Department of Social Development 2020/21 Audit & Annual Report

Public Accounts (SCOPA) (WCPP)

22 November 2021
Chairperson: Mr L Mvimbi (ANC)
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Meeting Summary


Western Cape Government Departments 2020/21 Annual Reports

The Committee convened on a virtual platform to engage on the annual report of the Western Cape Department of Social Development for 2020/21. In the first part of the meeting, which was closed to the public, the Committee was briefed by the Auditor-General of South Africa and the Audit Committee for the Western Cape Government’s Social Cluster on the audit outcomes of the Western Cape Department of Social Development (WCDSD) for the 2020/21 financial year.

In an open meeting, the Committee discussed sections of the WCDSD’s Annual report which dealt with Governance and Financial Matters.

The Western Cape Minister of Social Development, Ms Sharna Fernandez, told the Committee that the Department had never experienced a reporting period like the one under scrutiny. The impact of the COVID-19 pandemic had not been anticipated and the Annual Performance Plans (APPs) were therefore not aligned with the response to the COVID-19 pandemic. The result was that a lot of work that had been done was not reflected in the Annual Report because it had not formed part of the original APPs. The pandemic had had a deep impact on poverty and unemployment, which required the WCDSD to be swift and responsive to community needs.

The Minister expressed concerns about the findings by the Auditor-General about the Department’s interpretation of spending regulations. She was also concerned about the amount of red tape spent on that exercise.  She proposed that the COVID-19 pandemic required a different kind of thinking and methodology in delivering services efficiently. Viewing the audit report as a box ticking exercise would be misplaced. It should rather be viewed as a response to a global pandemic. She suggested that there should be reforms so that the needs of the most vulnerable could be addressed in the quickest manner without getting caught up in technicalities.

The WCDSD’s Head of Department said that governance had unfortunately taken a backseat during the period under review. Areas of governance had not been as tight as usual because everyone had to get accustomed to a new set of processes in providing humanitarian relief during the pandemic

Members questioned the WCDSD on measures put in place to address non-profit organisations (NPOs) which did not comply with financial regulations. They asked about measures to mitigate Covid-19 risks to the safety of staff members and those in old age homes and asked about the effect of the pandemic on efforts to mitigate gender based violence (GBV).

Members sought an explanation for the differences in interpretation of National Treasury instructions by the Department and the Auditor General.

The WCDSD explained that the lockdown had made the monitoring of NPO contracts an escalated risk because the department could not conduct site visits. Steps put in place to conduct compliance monitoring during the lockdown included a requirement for NPOs to submit documentary evidence via the WhatsApp application or in picture format. The Department attempted to support NPOs when they became non-compliant. They were given extensions on their audited financial statements. The Department also assisted them with filling in the application forms for re-registration processes and in communicating with the local authorities.  

The mitigation of risk to staff was done through the provision of protective equipment, the implementation of remote working and the vaccination of staff members and those in old age homes.

The WCDSD said it experienced difficulties in accessing communities for GBV services during the lockdown. The primary challenge with all social work services was not being able to make direct contact with clients during the lockdown. The number of reported cases also dropped during the hard lockdowns presumably because victims could not reach authorities. The WCDSD had tried to mitigate those effects by adopting measures like taxi services for victims of GBV who had to move urgently to safe spaces. Six new shelters had been made available by the national Department of Public Works and Infrastructure and set up in rural areas during the year under review. NGOs had been funded to look after those centres and the victims of GBV they housed.

Challenges in filling posts were also experienced. When internal candidates were promoted, it resulted in vacancies and a lag in time while the vacancy was advertised. It was difficult to adhere to rigid National Treasury limits on employment costs because of the unpredictability of vacancies.

There had been a decrease in current liabilities, with a total of R13 million in underspending. Additionally, underspending of Conditional Grants for Early Childhood Development Centres and NPOs had been due to the lapse of registrations and issues with audited financial statements of some organisations.

Meeting report

Opening remarks by the Chairperson

The Chairperson asked if the Auditor-General of South Africa (AG) was represented in the virtual platform meeting. This was confirmed by the Committee Secretary who also confirmed that Mr Ameen Amod, Chairperson of the Audit Committee for the Western Cape Provincial Government (WCPG) Social Cluster, was also present.

The Chairperson said the purpose of the meeting was for the Committee to consider the Annual Report of the Western Cape Department of Social Development (WCDSD). The meeting would take place in two parts. The first would be an in-committee meeting which meant that members of the public would not be privy to the discussions. The purpose of the first part of the meeting was for the Committee to be briefed by the AG and Audit Committee on the WCDSD’s audit outcomes. Once Members of the Committee had asked questions of clarity and engaged with the presentation, the second part of the meeting would commence where Members would engage the WCDSD itself.

The closed meeting lasted for 46 minutes, after which the Chairperson welcomed the WCDSD to the open meeting to consider the Annual Report of the Department. The Department was represented by its political head, Ms Sharna Fernandez, Provincial Minister for Social Development, and its Head of Department (HOD), Dr Robert Macdonald. The Chairperson said the meeting was open to the public who could also ask questions or make comments on the report once Members of the Committee had engaged with it. 

Opening remarks by the Minister

Minister Fernandez thanked the Committee for the opportunity to present the WCDSD’s Annual Report for scrutiny. The first component of the report had been presented that morning and the current focus would be on Sections C and E which covered Governance and Financial Matters. Ms Fernandez said it was key to emphasise that the WCDSD had never experienced a reporting period like the one under scrutiny. The impact of the COVID-19 pandemic had not been anticipated and the Annual Performance Plans (APPs) were not aligned with the COVID-19 pandemic. Therefore, she reiterated what she had said that morning: that a lot of work had been done which was not reflected in the Annual Report because it had not formed part of the original APPs.

Minister Fernandez said there was a need for the WCDSD to be swift and responsive to community needs because of the deep impact of the COVID-19 pandemic on poverty and unemployment. Departments had morphed from a siloed approach of working to transversal working groups. The WCDSD was heavily involved in humanitarian work. A lot of their work was not covered in the report.

Having read the entire report and with her understanding of the challenges the finance team faced, she was concerned about the interpretation of the legislation and its application. She was also concerned about the amount of red tape spent on that exercise as well as the amount of time that the AG spent in any specific department. The COVID-19 pandemic required a different kind of thinking and methodology in delivering services efficiently. She therefore feared that viewing the audit report as a box ticking exercise was misplaced. It should rather be viewed as a response to a global pandemic. She wanted some work to be done in that space. She made a commitment that she and her team would continue to collaborate with the AG and the Audit Committee. They had always enjoyed a good relationship, but she admitted that the last experience had been taxing.

She understood that there was work to be done but she insisted that the future had to be co-created so the needs of the most vulnerable could be addressed in the quickest and easiest manner without getting caught up in technicalities. When members of the public posed questions, they were unaware of the processes that needed to be followed.

Minister Fernandez said she definitely supported good governance and, coming from 30 years in banking, she understood the need for governance and control mechanisms. However, she also thought it would be worthwhile to navigate a way beyond what had transpired in the last round of reporting.

She thanked the Chairperson for the opportunity and availed her team to answer any questions. She repeated that the Committee should take cognisance of the plentiful work that had been done but had not been captured in the Annual Report.

Opening remarks by the HOD

Dr Macdonald thanked Minister Fernandez for her introductory comments. He also thanked the Committee for the opportunity to engage. He said Minister Fernandez had covered everything but added that it had been a difficult year of rapid adjustment to the disastrous situation that had been presented.

The WCDSD had had to move quickly earlier in the financial year when lockdowns were put in place on short notice. The core service provider for social relief, the South African Social Security Agency (SASSA) had been in a process of getting their systems ready to provide COVID-19 support. During that period a gap was created and the WCDSD had to provide food relief to people who had been limited to staying at home by the COVID-19 Regulations.

Dr Macdonald said that governance had unfortunately taken a backseat during that time, which was reflected somewhat in the report. There were areas of governance that were not as tight as usual because everyone had to get accustomed to a new set of processes in providing humanitarian relief in response to the pandemic. The year had been a disruptive one for governance and administration as there had also been an adaptation to remote working. Essential services had to be secured for business continuity during the disaster period. Thus, the planned governance activities and compliance issues could not be kept up to the usual standard, which was reflected in the reporting by the AG.

He acknowledged that there was work to be done to catch up on the governance front. This was reflected in the audit report and in the inputs from the audit committee. There was no time to do so during the disaster period. The levels of assurance and accounting were reasonable considering the unstable and challenging conditions which had also been reflected in fellow departments.

The funding of non-governmental organisations (NGOs) had continued throughout the period. The Western Cape was the only province that had managed that, which he felt spoke volumes about the administrative team who ensured funds reached the NGOs during that time. He thanked his team for that.


Section C of the WCDSD Annual Report

The Chairperson gave Members the opportunity to ask questions and engage with the Annual Report. 

Ms N Bakubaku-Vos (ANC) commended the WCDSD and Minister Fernandez for their hard work and acknowledged that the Department of Social Development was a difficult one because it had to bear the burden of the entire Western Cape. She said that people were vulnerable and the WCDSD had multiple tasks to fulfil. She encouraged them to keep it up and be strong. She appreciated the fact that political power had not been used within the department in its service to society.

Turning to page 116 that outlined the key risks considered and addressed during the year, Ms N Bakubaku-Vos referred to ineffective management of contracts with non profit organisations (NPOs). She asked how prevalent the issue was within the WCDSD. Were there strategies to address non-compliance among NPOs? What measures were in place to mitigate safety risks among staff?

Staying on page 116, Ms Bakubaku-Vos moved onto the fourth paragraph and asked for minutes of the Enterprise Risk Management Committee (ERMCO) meetings and the mitigation factors that were agreed upon.  She also asked what mitigation measures were put in place against the disruption of services due to the COVID-19 pandemic.

Turning to page 117 that detailed the key emerging risks for the following financial year, Ms Bakubaku-Vos asked about the effect on food security. She wanted to know what mitigation measures were put in place to address risk and what measures were in place to support communities and households.

Ms Bakubaku-Vos also asked for more details regarding the three cases of employees that were dismissed as detailed on page 118.

Ms N Makamba-Botya (EFF) had two questions from Part C of the report. Beginning on page 118, she said the nature of the three cases outlined were very serious and she noted that they had since been closed. She asked whether those employees were still employed by the WCDSD.

She also asked what caused the under expenditure of R65 000 for Goods and Services detailed on page 117. How did the WCDSD account for that?

Ms A Bans (ANC) asked a question about health, safety and environmental issues listed on page 120.  She asked what measures were put in place to mitigate that risk in old age homes. Secondly, what was the number of elderly persons and staff in old age homes that were vaccinated? How many employees within the WCDSD were vaccinated?

Ms Bans turned to page 122 that dealt with the staffing assessment report and the request for additional staff for the West Coast Region that was submitted to the DSD Head Office in 2018. She asked for an update on the challenges at the West Coast Region and the DSD Head Office.

On the investigations of payments not made within 30 days outlined on page 129, Ms Bans asked for the number of invoices not paid within 30 days and the reasons therefore. 

She referred to page 132 which dealt with Audit Committee reviews of the WCDSD’s processes for compliance with legal and regulatory provisions. She asked if that included compliance challenges faced by funded NPOs. She asked for an elaboration of that point.

Ms Bans turned to the last sentence on page 133 that stated that the Audit Committee noted increased findings raised by the external auditors that resulted from differences in interpretations of National Treasury instructions. She asked the WCDSD for clarity on the findings that were raised.

Ms R Windvogel (ANC) asked a question on page 118. She asked for the number of employees that had obtained approval to perform other remunerative jobs outside the public service. Were there any employees that performed remunerative work without approval?

Turning to page 119, Ms Windvogel asked how many employees appeared on the Central Supplier Database and how many had obtained approval.

Ms M Maseko (DA) began by congratulating the WCDSD for the sterling work it accomplished through the rough year. It was especially tough for the WCDSD which had to shoulder the responsibility for the well-being of many families who had to be sustained. Above that, achieving a clean audit was a plus as services continued to be delivered throughout the province. For that she saluted the entire team.

Addressing Minister Fernandez, Ms Maseko said gender-based violence (GBV) had not stopped but had increased during the lockdown. To what extent had there been mitigation of GBV numbers and how had families been relieved during the COVID-19 pandemic? What were the difficulties around accessibility faced by communities? She believed accessibility had been difficult during the lockdown and giving assistance to communities was also a difficulty, as she had found as a public representative. How did the WCDSD employ innovative ways of dealing with that or how would they budget to sustain that?


Dr Macdonald said the issue of ineffective management of NPO contracts came into focus during the lockdown period because the WCDSD could not conduct site visits for compliance monitoring. Those had since resumed. Steps were put in place during the lockdown period to require the NPO to submit documentary evidence via the WhatsApp application or in picture format to mitigate the fact that the WCDSD could not be on site during Lockdown Levels Four and Five.

He said there was still a fair level of non-compliance among NPOs and unfortunately there had been some within the Early Childhood Development (ECD) sector that had to close because they could not sustain themselves. Even though the WCDSD had been funding them they also required funding from fee-paying parents who stopped attending. Other forms of non-compliance involved the lapsing of organisations’ registrations or the inability to meet the norms and standards for the services required. In those instances, the WCDSD assisted the organisations to correct the error before funding was terminated as that would leave a gap in services in communities. All efforts were exhausted. There was an NGO Support Unit within the WCDSD that assisted NGOs with such matters as well as with governance skills.

Dr Macdonald said there were organisations that didn’t use the funds for intended purposes and the WCDSD had to take a hard line as it faced the risk of funds being stolen. Fortunately, there were not many cases like that during the year and there were no new referrals to Provincial Forensic Services for investigation during the year under review. There had been no reports of abuse of funds.

Minutes of the ERMCO could be provided.

Dr Macdonald also spoke about the strategies put in place to mitigate the risk of disruption to services due to the COVID-19 pandemic. These included remote working arrangements for personnel on the administrative front that required a decentralisation of access to systems to ensure the continuation of payment runs for NGOs, service providers, contracted services and the payment of personnel.

There were also remote working arrangements for frontline service delivery staff. Where possible, various kinds of telephonic and virtual link ups were introduced for social workers and their clients, and direct contact was limited to absolute necessity. The courts also adopted some of these strategies.

On the workplace safety, Dr Macdonald said the WCDSD provided transport to personnel who had to work in facilities and those who normally used public transport so that they could travel safely to work using government vehicles during the period of the hard lockdown. Personal protective equipment (PPE) was extensively provided to personnel. Sanitizer was also provided.

That was how some of the disruptive effect of the pandemic on services was mitigated. However, in some instances the disruption could not be avoided, particularly where it involved group work or congregations of people that were prohibited during the higher levels of lockdown. Those services had to be delayed to a later part of the year when group settings were allowed. The ECD centres were also disrupted as they had been closed by direction of Ms Lindiwe Zulu, national Minister of Social Development. There were thus some forms of disruption that were unavoidable but most of the essential services were sustained. The most important systems like the Child Protection System and the GBV System as well as the one that catered to the elderly were sustained.

On food security in the communities, Dr Macdonald said the primary measure put in place for the distribution of food relief began with food parcels. He admitted it was not the most efficient way but it proved to be the quickest way when the lockdown was initially declared. Secondly, the allocations of funding to Community Nutrition Development Centres (CNDCs) were increased. Allocations to targeted feeding sites were also increased. The ECDs were permitted to continue providing food to children on a takeaway basis so the children still obtained daily nutrition from the ECDs even though they could not attend them. There was also a close working relationship with the Department of Education (DOE) to coordinate food relief as the DOE had reinstated the School Feeding Scheme which ensured the learners who got food at school were still able to access nutrition.

Later in the lockdown, SASSA came on board with larger amounts of funding through the COVID-19 Grant. The WCDSD worked alongside SASSA to mitigate food insecurity. Additionally, the Solidarity Fund also rolled out food relief in coordination with the WCDSD to ensure there was no duplication of services. Private donors also provided mass support through various community kitchens and NGOs. The WCDSD also received a lot of private donations which were duly disclosed in the Annual Report.

In addition, farmers under the Department of Agriculture (DOA) provided support through food gardens and the delivery of produce that couldn’t be exported due to the lockdown. There were also other forms of support like the Expanded Public Works Programme (EPWP) which received increased allocations for its workers. The EPWP employed more people to spread income, food vouchers and the distribution of ingredients to informal food kitchens.

Dr Macdonald said those measures would continue and the DOA was also working on the implementation of the Nourish To Flourish strategy which was a shift towards sustainable food security. Thus, while the WCDSD continued its food relief, the DOA drove the roll-out of community gardens, residential gardens and other forms of sustainable community based nutrition. That was a long term approach to strengthen the resilience of food security in the province.

Addressing the three cases against employees, Dr Macdonald said these were closed at the start of the financial year. The first case involved an allegation of corruption against a staff member at one of the Child and Youth Care Centres. The report came via a hotline tip off. The second matter alleged the fraudulent use of funding at a funded organisation. The third case also involved an alleged misappropriation of funds at an NGO. On the outcome of the investigations, Dr Macdonald said the first case involving corruption at the NGO had been handed over to the Hawks for further intervention. The second matter had been handed over to the South African Police Services (SAPS) at Hout Bay, where a case number had been issued.

The case at the Child and Youth Care Centre resulted in a finding that it was not corruption but an irregularity that had to be addressed through corrective measures. Giving more detail, Dr Macdonald said the alleged corruption was related to Bosasa, which was a former service provider to the WCDSD. It had been alleged in Bosasa’s appearance before the Zondo State Capture Commission that two DFD officials received gratuities from Bosasa while employed at the WCDSD. There had been no actual evidence of their involvement or influence in the management of the Bosasa contract at the WCDSD at the time. It dated back many years and thus it was difficult to find evidence. There was however confirmation that the two officials received benefits from Bosasa which had not been declared. This was in contravention of the requirements to disclose gifts and donations received. The fact of the matter was that there was no evidence of actual corruption or wrongdoing in exchange for those gifts. He said it was inferred that there was certainly a conflict of interest and a report on that had been handed to the Zondo Commission on State Capture.

On the other hand, there had been confirmation of theft in the allegations against the organisation in Hout Bay. This was also the case with the third organisation and both matters were with law enforcement authorities. Dr Macdonald confirmed that the employees involved in the Bosasa matter were no longer employed within the WCDSD. Both had left in 2014.

On the underspending, Mr Juan Smith, Chief Financial Officer, WCDSD said the R65 000 related to private telephone calls. As a result of remote working from home there had been an under collection because when staff made private calls in the office, they had to pay for those private calls. There had been an under collection due to most of the staff having worked from home.

On measures to mitigate health and safety risks, Dr Macdonald said he had addressed the measures put in place for departmental employees. He clarified however, that the WCDSD did not run any old age homes but only funded them. Funding had been allocated to old age homes so they could obtain the necessary PPE to ensure the protection of the staff and residence of the homes. That was extended homes for the disabled as well as child and youth care centres. In addition, the old age homes were in the front of the queue for vaccinations, along with the department's staff. There was currently only one case of COVID-19 in a staff member within an old age home. The risk was thus very low.  A total of 20 957 elderly people and 11 432 staff members in old age homes had been vaccinated. Within the WCDSD, 1 438 out of 2 544 staff members had been vaccinated. These were the people who had confirmed with the department. It was possible that others had received their vaccines privately and had not informed the WCDSD.

On the staffing report and challenges raised in the report of 2018, Dr Macdonald said a copy of that report could be provided. Ms Annemie van Reenen, Director, Operational Management Support, elaborated on the West Coast issues. She indicated that the vacancies had been filled. However, subsequent to the filling of those vacancies, two staff members had been lost. Graduates had thus been added to assist with the service delivery issues and the workforce issue had been resolved.

Mr Smith (CFO) explained why some invoices were not paid within 30 days. He said the WCDSD dealt with 47 000 payment batches. Of those, there were six invoices that were paid after 30 days. Three of those cases were due to systems errors. He explained that when the processing was conducted and a system message appeared, National Treasury had to clear it before it went further. It could take up to a few days to sort that out which led to payment later than 30 days. There was another case where a staff member had been non-compliant, and that person had since been disciplined. The two other late payments were due to the fact that staff had to vacate their office after a positive Covid case emerged. The time it took for the staff to return to the office meant the payments could not be made within 30 days. 

On the Audit Committee’s review of compliance, Dr Macdonald said it did not include the compliance of funded NGOs. That was a different process. The Audit Committee’ focused on the WCDSD’s compliance with laws and regulations. The compliance monitoring of NGOs was conducted by the WCDSD through its Programme Officers, each of whom had a team of Monitoring Officials who looked at the Quarterly Reports and Annual Financial Statements of the NGOs to conduct compliance checks. Physical compliance checks were also conducted. That had been delayed during the hard lockdown period but had since resumed. The WCDSD flagged any NGOs that were non-compliant. The AG also checked on the integrity of the performance information from NGOs.

On the increase in findings by the AG about interpretation of National Treasury Regulations, Dr Macdonald said this was related specifically to the correction of misstatements in the financial statements. They were related to the way in which the WCDSD used funding for NGOs. The AG found that the WCDSD had funded organisations in a way that instructed them to do certain things, for example around food distribution. That could be interpreted as payment to a service provider as opposed to a recipient of transferred funding. Therefore, the AG found the WCDSD’s use of funding was not in compliance with Transfer Funding Guidelines as issued by National Treasury, but more in line with a Goods and Services approach, which rendered it a compliance issue.

Dr Macdonald repeated his explanation and said the WCDSD consulted the Legal Services department who confirmed that it could be interpreted that way, after which the WCDSD adjusted the financials to reflect the corrected classification. He said it was difficult because National Treasury Guidelines on the differences between Goods and Services and Transfer Funding were quite open to interpretation and difficult to make a call on. In particular, one of the key characteristics of Transfer Funding was that it should be transferred to an organisation but should be requited meaning it should not benefit the WCDSD. Dr Macdonald said the WCDSD’s interpretation thus far was that it couldn’t use transfer funds for goods or services for its benefit, for example for the training of staff within the department or for the provision of government carriage vehicles or for cleaning services for the department. However, the AG and Legal Services were of the view that if an organisation was funded in a way that furthered the objectives of the department that would be seen as requited funding because it helped the WCDSD meet its objectives. It was therefore a very fine line because organisations that did not align with the WCDSD’s objective should not be funded. The wording of the contracts which instructed the NGOs on what to do could be read as an agency agreement with the WCDSD. That was the essence of the difficulty encountered with the Goods and Services and Transfer Funding interpretation. The ambiguity was flagged with the AG as interpretation had such a  profound effect on audit outcomes. Dr Macdonald indicated that the WCDSD was working closely with Legal Services to avoid the situation in the future.

On the number of employees who were approved for remunerative work outside of the public service, Dr Macdonald said 54 employees were approved at that point. There were currently no employees doing that without approval and there had been only one case during the previous year.

Ms van Reenen responded to the question about how many employees appeared on the Central Supply Database. She said there had been none that she was aware of and asked Mr Smith if any had been picked up. Mr Smith said he understood the question to suggest that employees who were directors of companies should resign, and that could be followed up through the Central Supply Database. If those people conducted any transactions with the WCDSD the Central Supply Database would indicate that. It was a preventative mechanism and there were no cases that he could recall.

Dr Macdonald said a list of names of employees that were involved in companies that did business with the State was received from the Public Service Commission. However, when that was followed up with the employees all had resigned from the companies in prior years, but their names still appeared on the database. There was an issue with the database not being updated. He said when the letters were received from the Public Service Commission the employees were asked to provide evidence of their resignation from the companies.

On the difficulties in accessing communities for GBV services during the lockdown, Dr Macdonald said the primary challenge with all social work services was not being able to make direct contact with clients during the lockdown. Courts had also closed periodically due to COVID-19 infections and only dealt with urgent matters. That resulted in some cases being postponed during the lockdown period. The WCDSD had tried to mitigate those effects by adopting measures like taxi services for victims of GBV who had to urgently move to safe spaces. They could quarantine in a separate section before entering the shelters.

Six new shelters had been set up in rural areas during the year under review. They had been made available by the national Department of Public Works and Infrastructure (DPWI) and NGOs had been funded to look after those centres and the victims of GBV they housed. The WCDSD’s footprint had been expanded to reach more people in the rural areas. Access had been challenging during the hard lockdowns. Added to that was the fact that the number of reported cases of GBV decreased during the hard lockdown since the affected victims did not go to authorities due to the restrictions on movement. The GBV cases only began to resurface once the lockdown measures had eased. By that time the WCDSD’s ability to respond had also improved. There was still room for further expansion and that was why the Western Cape Transversal Implementation Plan had been adopted under the National Strategic Plan on GBV. The GBV response had been implemented together with the Safety Plan in the province. It coincided with tackling the murder hotspots as that was where the cases of GBV emerged.

The Chairperson thanked the WCDSD for its responses.

Further Discussion

Section E of the WCDSD Annual Report

Ms Bans addressed the table on page 191 of the report. She asked what had caused the increase in expenditure for minor assets and what assets had been procured.

She also wanted to know what caused the increased expenditure on agency and support outsourced services.

Similarly, she wanted an explanation for the increased expenditure on consumable supplies.

Lastly, what were the reasons for the increase in property payments?

Ms Bakubaku-Vos began on page 198 of the report that detailed the Social Relief sub-programme. She asked why there had been a cut in expenditure on the compensation of employees and wanted to know how many posts had been affected.

Turning to page 201 that detailed the sub-programme for Child Care and Protection, Ms Bakubaku-Vos asked why there were cuts in expenditure on compensation of employees and how many posts had been affected.

She also wanted to know the reasoning behind the increased expenditure on minor assets, contractors, consumables and property payments.

Under Poverty Alleviation and Sustainable Livelihoods on page 207, Ms Bakubaku-Vos asked what the increased budget had been intended for.

On page 208 on the Agents and Support Outsourced Services, Ms Bakubaku-Vos asked why there had been increased expenditure.

Lastly, referring to page 211 Ms Bakubaku-Vos asked what had caused the delays in filling posts and wanted to know how many posts had been affected. Was it a deliberate decision to cut expenditure on the compensation of employees or was it really a challenge in filling posts?

Ms Windvogel turned to page 214 that dealt with current liabilities. She asked what the funds had been earmarked for and why they had not been rolled over.

Proceeding to page 215 that listed the irrecoverable amounts written off, Ms Windvogel asked for the details of those funds and why they had been written off.

She asked for the details of monies written off under the payments for financial assets on page 231.

Lastly, Ms Windvogel asked about the fruitless and wasteful expenditure listed on page 238. She wanted to know how it occurred and asked for the profiles of the officials from whom the funds would be recovered. 

Ms Makamba-Botya pointed to the underspending that took place under the Conditional Grants that pertained to the Early Childhood Development (ECD) detailed on page 212. The reason listed was that the NPOs were non-compliant. Ms Makamba-Botya therefore wanted to know which NPOs were non-compliant and what the WCDSD did to assist the NPOs to ensure compliance.

She turned to page 232 and asked why the Recovery Revenue of R405 000 had been written off. Why had other debt totalling R755 000 been written off?

Mr D America (DA) congratulated the WCDSD. He then asked about the staff debt on page 237. There was a considerable amount of over R2.6 million owed by ex-employees. That comprised relief entitlements and the over-payments of salaries. The explanatory notes said that debt recovery procedures were undertaken. Mr America asked the WCDSD to share what measures were being taken to recoup the monies.


 Mr Smith responded to the questions about increased expenditure on minor assets, consumables, property payments and agency support. He said the minor assets were audio visual equipment at the WCDSD’s facilities, refurbishments at its Service Delivery Areas and equipment like thermometers. Those were all valued at less than R5 000 and therefore regarded as minor assets.

On agency and outsourced services, Mr Smith said the increase was due to the reclassification of expenditure, as Dr Macdonald had already explained. The WCDSD had to reclassify Transfers as Goods and Services. That had to do with Food Relief, the EPWP and PPE which had to be reclassified and which caused the massive increase.

On consumables, Mr Smith said those included uniforms and clothing within the WCDSD’s facilities. They also included linen, toiletries and cleaning detergents which were also COVID-19 related.

On property payments, the WCDSD had had to expand its contracts to deal with the deep cleaning services that had to be done during the year under review.

Mr Smith explained the reason for the cut in Cost of Employment (COE) under Social Relief and Childcare and Protection on pages 198 and 201.  He said the underspend on COE was mainly due to staff exits and the slow filling of posts. Some promotions also took place internally, so the underspend added up to just under R1 million.

Dr Macdonald said the number of months a post stayed vacant also resulted in cost savings. There had been a period during the Level Four Lockdown where the filling of posts had been paused due to the transition to remote working.

On the increased budget for Poverty Alleviation and Sustainable Livelihoods, Dr Macdonald said it was due to the extra funding allocated for the EPWP There was an increase for Food Relief. 

Mr Mzwandile Hewu, Chief Director: Community and Partnership Development, WCDSD, clarified that the bulk of the money was for food relief with only R10 million having gone to the EPWP.

On the increased expenditure on agencies and outsourced services, Dr Macdonald repeated the explanation about the reclassification of the funds.

Dr Macdonald said the delays in filling posts were not a strategy to contain the COE. The WCDSD had determined upfront which posts needed to be filled so the delay was a real challenge. The biggest challenge was that many staff members who had been appointed moved up a post, which left a vacancy in their previous post. It could never be determined whether a post would be filled with an internal or external candidate. Wherever there were internal candidates it resulted in vacancies and a time lag while the vacancy was advertised. It was difficult to predict any amount to be spent on COE because of that factor. The National Treasury gave a very rigid COE ceiling which had to be adhered to.

On the decrease in current liabilities, Mr Smith said it was due to the underspending. There was a total of R13 million in underspending. There was a request for rollover of the underspending.

On the debt write-offs, Mr Smith said this was due to the staff debt of previous employees which the State Attorney had advised was uneconomical to recover. In some cases, the persons were deceased, so the debts had to be written off. In other cases, there were debts due to damage and loss of vehicles. The department could discipline staff members for negligence, but the funds could not be recovered so those debts had to be written off. 

On the fruitless and wasteful expenditure, Mr Smith indicated that there were only two cases within the WCDSD and they occurred before the year under review. During the year under review the funds had to be recovered. In the first case an official booked accommodation for a meeting but did not show up and the official repaid the funds. The other case involved a staff member who travelled outside the province and could not find the venue where the meeting was being held. The person paid back the funds during the current financial year. There was one amount of R773 that remained outstanding which the WCDSD would follow up with the staff member. That would sort out all the fruitless and wasteful expenditure which would be fully recovered. There were no new cases during the year under review.

On the underspending of Conditional Grants for ECDs and the non-compliant NPOs, Mr Charles Jordan, Chief Director: Social Welfare, said non-compliance by ECDs occurred for two reasons. The first was where the registration had lapsed. An ECD had to be registered with the WCDSD every five years after complying with municipal by-laws. The second reason related to the audited financial statements. The WCDSD did various things in the ECD sector to support the NPOs when they became non-compliant. They had been given extensions on all their audit financial statements so the WCDSD could assist them. The WCDSD also assisted them with filling in the application forms for the re-registration process. There was also assistance by communicating with the local authorities if there was a struggle with health and safety clearance or the receiving of an occupational certificate from the municipality for example. That is how assistance was given when it came to non-compliance. The list of non-compliant NGOs was attached to the Annual Report. 

The Chairperson asked Members whether they had any follow-up questions.

Ms Windvogel asked about the incidents referred to on page 246. She asked for details for each incident and why there had been no disciplinary action for the invalid deviation from national instructions. Why had Dr Macdonald approved it?

The Chairperson asked for comments on the transfers to the NGOs who embarked on acquisitions without following the necessary supply chain management (SCM) procedures as highlighted in the AG’s notes. What was the reason behind that?

(The responses could not be captured as the livestream cut out)


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