Parliament Mid-Term performance 2018/19: briefing by Acting Secretary to Parliament

Joint Standing Committee on Financial Management of Parliament

19 March 2019
Chairperson: Dr M Motshekga (ANC) & Acting Chairperson: Mr D Monakedi (ANC)
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Meeting Summary

The Joint Standing Committee on the Financial Management of Parliament was briefed on the Mid-Year Performance and Third Quarter Report of Parliament for the 2018/19 financial period.

 

The mid-year performance information report indicated that only 50% of the indicators that had been measured had met the target. Expenditure at mid-year was at 47% of the annual budget and indications were that the total budget would be spent by year end. The institution would continue to place emphasis on achieving a fifth clean audit. Key initiatives included the rollout of an Institutional Reporting System and extending the role of the Audit Task Team to performance verification. The mid-year report indicated that Parliament had not requested additional funding from National Treasury for 2018/19 adjustment budget.

The Committee was informed that mechanisms had been developed to ensure that Parliament was producing quality legislation that had got a positive impact on the lives of the most vulnerable in society. It was reported that the Constitutional Review Committee held extensive public hearings across the country but that had been an unbudgeted expense. The report indicated that strategies would be developed to improve on the results of the 2017/18 client satisfaction survey. Three leadership development initiatives had been launched. A total of 181 employees attended various training courses and twenty one graduate interns had been placed in various units or areas of the institution. There were 41 posts in various stages of the recruitment process.

The Third Quarter Report showed reported that Parliament had spent 96%, that is R625.738 million, of its appropriated budget of R648.876 million for the third quarter and 72% of the R2.466.625 billion annual budget to date. Indications were that Parliament would have an underspending of R32.472 million of its appropriated annual budget at the end of the financial year. Of the projected underspending of R47.014 million under the administration programme, R30.442 million was from the Legislative Sector Support in respect of postponed sector training, and sector meetings which were cancelled.

The Third Quarter Report further indicated that of the 14 indicators the Administration was currently tracking, eight had only annual targets. The remaining six indicators had all met the quarterly targets. Progress against annual targets was tracking well. It was also revealed that Parliament had developed a new Integrated Strategic Management Framework that would be utilised in the development of the Sixth Parliament strategic plan. During the Sixth Parliament, the institution would be focusing on measuring the quality of its products and services rather than just timelines. The strategic planning processes for the Sixth Parliament had already commenced.

Members asked for clarity on the over-expenditure to political parties. Of particular concern to Members was the disciplinary hearing regarding the suspended Secretary to Parliament and they asked for an update on progress. How had the achievements of the three targets by the Parliamentary Budget Office compared with budget expenditure? Members were not happy about the annual targets because they were not aligned with the Act governing parliamentary finances and there was no recourse when it did not meet the targets. Why was the volume of resignations so very high and why it was taking a long time to fill the vacancies?

Meeting report

Opening remarks

The Acting Chairperson noted that it was a busy day for Members, some of whom would be leaving early. He welcomed everyone and asked that the meeting get down to business without delay.

Briefing on the 2018/19 Mid-Year Performance Information Report

Ms Penelope Tyawa, Acting Secretary to Parliament, informed the Committee that mechanisms had been developed to ensure that Parliament was producing quality legislation that has a positive impact on the lives of the most vulnerable in society. She said the Constitutional Review Committee had held extensive public hearings across the country and she figures showed that the access that people had to Parliament via social media and Parliamentary TV was very high. Over 80 000 publications had been distributed.

She reported that strategies would be developed to improve on the results of the 2017/18 client satisfaction survey. Three leadership development initiatives had been launched. A total of 181 employees had attended various training courses and twenty one graduate interns had been placed in various units or areas of the institution. There were 41 posts which were in various stages of the recruitment process. She also stated that Parliament had spent R1.157 bn or 47% of the annual budget of R2.466 bn, and indications were that there would be an over-spending of 0.29% or R7.234 m at the end of the financial year.

Ms Tyawa was convinced that all targets would be met by the end of the year.

Programme 1: Strategic Leadership and Governance

47% of the annual budget has been spent. Indications are that the full annual budget would be spent at the end of the financial year. Spending against the annual budget has been 46% and 47% for Offices of the Speaker and Chairpersons, respectively. The Parliamentary Budget Office has spent 45% while the Office of Institutions Supporting Democracy spent 47%.

Programme 2: Administration

The programme has spent 34% of the annual budget. Spending was as follows: Offices of the Secretary 47%, Finance Management Office 44%, Internal Audit 57%, Strategic Management and Governance 48%, Registrar of Members Interest 51% and Legislative Sector Support 18%. The Member capacity building indicator had missed the target due to changes in the University of Johannesburg programme which affected the delivery of the Post Graduate Diploma programme. Three programmes had been implemented, including two Post-Graduate Diploma programmes from the University of the Witwatersrand and one from University of Johannesburg.

Programme 3: Core Business

Staff vacancies and increased work volumes have contributed to performance challenges. Recruitment processes were addressing the challenges. Deviations from regular processes caused delays. The Programme has spent 47% of the annual budget. Indications were that there would be over-spending of R7.496 m due to increased oversight such as the Constitutional Review Hearing in all provinces which was not budgeted for. Spending of annual budgets was as follows: National Assembly 46% and the National Council of Provinces 41%.

Programme 4: Support Services

47% of the annual budget has been spent. Projections were that the programme would spend the full annual budget at the end of the financial year.

Programme 5: Associated Services

52% of the annual budget has been spent. The total transfers to political parties represented in Parliament was at 50% so far. Projections were that there would be an over-spending of R4.079 m on transfers to political parties at the end of the financial year. The projected over-spending was due to the fact that there had always been a shortfall on the budget for transfers over the years.

Ms Tyawa concluded that 50% of the indicators that had been measured have met the target and 50% had missed the target. Expenditure at mid-year was at 47% of the annual budget and indications were that the total budget would be spent by year end. The institution would continue to place emphasis on achieving a fifth clean audit. Key initiatives included the rollout of an Institutional Reporting System and extending the role of the Audit Task Team to performance verification. She informed Members that Parliament had not requested additional funding from National Treasury in the 2018/19 adjustment budget.

Briefing on the Third Quarter Report  2018/19

Ms Tyawa reported that Parliament had spent 96% (R625.738 m) of its appropriated budget of R648.876 m for the third quarter and 72% of the R2.466.625 bn annual budget to date. Indications were that Parliament would have an underspending of R32.472 m of its appropriated annual budget at the end of the financial year. Of the projected underspending of R47.014m under the administration programme, R30.442 m was from the Legislative Sector Support in respect of postponed sector training and sector meetings which were cancelled. The projected underspending would be available for use in the next financial year due to the fact that it was donor funds. She reported on the five programmes of the institution.

Programme 1: Strategic Leadership and Governance

The programme has spent 96% or R27.829 m of the allocated budget of R28.869 m for the third quarter and 73% of the annual budget. The over-spending of 1% or R118 k in the Office of the Speaker was due to invoices for the previous quarters which were only received and paid during the third quarter. There are indications there would be an underspending of R3.250 m of the appropriated budget of R106.423 m by the end of the financial year due to resignations.

The spending on the compensation of employees was 96% or R20.948 m for the third quarter and 71% of the annual budget. Under-spending was projected at the end of the financial year due to resignations during the year. The spending on goods and services was 97% or R6.878 m for the third quarter and 83% of the annual budget to date. It was projected that the full budget would be spent by the end of the year. A total of nine outputs were produced by the Parliamentary Budget Office (PBO) during the third quarter. That exceeded the target of producing six analysis briefs for Committees per quarter.

Programme 2: Administration

The programme has spent 61% or R30.103 m of the budget of R49.338 m for the third quarter and 50% of the annual budget to date. It was reported there would be an under-spending of R47.014 m at the end of the financial year. Most of the under-spending was from the Legislative Sector Support and projects. The projected under-spending on projects was attributable to projects which would not be completed during this financial year such as the Business Continuity Project and Digital Recording and Transcription Project.

Programme 3: Core Business

The timely provision of procedural and legal advice, content advice, research products, minutes and reports, and other products to the Houses, Committees and Members exceeded the target of 93%. This programme has spent 101% or R166.955 m of the budget of R164.977 m for the third quarter and 74% of the annual budget. Indications were that the annual budget of R614.956 would be over-spent by R1.978 m at the end of the financial year. The National Council of Provinces has spent 116% or R19.457 m of the R16.744 m for the third quarter. Indications were that there would be an over-spending of R2.356 m at the end of the financial year. That was due to the third ‘Taking Parliament To The People’ programme that was not budgeted for.

Programme 4: Support Services

101% or R100.148 m of the R98.742 m budget for the third quarter and 73% of the annual budget have been spent. The full annual budget of R383.271 m would be over-spent by R3.934 m by the end of the financial year. The Human Resources division has spent 111% or R19.872 m for the third quarter budget and 90% or R51.604 m of the R57.220 m annual budget up to now and indications were that there would be an underspending of R3.934 m at the end of the financial year.

Programme 5: Associated Services

The number of days taken to reimburse Members of Parliament in the third quarter exceeded the set target. 108% or R188.845 m of the R175.467 m budget for the third quarter and 80% or R538.230 m of the R675.792 m of the annual budget have been spent so far. Indications were that there would be an overspending of R15.400 m of the appropriated budget of R675.792 m by the end of the financial year. The projected overspending was due to the fact that there has always been a shortfall on the budget for transfers to political parties over the years. Virements would be made from areas where there were indications of possible under-spending in terms of section 22 of the Financial Management Parliament and Provincial Legislatures Act (FMPPLA).

In her conclusion, Ms Tyawa stated of the 14 indicators the Administration was currently tracking, 8 had only annual targets. The remaining six quarterly indicators had all met the targets. Progress against annual targets was tracking well. She also revealed the Administration had developed a new Integrated Strategic Management Framework that would be utilised in the development of the Sixth Parliament Strategic Plan. During the Sixth Parliament, she said, the Administration would be focusing on measuring the quality of their products and services rather than just timelines. The strategic planning processes for the Sixth Parliament had already commenced.

Discussion

Mr J Steenhuisen (DA) stated he was not happy about the annual targets because they were not aligned with FMPPLA and there was no recourse for not meeting the targets. He proposed the Committee should pass a resolution not to accept the report in future if targets have not been met. Committee Members needed to intervene during the course of the year if there were challenges on meeting targets rather than waiting to be told targets had not been met. He asked for clarity on the over-expenditure to political parties. He also wanted to know what the latest was on the disciplinary hearing regarding the suspended Secretary to Parliament. He remarked there was no report on virements.

Ms Tyawa explained that when Parliament provides allocation for political party spending, there are arrangements with Nehawu in terms of salaries that should be paid to political leaders and different specified categories. The category that did not have a specification was the constituency allowance. No money was allocated for political party staff members. A memorandum has been sent to all the political parties regarding the matter.

Mr Steenhuisen stated that party political staff was not the responsibility of Parliament and they did not fall under the compensation of staff or employees. They were the responsibility of the political party. If there was money during the year to increase allowances for parties, then that money should have been directed to the core business of Parliament.

Mr Joe Nkuna, Acting CFO, RSA Parliament, said that the allowance to political parties was for party administration which was counted on the first day the party entered Parliament. The administration part was being used as a conduit for the party allowance. The gradings for Parliament employees also applied to those of the political parties. He said he did not know who had requested the increase for political party transfers, but the overspending was due to under-budgeting from National Treasury.

The Co-Chairperson stated the disciplinary matter regarding the suspended Secretary to Parliament was work-in-progress. The key witness for the suspended Secretary would appear before the disciplinary committee soon. The bill of costs had been opposed by the suspended Secretary to Parliament.

Mr N Gcwabaza (ANC) commented it was difficult to understand the overall performance targets for the 3rd quarter because they were not itemised. He suggested that annual targets should be shown with quarterly targets to indicate what has been achieved quarterly. He wanted to know how the achievements of three targets by the Parliamentary Budget Office (PBO) compared with budget expenditure.

Ms Tyawa explained the PBO provided analytical reports on budgets. It used its own budget and staff. Its achievement had nothing to do with budget increase. The PBO targets four reports for the Joint Standing Committee on the Financial Management of Parliament. In-between it produced analytical reports for other Committees of Parliament.

The Co-Chairperson wanted to know if the Parliament Democracy Offices (PDOs) were not a duplication of constituency offices and asked if it was not better to put more resources into constituency offices because the PDOs were pilot projects to be rolled out to provinces.

Ms Tyawa explained there had never been an extension of the PDOs pilots. That would need an analysis to determine if they were doing what they were established to do and why constituency offices were not doing their work.

Mr F Essack (DA) wanted to find out why the volumes of resignations were so high and why it was taking so long to fill the vacancies.

Ms Tyawa said resignations were at 1.6%. That meant many employees were staying in Parliament. Resignations came mostly from people Parliament wanted to attract from outside Western Cape. Those offered jobs in Parliament brought their spouses or partners who often struggled to find work in Cape Town and, as a result, they chose to resign and return to where they had come from. Many people complained that accommodation was expensive in Cape Town. An analysis by Parliament indicated the number of resignations was not high.

The Chairperson asked if the vacant posts were critical because it looked like the performance had not been affected. He stated he was not sure if the indicator on the number of analytical reports produced by PBO was helpful in measuring performance. He suggested the indicator should focus on quality, instead of focusing on quantity. He asked for a comment on zero budgeting.

Ms Tyawa explained that analyses are always performed to see if a vacant post was critical or not. Of the 80 vacancies, 41 had been found to be critical. Reasons were usually obtained from divisional managers as to why they are critical. Offers had been made, but some candidates had declined the offers because they did not want to come to Cape Town. She stated zero budgeting was the basis of budgeting, but sometimes funds were moved around by the programme of Parliament as the management did not dictate what Parliament did.

Mr Steenhuisen remarked it was important to assess performance agreements of employees quarterly and to know who was monitoring the employees and why employees were not signing the quarterly agreements.

Ms Tyawa explained HR division had developed quarterly performance contracts. The purpose was to do away with annual performance appraisals. There had been a great improvement so far because there had been fights with the labour unions, but now the matter was understood by all parties. Management considered it a good idea that divisional managers monitored the performance of employees on a quarterly basis rather than informing an employee at the end of the year that he/she was not performing. She said there had been improvements because people had been encouraged to ask for training to improve performance. That was the rationale for the quarterly assessments.

Closing remarks

The Chairperson requested that the Administration address the employment issues so that they were resolved before the commencement of the Sixth Parliament. He thanked Members for their attendance.

The meeting was adjourned.

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