DoD 2020/21 Annual Performance Plans; with Deputy Minister

Meeting report

Opening remarks

Dr Sam Gulube, Secretary of Defence, said that the Minister of Defence, Ms Nosiviwe Mapisa-Nqakula, had been booked off by her doctors and was not at the meeting.

 

The Chairperson outlined the agenda.

 

The strategic plans (SPs) and annual performance plans (APPs) were key for the Committee’s oversight of the Department. They provided the Committee with the information needed to measure the performance of the Department.

 

The Chairperson asked for any apologies before proceeding to the presentations.

 

Mr W Mafanya (EFF) had network problems and would join the meeting once the issue was rectified.

 

Mr A Gxoyiya (ANC) said he had received an apology from Ms M Mmola (ANC) who was also struggling to connect and would join as soon as she could.

 

Ms Mmola then joined the meeting.

 

The Chairperson asked Dr Gulube for any apologies.

 

Dr Gulube said the only apology was from the Minister.

 

The Chairperson asked Dr Gulube to introduce the delegation.

 

Dr Gulube asked the delegation at the Defence headquarters to introduce themselves as he was joining from a remote location.

 

The delegates from the SANDF present in the meeting were: the SANDF Head of Strategy, the SANDF CFO, Eric Siphiwe Sokhela, the Chief of the SANDF, General Solly Zacharia Shoke, the SANDF Chief of Human Resources, as well as the Chief of Military Policy, Strategy and Planning.

 

The Chairperson thanked the delegation and wished to inform the members before handing over to Dr Gulube that the Committee would be tabling a report that would be sometime after 2 June 2020. The National Council of Provinces (NCOP) would pass the Division of Revenue Bill on 2 June. Then in July / August 2020, Parliament would pass the Appropriation Bill. Later in July / August 2020, the Minister of Finance, Tito Mboweni, would return to Parliament with an adjustment budget. This adjustment appropriation could not come to Parliament before the main Appropriation Bill was passed. This bill would take all COVID-19 matters into account. There was nothing preventing the Committee from asking the Department where it expected changes to be as a result of COVID-19 at this stage, however.

 

The Committee was dealing with the main Appropriation Bill in the meeting. The adjustments would be dealt with later.

 

He handed over to Dr Gulube.

 

Dr Gulube thanked the Chairperson and said Mr Michael Cox would present the five-year strategy plan and one-year APP of the Department of Defence.  

 

He indicated that due to COVID-19 there would be expected adjustments, particularly to the APP. Changes to the budget allocated for the year would also happen. Because President Cyril Ramaphosa had deployed the South African National Defence Force (SANDF) to help against COVID-19, an additional budget had been requested and it was hoped that it would be properly processed and that the members of the Committee would support the additional appropriations to the Department of Defence. This would allow the Department to be better able to meet targets and requirements that were not foreseeable when the plans had originally been formulated

 

The Chairperson asked the presentation to begin on slide 38. He did not want things that needed no explanation for the members to be presented. Changes to baseline targets were more important. When dealing with the budget, he asked the changes to baselines be spoken to in order to save time for questions. The Committee had only been provided two hours for the meeting.

 

DoD Strategic Plan and Annual Performance Plan 

 

Mr Cox said he would begin on slide 44 as the other matters had been dealt with previously.

 

Departmental Imperatives: Ministerial Priorities

 

The lack of funding to implement the Defence Review in the past year was a priority to be addressed. This involved finding new funding models, implementation of austerity measures, and revenue generation to supplement the insufficient fiscal allocation through internal austerity measures and the sweating of assets.

 

Implementation of the South African Defence Review (2015) as a strategic direction was important to arrest the decline within the Department. The Minister’s priority to do this was to direct the defence policy to stabilise and create a sustainable defence force that was coordinated by an effective, efficient, and economically managed Department that was able to deliver against predetermined Government expectations. The decline in critical defensive capabilities in South Africa needed to be halted through targeted interventions directed at the capabilities that were at risk, were unsustainable, or needed to be enhanced to meet operational commitments. Ministerial direction would be provided to initiate the Defence trajectory through organisational capability interventions.

 

Strategic resourcing would be undertaken through revenue generation to supplement the insufficient fiscal allocation for the Department. The Minister would direct a focused effort to identify alternate funding and revenue generation streams which included: maximised reimbursements against agreed upon Memoranda of Understanding, as well as the sweating of departmental assets, amongst other avenues.

 

Another priority was the maintenance of the SANDF Establishment Force Levels of Human Resources. Minister Mapisa-Nqakula would direct the maintenance of the current operational capacity within current operational strength and resource considerations. This implied the continual rejuvenation of the human resource component therein. The SANDF Reserves remained vital to augmenting the current force levels required to conduct military operations inside and outside of South Africa.

 

The imperative of organisational renewal was targeted through ensuring appropriate organisational form and structure. Minister Mapisa-Nqakula would direct the positioning of the Defence Secretariat and organisation within the SANDF through the optimisation of the Defence Secretariat and organisation of the SANDF through the optimisation of the Secretariat and the SANDF Command and Control system. Duplicate structures needed to be eliminated whilst prioritising accountability, effectiveness and efficiency promotion within an ethical and corruption-free environment. Focus would be given to ensuring the SANDF was seen as a professional and disciplined military force.

 

Capability sustainment was prioritised through ensuring the serviceability and availability of the current main operating systems and the Prime Mission Equipment needed to be maintained at a set level. Focus would be given to the maintenance, repair, and overhaul of land, air, maritime and military health equipment that was required for force training and employment.

 

Ordered Defence commitments were prioritised through increased contribution to the National Development Agenda. There was an expectation of an increased utilisation of Defence capabilities to contribute to the Government’s National Development Agenda. The collateral defence utility would be used in collaboration with other Government departments to enhance contributions. The SANDF would retain its ability to respond to disasters both internally and in the region against reimbursement arrangements. The SANDF would continue to enhance peace, security and stability in Africa through the conduction of ordered defence commitments in accordance with government policy.

 

Departmental Imperatives: Secretary of Defence Focus Areas

 

The Secretary of Defence’s priority was to support and assist the Executive authority. The Secretary of Defence’s focus areas in terms of Departmental imperatives was to assist in the provision of Departmental direction through implementation of the South African Defence Review (2015) “DOD Plan to Arrest the Decline”. This made clear the importance of developing Departmental strategies that were aligned with current as well as possible future realities, which provided direction to the Department over the Medium-Term Strategic Framework (MTSF) (2019-2024) and into the future. The Department’s strategy would inform the development of subordinate Military and Defence Secretary strategies that would ensure congruence between organisational operations.

 

Another priority was Departmental resourcing. This was to provide direction focused on the prioritisation of the limited resources available and applying them to particular Departmental priorities that had been identified. This entailed the maximisation of income to the Department from traditional and non-traditional sources of funding that had been outlined in the Department of Defence Funding Model. These strategies included: i) the sweating of assets, ii) re-imbursements, and iii) implementation of cost-saving initiatives and austerity measures within the Department.

 

The Secretary of Defence was also focused on the acceleration of the development and implementation of a sustainable Human Resource Strategy and Plan.

 

In terms of Departmental organisational renewal, the Secretary of Defence was to help to enable the Executive Authority of the Department to exercise effective civil control over the defence function by: i) developing a Defence Enterprise Architecture Framework that was supported by end-to-end business processes for the Department, ii) the alignment of organisational structures under the Secretary of Defence that would: i) enhance internal systems of control to reduce and combat fraud and mismanagement of resources, ii) ensure an effective delegation regime, iii) ensure the application of consequence management in cases of non-compliance, and iv) ensure a Departmental culture of ethics and accountability through training in line with the policy and structures. Non-compliance had found its way systematically into the Department and needed to be stopped.

 

The Secretary of Defence’s role in terms of Departmental capability renewal required: i) the acceleration of the development and implementation of an integrated Departmental ICT system and ensuring its cyber security by rejuvenating its aging legacy systems, ii) establishing of strategic research capability at the highest level of the Department so as to ensure the effective direction towards long-term sustainability, iii) providing of civil legal capability in the Department that was separate from the Military Judicial System, iv) facilitating the function shift from the Department of Public Works and Infrastructure to the Department of Defence with regards to facility management, and v) facilitating closer working relations between the Department and the defence industry and defence-related industry actors so as to align interests and future viability.

 

Ordered defence commitments were the priorities to provide the enabling mechanisms to support the SANDF deployments that gave effect to the commitments of the South African government. The strengthening of defence diplomacy through appropriate cooperation agreements and processes, as well as ensuring authorised mandated legal instruments so as to enable and sustain ordered defence commitments, would be pursed in cooperation with the Department of International Relations and Cooperation (DIRCO) to achieve this focus area. Legal instruments would be put in place to receive disbursements.

 

Departmental Imperatives: Chief of the SANDF Focus Areas

 

The Chief of the SANDF’s focus in terms of strategic direction was to ensure interventions to arrest the decline of the SANDF. Areas of importance included: i) the identification and implementation of resourced interventions to arrest this decline in military capabilities required for operations, ii) identifying and maintaining the multi-mission capabilities that were required to execute the priority missions assigned to the SANDF, and iii) ensuring continued investment in research and development capabilities, as well as test facilities so as to sustain an appropriate knowledge and technology base within the SANDF.

 

Imperatives in terms of strategic resource managing were to be supported through: i) the implementation of internal regulations and procedures to enable increased procurement efficiency and proper life-cycle management, ii) the Chief of the SANDF was to assist the Secretary of Defence in the implementation of internal controls so as to minimise fraud, corruption, and irregular and wasteful expenditure, iii) identifying assets that were to be sweated so as to generate funds to augment the allocated budget, and iv) the disposal of redundant and surplus military equipment and assets.

 

An imperative for the Chief of the SANDF in terms of human resourcing was the maintenance of force levels. In order to support this, the Chief of the SANDF was focussed on: i) optimising personnel utilisation in the Force through the balancing between the use of regulars, reserves, and civilians, ii) ensuring military discipline through expedition of legal actions that enabled effective consequence management, iii) the maintenance of current operational capacity within the current operational strength so as to ensure the continued rejuvenation of human resources. The SANDF reserves would be used to augment the current force levels that were required to conduct internal and external military operations.

 

Focus areas for organisational renewal management for the Chief of the SANDF were: i) the rejuvenation of the personnel component in the Force through an approved and funded mechanism that would ensure upward renewal and functional career mobility, ii) aligning force preparation and personnel development with the organisational requirements, iii) finalising and approving the SANDF force design and structure based on a command and staff system approach, iv) enhancing military leadership through the optimal utilisation of external and internal training institutions and opportunities, v) aligning and migrating the personnel to the approved command and staff structure, vi) establishing a cyber defence capability within the SANDF, vii) enhancing internal systems of control in order to reduce and combat fraud and mismanagement of resources, and viii) ensuring internal systems of control, ethics and accountably.

 

In terms of capability sustainment management, the Chief of the SANDF’s focus areas were: i) ensuring maximised re-imbursement for internal and external operations, ii) focussing on the maintenance, repair and overhaul of prioritised prime mission equipment and ensuring serviceability to enable force employment, and iii) optimising the use of internal maintenance and repair capabilities.

 

Ordered commitments management was to be focussed on through: i) enhancing border safeguarding through the deployment of sub-units and the utilisation of appropriate force-multiplier technology, ii) supporting the South African Developmental Agenda through specific high-impact projects, such as Project Koba Tlala directed to rural small, medium and micro enterprises, and iii) contributing to South African foreign policy objectives.

 

The aging ICT systems were a big concern. They were detrimental to the mandate of fulfilling cyber defence. Funding was the biggest constraint in this regard. Additionally, modernising the ICT systems without having the capacity to protect them would continue to leave the SANDF vulnerable.

 

Department of Defence Enterprise Risks (Department of Defence Strategic Plan 2020-2025)

 

DOD Enterprise Risks and Mitigation Actions (DOD SP)

 

The Defence Strategic Direction according to the regulatory framework could be compromised by protracted departmental policy processes. Risk mitigation would be undertaken through the provision of strategic direction through institutionalising national policy, imperatives, and regulatory frameworks within the Defence funding allocation, which would support the Defence mandate over the medium-term strategic framework period. This risk would also be mitigated through instituting consequence management as a mechanism to address non-compliance to departmental policies that impacted the performance of the Department of Defence.

 

Another risk was the prevalence of corruption and fraud through weaknesses in key internal controls which increased the opportunity for these, resulting in losses of future resources in particular. This would be mitigated through the execution of the Department of Defence Corruption and Fraud Prevention Plan. Fraud and corruption would also be reduced through implementation of departmental policies, ethics and moral regeneration programmes, and the strengthening of internal controls.

 

The risk of high prevalence of litigation arose through the inability of the Department to comply with applicable legislation, prescribed policy and procedures, which were causing costly litigation processes and losses for the Department. This would be mitigated through the institution of consequence management as a mechanism for addressing the non-compliance that was impacting on the corporate governance in the Department. Appropriate legal advice would also be provided to the Department of Defence management so as to enhance the legality behind decision making, thus reducing costly litigation in the Department.

 

The risk of deteriorating Departmental facilities and infrastructure could result in: i) compromised defence readiness (including training of defence-ready personnel), ii) the prevalence of occupational health and safety fatalities and subsequent costly litigation, iii) a tarnished image of the Department, iv) negative impacts on morale, v) the possible escalation of leasing costs as well a fruitless and wasteful expenditure in the Department, and vi) increases in theft due to easy access to Departmental facilities. This would be mitigated through the promulgation and implementation of an overarching logistic strategy. An electronic Department of Defence immovable asset register (at Department of Defence state-owned and defence endowment properties) would be implemented. Functions would be devolved form the Department of Public Works and Infrastructure to the Department of Defence through an Implementation Plan which would be monitored and reported on.

 

Another enterprise risk was the forfeiting of rights on Department of Defence property with current land claims and possible illegal invasion of Department facilities may result in the loss of the facilities, impacting on the readiness and deployment capabilities in supporting the Defence mandate. This would be mitigated through the expedition of existing land claims and implementation of a contingency plan that identified new and alternative facilities.

 

Outdated ICT systems had not been integrated into the Department of Defence. This was a result of the lack of modernisation procedures which could lead to unreliable, unverifiable, as well as loss of Departmental financial and non-financial information, accompanied by possible threats to business continuity. This would be mitigated through: i) the implementation of the Enterprise Architecture Policy in the Department, ii) modernising and upgrading the Department’s core ICT systems through the Integrated Defence Enterprise System (IDES) to ensure the Department’s interoperability and connection with the Government-wide Integrated Financial Management System (IFMS), and iii) instituting the Public Service Governance Framework through the strengthening of the Department’s ICT policies and plans.

 

Department of Defence Response to the Portfolio Committee on Defence Questions

 

Question 1: The Department was asked to brief the Committee on its internal measures to ensure that its departmental staff and SANDF members were protected from the COVID-19 pandemic while discharging their duties.

 

A SANDF Order 02/2020 from 17 March 2020 had been issued in this regard. It included measures to protect the forces that needed to be instituted in each unit. These measures ranged from provision of PPEs for deployed members and those in military bases. They provided guidelines on training and there would be no course breaks, with members staying in their units until the completion of training. Measures which included the use of scanners and sanitisers for people entering units had been implemented.

 

Question 2: The Department was asked to advise the Committee on the effect of the COVID-19 pandemic on its regional peace keeping efforts.

 

The SANDF Order 02/2020 from 17 March 2020 was also applicable in this regard as it covered the provision of supplies of PPE to deployed soldiers. The United Nations (UN) had medical support plans and life support supplies such as PPE and ventilators in place. Rotations of regional forces had been stopped until 30 June 2020.

 

Question 3: The Committee Requested the DOD to brief it on plans to contain its spending on Compensation of Employees. This had been raised previously as a major concern by the Committee and would likely result in renewed irregular expenditure if not contained. (3 Chief HR)

 

The matter had been raised in 2018 and 2019 when planning instruments for the Department had been presented. The Minister of Defence and Military Veterans had directed that the Department should remain within the National Treasury-approved budget ceiling. This had not materialised. The Department had then approached National Treasury in 2019 to lift the cap placed on compensation of employees by an amount of R2.9 billion. This was declined by National Treasury on 22 May 2019. The SDA was utilised by the Department to offset the compensation of employee’s shortfall over multiple years. As a result of the reduction of the SDC in the 2021/22 financial year, this would no longer be possible. This had been raised in May 2019 where an accelerated retirement for the SANDF had been proposed, along with a SANDF rejuvenation plan. The compensation of employees shortfall in 2020 according to the Department’s planning instruments amounted to a R31 billion allocation (with a R3.1 billion shortfall) in 2020/21, a R33 billion allocation (shortfall of R3.5 billion) in 2021/22, and a R34 billion allocation (shortfall of R4.8 billion) in 2022/23.

 

The SANDF Chief of HR said the President had met, at the beginning of 2020, with the National Treasury to discuss the shortfall.

 

It was not possible to reduce numbers below 75 000. The Department was working on the matter with National Treasury, which had undertaken to look into the requirements. Treasury had requested a rejuvenation plan to alleviate this. However, reduction of the cost of expenses was currently “not on the cards”.  

 

The Chairperson said that the Department may be asked to return the Committee to examine the personnel plan and budgeting more closely. It looked like an area for serious discussion.

 

Question 5: The Department intended on raising R3 billion over the MTEF through the sale and leasing of redundant assets and equipment. How would this process unfold? Would Armscor manage the process? Which state institutions (other than Parliament) would audit and oversee the fundraising process?  

 

Mr Cox said a combination of expertise was involved in the fundraising process.

 

According to the 2020/21 medium-term expenditure trends, 63% (R99 billion) of the Department’s total budget of R156.3 billion over the MTEF was allocated to compensation of employees with a human resource strength of 75 0000 personnel. The Department would review the composition of its personnel and military capabilities in its aim to strike the best balance between its regular, reserve, and civilian force components.

 

Efforts would be made to ensure a Departmental response to the constrained fiscal environment and would include: i) the use of internal personnel for basic maintenance and repairs to gain a decrease in planned expenditure of R209.8 million, ii) the introduction of measures to enhance revenue, including the leasing and selling of defence assets to generate R3 billion, and iii) maximising reimbursements from the UN for equipment that was used as part of South Africa’s peace support operations in the DRC, generating R1.9 billion.

 

The generated revenue / savings would be utilised to sustain the capabilities in the land, air and maritime defence programmes.

 

Question 6: The Committee requested the Department to brief it on its contribution to the National Development Agenda.

 

The National Development Plan (NDP) Vision 2030 direct contribution was based on Priority two which included economic transformation and job creation through acquisition projects.

 

The medium-term strategic framework (MTSF) for 2019-2025 direct contribution was based on Priority six of producing social cohesion and safer communities through borderline protection and provision of support to other Government departments. This would be done trough: i) execution of the Department’s border safeguarding function, ii) protection of the territorial integrity of South Africa and its people, iii) enabling national, regional, continental, and world peace, security and stability, iv) the latter would be undertaken, where required, in cooperation with the SAPS and in support of other Government departments. Cooperation in regard to securing borders as per Priority six of internal operations would be done in conjunction with the SAPS.

 

The MTSF also provided a direct contribution through Priority seven of producing a better Africa and world through participation in peacekeeping missions and combatting maritime crime and piracy, as well as search and rescue operations and humanitarian assistance.

 

The Department would also conduct external operations in support of the United Nations (UN) and African Union (AU) peace missions, according to Priority 7 relating to external operations, as well as contributing to the Southern African Development Community (SADC) Regional Indicative Strategic Development Plan.

 

Question 7: The Department was asked to explain the relatively high cost of the Ministry in the Department (compared to other Departments) as found by the Fiscal Cliff Study Group.

 

The increased costs were attributed to the aircraft chartering required for domestic and international commitments by the Executive Authority. Additionally, the budget for the Presidential Medical Unit (PMU), which also supported former presidents and deputies in all health-related issues, was located within the office of the Ministry of Defence and Military Veterans.

 

Question 8: How would funds for capital acquisition be allocated over the MTEF? Given that the Special Defence Account (SDA) will see its transfer reduced from R5.353 billion in 2020/21 to R1.407 billion in 2022/23, would capital acquisition funds be reflected elsewhere as the SDA would be phased out?

 

There would be no funds for capital acquisition over the MTEF due to the R5 billion cut. Discussions with the National Treasury were ongoing in this matter.

 

Question 9: The Department was asked to advise as to whether there are any plans to increase the strength of the Land Border Patrol. The DOD should also explain how the additional R225 million set aside for border control by National Treasury over the MTEF would be utilised?

 

Border safeguarding remained in the Department’s medium-term expenditure trends with the intention (subject to availability of resources) to increase the SANDF’s footprint on South Africa’s landward borders (4471km), from 15 to 22 sub-units. This included the utilisation of technology such as sensors in support of the National Security Strategy. An additional R225 million over the MTEF period had been allocated for prime mission equipment (such as technology and sensors) for border safeguarding in the Force Employment Programme. These would serve as force multipliers to enable soldiers to increase the range of the borderline under their protection.

 

The South African Navy’s maritime security strategy allocation amounted on average to 37% of its total operational allocation excluding human resources, to safeguard South African trade routes and support the Blue Ocean Economy. The South African Navy’s predominant budget allocation was directed towards the maintenance and repair of vessels to execute the maritime security strategy. Current backlogs in re-fits, maintenance and repair of naval platforms, as well as insufficient budget allocations had rendered the Navy unable to adequately prepare the required naval platforms. This, alongside increased illegal activities in the South African territorial waters, posed a threat to South African economic growth potential and the shipping trade, particularly if the budget to the Navy was further reduced.

 

Question 10: The Department was requested to brief the Committee on the recently installed fence on the northern borderline by the Department of Public Works, in as far as it pertained to the role of the Department in that regard.

 

Inputs were awaited on this matter.

 

Question 11: Were there funds allocated to provide mid-life upgrades for (1) the SA Navy Frigates, (2) the SA Navy submarines and (3) the Gripen fleet? How much was transferred to the various programmes for these purposes and what were their timeframes?

 

Due to budget cuts, there were no funds allocated for this purpose. Even contracted projects would be experiencing a funding shortfall by 2021. The matter was, however, under discussion between the Department and National Treasury. Through the sweating of assets, funding raised would be used to help service the Navy.

 

Question 12: The Department was requested to appraise the Committee of the level of preparedness regarding its air lift capability given the two recent accidents involving the C-130 aircraft at Goma in the DRC and Air Force Base Waterkloof, respectively.

 

The South African Air Force had two C-130 aircrafts serviceable. One would be deployed for a sustainment flight to the DRC.

 

Question 13: The Committee requested explanations on the following increases/decreases in the economic classifications of the various programmes of the Department (Figures from the Estimates of National Expenditure):

 

Programme 1: “Property payments had increased from R976.5 million in 2018/19 to R1.184 billion in 2020/21”. This was an error. In terms of the amount for property payments, it was not decreasing from R976.5 million, but from R736.6 million. These were devolution funds from the Department of Public Works that had been earmarked by National Treasury for the payment of municipal services to the Department of Public works.

 

Programme 3: “The allocation Food and Food Supplies had increased from R652.2 million in 2019/20 to R742.9 million in 2020/21. This item was expected to rise by 15.2% over the medium term”. This was another error, in terms of the amount for Food and Food Supplies, the correct number was R562.2 million, not R652.2 million. The reason for the increase from R180 million on Food and Food Supplies was a result of the over ten percent increase in food prices in support of intakes.

 

Programme 3: “The allocation for Travel and Subsistence had increased from R342 million in 2019/20 to R439.1 million in 2020/21”. This increase of R97 million on the Subsistence and Travel Allowance was due to Departmental changes in policy, which had increased the daily allowances from 50% to 100% daily allowance. Yearly tariff increases for meals had also had financial implications for the Subsistence and Travel increases.

 

Programme 3: “In terms of fuel, oil and gas decreases from R244.2 million to R138.2 million – how would this impact South African Army operations?” The reason for the decrease of R106 million was due to the two years fixed budget that was introduced during the previous cycle and the system was locked. As a result, the Budget Manager could not align the budget.

 

Programme 4: “The allocation for Food and Food Supplies increased from R15.9 million in 2019/20 to R100.1 million in 2020/21”. The budget allocation of R15.9 million in 2019/20 was due to budget cuts the Department had received. The increase to R100.1 million was due to reprioritisation. The budget allocation was mainly for ration packs for soldiers. Actual expenditure was R123 million by the end of the 2019/20 financial year.

 

Programme 5: “The allocation for fuel, oil and gas had decreased from R97.5 million in 2019/20 to R45.4 million in 2020/21. How would this impact South African Navy operations?” The Navy would still execute all of its ordered commitments, such as Operation Corona (involving maritime border safeguarding) and Operation Copper (involving maritime security strategy). However, force preparation and training would be curtailed due to the budget cuts.

 

Programme 6: “The allocation for agency and support/outsourced services had decreased from R428.2 million in 2019/20 to R261.7 million in 2020/21. How would this ensure outsourced services were provided where the South African Military Health Service could not?” The consecutive budget cuts over recent years had resulted in Services and Divisions having to reprioritise their budgets so as to be able to address cost inefficiencies. The allocation towards outsourced services had always been significantly lower than the actually spending trend as an intervention to curb the necessity of medical outsourcing. The ongoing reduction in medical outsourcing did not achieve the level of efficiency required to ensure that medical outsourcing, whilst remaining within the budget allocation. When the in-year pressure on the cost of outsourced medical services, the shortfall would be addressed using virement.

 

Programme 7: “How would the additional R167 million allocated to Defence Intelligence for 2020/21 be utilised?” Defence Intelligence would utilise the additional funds for Project Flute, which entailed the strategic and operational surveillance capability of the SANDF and for the Cyber Security Implementation Plan.

 

Programme 8: “The allocation for property payments increased from R252 million in 2019/20 to R341.7 million in 2020/21”. These were devolved funds from the Department of Public Works that were earmarked by National Treasury for the payment of leases to the Department of Public Works.

 

Question 14: In Programme 6, why was the target for the ‘availability of medical stock’ considered classified? Members of the Portfolio Committee had raised this as a major concern in the past. The reasons for the classification of this target should be provided as it did not relate to any operational concerns.

 

Stock levels were key in determining the level of readiness of the SANDF and were hence classified. The numbers could not be made public. When reporting to the Executive about such matters, a report was always produced and would be provided to the relevant Parliamentary Committees containing the information.

 

The Chairperson asked to move to the medium-term expenditure trend slide.

 

Dr Gulube wished to add to the responses before doing so. On the cost of employment at the end of the 2019/20 financial year ending March 20, the shortfall was R3.2 billion. National Treasury had not supported the request to lift the ceiling on cost of employees. It was thus disclosed as irregular expenditure. This was not because the number of employees had been increased in the Department; it was because, since 2016, the numbers of costs of employees had cut by R3 billion a year. For 2020 the shortfall for costs of employment was projected to be R2.9 billion. Because of COVID-19 it would be put to National Treasury that the target could not be reached. The cost of employment ceiling would be asked to be lifted because the Commander in Chief had determined that 73 000 SANDF members would be deployed from regular as well as reserve forces to combat COVID-19. It was hoped that in 2020 there would be a sympathetic hearing from National Treasury as it was beyond the control of the Department to deploy to support other Departments to fight COVID-19.

 

On the budget for the Ministry, the reason for the higher than average budget was that the Ministry was overseeing two large departments. These were the Ministry of Defence as well as Military Veterans. Another sphere was state-owned enterprises (SOEs) – an example was the Armaments Corporation of South Africa (Armscor) which had its own acquisition agency. This was unique and required Ministerial oversight, thereby increasing expenditure.

 

There had been a conscious move of the budget for the Presidential Medical Team from the Department of Defence to the Minister so that Minister Mapisa-Nqakula could have direct oversight to see what was involved as what was mandated within the PMU. This included the mandate to support and render medical services to the serving President and Deputy President but also former presidents and deputies. From time to time these former officials travelled at short notice without visibility or planning. This was a conscious decision on part of Minister Mapisa-Nqakula and the Department that the budget needed to be moved to office of the Ministry. This had led to expenditure in the Ministry being higher than ordinary in Departments.  

 

On the matter of the border fence, when it came to borderlines, the SANDF was responsible for safeguarding borders. However, borderline fences as well as borderline access roads utilised in patrolling were competencies of the Department of Public Works and Infrastructure. The Department had no visibility on these projects, as well as the expenditure of such activities to develop and repair these roads and fences on borderlines.

 

The Chairperson thanked the delegates for the presentation. He said to Mr Cox that he had gone through the Medium-Term Budget Policy and found that some figures were missing. He said the matter was tabled for a future meeting and the Committee would move to questions. He asked for agreement on the ruling in light of limited time. He recommended there be another meeting on the HR matter of the Department.

 

Mr D Ryder (DA) supported this.

 

The Chairperson asked members to therefore try to stay away from the HR Personnel Plan as it would be dealt with at the forthcoming meeting.

 

Discussion

 

Dr B Holomisa (UDM) thanked the presenters. He had a question and a recommendation.

 

In the previous financial year strategy, what had actually been achieved, given the complaints about budget cuts?

 

The Committee and the Defence Corps Service Commission had been engaging troops on ground. He was worried that there was little suggestion of addressing grievances reported by the two institutions on what had been reported to them. He suggested the Committee summons Minister Mapisa-Nqakula, the Commissioner of Defence, and the Military Ombud, General Vusumuzi Masondo, to sit for two to three days and go through the complaints and check whether they had been integrated in future budgets to be addressed. This was to determine whether issues raised by troops on the ground did require budgetary remedies or whether they were matters of laziness. The areas that could be covered include uniforms, promotion, training and transport.

 

Mr S Marais (DA) asked for feedback on the UN refunding. It was said – in the presentation - that South Africa was currently on 70% of targets. This was strange because during the Fifth Parliament, there had been an oversight visit to the DRC, and members had been given a totally different figure indicating far below the 70% potential in terms of refundability.

 

According to that presentation, 80% of the refund was dependent on the helicopter squadrons that could only fly 40% of the allocated flying hours of the UN requirements. This indicated poor maintenance. The Department could probably double the refund from the UN according to this. He requested more in-depth information on the matter because the two points seemed extremely contradictory.

 

On the matter of refunding, the SANDF had been deployed along the Vaal River. This was an example of operations conducted for other Departments in Government. Had refunds from these Departments been received?

 

Regarding the role of the Secretary of Defence with regards to defence and defence-related industries, what were defence-related industries for collaboration?

 

He raised a point of concern and asked for more information on the matter. It seemed that for the next five years the Department would be stuck trying to achieve Milestone One of arresting the decline of the SANDF. How would this affect the programme of the Defence Review in terms of the five years per milestone going forward?

 

He wished to mention the HR issue despite the forthcoming meeting. He had been informed by the defence force corps of auxiliary forces. None of the presentations in the meeting had referred to the auxiliary force. More information in that regard was required.

 

He asked for more information on how cyber technology assets could be used as force multipliers.

 

On the issue of the SDA, he had been informed that it would be phased out. What would happen and what would replace it? Would it be replaced by a budgetary item or a separate funding mechanism in future?

 

Looking at the responses provided, Mr T Mmutle (DA) asked where the Works Formation was located in the programmes that had been referred to? This was in relation to the border fence issue. The Works Formation needed to be taking some projects back from the Department of Public Works into the Department of Defence to be carried by the Works Formation. How far was the Department in terms of implementation of this and reducing the allocations to the Department of Public Works?

 

Mr M Shelembe (DA) appreciated the work done by the Department in relation to COVID-19.

 

The issue of strategic outsourcing had been raised in relation to disposal of redundant equipment and assets. Was it possible for the Department to provide a list of the redundant equipment with the estimated values to the Committee? Did the Department have a programme of action? The strategic outsourcing could assist the Department to fulfil its obligations.

 

The Department of Cooperative Governance and Traditional Affairs (COGTA) had implemented regulations for the Department. However, other departments were not filling their promises. For instance, people were going to town every day for grant payments. However, no money was available when they arrived to collect the money. This resulted in SANDF members having to enforce movements because people had to return on days, they were not supposed to in order to collect their late payments. Was the Department able to engage other stakeholders in the matter? At the end of the day the army or soldiers were seen to be fighting people when they had to return into town on the wrong day. Other departments’ failings were affecting the work of the army.

 

The Chairperson asked the Department to supply responses. There could be time for a final round of questions after that. Before Dr Gulube responded, he said that the Deputy Minister of Defence, Thabang Makwetla, had joined the meeting.

 

Dr Gulube began the responses. He said General Masondo would be relevant to deal with certain questions. He asked the SANDF Chief Financial Officer (CFO), Eric Siphiwe Sokhela, and his team to assist as well. Deputy Minister Makwetla would be asked to follow up once responses had been undertaken.

 

In terms of achievements that had been made despite budget cuts, there were four areas that were key focus areas for the SANDF and the Department of Defence.

 

Number one was the strategic direction programme. Despite cuts, policy development had been strengthened in terms of implementation of major policy documents. In terms of the Defence Review (2015), within the activities that did not require additional budget, the Department had been able to bring in efficiency into the system and financial expenditures. Another focus was safeguarding of borders, where there were many challenges.

 

The second area was peacekeeping operations. These included international commitments to the Southern African Development Community (SADC) standby force in particular. All targets had been met, as well as directives and commitments that had been assigned in relation to this.

 

The third area was disaster management and support to the people of South Africa. This had been done despite budget cuts, for example, the lockdown operation in the Western Cape that had been ongoing from June 2019 to March 2020. These commitments had been filled.

 

Dr Holomisa was right about challenges, but the Department had nonetheless tried to meet those challenges with the limited resources available.

 

On the issue of grievances documented from various oversight visits as well as from various other oversight entities, such as the Defence Force Commission, he was happy to have the opportunity to address the Committee on what had been done to address grievances.

 

On Mr Marais’ point about the UN refund matter, the issue is that the UN would provide a refund based on the serviceability of the available capability that was provided by the SANDF. In the particular case mentioned, you would not talk about refunds for the deployments of troops (the serviceability of troops was 100% notwithstanding a major disaster affecting them) – this refund was 100%.

 

When it came to equipment provided, it was a matter of serviceability and was the relevant matter to consider. Major equipment included the Oryx helicopter transport and the Rooivalk fighter helicopter. This provided transport capability as well as fighting capacity. This was the 70% refund availability that had been mentioned.

 

Funding had been prioritised from different programmes into Denel Aeronautics that would allow for increase in refundability by addressing these problems. Denel could ringfence the funding – this would increase transport and helicopter fighter availability for service. Increased serviceability would result from the arrangement.

 

On the question of the difference between defence-related industry and the regular defence industry, it was a matter of semantics. For instance, IT companies that provided various IT related services would be utilised in the development of certain electronic systems for ships, aircrafts, submarines used by the SANDF. This was a dual use of systems. Denel was a defence industry company, others, such as these IT companies, were defence related as they provided support equipment.

 

On the matter of the Defence Review, he concurred with Mr Marias. The 2015 review had five milestones over each five-year period. The Department was still in the first milestone phase. Limited funding availability was the matter holding them back. Now that Parliament, Government and civil society were becoming aware of the importance of Department of Defence during peace times and when certain threats loomed over society, he hoped that funding of the Department and the SANDF would become more important. This would hopefully motivate for appropriate funding and leave them better at meeting certain milestones.

 

On the matter of auxiliary forces, the terms used were: regular force, reserve force, and auxiliary force. Members were called in on a basis of when they were needed. Doctors could be called in to assist South Africa’s Medical Health departments. Other instances saw accountants or engineers being called.

 

On the matter of force multipliers expressed by Mr Marais, the term was used to suggest that without putting more boots on the ground you could place equipment and technology on the ground to support personnel in working more effectively.

 

On the matter of the Special Defence Account’s (SDA) phasing out, this was a major challenge being faced. He hoped to convince National Treasury to review the MTSF budget and not phase out the SDA. Given latest deployment of the SANDF to support with COVID-19, certain equipment had been a requirement for the SANDF to fulfil this deployment. Projects would run into difficulties in the medium term as a result.

 

On Mr Mmutle’s question, he asked General Masondo to address the matter of the Defence Works Formation. It fell under the logistics programme of the Department. It was not responsible for fence and patrol roads maintenance at that stage.

 

On the matter of disposal of redundant equipment, this could be related to Armscor as an acquisition expertise agency. When equipment was identified, Armscor appraised, put value on it, disposed of it, collected funds and re-allocated.

 

On Mr Shelembe’s social grants issue, he agreed with the challenges being faced. The Department of Defence had not been that involved apart from the COVID-19 enforcement. There needed to be more contact with the Department regarding issues of grant collection. 

 

Mr Sokhela said the matter to be addressed by him was the SDA. There was continuous engagement with National Treasury at the time about the matter. Dr Gulube was correct that there was an estimate that there will be a cut. If the budget for the SDA is not cut, this would have many positive implications for important projects. Preparation of financial statements was being done including SDA allocations as was always done. There was no way there would be phasing out of the SDA.

 

The Chief of Military Policy, Strategy and Planning said the major concerns about the fence issue had been covered. It was a process of taking over functions. The Department had taken over some municipal functions such as electricity in areas of the border. In terms of the entire facility control, there was a structure in place in the Department that was being implemented.

 

The Department was also looking at contracting engineering professionals and would then assume the function of the entire facility for the Department of Defence.

 

On the matter of redundant equipment, Dr Gulube had answered adequately. In the main, Armscor was involved the entire way in the process, particularly on matters of Category A equipment, and often going down to Category B as well.

 

The Chairperson said all questions had been covered. There was a list of items requiring a separate meeting on. These were: i) the HR Plan, ii) grievances (Dr Holomisa’s point), and iii) the Defence Works Formation matter.

 

When the devolution of Public Works projects to the Defence Works had been responded to, the Committee was not particularly interested in whether the Defence Force was given the function of paying municipal services accounts such as water and electricity. This was done by the SAPS as well. The focus was on the devolution of the entire infrastructure programme to the Department of Defence. Through the use of skills such as engineers, the Department could do more in terms of evolving its own infrastructure. On this matter of devolution, nothing had been done. The nub of the issue was the entire infrastructure portfolio, not the municipal accounts matter.

 

He asked if the Deputy Minister Makwetla wished to add anything.

 

Deputy Minister Makwetla thanked the Chairperson. He accepted the information provided by the Department on areas where inquiries were raised. He said more detail could always be added.

 

Some questions with clear concerns were well placed. An example was the issue raised by Dr Holomisa of consciously moving forward that at the end of every financial year that there was something purposefully achieved with the limited resources available on what was planned by the Department.

 

In terms of grievances of personnel and troops, it was important to tighten up processes of where grievances were voiced, particularly where they implied financial shortages. The budget needed to prioritise where shortages were found.

 

On concerns about refunds to the Department of Defence for services rendered, he appreciated that the Department was forever caught between a rock and hard place on the matter. It was an emergency Department in the nature of its work. The SANDF was called upon every now and again to deal with urgent problems. They could not say they would only intervene once they had been paid, they mostly acted first before costs were covered. The slowness of other departments in supporting the Department of Defence with COVID-19 spending was worrying. Money spent was at times never refunded.

 

He was otherwise happy with what had been covered.

 

The Chairperson said that he wished to end the question session in the view of time. Justice had been done to the inquiry. The Committee had met on its own and developed a long list of questions from the meeting to be sent to the Department to request them to incorporate into their presentation at the day’s meeting. This had been well done. It was the “bite”.

 

The second bite was the questions that had been posed in the meeting. The Department had answered these as well.

 

The last bite would be when dealing with the focus areas identified by the Committee (in a separate meeting). These included the HR Plan, grievances, and the Works Formation.

 

The discussion on the budget could then be closed.

 

Consideration and Adoption of Minutes of 01 May 2020

 

The Chairperson said the meeting would deal with minutes. He asked whether he could take the minutes as having been read by the members.

 

Mr Marias said that some of his questions had not been included in the minutes, such as his question on the phasing out of the SDA. He would send them to the Committee secretary be included in the minutes.

 

The Chairperson said that the Committee would reflect on all the minutes mentioned. The two meetings would reflect as one.

 

Mr Marais said he could not support the minutes without the inclusion of his content.

 

The Chairperson said that was fine and the matter would be looked into and then sent to the Department with the aforementioned replies.

 

The amendment was accepted.

 

The meeting was adjourned.