DPSA, NSG, PSC & CPSI Revised 2019/2024 Strategic Plan and APP for 2020/2021; with Minister

Meeting report

Opening remarks

The Chairperson said that the meeting would not be a repeat of the previous meeting’s report, but rather a focus on problematic areas that had been adjusted. It was important to get a sense of the funds that had been moved, and the different departments needed to give reasons as to why funds were moved from one specific programme to another.

Mr Senzo Mchunu, Minister of Public Service and Administration, said the adjusted budgets posed several challenges to all of the portfolios. The Committee needed to keep up with the Strategic Plan that had been developed for the next five years. The Annual Performance Plan (APP) had to be updated for the coming years, as it would be affected by the budget cuts implemented by National Treasury due to COVID-19. The Committee had to be very careful in prioritising the budget, and consider its impact on the programmes.

DPSA revised strategic and annual performance plans

Ms Yoliswa Makhasi, Director-General (DG): Department of Public Service and Administration (DPSA), and Mr Masilo Makhura, Chief Financial Officer (CFO): DPSA, presented the revisions to the 2020 - 2025 Strategic Plan and the 2020/21 Annual Performance Plan (APP).

Programme One: Administration

The annual targets in the following areas remained unchanged:

• Monitoring of fruitless, wasteful and irregular expenditure;

• Monitoring of compliance on the status of broad-based black economic empowerment (BBBEE);

• Draft Public Service Amendment Bill submitted to the Office of the Chief State Law Advisor for pre-certification; (Medium term strategic framework target)

• Consultations with the Department of Cooperative Governance on the draft Public Administration Management Amendment Bill. (MTSF target)

• Regulations on selected areas of the Public Administration Management Act developed; (MTSF target)

• Review of the identified DPSA policies commenced; and

• Annual report on the compliance by national and provincial departments with DPSA policies produced.

 

Programme Two: Policy Development, Research and Analysis

Consultations would be held with national and provincial departments on the full implementation of the Organisational Functionality Assessment Tool. This would replace the issuing of the tool to national and provincial departments for implementation (MTSF target). A quarterly report on the compliance by national and provincial departments with DPSA policies would be produced. 

Programme Three: Public Service Employment and Conditions of Service

This programme would see the commencement of the personnel expenditure review would replace the development of the wage setting mechanism for the public service. A transition plan for the implementation of the uniform job grading system would be developed. Guidelines for the implementation of proposals on the reduction of selected costs in public administration would be issued. Other initiatives included the development of a programme to improve the management of discipline within the public service; monitoring of the implementation of the Performance Management and Development system for Heads of Department, Senior Management Service (SMS) and levels one to 12; a job evaluation system for the public service to replace the issuing of approved SMS post provisioning norms and standards for implementation by national and provincial departments, and production of a quarterly report on compliance by national and provincial departments with DPSA policies.

Programme Four: Government Chief Information Officer

The main elements of this programme were:

• An audit report on the implementation of the national e-Government strategy issued to national and provincial departments. (MTSF Target)

• A public service data governance framework submitted for approval.

• Status and recommendations for improvements to the public service information and communication technology (ICT) infrastructure developed.

• A public service information security standard issued to national and provincial departments.

• Production of a quarterly report on the compliance by national and provincial departments with DPSA policies.

Programme Five: Service Delivery Support

The final revised Batho Pele programme would be developed, and Public Service Month and Batho Pele awards would replace the submission of the programme and awards for approval. The second generation African Peer Review Mechanism (APRM) country review would be conducted. A business processes modernisation programme would be developed (MTSF target), and a quarterly report on the compliance by national and provincial departments with DPSA policies would be produced

Programme Six: Governance of Public Administration

The main elements of this programme were:

• Guidelines on conducting lifestyle audits issued to national and provincial departments. (MTSF target)

• Database on public service employees appointed as board members to entities compiled. (MTSF target)

• Further category of employees in the public service designated to disclose their financial interests.

• Analysis conducted on the adherence by designated employees from national and provincial departments to the financial disclosure framework. (MTSF target)

• Cabinet memorandum on the retention of Heads of Department (HODs) developed.
• Development of a revised outline of the occupational dictionary to replace the development of the job competency framework for the public service. (MTSF target)
• Guidelines for SMS members’ participation in professional bodies issued to national and provincial departments. (MTSF target)

Breakdown of Budget Reduction per Economic Classification

Compensation of Employees:

This had been cut by R31 million, from R333.7 million to R302.7 million, and was related to savings identified on vacant funded posts, although it should be noted that the DPSA would still be able to fill the posts.  

Goods and Services:

A R49 million cut was proposed out of the R185.9 million budget, leaving R136.9 million available. The savings were derived mostly from a R22 million (70%) cut in domestic and foreign travel. Areas where reductions had also been made included catering, venues and facilities, training and development, and stationery.

Other cuts were related to specific projects, such as supply chain management, office accommodation, the Personnel Remuneration Review Commission (PRRC), the Government Employees Housing Scheme (GEHS), the public service ICT E-enablement for Gartner service, data retrieval from the Deeds Office, and izimbisos.

Reprioritisation of Funds

The reprioritisation of funds amounted to R1.4 million in Programme 1. These funds would be utilised to cater for COVID-19 pandemic projects like the procurement of personal protective equipment (PPE), the implementation of Microsoft Teams, and disinfection of the Batho Pele building to ensure health and safety compliance.

The DPSA was also responsible for the Urban Thusong Service Centre in Maponya Mall, so an amount of R120 000 had been reprioritised within Programme 5 from public participation and social dialogue to Maponya Thusong.

 

CPSI revised strategic and annual performance plans

Ms Lydia Sebokedi, Acting Executive Director: Centre for Public Service Innovation (CPSI), presented the revised annual performance plan 2020/21 and strategic plan 2020/25.

She said that the CPSI had not changed its APP and was maintaining its targets. Its mandate was to drive and entrench innovation in the public sector, so the COVID19 impact on the entity was:

• Face-to-face engagement with service delivery officials on site for assessment of the challenges, capacity and engagement on potential innovative solutions was negatively affected;
• Face-to-face engagement with developers in the National System of Innovation (NSI) and site visits to service delivery points impacting on projects related to the Development and Replication of innovative solutions were curtailed;
• Site visits as part of the verification of solutions for the Public Sector Innovation Awards programme  would not be possible; and
• Innovation workshops and conferences would be conducted virtually, thus possibly impacting on the number of officials to be capacitated and/or the quality of the workshops.

Mitigating measures included hosting virtual meetings, webinars and workshops, but development an replication projects would be delayed

Impact of revised budget on overall allocations

As required by the 2020 special adjustment budget guidelines, the CPSI had identified R6 million to contribute to the response package announced by the President that must be partly funded through the reprioritisation of the existing baselines of departments. The proposed saving from the CPSI constituted 32% of its consolidated non-interest, non-compensation budget.

Ms Sebokedi summarised the areas where the budget could be reduced. These were:

• Travel and subsistence -- R2.3 million. An 80% reduction in expenditure was anticipated as a result of the national lockdown, as travelling could not take place. Some of these savings would be redirected to unfunded projects. 
• Lease payments -- R 1.9 million. The unplanned expenditure relating to working online and towards Covid-19 measures would also be funded from the unspent funds allocated to lease payments.  The funds would be unspent as a result of the CPSI’s relocation to the DPSA’s Batho Pele building.
• Venues and facilities – R925 000. The annual Public Sector Innovation Conference and Awards Ceremony would most probably not be hosted in the traditional way. The CPSI was looking at hosting webinars to replace these programmes, which would cost less to host.  Savings had also been identified in other areas, such as strategic planning sessions, which would not require the procurement of a venue.  Alternative methods of hosting the innovation sector Specific workshops had also been sought, which would also result in savings on venues and facilities.
• Contractors and marketing – R619 000. The anticipated budget for audiovisual and marketing would not be used for the annual Conference and Awards Ceremony. Some of the savings would be used to upgrade the CPSI’s IT infrastructure and platforms as a tool for engagement with departments.
• R256 000 of anticipated savings had been identified in other line items such as communication, catering, stationery and assets, due to the lockdown.

Impact of revised budget on service delivery targets

Ms Sebokedi said the achievement of targets that required on-site work at service delivery points may be affected -- for instance, the replication programme and the development of solutions that requiredvisits to service delivery points to monitor implementation. The verification of innovation projects as part of the Public Sector Innovation Awards programme would also be affected, and may negatively affect the quality of innovation projects. There would have to be a change in the mode of presentation for innovation knowledge platforms. However, the CPSI did not foresee any changes to the Strategic Plan at this stage.

 

NSG revised strategic and annual performance plans

Mr Busani Ngcaweni, Principal: National School of Government (NSG), and Ms Phindile Mkwanazi: CFO, NSG, presented the adjustment to the Budget Vote the revised APP for 2020/21.

Describing the implications of the Covid-19 pandemic on the mandate of the NSG, they said that the implementation of the mandate (constitutionally and legislatively) placed the entity at the forefront of strengthening state capacity, and would require interventions and initiatives across the three spheres of government, legislative sectors, as well as state-owned enterprises (SOEs).

In supporting Priority 1 (a capable, ethical and developmental state), it had to be sufficiently resourced and capacitated to deliver education, training and development interventions. However, in fulfilling the mandate, it had to recover costs for revenue generation to augment the training trading account (TTA) for financial viability and institutional sustainability, as 20% of its revenue came from the fiscus and 80% was self-generated.

The NSG had already highlighted the deficit occasioned by the cancellation of training because of the pandemic during the past four months, which had been before the adjustment budget. This had had a significant impact on the NSG’s ability to sustain itself, as the current budget and reserves could not absorb the impact of losses. In the first quarter of this financial year, no face-to-face training had been delivered, only online learning. Many face-to-face programmes, such as the Winter School on Economic Governance, the Thought Leadership Series, and Executive Induction, had had to be reconsidered for later dates or shifted to online platforms

The NSG offered the majority of its education, training and development (ETD) interventions through face-to-face learning, and had initially set an overall target of 43 600 for the 2020/21 financial year, with a revenue target of R132 million. The revenue generation had been calculated on a scenario of a maximum of 20 learners per class. In keeping with social distancing and personal protection protocols, the NSG would have to ensure smaller class sizes for face to face training, and ensure adequate screening of learners. The effect of the COVID-19 pandemic would impact on the NSG’s ability to reach these training numbers and generate revenue, especially for face-to-face learning. It was likely to see the second quarter also being impacted. It had therefore had to revise downwards the training numbers and the revenue generation.

The other option for the NSG was online learning. However, this would still not enable the NSG to generate significant revenue, as the online learning tariffs were lower than the face to face training tariffs.  Furthermore, upgrading the current ICT infrastructure may not be able to be in place to recover lost time.

NSG’s response to the COVID-19 pandemic 

In pre-empting these challenges and implications, the Minister of Public Service and Administration had approved a response plan from the NSG, which would include some of the following interventions:

• Review of the current NSG programmes and courses that could be translated to online platforms to increase blended learning offerings;
• Aggregating the NSG enterprise resource systems to focus on blended learning capabilities;
• Increasing the NSG bandwidth capability to support initiatives like webinars, which would involve re-engaging with the State Information Technology Agency (SITA) on a proposal for a private sector data line);
• A massive marketing and communication drive to promote blended learning in the public sector;
• Revising the current eLearning course tariff, which would require re-engaging National Treasury on other financial issues;
• Finalising the ministerial directive on compulsory programmes, and for all departmental training budgets to be prioritised towards these programmes;
• Strengthening the NSG’s levers for partnerships with higher education institutions and other providers;
• There was a need for radical change from the current NSG business model to a more technology-based open distance learning model. This model would shift the NSG away from primarily physical classroom learning to technology-based learning;
• The NSG had to invest significantly in an ICT-enabled environment to be able to offer its learning virtually;
• There was a need to redefine the business processes and the way it do its work in the future, including the automation and digitisation of many of the business processes
• A new business model and new way of working would also compel the NSG to align the organisational structure accordingly, and build in virtual and remote working conditions.
• The development and/or acquisition of new skills and capabilities and a new organisational culture was needed, particularly in how managers related to staff, and how different business units engaged with each other. The NSG would have to undertake a re-skilling drive of its employees to operate effectively in the new business environment.

 

PSC revised strategic and annual performance plans

Dr Dovhani Mamphiswana, Director-General: Public Service Commission (PSC), presented the adjusted strategic plan and 2020/21 APP.

Describing how the revised budget would impact on the overall allocations to the PSC, he said the Commission’s initial budget had been R297.6 million, of which R228.872 million (76.9%) was for compensation of employees, and R66.9 million (22.5%) was for goods and services. The larger part of the goods and services budget was trapped in mandatory costs, such as rental for office accommodation, property payments, internal and external audit costs, communications, SITA, and other operational costs. Rental for office accommodation alone made up 30% of the total goods and services budget, so there was limited room to effect the budget cuts as instructed by National Treasury.

The PSC had made a R10 million budget cut to goods and services. This was mainly from the administration programme, as most of the PSC budget was centralised. Therefore, items such as communication (landlines), property payments (water and electricity) had been reduced, as some employees were working remotely.

Over and above the R10 million budget cut, an additional unbudgeted R3.68 million had been projected for the financial year to ensure employees were protected against the spread of COVID-19. These funds had been reprioritised from the current already stretched baseline. Procurement of PPE for the whole office had been effected. The PSC had sourced and continued to source service providers to fumigate, disinfect and sanitise offices regularly. Access control systems had been improved on all the leased buildings from the use of the risky biometric system, to an alternative card reader system.

The budget for fleet services, travelling and subsistence had been cut due to the limited travelling expected, and cartridges, stationery and other office supplies had been reduced due to the focus on becoming paperless during COVID. The purchase of assets had been deferred to the next financial year. Fewer seminars and workshops were expected. Virtual means of hosting such seminars and workshops would be explored.

Dr Mamphiswana said that since the national lockdown, the PSC had had to adapt its operations to be responsive to the needs of its stakeholders, and to assist members of the public facing service delivery blockages. As it recognised that this was the “new normal,” the PSC would continue to adapt the way it worked within the confines of the emerging circumstances. The single largest challenge that the PSC -- and the public service at large -- faced was the technological support to function effectively remotely. It would heighten its oversight and monitoring role over service delivery by departments during and post-COVID-19.

Discussion

Ms M Lesoma (ANC) referred to the DPSA budgets that had been frozen or deferred, and asked how the Department would be funded in the next financial budget. She did not foresee the National Treasury having more money for the next five years to offset the budget cuts. The DPSA must lead the move to a paperless public service. She wanted to know if there was going to be an audit report at the end of the financial year, as the DG had indicated previously. All the budget cuts that had been made should not necessarily compromise the core business of the various departments.

Mr M Rayi (ANC, Eastern Cape) said the Minister of Finance had repeatedly spoken about a zero-based budget, and he wanted to know what that meant for the Department’s strategic plan. There needed to be clarification on the impact a zero-based budget would have on the MTSF. He appreciated that the Ministry and the administration had been involved in negotiations with the Treasury to reach the level at which the budget was now. He asked why the issue of the job competency framework for the public service had been replaced by the occupation directory. He wanted some clarification on the relationship between these items and the reductions in the budget.

Dr L Schreiber (DA) asked if the reference to the technical unit was accurate, and what the current status of the establishment of that unit was. Would the budget allocation be sufficient to finalise that process? He asked for more detail on the DPSA’s reference to the personnel expenditure review replacing the development of the wage bill setting mechanism, it. What was the status of the Wage Bill renegotiations, given that this was an expenditure item that cut across the entire apparatus of government? He asked the PSC about the downward adjustment regarding the investigations, saying this was concerning because of the escalation of corruption and other issues that went along with the COVID-19 funding that had been made available. What assurance could the PSC give to show that they could cope with the demands that came with the cases being shown in the media around mismanagement of the COVID-19 response?

Mr T Brauteseth (DA, KZN)) asked for an update from all the entities that had presented, to see that they had been reporting all of their COVID-19 expenditure, and wanted to know whether a copy would be made available of the report that had been sent to Treasury for April, May and June. He said that it was important for both Committees to keep track of COVID19-related expenditure, because it was free of any procurement restrictions. On 20 May, the Committee had engaged with the DPSA and asked the Minister about the technical unit to which Dr Schreiber had referred. The Minister had given an assurance that the unit was functioning and several people in the Department were actively involved. He had asked for a list of the people involved and the matters that they were dealing with, but had still not received those lists.

Ms M Kibi (ANC) said that the strategy for generating revenue had been revised by the NSG from R132 million to R75 million, and asked if that was based on 20 learners per class or if there was another formula that had been used to calculate targets and the expected budget. She asked the CPSI if value for money would be realised if there were no site visits to replication programmes.

Ms M Clarke (DA) requested that at every Committee meeting, there must be a report presented on the expenditure of COVID-19 for all the departments.

Mr M Dangor (ANC, Gauteng) asked what the implications of zero-based budgeting would be for the Ministry.

Ms S Boshoff (DA, Mpumalanga) wanted to know if the Department and other entities realised that they could carry on after the pandemic, whether they would be prepared to look into their cost-saving measures as a long-term strategy.

The Secretary of the Committee said there had been a WhatsApp message from Mr I Cebekhulu (IFP) asking the government departments about not recruiting because of budget cuts, and if that would affect service delivery.

Responses

DPSA

Ms Makhasi answered the questions about Organisational Functionality Assessment Tool (OFAT) and the personnel expenditure. She said that the OFAT was work that the DPSA was doing around how they supported departments to improve productivity in the public sector. They were not ready to put this tool into effect yet, as there were capacity issues. They would be working with smaller departments in the meantime.

The issue of wage-setting mechanisms was a process that involved several stages, and the first stage would be to research personnel expenditure. The DPSA needed a personnel expenditure review for the public service, which was for the national and provincial governments. The Department of Cooperative Governance and Traditional Affairs (CoGTA) may do the same concerning the government, and the Department of Public Enterprises (DPE) had already issued a tender concerning the personnel expenditure at the SOEs. This first component of the wage-setting mechanism had to be delivered, and a lot of money needed to be put into research. Once the first stage was completed, a common framework had to be developed, which was at the core of the wage-setting mechanism. That common framework would look at wages in the public service so that there was one view of the public administration in terms of wages. Salaries and processes would be standardised, while still respecting bargaining processes and the labour relations process that had been out in place. This should result in a draft bill that would go through the Parliamentary processes that would standardise the wage-setting mechanism across the Public Service. The personnel expenditure review needed to happen in the current financial year. Before getting to job competency, people needed to be able to define occupations in the public service, and that was what the occupational dictionary was for.

In response to Mr Brauteseth’s question about the technical advisory unit and the lists he had requested, she said she had sent a report to the Minister which would be sent to the Committee. The key to the functions of the technical unit was about managing discipline and governance in the public service.

There had been no information from the Treasury on what process needed to be followed with the zero-based budget. The loss of R80 million from the DPSA was a large amount, and they were overstretching their capacity with the few resources they had. However, they were functional and were delivering on their tasks at hand. The R80 million budget cut had affected the DPSA because they relied heavily on human resources and personnel.

Mr Makhura responded to Ms Lesoma’s question, and said that it was the Department’s target to obtain a clean audit. The DPSA had not received the guidelines from the National Treasury for the zero-based budgeting, and only once they had, could they communicate the process. Zero-based budgeting meant that the departments were no longer going to rely on the baselines that they had. For example, the DPSA baseline was R575 million. It meant cleaning up all the programmes that were not government priorities by starting at zero, and then adding all the posts that were needed. This may impact the strategy going forward, and the MTEF allocations would also have to be revised. There were no COVID19-related items that had been procured, and a normal process had been followed, but there was a report showing all the COVID19 expenditure. 

 

CPSI

Ms Sebokedi said that the issue around value for money would remain a challenge because of the difficulty in accessing sites for visits. Health workers were in hospitals and clinics, so they would need to find a way to engage with their partners so that they could move forward. Cost-saving measures would be explored and if they worked, they would continue to use those measures.

Ms Annette Snyman, CFO: CPSI, said that there had been no emergency procurement, and it had all been done through the normal procurement processes. They were keeping a record of all the expenditure.

 

NSG

Mr Ngcaweni said that the NSG remained committed to the target of a clean audit. The matters raised by the auditors in the past had indicated that an age analysis must be done so that some of the money received from bookings where people had not attended training could be recognised as income. The NSG was in a process with the National Treasury to identify the money in the trade account that had not been used over the past three to four years, and to move it into the vote account. This would address the issues that that auditors had mentioned, and they would no longer have to rely on the National Treasury for extra money. If there was a budget cut, this would decrease the number of people who could attend training and ultimately affect the NSG’s revenue.

He asked the Committee about future projections, because it very important that the NSG worked on a self-funding basis -- it would not be able to meet its obligations if training budgets were to be withdrawn. The cuts in the technical budget meant that fewer public servants would have access to online data programmes. The NSG had spoken to the administrative leadership to help them to negotiate for some of the online programmes to be zero-rated.

Ms Mkwanazi said that the NSG had spent around R306 000 on COVID-19 preparations. Their only emergency procurement had been when one employee had been tested positive for COVID-19, and cleaning measures had to be put in place. The reduction of their revenue target from R132 million to R75 million was based on a class size of 15, as they had to make to ensure there was social distancing when they rolled out training.

 

PSC

Mr Mamphiswana said that the PSC had applied an audit tracking schedule which helped them to engage with issues that they had dealt with in the previous financial year. Regarding the revised targets from 80% to 60%, they were responding only to the cases that were going to be finalised, and not the cases that had been received. This was because of the challenge of the unpredictable environment which would make it difficult to finalise the 80% target. The in-year monitoring report, which included all the cost-related issues of COVID-19, was submitted to National Treasury monthly.

Minister’s comments

Minister Mchunu referred to the decline of the state fiscus, and said the priority would be to improve economic growth. He agreed with the CFOs and DGs that money that had been allocated must be accounted for. The departments had to be very clear on their motivation and costs when using zero-based budgeting, as there was no baseline. The DPSA needed to be clearer in its advertisements on when positions had been closed, and when the process of appointing would start.

Ms Makhasi responded that the DPSA had advertised for the technical advisory unit positions of chief director and disciplinary managements. The positions had closed and panels had been put together, and the interviews would be done at the end of July. Two directors had been responsible for ethics and integrity in the Department in the previous structure, and had been transferred to the technical unit and were part of the core team that ran the unit.

Dr Schreiber said that the Minister had not addressed the wage bill issue.

The Minister said that they had reported last time, and had taken an approach that sought to provide a labour court case and arbitration, and while they were addressing the matter there was no agreement. They had had to apply for a stay in arbitration so that they did not deal with the same issues all the time.

The Chairperson said that the departments had given comprehensive presentations and responses, and expressed gratitude to the departments and the Committee.

The meeting was adjourned.