to the agency. There is nothing much the Committee can do but it really wants the matter to be finalised. The investigation constituted must be completed. If there are charges, the charges must be put before the disciplinary committee. The Committee hopes the matters would be finalised before it rises.
The Chairperson noted that due to the absence of the Minister for Environmental Affairs, some of the original agenda would be rescheduled. The meeting would start with the third quarter performance report of the SA Weather Service (SAWS) and then the Committee would receive an update on the suspension of the CEO. The Committee needs to close all outstanding matters with regards to SAWS. In an earlier engagement with the SAWS Board, the Committee found out there were some matters affecting the Board’s performance. Hence the Committee asked the Minister to provide an update on matters affecting the Board’s performance. The other matter was the suspension of the CEO and the request for legal advice. The Committee had adopted the report on fruitless and wasteful expenditure incurred on terminating the CEO. The Minister has sent apologies and the legal advisor is on leave until 10 March 2019 so this part of the agenda would have to be rescheduled to dates that are convenient. The Committee considered abandoning engagements on fruitless and wasteful expenditure incurred following the decision of the former Board to suspend the CEO because SAWS now has a new Board. The Committee has however decided to scrutinise and ensure the official that took the decision in the previous Board would be held accountable as some of the members of the Board have been seconded to the new board. The ideal thing is for the Executive to disband all members of the old Board. The Committee however accepts the decision of ten Executive but has resolved it would engage on the reasons for the decision to suspend the CEO.
SAWS Quarter 3 Performance Report for 2018/19 Financial Year
The Board Chairperson, Ms Nana Magomola, introduced her team and agreed the matter should be concluded so that the Board could start on a good note. She said the third quarter performance of SAWS was not good but management assured the Board it was taking steps to ensure improvements were seen. SAWS was doubtful it would not meet up with two of its targets - this was in the area of employment equity due to the scientific nature of SAWS. Also SAWS has not been able to raise funds to get started with the new building.
The acting SAWS CEO, Mr Mnikeli Ndabambi, said the briefing would comprise an overall summary of the third quarter, the achievements in quarter three and the financial performance. In the third quarter 59.4% of projects were fully achieved.
Strategic goal 1-Provision of products and services:
The target on number of community radio receiving services was over achieved because the research done was expected to take longer than it did. The community radio receiving services target is a platform to increase the reach of SAWS. Based on its research, SAWS had given a target but it was overachieved. The target on mobile uploads were partially achieved.
Strategic goal 2-Capability and capacity development:
The milestones stated in the ICT power systems plan was partially achieved because of delays due to emerging needs. The ICT systems need to be included for procurement. Although the service provider has been identified, an implementation plan needs to be developed. It would be completed in the fourth quarter. The career path targets for core business, such as ICT, forecasters and scientists, was not achieved because SAWS prioritised to achieve the career paths for finance and supply chain management. The target on Employment Equity (EE) targets was not achieved - SAWS needs to get its organisational EE plan in place. Targets for women in leadership position were not achieved. The targets on the new SAWS head office building was not achieved because funds were needed to waterproof land development. It has 16 hectares which has huge potential but the land needs water proofing before building starts.
Strategic goal 3-Engaged stakeholders:
The targets on corporate communication plan were only 52% achieved hence SAWS appointed a new management staff to manage this target. Percentage increase in traffic volumes on digital media platforms was partially achieved. The number of strategic alliances established was partially achieved because the Request for Quotation (RFQ) was delayed on the Tender Bulletin in December 2018. The RFQs have now being defined and authorised. The strategic risk management plan target was not achieved because it needs to be reviewed and re-aligned to new strategic objectives.
Strategic goal 4-Research and knowledge:
The socio-economic benefit analysis report to showcase the benefits of SAWS was partially achieved because the identified sectors need to be surveyed. Funding has been secured for this goal and SAWS is using internal expertise.
Strategic goal 5-growth and sustainability:
The target to grow revenue streams through parliamentary grant funding, year-on-year aviation and implementation of revenue and pricing models were not achieved. These targets are beyond the control of SAWS as the parliamentary grant fund was cut, air traffic volume decreased during the period under review and appointment of a facilitator to review best practices and confirm models was delayed.
Ms Busisiwe Sibongwe, SAWS acting CFO, said the revenue collected in the third quarter was lower than the targeted amount because of commercial revenue generated. The agency does equipment sales to municipalities and it assists municipalities however SAWS was not able to bill municipalities because there were a bit of delays in ensuring the agency assisted municipalities. Expenditure was under budgeted because of compensation of employees. The parity exercise for staff salaries started in the previous year and this was not completed. The agency expects to complete Implementation by the end of the present quarter.
The Chairperson asked the CFO to explain the type of parity exercise.
Ms Sibongwe explained SAWS had plans in place to complete the parity exercise but could not complete it. The agency looked at benchmarking salaries within the industry. It decided the parity exercise would be done in phases within three years. The first phase has been completed, the second phase is being done and the third phase would be done in the next financial year.
The Chairperson said the Committee was not yet clear and required more explanation on the parity exercise after the presentation was completed.
Ms Sibongwe continued with the presentation noting there was under expenditure in administration expenditure mainly due to training and legal fees. The finance department requested the legal team provide the outstanding invoices because there are some invoices that have not been submitted hence the money would be spent. There was under expenditure in operating expenses due to electricity as SAWS budgeted a larger amount but Eskom provided a lesser amount during the approval process at Eskom so the agency has a savings. At the end of the third quarter, SAWS had a deficit but this was planned because the agency was using surplus funds retained from the previous year.
The presentation looked at a comparison of the actual funds expended against budgeted funds on the basis of revenue and expenditure. An analysis of its financial statement as at 31 December 2018 showed its assets exceeded its liabilities so the agency would likely operate as a going concern. In the past SAWS had been challenged on its receivables so it has put in more effort to collect monies due. Hence the agency has appointed account receivable clerks to ensure it would followed up its debtors to ensure it paid timeously and reduce its debtors base. The agency pays its contractors within 30 days and complies with government policies.
Ms Sibongwe said on the parity exercise, SAWS received guidance from DEA.
The Chairperson noted the financials presented were just a summary as the CFO did not want to go into details. He said in future the Committee requests the finances be presented in detail especially administrative and operational expenditure. Although compensation of employees should not be detailed, the Committee needs to receive detailed information on the agency’s key drivers of its expenditure. He said the Committee needed more explanation on the parity exercise and asked if the official from human resources could give more information.
Mr Ndabambi said the human resources official was new.
The Chairperson asked when the human resources official joined SAWS.
Mr Ndabambi said the human resources official joined SAWS at the end of November 2018.
The Chairperson remarked that the Committee accepted that the human resources official was new and could not have the background needed yet to answer the question.
Mr Ndabambi said there was a benchmark using the related science bodies using 2015/16 salaries and the outcomes of the benchmark were not implemented. DEA decided to do a parity exercise on its entities and discovered that SAWS was overpaying some cadres while underpaying others. The officials overpaid where staff that had been with SAWS for a long period but they were few. However those that were underpaid were significant and were far below the midpoint scale. DEA gave SAWS guidance on the parity exercise and presented the results to the Board. DEA took employee data from SAWS, analysed it and used it to give SAWS guidance. Based on the guidance, SAWS management submitted a comprehensive report to the Board. The Board decided it would impact significantly on employee costs and recommended a phased approach because SAWS had three options. The SAWS management submits reports on the parity exercise to the Board and it monitors if SAWS management did not exceed the budget. It is known that in an agency like SAWS science and information employee costs increases because it is a science agency.
The Chairperson noted the acting CEO had given a good explanation but the Committee would have loved to be briefed earlier so that it could monitor it during its oversight visit. He asked the CFO to confirm if the funds for the parity exercise would cause the budget for compensation of employees to be exceeded.
Ms Sibongwe said it would not lead to the budget being exceeded as the funds were an under expenditure.
The Chairperson was of the opinion it was over expenditure.
Ms Sibongwe said it was under expenditure and the agency could submit a report to the Committee to specifically give details on administrative and operating expenses.
The Chairperson said this was in order. He proceeded to the next item on the agenda.
Update on CEO suspension
Ms Magomola said SAWS could not say much on the matter of the suspended CEO but it would provide the information presently available. An allegation was made against the CEO and a preliminary investigation has been done and completed and a report was submitted to the Minister. The Minister then said the Board must communicate the outcome of the preliminary investigation to the CEO. The outcomes of the preliminary investigation have been presented to the CEO. The CEO is supposed to either deny or accept the outcome and the Board takes it further. In this case, the CEO denied the outcomes of the investigation and the Board sent some recommendations to the Minister. Presently, the Minister has appointed an investigating team to do an in-depth investigation so the Board would wait for the outcome. The Board would wait for the outcome of the report and the Minister’s recommendation before it takes it further.
The Chairperson asked SAWS to state when it anticipated the matter to be resolved and when the CEO was suspended.
Ms Magomola said the CEO was put on suspension on 14 September 2018. The suspension and dismissal of the CEO are governed by the SAWS Act. The SAWS Act is quite specific and its timeframes are longer than what would be encountered. If the Board was going via regular labour law probably the matter would probably have been concluded already.
Mr Phillip Dexter, SAWS Board Deputy Chairperson, said the Board Chairperson was right although the SAWS Act provides that the CEO responds to the Minister at various stages. It is quite a lengthy process with a lengthy time period of about six months. The Board would not be able to speed the matter up because the CEO has to respond at every stage. The Board is in the last stage. He expressed concern about the predicament of the Board and said the Committee needed to take cognisance of and look for a way to amend the SAWS Act to make the process shorter.
Ms Magomola added that the Board was presently reviewing the suspension which places the Board in a difficult situation.
The Chairperson asked the Board to confirm the steps to be taken based on the SAWS Act.
Mr Dexter explained when an allegation is made, a letter is written to the CEO and the CEO responds. On the basis of the CEO’s response a report is submitted to the Minister and the Minister then decides whether or not to conduct a preliminary investigation. Once the preliminary investigation is done, the CEO is shown the results of the preliminary investigation and is given an opportunity to respond to the results of the preliminary investigation. Based on the CEO’s response, the Minister then decides whether a full investigation should be done. The Board is waiting for the outcome of the full investigation.
The Chairperson asked if the Board was presently waiting for the outcome of the full investigation.
Mr Dexter confirmed this - once the full investigation is done, the outcome would lead to whether any charges would be instituted against the CEO or if full disciplinary actions should be implemented. The process is quite lengthy and the Committee should look for a way to shorten the process because it is unnecessarily bureaucratic. Unfortunately the Board cannot undermine the Act.
The Chairperson asked how long it took between charging the CEO and the conclusion of the disciplinary committee.
Mr Dexter responded that it took about 30 days and then obviously the length of time to run the disciplinary hearing. A panel would be constituted – this should be the final step.
The Chairperson said it was quite long and asked the Board to confirm if the SAWS Act was an Act of Parliament.
Ms Magomola said it was but the process would not be the same if it was any other employee as then the labour law would be followed. The Board’s hands are tied to the lengthy process and timeframes. The CEO can only be suspended by the Minister. The Board gets instructed as to the next line of action from the Minister.
The Chairperson agreed the process and timeframes were lengthy particularly when the official is suspended. The suspension affects the career of the individual because the official just sits at home doing nothing. Turning to the quarterly performance, he noted the actual communication plans implemented was about 61% out of the targeted 65% - this was recorded as not achieved when it is actually partially achieved. The presentation said the third quarter performance of 59% was lot but it might be because SAWS had not categorised the performances correctly. The Committee notes the performance on the quarterly report as presented but would only encourage SAWS to improve as the fourth quarter would end soon. He asked SAWS to reassure the Committee it had addressed matters laid out by Auditor-General as the CFO did not brief the Committee on progress made on its audit outcomes. The Committee would call the Minister to engage on the suspension of the CEO. The SAWS Act makes the resolution of disputes with the CEO a lengthy process while the labour law allows speedy resolution of disputes. The labour law is fair and no party is prejudiced but the SAWS Act does not agree with the labour law so it should be reviewed. The process must be speeded up so that the agency would have certainty on whether the CEO is exonerated or if something is found to ensure the CEO is sent out of the agency.
The Committee recalls that the CEO ensured that SAWS was moving forward when the agency had challenges and the old CEO resigned and terminated a contract. The suspension is taking forever with no indication if the matter would be finalised soon because of how the law is structured. This is unfair. The Committee requests that the matter be speeded up by the Minister to ensure there is certainty on what should happen to the CEO and give stability to the agency. When an official gets suspended it must be on the basis of the seriousness of the allegation and the fact that some prima facie evidence has been found before the actual investigation starts. The SAWS Act is structured differently. There is nothing much the Committee can do but it really wants the matter to be finalised. The investigation constituted must be completed. If there are charges, the charges must be put before the disciplinary committee. The Committee hopes the matters would be finalised before it rises. He asked for updates on the Board. He sought clarity on if the Board was reconfirmed or new members were brought in.
Ms Magomola said the situation was that the tenure of the old Board was expiring and the Minister had to find new Board members. The Board list was submitted to Cabinet and Cabinet has confirmed in November 2018. The new Board started in January 2019 so the old Board’s term of office has expired and this is a new Board.
The Chairperson asked the Board chairperson to confirm if the members of the current Board were old members.
Ms Magomola said it was a new Board because it was reconstituted, The Committee may recall that the Board chairperson, deputy Board chairperson and another Board member were appointed in June 2018 when the old Board’s term of office was being finalised in December 2018. So the present Board is a brand new Board.
The Chairperson said the Board chairperson should clarify if some of the members in the old board were in the brand new Board.
Ms Magomola confirmed this noting it often happened to retain some capacity. This also happens in the private sector. The retirement of Board members happens in a rotational manner. The majority of Board members are new as only three members came from the previous board.
The Chairperson asked for the names of the three old Board members retained.
The Chairperson said the Minister would not be available for the meeting with SANParks so the portion on officials undermining the Committee would be rescheduled. The Committee called on the Minister of Environmental Affairs to ensure the investigations commissioned and any disciplinary processes are concluded speedily.
The meeting was adjourned.