DoD, DMV, Denel: hearing on AFS & SIU Investigations; with Ministry

Meeting report

Opening Remarks

The Chairperson welcomed the Department's team and Committee Members. He said the briefing would cover the annual report and financial statements of the Department of Defence, Military Veterans, Denel, and Special Investigating Unit (SIU) investigations. He then allowed the Department to present.

Ms Angie Motshekga, Minister of Defence and Military Veterans, said she asked the Department to bring Denel to the meeting, but the entity did not fall under the Department of Defence (DoD). Engagements were ongoing, documents were being obtained, and work had begun, but without Denel she could not engage on their behalf as there had been no official status or response. She was surprised by Denel and the chief executive officer's (CEO’s) absence, as they still needed to report, and the Department could not answer for them.

The Chairperson said the Committee would address Denel’s absence, but first focus on the prepared matters. He said discussions would cover the delegation of authority and why it had not yet been granted, as well as Denel’s absence despite being invited.

Department of Defence presentation

Minister Motshekga said the Department was severely underfunded, particularly in labour-intensive sectors such as education and defence. This financial strain had led to a R3 billion overspending on human resources, driven by budget constraints. To manage costs, the Department implemented early retirement programmes, aiming to replace higher-paid employees with younger, lower-cost recruits. However, funding shortages extended beyond salaries, affecting critical areas such as equipment maintenance, which had resulted in fewer operational aircraft and ships, ultimately reducing training hours and overall military readiness.

Unfunded mandates and unplanned deployments had further strained the budget. The military was frequently called upon for security operations beyond its primary mandate, such as assisting the police in tackling illegal mining and participating in regional security interventions, including operations in Mozambique. Many of these deployments were not pre-budgeted, forcing the Department to adjust financial plans retrospectively. The delays in securing additional funding impacted operational effectiveness and necessitated resource reprioritisation.

The Minister acknowledged the underfunding challenge across land, air and maritime defence. She emphasised the importance of air power in national security, and said that the Department was prioritising investment in the air force. However, inefficiencies at Denel, the state-owned arms manufacturer, had delayed the repair and maintenance of military vehicles and aircraft, further weakening operational capacity. To mitigate this, the Department was seeking international partnerships, including engagements with China, to secure spare parts and maintenance solutions.

On the issue of military hospitals, the Minister said that they were struggling due to procurement challenges and infrastructure issues. Many hospitals were experiencing critical maintenance delays, including non-functional lifts and outdated medical equipment. Some equipment purchased during renovations had become obsolete even before being used due to prolonged project delays. The DoD was working with the Department of Public Works (DPW) to fast-track hospital upgrades and ensure military personnel receive adequate healthcare.

The Auditor-General (AG) had qualified the Department’s financial statements, citing limited access to classified military data, which accounts for 0.6% of total expenditure. The Minister acknowledged that asset management and procurement weaknesses had contributed to irregular and unauthorised expenditures. She also noted that outdated information communication technology (ICT) systems, which were largely paper-based, hindered financial oversight and efficiency. In response, the Department was developing plans to digitise operations and enhance procurement processes by training officials and improving governance structures.

Minister Motshekga added that budget cuts had impacted employee compensation, limiting the Department’s ability to recruit new personnel. Although early retirement initiatives were intended to reduce salary expenses, they had not yielded the expected cost savings. The Department recognised the structural inefficiencies within its financial management, and was actively working on solutions to optimise spending and improve operational effectiveness.

Discussion

The Chairperson said he would share an overall assessment based on the AG's and SIU’s input. He noted chronic underfunding, but highlighted a broader collapse in governance and leadership across the defence sector.

He said audit recommendations had been ignored, requiring accountability. Strategic procurement had also failed, with funds misallocated, such as spending on personnel instead of armoured vehicles, creating serious risks.

He said the Supreme Court of Appeal had ruled against government departments committing to obligations without funding, yet this had continued. The defence forces were repeatedly tasked with unfunded mandates, undermining operational capacity.

He added that the AG had expressed frustration over poor accountability in defence procurement, with SIU investigations delayed by senior officers disregarding civilian oversight. He emphasised that the defence force must submit to such oversight.

He called the Department of Military Veterans (DMV) a "train wreck," and said Denel and Armscor were failing their mandates despite fiscal allocations. He asked the Minister and officials for concrete plans to address these issues before allowing Members to ask questions.

Minister's response

Minister Motshekga said her colleagues would assist with some questions, but she would address the simpler ones first. She said that while there were challenges in the Defence Force, she would not describe them as a collapse of governance. She emphasised that the sector had strong leadership, including well-qualified and dedicated individuals providing strategic direction.

Regarding the DMV, she acknowledged significant structural and staffing issues, as well as a toxic work environment. Even Members of Parliament had been able to convene meetings and issue instructions within the Department, creating chaos. Addressing these challenges was a priority, given the importance of servicing veterans. To that end, government intervention included working with the Public Administration Leadership and Management Academy (Palama), the Department of Public Service and Administration (DPSA), and external auditors to improve operations.

On strategic procurement, she mentioned that Armscor’s lack of a board was not the only issue. The procurement process required a greater sense of urgency, as delays in acquiring spares had been a recurring problem.

Regarding the procurement of Cuban medication, she commented that the matter had been under discussion for some time, with findings from previous administrations.

On Denel, she asserted that it remained a national strategic asset with significant potential for job creation and economic contribution. While Denel had inherited financial challenges, including debt from previous leadership failures, the entity was still generating revenue. The government had allocated funding for its turnaround, and the Minister expressed confidence that new leadership would present a more positive outlook.

Minister Motshekga acknowledged the concern over the issue of unfunded mandates, but argued that defence operations often required immediate responses, such as interventions in Mozambique or emergency evacuations. She explained that while these actions may bypass parliamentary processes, they were necessary for national security. She suggested that SCOPA should, in some cases, recognise and condone emergency expenditures. While there may be differences in perspective, the nature of defence operations often requires flexibility and swift decision-making.

The Chairperson said he understood the need for immediate action in emergencies. However, the issue was that no follow-up process had ensured these expenses were properly accounted for. There was no budget adjustment or appropriation, leaving a permanent shortfall. The Defence Secretary had itemised unfunded mandates totalling hundreds of millions, possibly a billion, while the Department was already 52% underfunded. This gap was never closed. What was the Minister's response to this?

Minister Motshekga confirmed the AG’s report, which highlighted the Department's failure to address audit queries over the past four to five years, including issues like poor financial management, unethical procurement practices, and corruption. The former Minister, in consultation with senior defence staff, had created a strategy document in August 2022 to address these challenges, outlining steps for improvement. She urged the Committee to request the Secretary of Defence to share this document, which provides guidance and action items. Additionally, a Council of Defence meeting would be held to discuss the audit report and strategy, and a report would be drafted to assess the implementation of past directives.

The Committee should also consider the underlying issues, such as personnel quality and systemic failures. While some challenges were due to underfunding, others stemmed from fundamental issues in military operations, particularly the lack of response to the AG's findings. Furthermore, funding delays and procurement inefficiencies, like issues with medical equipment and strategic procurement, highlighted the need for improved financial management and oversight. The focus moving forward would be on addressing these shortcomings and improving operational efficiency.

Department's response

Dr Thobekile Gamede, Acting Secretary for Defence, confirmed that negotiations were ongoing with the Department of Planning regarding procurement weaknesses identified earlier. These issues have led to paying more than necessary, compared to internal procurement. The former Minister had instructed the Military Command Council (MCC) to review the contract to address concerns raised by the AG, and that process was now complete.

Regarding the SIU, two reports on personal protective equipment (PPE) had been addressed, with action taken, including the dismissal of 30 civilians, with one pending. In the military, personnel were disciplined under the military justice system, which requires thorough investigations before suspensions or disciplinary actions. The AG was working to strengthen the capacity of boards of inquiries, which had been slow in some cases.

DG Gamede also noted that 13 personnel from the Department of Public Enterprises (DPE) would join the Department of Defence, a process that was on track. She clarified the role of the Secretary of Defence, emphasising that while the Secretary oversees the military, challenges arise in disciplinary matters due to the Defence Act, limiting the Secretary's ability to charge personnel directly.

Addressing concerns raised by the SIU, Dr Gamede explained that while the military was commanded by the Secretary of Defence, certain procedures -- such as notifying the military of investigations -- must be followed for smooth coordination. The SIU's investigation issues were due to a lack of prior notice about their visits.

Lt Gen Michael Ramantswana, Chief of Staff, SANDF, refuted claims that the military refused to be accountable to the Secretary for Defence, stating that they worked in constant communication. He emphasised the SANDF’s commitment to consequence management, citing retired officers being recalled and legal proceedings against offenders. However, he acknowledged delays due to the judicial process.

He addressed budget constraints, highlighting that the SANDF had always been funded for deployments until recent operations like illegal mining and Eskom security, where funding was insufficient. Despite this, the SANDF had reprioritised its budget to meet national security needs, avoiding setting a precedent of inaction.

Regarding Denel, he expressed concern over the loss of intellectual property (IP), and urged efforts to restore capabilities. He also confirmed that Project Thusano had been reviewed, removing vocational training in Cuba while maintaining essential collaborations.

The Chairperson clarified that the concern was not about the defence force refusing lawful orders, but ensuring financial accountability. He emphasised the need to close the financial loop, preventing funds from being partially reinvested while a portion remained unaccounted for.

Ms V Mente-Nkuna (EFF) requested a full account of Denel’s current status, including its reporting structure and oversight. She noted that Denel was previously under the Department of Planning, Monitoring and Evaluation (DPME) but was now under the DoD, seeking clarity on its accountability and the relationship between the Presidency, the Minister, and Denel’s control.

Minister Motshekga said the transition of Denel was being managed with the Presidency. The Department has not yet had full control over Denel. She said meetings with Denel’s board had been held to prepare for the handover and to understand its operations. In the meantime, the Presidency had provided assistance, including securing contracts. She said Denel would not report directly to her until May.

The Chairperson said the key issue was whether a legal process was needed for full oversight of Denel, or if it was an administrative delay. He said Denel seemed to be in limbo without a Minister of Public Enterprises, and asked for clarification on who they currently reported to.

The Minister responded that Denel’s transfer to the Department of Defence was still in progress. The interactions with Denel were informal, as they did not yet report to the DoD. While their transfer was anticipated, they could not audit or hold them accountable at this stage.

Dr Gamede said the project was led by the Presidency, and Denel remained under the DPME. She confirmed that papers had been submitted for co-signing by the Minister and the Minister in the Presidency, with the sending Department now being the Minister in the Presidency. She assured the Committee that everything was on track administratively, including National Treasury reallocating the budget to the DoD. While she could not comment on Denel's operations, she confirmed the process was on track for them to transition to Defence at the start of the financial year.

She added that the plan was not their own, but followed timelines set by the Presidency. They were working according to a process that outlined the steps and rules for transferring a function, which required time and could not be expedited just because the President had given instructions. She concluded by asking if the responsible Minister for Denel had been confirmed.

The Chairperson asked if the person to speak to was Minister Kgosientsho Ramokgopa, Minister of Electricity and Energy, as they currently had statutory responsibility for Denel. He clarified that the plan in place aimed for the transition to take place on 1 April, but that the accountable executive member at that moment was Minister Ramokgopa, and he would be the person to talk to after the meeting.

Mr P Atkinson (DA) said that a recent judgment had made it illegal for the President to sign anything without adequate funding, raising concerns about the defence force operating without the necessary financial resources. He asked for clarification on how this affected the defence force, stressing that operating without funds could be breaking the law.

He also expressed concerns about the defence force's capability to protect South Africa, especially in light of the instability in Mozambique. He questioned whether the defence force had enough resources to defend the country if similar threats arose, particularly with the potential discovery of offshore gas.

Mr Atkinson criticised government's spending, suggesting that while large sums of money were allocated, much of it was wasted. He asked about the ratio of support staff to actual troops in the defence force, as well as concerns about the troops' ability to operate in the field, referring to reports of soldiers making do with inadequate food supplies and equipment. He mentioned the humiliation of South African Defence Force (SADF) images, such as troops waving a white flag in the Congo. He questioned why proper logistics and equipment were not being provided.

He also pointed out issues like the naval dockyards being unable to repair ships and pilots not having enough flight time to maintain their licences, further questioning the effectiveness of the defence force. He asked for reassurance that South Africa would be able to defend itself if needed.

The Minister responded by expressing confidence in the country's defence capabilities, despite not having everything it needed. She emphasised that South Africa had enough capacity to defend itself, pointing to their ability to fight rebels for hours in the DRC without sufficient funding or supplies. She acknowledged the financial challenges, particularly with domestic needs, but insisted that missions abroad had never lacked resources. She also noted that South Africa had successfully contributed to 23 peacekeeping missions.

Regarding issues at home, she addressed concerns about the dockyard and the Air Force, confirming that the budget had been reprioritised to increase flying hours for pilots and provide more training opportunities. She acknowledged the challenge of training more pilots, as not all planes were operational.

The Chairperson highlighted the concerning audit outcomes, noting a significant drop in flying hours and sea time, as well as personnel losing their competency. He stressed that the audit findings were more than just a matter of reassurance, calling for a deeper explanation of why the outcomes did not reflect the Minister's confident answer.

Lt Gen Ramantswana said he had never seen such a strong debate on defence in Parliament, and was impressed. He said that since 2015, the defence force had struggled with budget constraints, but had still managed three external deployments -- the UN Stabilisation Mission in the Democratic Republic of the Congo (MONUSCO), the Democratic Republic of Cong (DRC) mission, and Operation Vikela in Mozambique, while also handling illegal mining and border security.

He explained that limited resources affected operations, comparing it to having R10 when R100 was needed. The defence force had planned based on available resources, and had submitted these details to Parliament.

On the Air Force and Navy, he said pilots needed to stay trained for safety, and due to financial challenges, the SANDF had partnered with countries that had simulators for training.

He stressed that the defence force could respond to threats, but needed more funding for long-term operations. He also pointed out that Parliament had approved the defence review in 2015, yet Members were still asking the same questions.

Regarding the Russian packs, he said budget constraints required alternative solutions. Soldiers had once received expired packs from a supplier who was later taken to court. This led to discussions on whether they could pack their own rations at scale, instead of relying on external suppliers. He added that having soldiers prepare their own packs could be beneficial.

In terms of personnel, he estimated there were around 6 000 civilians in the defence portfolio, with approximately 63 000 soldiers, though those figures were offhand and might not be exact.

The Chairperson said the response was unsatisfactory and explained why. He said that without spare parts, fuel or mechanics, planes and helicopters could not operate, and even mechanics were losing their skills due to inactivity. He argued that a simulator was no substitute for real operations in an actual incursion.

He said that while it might be politically sensitive for military officials to admit it, the reality was that they lacked the capacity to respond effectively to threats. He questioned whether the defence force could mobilise against poaching, piracy, or other maritime threats, concluding that the honest answer should be no.

Deputy Minister of Defence and Miliatry Veterans, Bantu Holomisa, said the question was about the defence force's state of readiness, and whether it could be guaranteed. He mentioned the years of defence force defunding and recommended inviting National Treasury representative who briefed them last year. He recalled that the representative had said that funds for defence had been redirected to bail out SOEs. He emphasised that the defence force lacked resources, and referred to Committee minutes and President Zuma’s decision to allocate funds for free education.

Mr D Skosana (MK) noted the absence of the Chief of Defence, and raised concerns about Gen Rudzani Maphwanya, citing past allegations. He questioned when Denel would be fully under the DoD's control. He also pointed out Pravin Gordhan’s role in misdirecting funds, which had contributed to the defence force’s lack of capacity.

He raised concerns about finances, the National Conventional Arms Control Committee's (NCACC's) status, and procurement delays. He acknowledged progress on PPE matters, but noted the frequent turnover of officials. He concluded by stressing the need to address the misappropriation of funds and its impact on soldiers’ morale.

Ms Mente-Nkuna said that Denel’s absence was unacceptable, and needed an explanation. She asked why the defence force did not provide clarity, and called it undisciplined. She questioned whether the country would send troops to dangerous places without enough money, just because of a decision, and said that sending troops without the right resources was irresponsible.

She asked the Minister to explain why austerity measures affected the defence budget. As part of government, she should explain why important departments like defence were underfunded. She stressed that South Africa’s security depended on a well-funded defence force and government should take responsibility.

Ms Mente-Nkuna also raised concerns about problems flagged by the AG since 2019. She asked why no action had been taken against those responsible, and said the AG should have more power to recover money.

She asked how unauthorised spending was being handled. She worried that even if more money was given to defence, it would first go toward paying off debt caused by mismanagement. She also asked for updates on the 11 cases related to PPE and vehicles, and when disciplinary hearings would happen.

Mr C Niehaus (EFF) said he had attended the SCOPA meeting to compare what the Defence Department shared here with what it had shared with the Portfolio Committee on Defence. He said the SIU report was troubling, showing many irregularities, and criticised the Department for always blaming underfunding while ignoring mismanagement and corruption. He argued that the problem was not just a lack of funds, but a legacy of corruption within the Department and its associated agencies, including Denel. He was disappointed that Denel did not attend the meeting, especially since the DoD would soon take control of it.

He mentioned three failed projects as examples of mismanagement. He spoke about Project Hoefyster, where R8 billion had been spent without delivering results. He then referred to Project Hotel, a delayed shipbuilding project in Durban, where costs kept rising, and a senior official who had approved the contract later became the executive chair of the company that had received it. He also brought up One Military Hospital, where mismanaged tenders had left parts of the hospital, including the operating theatres, non-functional. Equipment purchased for the hospital had become obsolete even before being used.

He accused the Department of dishonesty, saying the Minister had given misleading answers in Parliament. He claimed the Minister had denied any criminal investigation into One Military Hospital, even though the SIU was actively investigating it. He had asked about Project Hotel in Parliament, and was told there were no cost overruns or mismanagement, despite clear signs of both.

Mr Niehaus criticised President Ramaphosa for bypassing Parliament when approving military deployments. He said the President had sent a letter on 24 December 2024, making proper oversight difficult. He argued that Parliament had the legal right to respond, but had been prevented from doing so, leading to soldiers being sent to the DRC without enough resources. He said this was unacceptable, and that both the President and the Department needed to be held accountable.

He concluded by saying the DoD had failed to do its job, contributing to the country’s military decline. He also raised concerns about South Africa’s arms trade oversight, saying the NCACC took too long to be reconstituted, and lacked the resources to track weapons, which could end up in conflict zones like Ukraine or Israel. He said SCOPA needed to investigate this to ensure South Africa was meeting its international arms control obligations.

Mr A Trollip (Action SA) challenged the Minister’s claim that the SANDF was capable of fulfilling its mandate, pointing to corruption, mismanagement, and underfunding. He asked about progress on a 2023 plan to move the defence force out of crisis, questioning why leadership issues identified in the plan had not been addressed.

He criticised the poor state of military hospitals, noting that top officials, including past presidents, avoided them while seeking treatment elsewhere. He described the South African Military Health Service as a mere referral agency, unable to provide adequate care.

He expressed frustration over financial mismanagement, highlighting the Department’s inability to account for troop numbers, with discrepancies in the thousands. He questioned how a Department that could not manage its current budget expected more funding. He also pointed out contradictions in the cost of the DRC deployment, which was initially estimated at R43 billion, yet the Department had requested only R2 billion in adjustments, effectively setting up its troops for failure.

Mr Trollip raised concerns over delays in Project Thusano, which was supposed to be completed in January but remained under review. He also criticised the ongoing failures of Denel and Armscor, noting that even the Secretary of Defence appeared unaware of which Minister was responsible for oversight.

Concluding, he said the Department needed to face its failures rather than make excuses. He warned that unless the Department took responsibility, Parliament should not allocate additional funds, which he would not support.

Minister's response

Minister Motshekga acknowledged that austerity measures were necessary due to economic stagnation and rising debt, which threatened the integrity of the national budget. The decision to slow spending was aimed at preventing excessive borrowing, which affected multiple departments, including defence and infrastructure.

She admitted that corruption and financial mismanagement made it difficult to justify additional funding requests. Treasury was unwilling to allocate more funds to departments that had misused resources in the past. She emphasised the need to clean up internal processes to restore credibility and secure future funding.

The Minister also noted that budget constraints delayed critical programmes, such as infrastructure projects and curriculum modernisation. While agreeing that the situation was problematic, she reiterated that it was a national issue affecting all sectors.

The Chairperson asked the Gen Ramantswana to clarify the military justice system's delays, asking whether all matters had to go through the courts, or if internal disciplinary inquiries existed. He emphasised the need for timely accountability, and inquired whether legislation allowed for alternative inquiry mechanisms.

Geb Ramantswana said that military operations had always been funded, except for the Eskom infrastructure deployment, which had forced the Department to reprioritise resources. He expressed shock at the lack of funding, and emphasised that National Treasury was fully aware of the issue. He also highlighted an underfunded illegal mining operation, where R150 million had been allocated, yet costs had escalated to R320 million.

Regarding procurement and material irregularities, he deferred to the Chief of Logistics and noted that matters managed by Armscor, such as Project Hotel, should be addressed by the responsible officials.

Regarding the unfunded mandate, he reiterated that the defence force had historically been funded upon the commander-in-chief’s approval, but the Eskom deployment had been an exception. Treasury had referred them to Eskom despite the absence of a service level agreement.

On Project Thusano, he confirmed it had been reviewed, and explained that certain elements had been removed. Foreign training opportunities would now be handled similarly to other international programmes. The Department had discontinued sending soldiers to Cuba for medical, engineering, and vocational training, opting instead for alternative partnerships within Africa. However, Cuban engineering support remained in place for landward operations.

Gen Ramantswana acknowledged the Committee’s scrutiny, and expressed optimism that their discussions would lead to meaningful changes in defence funding and accountability. He urged Members to advocate for the defence force, emphasising that the Department could not continue addressing the same funding concerns repeatedly.

The Chairperson asked for a clear explanation of the delays in the military justice system, emphasising the need for specific causes rather than legislative references. He asked whether delays stemmed from personnel shortages, case overload, or other constraints.

Gen Ramantswana replied that military justice relies primarily on the court system, with summary trials and suitability boards no longer in use. To address delays, the Department introduced the Military Discipline Bill, aimed at empowering commanders to expedite disciplinary matters. However, the bill had been returned by Parliament due to concerns about its application to civilian components in the Department of Defence, requiring further legislative processing.

He acknowledged that personnel shortages contributed to case backlogs. To address this, additional military judges had been appointed, as directed by the Minister. However, he requested permission to provide a written submission for a more detailed response.

Deputy Minister Holomisa suggested that the Department of Justice establish special courts dedicated to addressing long-pending cases, particularly those flagged by the AG. He emphasised that severe financial mismanagement and corruption required a structured judicial process for accountability. Reflecting on past Committee resolutions that were rarely implemented, he urged the Committee to take concrete action.

He further highlighted systemic issues in financial oversight, noting that ministers and senior officials often signed off on documents without proper scrutiny. He stressed the need for stronger checks and balances across government departments, particularly regarding secret funding and daily expenditures.

Vice Admiral David Mkhonto, Chief of Logistics, SANDF, provided an update on material irregularities and the administration of consequence management. He noted that the irregularities dated back as early as 2012, despite the inquiry focusing on cases since 2019.

From 2016 onward, there have been 270 total incidents, comprising 246 cases of irregular expenditure and 24 cases of fruitless and wasteful expenditure. Out of these, 113 cases remained under investigation. Recently, consequence management actions have been taken on 12 cases. Currently, 20 members are undergoing consequence management, with seven reprimanded, 11 charged, and two dismissed. 101 board of inquiry cases were still open, with legal advice pending before closure. Five cases were undergoing criminal court procedures, while 157 cases had not been investigated. The Department had disputed 71 findings by the AG.

Regarding the PPE procurement fraud case, allegations emerged between March 2020 and 2021 against logistics division members for fraud and corruption in PPE procurement during COVID-19. Eleven members had been charged and appeared in a military court in September 2022. The case was postponed in February 2024 due to incomplete preliminary investigations and an accused member being medically unfit. The accused had remained unfit to stand trial in September 2024, leading to another postponement until 7 April 2025. The state prosecutor was considering separating the trial to proceed against the 10 remaining members.

The board of inquiry process had been delayed due to the reliance on senior officers, many of whom were retired or reserve force members. Budget constraints on reserve force salaries had impacted their availability, further delaying inquiries. To address this, the Department was working on retraining senior officers with the assistance of the Legal Adjutant General. The situation was expected to improve when funding was available in the next financial year.

Vice Admiral Mkhonto assured the Committee that the Department was actively addressing these issues and would provide further updates as investigations progressed.

Dr Gamede said case delays were due to slow inquiries, which made it hard for commanders to decide on charges. The board of inquiry had to finish and get legal reviews before cases could go to a military court. Delays happened because board members were not always available or trained well. The Adjutant General was working on training to fix this.

She said hospital repairs had been moved from the Department of Public Works to the Department of Defence to speed up the process. On Project Hotel, she said that Armscor was in charge, and the delays had been caused by floods in Durban and COVID-19.

The Chairperson said Denel would appear on 25 February, and they were trying to get the Minister of Electricity and Energy to attend. They had moved discussions on military veterans to the same day.

Follow up questions and responses

Ms Mente-Nkuna asked where the defence audit committee was, as their reports should monitor finances. She said the lack of oversight suggested no one was tracking financials, and the Committee could not condone R6 billion in unauthorised spending, which pointed to corruption and mismanagement. She noted that the SIU tribunal was dealing with a single PPE case involving R273 million, while nearly R2 billion in material irregularities remained unaddressed.

She said the long disciplinary process allowed corruption to continue, with service providers chosen incorrectly, inflated prices, and no accountability. She insisted that the Secretary of Defence should not argue with the SIU and AG, as their findings showed the system was flawed.

She questioned how the defence budget for the DRC was being managed, asking if funds were being reprioritised, taken from existing budgets, or if there was a dedicated budget. She also asked if soldiers were receiving everything they needed.

She asked how long it would take to fix the management and financial issues, saying the financial system was in chaos. She added that sending documents to the Minister for approval would not fix the deeper management failures.

Mr D van Rooyen (MK) commented on the executive's concerns about economic growth affecting the financing of development programmes. He advised the Minister and Deputy Minister to review the fiscal policy, saying the current focus on fiscal consolidation limited strategic investment in revenue-generating areas.

He suggested adopting a broader fiscal strategy to maximise revenue from mineral resources and tax opportunities. He said the lack of investment in customer services was unnecessary, since proven revenue sources existed. He pointed out that Denel’s intellectual property had been lost to private entities due to underfunding, despite its potential to generate revenue through specialised products.

He emphasised the need to rethink fiscal policy, as funding complaints kept repeating. While financial management remained crucial, he stressed that the Committee should focus on solutions. He urged the Committee to reconsider the 2015 Defence Review, believing it contained overlooked solutions. He suggested that the Committee determine its relevance, as valuable lessons had been ignored for unknown reasons.

Mr G Skosana (ANC) appreciated the Minister’s presentation on the state of the Department. Before his questions, he addressed housekeeping issues, noting that Mr Niehaus had violated National Assembly Rule 85, as accusing the Minister of deliberately misleading Parliament was unparliamentary, as it cast doubt on her integrity. He also objected to the claim that President Ramaphosa had sneaked a deployment letter, saying it implied dishonesty. He recorded these concerns without raising a point of order, to avoid stifling discussion.

He then asked why the DoD had received qualified audit opinions for five consecutive years, expressing concern over the lack of improvement despite audit action plans. He wanted to know what would be done differently to secure a favourable audit opinion.

He also questioned the overpayment of employees’ basic salaries, housing allowances and deprivation allowances, asking why this issue persisted and how it was being addressed. Lastly, he raised concerns about the Department’s lack of a system to identify and disclose irregular expenditure.

Ms H Neale-May (ANC) expressed concern that the DoD had achieved only 33% of its performance targets for the 2023/24 financial year, while overspending by R2.3 billion and incurring unauthorised expenditure. She questioned whether the Department’s unplanned expenditure affected its ability to meet performance targets.

She also raised an issue with the Department not paying invoices within 30 days, as required by the Public Finance Management Act (PFMA) and Treasury regulations. She attributed this to the legacy system and the lack of integration between financial systems, logistics, and supply chain management. She asked if the Department was addressing this issue and improving the system.

She asked the Minister to guarantee that future compliance issues, particularly those related to non-compliance with the PFMA, would be properly addressed, emphasising the need to resolve these ongoing challenges.

Mr N Maduna (ANC) commented that both the Department of Defence (DOD) and the Department of Military Veterans (DMV) had been facing issues with acting positions, including the chief financial officer (CFO) and secretary at the DOD. He questioned why permanent appointments were not being made which could affect organisational memory in these crucial departments.

He also asked if the DOD had a properly functioning audit committee and whether it was outsourced, pointing out that internal audits were usually more beneficial than outsourced ones. He stressed the importance of a functioning internal audit system to improve internal controls and governance.

Regarding performance, he expressed concern about the low performance targets achieved by the DMV, especially considering the budget spent. He questioned whether the expenditure provided value for money, and expressed doubts about DMV’s ability to deliver on its mandate.

Finally, he commented on the need for better financial planning in military departments, similar to municipalities, where budgets were set aside for unforeseen costs like disaster management or vehicle repairs. He also highlighted the issue of unexplained wealth among supply chain management (SCM) officials. He emphasised the need for ethical and moral regeneration within the public service to address these problems.

Mr K Madlala (MK) began by emphasising the importance of understanding the challenges departments and state-owned enterprises face to effectively support and resolve their issues. He stressed the need for transparency in reporting challenges, and for departments to be frank with the Committee about their issues to ensure meaningful solutions.

He expressed concern about the lack of discipline and consequence management in the DOD, particularly given the high expectations of discipline and moral authority in the military. He emphasised that any problems related to discipline and behaviour within the Department could affect high-risk areas, and were a serious concern.

He also raised the issue of legacy problems, urging the Department to clearly identify whether these were related to systems, processes or people. He stressed the importance of mitigating these issues and implementing preventative measures so that the same problems did not persist for years.

On the financial management front, Mr Madlala said it would be illogical to expect effective management of larger budgets when smaller budgets were mismanaged. He emphasised the need for systems, controls, and ethical leadership to ensure proper utilisation of resources before asking for more funds. He concluded by highlighting the importance of leadership stability and ethical behaviour within the DoD, stressing that this impacts not just the Department but the country's sovereignty and security.

Mr T Kubheka (MK) voiced strong concerns regarding DoD's current state, particularly its ability to defend the country effectively. He expressed disagreement with the Minister's statements that the country was safe and that the Department was functioning adequately. He cited figures from the AG and the SIU, highlighting a severe decline in flying and sea hours by the military, including a drop in navy sea hours from 11 000 to 2 600, and a similar decline in the air force's flying hours.

He criticised the lack of unmanned aerial vehicles (UAVs) and the dysfunctionality of Armscor and Denel, pointing out that soldiers in the DRC did not even have the necessary equipment to repatriate fallen comrades, as their bodies were transported by a Tanzanian Air Force plane, rather than an SANDF aircraft. He raised concerns about the Department's ongoing financial mismanagement and dysfunctionality, particularly in internal audits, vacancies, and lack of accountability for misconduct. He warned that allocating more funds without addressing these systemic issues would only lead to further mismanagement and potentially corruption.

Mr Kubheka asked whether the Department's accounting officer had the authority to discipline senior officials, as indicated by the AG and SIU reports. He also labelled the actions within the Department as potentially treasonous, as they jeopardised the safety and defence of the country. He criticised the Minister's stance on funding and equipment, pointing out the underfunding of military compensation and the overuse of reserve forces.

Finally, he expressed concern over any future plans to involve private companies in the DoD, particularly fearing the privatisation of defence and the influence of foreign military-industrial complexes, which he believed would undermine the sovereignty of the country.

Dr M Burke (DA) asked the Deputy Minister about the justification for South Africa’s presence in the DRC, especially considering the significant funds that had been historically spent on the mission. He also asked if the R1.8 billion allocated in the national budget for the year ahead was still necessary, given the situation in the DRC.

He then inquired whether Ministers Motshekga and Ramakgopa had signed certain critical documents related to the Department, asking if he was broadly correct in understanding that those signatures were required. He also requested that the agreements and sub-agreements between South Africa and Cuba be made publicly available, to assist the Committee in overseeing public accounts.

He asked the Secretary of Defence about the last unqualified audit the DoD had received, and raised a concern regarding the Department's lack of disciplinary action. Specifically, he questioned the Secretary of Defence’s statement that if a member ignored directives, there were no direct consequences or actions, and wanted clarity on the disciplinary process and why it appeared not to be enforced more rigorously.

Lastly, he asked about the Military Discipline Bill, which had been withdrawn in March 2020. He questioned why it had not been reintroduced in Parliament after five years, and when it could be expected to be tabled. He also made a comparison between the Battle of Bangui and the Goma defeat, highlighting similarities such as the lack of air support, heavy armour and resupply issues, and asked whether it was fair to judge the DOD based on these two similar situations.

Mr F Essack (DA) acknowledged the difficult decisions facing the Department, and emphasised the need for consensus and tough quality decisions in the best interests of South Africans. He touched on the budget shortfall of R2 billion, and inquired whether the Department was still using or leasing private aircraft for chartering purposes. Specifically, he wanted to know if there was ongoing expenditure on private chartered aircraft.

He also raised the issue of unoccupied buildings leased by the DoD over a five-year period. The AG's report mentioned a lease value of R108 million for properties that may have been unnecessary, which he deemed a significant waste of resources. He requested clarification on this issue from the Department. He referred to the vacant position of chief audit executive, though he chose not to delve into further details on that topic.

He then raised a point regarding the repositioning of the SCM function under the control of the CFO, as required by Treasury regulations, which was discussed in the presentation. He asked for a clear answer on whether this repositioning was happening or had been implemented.

The Chairperson acknowledged the questions posed, and said that the Committee would reconvene on 25 February to continue the discussion.

Addressing the Minister, he emphasised the importance of answering whether she had misled Parliament or the Committee. He asked her to begin by addressing that before responding to the remaining questions from the Members.

Minister's response

Minister Motshekga responded by addressing the several points raised. She rejected the suggestion that she had deliberately misled the Committee, considering the accusation as serious. On the matter of defence readiness, she reaffirmed her previous stance, stating that while the question was repeatedly asked, her answer remained unchanged. Regarding compliance and vacancies, she acknowledged the Department’s efforts to address issues and fill senior posts, with expectations to fill them by March.

The Minister agreed with the concerns about outsourcing internal audits, but emphasised that due to personnel shortages, outsourcing was necessary for certain areas, such as military deterrence. She gave an assurance that building internal capacity was the goal moving forward.

Regarding logistics in the DRC, she clarified that communication was ongoing about how injured troops were being returned. Regarding privatising the army, she firmly stated that there were no plans to do so.

In response to the “white flag” incident, she explained that it was not an act of surrender, but rather a temporary measure to secure safe passage for injured personnel. She addressed concerns about unoccupied Defence Force properties, acknowledging the issue and referred to discussions about how to manage or partner on the unused land to avoid further deterioration.

Finally, on the R1.8 billion question, she said that while she was unsure of its origin, the funds were still necessary for ongoing operations in the DRC, and the mission had not been surrendered. She planned to ask the Chief of Defence for clarification on this matter.

Dr Gamede addressed the question regarding procurement and accountability. She clarified that the PFMA outlines a delegation regime, where the accounting officer of the DoD delegates procurement authority to various units. There was a directorate responsible for risk governance, which conducted spot checks to ensure compliance with procurement regulations, including segregation of duties. If non-compliance was found, delegations were withdrawn. Before any delegation is signed, the governance and procurement team conducts checks to ensure that the unit is capable of procuring properly. Regarding the R1.8 billion, she indicated that the acting CFO would provide further comments on that issue.

Mr Edem Abotsi, Acting CFO, SANDF, explained that the R1.8 billion allocation from the National Treasury covered the SANDF's deployment to the DRC from 2020 to 2026. This sum was composed of R1.3 billion for the deployment itself, and R487 million for South Africa's assessed contribution as a country.

Regarding the unqualified audit opinion, he said the last time the SANDF received an unqualified audit opinion was in the 2015/16 financial year.

He acknowledged that the SANDF was struggling to meet the target of paying suppliers within 30 days, with performance ranging between 78% and 82% in the past two years. The challenges were due to legacy systems that were not well-linked, as well as the involvement of private medical service providers who were not registered on the Central Supplier Database (CSD), which delayed payments.

He further addressed qualifications in the SANDF’s financial audits, particularly around regulatory expenditure and asset completeness. These qualifications were largely due to legacy systems and manual interventions in accounting processes. Although progress was being made with action plans and regular meetings with the AG, he acknowledged that improvements were taking time due to outdated systems, which required manual updates. He mentioned that these challenges were tied to the legacy nature of the SANDF's accounting systems, which dated back to the 1970s, and their efforts to address these issues were ongoing.

Chairperson's concluding comments

The Chairperson concluded the meeting by outlining the next steps. He emphasised the need for a follow-up on all outstanding issues, which the secretariat would provide in writing to the Committee. He also mentioned that after the defence budget vote, another meeting with SCOPA would be convened to discuss funding issues and the Minister’s plans moving forward. He assured the Minister that the secretariat would continue to work closely with the Department of Defence on these matters.

He also highlighted the importance of developing an understanding of the Department’s turnaround plan. This plan should address the issues raised by Committee Members, and should be presented clearly in future discussions. It should include the seriousness of the problems, the progress made, and the implementation of consequence management.

He thanked all Members, the Minister, Deputy Minister, and the Department of Defence for their contributions before formally adjourning the meeting.