Parliament's 2020/21 Annual Performance Plan
Joint Standing Committee on Financial Management of Parliament
05 September 2019
Chairperson: Ms B Mabe (ANC); Ms D Mahlangu, (ANC, Mpumalanga)
The Joint Standing Committee on the Financial Management of Parliament met to review Parliament’s draft 2020/21 budget and annual performance plan, as well as its performance in the first quarter of the 2019/20 financial year.
The Committee was informed that the 2020/21 budget and annual performance plan had been completed because of the imperatives of the budget cycle, but would have to be revised to align with the policy priorities of the Sixth Parliament once the National Council of Provinces and the National Assembly had completed their strategic plans. Parliament had five months to submit the revised budget and plan to the Auditor-General. The Committee agreed to postpone the presentation until the budget and the plan had been revised.
Parliamentary Services presented Parliament’s performance in the first quarter of the 2019/20 financial year, which was based on the strategic plan and priorities of the Fifth Parliament.
In respect of the budget allocation, Parliamentary Services pointed out that R1.8 billion had been included for Members’ salaries and the benefits of former Members of Parliament and Members of provincial legislatures, and that had distorted the total budget for Parliament. Parliament had spent 92%, or R437m, of its appropriated budget of R475m for the first quarter, and indications were that there would be an overspending of 1% of the R 2.081b annual budget at the end of the financial year. The projected overspending emanated from the Associated Services -- transfers to political parties and medical aid contributions for former Members of Parliament and Members of legislatures. National Treasury had been engaged to address the shortfall.
In addition, overspending was due to the payment of loss of office and exit gratuities to non-returning Members after the 2019 general elections. Parliament had been unable to plan because no one had known how many Members would be leaving at the end of the Fifth Parliament. The situation had been aggravated by the reduction in the size of Cabinet.
Parliamentary Services believed that the greatest concern was the impact of carrying the budget for former Members of Parliament, and the funding to be transferred to political parties.
Members asked why the budget on former Members’ gratuities had been 42% overspent. Why was it such a huge overspend? What process would be followed to get the funds back? Did the gratuities buck a trend, or what had happened? What was the plan to ensure that the Office of Institutes Supporting Democracy integrated its work with the requirements of Members of Parliament? Why were annual targets presented when it would be too late at the end of the year to intervene if a target was not met? Concerning the Hansard targets, was the 95% achievement rate to do with the revised Hansard and the printed copies?
Members also requested that the economic classifications be broken down to provide more specific information, instead of simply a high-level overview. What were the capital assets? Who benefited from the total budget of R2.8 billion? Did women, children or youth benefit?
Co-Chairperson Mabe welcomed the Members and the Acting Secretary to Parliament, Ms Baby Tyawa, as well as her entourage, and requested her to present Parliament’s draft 2020/21 budget and annual performance plan (APP) and its performance report for the first quarter of the 2019/20 financial year.
Discussion on 2020/21 Budget and Annual Performance Plan
Ms Tyawa informed the Committee that the 2020/21 budget and APP had been completed because of the cycle of the budget. However, because of the processes of planning, once the two Houses had completed the five-year strategy for the Sixth Parliament, the likelihood was that the strategy and APP for Parliament for 2020/21 would be amended. She asked whether she should present the Budget and APP as it stood, or whether Members would prefer to wait for the strategies from the two Houses, as Members would have to come back and re-visit the Budget and APP after that process. The National Council of Provinces (NCOP) was almost done, and the National Assembly (NA) would be addressing the strategy the following week. The current budget and APP was merely a stopgap. The chances were that it would change. The Financial Management of Parliament and Provincial Legislatures Act (FMPPLA) allowed Parliament to present a revised budget and APP by 8 November 2019. She did not wish to waste Members’ time.
Mr J Steenhuisen (DA) concurred that the proposal made sense, as it had been passed by the previous Committee and was only a stopgap budget. The NA would be sitting that Thursday and Friday to determine its priorities. Rather than interrogate a document that might well change, it would be preferable to interrogate a consolidated document at the end of the process. That was proper oversight.
Co-Chair Mabe invited the Content Advisor to comment.
The Content Advisor to the Committee said that both the Acting Secretary and Mr Steenhuisen were correct. Even the budget would have to be amended, based on Parliament’s strategic plan and the budget would have to be aligned with the plan. The current budget had no basis, as no documentation had informed the 2020/21 budget. The real budget would be developed only after the strategic plan of Parliament had been completed. The law stated that it had to be completed five months after the elections. The likelihood was that the budget would be revisited.
Ms R Lesoma (ANC) said that she was comfortable not to discuss it as long as it was not contrary to the required timelines, because those requirements did not change. If the Acting Secretary could give a sense of the timelines, she would be comfortable. She reminded the meeting that there was also an opportunity to review the budget when the Committee did the Budget Review and Recommendations Report (BRRR).
Her concern was simply that the Committee met the necessary requirements and if it did, she would be happy to support the previous speakers.
Co-Chair Mabe believed that the Committee had complied, but she asked Ms Tyawa to confirm her belief that the budget of Parliament did not have to follow the Parliamentary budget cycle. The Committee could make its own timeframes.
The Acting Secretary dealt with the compliance issue. She said that Parliament had complied with requirements because the budget and APP had been presented to the Joint Standing Committee in the previous Parliament. After an election, Parliament had to realign its budget and APP within five months, which would bring them to 8 November 2019. Once Parliament had revisited the APPs, it would have to have a meeting with the Auditor-General (AG) to talk about the audit plan. The internal audit plan would have to change and the AG’s audit plan would have to change, in line with the strategic objectives set in line with the policy priorities of the Sixth Parliament. The current budget and APP had been tabled and ATC’d and presented in both Houses, so Parliament was in compliance. Parliament had a budget vote as per the rest of Parliament, as it was aligned with all budgetary processes in Parliament.
Co-Chair Mabe determined that the decision was to wait for both Houses to complete their annual plans. In November, the Acting Secretary would present the revised budget and APP.
The Acting Secretary agreed that she would present in accordance with her planning cycle, which had dates for the presentation. She promised to re-send the planning cycle to the Committee which had all the dates for when the strategy should be finished, when it should be submitted to the Executive Authority and the oversight Committee and then tabled.
Mr M Rayi (ANC, Eastern Cape) asked when the National Assembly strategy planning session would be taking place.
The Acting Secretary replied that the strategy planning session would take place the following week, on 12 and 13 September.
Parliament’s first quarter performance
Ms Tyawa briefed the Committee on the performance of Parliament in the first quarter of the 2019/20 financial year. She reminded Members that the 2019/20 APP had been based on the Fifth Parliament’s strategic plan and priorities. The budget and the APP would be linked to the strategic goals and objectives of the Sixth Parliament.
Certain targets had not been met because of the election period, the intervening period for the establishment of committees, and other processes. The APP had been assessed in terms of annual targets which Members had regularly queried, but she would show how the targets had been determined. The targets assessed the work of staff in supporting Members. Maybe in the new strategy, the Members might want to measure value-add.
Parliament had commissioned and tracked whether people had access to Parliament, how much they knew about Parliament, etc. Reporting was on what her office had done to date, including workshops and a round table discussion on the Fourth Industrial Revolution (4IR). The indicators would provide percentages at the end of the year. At this point, she was just narrating figures, but her Ooffice monitored on a quarterly basis whether targets would be met.
In respect of the budget allocation, Ms Tyawa pointed out that R1.8 billion was included for Members’ salaries and the benefits of former Members of Parliament and members of provincial legislatures, which distorted the total budget for Parliament.
Parliament had spent 92%, or R437.165m of its appropriated budget of R474.611m for the first quarter, and indications were that there would be an overspending of 1%, or R13.481m of the R2.081b annual budget at the end of the financial year. The projected overspending emanated from Associated Services (transfers to political parties and medical aid contributions for former Members of Parliament). National Treasury had been engaged to address the shortfall during the Medium-Term Budget Policy Statement (MTBPS) in line with section 18 (2) (a) of the Financial Management of Parliament and Provincial Legislatures Act (FMPPLA).
The spending on direct charges had been R187.687m, or 142% of the first quarter budget of R131,880m, and indications were that there would be an overspending of 21%, or R111.987m of the R527.518m annual budget at the end of the financial year. Overspending and projected overspending for the first quarter and annual budget respectively was due to the payment of loss of office and exit gratuities to non-returning Members after the 2019 general elections. Her office had been unable to plan, because no one had known how many Members would be leaving at the end of the Fifth Parliament. Ms Tyawa reiterated that Parliament could not continue carrying the funds for former Members and the funds for political parties, as this distorted the budget.
The spending on the compensation of employees was 100%, or R268,015m of the first quarter budget of R266.587m, resulting in a minimal variance of R1.428m, and indications were that there would be an overspending of R11.382m at the end of the financial year. The projected overspending was in respect of the payment of medical aid contributions for former Members of Parliament and provincial legislatures. Until the end of June 2019, 181 former Members of Parliament and Provincial legislatures had decided to continue with their medical aid, and Parliament had to contribute certain percentages, depending on their service. National Treasury had been engaged to address the shortfall.
In summary, the Acting Secretary stated that her greatest concern was the impact of carrying the budget for former Members of Parliament and the funding that Parliament had to transfer to political parties. There had to be another way of dealing with those funds.
Mr Steenhuisen said that the Committee had previously had a discussion about Members’ gratuities. That budget had been 42% overspent. What process would be followed to get the funds back? Why was it such a huge overspend? Did the gratuities buck a trend, or what had happened? It that was the case, it was less concerning than if Parliament had had the data but had not prepared sufficiently. That would be a bigger problem.
Mr Steenhuisen said he would like the Committee to drill down into the Office of Institutions Supporting Democracy (OISD) because, from a frontline aspect, Members did not get good service or benefit from that office. In the previous term, he had had to phone round to find reports, although the OISD should have been the steward of those reports. He wanted to understand what the plan was to ensure that OISD integrated its work with Members of Parliament. His usual concern was the annual targets. Annual targets were useless for that Committee, as at the end of the year it was too late too intervene. There was a need for quarterly targets so that the Committee could assist the Secretary to ensure that targets were met in each quarter. There was no room for manoeuvre at the end of the year.
Co-Chair Mahlangu commented on slide 8 on the budget allocation. She understood the explanation that the number of Members leaving the system was not planned. She had heard that it was an historic number. She asked about the difference between the financial year for local and provincial government versus national government. Parliament followed the national government financial year of April to March, so was the Committee looking at expenditure for the first quarter? On slide 9, there was apparently no anomaly but if one budgeted for 100%, then one should spend 25% per quarter. She understood that the direct expenditure budget had been-over expended by 142%, and that many Members who had left had not yet been paid out. She did not understand the quarterly budget. She understood that the budget would have to be reviewed and re-prioritised and perhaps find savings. She was confused about the budgets and the term.
As she was speaking, the Co-Chair realised that the budget was for the first quarter and the reporting was on what had happened in the Fifth Parliament, for example, the Women’s Parliament.
Mr Steenhuisen added that he needed clarity around the targets for Hansard. He had not seen a Hansard as yet. Was the 95% achievement rate to do with the revised Hansard and the printed copies? He had not been given a single copy of Hansard from the Fifth Parliament.
Mr Rayi asked about the indicators and progress. Indicators had been provided in the form of percentages, but progress was in terms of figures. He asked for consistency. What was the target in terms of a percentage? The Committee was very small, so it should be able to interrogate the details. Each economic classification should be more specific, such as salaries and wages, contributions to social services and so on, and not just numbers. Goods and services should be broken down, as should capital assets. What were the capital assets? It was a high-level presentation of the budget, but he requested breakdowns seeing that it was a small Committee that had to interrogate the budget.
Co-Chair Mabe commented that Mr Rayi wanted to strengthen accountability. Who benefited from the total budget of R2.8 billion? Was it women, children, youth etc.? The Acting Secretary could provide a response in writing, or preferably when she presented the revised APP. What was meant by the statement that Parliament was carrying the Parliamentary medical aid scheme? Did this refer to ParMed?
She added that targets not met were the core business and strategic management targets. No reasons had been given for targets not being met.
Co-Chair Mahlangu asked about the Hansard handbooks. Were they being printed, or would Members get them electronically as opposed to printed copies, since Members had tablets and other electronic gadgets? There had been savings on personnel vacancies. How long had those positions been vacant? Exit interviews had been agreed to during the previous strategic planning session, as Parliament had to look at how it retained staff who were often poached by departments, and that weakened Parliament.
Acting Secretary’s Response
Ms Tyawa responded that Parliament was given some money for gratuities, but it did not know how much. There had been additional resignations, above the norm, at the end of the Fifth Parliament, but Cabinet had also been reduced and that had led to more Members being including in the gratuities. There was no way of planning accurately for the number of Members who did not return. Parliament had requested an adjustment of R111 million, and was waiting for National Treasury to come back with a decision on the matter. Treasury was checking that the Members had not been paid twice because some Members had been paid out by their ministries. Parliament had supplied Treasury with a list of those Members who had been paid out.
She explained that the relevant official was currently looking at how the OISD interfaced with Members of Parliament and was looking to refine the indicator so that services from that office could be measured.
Ms Tyawa said that the annual targets were a result of annual surveys. Perhaps the targets could be broken down, such as a questionnaire representing 5% of the target. The staff could work out a formula for measuring what they were doing. Surveys could take place at different times and staff could also look at getting live data. Her office would look at quarterly targets. However, she assured the Committee that the staff was always confident of meeting the targets.
Parliament did not do linear budgeting. Budgets were zero-based. Staff knew, for example, that Microsoft licences were paid at the end of the year so the funds lay there and were not divided into quarters over the year. She acknowledged that there should be percentages as well as actual numbers against the targets.
She explained that 72% of the medical aid contributions made by Parliament as the employer were for former Members and former provincial legislature members, so that budget was not a genuine budget relating to the administration of Parliament. Even political party funding went into Parliament’s budget, but should be paid directly in the political party funding account. She had already made three requests to Treasury to move the funds so that the cost drivers were around the core business of Parliament. However, Parliament did not have a Budget Act, so Treasury could not move the funds.
The cost drivers in the budget were actually around the core business of Parliament, which was to support public participation, and the bulk of the researchers, content advisors and Committee support. She would break the budget down as requested to show the benefits, salaries and key drivers of the budget, but would not go into the finer details as she was sure Members did not wish to go through 1 300 salaries. She would show who benefited from the budget.
The Acting Secretary commented that in the past, before the oversight Committee had been established, there used to be a Budget Council. There needed to be a focussed discussion on the budget alone. At the presentation of the next APP, she would show the details of how the budget had been broken down.
Dr Leon Gabriel, Division Manager: Knowledge and Information Services: Parliament, said that the targets were related to the unrevised Hansard which was published on Parliament’s website. There were 2 453 Hansard records currently on the website. His staff were currently finalising the Hansard of the Fifth Parliament, as there had been some lag time with the Fifth Parliament volumes. Parliament would no longer be printing hundreds of volumes of Hansard as it had moved to e-copies, but would print copies on demand for Members.
Mr Mpho Mokonyana Human Resources Executive: Parliamentary Service, informed the Committee that public service staff were employed in terms of pay plus benefits, so there was a breakdown of what went to salaries and what went to medical aid, housing and such benefits. However, in terms of Parliamentary administration employees, including management, all employees were on total cost recovery so there was no way of dividing the figures into salaries and benefits.
He had previously agreed to make a presentation on some of the reasons why colleagues had left their positions in Parliament. The rate of resignations was not very high. For the past three and a half years, it had been about 2.5%, while the same percentage of employees had retired or left due ill-health. In three and a half years, Parliament had lost only nine researchers and eight content advisors, but it was difficult to attract colleagues to the Western Cape. That figure meant that about two content advisors left per year out of a total of about 50 content advisors. That was a low resignation rate. One of the problems had been that staff were offered fixed term contracts, but now staff were permanently employed, and when advertising for a permanent legal advisor recently, an appointment had been made after the first round of interviews, whereas legal advisors had previously been loath to leave a permanent position for a contract post.
The Acting Secretary said that one target had not been met because there had been no process for tracking the attainment of the target. That was being attended to. Targets related to Committees could not be met, as Parliament had not been in session.
Mr Rayi said that when he had spoken about a breakdown of the budget, he had not only been referring to employee compensation, but also to goods and services and capital assets. The Committee needed a breakdown of each economic classification within the budget. The report was currently a high-level report but as a small Committee, Members could delve more deeply into the details of the budget. He did not need a response, but would wait for the breakdown of the budget in the next presentation of the budget.
Co-Chairperson Mahlangu asked which Act covered employees in Parliament if they were not employed in terms of the Public Service Association bargaining council agreements. Who determined the levels of compensation? Co-chairperson Mabe had said at the previous meeting that there had been allegations from a specific unit of differences in salaries, but generally there were allegations that content advisors and other staff members were compensated differently, depending on whether they were working in the National Assembly or the National Council of Provinces. If Members could be informed which legislation governed employees, they could read up on the information.
Co-Chairperson Mabe said that her Co-Chair had touched on a very sensitive point. There were disparities across Parliament, including Table Staff, Security and Communications, and between the NA and NCOP. It was not only in one department. She suggested that the Acting Secretary and her officials should not rush into an answer but should check the strategic plan, because she understood that it depended on how and when the employees had been employed. The Committee would expect a response when it next met, as employees would raise issues and she did not want to bring matters of the corridor into the meeting.
Ms Lesoma said Parliament was Parliament. If there was any lack of uniformity between employees, there had to be a law or an Act that allowed that situation. The Acting Secretary should indicate what needed to be done to resolve the matter. She added that there were permanent Members from provinces in Parliament who were doing the same job. There could not be dissatisfaction in Parliament. It appeared that employees were not covered by the Public Service Act, so what made them unique? What would it take to address the concerns?
Mr T Brauteseth (DA) said that the Committee had been promised a report on salary structures, but it had not been received. The Committee had asked about the difference between the NA and NCOP, and had been told that it was to do with performance contracts, but there had been an undertaking to obtain further information and submit it to the Committee.
He added that the Committee had also asked for information on the travel tender. Members had been promised it within a week, but the week was up and they did not have it. They had been told it would be quick. Could they get a commitment for the following week?
Co-Chairperson Mahlangu said the Parliamentary staff had assured the Committee that they had followed processes, so Members had asked for a copy of the request and the resolution. The information was to have been sent to the Co-Chairpersons through the secretariat, but it had not been done. Could she get a timeframe? She wanted to see the tracking of resolutions so that Members could see if the resolutions had been implemented. Was seven days for the finalising a resolution achievable?
Mr Rayi said that the Committee had to have minutes of the previous meeting each time it met, and also a template of decisions taken, with a column on progress. Instead of selecting one or two decisions that came to mind, there had to be a template. The Committee should always start with the minutes before a presentation. That should be the process going forward. He added that the Members’ current requests should be addressed.
Co-Chairperson Mahlangu agreed that Mr Rayi was correct. The Committee should have dealt with the previous set of minutes, but she had suggested that they not deal with minutes, although she had them, because of the confusion as to whether Members would be excused from the NCOP. She had suggested that the minutes be sent to Members so that they could be amended before the meeting. Members could communicate directly with the secretary, as long as the changes did not change decisions or re-direct resolutions.
Mr Rayi added that management should respond on the progress of resolutions before each meeting so that the secretary could complete the template prior to the start of a meeting.
Co-Chairperson Mabe said that the proposals would be captured in a specific section of the minutes.
Ms Lesoma said that there should also be a tracking system, because minutes could not be tracked. A tracking system would ensure delivery. Members would not have to wait for the minutes.
Co-Chairperson Mabe asked whether a turn-around time of 14 days would be acceptable.
The Acting Secretary said that her office had a template, and they did not wait for seven days to implement a resolution unless it was a complex one. She would have to activate that template. Normally her team had a debriefing after the meeting, after which they would send the template to the secretary. She started with a report back on the actions taken to fulfil the resolutions at each meeting she held with her staff.
Co-Chairperson Mabe said that the Committee agreed on seven days.
Co-Chairperson Mahlangu said that the Committee would meet the Executive on the matter that the Executive wished to discuss. They had been scheduled to meet the previous week, but a postponement had been requested as the Executive had not been ready with the report. The request was in line with Joint Rule 47 on page 27 and given the nature of the matter to engage on, she requested that Members take a decision that the meeting be a closed meeting. She asked for a formal decision on a closed meeting on 11 September 2019 at 13:00.
Mr Brauteseth said that generally he did not support the principle of closed meetings, as Parliament was supposed to be an open place, but he understood the nature of the matter, and as it was an internal matter within Parliament he would provisionally agree. He commented that he would, in any case, be outvoted if he did not agree.
Co-Chairperson Mahlangu informed the Members that there was consensus, and it was formally agreed that the next meeting would be a closed meeting between the Committee and the Executive because of the sensitive nature of the matter. The secretariat would communicate the processes to the stakeholders. The venue would be communicated.
Co-Chairperson Mahlangu thanked the Members and the staff to for their attendance. She admitted that the Committee did meet at odd hours, but she had requested that Committee meetings be scheduled for times when Members and staff were fresh and ready to engage with the business at hand.
The meeting was adjourned.
Mabe, Ms BP
Mahlangu, Ms DG
Brauteseth, Mr TJ
Lesoma, Ms RMM
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