Budget Review: briefing by Director General and Chief Finance Officer

Meeting report

JUSTICE AND CONSTITUTIONAL DEVELOPMENT AD HOC COMMITTEE
4 June 2004
BUDGET REVIEW: BRIEFING BY DIRECTOR GENERAL AND CHIEF FINANCE OFFICER

Chairperson: Ms F Chohan-Khota (ANC)

Department Delegation: Adv V Pikoli, Director-General; Mr A MacKenzie, Chief Finance Officer

Documents handed out:
Business Units organogram
Report of the Chief Financial Officer

SUMMARY
The Department of Justice and Constitutional Development briefed the Committee on its budget. Its greatest challenge was to meet its needs with limited resources. In the forthcoming financial year, more emphasis would be placed on poverty alleviation and the Department intended to deliver services to the people instead of the people approaching the Department to look for services.

The Committee raised concerns about a number of matters, but particularly on maintenance and the functioning of the courts. It was assured that maintenance investigators would be deployed to the courts to ensure speedy processing of maintenance cases. Maintenance investigators would also be trained to ensure that they effectively dealt with maintenance cases.

During the afternoon session, the Committee was briefed by the Chief Financial Officer of the Department on financial management improvements for the year 2003/04 and the details of its proposed budget for 2004/05. The discussion concentrated on the Department's inherited debt, the impact of the Re Aga Boswa project on financial management accountability, new systems to regulate court maintenance and moneys held in trust and the Department's legislative costing capabilities.

MINUTES
Adv Pikoli (Director-General: Department of Justice) conducted the briefing.

Budget
The Department received a total allocation of R5, 2 billion to spread across its units. The Court Services Unit receives R2, 4 billion, the Master's Unit R112 million and R35m is devoted to Legislation and Constitutional Development. Legal Advisory Services gets R133 611. (????)

Organogram
The department has eight business units. There is also an Executive Committee made up of the Director-General together with the heads of all the business units. It meets weekly to look at operational issues within the Department. There is also a Technical Committee that does not have its own budget because its members belong to the eight business units.

Mrs S Camerer (DA) asked why Mr MM Tshishonga is still listed as the head of the Master's Unit.

The Director-General said that Mr Tshishonga was suspended in September last year. A misconduct hearing is currently underway. He is not in his position as the Head of the Master's Unit.

Master's Business Unit
The Director-General said that the Master's Offices operated almost independently from the Department. As a result there was too many cases of corruption and mal-administration. This was disappointing given the fact that the Unit is one of the most important units within the Department. Hence it was felt that they should fall under the core business of the Department and be controlled and guided by the policies of the Department.

Legislation and Constitutional Development Unit
This Unit was established in 1999. It came without founds and staff. The Department struggled to set it up. The unit has performed very well without people and funds.

Legal Advisory Services
This branch housed the state legal advisors and attorneys.

Court Services.
This unit deals with the courts.

The rest of the Units are for support services.

Office of the Director General
There are four Chief Directorates under the Director General's office with a budget of R53m to cover the salaries of staff and their activities. These are the Policy and Research Co-ordination Unit, Strategic Planning and Management, Internal Audit and Security Unit. The directorates are fairly new. The mandate of the Department, the problem of service delivery and number of duties that the Director-General has to perform motivated the establishment of the directorates.

The Director-General said that the Policy Research, Co-Ordination and Monitoring Directorate is aimed at ensuring that the Department is able to implement Cabinet decisions and parliamentary resolutions. It also helps the Minister with policy research including issues of national importance that went beyond the Department's purview. The Directorate was established in 2003.

The Strategic Planning and Management Unit was established in November 2002. The Internal Audit Directorate was established pursuant to the provisions of the Public Finance Management Act (PFMA). Functionally, the Directorate reports to an independent audit committee and not to the Director-General. The Security Unit was established in 2003 following concerns that were raised about security in our courts.

Key challenges
The Director-General said that case backlogs are not included under challenges because they are operational issues.

Resources

The question of resources remains a major challenge. Available resources invariably and inevitably affect the work that the Department does. The resources that the Department has are far from adequate. But if the Department was to impose high levels of efficiency upon itself it might be able to do more with less.

Consolidation and sustaining achievements

The Department is also faced with the challenge of consolidating and sustaining what it has achieved over the past decade.

Expanding access to justice for all.

This is an area where the Department has to be more creative and go beyond what is normally understood by access to courts. There is a need to be biased in favour of the poor and vulnerable groups if access to justice is to be expanded. The Department has taken note of RDP houses that are being sold in execution to satisfy a judgement. This should not be the case because it makes people poorer. The Department is looking at how it can intervene when situations like this arise.

Transformation of the judiciary

This is a very sensitive area. One needs to know as to what exactly is entailed in the process of transforming the judiciary. One can look at the numbers in terms of colour, gender and disability. The transformation of the judiciary has to go beyond these issues. If the process is done within the framework of the Constitution, there should not be problems.

The implementation of legislation

The Director-General said that the Justice Portfolio Committee had passed 108 pieces legislation in the past decade. A negative aspect was that legislation was not always accompanied by implementation checks. This is one of the weaknesses of the system. The Department is trying to address this by acquiring the necessary skills and linking with people who have the necessary skills when it comes to the costing of legislation. The problem has always been that whenever the Department takes Bills to Parliament they are not accompanied by an implementation plan that also sets out the costs involved. Of the bills that were passed, 61% were related to the transformation agenda of the government; 26% dealt with the resolve to strengthen the fight crime, while the remaining 13% dealt with legal reform.

The Director-General reminded Members that the last time he briefed the Committee there were 515 outstanding disciplinary matters. The Department is currently dealing with 264 matters, while 48 suspensions were currently in effect.

Discussion
Imam G Solomon (ANC) observed that the Department's budget is R5.2bn. However, the Director-General said that the Department's budget is in effect R3, 2bn as R1bn would go to the National Prosecuting Authority. He asked the Director-General to indicate an amount of money that would be adequate for the Department.

The Director-General relied that the R3.2bn was the actual budget that remains with the Department having taken away the budget for the NPA, independent bodies and the salaries of judges.

Imam Solomon said that the Deputy Minister of Justice spoke of the high expectations that people have. The Director-General had indicated that it is not easy to reconcile the tasks that the Department has to fulfill with the available resources. He asked if the Department has what it takes in terms of resources to deliver or realise the expectations that people have of the Department.

The Director-General replied that the Department has actually out-performed itself given the resources at its disposal. This has been a great risk to the health of the officials in the Department. If one looks at the Legislation and Constitutional Development Unit it has a budget of R35m but it managed to assist Cabinet and Parliament to come up with108 pieces of legislation. Very few of them were constitutionally challenged. There are serious skill problems in areas like finance. The Department created a programme aimed at building such skills and capacities. The reluctance to retrench people also damaged the Department. There are people who were placed in positions for which they were not suitable. This meant that the Department had to embark on a serious training programme. However, things are beginning to shape up. This remains a challenge especially as far as the courts are concerned. There are not enough personnel throughout the Department.

Mrs S Camerer asked if the Security Directorate is a new establishment. She commented that there are enormous security problems in our courts. She went on to ask for an explanation on how the unit fits into the structure of the Department and also how it operates. Ms Camerer felt that the figures that the Department had presented did not make sense and asked the presenter to furthermore clarify how the budget is structured.

The Director-General said that the Department has always had a security division. However, the unit was previously located under Auxiliary Service Directorate. Given the nature and extent of crime in South Africa and following interventions by National Intelligence Agency it was decided that all Departments needed to have security managers. The person who was responsible for auxiliary service dealt with various issues other than security. The decision was to elevate the function of security.

The Chairperson agreed that the figures did not add up. She asked the Director-General to supply another document with the right figures at a later stage.

Ms Chohan-Kota said that the issue of maintenance is one of the opportunities that the Department can use to play a role in poverty alleviation. She asked the Department to give a broad overview of its vision for successful maintenance implementation.

The Director-General said that he had personally identified the question of maintenance as one of the issues that, if handled correctly, could alleviate poverty. There are problems in this regard. The Act was passed in 1998 but there are still problems regarding its full implementation. Up to so far 67 maintenance investigators had been appointed, but the number was far from adequate. Now that the Minister has approved a policy regarding the investigators they would become permanent members of the Department. The Department has R40m aimed at alleviating some of the problems faced by the poor. At the beginning of the year the Director-General set up a maintenance project in Market Street. A Chief Director was sent to a court in Market Street to look at and fix all problems around maintenance. The Chief Director has been able to identify a number of problematic areas including the system that are in place and the general attitude of the staff. Things are starting to improve in that court. The essence is to have a model court that would then be rolled out to other areas.

The Department is working on a system that would ensure that maintenance money could be paid or withdrawn anywhere in the country. The Department has started a system through which it contacts beneficiaries who have cellular phones when their money has been paid. This avoids situations where people go to court only to find that their money has not been paid in. The Director-General said that in the Northern Cape a woman had to travel a long distance and spent R160 on transport to pick up R200.

Mr J Malahlela (ANC) asked if the Department has looked into the possibility of outsourcing security services to assist the Department's financial situation.

The Director-General replied that discussions led to a conclusion that security is not a core function of his Department. A decision was taken to outsource this function especially after considering that a further 3000 security officers were needed. Besides installing metal detectors in court entrances, the Department is also involved in safeguarding cash in transit from banks or courts. There are other functions like information and officers' security that cannot be outsourced. Together with SAPS and NIA, the Department carried out a security audit to see where the shortcomings were. An amount of R600m is required for securing all courts. The courts do not always have the minimum standards of security. Private security companies have been hired to boost security. Such companies are vetted before they are engaged so that they did not pose security threats. The Justice, Crime Prevention and Security cluster is in the process of establishing a protection and security division within SAPS. A number of people would be leaving the SANDF and would become part of the new division. They would look after courts and other key national points.

Mr J Jeffrey (ANC) focused on maintenance officers. He said that in Richmond (Kwazulu-Natal) there was an officer who was fairly young, new and giving quite bad advice. This indicated that not much had been done about training. He asked if there had been training programmes for maintenance officers to ensure that they give quality advice.

The Director-General replied that the Market Street project has highlighted lack of proper training and appropriate knowledge of the Maintenance Act. One cannot expect quality services if the people charged with service delivery had little knowledge of the issues involved. The Department is trying to solve this problem.

Mr Jeffrey said that there are bottlenecks with regard to foster care grants. Sometimes they relate to social workers who have to do the investigation and often when the social workers bring the matter to court for a magistrate to make a ruling. He asked if the Department has looked at the role of magistrates in foster care grants.

The Director-General replied that he was not aware of the situation regarding foster care grants. He promised to give answers at a later stage.

Mr Jeffrey asked for an explanation of the criteria used in deciding which courts get renovated. He also asked who makes the decision on which court gets renovated first. This is important given the fact that one would find a good court in town being renovated before former homeland courts that are in serious need of attention.

The Director-General replied that the Department had to change its focus and approach on issues like capital works programmes and the maintenance of courts. There are serious backlogs particularly in black townships and the former homelands. The focus is now on courts in black townships and rural areas. At the same time one should not allow courts of high standard to degenerate. There is a list of courts that need attention but they cannot be attended to at the same time. The decision to renovate courts is taken at national level. The Court Services Unit is responsible for identifying courts that need urgent repairs.

A Member raised a concern over the suspension of officials with pay. He noted that it is almost ten months since Mr Tshishonga was suspended. He asked the Director-General to indicate when the case would be finalised. He noted that the section headed by the Chief Financial Officer, Mr Mackenzie, has a number of problems. However, the nature of the problems has been specified. He asked how the Director-General expects the Committee to pass or recommend a budget without knowing what is happening in the Department.

The Director-General replied that Mr Tshishonga was suspended following serious misconduct. The outcome of the hearing is still being awaited. He is still being paid and he hoped the outcome would be delivered soon. There are also other people who have been suspended for unacceptably long periods and this drained the Department's resources. The process of suspension without pay is laborious in terms of the Labour Relations Act and the directions from the Department of Public Service and Administration (DPSA). Some matters dragged on as a result of appeals.

Mr CV Burgess (ID) noted a number of problems regarding the Domestic Violence Act and the operation of the courts. There are problems regarding long waiting periods and understaffing. He asked if the waiting periods could be shortened and more staff recruited.

The Director-General replied that part of the problem is that promulgated Acts were not always accompanied by implementation plans. He said there would be a workshop on 7 June 2004 to work out the guidelines for maintenance and domestic violence issues

Mr Malahlela asked if there were skills transfer mechanisms when the Department used consultants. He also asked to what extent the Department had spread its donor funding net. He also asked if the Department's staff compliment was sufficient to meet its objectives.

The Director-General replied that wherever possible the Department entered into co-sourcing agreements with consultants. Co-sourcing is not outright outsourcing. The Department prefers to have less outsourcing. Emphasis is placed on skills development within the Department. This ensures that the Department actively participates in the function it co-sources. In this way the Department gains the necessary skills. Some areas are outsourced because they are not part of the Department's core mandate.

The Director-General replied that one should be wary of donor funds. Things being normal, the Department should be able to cope with its budget. The danger is that donors might at times derail the Department from its own plans. But because of lack of resources the Department is forced to accept money from donors. There is also a problem of sustaining the projects that were initiated by such funds.

The Chairperson focused on poverty alleviation and unpaid maintenance. She said that two issues are involved. Firstly there are the problems that the Department is dealing with in the Market Street Court and the concept of separation of powers. When the former Portfolio Committee of Justice went to provinces it found that there would be a base court and circuit courts but there were no plans to have circuit courts for maintenance issues. When a Magistrate goes to an area and holds his or her circuit court he or she is delivering a service to the people. Given the staff shortage in the Department, there is some merit in the suggestion that Magistrates themselves should get involved in some managerial aspects. It does not have to be the Magistrate who will ultimately sit and hear the dispute.

The second issue deals with the vision of the Department. There is a major plan to have maintenance investigators in all courts. At some point the Department had done an assessment of areas where there is a great need. It would be a disaster if one maintenance investigator were to be appointed per court because the workload would be too much for that person. The Chairperson lamented the fact that there was about R2bn in unpaid maintenance money.

The Director-General noted the Chairperson's concerns.

Information and Management System
Mr Ebrahim (Head of Information and Management System) said the Information and Management System (IMS) was established two years ago to utilize IT as a strategic enabler. It has facilitated greater access to the public and other stakeholders. High Courts are beginning to ask why courts rolls are not published on the website so that advocates and attorneys can have speedy access to the court schedules. The Department is now able to respond to queries timeously.

Discussion
Imam Solomon commented that the Director-General had indicated that the focus is now on the poor. However, the IMS is heavily dependent on infrastructure and this is not readily available in rural areas. He asked Mr Ebrahim to explain how the system would operate in those areas. He also wondered if the Department's budget would be able to upgrade the IT system.

Mr Ebrahim replied that most courts are electrified. Telkom also was beginning to make significant inroads in the rural areas. Consequently, all courts would soon have the necessary infrastructure. On the issue of upgrading the system, he acknowledged that the cost was always escalating. The current Departmental budget was not sufficient to cover the upgrade of the system.

Mr M Masutha (ANC) said the committee usually received information on how the Department is spending its money. However, the presentation was thin on this aspect. The Committee had over the last few years criticised the way the Unit was spending its money. He asked how the Unit has responded to the criticism and whether it had tried to reduce its costs.

Mr Magwanishe asked if all courts were electrified to enable use of the system. He also asked if there has been any form of resistance to the system especially given the fact that IT is new to most people. He went on to ask how the Department was dealing with such resistance.

Mr Ebrahim replied that there had been a change in people's attitude towards IT. Even the more conservative were beginning to welcome technology. There is still resistance because some people fear that they might lose their jobs. As to savings from the system, he said that there was a need for a scientific study on this aspect.

The Chairperson said that it is important for the Department to be in charge of its products. The Department created laws but it had to buy them back from publishers in order to supply them to courts. These should be available on the website so that the Department can easily access them. She asked if everything in the Department gets channeled through the IMS.

Mr Ebrahim shared the Chairperson's sentiments. He said the Department spends about R9m to buy back documents that it had authored. The question was why the Department could not put all judgements on its intra-net with free access to all.

Afternoon session
Mr A MacKenzie (Chief Financial Officer) noted that while their aim was to receive no audit qualifications, it was impossible because the National Treasury expected it to save R433 million to effect write-offs. He thus requested the Committee to consider this fact and take it up with the National Treasury as the Department could not sustain enforced savings, some of which was due to the bad debts of former homelands.

He noted that the financial management of court services would be moved within the Re Aga Boswa rollout project. Therefore, the Office of the Chief Financial Officer would have to define the standards for finances in court services and the Department would closely monitor the implementation. He also noted that the issue of connectivity is very important to the function of the Chief Financial Officer as it enhanced dialogue and ensured service delivery to people in rural areas. In order to increase skill levels, about 86 of the departmental staff have registered for post graduate finance training courses with the undertaking that they would work for the Department for at least two year after completion of their studies. Furthermore, about 1633 people have been given computer training throughout the country.

Discussion
The Chair noted the huge amount of R173 million that was held in a suspense account which the Department is forced to save so that it could be written off and of which R68 million was indeed written off at the end of May 2004. She wondered where the Department was going to get the remaining R105 million so that it could be written off and noted that it might call for intervention by the Committee.

Adv V Pikoli (Director-General), concurred, and noted that it was a dilemma that beset the Department as the amount represented artificial savings. He noted that it should be borne in mind that it was the suspense account that led to a qualified audit opinion in the previous financial year. On the one hand, they were trying to correct one situation, while on the other, there were other financial imperatives such as filling vacant posts and service delivery.

The Chair, noting that the debt had been inherited, was of the opinion that something drastic needed to be done otherwise Parliament would continue passing legislation that would not be implementable.

Imam G Solomon (ANC) asked whether the National Treasury could not simply write off the debt as it was not an issue of overspending by the Department, but a legacy of the homeland system.

Mr MacKenzie said that it should be noted that public sector practice differed from the private sector where the debt would long ago have been written off. However, the National Treasury's accounting requirements did not allow the public service to post a loss and debts are thus always reflected as assets on the balance sheet. He said the Department was perplexed that its service delivery could be hampered in order to write off a historical debt and that no one would be negatively affected if the debt were simply written off at this point

Mr J Jeffery (ANC) was of the view that the Committee and the Department should convene a meeting though the Chairperson of the Ad Hoc Committee on Finance where officials from the National Treasury could clarify the issue.

Mr L Landers (ANC), concurred, and proposed further that the Auditor-General should also be invited to such a meeting through the Standing Committee on Public Accounts as it was that Committee which could authorise "unauthorised" expenditure.

The Chair noted that the Committee would consider the proposal as the situation might have serious ramifications for service delivery. She further noted that the Ministry should also deal with this as it could not continue and that the National Treasury should afford the Department a reasonable opportunity to write off the inherited debt. She also noted that the Minister indicated that the implementation of the Re Aga Boswa project had been intended for the country as a whole, but that had to be changed until such time as the situation in KwaZulu-Natal had been sorted out completely. She wondered if this was the correct strategy to follow.

Mr MacKenzie said it should be noted that the project had two sides - theoretical and practical. The theory determines how the project would unfold while the practical side dealt with "real" issues on the ground. He commended the Western Cape for being better organised than the other provinces, but pointed out that the process, while correct for KZN, could not be applied to all other provinces. The existing funding would therefore be used to fill vacancies before the project is rolled out countrywide.

The Chair acknowledged that, while the Re Aga Boswa project might bring about some changes in the Department, the positive aspect was that there would be accountable persons for the court services. However, she was concerned at the funding for the human resource functions within court services and asked if the Department had made projections for over-expenditure that might result.

Adv Pikoli responded that it was evident from the previous year's expenditure that the Department had overspent on court services. That left it with a situation where it would have to cut expenditure on equipment and other aspects so that the overall budget was not again exceeded.

The Chair, noting a discrepancy between trust monies received and the number of transactions, asked the Department for an explanation, especially regarding maintenance issues.

Mr MacKenzie said it should be noted that the figures related to the financial year ending 31 March 2003 and in that year more people collected trust money than were received.

The Chair stated that, as the Committee now knew the size of the problem facing the Department, a solution had to be found and she proposed a draft Bill to deal with trust money. She also asked for an explanation of the percentages listed for the maintenance case basis.

Mr MacKenzie noted that although the analysis was incomplete, the percentages represented the monthly number of maintenance cases where no payment is received in terms of an order of court. As this shortfall in payments was not conducive to poverty alleviation, a new system would come into operation on 1 April 2005.

The Chair asked the Department to keep the Committee up to date on the implementation of the new system. She also asked the Department to identify the areas that have been affected by unauthorised expenditure.

Mr MacKenzie noted that there were matters under investigation that related to irregular procurement. The Chair wanted to know who had made the relevant purchases. Mr MacKenzie said that IT procurement fell outside of his responsibilities as the State Information Technology Agency (SITA) dealt with it. In certain instances SITA had allowed contracts to lapse and that resultant procurement was therefore considered to be irregular in terms of procedure..

The Chair noted that the Department seemed to prefer finalizing legislation before its parliamentary introduction and asked what strategic plans were in place for legislative costing.

Adv Pikoli said the plan was to establish a legislative costing unit within the Department to ensure that every Bill is costed before the Minister takes it to Cabinet. The Department now had to ensure that it had the capacity for this unit and he asked for the Committee's assistance to ensure that the Department had enough funds to accomplish this task.

Mr MacKenzie noted that the Department had employed two competent persons for the costing exercise. They had been tasked to cost maintenance investigators and the equality legislation. This was a massive task taking into account that about 163 Acts had cost implications while a large number of Bills still had to be introduced.

The Chair asked the Department to submit its written plan in this regard so that the Committee could have an idea on how this would unfold in practice. She thereafter thanked the Department for its presentation and welcomed Mr MacKenzie's offer to meet with individual Members to further clarify their concerns.

The meeting was adjourned.