In a virtual meeting, the Joint Committee met to deliberate on the 2019/20 annual report and audit outcome of Parliament. The Auditor-General of SA (AGSA) reported that Parliament has achieved another clean audit outcome for the fifth consecutive year since the 2015/16 financial year. Although governance and leadership were fairly good in Parliament, the AG’s Office highlighted its concern over Parliament’s financial and performance management.
Members congratulated the institution on maintaining a clean audit outcome and commended the Preventive Control Guide initiative which served as an example for government. They questioned financial performance management challenges, irregular expenditure and whether auditors were rotated.
Parliament then briefed the Committee on its annual performance. The sixth term of Parliament started with a high base-line performance of over 78 percent that has been maintained despite the transitional challenges of an election year and declining operational budgets. Strategic prioritisation of scarce resources has been embedded in the planning processes of Parliament to minimise disruption of performance levels and ensure institutional sustainability. Constrained, declining operational budgets still remain an institutional risk, which highlights the need for the sixth Parliament to continue to strategically prioritise and use our resources effectively. The institutional response to COVID-19 developments and scenarios will remain a priority that needs to be factored into the business of Parliament. Whilst COVID remains a risk, it is simultaneously an opportunity to modernise and reimagine the operating model of Parliament so as to continue to remain relevant to a future generation of South African citizens.
Members discussed the use of surveys, how Parliament was further broadcasting its activities for all South Africans to be aware of the legislature’s work, public participation in the time of COVID19, engagement with the provincial legislatures, payments made within 30 days to SMMEs and interpretation services. Some Members called for the broadening of annual performance indicators
The Chairperson made her opening remarks emphasising the Joint Committee’s role in ensuring sufficient resource being provided for Members’ oversight functions.
The Committee had received apologies from Ms M Lesoma (ANC), Mr J Nyambi (ANC, Mpumalanga) and Mr M Rayi (ANC, Eastern Cape).
Briefing by the Auditor-General of South Africa on Parliament’s 2019/20 audited financial statements
Ms Sharonne Adams, Business Executive, Auditor-General of South Africa (AGSA), briefed Members on Parliament’s 2019/20 audited financial statements.
Parliament has achieved another clean audit outcome for the fifth consecutive year since the 2015/16 financial year.
Although governance and leadership were fairly good in Parliament, the AG’s Office highlighted its concern over Parliament’s financial and performance management.
Parliament realised a deficit for the current year as well as the prior years. This is attributable to the post retirement employee benefit obligation and exit gratuity.
Further, payments were made to Members in relation to proclamation 48 in the current year as compared to the prior year. This is due to the increase in the number of Members that would exit the political office bearers’ pension fund before or as a result of the 2019 election.
It should be noted that the entire post-retirement benefit and exit gratuity is funded on an annual basis by National Treasury via a direct charge and thus no risk was raised in respect of the going concern assumption for Parliament.
The AG’s report also shows that additional efforts were introduced to improve the status of financial and performance management.
[see presentation attached for further details]
Mr M Moletsane (EFF, Free State) congratulated Parliament’s achievement in maintaining its clean audit for the 2019/20 financial year. His question came from slide ten of the presentation which showed that Parliament was experiencing a bit of a challenge in its financial performance management. Hence, he wanted to know whether any recommendations had been done to rectify the challenge and to improve performance.
Mr N Singh (IFP) concurred with Mr Moletsane’s concern on Parliament’s financial performance management. He wanted to know the nature of some of those findings which caused concerns for the Auditor-General’s office
Ms O Maotwe (EFF) enquired about the zero irregular expenditure on slide eight and asked if there was any fruitless and wasteful expenditure recorded in the 2019/20 financial year.
Ms Maotwe commended the Preventative Control Guide calling it a good initiative. Since the initiative was only launched in September 2020, she wanted to know what the roadmap was to get Members of Parliament and provincial legislatures to be familiarised with the content.
Mr B Radebe (ANC) concurred with his colleagues and congratulated Parliament’s good performance for another clean audit. His question was on whether the people who did the books for Parliament remained the same people or were rotated. He reminded everyone that people usually get too comfortable with the people that they work with - although it is a natural human inclination, it might affect the fairness and quality of the audit work should staff not be rotated.
Ms Adams responded to Members’ enquires on slide ten of the financial performance management. She said that the Office of the Auditor-General checks Parliament’s financial statement, its compliance with laws and relevant regulations as well as any findings on predetermined objectives. The highlighted areas shown on the slide indicated that Parliament had not made its financial statement submission in time due to COVID-19. Hence, the AGSA had to highlight and include it in the management report. She highlighted that consideration had to be given for the COVID-19 lockdown for some late payment invoices that had been paid within the prescribed 30 days. On findings on predetermined objectives, she said there was quite a huge problem that was carried over from the previous year. However, there were some reliability challenges which were related to programme three’s core business. She believed that those errors were material in nature.
Ms Adams responded to Ms Maotwe’s question on Parliament’s fruitless and wasteful expenditure. She asked Members to be aware of Note 31 which had stated that there was R299 000 which had been carried forward from the previous year. She informed the Committee that this amount was R12 000 in the current year which Parliament could clarify how those arose in the subsequent briefing.
Ms Adams said that the Preventative Control Guide had started last year. The Office of the Auditor-General had already held a number of webinars to showcase its rollout. There have been engagements with provincial legislatures. What the Office needs to do now is to make sure that the message is reinforced and being implemented.
Ms Adams informed Mr Radebe that the AGSA has a rotation policy that happens every three to five years. The purpose of which was to ensure that Mr Radebe’s concern would not happen from an ethical perspective. In addition, the AGSA also has various levels of independent persons to conduct quality control. Further, as an institution that is dedicated to training new staff, there are new trainees joining the AGSA every year. Hence, she guaranteed that the audit opinions are fair and unbiased.
2019/20 Annual Report of the Parliament of the RSA
Ms Baby Tyawa, Acting Secretary to Parliament, continued Ms Adam’s response and clarified to Members that the R12 000 wasteful expenditure, as highlighted by the AG, was the result of several traffic offences by various drivers in Parliament. She confirmed that Parliament has its own governance committee investigating irregular expenditure on a quarterly basis and reports back to the audit committee and this Joint Committee.
She further informed Members that Parliament does have a business continuity plan but the plan is largely based on the business of Parliament and is within the parliamentary precinct. The plan was not flexible to deal with a national lockdown as the result of COVID-19. Hence, as a result of the lockdown, Parliament had not had sufficient time to make its submission of its financial statement to the Office of the Auditor-General. The Financial Management of Parliament and Provincial Legislatures Act, No 10 of 2009 (FMPPLA) did not have flexibility to address this scenario either. Hence, Parliament had to use chapter 9 section 65(q) of the draft regulations to act as directive to conduct its business in such an emergency which fell out of the business continuity plan to ensure that Parliament’s clean audit record did not regress. Currently, the lesson learnt from COVID-19 was that Parliament had to devise a contingency business plan to deal with operational matters and situations that fall out of the scope of its business continuity plan.
Ms Tyawa briefed Members on the highlights of Parliament’s performance in the 2019/20 financial year. These included the passing of 17 Bills, eight section 139 interventions, having held 977 committee meetings as well as having conducted 31 oversight visits.
The Committee was then briefed on Parliament’s programme performance information.
The sixth term of Parliament started with a high base-line performance of over 78 percent that has been maintained despite the transitional challenges of an election year and declining operational budgets. Strategic prioritisation of scarce resources has been embedded in the planning processes of Parliament to minimise disruption of performance levels and ensure institutional sustainability. Constrained, declining operational budgets still remain an institutional risk, which highlights the need for the sixth Parliament to continue to strategically prioritise and use our resources effectively. The institutional response to COVID-19 developments and scenarios will remain a priority that needs to be factored into the business of Parliament. Whilst COVID remains a risk, it is simultaneously an opportunity to modernise and reimagine the operating model of Parliament so as to continue to remain relevant to a future generation of South African citizens.
[see presentation attached for further details]
Mr Singh asked the Acting Secretary whether Parliament’s annual surveys must be done every year. He was aware that Parliament’s outsourced this service to independent contractors and Members often get two to three calls a day from those people which is very inconvenient as sometimes Members might be in a meeting. He asked if the surveys were a statutory requirement.
As channel 408 is currently the only medium for the public to know what is happening in Parliament, Mr Singh asked if Parliament has made any effort to broadcast some its activities for people who do not have DSTV.
Mr J Julius (DA) congratulated Parliament’s management and appreciated its good work. He said that the performance indicators in the Annual Report are very limited. He encouraged Parliament to work on broadening its indicators so as not to limit Parliament’s ability to reach out to people. He wanted the Acting Secretary to conceptualise ‘public participation’ in this new dynamic of COVID-19, adapting to new norms and Parliament’s hybrid sittings. He emphasised that Parliament must not forget the people living in township areas without any internet connectivity.
Mr Radebe concurred with other Members’ views and suggestions. He commended Parliament’s leading by example. Given the role of Parliament as an accounting body to government departments and state-owned enterprises, its clean audit report should be a motivation for all.
Mr Radebe said that the issue of permits are disturbing. He said that it is a form of compensation which should be dealt with at the commission that is in charge of the remuneration of Parliament. He asked what Parliament’s staff will need from this Joint Committee to ensure better administration in this regard.
Mr Radebe wanted to know the current state of Parliament’s engagements with provincial legislatures.
Mr Radebe commented on the 30-day payment issue and emphasised that for any country that wishes to triumph economically, it has to prioritise its Small, Micro and Medium Enterprises (SMMEs). Although he understood that there was a pandemic, he believed that those types of enterprises and their payments must be prioritised.
Mr Radebe highlighted Parliament’s need to get more interpreters as a means to show Parliament’s honouring its public participation mandate. He found it very embarrassing that the House had to adjourn because there was no available interpreter this week. He asked the Acting Secretary what Parliament was doing to alter the situation.
Ms Tyawa responded to Mr Julius’s question. She said that Parliament had done some adjustments and had some programmes restructured to better reflect the mandates of Parliament. For instance, Parliament has decided to include public participation as a separate programme in recognition of its mandates.
Ms Tyawa said that the performance indicators are always aligned to the business of Parliament. The sixth Parliament strategy, which was rolled out, addressed some of the concerns that Mr Singh talked about. She said that the surveys were one of the ways to show the opinions of the public of Parliament and surveys assisted in realising the true meaning of public participation. However, she assured the Committee that surveys were not statutory. Parliament is now looking at going beyond doing quantitative research to doing qualitative research. She believed that virtual platforms, such as Zoom, would be very helpful in enabling that qualitative research work. She said more often, people do not even know where their constituency officers were based. With the assistance of technology, Parliament should be able to inform people of their constituency offices by assisting people to find them. She informed the Committee that focus group qualitative interviews would be held. She said that Parliament’s office does not do surveys annually and it did struggle to reach targeted sample last year.
Ms Tyawa addressed Members’ concern on the broadcasting of Parliament’s activities. She said that footage of Parliament is available to the South African Broadcasting Corporation and ENCA, however, those broadcasters selectively broadcast the given footage. Although many Members believed that it was the mandates of the SABC to broadcast Parliament’s activities, the broadcasting has never been free. When Ms Tyawa started her job at Parliament, Parliament was paying a staggering amount of R23 million to buy airtime at the SABC. Although the entity was confronted by Members asking why Parliament had to pay for airtime for it do perform its public mandate, the SABC’s explanation was that non-paying would result in catastrophic revenue loss for the SABC which would close down the entity. The approach taken by Parliament now is that it is going to work with Parliament’s broadcast studio, community radio stations, 80 SABC African language stations with the 11 or 13 infrastructure that had been donated to Parliament. There would also be a studio assembly in Parliament for Members to interact directly with members of the public. Her team was very excited about this new change to send Parliament’s message across the country and enable a larger population to be aware of Parliament’s activities.
Ms Tyawa said that the drastic budget cut, which she would not discuss extensively at this meeting, was indeed a huge risk to many of the operational aspects of the sixth Parliament. The Secretary to the National Assembly manager, who was responsible for language interpreters, had expressed in a programme meeting that Parliament supporting staff are now facing a backlog caused by diseases and colleagues’ comorbidities. The Acting Secretary, on behalf of Parliament’s staff, apologised and said that it was unfortunate that the Presiding Officers had to suspend the House. However, Parliament had intervened and is getting standby specialists who will be there when language interpreting service is required. A similar incident happened at the NCOP sitting yesterday as well.
Ms Tyawa agreed with Mr Radebe that it should not be acceptable that an outstanding invoice to an SMME be delayed, especially during COVID-19. There are divisional managers in Parliament and payments of invoices are being reported to them on a monthly basis. In this quarter three to quarter four, Parliament has paid a total number of 7 722 invoices on time within 12 days which is the equivalency of R58 million. In addition, Parliament has paid 6 353 six-month invoices which totalled R127 million. On average, all payments are done within 22 days. Ms Tyawa said that Parliament absolutely did not want to regress on its compliance on the 30-day payment policy. Currently, there are 243 outstanding payments which are over 30 days. Essential steps, such as queries, have already been made.
The meeting was adjourned.
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