2019 MTBPS: Public Service Commission briefing

Standing Committee on Appropriations

06 November 2019
Chairperson: Mr X Qayiso (ANC)
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Meeting Summary

The Committee was briefed on the 2019 Medium Term Budget Policy (MTBPS) by the Public Service Commission (PSC). The PSC spoke to its mandated areas of oversight and administration and adherence to applicable procedures of the Public Service such as personnel; public administration practices; and compliance to the values and principles of the Constitution. Members heard the PSC speak to strategies to significantly improve management practices in the public service, and the issues of governance across the public service namely the Financial Disclosure Framework (FDF); the lack of submission or timeous submission of documents; financial misconduct; the non-payment of invoices by departments; precautionary suspensions of officials; and to opportunities for efficiency, effectiveness and value for money.

The PSC was forthright in its engagement with the Committee even providing a set of key questions for the Committee to consider. These were how the National Treasury would ensure budget alignment to key priorities of government such as the new District Service Delivery model; to what extent the AG has implemented the Public Audit Amendment Act; and what were the prospects for efficiency in the reconfiguration of government, given the public sector wage bill.

Members asked which departments should be held accountable to support other departments; what additional support was needed for municipalities or the Department of Public Service and Administration (DPSA); what had the Public Service Commission (PSC) done to pressurise departments to meet compliance due dates for financial disclosure; and how could the Office of the Presidency perform at 67% when it contained the Department of Monitoring and Evaluation, when actually, it was the very Department of Monitoring and Evaluating itself! On provinces with perpetual procurement issues and of going over-budget, Members asked where the buck stopped and who audited the impact of expenditure. Members were very concerned about the vacancies in the PSC and wanted to know if there were there any challenges in the capacity of the PSC which could impact its ability to fulfil its mandate. The Committee asked: ‘Has the PSC interrogated the President’s proposals to restructure departments’?

There was further discussion on which departments needed to be focused on by the Committee and held accountable to support other departments, additional support was needed for municipalities or the Department of Public Service and Administration (DPSA) and if there was any form of consequence management on non-compliance with the HOD or senior management for not submitting financial disclosure documents. On consequence management, the Department said that government was not managing well, because it was co-managing with officials and the perception it was co-managing with unions, while other officials entered into the political arena. The Committee felt that the PSC should engage with the Committee more often and not wait for a formal engagement.

Meeting report

Dr Moeletsi Leballo, Commissioner: North-West Province, spoke to the PSC areas of oversight of the organisation and administration and adherence to applicable procedures of the Public Service. This included the following areas: personnel; public administration practices; and compliance to the values and principles of the Constitution. He then spoke to strategies to significantly improve management practices in the public service.

Ms Irene Mathenjwa, Deputy Director-General: Monitoring & Evaluation: PSC, spoke to issues of governance across the public service, namely the Financial Disclosure Framework (FDF) and the lack of submission or timeous submission of documents; financial misconduct; the non-payment of invoices by departments; and the precautionary suspensions of officials.

Repeat defaulting departments - where the FDF forms did not reach the PSC on time - were the Departments of Defence and Public Service and Administration as well as the National School of Government. Seven HODs had not submitted their forms and two had not disclosed their financial interests.

351 cases of financial misconduct were completed, while 335 were not. In total the cases amounted to R253.4 million of which R184.9 was not recovered. The PSC was of the opinion that there was no consequence management in departments.

The PSC noted that while there was a decline in the number of invoices older than 30 days that were not paid, there was an increase in the value of these invoices. The main transgressors were the Departments of Water and Sanitation, Public Works, Agriculture, Social Development, Women, and COGTA.

Ms Mathenjwa said the placing of officials on long periods of suspension meant that departments were not dealing with discipline processes promptly. There had been a decline in the number of suspensions and of those longer than 30 days, as well as the associated costs of the suspensions.

She then spoke to performance against targets and to opportunities for efficiency, effectiveness and value for money. It would be a delicate task to manage performance and service delivery, against the expenditure cuts of government and the compensation ceiling arrangements as the MTBPS anticipated a reduction in goods and services of R21 billion in 2020/21 and R29 billion in 2021/22. Key questions for the Committee to ask was how the National Treasury would ensure budget alignment to key priorities of government such as the new District Service Delivery model; to what extent the AG has implemented the Public Audit Amendment Act; and what were the prospects for efficiency in the reconfiguration of government, given the public sector wage bill.

Discussion
Ms D Peters (ANC) asked which departments should be focussed on by the Committee to be held accountable to support other departments. ‘What additional support was needed for municipalities or the Department of Public Service and Administration (DPSA)’? ‘What had the Public Service Commission (PSC) done to pressurise departments to meet compliance due dates for financial disclosure’? She said the DPSA and the School of Government were also culprits. On the payment of invoices, she said the Committee needed to engage with portfolio committee chairpersons on the matter. The Department of Women appeared to have a lack of capacity or skills, because every year invoices were not paid and what type of services was procured by this department from one service provider for over R1m. She said the lack of delivery in the Department of Rural Development and Land Reform (DRDLR) gave a sense of the challenges of rural development and the migration to cities. The delivery of basic services in rural areas was not happening and there were delays in land restitution and redistribution. ‘How could the Office of the Presidency perform at 67%, when it contained the Department of Monitoring and Evaluation? ‘Was it not monitoring and evaluating itself? Why were people rewarded when they had not delivered’? ‘How were departments which contained legal services units evaluated, as they outsourced some of their work’?

Ms R Komane (EFF) was concerned about the performance of departments, as presented in the presentation, and asked what should happen in terms of consequence management. On the late payment of invoices, she wanted to know if a thorough assessment was done by the PSC to understand why late payments occurred and what the contributory factors were. On financial disclosures, she asked if the PSC identified major issues that needed the attention of Parliament.

On the question of decreasing the number of employees to reduce the wage bill, Mr Z Mlenzana (ANC) said shortages in key positions needed to be considered. On provinces with perpetual procurement issues and of going over-budget, he asked where the buck stopped, where responsibility lay. He asked who audited the impact of expenditure, that is, who audited activities.

Mr D Josephs (DA) asked if there was a policy for services to informal settlements. ‘Were there any vacancies in the PSC and were there any challenges in the capacity of the PSC which could impact its ability to fulfil its mandate’? ‘Had the PSC interrogated the President’s proposals to restructure departments’? He said the teacher: student ratio was very important for good education outcomes. He asked if there was any form of consequence management on non-compliance with HOD or senior management for not submitting financial disclosure documents. His opinion was that performance bonuses were brought in because the economy and economic growth was good. He said performance bonuses should be based on performance especially in state owned entities. He said the matter at hand was implementation, and in that regard, capacity needed to be built. Where in the public service was there a lack or shortage of capacity?

Mr O Mathafa (ANC) said the PSC’s mandate was oversight and it had given some directions in the presentation. ‘Was there a punitive element to the directions given, like for example, where officials did business with the state’? He said there were reasons why disclosure documents were not provided. He had noted that many individuals especially in the Department of Health went to their businesses and not their work. ‘How responsive was the PSC to current affairs like SONA’? ‘How did the PSC ensure realignment by departments with the President’s announcements’? ‘How would policy be linked to under-performing departments that wanted a budget’? ‘Was there a framework or a standardised policy to deal with such instances’? One of the big challenges was unemployment which was a result of underspending. Small enterprise business lacked the market penetration while the environmental threat of poachers and deforestation were also examples of issues. ‘Were departments alive to such challenges’? ‘Did the cost of suspended officials also include salary adjustments for officials placed in an acting capacity in those positions’? Departments were not dealing with the disciplinary process but there were time limits to cases and if they were exceeded, cases expired.

Mr X Qayiso (ANC) said the performance of individuals should not be measured against the economy because it was a contract with an employer. On the issue of violence against women he said there had been a call for more police and the President had responded. ‘How would the public sector wage bill be cut when there would be increases in police personnel’? He said HOD’s not accounting for the submission of full disclosure documents was serious. He said this was a matter that ‘must’ happen. ‘To what extent had the PSC clamped down on this matter’? He said that the PSC should be telling the Committee about the reconfiguration of the Department, not the other way around. He said consultants were an extra-ordinary cost, as there were legal services people employed in departments.

Ms Komane said it would be helpful to get to know what the PSC could do and what the Committee could do. It would be helpful to know what the mandate of the PSC was.

On which departments should be held accountable and what added support DPSA could give, Mr Leballo replied that there were a number of departments including the Departments of Water and Sanitation, Human Settlements, Defence, Military Veterans and Rural Development and Land Reform which needed to be engaged with. The PSC had engaged with these departments to assist them with their challenges. He said the report being presented was based on 2018/19 but there had been changes since the start of the sixth parliament. The new Minister of the DPSA was open and pronounced on issues and was supportive of the PSC and wanted the PSC to work closely with the DG. He expected the report after six months would read differently and better than the current one.

Ms Mathenjwa said it was most important that there be a stronger central government and a stronger DPSA and Treasury to assist where problems arose. She said sections of the Constitution were invoked for dysfunctional provinces and municipalities but not for national departments. She said the political interface could at times create issues and problems leading to non-performance of departments.

On financial disclosures, Mr Leballo said there were deadlines and HOD’s failed to submit before the deadlines. Sometimes the executive authority also did not act before the deadlines. The PSC was engaging with executive authorities.

Ms Mathenjwa said the issue of financial disclosures was an example of why government was calling for a high standard of ethics. Financial disclosure forms (FDF) were sent to the Minister who was supposed to send it to the PSC for scrutiny and provide feedback. Data for 2017/18 show certain ministers responded and took disciplinary action, but FDFs needed to be looked into. A high standard of professionalism also needed to be looked at, but from a different angle, because it could not only be looked at from a compliance point of view only, because real corruption did not occur on paper. The ethical dilemmas in departments needed to be confronted and addressed. She said it was a professional ethics issue where for example people came to work but did not work.

On the non-payment of invoices, Mr Leballo said the PSC was engaging with departments. Reasons given for not paying within 30 days were changes to banking details, but the PSC did not accept that as valid reasons for not paying.  

On consequence management, Ms Mathenjwa said government was not managing well, because government was co-managing with officials and there is a perception that Departments are co-managing with the unions, while other officials entered into the space of politics.

On the issue of non-payment of invoices, the PSC said it would appreciate the support of the Committee on this, because the PSC were inundated with service providers querying non-payment. She said the service culture was so bad that at times the calls from service providers were not taken and they did not have funds to take the department to court. There were valid reasons for non-payment, but there was also an element of corruption, where officials wanted a bribe to facilitate the processing of payments.

On performance bonuses, she said government officials wanted bonuses just for doing the work they were contracted to do.

On where the buck stopped, she said that at a higher level there was the Department of Monitoring and Evaluation and the PSC also did inspections, but each department had monitoring and evaluation units. These however, were only compliance driven, instead of monitoring and evaluating problems and addressing it within the department, where the responsibility resided.

She said the Performance Management and Development System (PMDS) were not working. Assessments were not done or HODs and DGs were last assessed three years ago and some did not submit performance agreements. Minister’s had to hold DGs accountable.

On the cost of suspended officials, she said that government did not allow extra money to be paid to officials employed in an acting capacity in a post, because the post was not vacant.

On how the PSC was dealing with disciplinary cases, she said that labour relations were an issue across the entire public service, if one looked at the large number of grievances that were referred to the PSC. The cases were around HR, recruitment, management issues and how labour relations were dealt with and the latter needed urgent attention.

On the wage bill, she said PSC had looked at the national and provincial figures of PERSAL. In his MTBPS speech the Minister had referred to 29 000 government employees earning R1m and over. There were 10 000 employees who were on salary levels 13-16 and SOEs needed to be looked into. There were about 700 SOEs all having board members, CFOs and CEOs and a CEO’s salary was much more than a DG. Many SOEs could be subsumed into the Department. She said a study needed to be done on the wage bill and what the bill should be for a country like South Africa with a population of around 57m people.

She said the mandate of the PSC was to do oversight and report to Parliament and the responsibility for running departments lay with Ministers. The PSC wrote letters and held meetings but it also did not have a big enough budget to do its work.

Mr Z Mlenzana (ANC) proposed a quarterly interaction with the PSC and especially between the current moment and the main budget bill in mid-February.

Mr Josephs said he was concerned about the comment of government about co-managing with trade unions. ‘How far had the PSC come regarding trade unions and government on guaranteeing the provision of essential services such as health, and what should be pursued to ensure such service’?.

Ms Peters asked if there were departments that had best practices for other departments that were experiencing challenges or underperformance to emulate. ‘Did the 2019 MTBPS make sufficient proposals to realise the developmental goals of government? What in the NDP needed revision to ensure that departments delivered on their NDP targets’?

On best practices, Mr Leballo said there were no departments that could be regarded as operating on best practice principles.

He said the directions of the PSC were binding. If a person was irregularly appointed and it was brought to the PSC’s attention, then the PSC gave direction that the department had failed in the matter of the appointment and the matter had to be taken to the labour court, whose decision was final. The PSC also gave recommendations. In most instances the executive authority agreed and implemented them and they were bound by prescripts to give reasons if they did not agree with the recommendations.

On the trade unions, Ms Mathenjwa said that public servants had rights, but there needed to be space for managing and space needed to be created to deal with labour relations. The problem was when management was not able to deal with labour and labour problems were created. In one instance a hospital operating theatre was blocked by employees and this could not be allowed to happen, even if labour had grievances. Who was running the institution?  Management feared union reprisals and this affected management systems. A manager should be able to tell someone they were not performing without having to fear the unions.

On the PSC’s response to the NDP, she said that this was difficult to answer, because the economy was not doing well as money was needed to do what was supposed to be done. The revision of the NDP was done and incorporated the lessons learnt, but she was unsure where Cabinet had approved the revised NDP.

The Chairperson noted the following key trends and situations regarding the PSC: the PSC’s call for the assistance of the Committee in its interaction with departments; its call to ensure that the delegation of authority was emphasised in engagements with departments so that service delivery was enhanced; the PSC’s concern of the departments’ monitoring and evaluation was not working as it should be because the work was compliance driven; the PSC’s call that a thorough study of the wage bill be done so Parliament could be fully informed when statements were made that the wage bill was bloated; the PSC’s comment on the inconsistent leadership of departments because of the political change of heads of departments and on the review of the PMDS because in its current form it was not assisting the department; the PSC’s call that attention be given to areas of misconduct which were costs to the departments, and that the use of consultants should be clamped down on. He said the PSC should engage with the Committee more often and not wait for a formal engagement.

Minutes
The minutes of the meetings of 9, 10, 22, 23, 29, and 31 October were adopted.

The meeting was adjourned.
 

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