Stats SA: Matters Raised During hearings on its Annual Report

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Finance Standing Committee

14 March 2006
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Meeting report

FINANCE PORTFOLIO COMMITTEE
15 March 2006
STATS SA: MATTERS RAISED DURING HEARINGS ON ITS ANNUAL REPORT

Chairperson:
Mr N Nene (ANC)

Documents handed out:
Stats SA Feedback on Annual Report

SUMMARY
Statistics South Africa responded to some of the Committee’s concerns from their previous meeting. The Committee had commented that they were worried about the reporting on the quality of statistics. Statistics South Africa’s response had been to improve the dimensions of quality. The Committee was also concerned about the presentation and definition of unemployment in the labour market statistics. Statistics South Africa used the Labour Force Survey to provide current labour market indicators, which then provided the official unemployment rate. The Committee raised issues about the uncertainties surrounding the Community Survey. In this regard, an agreement had been reached with the Statistics Council in September 2005 and a pilot survey was conducted in February 2006. The Committee was concerned about the financial management of the Department. This was evidenced by under-spending of 30% in the previous financial year.

MINUTES
Briefing by Statistics South Africa (Stats SA)
Mr P Lehohla (Statistician-General) said that in the previous meeting, the Committee had commented that they were worried about the reporting on the quality of statistics. Stats SA’s response was to improve the dimensions of quality. The areas that were important were the relevance; accuracy; timeliness; accessibility; interpretability; methodological soundness; integrity and the coherence of the information. Stats SA was in the process of standardising its reporting on these dimensions in statistical releases.

The Committee was also concerned about the presentation and definition of unemployment in the labour market statistics. Stats SA used the Labour Force Survey (LFS) to provide current labour market indicators, which they then used to provide the official unemployment rate. They would continue to provide information on other labour market data and were re-engineering the LFS in terms of the measurement and frequency of reporting.

The Committee had wanted an indication of the role and size of the informal sector in the country’s Gross Domestic Product (GDP). Stats SA’s response was that the coverage of the economy was improving, and so was the business register based on tax information. The measurement of the informal sector continued to be a challenge, and this was being addressed through a household-based survey. They had discovered that the current contribution of the informal sector to the GDP was 4%. Stats SA was also in the process of enhancing its quarterly and monthly economic surveys.

The Committee had raised issues on the uncertainties surrounding the Community Survey. In this regard, an agreement had been reached with the Statistics Council in September 2005 and a pilot survey had been conducted in February 2006. That data was being processed, with the main survey being scheduled for February 2007. The results would be released in November 2007. This whole process was important to build capacity with a view to the census in 2011.

The Committee had wanted to know what support Stats SA was giving to rural municipalities in the use of statistics. Stats SA’s mandate was to collect, analyse and disseminate statistics. All of its statistical products were placed on its website, and for those without access to the internet, printed reports were distributed free of charge. Provincial offices provided support to the provinces and local governments, and where resources allowed, Stats SA would provide more statistical support to municipalities.

The Committee also raised issues about the governance structure and management of Stats SA. In response to this, management had been strengthened. The Minister of Finance had chaired an interviewing panel with recommendations passed onto the Cabinet. This had resulted in new Deputy Director- Generals and a Chief Financial Officer (CFO) being appointed. Stats SA was committed to building a coherent senior management team.

The Committee was concerned about the financial management of the Department. This was evidenced by under-spending of 30% in the previous financial year. To remedy such malaise, management had initiated several processes to bring under-spending under control. In this regard they anticipated that their under-expenditure would only be 7% for that year. They did note that the Community Survey still experienced an under-spending problem, but this was mainly caused by a delay in the decision-making process about the project. Constant improvement of integrative planning and budgeting was under way.

In their previous engagement with the Committee, Stats SA commented that their activities were being hampered by a lack of adequate skills, with the Committee asking what they were gong to do about this. As remedial measures, Stats SA had head-hunted ten highly qualified professionals and initiated an internship programme whereby 13 interns had been appointed permanently. A second cohort of 17 interns was currently being trained. They predicted that their internship programme would yield about 135 qualified professionals by 2009.

To address the skills shortage in general in the society, a numerate society had to be created. Stats SA had partnerships with certain universities, was in the process of setting up a Statistical Training Institute and was heavily involved in the Teacher-training and International Committee on Teaching of Statistics (ICOTS). They were also harmonising training initiatives within the SADC region and were going to assist countries such as Nigeria and Egypt with their censuses later in the year.

Discussion
Mr K Moloto (ANC) said that the Committee still had not received any feedback from Stats SA’s interaction with the Auditor-General.

Mr Lehohla said that the some of the issues raised by the Auditor-General were being addressed by the strengthening of the management, the appointment of a CFO and an improvement in the integrative planning and budgeting.

Mr I Davidson (DA) said that Mr Lehohla had not commented on what had happened to the suspended directors and what the situation was currently. He wanted assurance that there would be statistics provided on the people outside of the narrow definition of ‘unemployment’. He asked what the diary method and business register were.

Mr Lehohla replied that the two persons who were suspended had had their services terminated. Information on discouraged work-seekers was included in their statistics. They were committed to supplying relevant information, using International Labour Organisation Guidelines and information garnered from user consultations. The Diary Method was a method implemented on the Income and Expenditure Survey. Stats SA had questioned communities on a monthly-basis on their expenditure. This survey was done to re-base the Consumer Price Index.

Mr Y Bhamjee (ANC) asked if Stats SA was now fully capacitated. He enquired if some post had been hard to fill because of competition from the private sector, and how did this impact on their performance. He questioned what Stats SA was doing to make their posts more attractive.

Mr Lehohla replied that there were still some vacancies, but they were now taking a more strategic approach to filling them. They had to head-hunt, and were taking their time to locate the appropriate people. The need for better staff was not as acute as it used to be, and the organisation was pacing itself in terms of the projects it undertook, which depended on the human resources it had. He did not want to create a situation where people became statisticians only for monetary gain. Stats SA did not want to incentivise scarcity. There had to be more training to create a larger pool of skills, reducing the need for high salaries.

Mr T Vezi (IFP) asked if Stats SA was still in partnership with the University of Makerere in Uganda.

Mr Lehohla replied that they did still send students to the University of Makerere, but it did not have a strong economic programme as Uganda did not have as strong an economy as South Africa. Students sent there focused mainly on agricultural and informal sector statistics. These collaborative efforts would continue but local institutions were improving their programmes in reaction to this.

The meeting was adjourned.



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