Public Service Portfolio Audit Outcomes; DPME, Brand SA and Stats SA Annual Reports 2021/22; with Deputy Minister

Public Service and Administration

11 October 2022
Chairperson: Mr T James (ANC)
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Meeting Summary

Video

Planning, Monitoring and Evaluation

Stats SA

Brand SA

Brand SA: 2021/22 Annual Report 

Brand SA annual report presentation (outstanding)

In a virtual meeting, the Committee convened to receive briefings on the public service portfolio’s 2021/22 audit outcomes, from the Auditor-General of South Africa. The report included three entities, the Department of Monitoring Planning and Evaluation, Brand South Africa, and Statistics South Africa, whose delegations were all present in the meeting. The Deputy Minister was also in attendance.

The Auditor-General of South Africa highlighted that the Department maintained a clean audit over the years. The Department was the only entity that received a clean audit. The report touched on the leadership oversight that has been entrenched in the organisation; monitoring takes place at all levels; internal audit effectively executes the mandates of the entity by following up on audit action plans and monitoring the implementation of actions to address prior year audit findings, as some of the factors which contributed to the clean audit.

Some of the key targets in the medium-term strategic framework for the portfolio were highlighted. The Department achieved 80% of the targets it had set for itself, and Stats SA achieving 90% of its set targets. The Auditor-General indicated the performance of the various Departments in terms of the medium-term strategic framework. Seven of the framework output indicators had a link to the planning documents of the Department. However, the Auditor-General report indicated one which differed materially from the framework indicators. The indicator highlighted that several jobs would be created through Operation Phakisa, and the planning documents indicated that a number of integrated Operation Phakisa reports were produced.

Brand South Africa presented its 2021/2022 financial year annual report. Although the entity had a good year overall, one of the main issues that were highlighted by the entity was around the issue of understaffing. The board chairperson alluded to the fact that the understaffing was caused by an ongoing moratorium which has restricted the board for quite some time to be able to make the necessary appointments. The looming merger between Brand SA and South African Tourism has caused a lot of uncertainty among employees and instability in the organisation. The board chairperson indicated there had been no formal communication on the merger from the Minister.

Stats SA said it received an unqualified audit opinion with two matters of emphasis. Matters related to an underspending of R283 million for the census. There was also a matter of R236 million irregular expenditure, which was related to the non-compliance with supply chain management prescripts.

Members raised concerns on the issue of vacancy rates within Brand SA. The Committee Members also asked a few questions related to the issue of gender equity and the employment of persons with disabilities. The Committee Members made a few suggestions on ways to address the issues.

The Department presented its progress report before the Committee. The report outlined the nine recommendations the Department had to implement and the progress made thus far.

Members asked for clarity on the way in which the Department determines the consequence management on the non-achievement of targets – the mechanisms used.

Meeting report

The Chairperson opened the virtual meeting by welcoming everyone present. He indicated that the agenda of the meeting would include presentations on the tabled annual reports for the 2021/2022 financial year, by the Department of Planning, Monitoring and Evaluation (DPME), Brand South Africa, and Statistics South Africa (Stats SA). He said that the Auditor-General would present the audit outcomes of the previously mentioned Departments, and a discussion would follow shortly after the presentations.

The Committee Secretary noted apologies from Ms V Maneli (ANC) and Mr C Sibisi (IFP), who indicated that he was experiencing connectivity issues.

Mr J McGluwa (DA) said that, due to the nature of load shedding in the country, he would like to suggest that meetings of this length should be held in-person and not held virtually, as there are still some Committee Members who have not received their tools such as data cards.

The Chairperson acknowledged the point raised by Mr McGluwa, and he handed over the platform to the delegation from the Auditor-General of South Africa.

Briefing by the Auditor-General of South Africa
Mr Zama Kubheka, Manager, AGSA, introduced his colleagues. He outlined the mission and vision of Auditor-General South Africa. He said that AGSA has a constitutional mandate. As the supreme audit institution of South Africa, it exists to strengthen the country’s democracy by enabling oversight, accountability, and governance in the public sector.

Mr Kubheka mentioned the importance of including all the stakeholders, which the AGSA derives support from, in the accountability ecosystem. The AGSA believes that some entities still do not have good audit outcomes. Therefore, with collaborative efforts in the ecosystem, there would be a change in the current trajectory. He took the Committee through the various role players within the ecosystem, saying that the Auditor-General remains in the centre of the ecosystem where it seeks to give insight, influence, and enforcement. He highlighted that the AGSA has been doing audits on the auditees such as the DPME and Stats SA. The citizens are the most critical beneficiaries in the ecosystem.

No change was recorded from 2019 to 2020 until 2022, the current financial year, during the administration term. DPME has maintained a clean audit over the years. Overall, audit outcomes have remained the same from the first year of administration to the current financial year. The portfolio only consists of one auditee (DPME) that achieved an unqualified audit opinion with no findings. He highlighted some of the factors that contributed to the DPME clean audit. He spoke on the leadership oversight that has been entrenched in the organisation; monitoring takes place at all levels; internal audit effectively executes the mandates of the entity by following up on audit action plans and monitoring the implementation of actions to address prior year audit findings; the audit Committee monitors the implementation of the plans to address audit findings through the reporting by the internal auditor, and finally, the leadership of the entity commits to taking action to address all findings raised and supported by adequately resourced and skilled staff. Going forward, the DPME will focus on ensuring that service delivery departments are effectively monitored to enable the effective and efficient delivery of services to citizens.

He said that the Auditor-General identified a few concerns regarding Stats SA and Brand SA. The entities received an unqualified audit opinion on compliance with legislation. He unpacked some key issues that led to the auditee's failure to obtain a clean audit. He stated that, when the two entities submitted financial statements, only DPME submitted financial statements which were free of material misstatements. This could be attributed to the lapse in the control environment, where the internal control systems of the auditees. The key root causes of the errors in the financial statements were due to a lack of understanding of the requirements of accounting frameworks, and inadequate reviews by different role players. Mr Kubheka also took the Committee through other compliance issues, which included procurement and contract management of Stats SA and asset management of Brand SA.
 
Auditees were urged to develop and implement an action plan to address the non-compliance identified in the current year, and internal control should be enhanced to ensure detection and preventative measures are put in place.

Mr Kubheka took the Committee through some of the portfolio performance information. He indicated the quality of performance reports before and after the audit. DPME had their findings on the APR (annual performance report), while Stats SA and Brand SA had no findings. However, after the audit, all the issues were resolved.

The Auditor-General highlighted the key targets in the medium-term strategic framework for the portfolio. Some targets and indicators have not been achieved. He indicated that these range from 80-90%, with the DPME achieving 80% of the targets they set for themselves, and Stats SA achieving 90% of its set targets. AGSA looked at the performance of the various Departments in terms of the MTSF (medium-term strategic framework). Seven of the MTSF output indicators have a link to the planning documents of the DPME. However, the AGSA report indicated one which differed materially from the MTSF indicators. The indicator highlighted that several jobs would be created through Operation Phakisa, and the planning documents indicated that a number of integrated Operation Phakisa reports were produced. He stated there was a misalignment, as the MTSF speaks of jobs that have been created while the planning documents from DPME speak of reports that have been produced. The AGSA has been engaging with the entity to understand how the indicator was published.

Mr Kubheka took the Committee through the value-add insights. The AGSA looked at the quality of performance indicators, the performance of the Ministers, and the APP review process. The AGSA understands that DPME reports are reported through various structures. However, some of the recommendations are not being implemented.

The performance process of Ministers and Head of Departments and the Assessment of the DPME’s value-adding APP review process was also highlighted. Performance measurement systems do not always align. Six provinces submitted their draft APP for review to the DPME, and it was noted that provinces such as the Kwa-Zulu Natal; Western Cape, and Gauteng all have the capacity to perform the reviews. However, the reason for these provinces to submit to DPME the provinces highlighted that they cannot perform the reviews.

The Auditor-General indicated the role and mandate of Stats SA. Out of the seven priorities, two were not linked to Stats SA. He indicated that this was the largest cyclical project undertaken and it should also be noted that it was the first time it was being done digitally. The Department procured 165 000 tablets, contracted with 16 car hire service companies, and recruited 91 501 temporary staff (field workers and supervisors). Based on the assessment of Stats SA’s role and mandate against the Department’s programme and indicators, the Department’s programme and performance indicators are relevant and complete as they contribute to achieving the Department’s role and mandate.

There were no material irregularities identified for Brand SA. The AG also indicated some of the MIs that were identified, together with the next steps and responsibilities.

He touched on the issue of compliance. The financial statements submitted for audit contained material misstatements except for DPME. The material misstatements are attributable to a lack of proper records management; a lack of regular reviews and reconciliations of the financial statements. The AG highlighted the root causes of some of the significant findings in the portfolio, the recommendations, and the commitments made by accounting officers and authorities.

The Chairperson reiterated that the Portfolio Committee Members would not engage in the presentation. He said he would first allow the DPME and other entities to present. Thereafter, they would be given the chance to discuss all the presentations. He invited the Deputy Minister to make opening remarks.

Deputy Minister’s Opening Remarks
The Deputy Minister of Public Service and Administration, Dr Chana Pilane-Majake, appreciated the presentation from the AGSA. She said that the DPME, Brand SA and Stats SA presentations would assist the Committee to look at some of the concerns and plans of DPME, together with its entities, to stabilise and bring good governance. She acknowledged the concerns raised by the AG around DPME, Brand SA, and Stats SA on procurement and contract management and other related issues.

She noted the suggestion made by the AG that the Department needs to raise the calibre of CFOs, officials placed in the budget office, and internal audit officials.

She then introduced the Director General and the team from the various entities and handed over the virtual platform to Dr Robert Nkuna to take the Committee through the presentation. She also indicated that Minister Gungubele was in Cabinet Committees for the day.

The DG was not available to take up the platform, and Ms Thandi Tobias, Chairperson of Brand SA, took over with her team from Brand SA.

Briefing by Brand SA - Board Chairperson’s Remarks
Ms Thandi Tobias made a few opening remarks preceding the presentation. She opened by stating that the current financial year was the most successful year for the current board and the entity. The entity was able to go full steam in the implementation of its strategic mandate as opposed to the previous years when it battled with internal challenges.

She said that the entity should be given more time to be able to do tasks that they were able to do in one year, as it was not enough time to realise all the programmes that have been adopted at the strategic planning session.

She highlighted that, despite the high vacancies, the team was able to perform well. The main programme, which was marketing, got a 100% performance rate. The programme that had challenges was Administration. Brand SA marketed South Africa fiercely in the current year and attempted to protect the reputation of the country both domestically and internationally to the extent that government started being the client department in helping to shape the country’s narrative.

In the previous week, Brand SA held a successful International Brand Forum. South Africa remains an attractive destination for investors. To amplify this point, Brand SA hosted a successful Nation Brand program that saw other African countries in attendance to compare notes with South Africa.

The entity remains with challenges in terms of systems, as highlighted by the AG, and it does not have the requisite skills due to a shortage of staff. Ms Tobias highlighted that they are humbled by Mr Khathu from MDDA joining Brand SA as an acting CEO. She said that the entity is indebted to the team led by the Acting CEO, where all the members are holding acting positions and were able to run to great lengths in doing their work.

She commended the team of country representatives who remain at home while the entity struggles with issues of vacancy, but they continue to do sterling work in their respective fields. Once the vacant positions are filled, the entity would be able to address all the issues of instability raised by the AG.

She invited the Acting CEO to take the Committee through the presentation.

Brand SA Presentation Annual Report 2021/22
Ms Sithembile Ntombela, CEO of Brand SA, introduced her colleagues and the programmes they will be presenting. She said three recommendations emanated from the budget vote; one spoke to a need for Brand SA to continue discharging its mandate to positively influence and enhance the image of South Africa locally as well as internationally. Brand SA took the call seriously. The CEO used the Dubai Expo to indicate an example of an integrated project that Brand SA implemented to champion the country's messaging. Brand SA was able to come up with different themes to enable the entity to showcase the strengths of the country.

She was pleased to announce that Brand SA has had two reports that have been able to indicate that it is doing something right, one being from Media Monitoring services. The second report was the Bloom Report, which looks at the country’s reputation globally and looks at the drivers thereof. The Dubai expo was instrumental in shaping South Africa’s reputation. Despite the challenges visible in the media, the world out there has not reacted in terms of an investment perspective. The reputation profile as a country remains in good condition because of the work that is being done together with the stakeholders. The drivers of the good reputation continue to be academic institutions, as more people want to come and study in South Africa. Sports, Arts and Culture is the strongest pillar that needs to be nurtured, and Tourism is the third leg.

Ms Ntombela touched on investment, and how well the policies can be used to package them in a manner that is palatable by investors. She said that these are the interventions put in place, but were not limited to that and she also mentioned the Mining Indaba and West Davos which were aimed at influencing and telling the South African story. The entity needs to push its footprint within provinces to make itself known publicly, for awareness and its mandates and programmes.

Despite the limited financial resources, the team was tenacious enough to penetrate rural areas in the Eastern Cape, Limpopo KZN, where Brand SA went together with the constitutional awareness and Play Your Part programme to ensure that the layman on the street understands their key role in the bigger agenda of the country. There was a need to ensure that Brand SA visited all the provinces and prized under the Play Your Part programme. A call was made in the previous year wherein communities were challenged, and Brand SA collaborated with radio stations to ensure everyone was involved.

The Director of Corporate Services took the Committee through Programme One, Administration. Brand SA had 35 targets, and the entity was able to meet 31 of the targets. Eight targets were areas of focus for programme one and only five were met. The targets that were not met related to the vacancy rate, the 30-day invoice, and the organisational performance which was targeted at 92% but the entity ended up with 91%. She said these issues are all related to the challenges with capacity on the ground, although it may have been due to system issues in some instances. However, the fact that there are staff shortages results in the entity’s ability to meet some of its targets.

Programme Rwo had 19 targets and all of the targets were achieved. The Director indicated that programme three had eight targets and only seven of those targets were achieved.

She indicated that the entity had an overall vacancy rate of 25% and an overall staff rate of 17%, which was due to the resignations. There were 29% resignations from the critical Workforce position, which are all related to the effect of the ongoing talks about the merger which has created instability for Brand SA and staff felt threatened. She also touched on the issues of Employment Equity statistics and Gender Equity. She said these are monitored as required by the law, plans are also in place, and feedback is given to the Board of Trustees.

Ms Mpumi Mabuza, General Manager: Stakeholder Relations, Brand SA, continued the reflections on the performance of programmes two and three. She said that programme two focuses on brand marketing and reputation, which is the core programme of the organisation, where the focus is on the profiling and positioning of the country, and also looks at the reputation and communications interventions to balance the narrative about the country. The entity performed well for the financial year; all the targets were achieved. Some activities had been postponed from the previous financial year, which felt the impact of Covid-19.

She took the Committee through some of the targets not met in the second programme. Indicating the target around marketing campaigns, master classes to educate stakeholders about the alignment to the nation's brand, which could not effectively be completed due to Covid-19.

She highlighted the activities that took place internationally, integrated reputation, and the communication activities and strategic platforms. Similar events occurred in the United Kingdom, where the entity leveraged a platform around investment. The UK is a key trade partner. Therefore, when the opportunity availed itself, the entity took advantage of it.

Ms Mabuza said that the targets around research work were on track and were all delivered. Quite a few in-person activities had to be converted to online platforms due to the restrictions of the pandemic. This allowed the entity to reach a wider audience.

The targets for content pieces published to positively position the country were exceeded. The organisation was instrumental in adding its voice to the calm and call for peace among South Africans during the July unrest.

The organisation has grown significantly, in terms of the Play Your Part ambassador engagements, from 16 engagements to 83 in the last financial year. There are targets set in place to mitigate targets that have not been achieved in the 2021/2022 financial year. There are audit action plans that have been set and are currently being tracked on a monthly basis.

Mr Zolile Zibi, Acting CFO, Brand SA, presented the highlights of the financial health of the entity and the results from the AGSA audit. In terms of the creditor’s 30-day payment period requirement, he said that the entity has increased the days it took to pay suppliers from 16 in the previous year to 30 in the current year. This was due to the issues around capacity constraints, and the entity needed to ensure that its profile processes were not compromised. The entity had a bigger balance compared to the previous year, due to the number of creditors that it had to pay. The previous year, it was R26.4 million, and the current year, it was R42.2 million, and there was a surplus of R10.6 million.

The entity received an unqualified audit opinion with other matters. The matters affecting the audit report related to misstatements in the financial statements. Mr Zolile indicated the entity had no irregular expenditure in the year under review.

Statistics South Africa Annual Report 2021/22
Mr Risenga Maluleke, Statistician-General (SG), started by highlighting the contents of the presentation, stating that the presentation will focus on the strategic overview; organisational performance; human resource performance; financial performance; key achievements, and a Census update.

Statistics SA indicates that, as an entity, it has an interest in improving lives through data ecosystems. Mr Maluleke also highlighted the mission of Stats SA, which is to transform the production, coordination, and use of statistics through optimisation, innovation, and partnerships. The strategic outcomes are related to insightful data, an agile operating model, and interconnected statistical systems.

He indicated some of the priorities of the entity, which included driving legislative reform, sustaining the quality of the national indicators, conducting Census 2022, and driving a transformation and change agenda.

The organisation had 368 targets and 89.5% of the targets were achieved and 10.5% remained unachieved. Expenditure was at 94.3%, and the vacancy rate was at 19.3%. Women in SMS were sitting at 41.6% and staff with a disability was 1.2%. Mr Maluleke said that, regarding women in SMS, the entity tries hard to move the bar up every now and again. There has been progress made in that regard. The entity has been losing a lot of women employees to bigger and more credible organisations.

He took the Committee through the performance of the different branches. South African National Statistical System (SANSS) was at 100%, and Statistical Operations and Provincial Office were at 58.3%. The SG said that the organisation has been quite strict in terms of performance; if a target has not been achieved within the stipulated time frame and it is achieved a few days later, it will be classified as not being achieved. The SG highlighted that the organisation has about 360 370 statistical reports and a number must come out every day, and there cannot be any exception.

The SG took the Committee through the human resource profile, indicating the filled posts per race group as at 31 March 2022. The total number of filled posts was 2 674. He also looked at the filled posts by Gender.

The SG outlined the Human resource performance in relation to the Women in SMS level per programme as of March 2022. Population and social statistics recorded the highest percentage at 16, while Methodology recorded the lowest at seven percent.

Stats SA performed at 99.3% in terms of the invoices paid within 30 days, but actual spending after virements was at 94%. The lowest performance was the SANSS with 70%. Other branches were above 86%.

The SG highlighted the distribution allocation, indicating that 11% accounts for Payments and Capital assets, 52% accounts for goods and services, compensation of employees was at 36%, and one percent was transfers and subsidies.

Stats SA received an unqualified audit opinion with two matters of emphasis. The matters were concerning underspending of R283 million for the census. The SG stated that census was started in February towards the end of the financial year and finances were close by 31 March, and there were still payments that needed to be made. The organisation already had an understanding and came to an agreement with National Treasury. A rollover was granted. There was also a matter of R236 million irregular expenditure, which was related to the non-compliance with supply chain management prescripts. The organisation received a clean audit for the performance information.

Mr Maluleke indicated some of the key achievements of the organisation. A total of 48 statistical reports on measuring the society were scheduled for 2021/2022. There were 228 statistical reports measuring the economy scheduled for the 2021/2022 financial year. The organisation published 273 statistical reports out of the 276. The rebased and benchmarked estimates of GDP were published. Stats SA also published the Financial Census of Municipalities time series from 2006 for the first time.

The organisation adopted a multi-mode approach in Census 2022. Valuable lessons were learnt to apply to household surveys. Stats SA established an end-to-end geospatial platform and layer of output areas, which will enhance the dissemination of census products. Stats SA adopted the United Nations Generic Statistical Business Process Model (V5.1) and business process mapping for CPI (As-Is) and (To-Be), and business process mapping for Mixed mode data collection (As-Is) and (To-Be) for household surveys. The organisation continues to pilot the CPI digital data collection from outlets and pilot the continuous population survey.

The SG gave a status update on the progress made to date with the Census programme. He highlighted that this was the country’s first digital census. He gave a monthly update from the beginning of the Census in February 2022 and the upcoming months for the Post Enumeration Survey. He indicated that the PES is an independent survey used to measure the accuracy and the reach of the census. PES data collection is undertaken shortly after the completion of Census enumeration as per the UN guidelines.

Data collection for the census ended on 31 May 2022. Stats SA is currently in the process of structural editing, data confrontation, data coding and editing, weighting and estimation, analysis, and report writing. Based on the envisaged PES and downstream process, the final census data is scheduled to be released in 12 months.

See attached for full presentation

Discussion
Ms M Kibi (ANC) welcomed the presentations from the entities. She directed her first question at Stats SA. She said that the entity had had a historical challenge in meeting the Gender Equity targets, concerning appointing 50% of women in senior management positions and two percent of people with disabilities. She said that, after the point raised by the SG where he refers to women leaving the organisation to look for greener pastures, she would like clarity on what plans the organisation has put in place to ensure that it meets gender equity targets in senior management roles. She asked for clarity on the number of acting females in SMS in relation to their male counterparts.

Ms Kibi asked whether the entity has approached any disability organising structure to assist and encourage people living with disabilities to apply for vacancies at Stats SA.

She stated that Stats SA has achieved a 99.3% payment of invoices. However, the Public Service Commission records show that payments have been made after the 30-day period. She sought clarity on the matter. She asked for clarity on the reasons why Human Resource Management prescripts were not followed during the recruitment of 67 000 staff Members for Census 2022, as highlighted by the outcomes of the AG.

She addressed Brand SA and indicated her appreciation for the good work that the entity continues to do in trying to put South Africa on the map. She asked for an update on the process regarding the reconfiguration of Brand SA and Tourism South Africa. Ms Kibi asked if there is any platform where both Ministers from the respective Departments met to discuss a way forward on the planned proposed merger, indicating that the process has been delaying the work that needs to be done and has a negative effect on the work of Brand SA.

She asked for clarity on the measures the leadership and management put in place to offer a message of hope to the staff amidst the reconfiguration of the organisations. The reality is that people are moving and looking for greener pastures, as they remain unsure about the future of Brand SA as an entity. She also asked whether the Board of Trustees spoke to the Minister to increase the period to five years of appointment since it was 24 months and people are unsure of their future in the entity.

She asked about the plans that have been put in place to address issues raised by the Auditor-General of South Africa concerning asset management and financial statements.

Mr J McGluwa (DA) welcomed both presentations from the entities. He requested that the Departments respond in writing to the Committee on the points raised by the AG.

Brand SA has the duty to protect the identity of South Africa even in light of the future of a merger. The AG has reported that there are performance problems in the organisation. He asked for clarity on the main drivers affecting Brand SA's performance.

He indicated that he was happy that reasons have been put forward for specific targets which were not achieved. The biggest issue indicated was the issues around staff problems. He also noted that most Departments in the country are experiencing issues with the 30-day payment of invoices, and most Departments have put the blame on the effects of Covid-19 restrictions. He agreed with the Departments in saying that, indeed, Covid-19 had a role to play. Businesses have also been suffering during the Covid-19 period. He mentioned the riots in KZN and also the floods that occurred in KZN, as a result of that, businesses have died a slow death. The Department has the duty and a challenge to ease the red tape in ensuring that small businesses get their due payments. He suggested that the Department provide a clear report on the outstanding invoices and the amounts.

Mr McGluwa asked for clarity on the issue around staff. He asked for an update on the efforts to ensure that staff are secure, concerning the issues raised on the long-awaited decision on the merger. He said that Cabinet should take full responsibility in that regard, and he suggested to the Chairperson that the Committee write to Cabinet to understand the reasons for the delays in the amalgamation of Brand SA and Tourism South Africa.

Mr McGluwa said that the StatsSA presentation was unclear on the reasons behind some of the unachieved targets, and the intervention measures being put in place to rectify these unachieved targets on the human resources profile.

He touched on the issues of irregular spending. He said there was a huge difference between a letter and a lease of agreement, indicating that it was a serious omission in his view. He said that the entity needs to be upfront with the Committee on the real issues, whether it was capacity, or perhaps the qualifications of the employees.

He asked for clarity on the interventions put in place by the Department to deal with the issue of people with disability being at two percent employment. He said that it was not good enough to highlight the issue, but they needed to provide solutions. 

Ms C Motsepe (EFF) welcomed both the presentations from Brand SA and Stats SA. She addressed Brand SA first, and asked whether all the provinces are on par with the implementations of Brand SA. She asked for clarity about the provinces that are still lagging behind and the provinces that have limited resources. She asked the entity for clarity on the preventative measures being put in place to address the matter.

Ms Motsepe asked for a breakdown of the percentages in terms of the Employment Equity in relation to women and persons with disabilities. She also asked for a timeframe of when the entity plans to appoint permanent staff.

Ms Motsepe asked for an update from Stats SA on the measures they are putting in place to address the two-percent employment rate for persons with disabilities. She asked when the organisation will be employing permanent field workers, to avoid having contract fieldworkers that disappear in the middle of an activity. She asked for an update on the issue of non-payment for some of the field workers.

Ms M Ntuli (ANC) welcomed all the presentations. She asked whether the AGSA has any policy framework that addresses the issue of non-compliance and irregular expenditure. She asked for clarity on the measures that the AGSA has put in place to avoid the scourge of non-compliance and irregular expenditure in the departments.

She asked for an update on the progress of the amalgamation between Brand SA and Tourism SA, as the process has gone far too long and has impacted the vacancy rate.

She followed up on the question asked by her colleague, Ms Kibi, on the board's term of office that is coming to an end. She asked for the outcome of the engagement with the Minister. 

In relation to the open poaching that has been occurring at Stats SA, Ms Ntuli asked whether it was possible to apply the detective and preventive mechanisms to curb the issue. She asked if the entity has reached the ceiling in dealing with the matter, as they see the issue coming but nothing has been done about it.

She said that Stats SA should not wait until there is a problem. She said that irregular expenditure and non-compliance are uncalled for.

Mr Z Mbhele (DA) appreciated the presentations from the various entities. He said that his question applies both to Brand SA and to Stats SA. He highlighted that there are huge concerns around the issues of capacity constraints, as these are both human capacity-intensive entities. Therefore, operating under capacity is a huge concern, and solutions should be promoted.

He referred to the National Macro Organisation of Government Process, indicating that one of the big highlights from the presentation was the extent to which there were excess staff after reconfigurations structurally. Noting that both Brand SA and StatsSA operate in specialised knowledge-intensive environments, he asked for a response on whether there would be an opportunity to capitalise on the pending issue of excess staff scattered around the public sector to mitigate the capacity constraints experienced by the entities.

Ms R Komane (EFF) addressed the issue around the representation of disabled people at Stats SA, referring to it as an “elephant in the room”. She thereafter asked for clarity on the measures the entity has put in place to mitigate the issue.

She asked for the exact percentage representing the number of women in senior management positions.

She asked what could have been done by Stats SA to prevent the R236 million of irregular expenditure for non-compliance within the supply chain. She asked whether the entity strengthened its intellectual controls to minimise the wasteful expenditure.

In terms of the legislative reform, she asked why it took so long to finalise the amendments and tabling of the legislation in Parliament.

She asked for a status update on the payment of fieldworkers, and an update on the challenges that were faced which resulted in the non-payments. She also asked what was being done to mitigate the issue.

She asked whether Brand SA employees are still being employed on a 24-month basis, highlighting that the policy instils fear in the employees, resulting in the employees leaving the organisation as their future remains uncertain.

She said that the discussion around the merger has been going on for quite some time, and it needs to be concluded as soon as possible. The Committee needs to know where it stands in terms of the merger and it can no longer afford to hear about delays in that regard. She therefore asked for a status update on the matter and the outcomes from both Ministers.

She asked for clarity on the plans put in place to address the issues raised by the AG regarding asset management and financial statements within Brand SA.

Based on the findings by the AGSA relating to StatsSA and Brand SA, she asked whether the issues raised have been attended to and she also asked for a status update on the measures taken to address the issues raised by the AG. She said there needs to be accountability, and people taking responsibility for the issues around non-compliance and other related matters.

Responses from Brand SA
Ms Tobias started by expressing her appreciation for the questions and concerns raised by the Committee Members, indicating that these will assist the organisation in moving forward and also to explain the challenges experienced.

She addressed Ms Kibi’s question on reconfiguration by highlighting that the matter of reconfiguration had not yet been engaged upon properly with the board. She said that the board does not have any clear terms of reference, or any timelines. There has not been any formal address. The matter was raised by the late Minister Jackson Mthembu. The merger has never been briefed to the board, but it was indicated that positions could not be filled as there was a merger on the way. After the board requested to be briefed on the merger, it was told that a technical committee would be established, but it was never established. She said that, after hearing sentiments from a particular Minister in the media, she convened a special Board meeting to indicate that thus far, nothing had come from the Minister responsible for the entity in relation to the matter. The Minister had confirmed at a strategic meeting that he had not yet discussed the merger with anyone. The Minister had agreed on record with Brand SA that the entity has a distinct role and cannot be swallowed through any means. Brand SA attempted to advance the argument of the possibility of leaving Brand SA as it is, as its mandates are broader than a sectorial mandate, such as South African Tourism.

In relation to the concerns raised around the message of hope for employees, Ms Tobias said that both the Chairpersons of Marketing and Human Resources were unleashed to instil a message of hope to the workers while the entity deals with the complex issues at hand.

She also addressed the question relating to increasing the employment period of workers. Ms Tobias highlighted that she fought for this issue for three years, noting that appointing people on a two-year contract does not attract the best candidates instead, it creates instability. She highlighted that one of the presenters in the meeting had been hired on a two-year contract which was about to come to an end, but no progress had been made yet. Debates have ensued in the board, with talks of fighting for employees to be employed full-time, and the CEO would elaborate further on the matter.

She said that she was humbled by the support from Mr McGluwa, as he shares the same sentiments on the merger, and he understands the way it works. She referred to his question on the key performance problems and main drivers of slow performance on targets, and she said that it was related to the issue of staff retention. She indicated that three out of the four people presented were acting staff and only one was a full-time contract about to end. She said it may sound as though the entity was defending itself as the 30-day payment period was not observed, but the staff was exhausted. There were also instances of double payments because everyone was doing too many tasks at once with few hands on deck. The entity had also lost almost 30% of its workforce, indicating that the current team works tirelessly and above the call of duty.

She said that the Minister has not corroborated what was presented in the media. Therefore, the entity was not aware of any meeting taking place, nor were they aware of any processes taking place. She said that she would not be able to respond to the question about the extension, as the entity had not yet completed its mandate. She agreed with the Committee Members that Cabinet would have to take responsibility for some issues.

Regarding Mr Mbhele’s question, she said that research has been done, and unfortunately, she cannot reveal much. The research has shown the opposite of the suggestion made by Mr Mbhele; the suggestion would create excess workers. She indicated that the research was international and directed by people who have done mergers in other countries. And until the discussion takes place with the relevant powers, the entity does not want to show the unintended consequences. G-Tech should be the platform that looks at the work structure and concludes as to what happens with excess workforce.

She handed over to the rest of the Brand SA team to answer some of the other concerns raised by Members.

Ms Ntombela agreed with Mr McGluwa in saying that Brand SA has the highest mandate of protecting the identity of the country. She said that the current situation that the entity finds itself in was not viable enough to drive the mandates and be the best. Alignment plays a key role in terms of understanding the efforts of the entity’s mandates to build a brand. One of the intricacies involved in building a brand is consistency; it is key in ensuring that the brand message and how the world sees the country remains the same over the years. The entity has been crippled by some challenges in being able to maintain the stature and the consistency of the mandate. The brand that the entity aims to build is that of a competitive South Africa. She said that they were aware that it was an area that needed urgent attention.

She referred to the question about the main drivers affecting performance within the entity. She said there was only one stumbling block underpinning everything done by the organisation, which was the current moratorium ongoing for about two years with no progress and no clear direction. She indicated that there is a team in place that believes in South Africa and its brand. However, they can only do so much. Oftentimes, the leadership carries a team of passionate individuals but the environment is not enabling them to do their work.

There are plans in place to mitigate the issues related to the 30-day payments. Ms Ntombela said there are not enough hands to follow up with suppliers to ensure invoices are submitted on time. One of the root causes of the issue remains that there are not enough bodies to navigate all the operations of the organisation.

She said that Brand SA has scoped in the quality reviews and the quality checks in the work of internal auditors, to ensure that they constantly monitor the organisation against the scorecard of the AGSA. The entity has been in the process of reviewing its asset management policy in consultation with the AGSA to address the issues raised. She said that the action plan that is currently in place will be utilised and monitored on a monthly basis.

The organisation does have programmes which enable it to engage with communities at a grassroots level, such as the Play Your Part programme which has been measured by an independent service provider for research. The entity currently seats at more than 40+n levels of awareness, from different provinces and from an assessment perspective, progress has been made. With a budget of R110 million, there needs to be an international mandate and a domestic mandate, as it helps to discharge the organisation's mandates locally. The budget has been split to have a 60% international focus, and those are in terms of Euros and Pounds. The volatility of the exchange rate also plays its part. Training done through investment in promotional agencies and Tourism agencies also helps to cascade information at a grassroots level.

Ms Ntombela appreciated the suggestion made by Mr Mbhele and said that the entity may even consider the suggestion to see if there would be room for secondment. The entity has, in theory and in practice, embarked on the journey of secondment in the past.

She reiterated that, through the last two audits, the issue of vacancy rate was the common denominator that continued to hamper the organisation's performance. The board resolved in line with its fiduciary duties as a board of trustees that has been appointed to make sure that the organisation performs at its fullest potential. The board decided that the vacancy should be filled per the original structure, especially those below executive, on a permanent structure and contract basis. The positions have already been advertised, and the plan was to have the positions filled by December.

In terms of gender equity, there are 63% female and 37% male. In senior management roles, the entity has 54% females at managerial level and 46% males at managerial level. In terms of people with disabilities, there are 2.33%.

Ms Tobias also added that the organisation has been able to adhere to the request of the Portfolio Committee to address the issues of disability and gender equity. The entity is mostly female-dominated but is making strides towards having more males within the organisation. The concerns of race are also being addressed, as the organisation was seen as a black organisation.

Responses from Stats SA
Mr Maluleke, SG, introduced the team from Stats SA and indicated that they would be assisting him in responding to the questions and concerns raised by the Members.

Ms Yandiswa Mpetsheni, Acting DDG: Population and Social Statistics, Stats SA, stated that the delays in the legislative reform are largely related to the consultations that the organisation had to do. The entity previously presented to the Committee that they had gone to the ministerial committee for governance state capacity and institutional development, and they had been advised to talk to the Information Regulator to see whether they are compliant with the Protection of Personal Information Act (POPIA). The entity had to apply for an exemption and wait for the regulator to complete the application. They finally responded that the entity was fully compliant with the POPI Act. The entity had to wait for the ministerial committee to sit which took almost a year, and they finally sat on 2 September 2022. The Cabinet committee for government state capacity and institutional development agreed that the entity should pass the reform through the full Cabinet and then through Parliament, therefore adding to the delay.

Ms Celia De Klerk, Executive Manager, responded to the questions on performance. She said that the details for not having achieved targets have been detailed in book two of the annual report. She indicated that 39 targets in total were not achieved, and 26 of those were related to the census and the fact that StatsSA has extended the Census data collection. As an organisation, many branches contribute to a big project such as the census, and the fact that data collection was not completed by the end of March was noted in the unachieved targets.
 
She added that the second biggest reason for not achieving targets was related to resource constraints. Going forward, the entity hopes that issues will be addressed in the future.

Mr Bruce Jooste, Acting DDG: Corporate Services, addressed the question from Ms Kibi. He indicated that Stats SA’s new organisational structure was approved in April 2020 and with Covid-19 the implementation was delayed, which resulted in the commencement moving to September 2020. SMS Members that had to be replaced had to be redeployed within the organisation and then moved to levels 1 to 12, which were the non-SMS levels, starting in March 2021. As a part of the restructuring process, 482 colleagues had to be placed in other positions with the organisation. Of that, 175 were redeployed. The entity received R40 million over the three years for additional funding from the National Treasury, which was little compared to the total vacancy rate of over 600.

He said that because the entity could not advertise for vacancies due to shortage of funding since 2016, internal candidates were given the opportunity for promotion following the recruitment process. The placement process was concluded in December 2021, and adverts were run in March and up until now and again in the next two weeks. Funding has only been available for 300 out of the 680 vacant positions. Recruitment adverts reflect that positions are targeted at females and persons with disabilities. In the current recruitment process at SMS level, preference is given to appointable female candidates. Two positions have appointed female candidates.

Stats SA has been engaging with three NGOs, the National Council for Persons with Disabilities, the QuadPara Association of South Africa, and the Disabled People of South Africa. The entity has also joined the Disability Advisory Group of the Department of Women and Youth and persons with disabilities. The adverts are forwarded to these NGOs. Thus far, there have been 33 CVs for 30 posts, all in the efforts to increase disabled employees in the entity.

The entity has been beefing up controls and improving the reporting processes within the SMS environment. He indicated that all Census workers have been paid, but queries still come through the organisation occasionally.

Mr Maluleke spoke on the issue of contract versus permanent staffing. There are usually about 3 000 maximum field workers appointed as temporary, when there is contract work, and some of which are user-paid. When a user approaches the entity and needs a survey to be conducted, the entity needs to hire field workers, and that would not be money within the organisation's baseline. Therefore, when the work is done, the field workers need to be demobilised, because if they are kept permanently the entity would not be able to sustain an extra 3 000 staff members.

In terms of creative ways of keeping staff members, particularly female workers, whom the entity has been losing at alarming rates, he said that the workers are being poached by banks within the private sector, and world organisations. Unfortunately, the entity cannot match the offer made by these corporations. The entity can encourage staff to stay by offering opportunities for study bursaries, but the private sector agencies go as far as buying them out and giving salaries that are two times the rate they are earning in the organisation.

DPME Annual Report 2021/22
Mr Robert Nkuna, Director-General, introduced his colleagues to the Committee and indicated they would present alongside him.

He stated that the DPME has taken note of the feedback and points raised by AGSA, and they have engaged with AGSA on several issues, some of which are in the presentation by the DPME. He also said that there are issues that will continue to be discussed between DPME and AGSA. The DPME engages with the AGSA on behalf of the entire government, given the role that it plays. The Department needs to engage on behalf of all government departments, as most guidelines relating to planning monitoring and evaluation come from DPME.

The DG indicated that, during the presentation, the DPME mentioned quite a few reports that have been produced, and the Department would be more than willing to come back and present those in greater detail, as they may not go in-depth in the current presentation.

He said that the DPME has observed that there have been instances of irregular expenditure, relating to the work done with SETA and Public Works. He said that the two institutions function as monopoly institutions. Government Departments have to work through them.

The presentation deals with the annual report, and the issues that the Committee has raised in the previous Portfolio Committee meeting related to the budget role.

Mr Clement Madale, DirectorL Strategy and Service, DPME, highlighted that he will deal with two presentations. The DPME had nine recommendations emanating from the Committee recommendations from the budget report for 2022/2023.

The first recommendation had to do with implementing the policy framework on Integrated Planning to improve institutionalisation and harmonisation in the planning system aimed towards improving results. The Department developed the Policy Framework on Integrated Planning in the year under review, 2021/2022 and has undertaken extensive consultation on the document.

The second recommendation outlined that the Department, together with the Department of Cooperative Governance and Traditional Affairs (CoGTA), should provide to a Joint Committee meeting of the portfolios a comprehensive report on the piloted District Development Model (DDM) to determine the efficacy of the model with the aim of improving coherence and coordination across the three spheres of government. He highlighted the progress of the recommendation, indicating that the DPME served on the Steering Committee of the DDM pilot sites led by the DCOG. The evaluation is currently being finalised for presentation.

The third recommendation related to the development of a monitoring Framework tool directed at the Zondo Commission report to ensure that all recommendations are implemented. With the support of the DPME, the Presidency developed a monitoring system for implementing the Special Investigations Unit PPE recommendations. The system has been expanded to include the State Capture Commission recommendations. Thus, an implementation plan is being developed.

Recommendation four related to the collaboration and coordination of monitoring activities of the DPME with implementing departments, to ensure that service providers provide quality services. The strengthening of project management and quality assurance are some of the issues being addressed in the Mid-Term Review.

Recommendation five speaks to the Frontline and Citizen-Based Monitoring. The DPME, together with the Department of Public Service and Administration (DPSA) and the Public Service Commission (PSC), should collaborate and coordinate monitoring activities concerning frontline monitoring services and citi-based monitoring to avoid visiting the same facilities. All three institutions have similar programmes without better coordination. The DPME and DPSA coordinated the Public Service Monitoring Month which started in September 2022.

Recommendation six highlighted that the Department should continue to monitor the implementation of the 2019-2024 revised MTSF targets and indicators and other key priorities in the Economic Reconstruction and Recovery Plan.

The seventh recommendation indicated that the Department should ensure that the MTSF monitoring and reporting system tool assists in assessing performance of the departments and is used to compile reports on the progress made to determine whether government is on track to deliver on the objectives of the National Development Plan (NDP). The Development Indicators 2021 Report has been produced to track the progress towards the NDP 2030 goals. The MTSF monitoring and reporting framework was issued by the Department, and reporting is to happen bi-annually.

Recommendation eight stated that the Department should move swiftly in developing an integrated Report on State Owned Enterprises. The DPME finalised an annual assessment of State-Owned Entities (SOEs) in September 2022.

On the final recommendation, the Department was urged to align its resources towards monitoring government departments in the implementation of the MTSF deliverables of the NDP and for the purpose of assessing performance of individual departments which will serve as evidence-based information during performance assessment of Ministers and Heads of Department. There is an alignment between the MTSF Bi-Annual report and the deliverables of the NDP and Ministerial Performance Score Cards.

Mr Madale took the Committee through the DPME annual report. He highlighted the mandate of the DPME to remind the Committee of the core functions, values and mission of the Department.

In the year under review, the Department had 49 targets and 39 were achieved, constituting 80% of the targets. He indicated that some targets were achieved after the end of the financial year and were therefore rated as not achieved in the report.

The first programme was Administration. He pointed out the targets which were not achieved in the programme. There was a target related to the disclosure of financial information. For that, there was an overall 98% achievement rate, and those are categorised in terms of the various levels of people who were meant to disclose their information.

All the targets under programme two (National Planning Coordination) were achieved. Programme 2B had 11 targets and ten were achieved. The one target that was not achieved was the Research Report on the alignment between the National budget and government priority areas, which was supposed to be developed by 31 March 2022 but there was a delay in the procurement process. Programme three, Sector monitoring services, had six targets and all six were achieved.

For programme four, Public Sector Monitoring and Capacity Development, there was a target related to implementing Ministerial PMDs, and the DPME planned to produce two reports. Only one was produced because, at the time of producing the first report, the Department realised that it needed to develop a framework for assessment. The target for the production of SOE performance report was not achieved.

Programme five (Evaluation, Evidence and Knowledge Systems) had six targets, and only five were achieved. The target related to the central database management and analytical system was not achieved.

Mr Madale outlined the status of human resources in the Department. HR and Corporate services adhered to the Departmental COVID-19 working arrangements, which among others, included shift working hours in order to reduce the number of staff members in the office, and to ensure a safe working environment.

The Department did not achieve the five-percent vacancy rate which it set out for itself. About 80% of the workplace skills are planned under trying circumstances of COVID-19. The Department's target of achieving 50% representation of females in SMS was achieved, and the percentage regarding people with disabilities exceeded 0.1%.

Mr Madale said that, in the reporting period under review, the total budget was R459 million and R396.7 million was spent, which constitutes an expenditure of 86%.

He outlined the material variances, indicating that the Department spent 86.4% of its allocated budget. The underspending was related to compensation of employees, which was five percent of the allocated budget attributable to all programme due to vacant posts and staff turnover. Goods and services underspending was 31.6% due to the approval of the NPC commissioners’ secretariat received towards the end of the 3rd quarter, resulting in procurement of research projects commencing in the fourth quarter and affected the spending on consultants and advisory services.

The Department received an unqualified audit opinion with no material findings.

See attached for full presentation

Discussion
Ms M Kibi (ANC) welcomed the presentation. She asked what measures the Department had put in place to mitigate the low performance assessment of the DGs and HODs as identified by the AG.

She asked whether the two status reports on the implementation of HOD and PMDS contain the performance of individual HODs. She also asked whether there was a link between the performance of the HOD and the Minister in terms of key deliverables.

Ms Kibi asked if the local government management improvement model has made any impact in the local government sphere. She also asked for more information on how often the information contained in the model has been presented in local government forums.

She asked for clarity on the rationale behind phasing out of the management performance assessment tool, and continuing with the local government management improvement model.

Ms T Mgweba (ANC) also welcomed the presentation by the DPME. She highlighted the slide that spoke on the presidential hotline achievements, where the Department indicated a shortfall of 27%. She said that, in her view, the presidential hotline was not doing well. She also asked for an outline of the budget allocation for the presidential hotline. She then asked for a clear indication of the average number received daily and weekly, and for an indication of the staff complement.

She questioned the Department on the need for the Presidential hotline in light of the local rates by citizens and the fact that all government departments have call centres.

She asked how it was possible for the Department to produce a SOE performance report despite having SOE’s monitoring tool, and she asked for clarity on the tool used to produce these reports.

Mr McGluwa (DA) stated that this was not the first report on implementing recommendations of the State Capture Report, and he wished the Department well as he noted that it will be a mammoth task. He asked whether any recommendations have been implemented to date, and asked for the reasons if otherwise.

He expressed that he struggled to understand how irregular expenditure could be caused by an unauthorised official. He questioned whether proper oversight was held over such a transgression. He asked for an update on the progress of the investigation. He also asked whether the DPME has opened a case against the individual and whether the individual still receives payment while sitting at home during the investigation.
 
He asked for an explanation of the targets, as he noticed a disjunction in meeting some of the targets, while he understood that Covid-19 really had a role to play. The Department was asked to provide an oversight on the hotline in a previous meeting (previous year), to get insight into the types of calls received and the issues there. The Department has still not provided an update on the matter.

Ms C Motsepe (EFF) welcomed the presentation from the DPME. She asked for clarity on the way in which the Department determines the consequence management on the non-achievement of targets. She asked for an outline of the mechanisms used. She also asked the Department for clarity on the criteria used to suit the recommended number of staff.

Mr Mbhele (DA) congratulated the Department on a clean audit, and he said that it was a great example for the rest of the public sector.

He asked the DPME to indicate the reasons for either of the late submissions or non-submission of the financial interests by the handful of SMS Members, which had led to the non-achievement of full compliance. He also asked for clarity on the consequence management applied in these cases.

He said there was an indication of high turnover in the financial year under review. He asked for the reasons behind the high turnover, whether through exit interviews or if there might be concentration of departures. He also asked how the work environment pressures are being addressed to relieve the staff affected.

Mr Mbhele, as it was highlighted that there was no electronic system in place for recruitment processes, asked whether there was a digital system used to track the NDP Indicators and targets linked to that.

Ms Komane welcomed the presentation by the DPME. She said that the presentation indicated that the irregular expenditure occurred due to unauthorised personnel. She asked for clarity on the measures implemented by the Department to address the issue. She echoed the sentiments of Mr McGluwa on the issue.

She asked what tools were used by the Department in relation to checking the performance of SOEs, and questioned whether the Department was not going overboard in that regard.

She asked which performance tools were being used by the Department to measure Ministerial performance, including compiling performance scorecards. She also asked whether the local management improvement model was making any impact in the local government sphere.

Responses by DPME
Mr Nkuna indicated that a 10% vacancy rate is the policy, and the Department believes that it can aim to do much better than the stipulated percentage. The DPME enforced its own strict measures to ensure that it passed the 10% target.

In terms of the payment of service providers, he indicated that the current policy states 30-day and the Department processes the payments in less time than the set target.

In relation to the performance of HODs and DGs, the AGSA had indicated that there are still challenges with the signing of performance agreements, wherein some performance agreements are only signed by the DGs and not the Minister. He highlighted that there was another issue around assessments. It has now been included in the performance agreements of Ministers that DGs and HODs, where necessary, have ensured that they signed performance assessments and agreements.

He highlighted that the SOC performance reports are done at two levels. The first level looks at departments that provide oversight on success. There are branches that have been established to oversee the SOCs.

Once the reports are processed, they are submitted to the team that works with presidential coordination, a council on SOCs. Even at the level of head of state, the reports are presented.

Mr Nkuna stated that the Department is indeed dealing with the State Capture report, as indicated in the presentation which started with the SIU Report. He said that the Minister has also indicated to the Department that work is indeed being done.

He said they found that departments that were supposed to process the report have not done so, and it remains a performance issue. Departments should be required to implement the recommendations of the SIU (Special Investigating Unit) report.

Consequence management for non-compliance is fairly straightforward. Every individual is expected to make a presentation on the reasons for their non-compliance with the policy. Some individuals blame system failure. However, the follow up question would be what they did when they were faced with the issues of system failure. The reasoning is therefore always invalid. Sanctions imposed on people are not the same across the board.

The Chairperson thanked the Members and all the guests for attending.

The meeting was adjourned.

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