Provincial Treasury explained that the Western Cape Adjustment Appropriation Bill meant that there was a 2.8% decrease in its budget vote for 2021/22. Various internal virements and shifting had occurred. Programme 1 had been allocated additional funding for agro-processing as well as for the Culture and Leadership Management process. It explained that the underspending for capital assets had been due to a delay in receiving equipment that relied on micro chips. Programme 2 incurred savings as funded vacant posts remained unfilled.
Committee members questioned Provincial Treasury's reporting method for vacancies. They asked for clarity on the Fiscal Futures initiative and the "Building Treasury's Brand " project. After satisfying itself, the Committee adopted its Committee Report approving the R12 million downwards adjustment in the Provincial Treasury 2021/22 budget allocation in the Western Cape Adjustments Appropriation Bill, 2021.
Western Cape Finance MEC overview
Mr David Maynier noted that the Provincial Treasury budget allocation had been adjusted downwards by R12 million. This had largely been achieved by reductions across the various programmes of the department. Provincial Treasury had prepared a short presentation as a scene-setter for Members to engage with. He was looking forward to deliberations with the Committee.
Provincial Treasury adjustment budget briefing
Mr David Savage, Provincial Treasury Head of Department, said the presentation provided a short synopsis of the significant factors for the Committee to better grasp and debate the adjusted estimates.
Mr David Savage, Provincial Treasury Head of Department, briefed the Committee on the changes to the Provincial Treasury Vote 3 in the Schedule to the Western Cape Adjustments Appropriation Bill, 2021. There had been a 2.8 % decrease in Vote 3. Various internal virements and shifting had occurred. Programme 1 had been allocated additional funding for agro-processing as well as for the Culture and Leadership Management process. It explained that the underspending for capital assets had been due to a delay in receiving equipment that relied on micro chips. Programme 2 incurred savings as funded vacant posts remained unfilled
The department had a busy year with Provincial Treasury focused on priority projects. In the medium term, work had been done on risk management and ongoing budget adjustments. A lot of work had also been done on infrastructure, especially in the local government domain. It had also conducted work – and committed itself to – procurement reform in the Western Cape.
Ms N Nkondlo (ANC) noted the savings the Department had recorded in compensation of employees. She added that the vacancies that the Department had anticipated to fill had not been filled across all its programmes. She asked if these vacancies had been repeats from the previous year and if the unfilled vacancies impacted critically on the department's mandate. Were these critical posts important to the department's mandate and organogram? She requested a detailed list of these unfilled vacancies and relevant details such as which programmatic area.
She referred to the department practice of reporting vacancies as a stand-alone item. She wanted to grasp fully how the department had arrived at its conclusions. The Department had recorded these unfilled vacancies as a savings, yet the unfortunate consequence of this is that the funds are being returned to the Provincial Revenue Fund.
Ms Nkondlo referred to the R2.7 million saving on the "Building Treasury's Brand " project. She recalled the Premier and the MEC had previously spoken about this and she wanted to know what this project was about. Also, consultants had been roped in for this project. Had this been a new project and would it be concluded this financial year? She asked if the project had been allocated additional funds, and if funds would be allocated to the project in 2022/23.
Ms Nkondlo noted the interventions that the Premier and the MEC had made on the Fiscal Futures initiative. She wanted to ascertain how this project had been funded as the funds had to be utilised before a certain time, otherwise it would be reallocated.
On the funds disbursed to the province as part of the Presidential Youth Employment Intervention programme, she asked about the reporting and monitoring process for these funds. Did a service level agreement exist between the two spheres of government? She asked if this should be considered as standard given that it belonged to no specific programmatic area or budget allocation.
Mr A van der Westhuizen (DA) detailed his struggle to locate and download the Adjusted Estimates document from Provincial Treasury's website. It would not download. He stressed the importance of access to the document, as it was in the public interest.
He pointed to the R400 000 allocated to "local government for policy formulation by consultants". Had the department determined if consultants had given value for money and if quality assurance was conducted.
The Chairperson requested Provincial Treasury look into the availability of the Adjusted Estimates document.
Provincial Treasury response
HOD Savage said that the department was already following up on the unavailability of the document on Provincial Treasury website. He promised he would do so again as soon as the meeting concluded and thanked the Member for pointing that out. He had been informed that the document seemed to be too big.
On critical unfilled posts, the department had a Critical Vacant Posts Committee which had also assumed responsibility for a strategy for reviewing individual posts to determine if it fell under the critical or non-critical category. Given the current reality, not all posts could be determined critical although certain critical posts had been so determined. That committee reviews and recommends to the Office of the MEC after which the MEC would pronounce on the matter.
Provincial Treasury had relatively high level of skills as it tended to be the place where other departments came to acquire knowledge and skills on supply chain management. Provincial Treasury had not counted this as a cost as it viewed it as enhanced skills and capacity development in the public sector. Some municipalities had the capabilities although the cream of the cream always came back to Provincial Treasury. It could provide the Committee with a list of these critical posts.
On savings, he noted that resignations tended to happen within a month, whereas the process to fill that vacant post took much longer. Each day that a post remained vacant meant a cost-saving to the department. Provincial Treasury had communicated to staff to indicate well in advance of their intentions to resign. For Provincial Treasury what mattered most was a person's ability to support its operations.
A lot of work had been done on Provincial Treasury brand awareness. The work done related to the culture and dynamics of the organisation and not so much about communication.
The programme that Ms Nkondlo referred to had been funded within Programme 2. Provincial Treasury required highly skilled personnel, and thus it continued to upscale and develop the capabilities of its staff.
On the Presidential Youth Employment Initiative (PYEI) in Basic Education, 20 000 teaching assistants had been hired. The Presidency set the framework and the allocation had been included in the provincial equitable share. Provincial Treasury had considered it important to maximise benefits and to this end had entered into discussions with National Treasury. For the second phase of the initiative, the provincial authorities had asked for a much broader definition of eligible applicants that should also include professions such as sports coaches. The provincial authorities had taken an holistic approach. The Department of Basic Education administered the programme.
On the use of consultants, Provincial Treasury had a system in place that facilitated oversight and monitoring of all contracts and value output. Provincial Treasury staff remained close to the consultant every step of the way. "We work hand in glove holding them to account". Other provincial departments had also been engaged to conduct vigorous oversight of their consultants and Provincial Treasury remained ready to assist them.
Ms Annamarie Smit, Provincial Treasury CFO, replied that 28 funded posts remained vacant and that she did have a timeline for by when these posts should be filled. She noted the time it took to fill these posts as sometimes it took six months to a year. Funded posts ranged from Level 9 to 14. A slew of Senior Management Service (SMS) posts had recently been filled.
Ms Naadia Ismail, Provincial Treasury Director: Strategic and Operational Management Support, spoke to the "Building Treasury's Brand " project which had been implemented to review the internal culture and to strengthen this. The first phase dealt with the mapping or diagnostic of the culture, and the formulation of a strategy. The second phase would focus on the implementation of that strategy. The contract which had been slated to conclude at the end of January 2022 would be extended for another year as Covid-19 had derailed efforts.
Dr Roy Havemann, Provincial Treasury Deputy Director General: Fiscal and Economic Services, explained the Fiscal Futures initiative and that Provincial Treasury had produced all the groundwork internally and that outside service providers would be required for the next phase of this project. The Fiscal Futures process is conducted in the run up to the Medium Term Budget Policy Statement (MTBPS). It comprised testing, modelling and mapping that allowed Provincial Treasury to determine forecasts.
Mr Isac Smith, Chief Director: Asset Management, spoke to Provincial Services management and stated that within the province there had existed a sound system of governance and project monitoring. The system had been tailor-made and aided enhanced contract management. It had further been strengthened by a manual that detailed how specifications should determined. This enabled Provincial Treasury to spot anomalies. This toolkit had been offered to other provincial entities.
The MEC thanked the Committee for the robust debate on the adjusted budget.
The Chairperson thanked the MEC and his team for their good work and responses to its various budget cut directives.
Mr van der Westhuizen stated that he had satisfied himself with the Provincial Treasury responses and moved for support of the adjusted budget.
Ms M Maseko (DA) supported the proposal.
The Committee approved the Provincial Treasury adjusted budget. The ANC reserved its position until the House sitting.
The Chairperson read out the Committee Report on the decision by the Standing Committee formally to support the Provincial Treasury adjusted budget in the Schedule to the Western Cape Adjustments Appropriation Bill, 2021.
The Committee adopted the Committee Report on Vote 3.
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