Legal Aid SA 2020/21 Annual Report

Meeting report

Opening Remarks by Legal Aid South Africa (LASA)
Mr Nkosana Mvundlela, Deputy Board Chairperson, LASA, provided brief opening remarks and introduced members of Legal Aid SA in attendance.

Ms Mantiti Kola, Chief Executive Officer (CEO), LASA, introduced the remaining members of Legal Aid SA. She highlighted the impact of the COVID-19 pandemic on the ability of Legal Aid SA to serve the public and provide access to justice. She asked that tribute be paid to their 14 departed colleagues who passed away due to COVID-19 related complications; she applauded them for their contribution to Legal Aid SA and the lives they impacted whilst in the service of Legal Aid SA.

The Chairperson asked that a moment of silence be observed.

A moment of silence was observed.

Legal Aid’s South Africa’s Annual Report for the 2020/21 financial year presentation
Ms Kola presented Legal Aid SA’s Annual report for the 2020/21 financial year to the Committee.

The 2020/21 financial year was the first year of implementation of the entity’s Strategic Plan 2020-2025. Legal Aid SA delivered on over 90 percent of the Business Plan 2020-2021 and achieved its 20th unqualified audit opinion. Legal Aid SA had a turnover rate of 5.34 percent for cases. 2426 staff members were recruited. 99.9 percent was achieved on its internal Information Technology (IT) system availability. The different COVID- 19 Alert Levels adversely affected legal service delivery with court coverage, intake of new matters and finalisation of matters lower than was initially planned. Legal Aid SA adapted its operations through the various lockdown alert levels to ensure that indigent and vulnerable persons were able to access justice. This required Legal Aid SA to make effective use of technology to ensure continuity of service delivery. Video and online conferencing was used in courts.

Targets
All criminal courts and specialised criminal courts, including specialised Child Justice Courts, Sexual Offences Courts and Commercial Crimes Courts were covered. Court Coverage targets were achieved including District Courts at 85 percent, where a target of 84 percent was set and Regional Courts at 94 percent where a target of 94 percent was set.

In the High Courts, representation was provided in all matters requiring legal aid. A quality monitoring and intervention programme was put in place of training programmes, legal research and support programmes, mentorship and supervision as well as access to electronic libraries. Legal Quality Assurance Unit (LQAU) file audit assessments confirmed that all categories of legal practitioners achieved the quality targets for their file audit scores, in both criminal and civil matters. Court observations were not possible owing to the limited functionality of the courts during the pandemic.

Governance
During the 2020/21 financial year all quarterly reports on performance against the Annual Performance Plan as well as the Legal Aid SA Annual Report 2019-2020 were submitted to the Executive Authority. As at the end of the 2020/21 financial year the Board of Legal Aid SA was not fully constituted as 13 out of 14 Board positions were filled. The vacant position was subsequently filled on 26 April 2021. The Board effectively fulfilled its fiduciary responsibilities over the organisational strategies, policies, strategic risks, quarterly performance and review. The Internal Audit Department achieved the target of 95 percent completion of the annual Audit Coverage Plan, with 124 of the 130 planned audit projects completed, as well as an additional six projects.

Human Resource Management
The recruitment rate for the 2020/21 financial year was 86.7 percent against a target of 95 percent. The 8.3 percent variance is mainly due to budget constraints - avoid overspending on the compensation of employee's budget.

Employment Equity Plan 2020-2025 in place and implemented.
            Targets for overall total staff:
                        Blacks – 91 percent; actual 90 percent
                        Africans – 79 percent; actual 75,1 percent
                        People with disabilities 2 percent; actual 1,6 percent
            Targets for senior management:
                        Blacks 91 percent; actual 79.8 percent
                        Africans 79 percent; actual 64,9 percent
                        Women 45 percent; actual 41.2 percent.

Financial Performance
There was underspending on operating expenses such as travelling, given the restrictions placed by the COVID-19 Lockdown, as well as the conservative management of the staff establishment. Two budget cuts in the 2020/21 financial year, totalling R127 million impacted negatively on service delivery and the ability to fulfil their constitutional mandate. Payments to creditors and Judicare within 30 days was below the 100 percent target owing to system and accessibility challenges.

SCM policies and procedures were reviewed and tested for compliance through the Internal Audit Coverage Plan. Irregular expenditure amounting to R1,7 million was incurred. This was a 33 percent reduction in irregular expenditure compared to the previous year. The incidents of noncompliance included conducting of business with non-tax compliant service providers for office accommodation, failure to renew contracts before they expired and other non-compliance with applicable National Treasury Instruction notes.
 Numerous processes and system enhancements were developed to minimise the recurrence of irregular expenditure. Legal Aid SA generally complies with legislation and regulations that govern the organisation. To strengthen the internal control processes, an Internal Control Officer was appointed during the financial year. The acquisition and management of office accommodation remains a challenge as this contributes to 80% of the irregular expenditure incurred by Legal Aid SA.

Conclusion
The R534,670 million total budget cut over the Medium-Term Expenditure Framework (MTEF) period 2021/22 – 2023/24 will result in a reduction in the coverage of courts and delivery of legal aid services to indigent and vulnerable persons, affecting the ability of Legal Aid SA to fulfil its mandate. The new Land mandate funding plans are under way to secure requisite funding for the Land Rights Management Facility (LRMF) transfer to Legal Aid SA from 1 January 2022. Should such funding not be made available, Legal Aid SA will not be able to take over the function in January 2022. Office accommodation challenges will be alleviated with the acquisition of Legal Aid SA properties.

Discussion
Dr W Newhoudt-Druchen (ANC) noted that it had been difficult year, given COVID-19 and the budget cuts. What was the impact of COVID-19 on Legal Aid SA as an organisation, particularly the cost to the organisation? Did the online and virtual meetings include being able to have online meetings with the inmates in correctional services? She congratulated Legal Aid SA on the 99 percent disclosure. She was curious about the one percent who had not disclosed; what was the reason for that? She noted the 1.5 percent for disability - no reasons were provided about why Legal Aid SA could not achieve the two percent target, she asked that this be explained. Gender-Based Violence (GBV) rates increased during the lockdowns, had Legal Aid SA been able to assist with GBV cases during the lockdowns? The Report showed irregular expenditure due to not being tax compliant. What would Legal Aid SA do about this situation? She asked if Legal Aid SA could provide a written response to the Committee listing the Legal Aid SA Offices throughout South Africa.

Mr W Horn (DA) congratulated Legal Aid SA on another clean audit. He noted that the Auditor General (AG) had made some comments about contract management, which seemed to be a problem that was now plaguing Legal Aid SA from one year to the next. What was the plan to improve the situation? The issue of payments within 30 days had seemingly regressed, specifically the Judicare payments which were not paid within the prescribed period. The difficulty of assessing the performance of Legal Aid SA was that to a large extent during the lockdown periods courts had limited functionality. Now there was a situation where there was a backlog roll that had increased exponentially; what measures had Legal Aid SA put in place to assist the criminal justice system to address matters and roll-back some of the increases in the criminal backlog roll. The Committee was informed by the Deputy Minister that unfortunately the Ministerial Management Committee could not be involved in the backlog roll initiative because involvement of the Executive was viewed as a breach of the separation of powers. The Deputy Minister informed the Committee that the initiative of the Executive had stopped. From Legal Aid SA’s side was there an initiative being pursued to deal with the backlog roll, that excluded the Executive? If not, could such a process improve the situation?

Ms N Maseko-Jele (ANC) suggested that there were issues that Legal Aid SA needed to focus on, beyond the clean audit report. These issues had been raised by the Audit Committee, particularly the inadequate contract management, the daily and monthly controls, monitoring of compliance and Information Technology (IT) system controls. She asked for comment on this matter. She was largely covered by Mr Horn on the backlog issue. The top employer accreditation was welcomed for the 12-year period, but there seemed to be an issue of staff leaving Legal Aid SA. Why were staff leaving? What did the Committee need to know about?

Many communities were not happy about the clean audit, when service delivery on the ground was not felt. The service delivery needed to match the report. She raised the issue of a lack of female representation in Legal Aid SA. It was reported that Legal Aid SA had challenges in meeting its targets, particularly for African females in top, senior and middle-management positions. What exactly was the problem? Legal Aid SA had said that it would address that issue between 2022 and 2025, no specifics were provided. Were there even vacancies where this issue could be addressed? The issue of women having to get space and be recognised was very important, it was not a joke. The Committee did not only want to see this in the numbers, the Committee wanted to feel that women were being accommodated in these institutions.

Adv G Breytenbach (DA) stated that it was taking quite a long time to transfer the legal representation function and the budget that went along with that from the Department of Agriculture to Legal Aid SA – why was this and what progress was being made? There was R1.7 million irregular expenditure that was incurred due to transactions of non-compliant service providers, was there a mitigation plan to deal with this? She asked for more information about Legal Aid SA’s ICT system and its security, especially given the ransomware attack on the Department of Justice. Did the attack on the Department of Justice have any effect on the capabilities of Legal Aid South Africa?

The Chairperson asked if any exit interviews had been conducted to understand why there was a high number of resignations and what these interviews had shown. There was under-expenditure of R154.5 million, which was up from the R119 million of the previous financial year. What were the causes for that? Legal Aid SA requested a rollover of R39.7 million – had National Treasury accepted this request? There was R53 million in savings from operations – to what extent would that assist in the next financial year to alleviate Legal Aid SA’s financial challenges. There was an issue that Ms Maseko-Jele had raised that was becoming an increasing concern, being the lack of representation of women and persons with disabilities. For the past ten to 15 years if one went to universities, there were more women than men graduating however this was not translating into the workforce – where did the women end up? He asked if Legal Aid SA had considered online applications, as was done in South Australia, where people were able to apply for legal aid. If not, why? If yes, what would be the relevant details?

He asked if Legal Aid SA had asked the Department of Health to assist with vaccinations, as Legal Aid SA was providing frontline services. He noted the rate of persons who contracted COVID-19 within Legal Aid SA was quite high. Had Legal Aid SA considered that? If yes, to what extent was Legal Aid SA experiencing vaccine hesitancy or resistance amongst staff? If this was experienced how would Legal Aid SA deal with vaccine hesitancy?

Ms Kola responded to the questions about COVID-19 operations. Legal Aid SA had adapted its operations into a ‘two teams approach’ largely to comply with COVID-19 protocols of social distancing and to protect cross-infection amongst the staff. This had worked well for the better part of the pandemic. The two teams approach was still in effect. Due to the two teams approach, Legal Aid SA’s other expenditure items were lower and the biggest cost during COVID-19 was the data and cell phone allowance to enable remote working. This had helped Legal Aid SA ensure that there was continuity of service. Court practitioners were able to liaise with their line managers, utilising the data and remote access so that there was continuity of service and monitoring of the quality of service that Legal Aid SA offered. There was quite a satisfactory take on vaccinations, considering that the percentage to date was 48.6 percent. Legal Aid SA was concerned about the younger members of the team, those under 35 years, where there seemed to be some vaccination hesitancy. Legal Aid SA had invited various experts, through the wellness programme, so that any questions or concerns could be addressed. Since the wellness team, from Human Resources (HR), had started these sessions there had been a positive turn and more staff were going for vaccinations. She was confident that by the end of the year, Legal Aid SA would have reached a vaccination rate of 55 percent.

She responded to the questions about the AG’s concerns. The concerns had been shared with the entity through the management letter. She was happy to say that of the concerns that were raised with Legal Aid SA, almost 70 percent of them were reported to the Board in November 2021 to have been taken care of. The Acting CFO would provide more information on that. Contract management was ‘keeping them awake at night.’ Numerous strategies had been implemented, including system enhancements, where Legal Aid SA had an automated variation system, or an automated system that was intended to help managers tackle this problem. Legal Aid SA had arranged training with National Treasury through the Acting CFO and the finance team so that all the local office managers, and admin managers, were put through training again to deepen their understanding on compliance risk. The AG raised the issue of contract management, Legal Aid SA was prioritising it, this was included in Legal Aid SA’s report to the accounting authority. Legal Aid SA had also outlined how they were dealing with consequence management in the report.

She addressed the concern raised about Judicare. Although Legal Aid SA’s overall payments within 30 days were above 90 percent, the one for Judicare was at 84 percent for the year under review. For the current year Legal Aid SA was sitting at over 90 percent. The reason Legal Aid SA had been below 90 percent was largely due to the instability of the new system, which had since been stabilised. Legal Aid SA was moving to phase two, which would include online applications. The first phase was plagued by problems, but it had been stabilised.

The employment equity targets had been prioritised, if Legal Aid SA looked at where it had been in the year 2019/20, and where it was currently, there had been improvement. For instance, the target for women at a senior management level was 45 percent and Legal Aid SA was currently at 42 percent. Legal Aid SA had made appointments that were effective from December 2021 and January 2022 which would change the current picture. A lot was being done in that space to empower women leaders to ensure that when the positions were available, women could compete with their peers. With the reduction of the budget, for instance in the current year, a reduction of R100 million for employment – that impacted the number of positions that could be filled. For this financial year, Legal Aid SA was not recruiting more than 100 of their approved positions. The turnover was around five percent, Legal Aid SA had never been above 5.5 percent. The industry norm was ten percent. For the Committee’s assurance, Legal Aid SA did conduct exit interviews, for those employees that left the organisation. In the exit interviews, most of the time, no issues were raised.

The unfortunate incident that had impacted the Department of Justice had not effected Legal Aid SA, as there was an independent IT outfit. There was a cyber security strategy that the Board was monitoring closely. The Board had enlisted the support of additional members that were IT experts so that the IT oversight could be increased.

The question of the land transfer was very advanced, Legal Aid SA was grateful for the cooperation of the Department of Justice and the Department of Agriculture. Legal Aid SA had a task team lead by the executive that was coordinating that. Everything was on-track to have the Memorandum of Understanding (MoU) and a commitment for the funding for the new mandate. Internally the legal executive would shed light on the progress to date to prepare for January 2022.

Mr Nkosana Mvundlela excused himself.

Adv Brian Nair, National Operations Executive (NOE): Legal Services, LASA, responded to the question about Judicare. For the first two quarters of this year, the payment rate was 99.16 percent. It was one of the targets that Legal Aid SA did not meet, 100 percent was the target. Legal Aid SA was getting very close to the target. The recruitment level, with the budget cuts in the last financial year, had dramatically slowed down recruitment. For the coming year, there was a further cut of R29 million and the additional R47 million, meant that Legal Aid SA had to fund the deficit in the salary budget, given the cost of living increase. The recruitment had to be carefully managed so that Legal Aid SA did not recruit people for posts and find that they had to retrench ‘warm-bodies.’ One of the methods utilised so far was to identify posts that Legal Aid SA could do without, alternatively to fill certain posts on a temporary basis, whilst determining the overall cuts and if they were able to absorb it.

The backlog situation was regrettable. No other committee had been setup since. It was at local level that the previous interventions were being pursued. Legally in South Africa, local managers had been requested to play a role in the local management committees, to the extent that where there were backlog cases for those matters to be given priority. The development committee that looked at a lot of other issues was currently processing a framework document for the management of backlog and priority cases. It was hoped that the document would be implemented soon, it included many of the previous focus areas. There was consideration of whether a project management office needed to be setup to monitor the implementation of these priority cases and if they were getting through. The document was being looked at to see if data collection and analysis of data could be improved. There were various interventions that were being proposed. Legal Aid SA had a good grip on which cases were backlogged and liked to believe that management on the ground was playing its role. It had been noticed that the backlog numbers, as they were a year before had started to drop across all courts. It was still much higher than their targets, but there was a trend showing that it was decreasing – that was the positive side.

Legal Aid SA had not conducted any online meetings with inmates. That had been one of the key concerns – access to inmates for consultation. Many correctional facilities had been closed due to the pandemic, which had inhibited Legal Aid SA’s ability to adequately meet with inmates, in many cases Legal Aid SA only met them in court.

Mr Sethopo Mamotheti, Chief Operations Officer (COO): Support Operations, LASA, addressed questions of cyber security, disclosure of interest and irregular expenditure. Legal Aid SA conducted penetration tests and IT government reviews regularly. The last penetration test was done the year before, which highlighted gaps that needed to be addressed. Those issues had since been addressed. Legal Aid SA was currently doing a penetration test, which had started in October 2021 and Legal Aid SA was awaiting the outcome. If there were any gaps, these would be addressed. The penetration test was conducted by an independent service provider.

IT maturity was assessed, the year before Legal Aid SA’s assessment was at level three out of five levels. In quarter two of this year, a maturity assessment was conducted and it was found to be at level four, which was positive. Legal Aid SA was confident that the measures that were being taken addressed the risks relating to cyber security. He noted the question about disclosure of interest and why it was 99 percent and not 100 percent. The one percent was made up of employees who were on leave at the time of the cut-off date. Upon their return a follow-up was made and those members would have declared their interests. The internal audit covered that and reviewed the register that was being declared independently. It checked if what was declared was true and complete. Any gaps were highlighted to management.

There were problems with leases the year before. In quarter one and two, he was happy to report that Legal Aid SA had not incurred any irregular expenditure relating to leases. This was because Legal Aid SA had a property management strategy. It was that strategy where a tracking system highlighted and warned people when contracts were about to expire. Legal Aid SA had ‘beefed up’ its property management portfolio and employed somebody that was experienced in this field. One of the options was to acquire properties where they struggled to get landlords that were compliant. An application had been made to the executive authorities as acquisition of property could not commence before permission was granted by the executive authorities in terms of the Public Finance Management Act (PFMA).

Ms Ndiitwani Liphosa, Acting CFO, LASA, stated that Legal Aid SA had implemented a web page and enhanced it so that all contracts were uploaded to it as well as deliverables. Each office and manager was expected to go in and update comments on what had been done on the deliverables for each contract. This had been enhanced, so that supporting documentation had to be uploaded. Every week it was monitored to check that people were inputting the comments for each contract and was signed off monthly to ensure that there was contract monitoring taking place properly, in accordance with the AG’s comment. There was also a web page that had all the contracts Legal Aid SA had in place. It used to be sent out every two weeks to remind everyone about the expiry dates for contracts. It indicated when there was an expired contract and a new one had not been loaded. This was now sent out weekly to improve on this target. Reasons needed to be submitted when no new contract was in place i.e. when combined with another service.

Legal Aid SA had requested the retention of surplus, Treasury had given them permission to retain the surplus, the R39 million would be used to finalise the fixed assets that were procured and only delivered at the beginning of the current financial year. Part of the funds requested, the R53 million, was to top up the budget to procure buildings in line with the building strategy.

The Chairperson asked for the reasons for the under-expenditure that had increased from R119 million to R154 million in this financial year.

Ms Liphosa responded that part of the reason for the under-expenditure was due to the decision made by management to relook at the recruitment, which was done to monitor expenditure. Part of the savings was from the vacant positions. The other savings was from the operational line items, which Legal Aid SA used as part of the request for the retention of surplus.

Ms Kola added that when Legal Aid SA received the outlook for the Medium-Term Expenditure Framework (MTEF) with budget cuts, over R100 million for the MTEF period, Legal Aid SA was cautious not to proceed with recruitment so as to avoid lay-offs within three years. Where possible contractors were used. If not, Legal Aid SA saw how best it could work around the budget cuts. It would not be prudent to go on an aggressive recruitment drive if lay-offs would occur within three years.

Mr Thabiso Mbhense, Legal Executive of Land Rights Management, LASA, stated that there had been a break-through on the issue of funding. It had been agreed that Legal Aid SA would have access to R33 million for the last quarter and R117 million after April 2022. Legal Aid SA was busy finalising the Memorandum of Understanding (MoU) by the following week. Legal Aid SA had a structure, Legal Aid SA would operate from the national office until capacity could be built within Legal Aid SA. Recruitment was being finalised, the HR department was working tirelessly to finalise that process. The hope was that it would be finalised by 30 November 2021. With the transfer of fines, Legal Aid SA was at an advanced stage, because this was being done with the Department. The IT department was working with them as there were systems that needed to be created within Legal Aid SA. It was at an advanced stage, by 1 January 2022, Legal Aid SA would be ready to take over the project.

The Chairperson stated that the strategic litigation had increased from 10 to 13 percent – which areas were covered in this financial year in the strategic litigation?

Mr Patrick Hundermark, Chief Legal Executive, LASA, stated that Legal Aid SA’s strategic litigation varied from year to year depending on the matters that got identified by themselves or externally by service providers. A committee considered the matters that came. This was considered in relation to Regulation 35. The types of matters that Legal Aid SA had funded over the period of time, particularly in the last financial year, had been matters relating to mining, evictions and water rights. It ultimately depended but mostly where issues affected a large number of people were those that were funded. Evictions had been a big issue, in Cape Town the Human Rights Commission was involved, and Legal Aid SA had funded some related matters that had also been funded by the Legal Resources Centre (LRC). There were two booklets that could be made available to the Committee, both 2020 and 2021, where Legal Aid SA set out these matters in detail.

Dr Newhoudt-Druchen stated that she had asked a question about GBV cases during lockdown and what Legal Aid SA’s intervention had been, she had not heard that response.

Mr Nair explained that Legal Aid SA would certainly get involved in all GBV cases in as far as the accused was concerned, if it the case had been taken to court and legal aid had been applied for. From a criminal perspective, Legal Aid SA would assist the accused to ensure that they had legal representation.

Mr Hundermark responded from a civil perspective. The way the regulations were currently worded, Legal Aid SA could only assist in domestic violence cases where the other party was legally represented. Legal Aid SA did not usually get involved at the initial stage. Family law matters currently made up about 48 percent of Legal Aid SA’s cases. Of that the majority were linked to divorces. About four percent were linked to maintenance and domestic violence. There were about 1000 matters the previous year where Legal Aid SA provided assistance on such cases.

The Chairperson thanked Legal Aid SA for their good work under very difficult conditions, particularly the budget cuts.

Mr Matome Leseilane, Chairperson of the Remuneration, Social and Ethics Committee and Board Member, LASA, thanked the Committee for the opportunity to appear before the them as well as their support. Legal Aid SA was aware that the management team and the rest of the legal aid community carried out their work with dedication and commitment. He hoped that in this financial year Legal Aid SA would deliver the desired results.

The Chairperson suggested that there was no serious quality assurance that Legal Aid SA’s IT was up to scratch, given that the presenter was unable to open her camera during the presentation.

Ms Kola stated that the IT capabilities would be outlined in Legal Aid SA’s next appearance before the Committee.

The meeting was adjourned.