DPSA, NSG, CPSI Q1 to Q3 2024/25 Performance; with Deputy Minister

Meeting report

Opening remarks from Chairperson
The Chairperson explained that the Money Bills Act requires Parliament’s Committee s to conduct reviews of both the non-financial and financial elements of their assigned departments and entities, and if required, to issue recommendations on the use of resources. The purpose of this meeting was to receive presentations on the Quarter 1 to 3 performance for the 2024/2025 financial year of the Department of Public Service and Administration (DPSA), the National School of Government (NSG), and the Centre for Public Service Innovation (CPSA).

Opening remarks from Deputy Minister
Ms Pinky Kekana, Deputy Minister of Public Service and Innovation (DPSA), said that this meeting would focus on the three reports of the DPSA, the NSG, and the CPSA. The Ministry for Public Service and Innovation (MPSA) is also responsible for the entities, as well as the department, to ensure that the quarterly targets of Annual Performance Plan (APP) were achieved. She pointed to the NSG that is involved in rigorous training programmes for public servants to ensure that the capacity of the state to deliver is addressed and the right people are in place to deliver on government programmes.

National School of Governance on Quarter 1 to 3 performance of 2024/25
Prof Busani Ngcaweni, Principal of the National School of Governance, said that this quarter was a very busy one for the NSG. key highlight during this period was that they were given an opportunity by over 32 departments and state entities to facilitate their strategy plans. This enabled them to help government as it was making its transition in its first months as the Government of National Unity (GNU).

Mr Dino Poonsamy, Chief Director of Strategy and Systems, said overall NSG had achieved 81% of their targets for Quarter 3, and that they had put remedial actions in place to ensure the achievement of targets in Quarter 4. The revenue generated so far through the training amounted to R82 million. On their human resources, NSG has a total of 238 posts. There was a vacancy rate of 10.5%, but that they hoped to reduce this.

Mr Poonsamy said that there were two critical NSG performance indicators: revenue generation and number of public servants who had gone through training. By the end of Quarter 3, 55 775 learners had gone through various points of the interventions against a target of 48 965. The Nyukela Open Distance eLearning course had 4 970 learners enrolled and 2 427 successfully completed. The Ethics Open distance eLearning course had 56 386 learners enrolled and 41 974 successfully completed. NSG had also worked extensively on and launched a programme for Women in Leadership. It had undertaken webinars on topical issues themed “Managing the political-administrative relations within a GNU: Lessons from municipal coalition governments” and “Structuring negotiation and managing mining contracts”. They had continued to grow international relations with other global NSGs.

See attached for full presentation

Centre for Public Service Innovation on Quarter 1 to 3 performance of 2024/25
Ms Lydia Sebokedi, Acting CPSI CEO, said that their vacancy rate had decreased from 9.1% to 6%. CPSI had achieved all of their targets. The overall audit outcome of the government component was unqualified without findings (clean audit). This is the same as the previous year’s audit outcome. It had improved on its 30-day payment of invoices. Factors driving this improvement were enhanced invoice processing efficiencies, increased automation and digital workflows, and stronger financial controls and monitoring.

CPSI expenditure as of 31 December 2024 amounted to 66.24% which moved to over 80% by the end of January 2025, against the adjusted appropriation. She was confident they would use most of their budget allocation by the end of the financial year.

To achieve their mandate, Ms Sebokedi said that due to existing cost pressures, they would reallocate funds from Goods and Services to create capacity in key programmes.

See attached for full presentation

Department of Public Service & Administration Quarter 1 to 3 performance of 2024/25
Ms Linda Dludla, DPSA Deputy-Director General for Administration, said in Quarter 1 DPSA achieved achieved 70% of their targets, in Quarter 2 88% of targets and Quarter 3 77%.

In programme one, the DPSA achieved all their targets in the three quarters.

In programme two they had two targets they achieved 40% of their targets in Quarter 1, 67% in Quarter 2, and in Quarter 3 they had no planned targets. The targets not achieved in Quarter 1 were that the implementation monitored on the Directive on Compulsory (CTP)Training Programmes was only in 38% of departments; and that the implementation of the Public Service Job Competency Framework was only monitored in 38% of the departments, not 100% of departments. This second target was however achieved by the end of December 2024. Here they had also not achieved the target of the Implementation of the Skills Audit Methodology being monitored in 20 Provincial departments; this target however was also achieved by the end of December 2024. In Quarter 2 under this programme the targets they did not achieve were the implementation of the Public Service Job Competency Framework monitored in 50% of departments and a proposed framework for the compliance report and the two selected Public Administration Norms and standards to be assessed for compliance submitted to EXCO for approval, these targets were also achieved however by December 2024.

In programme three, 88% of targets were achieved in the first quarter, however they did not achieve the target of costed proposals developed for tabling at the Public Service Co-ordinating Bargaining Council (PSCBC) and securing a mandate on the costed proposals sought from the Committee of Ministers; these targets were achieved by December 2024. In Quarter 2, 100% of their targets were met. In Quarter 3, 67% of their targets were met, however they did not achieve Job Evaluation and Job Grading System implementation workshops conducted for all national departments or the drafting of regulations to standardise the use of the central register across all spheres of government published for public comment.

In programme four, 67% of targets were met in the first quarter, however they did not meet the targets of developing a Draft Digital Services Directive; ensuring that Draft Digital Services Directive consulted with GITOC and that published in government gazette for comment, this however was achieved by December 2024. In the second and third quarters, the DPSA achieved all of their targets.

In programme five, 67% of the targets were achieved in Quarter 1, 75% in Quarter 2, and 100% in Quarter 3. The targets that were not achieved in Quarter 1 were the analysis and report of OFA improvement plans of cycle 2 (2023/24) departments submitted to MPSA for noting and the monitoring of the implementation of the Batho Pele Revitalisation Strategy in 40% of departments. The first of these two targets was achieved however by the end of December 2024.

The DPSA vacancy rate was 9.92% but it aimed to fill those vacancies in the next four months.

Mr Masilo Makhura, DPSA CFO, said that by the end of December 2024, spending was at 69.8%. Compensation of employees was 72.9% by the end of December 2024, which was in line with the budget. There were some savings on Goods and Services of about R4.5 million, which they reprioritised in Quarter 4 to other priorities.

See attached for full presentation

Discussion
Ms C Mkhonto (EFF) asked NSG if after training of public servants, they were able to identify if there were improvements and she emphasised the importance of an impact assessment.

Ms Mkhonto inquired about the induction of board members of government entities.The National Youth Development Agency (NYDA) was one entity which was underperforming or not performing at all. She did not see it on the NSG list, and asked why the NYDA was not identified as an entity that requires training.

On CPSI, Ms Mkhonto noted that a lot of the budget was spent on the compensation of employees and asked if this was in line with its mandate.

Ms Mkhonto, in reference to the CPSI mandate, asked what innovations had been put in place to ensure that the challenge of long queues, such as at Labour Centres and Home Affairs, were addressed. Innovations should address challenges that exist in the public sector.

Ms Mkhonto asked how DPSA differentiates between saving and underspending, as in her understanding, under spending is linked to under performance. She asked if this under performance was a result of under planning.

Ms Mkhonto asked what the DPSA savings entailed and if this money was taken back to National Treasury if unspent. How are funds being “saved” if National Treasury will take the money back if not spent?

On slide 29, DPSA spent R292m on compensation of employees. This was too much and she asked if this matched its mandate. Where could they spend more of that money instead of spending it on compensation of employees? Was this not a possible factor contributing to them DPSA performing?

Ms L Potgieter (DA) wanted to understand the progress in NSG completing the skills audit and KPI for line departments? With every update, there seemed to be delays due to line departments not following the process and what was required of them. Can the NSG expand on the audit findings?

Last week the Committee was advised that 157 national and provincial departments were engaged in the professionalization of the public sector. She asked if there were engagements happening at a local government level or if that still needed to happen, as that was where the majority of problems were and where legislation was being bypassed.

Ms Potgieter asked if NSG could advise on the experts that had declined to assist in writing courses such as for senior management positions at level 15 and 16? Were there reasons for why they declined?

Ms Potgieter noted that the CPSI events, notably the ICT conference in October and the Global Green mobile app launch in November. She asked if the Committee could be invited to these innovative technology events. The Committee did not have knowledge of these events until they had already happened.

Ms Potgieter asked DPSA to provide the lifestyle audit guide issued in March 2021, and if it was still relevant. She asked if it had relevance to local government or if it provided an overarching guide to how they develop their lifestyle audits?

Ms Potgieter noted the delays caused by departments ignoring DPSA requests to submit information. This was why many of the KPIs were not being met, as there are delays with departments failing to give their information to DPSA. It should be a requirement for these departments to comply with DPSA monitoring. This should not be a request, it should be compulsory, and “if you fail to submit there should be a consequence”.

Ms W Tikana-Gxotiwe (ANC) asked if DPSA was also responsible for negotiations on the wage bill as they were key at the negotiation table. She said that the wage bill needed to be
 measured alongside the economic decline in our country. How would DPSA advise government on the wage bill moving forward? Although there are more and there is an appetite to employ more people, there is a decline in finances. How has DPSA positioned itself to ensure that government will not reach a crisis when negotiations occur?

Ms Tikana-Gxotiwe said that the labour force may not accept the offer and that this needed to be considered as the public service wage is increasing dramatically. She asked if this was not informed by the ballooned organogram of this government department. The performance and output of government departments and the number of staff needed to be considered to ensure that this was all measured against the finances available to government. DPSA was also responsible for advising government on the staff that constitute the 81 government departments it monitors. DPSA needed to have a plan for advising government to ensure it does not collapse. If it continues to have bigger organograms with bigger CoE, government would collapse due to its increasing wage bill.

The purpose of the lifestyle audit is to reduce corruption. Were there consequences for staff members found guilty of corruption? There needs to be consequence management if people are found on the wrong side of legislation.

Ms Tikana-Gxotiwe said, with reference to the wage bill, that it was evident that the skills component of the department was minimal. She asked how DPSA planned to fill the research component vacancies as she believed that this was the core business of DPSA. If research was minimal, it could not ensure the output of DPSA.

Ms Tikana-Gxotiwe appreciated the work done by NSG, however she had reservations on the number of people who were dropping out. NSG indicated that there were 4 970 students registered, however only 2 427 students completed the course. She was of the understanding that these were responsible people in our society and asked what NSG planned to do to motivate these students to finish courses. She was not sure if this would increase NSG revenue but she linked people who dropped out with their performance in their departments. It enabled the entire non-performance of our government as she assumed that if one drops out, that one may underperform in the work one does.

Mr J De Villiers (DA) supported the call to have the Committee invited to events, especially when the Minister is invited. He believed that being invited to partake in CPSI events and being involved would make the Committee more effective in its work, especially if it is informative and gives the Committee a greater awareness of what CPSI is doing.

Mr J De Villiers “seriously supported” the question about the ever-growing public sector wage bill. It had been sharply highlighted by the previous week’s postponed Budget Speech that South Africa is under immense financial pressure. An important part of this was the countries ever-growing and ballooning government wage bill, which had dramatically increased in recent years and was R7.24 billion in 2023/24. To put that in context, that that was 10% of South Africa’s GDP meaning that it was the third highest as a percentage of GDP compared to 20 other major economies. This makes our wage bill one of the highest in the world in comparison to other major economies.

Mr De Villiers said that this had placed major strain on government’s finances to pay the growing wage bill and that it could lead to finances being diverted from important priorities for boosting economic growth, creating jobs and supporting the poor. This in turn could place more pressure on taxpayers who already had such a heavy burden. “There is no more juice to squeeze from taxpayers”.

Mr De Villiers said it had become the responsibility of the government to look at its growing expenditure and identify where it was getting the right results for the money spent. DPSA has a central role to play in this. Public servants have many benefits which could be leading to an unnecessary increase in the public sector wage bill.

It was certain that there was wastage in the public sector wage bill. What was DPSA urgently doing and prioritising to identify this wastage? Well documented examples of this were “ghost employees” or dead employees who were still on the payroll; employees waiting for disciplinary action sitting at home for years not working or contributing, because their disciplinary action cases were being dragged out and not finalised. There were employees who were earning salaries for positions they did not have the qualifications for. There are employees who were doing business with the state which is illegal as well as government employees drawing SASSA grants. All of this contributed to salary wastage. Money for which citizens and taxpayers were not getting value and which was not contributing to the growth of the economy.

Mr De Villiers asked what DPSA is doing about the ever-increasing salary bill and the wastage in this salary bill.

NSG responses
Prof Ngcaweni noted that he was currently meeting with the NYDA to finalise their strategic plan. NSG had done work with the NYDA at different levels including training some of the youth participating in their programmes, as well as facilitating their strategic engagement, and attending training. The process has been voluntary however he assured the Committee that as soon as the new board was finalized, it would be put through the induction process and several other training programmes on leadership and managing finance. The NYDA were buying services from NSG.

Prof Ngcaweni said based on relationship that NSG currently has with the South African Local Government Association (SALGA), they were moving faster and more purposefully in supporting the project of professionalising local government. There were several options SALGA was considering at two levels: helping the local councillors as elected officials as well as the appointed officials. SALGA was thinking about the future and what could happen after the next local government elections to strengthen the capacity of the councillors to make effective decisions on service delivery and growing the economy. SALGA was also looking at measures to enforce rules concerning the minimum requirements for who work in local government.

Prof Ngcaweni said that after the amendment to the legislation in the last two years, people holding senior positions such as managers and executive directors could now be given long term contracts. SALGA has been monitoring this, as it is not automatic that if you were in a five-year contract that you will move into a permanent position.

Having adopted a professionalisation approach, anyone who wanted to be given longer tenure had go through the interview process again. There have been some municipalities in which executive members had not made it through the interview process because the bar had been set higher.

Prof Ngcaweni said that SALGA had formally adopted the professionalisation framework, and that with the legislative amendments underway, the hope is that it will be easier for the framework to be enforceable at local government as well as at national level.

Mr Botshabelo Maja, DDG: Professional Support Services, said that NSG does conduct impact assessments and every training intervention of NSG is monitored. NSG also conducted impact evaluations to follow up on the issues raised by Ms Mkhonto.

Mr Maja said based on this they had identified two things. Firstly, public servants tended to be appreciative of the interventions they receive from NSG, and that they provide them with enough information and knowledge for them to make a difference when they get back to their departments. Secondly, in most instances, the ecosystem in DPSAs where the trainees work, were not always supportive of the knowledge they would have gained. Therefore, the ecosystem in government departments can be limiting to the knowledge that those attending courses had acquired and were able to implement when they returned.

On the skills audit, Mr Maja said five things have emerged as the project was unfolding.
1. It was important that the focus was both on infrastructure departments as well as frontline departments. Infrastructure departments faced persistent critical skills shortages especially in the areas of engineering and the skilled environment. The competition they faced from the private sector did not assist.

2. There were existing gaps in management, governance, strategy change, financial management, and problem solving, including around service delivery and innovation.

3. Although departments had competency frameworks, they had not been conducting audits that would allow them to identify gaps emerging.

4. Human Resource practices for hiring, retrenching and so forth, were difficult and in most instances sluggish. There were high termination rates, vacancy rates, and there was less than optimal career pathing through adequate performance management, skills retention practices and a lack of incentive policies to attract and retain critical skills.

5. It remained unclear as to the extent government departments were taking advantage meaningfully of partnerships with professional that could assist in dealing with this skills gap.

On course completion rates, Mr Maja said that this was something that worried NSG, and that they had put incentives in place to encourage public servants to complete training. They always encourage supervisors in departments who pay for this training and who release these public servants for NSG training, to take greater responsibility and ensure consequence management not only for the completion of these programmes, but also to make a difference when these public servants get back to their place of employment.

Ms Phindile Mkwanazi, DDG: Learning and Professional Development, replied that Nyukela Open Distance eLearning courses were still available and accessible to all public servants. NSG felt that it had to separate the Nyukela from senior management levels 15 and 16, to make those more complex. Based on this, NSG was in the process of developing new programmes.

Ms Mkwanazi said that this allowed them to target new people to be key experts at high levels, which ensured that they had expert input in the programme course. Some of them were not available due to prior commitments, which caused delays in NSG proceeding. However they had appointed those that were available and NSG was on track to finish the development of the programme by the end of the financial year, start with the pilot on 1 April, and thereafter make it available for everyone.

Prof Ngcaweni said that there were several departments that had been implementing tougher measures to ensure completion. If people had not completed the courses they were contracted to do, especially senior managers, then they would not qualify for paid progression. Many heads of departments were taking a tough stance on this to ensure that people did complete courses, especially when the employer had paid. The challenge however was that there were people who were not completing programmes that were available for free, as fees had been waived.

For Nyukela, Prof Ngcaweni said that in the new financial year, NSG will have a differentiated assessment entry examination. This was important, as someone who had been a chief director for 15 years need not write the same re-entry assessment as a person who was transitioning to become a top manager in the civil service. Therefore, certain assessments were more complex, and test more on leaderships skills and the ability to manage, as opposed to the assessments of someone who was entering from a deputy director position into a more senior civil service position. For this, NSG found people who were former DGs, former CEOs and former CFOs due to their experience and expertise to form part of the input makers. In the majority of cases, NSG programmes were not generated by NSG employees but rather by people who are practitioners.

For example, the NSG mayoral programme had involved people who were former successful mayors or municipal managers. For the CFO programme, they found CFOs with a proven track record of working in the public sector as a chief financial officer, to ensure they had credibility to be part of the course writers.

CPSI response
Ms Sebokedi said that they would invite the Committee to some of their engagements, whether it be a DEVcon, a conference, or handing over a solution they had worked on. Sometime between June and August, CPSI would be handing over the Emergency Medical Services (EMS) solution to Gauteng.

Ms Sebokedi said there was a spike on the compensation of employees as CPSI moved some money from Goods and Services to boost compensation. They had an approved structure that was not fully filled so they had been progressively filling all the posts. However they lacked the money to fill all the posts that were vacant but unfunded. They were careful to re-prioritise money from Goods and Services to create more capacity.

Unfortunately, with the innovation journey one has resistance to innovation adoption which happens anywhere, in the private or public sector or in communities. When innovation is introduced, there will be those who resist. You need people to do the change management and say, “You can no longer do this service using paper, you need to use the digital platform”. It does however take time to nudge people to adopt innovations.

Ms Sebokedi said that this was a similar challenge to what NSG faced, where learners leave NSG course very excited but when they returned to their department, there was a bit of push-back. Therefore, it does take a bit of nudging for these departments to adapt to these innovations.

Ms Sebokedi said that the movement of the budget allocation into CoE was because CPSI was trying to build capacity and minimise the use of consultants. This was done to ensure that personnel were used in the correct way to keep them fully engaged in their work.

Mr Pierre Schoonraad, head of Research and Development Unit, said with regards to Ms C Mkhonto’s question that innovations addressing long queues was an issue very close to the CPSI’s heart. Many of their interventions were currently related to reducing issues like queues. for the CPSI, queues are a symptom and not the issue to be addressed, as they speak to the possible lack of efficiency in the back office. The first question they always ask is “Why do people have to queue in the first place?”.

Mr Schoonraad said that the innovation demand from departments and institutions was quite extensive and although CPSI would like to respond to all of them, they do not have the capacity to do so. CPSI had tried to address the issue of queues. This included work done with a group of University of Johannesburg students at Tambo Memorial Hospital, where they found one of the root causes was the way that file retrieval was dealt with. Based on this, CPSI had developed a digital instead of paper file retrieval system as patients would have to first wait for an A4 list to be completed which would then be sent down to the filing room and only then would files be retrieved. The digitalisation of files and immediate file retrieval was something CPSI had worked on to remove at least an hour out of the waiting time.

CPSI had previously worked on the automation of pharmacies so that at places like Helen Joseph Hospital by 11:00 or 12:00 there were no queues left at the pharmacy. CPSI had been working with the Northern Cape on a virtual Thusong Centre to give additional digital platforms for citizens to engage with so they did not have to come in to queue. There were quite a number of initiatives CPSI had developed, including a not-yet implemented solution for Home Affairs to track in real-time the progress and the journey a citizen would take through Home Affairs.

Mr Schoonraad said that unfortunately for this to have an effect, there was a need for more digitally skilled workers in government, which was tied to the conundrum of the wage bill. Not only did they need to cut down on the wage bill, but they also needed a different kind of public servant who was digitally skilled and therefore could save money in departments through the digitalisation of processes.

Mr Schoonraad said that they only have two in-house developers but they need a whole team of developers. Those two developers however had already saved Gauteng EMS about R3 million in the developing cost of a solution. They needed to rethink the way in which they bring onboard new public servants as that would help them to deal with queues directly. This was the reason that CPSI was part of the digital public infrastructure work, as they needed to completely reinvent the way they deliver services in government, provide the necessary integration, provide the necessary digital online identity management and security, which in turn would reduce the queues and speed up service delivery. Digitised environments would also pick up on issues like “ghost workers”.

Ms Sebokedi said that CPSI had not yet worked with the Department of Employment and Labour (DEL), however they would get into that space and share some of the innovations. She believed that the Global Green app could be customized to deal with inspection of factories, restaurants, and spaza shops. They could organize a workshop to introduce the Committee to some of the innovations. In the next financial year, she would ensure that one of their design, thinking and innovation workshops would go to the DEL.

DPSA responses
Ms Linda Dludla, Deputy Director General: Administration, replied about department attendance being requested rather than made compulsory. It was important to indicate that departments were usually requested to attend sessions. Some of those sessions were for implementation support after DPSA had issued a new directive or policy to assist them in understanding it so that it could be implemented correctly. They would request them to be at these workshops. They would not have all departments attending for various reasons, including other scheduled engagements or travelling difficulties due to budget cuts. DPSA was trying to use more online automation such as FAQs and Q&As on its website so departments were able to get the information without physically travelling to workshops.

Ms Dludla said that where they had been using workshops to do monitoring and evaluation (M&E). They are currently looking at developing an integrated M&E system for DPSA, so that departments can do online reporting for compliance monitoring.

Ms Dludla said that as part of their plan for 2025/26 which they are currently finalising, they were going to look at using Section 16A of the Public Service Act, which requires executive authorities to report to the DPSA Minister when there was non-compliance, so that the Minister could take these reports to Cabinet to ensure accountability at the level of executive authority as well. This was to ensure compliance with the different norms and standards of policies that the Minister issues for departments.

Ms Dludla said that the lifestyle audit 2021 guideline was still relevant. The first phase of the guideline was only for the public service, which was provincial and national government. However because the Minister’s mandate on some aspects of the norms and standards had been extended to local government through the Public Administration Management Act (PAMA) Act, DPSA was currently in the process of developing further regulations under the Act to extend items like the lifestyle audit to local government.

Ms Dludla said that DPSA had done work with the Department of Social Development about two years ago when the scandal broke about public servants being given SASSA grants. They did investigations that resulted in disciplinary action being taken against the public servants that were found guilty. She offered to give the Committee a detailed report on that work and the outcomes.

On suspensions, in previous meetings DPSA had indicated it was looking at other ways of dealing with employees instead of having suspended people sitting at home. Depending on the nature of the alleged misconduct, there was the option to make use of a precautionary transfer. Here the official under investigation can be transferred out of their unit to another, if applicable, as suspension was usually used to ensure that the person did not interfere with the investigation or witnesses. Therefore, DPSA, as part of its monitoring, was starting to look at the nature of the suspension and advise departments if there were alternatives to the suspension where people were sitting at home up to five years.

On conducting business with the state, Ms Dludla said that there were disciplinary processes applicable and employees were subjected to these. Remunerative work outside of the public service was possible. When colleagues applied for this, an assessment was done to determine if they would be conducting business with the state.

Ms Dludla said that the lifestyle audits flag such issues and investigations were done, and if something untoward was found, then the relevant disciplinary action would be taken. In some instances this would also be referred to the police and the National Prosecuting Authority (NPA) to charge and prosecute based on the facts found.

Ms Dludla pointed out that DPSA does not have a separate research component. As a policy department, those officials responsible for policy development should be cognisant of the research, because research is needed to develop policy. They had identified a need to either build or refresh research skills for policy development. This is part of the training that had been made compulsory for staff. DPSA staff was currently attending this training to ensure that they could strengthen their research capacity.

Mr Masilo Makhura, DPSA CFO, that when you are given a budget, but do not do the work or the money is not spent, this is considered underspending. Regardless of the reasons given, such as poor processing or under planning, when the work was not done, the money would not be expensed, and so this was under spending. On the other hand, savings is when you were given a budget, but the whole budget was not spent because you found other ways of doing the work. For example, if you had budgeted R100 to travel to Cape Town to implement a project but you decide to attend the project on a virtual platform instead of spending R100 on travel costs, at the end of the day you have done the work, but you did not have to spend the money. Therefore, in doing so you saved money for government.

Mr Makhura said that when he talked about savings, for example where there was an amount of R4.5 million they had saved, even if it is underspending, it was still saving. They had budgeted this money to pay for electricity but because they had implemented an energy saving device in DPSA that saved electricity through switching off the lights when everyone had left the office. They did not expend this money because they had saved government money, they could take that money and utilise it for something else, or they could take it back to Treasury so it could be reallocated to other priorities in government. Overall, if the money was not spent, it would go back to Treasury if it was underspending or savings.

Mr Makhura spoke to the reallocation of R292 million for the compensation of employees. The budget allocation for compensation of employees was 54% because DPSA was a policy department. They rely on their employees, not others, to do the work. They develop policies and consult with provinces, so the labour budget was more than the operational budget. This was because they rely on employees to do the work and are labour intense in comparison to other departments. For example, the Department on Public Work and Infrastructure budgets more for building roads and bridges, so its operational budget is more than its CoE.
 
Mr Dumisani Hlophe, Acting Deputy Director-General: Wage Negotiations and Remuneration Management, said that the oversight questions being asked were important as they would enable DPSA to do the work to manage the wage bill better.

Mr Hlophe said that when they go into wage bill negotiations, they do extensive research and work very closely with the National Treasury, as well as do extensive research on the economic outlook, both internal and international trends. They had aligned the negotiation process with the government planning and budget planning process, to ensure that what they agreed on with the organized labour was not outside the confines of what was available in the state coffers at that time. They did this work very closely with National Treasury – there is a technical team comprised of DPSA and National Treasury senior officials to ensure they employ the best scientific technologies to ensure they work within what is available.

Mr Hlophe said that the negotiations process at the political level is chair by the Minister. Their old minister worked very closely with the Minister of Finance to ensure that the wage bill agreement was not outside available funds. These two ministers worked very closely together to ensure nothing agreed to was beyond what was available in the national fiscus.

Mr Hlophe noted that it was interesting that since the formation of the Government of National Unity (GNU), they had a mandating committee which for the first time in the negotiation process was comprised of political executives from various political spectrums within the executive. For example, the mandating committee had provincial premiers from all over the country but also ministers from departments such as Basic Education, Health, Defence, and Public Works. Since these departments were larger, they had a direct bearing on the size of the wage bill. Therefore, this was a very comprehensive and highly inclusive process but at the end of the day, what stood out were the technicalities of the figures on the table that determined the outcome of the negotiations.

For example, this year, organised labour started the negotiation level demanding 12% and ended up with an agreement of 5.5%. This showed the extensiveness of the negotiations they had to go through.

Mr Hlophe replied about the return on investment or the productivity of public servants for what they are paid by the state. DPSA working alongside National Treasury did substantive research on the personnel expenditure review. This looked into the salaries paid to civil servants but also the benefits they receive, and the means to promote the productivity of the state based on what the state invests in its public servants. Part of the essential focus in that area was the Occupational Specific Dispensation (OSD) regime. They did comprehensive research, on which Cabinet gave recommendations particularly on how to consider the OSDs. This review was approved by Cabinet, and certain departments such as Health, Education, and Social Development were busy working on recommendations as part of an overall process to ensure there was alignment between what the state invests and the proactive return on that investment.

Mr Hlophe said that there were snippets of research happening, as they needed to be careful not to reduce the sum total of the national fiscus challenge simply to the wage bill. One question they constantly engage with National Treasury on was “What are the real national fiscus challenges in this country?”. Part of the answer was the state was not generating enough revenue. When this occurs, certain areas had to be “squeezed in”. There could be a danger of demoralizing civil servants if you continue to say that the sum total of the fiscus challenge is the wage bill.

Mr Hlophe said that in the last two years, while working alongside National Treasury, they had begun to look into how much the state agencies absorb from the state, especially those not generating resources. All of these issues needed to be looked into.

Mr Hlophe said that in the last 10 to 15 years, the size of the bureaucracy was relatively stable at 1.3 to 3 million. It had not grown beyond that. However, when the population size was considered, it had grown to 62 million people according to StatsSA. This meant that the ratio of bureaucrat to the population size they have to service had changed quite drastically. There needed to be a sense of reflection on how this could be managed so public servants do not burn out because there was more work put on them.

Mr Hlophe said that they currently had a three-year wage deal and that gives them more time to approach and manage the wage bill in a manner that is progressive and sustainable.

Mr Nyiko Mabunda, Acting DDG: Human Resource Management and Development, in response to the question on “ghost employees” said that they had introduced a number of key strategies to prevent these “ghost employees”. Firstly, the professionalisation directive had streamlined pre-employment screenings, and introduced onboarding processes where departments are expected to perform comprehensive background checks and verify new hires. They also required supervisors to sign off and verify employees and their salaries, in terms of the employees who report to them, monthly. Beyond that, he said that they had also introduced an integrated approach to skills audits which were linked to verifying existing employees as part of conducting routine internal audits of employees, their skills, qualifications, as well as payroll records, so that they understand and periodically verify the existing status of employees especially in remote locations.

Mr Mabunda said that throughout the year, they had run projects to improve the accuracy of personal information as part of maintaining updated and correct personnel records across the public sector. This included the introduction of improved access controls on personnel payroll systems, they had also restricted who could make changes to employee information, as well as who could onboard new employees through the use of biometric verification processes. This was part of wage management system where there is a requirement for an authorization code which must be given by DPSA when there are new additions to the system.

Mr Mabunda said that in modernising this area, they had initiated an integrated human resource system for the South African Public Service Project, which would result in the design and implementation of a comprehensive human resource management system, including resource management, skills development and training, and payments. This was done as a response to the delay of the Integrated Financial Management System (IFMS) to plug that role including e-recruitment, payment systems, leave management and so forth. This system was intended to enhance operational efficiency, improve compliance with norms and standards with other governmental recognitions, as well as strengthen how they use human resource management and capabilities for decision making within the public service.

Further discussion
Ms Potgieter said that she knew one of the roles of the Minister was to guide other departments and Cabinet on remuneration. However was it not possible to take a more proactive approach to the wage negotiations in setting up a five-year feasibility of salary progression scales? They needed to go into these negotiations more proactively. The unions often came with a request and then they were negotiated down. She asked if it was not a better idea to have a five-year or ten-year plan in place, and they make it clear what they can afford, so that it is on the table from the offset. This would also make the public aware of where they stand as an administration on salary progression.

Dr De Villiers understood comments about the number of public servants remaining the same while the population is growing. However, this was one of the areas of caution. If the number of staff continued to grow, but the wage bill itself grew above inflation and was already, as a percentage of GDP, one of the highest in the world, then surely the problem would be that DPSA is not very good at their wage negotiations as they are constantly giving an above inflation rate wage increase, when as a country it is not affordable. If there was a desire to increase the number of people working for the state, then surely one of the first things that needed to be done was to stop giving above inflation wage increases.

Further responses
Mr Hlophe said that in the last two series of negotiations that was what they did. It was shocking for organized labour that DPSA was the first to go to the Public Service Co-Ordinating Bargaining Council (PSCBC) and “say that as a state this is what we are putting on the table”. They then negotiated around that until they got to a consensus.

Mr Hlophe said that they had an agreement with organised labour that the way in which they undertake salary negotiations must be aligned to the calendar of government planning, as well as government budgeting. once this was agreed upon, it became easier for them to initiate the counters of negotiation. for the last two sessions of wage negotiations, as the state they were the first to put the issues on the table, therefore, when organised labour came back with 12%, as well as their conditions, it was a response to what they had tabled. They had embarked progressively on a proactive approach to the issue of negotiations.

Mr Hlophe said that these issues were extensively engaged on with the political mandating committee . The reason they reached that deal was because of the responses that were given to some of the issues raised in this meeting. His suggestion was that if there was an instance where they needed to do more on their approach to negotiations, it would be prudent that they go to that committee with their technical colleagues from National Treasury so that some answers can be given in more technical detail.

Deputy Minister Pinky Kekana said in addition that she appreciated the Committee engagement and oversight. When looking at government’s approach to budgeting and planning, they take a five-year planning cycle and budgeting is a three-year cycle. The PSCBC was aligning to the three-year process, which was considered a win. However, it would not be feasible for now, depending on what the technical team would guide.

Within the 30-year National Development Plan (NDP), you have the five-year plan in place to break down this 30-year plan and within that you have the three-year budgeting cycle. This was why, at least for now, given the negotiation process, unions were able to fall within the three-year budget cycle.

The population was now sitting at 63 million, and so there is not enough money. even if the wage bill seemed too high, they were still lacking clinical officials in hospitals. Now with the BELA Bill, they want grade R students to have professional grade R teachers, and not ordinary practitioners.

If you look at the number of people in the population in South Africa versus the personnel government has, there is still a big gap. However the salaries have been steadily increasing, and this is why they are mitigating some of these issues. For example, officials at 55 can now exit the system without penalty. When these public servants leave, DPSA is then able to hire. There are not enough public servants to meet what the public has advocated for.

Further discussion
Ms Tikana-Gxotiwe said that she appreciated the input from the Deputy Minister. However we must all be responsible citizens, either as an oversight committee or as public citizens because we complement each other. When inputs are given here in the Committee , they are giving advice to the implementers of decisions for our government.

Comments made about salaries ballooning were a fact, and there needed to be new improvements in some of the posts. She asked why the digitalization process and the reduction of transport and accommodation costs had not yet been done. The department built plans to navigate this, but unfortunately they were not enforceable. “We’ve been planning towards digitalisation for years, yet we are still talking about it now”. She asked what strides were being made in reducing crime by the police.

Ms Tikana-Gxotiwe said that three years would expire and there would still be no income, so it is important to find other streams of revenue as government. The Committee needed to look at better ways for government agencies to contribute to reducing the wage bill in all spheres not just in the public service.

Ms Tikana-Gxotiwe said that department processes were delaying the filling of posts, and that the money was being taken back to Treasury. They had to pay more attention to adhering to time frames to ensure the money was not taken back by Treasury. One needed to be careful that if these posts were not filled, those qualified may get absorbed by the private sector, however their skills are required by the state.

Ms Tikana-Gxotiwe said that it was important to consider all contributing factors that have an impact on the budget. She asked when the digitalisation process would be implemented.

Further responses
Mr Mandla Ngcobo, DPSA eGovernment and Chief Government Information Officer, said that there were areas they needed to plug to ensure the revenue leakages were stopped.

Mr Ngcobo highlighted that there was already a programme being led by the presidency, in which DPSA is a participant. This programme is a roadmap to transform the public service. It ensured that there was a central digital identity for all citizens of the country. He notes though that the South African Reserve Bank (SARS) were the ones who were working on the actual digital ID from a definition perspective.

Mr Ngcobo said that there is a vast initiative which is looking at ensuring that there is the need for all South Africans to clear and certify all their important documents. This can be done through the use of a digital wallet. There had been discussion with Umalusi around this to see if there was a chance that they could use it to issue matric certificates, but this was still under consideration. He also noted that these were some of the issues around transformation of the public service.

Mr Ngcobo said that they were currently consolidating a list of public services, with the view of seeing which services were more frequently accessed, which services were already digitalised, which services could be improved.

Mr Ngcobo said that they would have a meeting the next day with the President who has appointed an internal committee consisting of ten ministers and DPSA is one of them. If there was one area which needed improvement it was governance, but they had finally gotten that correct as they had coordination at the right level.

Deputy Minister Kekana said that they acknowledge that the wage bill is too high. However the reality is that given the arguments and the percent increases that PSCBC agrees on, there was nothing DPSA could do. There was no way to reduce this, as it is agreed upon at the beginning.

The Deputy Minister agreed that they may have been slow in bringing technology to ensure they improve government service delivery, however one of the unintended consequences they faced with this was the capacity of the State Information Technology Agency (SITA). Technology was needed to help, however technology on it own was not a means because there were areas where you still needed actual people to deal with the challenges.

She hoped that the conversation between the Minister and the Minister of Communications and Digital Technologies would help to deal with some of the issues, especially because the professionalisation framework in now being implemented.

DPSA would be working towards doing more training with the NSG, to help and enable everyone to understand what the GNU is and how to better work towards it.

The meeting was adjourned.