Department of Social Development Audit Outcomes & 2019/20 Annual Report

Public Accounts (SCOPA) (WCPP)

27 January 2021
Chairperson: Mr L Mvimbi (ANC)
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Meeting Summary

Video: Public Accounts Committee, 27 January 2021, 11:30

Western Cape Government 2019/20 Annual Reports

In a virtual meeting, the Public Accounts Committee (SCOPA) convened to consider the Auditor-General's (AGSA) 2019/2020 audit findings of the Western Cape Department of Social Development.

The Auditor-General was the first to give its presentation and it presented on the audit outcome and any emerging risk that needed to be highlighted to the Committee. Beginning with the audit opinion history it confirmed that this was the third consecutive year that the Department of Social Development obtained a clean audit outcome. There were also no areas of significant non-compliance, that impacted negatively on the audit report. There were also no internal control insufficiencies to be reported on.

Expanding on the predetermined objectives, the AGSA confirmed that it only audited one programme, which was programme three focused on children and families. Details of the programme were set out in the Annual Report in pages 74 to 83. It confirmed that all misstatements that were in the predetermined objectives were resolved with the Department and corrected in the Annual Report.

Turning its attention to the emerging risks, the AGSA confirmed that the effective date for the componentisation of assets has not been determined yet, but the Department has been encouraged to start looking at and implementing that although it has not become compulsory yet AGSA confirmed that it has been waiting for a number of years for treasury regulations to be announced and did not know about the effective date.

The Audit Committee the proceeded to give its presentation and it dealt with Section C which is found in the report from page 103 to 117 and Section E from page 156 to 237 of the report. 

Following the presentation, the Committee wanted to know what work is being done by the Department to address fraud and corruption in the regional offices and the funded Non-Profit Organisations (NPOs). It also wanted feedback regarding the three pending cases on fraud and corruption. It asked why those cases had not yet been closed and asked for details and updates on open cases. The Committee further asked if there were any cases of employees who were doing business with the state and if there were any applications received from employees who would like to do remuneration work outside the public service. Members asked about areas of risk, youth cafes, adjustment of material misstatements, details of the compliance assessment report and transfers and subsidies. Members also sought more detail on contingent assets, food parcels, under spending and the sanitary towels programme.  Members requested a report from the Department on irregular expenditure.

Meeting report

The Chairperson welcomed Members to the meeting as well as those present from the Auditor- General of South Africa (AGSA) and gave a breakdown of the agenda for the meeting. He said that the first part of the meeting would be led by AGSA and the Audit Committee, who were going to give a presentation on the Annual Report for the Western Cape Department of Social Development. Following that he said that the Department of Social Development would be given the opportunity to have a discussion with the Committee based on the presentation of the Annual Report.

Before the meeting started, the Chairperson asked the procedural officer if there were any apologies that had been received from Members. The procedural officer confirmed that there was only one apology received from Ms D Baartman (DA) and that Mr G Bosman (DA) would be attending in her place.

The Chairperson then invited the AGSA to proceed with its presentation. The Chairperson requested that in the interest of time, it be assumed that the report has been read by Members and that only pertinent issues that need the Committee’s attention from the report be raised. He said that he would like it to be this way because what has been experienced in the past is that the limited time set aside in meetings to engage and raise questions is sometimes not enough. Therefore that is why he has requested that only pertinent questions be raised, without going through the report one detail at a time.  Following that he then handed over to AGSA.

Presentation by Auditor-General South Africa

Ms Sharonne Adams, Business Executive, AGSA, thanked the Chairperson for the opportunity to present and began introducing the team that was present with her from AGSA. She confirmed that Mr van Huyssteen would be in charge of the presentation and would also be responsible for dealing with the audit outcome and any emerging risk that needed to be highlighted to the Committee.

Mr Danie van Huyssteen, Senior Manager, AGSA, began by taking the Committee through the audit outcome. Beginning with the audit opinion history he confirmed that this was the third consecutive year that the WC Department of Social Development obtained a clean audit outcome. There were no areas of significant non-compliance that impacted negatively on the audit report. There were also no internal control insufficiencies to be reported on. Mr Van Huyssteen confirmed that the detailed report could be found on page 156 of the Annual Report for Members who wanted to look through it.

Expanding on the predetermined objectives, Mr Van Huyssteen confirmed that AGSA only audited one programme, which was programme three focused on children and families. Details of the programme were set out in the Annual Report in pages 74 to 83. He confirmed that all misstatements that were in the predetermined objectives were resolved with the Department and corrected in the Annual Report.

Turning his attention to the emerging risks, Mr Van Huyssteen confirmed that the effective date for the componentisation of assets has not been determined yet, but the Department has been encouraged by AGSA to start looking at and implementing that although it has not become compulsory yet.  There are new chapters on the modified cash tenders. These are modified cash tenders on transfer of functions on chapter 19 and chapter 20 on mergers. He confirmed that early implementation of both chapters is permitted.

Mr Van Huyssteen confirmed that AGSA has been waiting for a number of years for treasury regulations to be announced and did not know about the effective date. Speaking on the Annual Performance Report, he said that there are a number of new requirements that AGSA will look at in future concerning presentation, disclosure, relevance and completeness of relevant indicators. AGSA looked at those issues during the audit and no significant matters were identified in that regard. He confirmed that possible changes in the audit scope are also an emerging risk.

Concluding the presentation, Mr Van Huyssteen then invited the Committee to raise any questions that it may have.

The Chairperson thanked Mr Van Huyssteen for his presentation and proceeded to ask the Audit Committee to begin with its presentation.

Presentation by the WC Department of Social Development Audit Committee

Mr Ameen Amod, Chairperson: Audit Committee, took the Committee through its presentation. He began by confirming that the presentation document had been sent out to Committee Members earlier on in the week. He then proceeded to introduce the other members of the Audit Committee that were present in the meeting with him. Mr Amod explained that over and above the points mentioned in the presentation regarding the role of the Audit Committee, it also facilitates communication and confidence between management and internal auditors and similarly reviews the work of the external and internal auditors.

[break in proceedings]

The Chairperson reconvened the meeting and began by recapping what had taken place earlier on in the meeting. He then proceeded by explaining that next session is scheduled with the Department of Social Development.  He explained that the Department will deal with Section C which is found in the report from page 103 to 117 and Section E from page 156 to 237 of the report.  Before proceeding with the report, The Chairperson asked the MEC if she had any opening remarks or statements that she would like to make before diving into the report.

Discussion with the Department of Social Development

Opening remarks by the MEC

Ms Sharna Fernandez, Western Cape MEC: Social Development, thanked the Chairperson for inviting the Department to come back and deal with the financials of the Annual Report. She also thanked the audit teams that assisted the Department.

The Chairperson then invited the Head of Department (HOD) to take the floor. The MEC then interjected to explain that the Department was having a cabinet session which was running concurrently with the current meeting. She pointed out that the HOD, Dr Macdonald, was completing a session in that meeting and that he would join the meeting shortly.

The Chairperson then asked that the procedural officer indicate to him once the HOD has joined the meeting. He then asked Members if they had were any questions, points of clarity or issues that  they wanted to raise. He indicated that the meeting was an open meeting of the Standing Committee which meant that the meeting was open to members of the public and members of the media. The Chairperson explained that at the end of meeting when all discussions are finished, if there are any members of the public that are logged in, they will be given an opportunity to raise any questions that they may have. He then asked for an indication of those Committee Members who would like to ask questions by show of hands.

Discussion

The discussion was framed around sections C (pg. 103 to 117) and E (pg.156 to 237) of the report.

Ms A Bans (ANC) indicated to the Chairperson that her questions was referring to page 105 under the subheading ‘fraud and corruption’ where the Department has an approved corruption and fraud prevention plan. She said that she would like to know what work is being done by the Department to address fraud and corruption in the regional offices and the funded Non-Profit Organisations (NPOs).

She then said that her second question will be based on page 111 in reference to how the Kayamandi project was assisted as it had made an application for funding. Referring back to a discussion that had taken place in a meeting on 13 March 2020 regarding this project she said that she wanted to know what the progress was regarding this point of discussion.

Ms M Maseko (DA) pointed out that her question to the Department was in reference to the key emerging risk on page 105.  She said that she could see the key emerging risks for the following financial year but could not see the ripple effect for the emerging risks tabled in the report. Making reference to land invasion, she highlighted that communities usually stay on inhabitable land and then during rainy season one will find that floods occur in this area and then as a result the Department of Social Development (DSD) has to put measures in place to relieve the disaster that is happening in those informal settlements. She also pointed out that fire disasters is also another way in which the Department has to step in and help families in those informal settlements, in terms of managing the disasters which then become a cost to it because of money spent. This is another way in which the Department finds itself spending to provide relief to families.

Making reference to the disasters that she had spoken about, Ms Maseko asked if the Department sees them as risks within the Department because on a yearly basis the Department would not know how much it is going to spend attending to such cases. If that is the case, why does the Department not list them as emerging key risks or table them as key risks considered? So that they are addressed during the financial year.

Ms N Nkondlo (ANC) said that her question had been partially covered by Ms Bans. She requested that the Committee get a status update regarding the fraud cases and the level of control measures for the avoidance of such in the Department.

Secondly, regarding the risk, Ms Nkondlo said that she sees that there are three risks that are more environmental in the sense that these are things that are in the environment within which the Department is operating. Looking particularly at the safety of staff she said that she sees the narrative presented by the Department.  She asked the Department to give a definition of high risk and explanation of same given the level of challenges of safety especially in the high risks that it mentioned in the context of its work. She further asked for a breakdown of the Departments effective response in relation to the security cluster. What has been the level of performance and progress, if any, in minimising this particular risk?

Ms R Windvogel (ANC) said that she wanted to get an update on the three pending cases on fraud and corruption. She asked why those cases had not yet been closed and asked for details and updates on open cases.

Referring to the point on page 106 about employees within the Department who had not obtained the necessary approval to perform other remuneration services outside of the public services, Ms Windvogel said that she wanted to know if there were any cases of employees who were doing business with the State and if there were any applications received from employees who would like to do remuneration work outside the public service.

Before the meeting proceeded, MEC Fernandez, brought it to the attention of the Chairperson, that Dr Macdonald was having issues getting permission to join the meeting. She requested that the necessary support be provided to Dr Macdonald.

The Chairperson requested that the procedural officer and the IT department follow up on the MEC’s request and provide the necessary support. After a few minutes Dr Macdonald confirmed with the Chairperson that he was able to join the meeting.

Mr M Xego (EFF) brought it to the Committee’s attention that the Department had made reference to a corruption prevention plan on page 105 of the report that it had drawn up. He said that he wanted to know what the progress of implementing this plan was. Had the plan being implemented and how effective was the plan?

Following that question, The Chairperson then gave the floor to the Department, to give feedback and responses. He left it to the Department to determine how this would be done and by whom.

Department Response

MEC Fernandez responded by saying that because Dr Macdonald had just joined the meeting, there were members of the team who were equipped to responding to the questions like the  Chief Financial Officer (CFO) until Dr Macdonald gets up to speed. She said that she would leave it to Dr Macdonald to decide who was in the best position to respond, but in her opinion she said that the CFO was well equipped.

Dr Macdonald said that he would let the CFO respond in the first round and he would respond in the second round.

Mr Juan Smith, Chief Financial Officer, Department of Social Development, began by thanking the Chairperson for the opportunity to respond and Committee Members for the questions put forward. He said that he would deal with all questions that were within his scope and for everything else he would ask some of his colleagues to assist.

Responding to the questions around fraud and corruption issues, he said that the Department has a Director in the office of the HOD and she deals with all of the fraud and corruption issues directly with the Department’s Forensic Services Unit. In terms of the annual fraud and corruption prevention plan, every year the Department reviews that plan and on a quarterly basis it also meets with the forensic team to update the fraud and corruption prevention plan. That plan is put into place and is dealt with by the Department.

Mr Smith said that part of dealing with that plan is ensuring that any whistle blowing from staff or the public is recorded and it is directly dealt with by the forensic unit.

The Department has a policy and departmental fraud and corruption prevention plan that it also implements throughout the Department. It also has a case management system and that system helps it record any cases.

Mr Smith said that Members will note further down into the report that there are a number of cases that have been mentioned, which include the three cases. He said that the Department cannot unfortunately at this time give details of those cases. With the permission of the Committee, Mr Smith asked if it could present on the types of cases and what happened in those cases.

He said that in the paragraph on page 105, it was mentioned that the Department also deals with protective disclosures and there is also an ethics committee that has been formed with the Department. In this ethics committee it is where there is disclosure by staff of their assets, declaration of any interests or any conflicts that might exist. All these are then declared within the process.

Mr Smith said that the Department has various registers especially for tenders which state that those who are served must declare whether they have any interests in those things. The Department also has awareness sessions, which are also conducted by the forensics unit, not only within the head office, but also at the Department’s facilities and also within the regional offices. All staff is made aware of the various risks that exist around some of these economic crime activities like corruption kickbacks, bribery or any nepotism. Training is provided and awareness sessions take place around these activities.

Responding to the question about whether key emerging risks would include issues around land, floods, fires and those kinds of disasters, Mr Smith said that as the DSD it mainly assists when there are disasters with the humanitarian relief side. The Department’s role is mainly to assist municipalities and the City of Cape Town if it is in an urban area as they mainly deal with those types of disasters. The Department did not indicate that as one of its emerging risks, hence it was not mentioned in the report.

As stated in the report, the Department’s emerging risk is now that due to the COVID pandemic. It ensures that it can recover in terms of its Departmental business and get back on track with rendering the desired service that is required.

In terms of the question about the remuneration work, Mr Smith said that the Department can provide details around all staff who actually applied for r work. The process is well known and communicated within the Department. If staff engage in any other activities while still employed, then staff members know that they need to apply for that. There needs to be a motivation and that motivation then goes to the HOD for approval. Mr Smith said that he will provide a list with the numbers of officials that have applied and were successful to the Committee at a later stage as a follow up because he didn’t have the numbers on hand at the meeting. In other cases where staff member applications were not favourable, they were turned down.

In terms of the corruption plan and implementation thereof, Mr Smith confirmed that the Department  indicated that it has a plan and annually that plan is reviewed together with the forensic services unit. The Department also has quarterly review sessions through its enterprise risk management sessions that it deals with.

Mr Smith asked that one of his colleagues respond to the question raised about Kayamandi.

Dr Robert Macdonald, Head of Department, WC Department of Social Development, asked Mr Smith if the questions relating to Kayamandi related to the oversight visits that occurred there and to the old age home. Mr Smith responded and said that it was about the women’s centre in Kayamandi.

Thanking Mr Smith for the clarity, Dr Macdonald asked Mr Jordan to assist by responding to the question.

Mr Charles Jordan, Chief Director: Social Welfare, WC Department of Social Development, said that the Department is fully aware of the Kayamandi site for abused women and children and is aware of the fact that there was a request for the Department to come and assist. He said that a team was sent out in the previous year, to go visit the site and provided norms and standards according to shelters operating because there were certain norms and standards that needed to be addressed. That has been provided to the NGO and the Department will see how it can support the NGO as far as possible.

With regards to funding, the Department follows a three year funding cycle. For the funding cycle for the next financial year April 20/21 the Department has made a call for proposals in newspapers and this was done in July 2020. The Department has received over 4000 applications from NGOs, applying for funding. If Kayamandi has applied, it will be assessed alongside the Departments procedures. Teams are currently busy assessing all applications and assessments began during the month of November and will run till the end of February. Thereafter institutions that have applied for funding from whatever sector and have been successful will be contacted by the Department as from the 1 April 2021.

Regarding the question asked about risk and fraud specifically relating to Non-Profit Organisations (NPOs) and NGOs, Mr Jordan said that as a Department it has specific processes to look at fraud and corruption at the NPOs that it funds. First and foremost in the contract and service level agreements, the Department has clauses that relate to fraud and corruption. When the Department sends out these contracts, it also does awareness amongst the NGOs about matters of fraud and corruption and it also has pamphlets that it sends along that it has received from its provincial forensic services and the Department of the Premier. On a quarterly basis, according to the contract, each NGO must submit quarterly progress reports. The Department will therefore analyse those quarterly reports by looking at the income and expenditure, non-financial data and registers of clients that receive services. Mr Jordan said that the Department double checks and verifies those clients as well.

When the Department picks up that there is an issue of potential fraud or there is a whistle blower informing it that they are aware of some fraud at a specific NGO, the first thing that the Department does, is send out a monitoring team, with monitoring officials who then conduct a site visit and look at the documents that could give information of anything that could relate to potential fraud. The Department also analysises the  audited financial statements on a yearly basis because sometimes it can pick up from the audited financial statements issues of financial concern.

Once the Department has done those assessments and has received further proof and asks for further verification of the NGO, then it is able to see if it is merely a matter of proper financial systems not being in place or alternatively deliberate fraud taking place. If there is deliberate fraud, the Department will then take the report that it has done from its M&E officials and will send it to the provincial forensic services in the Department of the Premier that will then conduct a comprehensive detailed forensic investigation on all finances, accounts and invoices over a period of at least three years with that specific NGO.

Mr Jordan said that if an NGO has committed fraud, the first step would be for the Department to end the contract because there would have been breach of contract and cases will be handed over to SAPS for criminal charges and prosecution.

Mr Smith then asked the HOD if he could respond to one of the questions about the safety of officials as a risk that he had overlooked and the definition of high risk.

He said that in term of the Departments risk procedures, it does its assessments on a quarterly basis where it looked at its action plans to mitigate some of these risks and based on the inherent nature of that risk and the action plans that it develops for those risks, that would then indicate how the Department would then reduce the nature of the risk and the level is then determined through the likelihood and the impact that the risk might hold for the Department.

In closing Mr Smith said that in terms of this the Department regarded that the safety of its staff is a high risk area and there is various mitigation strategies that it has implemented. The Department is also dependant on some of its stakeholders eg: SAPS because sometimes when social workers need to go into certain high risk areas, they need to be accompanied to be able to do their visits in high risk areas. He then thanked the Chairperson for affording him the opportunity to provide said response.

An official from the Department confirmed that the DSD does dictate the issues of human disasters and emerging risks that will follow. Whether the disaster is COVID 19, fire or floods, the Department does take that into account. Although the immediate humanitarian response for the beneficiaries affected, is budgeted for by SASSA, there are always remnants that come to the Department be it psycho-social support and trauma counselling that must be given to the affected beneficiaries. The Department is always on standby hence it was highlighted in the report as a humanitarian crisis. It did not outline all the different types of crises even though as a Department it is always available as well to mobilise other role players and humanitarian relief organisations to respond to whatever humanitarian crises that follows the disaster.

Dr Macdonald added that the SDU centre is a secondary role player in the disaster space. He said that in terms of the Departments planning around disaster assistance, it has a particular role that is agreed upon with SARS and Local Government which is set out for the Department in terms of what it needs to do. During the COVID disaster the Departments role has been intensified because of the scale of the need which has made the DSD have to take on a more prominent role than it normally would. The requirements around social relief are set out in the Social Assistance Act, which makes SASSA the primary agency of social response and disaster relief together with local government. The DSD then plays a secondary support role in that respect.

The Chairperson raised that there was a question that was raised about the three cases. He asked the HOD if the Department had responded to that question.

The HOD then apologised and asked the Chairperson to repeat the question for him. The Chairperson then asked Ms Windvogel to repeat the question to the HOD, because he said that the way he had noted it down might not be accurately recorded as he always summarises everything that is said for his own understanding. Ms Windvogel then asked the HOD why the three cases were not closed and what were the details and updates of the open cases.

The Chairperson also pointed out that there was a question relating to employees getting permission to perform other work in reference to page 106.

Dr Macdonald started his response by addressing the matter of the three cases. He said that he presumes that the cases are with the provincial forensic services. There are some cases where it took some time to get the necessary information from the people who were involved. He said that there are some people who unfortunately refuse to assist and that drags the investigation out. Some of the cases were quite extensive in terms of the amount of information that needed to be dealt with.

Dr Macdonald said that in terms of the three open cases, they are all cases that are close to completion. He said that the Department has the list and can provide that information to the Committee.  Cases that are closed are at the reporting stage. The main thing with the cases is that the SASSA investigation which took quite a long time, was because of the non-responsiveness of the former officials that slowed things down. In the end the Department was able to finalise a report and that report was submitted to the Auditor-General (AG), but that came after the reporting date. That matter is now closed and the report has been given to the AG and the Zondo Commission. The other reports relate to individual complaints one relating to the Hatton NGO, which was also investigated and that matter was closed after the reporting period and the further one is also closed as of the middle of the last financial year. He said that all those matters have been closed, but they weren’t closed as of the time of the reporting date.

The second question related to the whips -approval for remunerative work outside public service. Dr Macdonald responded to this question by confirming that the Department has provided permission for officials to perform remunerative work. He said that statistics on this permission are included and confirmed that there have been some instances where permission has been denied. Usually that would be in the case where the request for work involved officials doing some work during office hours of the Department, which it does not permit. If officials are doing remunerative work outside of the public service, it must not interfere with their duties while working for the public service. It is for this reason that the Department has turned down some these requests. There has also been some conditions attached to the permission eg: where some of the social workers are providing social work services on a private basis, the Department creates a condition that the social workers must not use or access clients that they work with in their Departmental capacity for their private practise as this would be a conflict of interest. The number of approvals for remunerative work is set out in the report.

Ms Windvogel raised that there was another question that the Department had not answered, about whether or not there are any employees that do business with the state.

Dr Macdonald confirmed that employees are prohibited from doing business with the state. Where there are cases that are reported or picked up the Department would take disciplinary action. In terms of the period under review, he confirmed that there were a number of names that were brought to the Department’s attention of employees allegedly doing business with the state by the Public Service Commission. The Department went through those allegations and what it found is that in most instances it was employees who used to be on Boards of companies or who were involved in Directorship that did business with the state. These employees have since resigned from these positions but their details are still on the company’s database as the database has not been updated.

He said that in terms of that the Department has not had a problem but there has been a case that the AG has picked up of an employee doing business with a municipality. The Department cannot pick this up from their side because they do not have access to that information, but when it occurs the Department will deal with it. He confirmed that the Public Service Commission sent the Department a list of employees that appeared to be doing business with the state, however it found that those cases were all due to databases not being updated in terms of directorships and involvement in these companies.

The Chairperson quoted Dr Macdonald on a case he made mention of in his response that had been referred to the Zondo Commission. He asked Dr Macdonald to tell the Commission what that case was about.

Dr Macdonald explained that during the course of the last year, the Zondo Commission heard testimony from Mr Angelo Aggrizzi who was a former employee of Bosasa and one of the issues that he testified on is that there were two former employees of the Western Cape Social Development, who had allegedly been getting kickbacks from Bosasa in exchange for benefits to Bosasa that were not actually stipulated by Mr Agrizzi. Pursuant to those allegations at the Zondo Commission, the DSD requested Provincial Forensic Services to investigate the role of those two officials, who were both former employees as they were no longer employed by the DSD and had not been for a number of years. Their roles date back to 2010 and before.

Those two officials that had dealings with Bosasa were investigated as well as their potential ability to influence or involve themselves in any way in the tender processes, given that the Western Cape DSD had a contract with Bosasa rendering secure child care and youth care services at the Departments Horizon and Williams centres. That investigation was conducted and the report that stemmed from that found that there was very little material evidence which is not surprising given the allegations that things were handled in cash, so the paper trail was not there. However the Provincial Forensic Services did pick up that one of the former employees had accepted free trips that were paid for by Bosasa during his time at the DSD that he had not disclosed. The former employee was directly involved in the monitoring of the services provided by Bosasa, which placed him in a position which constituted a conflict of interest. The Department accordingly submitted that report to the Zondo Commission for the purposes of their continued deliberations on the Bosasa aspect of the state capture inquiry.

Dr Macdonald informed the Committee that the report was also given to AGSA  who did a very thorough audit of the Bosasa contracts that the DSD had going back to 2008. All of the supply chain processes were looked at going back that far, however AGSA was not able to find any indication of propriety or irregularity in those processes, but in one instance in 2011 where there had been a specification used instead of a new specification developed for advertising of a tender which resulted in  an irregular finding by the AG  which was presented in the report. That was more of an administrative oversight at the time rather than an indication of corruption or maladministration. Other than that there had been no evidence that was found to show that there was any tampering done by the two officials. The one official that was implicated recused himself from the bid processes, because he was a former employee of Bosasa. That was recorded in the 2011 audit. The investigation delayed the Departments audit report last year.

The Chairperson thanked the HOD for his feedback and proceeded to note hands from Committee Members

Discussion

Mr G Brinkhuis (Al Jama-ah) asked the DSD to provide more detail on the youth cafes and the possible ear marked areas for the up and coming youth cafes. He asked that the Department give details of how many there are currently and how many are still going to be established.

Ms Maseko requested that Members indicate which page in the report they are referring to when bringing questions forward, so that everyone can follow.

Mr Brinkhuis responded to say that he was referring to page 110.

Ms N Bakubaku-Vos (ANC) tried to raise a question based on the information on page 158. The Chairperson then reminded her that the Committee was still dealing with section C and would be moving to section E shortly afterwards and so asked her to park the question till then.

The Chairperson then asked the Department to respond to the question that Mr Brinkhuis had put forward.

Mr Mzwandile Hewu, Chief Director: Community and Partnership, WC Department of Social Development, confirmed that during the reporting period the Department had 13 youth cafes, which are spread across the Province. He said that the Department would provide a list to the Committee of where these cafes are and which NPOs are managing them. 

Thanking Mr Hewu for his response, the Chairperson addressed Committee Members saying that he was of the opinion that questions pertaining to section C had been exhausted. He then requested that the Committee move onto section E. He reminded Members that section E began at page 156.

The Chairperson then began noting the hands of Committee Members for the discussion to follow on section E.

Discussion

Ms Bakubaku-Vos raised a question about the adjustment of material misstatements, on page 158. She asked what material misstatements were identified and how the Department corrected them. Asking a second question in reference to page 159, she asked what the details of the compliance assessment report were and what issues were identified. What are the details of the Provincial Forensic Services findings and investigation and what findings were made?

Lastly Ms Bakubaku-Vos requested that the Committee be provided with copies of the two reports.

Mr D America (DA) said that he had four questions to ask and the first question was based on page 195. He said that there was an amount for catering in the past financial year and that amount increased by over R550 000 compared to the previous financial year. He asked that the Department provide clarity on why there was such a substantial increase which amounted to almost over a Billion rand for catering, which was quite a large amount of money.

Then his second question had to do with the transfer and subsidies. He said that he was directing the question to Annexure 1A. Mr America said that there was an amount of R2.5million that was transferred to the sectoral education sector. He asked that the Department clarify if this transfer had to do with the skills levied at the Department paid on behalf of the employees.

Linked to that, he noted that in the previous financial year the Department paid a levy to the Health Workers Seta and in the past financial year no such levy was paid. He asked if there was a relationship between the two and if not he asked for clarity as to why the Department has not paid the levy towards the Health Workers Seta.

Thirdly in relation to page 205 which was dealing with contingent liabilities he pointed out that there was reference to Annexure 2B. He said that the thing that stood out for him is that there were two claims of R5 million and another of over R5 million and there was not much detail about these claims provided. The R5 million is in relation to labour matters, but what is not clear is if it was one labour matter or two and where in the process this matter is. Is it with the Labour Court, the Labour Appeal Court or the Bargaining Council? Mr America requested the Department to give clarity on this issue.

 In addition, Mr America pointed out there is an amount for contingent assets on page 204 for a huge amount of R1.5 billion relating to alleged fraud and theft but there is very little detail around it. He asked for a little more information around this amount for the purposes of clarity as to what those amounts represent.

Raising his last question, Mr America said that as far as asset management and inventory is concerned there are movable assets that cannot be traced on page 214. Similarly there are minor assets also of over R1 billion that cannot be traced on page 218 and this is quite a substantial amount of assets that cannot be traced. He asked where the Department was in terms of locating the movable assets.

He also asked if there was a relationship between the food relief that the Department provided and the food parcels that were distributed. Over R30 million was spent on food parcels and most of it was reported post the reporting period. Once again Mr America asked the Department to provide clarity.

Ms Windvogel said that her question was taken from page 210, the point of reference being local content not applied. She said that she wanted to know from the HOD why he approved the removal of local content and what the update of the investigation and disciplinary action taken officials implicated in this expenditure was.

Referring to page 213 under the political office bearers’ point of reference, she said that she wanted to know what the details of the two political office bearers are and what is the breakdown of the expenditure amount.

Ms Nkondlo asked her first question based on page 163. She said that the point she wanted to check on related to the under spending of 50.4% spending on the budget under programme two, which is social welfare, considering that this sub programme provides support to the most vulnerable. She said that an explanation is given on page 179, which alludes to some procurement delays, which relate to revised requirements of the sanitary towels programme and also appointed a service provider for the substance abuse research. She said that she wanted to understand why this has happened and the impact it has had on service delivery. Ms Nkondlo said that she assumed that if there were particular sanitary pads to be given away, it meant that because of this revised requirement there were delays. How did the Department deal with this in terms of those beneficiaries that were expecting to get these sanitary pads? She asked that the response include the impact that relates to the research which could not happen as it is unclear if it is planned for the future financial year.

She said that this also links to the programme on restorative services because once again on page 179 an indication of the procurement delays which relates to the furniture and equipment for secure care facilities included vehicles for disabled persons on page 180. The question Ms Nkondlo had based on this was what the problem was in terms of these procurement delays and their impact. Looking at the DSD and the type of work that it has to do, she said that it is very closely attached to services provided to vulnerable groups. So if the Department is unable to secure what is needed like the vehicles and furniture, what then happens to those commitments.

Ms Nkondlo said that when she looks on page 200, in particular to the point about special modification of vehicle transportation for people with disabilities, the cost is +- R3.5 million for four vehicles which means that each vehicle costs anything between R700 000 to a R1 million. She asked if this is the case and further wanted to know what the special elements were that were costing this much. Can the Department engage the market to reduce the initial cost or is this the standard cost that the Department would normally have to pay for modification of those particular vehicles.

On page 202, Ms Nkondlo said that she picked up that there was an over payment  to NGOs. She asked that the Department provide more details about this in terms of how it happened given the control measures put in place by the Department. The matter is said to be with the State Attorneys. She said it is important for the Committee to understand how that particular situation is being managed.

In terms of pages 209 to 210, the point that relates to irregular expenditure of local content, the local content sets off a value of about R57 000 which was not condoned but has been approved by the HOD. Ms Nkondlo said that she wanted to understand in terms of guidelines or regulations that regulate irregular expenditure if the provisions stated that it could be done at an HOD level. She asked for an explanation around why it was approved and what items would this approval is applicable to. She asked for an explanation about the circumstances of how this amount was waivered at Department level. Looking closely at the totals on these pages, it is reflected as R735 000, whereas on the next page the total is R792 000. She asked for clarity further adding that maybe she was the one not reading the totals correctly.

Lastly referring to the food parcels as stated on page 214, she pointed out that there were food parcels distributed by the Department and others that were distributed by NGOs. She wanted to know if it was value for money to have both the Department and NGOs distributing food parcels simply because the NGOs act on behalf of the Department. She asked that the Department explain what the rational is behind this.

Ms Bans asked a question relating to page 198 particularly referring to the staff debt that is written off because it could not be recovered due to State Attorney advice. What kind of debt is this referring to? The other is other material losses written off: damages and losses related to Government vehicles.  Damages for which employees did not forfeit their State cars. What are the details of the damages made to the vehicles, how did it happen and what remedial action was taken?

Mr Brinkhuis pointed out that the Department had received access control data from the Community Safety Committee. He asked that it gives more detail on the control data that it has received.

Department Response

Before responding, Dr Macdonald asked Mr Brinkhuis to direct him to the page which the question was referring to. Mr Brinkhuis responded by saying that it was page 213.  The HOD began by responding to the question that was raised about the material misstatements.  In most instances these would relate to the children and families programme. He explained that the AG tested a relatively small sample and it would pick up an error and reject it. Sometimes those errors turn out to be isolated incidents and sometimes it turned out to be larger margin errors in the report.  He said that there are a few of them, so it is a bit difficult for him to go into detail at the present moment. Addressing the Chairperson, he asked if he would like him to go through each instance or if that would be something the Department could submit in writing.

The Chairperson asked Ms Bakubaku what she would prefer in terms of what the HOD had proposed. Ms Bakubaku responded by saying that she would like it to be in writing.

Dr Macdonald went on to explain that there was not alot of indicators but with about three certain things were picked up and the Department then recounted. The number of family members reunited with their families had a discrepancy of 17 out of a total of 580 which was corrected. In terms of the family preservation services, the Department also had incorrect figures there and also the number of registered partial care facilities it was an incorrect number of one out of a population 1 709. Dr Macdonald confirmed that those were corrected but will be more than happy to provide the details of how this was discussed and agreed upon with the AG at a later stage. There were also some cases where the AG stated that it could not find evidence for the reported investigations into whether a child is in need of care and protection because it could not find case files. The Department was, in most instances, able to find those case files but there were also some that it needed to correct. Dr Macdonald confirmed that the Department will provide all those details once it receives a request from the Committee.

Responding to the second question by Ms Bakubaku-Vos in terms of the details on page 159 regarding compliance and reporting, Dr Macdonald asked the CFO to  briefly respond to it.

In terms of details of the Provincial Forensic Services report, he said that if there is a request the Department can provide those reports to the Committee. The Department needs the request to be in writing before it can submit the reports.

Delegated to respond, Mr Smith requested that the question be repeated. Paraphrasing Dr Macdonald said that the question was around a supply chain compliance report which was item 30 on page 159.

Mr Smith confirmed that it was the Bosasa investigation and also related to the two officials that previously worked for the Department. In terms of the compliance assessment, he said that the two officials went through all the reports in terms of their applications for the tender and based on those compliance assessments reports they did various tests and investigations in terms of that and it related to the awarding of the tender at that point in time which was round about 2004. That was the compliance assessment report that was conducted by firstly the Provincial Treasury who did their own assessment around that and that assessment was concluded in July 2019. Thereafter it was then sent to forensic services. That report the Department can also make available.

Dr Macdonald confirmed that this was one of the two forensic reports that Ms Bakubaku-Vos referred to, which the Department can provide if requested.

Responding to the question from Mr America about the catering where it had increased by a significant amount from the previous year on page 195, Dr Macdonald said  that it relates to the fact that the Department insourced the centres from Bosasa and now had to contract for the provision of food for the children in the secure centres whereas before that was paid for via the contract with Bosasa. He asked the CFO to confirm the correctness of his feedback.

Mr Smith said that the amount reflected in the report was the amount for catering expenditure for the children in the Departments facilities. The reason for the increase was mainly due to the influx and the number of intakes that the Department had especially for the period under review.

Responding to the question about the R2.5 million transferred to the Seta, Mr Smith said that by law in terms of the Act the Department needs to pay the Seta a percentage in terms of its funds. The Department gets invoiced  by the Seta for its  training and development needs and it then pays that over, so that was the amount reflected in annexure A. In terms of why it was not done in the previous year, he said that it was due to a project that was undertaken through the programme five colleagues. Mr Smith said that Mr Hewu would be able to give further details on that contribution that was done on that.

Mr Hewu stated that in the Chief Directorate of Community and Partnership Development there was a relationship with the Health and Welfare Seta which gave the chief directorate 50 opportunities to give workplace experience and exposure to young people who have a qualification in social science, developmental studies and community development. Those young people were employed through persal. There has been a relationship between the DSD finance and the Seta to pay all the related levies that accrue as a result of the relationship because those are all statutory matters that need to be covered.

Dr Macdonald confirmed that this was an additional special project that was in addition to the normal skills levy that the Department pays over. This was a specific opportunity that came from the Seta.

Moving onto answering the question about contingency liabilities which amounted to R2.5 million each on annexure 2B on page 205, the HOD requested that the CFO indicate the nature of the two amounts.

Mr Smith explained that those contingency liabilities were all with the State Attorney. He said that what the Department is finding unfortunately, is that those opening balances also result in being the closing balances because the capacity and number of time it takes is quite extensive. The Department will have to look at the report through the Chairperson, to be able to give the detail of those specific ones especially the one of R5.6 million which is a claim for damages and the one for R5 million which is a labour matter. He said that the Department can provide those details ASAP.

Dr Macdonald  confirmed that one of the cases is an injury on duty case and the other one may be a labour dispute although he is unsure what dispute it is in particular.

Moving on Dr Macdonald reiterated that the next question related to contingent assets on page 204. Again he asked the CFO to assist in giving a response and detail around the alleged fraud and theft of R1.5 million.

Mr Smith said that there is a note around the alleged fraud and theft at the bottom of that note. He said that the Department will have to look into the case reference number because this matter is also with the State Attorney for the alleged fraud and theft of R1.46 million.

Responding to the question put forward by Mr America relating to page 214, Mr Smith said that in terms of those assets that cannot be traced he said it would be best for him to give a rundown of the process the Department uses for asset verification. The Department has a quarterly verification process and it has appointed asset controllers. Those asset controllers work hand in hand with the staff that has those assets, then they do the verification on a quarterly basis. Then on an annual basis, there is a team at the head office that then goes out physically to do an independent asset verification test. During those times the Department would find that sometimes those offices might be locked and the officials are on the road and not in the office. Those cases will then need to stand over. Those assets will then be recorded at that stage as not being found as a shortage although in some instances the Department has found a surplus. Once it is back at their offices it will do reconciliation for those assets that are in surplus and for those that have been short. In some cases the assets are found to have been moved from the one premise to another and that can also result in a shortage which is temporary.

Referring to page 214, Mr Smith confirmed that when there are shortages they are recorded in the register and from there the Department will do an investigation. Sometimes some of these investigations will have a result that the Department cannot find anyone to be held responsible. This is either because the individual has left the Department or moved to another location. In some cases the matters will be under investigation then reported to the State Attorney for assistance. After a period the Department will need to look into whether it can dispose of those untraceable assets. Most of them would be based on assets that are old and redundant and have been replaced by the open plan furniture scenario. Those investigations continue until it gets to a point where affidavits and the necessary documents are received. The challenge that the Department had over the many years is the bar coding system at one point in time that it did not have. At one point in time it had to rely on the manual system of counting and tracing those assets. Sometimes the theft that took place and the reporting of those cases was not done timorously. In some cases the DSD found that by the time the case was reported some time has already lapsed and that also made some investigations difficult. For now the DSD says that it has not written those cases off and still reports them in its financial statements as untraceable, but they are still being investigated in order to determine the responsibility for those assets.

Dr Macdonald made mention that the amount is not R1 billion it is actually R1.1 million. Reiterating what Mr Smith had said he said that there are some assets that disappear and reappear particularly when there is movement happening where barcodes fall off and the asset gets misplaced and do not get counted and turns up again. This does not necessarily reflect a total loss but rather things that are not accounted for at the end of the financial year where it may have been placed in a store room or office where it does not belong and as a result it does not get counted and gets reported as missing in the interim.

Mr Smith interjected and stated that the total on page 218 is actually R404 000 for the number of 344 assets and he confirmed that, that investigation process is still underway.

Responding to the question about whether there is a relationship between food relief and food parcels, Dr Macdonald stated that the Department has different modes of delivering food relief. Every year, it does provide some food relief and that is reported in the annual report and that is usually done through NGOs that the Department funds to provide food relief where if finds there is a need. The distribution of food parcels was a special project. It would not have been reported on in this annual report because the roll out happened after the reporting period ended, however the food parcels was a once off. There is a still a distribution of food parcels to a small number of people who cannot access any other form of assistance such as going to a soup kitchen or feeding scheme and also for people who are in quarantine or self isolating and are unable to get anyone to go to the shops for them. The majority of the Departments food relief is now in the form of providing funds to NGOs that run feeding schemes in communities since that proves to be a more cost effective and a more rapid way of getting food out to larger numbers of people. He further said that in his opinion he believed that the food parcel process was quite limited and was designed for the lockdown when people could not move around, but otherwise he said that it is not the right kind of approach for the current situation.

Before Dr Macdonald could proceed to answer the question put forward by Ms Windvogel, the Chairperson raised a question about the food parcels. He asked whether the distribution of the food parcels was related to any COVID 19 relief programmes.

Dr Macdonald confirmed that the food parcels were specifically for the COVID 19 response. There was a period where SASSA was unable to mobilise significant social relief and distress support because its budget had been depleted from the year prior and it was moving to get food parcels distributed. At the same time the Solidarity Fund was preparing to do the same thing but the Province needed to get started with the distribution as quickly as possible so the DSD was tasked with distributing 50 000 food parcels and then shortly after that other agencies started doing the same thing and then SASSA introduced the COVID grant which then assisted. The food parcels were an interim measure designed to assist during the lockdown last year. It was very much specifically for people who had lost incomes and were unable to go out and get food.

Responding to the question about the local content and the removal of it, Dr Macdonald said that the local content issue was dealt with internally in terms of the investigation. Disciplinary action was applied to the officials involved and the necessary condonation was sought from the Department of Trade and Industry (DTI). Thereafter the Department was advised that the HOD can condone it. He asked the CFO to expand further on the technical side of that.

The CFO explained that in terms of the guidelines and the irregular expenditure the Department firstly does an assessment and then from the assessment is able to determine that indeed it is irregular then based on that it does an investigation to determine responsibility. In terms of this particular matter the Department conducted an investigation and found that the non use of local content did not require further disciplinary action against the official. The next step is that once that is determined the Department can condone it or there is a process that if it meets the criteria as stipulated in the guidelines then the accounting officer can then remove it. In this case this particular irregular expenditure of R57 000 was removed by the HOD given that the criteria was met by the Department. There was no loss by the Department and the value that it received, it did receive in terms of the work that was done.

Addressing the question about the difference between the two amounts, Mr Smith stated that on page 209 the total is R735 000 and on page 210 is R792 000. He explained that the difference between the two amounts is due to the R57 000 that was removed.

Focusing on the question raised regarding the two office bearers as per page 213 Dr Macdonald said that normally that would be one, but with the year under review there were two MECs because at the beginning of the year it was MEC Fritz then MEC Fritz moved to Community Safety then MEC Fernandez took over. So the expenditure amount is the same but it is just that there was two individuals where one took over after the other.  Hence it indicates two political office bearers.

In terms of the question taken from page 163 put forward by Ms Nkondlo, the HOD explained that in terms of the delay with the sanitary dignity project the Department had a tender that was put out that had specifications that the National Department required the DSD to have as part of the conditions for the funding that was allocated to all of the Provinces for this purpose. The National Department of Women required SABS certification. It turned out that none of the service providers that are able to provide those products actually had that necessary accreditation and that accreditation is a work in progress. That essentially ruled out any available service providers because neither could meet those requirements. The DSD then had to cancel the tender process and restart a new tender process without those requirements which pushed the process very late into the financial year. Dr Macdonald confirmed that the DSD was able to award the tender, but it meant that expenditure was delayed. Unfortunately this is what happens with new projects when unforeseen things happen and specifications are developed. It is not always that the specifications have unintended consequences like they did in this instance. Giving his opinion Dr Macdonald said that he felt that the requirement were too stringent for the market.

Because this was a new project there weren’t any beneficiaries yet receiving the product so there was no interruption to the service as such but rather the commencement was delayed. The roll out did begin, but that was further interrupted by school closures due to the COVID 19 lockdown, so the impact has been that this has been a very difficult project to get going. Even though there has been the interruption of schools opening and closing, the DSD has been able to begin with the roll out of the project and the intended beneficiaries have been reached.

Responding to the question about the service provider for the substance research project, Dr Macdonald said that again it was a question of finding a suitable service provider but the research did eventually go forward. He confirmed that this has now been done in the new financial year.

The savings that resulted from some of the delays were redirected into COVID relief efforts, so the funds were not lost as the DSD was able to reprioritise them to programmes such as food aid . The HOD felt that this was a blessing in disguise because the Department needed those funds more at the time with schools being closed, so food was more of an urgent issue.

In terms of the question taken from page 179, Dr Macdonald asked Mr Jordan to respond to the issue of furniture and procurement delays and indicate what that related to. He also asked Mr Jordan to give a little more detail around the delay concerning vehicles for disabled persons, which were procured in the new financial year which was done through the Department of Transport and Public Works.  He also asked Mr Jordan to speak about the costs associated with the modification of the vehicles as Committee Members wanted to know if these were market related or if it is something that can be done cheaper.

Mr Jordan explained that the delays with the furniture were caused due to issues with the service suppliers, which resulted in getting the furniture being quite a process. Another reason was because of the refurbishment and renovations of places like Atiniqua and those kinds of secure care centres.

With regards to the disabled vehicles Mr Jordan felt it would be best to first give the Committee Members a guideline on the fact that the Department of Transport and Public Works are the ones that act as an agent on behalf of the DSD, when these vehicles are being purchased. These four vehicles are specifically for four special day care centres, for children with intellectual disability. The Provincial Department of Public Works, had to make use of a tender process that was already approved by the National Department. there was a National tender that was allocated for the purchasing of vehicles so the DSD did not make use of their own tender process, it followed the process of  National, where it had already identified service providers. The reason is that the vehicles are specific vehicles, Quantum vehicles, and two of them are 24 seaters and two of them are 16 seaters. So the prices are quite steep compared to if the DSD had to go directly to Toyota or any other brand company in Cape Town. The prices are cheaper when acquired through the National tender process. To illustrate his point Mr Jordan gave the following example: if one take a 24 seater, for the one 24 seater each chair needs to be accommodated for the abilities of a child with physical and intellectual disabilities. Also special seating arrangements need to be done. The safety belts also need to be specially done. The most expensive part of such adaptation, is that at the back of the vehicle it needs to be fitted with a lift which is called a waist, so that a person with a wheelchair can be waisted up  into the vehicle. So all of those costs are quite expensive as compared to purchasing a vehicle for an able bodied person. The adaptations make it more expensive.

Mr Jordan confirmed that the adaptations were completed in this financial year, although it is not included in the report that is currently being discussed by the Committee. The vehicles will be handed over to the NGOs in the near future.

The next question to be responded to related to page 202 regarding the over payment to NGOs. Dr Macdonald asked the CFO to respond to that question briefly.

Mr Smith started his response by saying that it was unfortunate that NGOs had been overpaid but with NGOs the Department normally pays them in advance so in some cases they were previously paid on a quarterly basis and some cases they were paid on a monthly basis. He explained that what happened in this instance is that the DSD had already paid NGOs but could not continue with their services, which resulted in the NGOs having funds and being overpaid. Some of them could not be subsidised going forward because of that. The Department is hopeful that when the NGOs are subsidised and have the capacity in terms of funds they will repay the Department. Until then the information regarding these NGOs is still recorded in the Departments books.

Responding to the question about whether it was value for money to have the DSD and the NGOs distributing food parcels, Dr Macdonald said given the very fast roll out it was a case of having all hands on deck. The NGOs assisted with delivery and the DSD local offices assisted as well to try and expedite the distribution as far as possible. The NGOs were doing what they could with their capacity and the Department was also doing that. According to Dr Macdonald the value for money was relatively good simply because the parcels that the Department funded compared to the prices that SASSA was getting from its service provider and the contents. Compared to other Provinces as well the Western Cape DSD believed it was getting better value for money. It worked out cheaper than if the Department had gone out to tender and done it through the for profit companies. The NGOs that were funded and participated also put in their own equity and own donor funding to minimise the costs of these parcels. So in terms of the content the Department feels it got value for money for the taxpayer and the beneficiaries of these parcels.

Answering the question raised in relation to page 198 about writing off of staff debt and details  of damages to vehicles  raised by Ms Barnes, Dr Macdonald explained that generally the majority of staff debts relate to cases where they have either been overpaid  for whatever reason or due to claims against them. In most instances it does relate to those kinds of issues. In terms of the damages to vehicles there have been instances of damages to vehicles by staff as the Department has a large fleet of vehicles and a large number of staff members using those vehicles. So there have been a number of incidents but some of these incidents have not been the staff members fault eg: another driver driving into them. Majority of cases are relatively minor like a bumper bashing or officials backing into a street light pole or something like that. Where there is potential negligence on the part of the official then there will be an internal control investigation followed by a disciplinary process. There has been a number of disciplinary process related to misuse of GG’s and damages. However the principal of state cover for employees, which applies in the public service  in most instances unless there is gross negligence, state employees do not forfeit their state cover. So although disciplinary action is taken which can include suspension without pay amongst other things or even dismissal if it is a very serious case in most instances the State will not be able to recover the costs from the official under the current state cover policies and regulations. That then becomes one area where the Department has to write off loses. Dr Macdonald asked Mr Smith to speak to the staff debts.

Mr Smith explained that mainly with staff debt it is the resignations. It so happens that some of the Departments staff resigns within a month and sometimes that month is not sufficient to calculate any outstanding debt against that official. The law prohibits the Department from touching the employees’ pension unless there is permission given beforehand. This is the one type of debt that the DSD finds itself sitting with. The other type is major pillar decisions. When major pillar decisions take longer than it should, the Department has cases that are eventually turned down and the leave becomes unpaid and in some cases staff has already left.  Those are just a few examples of the debt that can arise from staff and here and there, there can be administrative errors that arise where calculations are incorrect especially where there are OSD cases. The Department will recover the funds from staff. In the case where staff has already left and it cannot trace the staff member, the Department will engage the State Attorney for advice and then write the debt off as a bad debt.

Regarding the access control data on page 213, Dr Macdonald explained that the information provided has to do with access to the DSD buildings. The Department of Community Safety is the service provider that provides the security and access points for the DSD, whether it is at head office or at the local and regional offices. It also keeps all the data and so forth for the DSD and assists with the access cards and access management for staff. The reason why it is mentioned is because it is a service  but the DSD gets it free of charge as the Department of Community Safety does not claim back the services it has provided.

Discussion

Ms Nkondlo said that she has a few follow up questions. Regarding the local content irregular expenditure, she asked that the Committee be furnished with a full report of the steps taken to the point where it is said that the irregular expenditure is allowed. She said that she felt that there were not enough details given regarding this matter therefore a written submission will suffice.

She said she would be interested to hear from the HOD given that he said the Department gained value for money in terms of their food parcels method, what the cost is between what it pays and what the NGOs pay per food parcel.

Making reference to page 206, Ms Nkondlo said she has one last question around the contingent liabilities. There are claims reported on but the details of those claims are not provided.

Department Response

Dr Macdonald responded saying that the Department can provide a report to the Committee with details around the irregular expenditure. He then asked Mr Hewu to speak to how much the Department spent per food parcel.

Mr Hewu explained that the Department spent R400 per food parcel after a comparison was done with National. It was then decided that this was value for money.  

Dr Macdonald asked the CFO, Mr Smith to respond to the question about contingent liabilities on page 206  and give details about those claims in terms of what those claims are about and their status. If it is not available it can be provided in writing.

Mr Smith suggested that it will be best that the details be sent through in writing to the Committee simply because he did not have them available at that point in time.

The Chairperson then asked the Committee Members if they had any further questions. Once Members confirmed that there were no more questions he gave the chairperson of the Audit Committee an opportunity to share any views he may have based on the presentation and discussion.

The chairperson of the Audit Committee expressed  that he felt the DSD had done very well given the exceptionally difficult circumstances everyone finds themselves in. He said that the DSD has been one of the frontline Departments for the last 10 months. For the Department to have had service delivery remodelling and working under the circumstances to maintain its clean audit status was a great effort from the HOD and his team.

As the audit team it has been speaking on the intensification of service delivery and while the yard stick of a clean audit is fantastic the intensification of service delivery and meeting the requirements and the expectations of the populous is also exceptionally important. Again the chairperson of the Audit Committee congratulated the Department on a job well done and confirmed that it will be available to guide and assist it in any which way possible.

The Chairperson then noted that he had overlooked giving members of the public an opportunity to comment. He then asked Mr Davids if there were any members of the public that had anything to raise. Mr Davids confirmed that no one from the public had given an indication of a desire to raise anything.

In closing the HOD thanked the Committee, his team and Minister for the support that was given over the year especially under the circumstances.

MEC Fernandez was given a chance to say something and she began by thanking the Chairperson and the Committee co-ordinator but more importantly she thanked the Committee for a very robust engagement. She said that she was grateful to the Committee for asking pertinent questions as this spoke to exactly what oversight was about. She guaranteed that the Department had committed to providing certain pieces of information and that this information will follow.

She also thanked the audit committee and the AG for their support while getting everything prepared. She said that she was well aware that a clean audit is not the only measure of good governance and that in fact she would like to measure the impact of service delivery, to ensure that services reach the most vulnerable recipients. She also thanked Dr Macdonald and the entire team, reiterating that the Departments challenges are not over as the country has just come out of the second wave and this means that it will be increasingly difficult, but the Department will soldier on and it pledges its cooperation and to work in a very transparent and dignified manner.

The Chairperson thanked the Minister for availing herself and thanked the Department for its hard work. He added that the Committee values the cooperation that has been shown through the responses that have been given and said that those issues that need a follow up will be followed up on. The purpose of the meeting was not to catch the Department out but to try and ask constructive questions so that the issue of service delivery is addressed as is actually needed. He also thanked the Audit Committee for being a very crucial stakeholder in the drive of accountability and oversight. He also thanked the AG for being a dependable ally in assisting the drive of good governance and always being available.

After excusing the Department, Audit Committee and AG, the Chairperson addressed the Committee Members and asked to get an indication of any proposals for resolution from the Committee regarding the presentation given by the Department.

The Chairperson noted that there was one resolution that was raised even by the Department itself, in terms of giving written replies to the questions, especially the question of providing a list of the  irregular expenditure. Mr America raised that the Department had committed itself to providing more details regarding the contingent assets particularly for the R1.460 million. Ms Nkondlo raised that it should be noted that the Department said that it currently did not have information about the claims and that it would send a follow up in writing.

The meeting was then adjourned

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