National Departments 2019/20 Quarter 3 Expenditure Performance: Committee Staff Analysis

Meeting report

Briefing on Department’s 2019/20 Quarter 3 Performance

Mr Musa Zamisa, Committee Researcher, told Members that five departments had performed well. They had either underspent or deviated by less than 1 percent from their projections. They were the departments of:

​Ten departments did not perform well. These were the departments of:

• Women, Youth and People with Disabilities;
• Communications;
• Correctional Services;
• Mineral Resources and Energy;
• Police.

​Ten departments did not perform well. These were the departments of:

• Social Development. There was underspending of R14.6 billion, or 9.6 percent of projected spending;
• Higher Education and Training: underspending of R3.3 billion (3.9 percent);
• Human Settlements: underspending of R1.7 billion (7.5 percent);
• Cooperative Governance and Traditional Affairs: underspending of R4.5 billion (7.0 percent);
• Trade and Industry: understanding of R761 million (11.0 percent);
• Agriculture, Fisheries and Forestry: underspending of R666.1 million (10.4 percent);
• Public Works: underspending R497.1 million (8.0 percent);
• Public Enterprises: overspending of R13 billion (61.1 percent);
• Science and Technology: overspending of R902.4 billion (16.3 percent);

Small Business Development: overspending of R214.4 million (14.9 percent).

The Research Unit recommended that four of the poorly performing departments be invited to appear before the Standing Committee. These were the departments of Human Settlements; Agriculture, Forestry and Fisheries; Higher Education and Training; and Cooperative Governance and Traditional Affairs.

Department of Human Settlements (DHS)

The Committee was informed that it was of concern that 98% of the underspending of R1.7 billion occurred in the Housing Development Finance Programme. This was due mainly to the withholding of grant funding. Service delivery protests were largely centered around the lack of human settlements. Access to housing often predetermined access to basic sanitation, electricity and general wellbeing. Some residents who had been given houses were still without title deeds. In spite of a greater need for human settlements, budget cuts would continue over the period of the 2020 Medium Term Expenditure Framework (MTEF). 

Department of Agriculture, Fisheries and Forestry (DAFF)

Among the main reasons for the underspending of R661.1 million was a delay in the transfer of R360 million to the Land Bank for the blended finance loan programme for black producers. The delay was due to a failure by DAFF and the Land Bank to reach agreement. The report said it was of concern that intergovernmental disagreements should delay progress in such a high impact spending area.

Further, the Department had failed to fill 326 positions, raising concerns about its capacity to contribute to job creation and economic growth. The report asked why the Department requested funding for vacant positions if it was not going to use it?

Department of Higher Education and Training (DHET)

There was high underspending of R2.8 billion in the University Education Programme mainly due to delays in the transfer of critical grants for building universities' capacity and infrastructure and for providing student housing.

The presentation highlighted that the government was facing destructive student protests centered on insufficient capacity and lack of student housing.

There were delays in filling critical positions in the department’s Skills Development Programme and at technical and vocational education and training (TVET) colleges and at community education and training (CET) colleges.

Cooperative Governance and Traditional Affairs (COGTA)

There was underspending of R3.6 billion in the Institutional Development Programme. This was due to the withholding of funding for municipalities because they had unfunded budgets and persistently underspent on conditional grants.  The report said this occurred almost every financial year and there was a huge impact and service delivery.

There was underspending of R1.1 billion in the Local Government Support and Intervention Management Programme. The main reason was the withholding of funds from the Municipal Infrastructure Grant (MIG) because of non-compliance with requirements. This too occurred almost every year with a significant impact on service delivery, economic growth and job creation.

There was a “very high” vacancy rate of 13.2% and underspending of R2.4 million on compensation of employees.

Discussion

Mr A Sarupen (DA) suggested that the Department of Public Works be added to the list of those to be called before the Committee.  It was known that the department had achieved only 30% of its targets, yet the report before the Committee showed underspending of only 8%.

Ms D Peters (ANC) said the problems of underspending of funds for human settlements would be the result of provincial governments not spending the money transferred to them by the national department.

Mr Z Mlenzana (ANC) suggested that the DAFF capacity constraints could be due to people being placed in positions for which they were not suited. He suggested that staff who “came in through the wrong door” should volunteer for training in the work they were required to perform. The committee needed to develop mechanisms for interacting more with departments such as the National Treasury and the Department of Planning, Monitoring and Evaluation (DPME) which had a responsibility to oversee and guide other departments. These departments could assist the Committee in its oversight functions by supplying it with relevant information.

Mr O Mathafa (ANC) agreed with Mr Mlenzana. He believed there should be a skills audit throughout government to ensure that people were in the right positions. Service delivery took place at the micro and not the macro level. Voters bore the brunt of officials failing to perform their tasks. He knew of residents at Eersterust who had been waiting for nine years to receive title deeds which they had been promised. The Gauteng Government had launched a big development project with great fanfare. It had to be called off because of a failure to make use of a grant for providing bulk infrastructure. Officials did not know how to deal with grants.

People were subjected to man-made disasters because government departments failed to coordinate their planning. For instance, people were given houses in an area that was subject to regular flooding from a nearby power station. The SA Local Government Association (SALGA) should join COGTA at the proposed committee hearings. 

Mr Mathafa said the national budget presented to Parliament was “rigid” and did not reflect priorities outlined in the State of the Nation Address (SONA).  The DPME should assist the Committee in measuring performance against promises made.

Ms Peters said the large number of vacancies in departments was worrying. The Department of Public Service and Administration (DPSA) and the Public Service Commission (PSC) should perhaps be called to explain why it was not possible to fill positions.

The Acting Chairperson said underspending at the Department of Trade and Industry was of concern at a time when the country was facing widespread job losses. On provincial spending of grants, he suggested that the Committee could identify strategic areas and visit certain provinces to engage with the authorities at that level. This would convey a message that “we mean business and are not just talking to the ministers.”

Mr Mlenzana questioned whether the Committee’s oversight of departments was effective. They appeared before the Committee, but concerns raised at these meetings appeared to be ignored. “Will we get to the point where we are sitting for the sake of sitting?” he asked. “Are our teeth just for smiling purposes?”

The Acting Chairperson asked for the views of the Parliamentary Budget Office (PBO).

Ms Nelia Orlandi, Deputy Director, PBO, said the way in which the budget was structured made it difficult for the Committee to “follow the money.” 70% of the national departments funds were transferred to provincial and local government entities. The Committee did not receive report-backs on what thát money was buying.

Mr Sifiso Magagula, Committee Content Advisor, said the Committee did have the teeth to bite, but that depended on its willingness to bite during the budget appropriations process. For two years, DAFF and the Land Bank had not been able to make use of funds allocated under the blended finance programme. The Committee could question why it was again being asked to appropriate money for this programme.

Mr Zamisa said the committees’ researchers would incorporate issues raised by members in their work going forward. He noted members’ frustration about the lack of response to concerns they raised. There needed to be a tracking mechanism to see whether recommendations in committee reports were implemented.

Mr Magagula suggested that the Committee could earmark one day in each parliamentary term to reflect on the work it had done and what had been achieved.

Mr Sarupen said there was a mismatch between the government’s financial reports and its performance reports, because they covered different periods. They should be aligned so that they spoke to one another.

Ms Peters said the Committee needed to raise its profile and make citizens aware of the issues it was raising with departments. It needed to use its teeth and not be “mesmerised” by smooth-talking officials.

The Acting Chairperson agreed that the Committee should improve its communication. He thanked the researchers for the work they were doing.

The meeting was adjourned.