Department Strategic Plan and Budget: briefing

Meeting report

HOME AFFAIRS PORTFOLIO COMMITTEE
29 May 2006
DEPARTMENT STRATEGIC PLAN AND BUDGET: BRIEFING

Chairperson: Mr H Chauke

Documents handed out:
Department Strategic Plan 2006/07-2008/09 presentation
Department Response to Disclaimer of Opinion by Auditor-General on 2004/05 Financial Statements
Department Forensic Audit conducted during August 2005
Department Budget Presentation

SUMMARY
The Department presented their Strategic Plan and Budget The Department then briefed the Committee on the Forensic Audit conducted during August 2006.

Members raised concerns about the disclaimer issued by the Auditor General for the Department's 2004/05 financial statements. One of the reasons for the disclaimer was the money paid for cars from the Department of Transport as no formal agreement was entered into with that department for the cars. Members were dissatisfied with the Department’s Strategic Plan as none of the challenges, which the Department currently faced, were reflected in the Strategic Plan.

MINUTES
Department Strategic Plan 2006/07-2008/09 briefing
Ms T Cele, Deputy Director-General of the Department, briefed members on its strategic objectives, noting first was objectives had been met in 2004/05 (see document)

Some of the comments she made were that forensic equipment had been acquired for testing suspected fraudulent documentation, and partnerships for fighting corruption had been forged with different departments. A toll-free number for internal use was activated, and a counter-corruption plan and whistle-blowing policy implemented. The physical security at all offices had been finalised. The Department had reviewed and updated its risk management strategy and also developed internal and external communication strategies. One million copies of the ‘Know your Rights’ booklet had been published. The Department aimed to replace outdated systems while taking interim measures to improve delivery. It also aimed to develop its infrastructure. South Africa’s global relations should improve with special focus on Africa and countries of the South. The Department’s quarterly reviews would form the basis of the Annual Report and would feed into the Cabinet’s January Lekgotla. An annual Foreign Missions Conference would be held to ensure integration and alignment with foreign policy.

Discussion
Mr K Morwamoche (ANC) asked how the Department had responded to the disclaimer put on their 2004/05 financial statements by the Auditor-General. He asked why they were still using ‘Apartheid language’ on passports and why the coat of arms had not yet been changed. He also asked how the Department was dealing with municipalities that had been placed under the jurisdiction of a different province.

Mr M Sibande (ANC) enquired whether the officials recently appointed had the necessary skills for their positions. He asked why the system that Home Affairs was using was not in line with the Auditor-General’s system, and expressed concern about the turnaround strategy.

The Chairperson told Members that they would deal with questions on the financial statements once the presentation on them had been done.

Mr M Swart (DA) commented that the Strategic Plan sounded like a vision and mission statement. It was not clear how long it would take the Department to issue ID documents.

Ms S Kaylan (DA) asked how many mobile units were in operation and how many more were needed. She asked if any of the information from the University of South Africa (UNISA) survey had been used.

The Director-General, Mr Jeff Maqutuka, replied that a passport was valid for a period of ten years. The Department decided not to change the coat of arms on passports immediately as Cabinet had decided that the stock that they still had needed to be used. This time new security measures would be put in place on the passport.

Mr K Morwamoche commented that he was not satisfied with the answer.

The Chairperson said that this issue had been raised previously with the Department. There were reports that the paper used by the Department was imported. He requested an explanation on the stockpiling of the paper on which passports were printed.


The CEO for Government Printers, Mr T Moyane, replied that they had bought sufficient stock so that they would not run out of paper. As the paper was imported they might have to wait for it to arrive. The current stock level would take them to the end of the next financial year. They had never run out of paper. They communicated with the Department to find out how many passports they needed printed.

The Chairperson commented that the language used in the passports was unacceptable.

The Deputy Minister, Mr M Gigaba, commented that it was easy to catch someone with a fake South African passport. South Africa’s passport was the fifth most secure in the world. They would be looking at the issue of the coat of arms. New features on the passport would be introduced. You did not need a passport to live in South Africa, you need an ID to live in South Africa. French is the most widely-spoken language in the world, which is why it is used on the passport.

Mr K Morwamoche said he did not agree as French was not one of the official languages of the country.

The Chairperson commented that during the development of the new passport the Committee would interact with the Department, to give their input.

In reply to Mr Sibande's question on whether recently appointed officials had the necessary skills for their positions, the Director General said that it was no secret that a number of regional heads did not qualify for their positions. They were short-listed so that they could have an equal opportunity to get the position. The elevation of regional head to Chief Director did not mean that the regional heads would qualify automatically.

In this regard, the Chairperson commented that the Northern Cape Department was the best run. The head in the Northern Cape had a solution for every problem that arose in his department.

The Director-General continued that the people whom they had appointed had been trained and this was an ongoing process.

On the question of their Strategic Plan, he said that they had deliberated on their Strategic Plan and found that there was no distinction between their strategy and business plans. The turnaround times for IDs would be shown in the business plan.

The Chairperson asked why they were moving towards a business plan. In the previous strategic plan shown to the Committee all of the information had been there. Mr M Swart asked why they could not see a business plan immediately.

The Director General replied that the first part of the Deputy Director-General’s presentation aimed to capture the strategies they had not shown previously.

The Chairperson said that he thought they were going to see a strategy with deliverables and timeframes. A layperson would not understand the plan. There were no timeframes for the issuing of IDs. What about the fake passports manufactured in South Africa that had been detected? The Strategy Plan did not address the challenges that the Department faced. The presentation did not meet the Committee’s expectations.

The Department’s Chief Financial Officer replied that 67 mobile units had been deployed. A further 42 would be deployed.

Ms I Mars (IFP) asked for more clarity on the 'track and trace' programme.

The Director-General replied that it provided an opportunity for clients to know how their applications were progressing. A status report could then be given to the client. This would be operational by March 2009.

Department Budget briefing
The CFO, Mr P Nkambule, told Members that the major items for over-expenditure which were included in the Department’s request for roll-over funds from 2004/05 to 2005/06 included: the Back Record Conversion and invoices for Goods and Services not received in time during 2004/05 and paid in 2005/06. There was an upswing which had resulted in slight overspending. He said that the Minister had mentioned in her Budget Speech that the Back Record Conversion had moved ahead speedily resulting in overspending. However Treasury could not allocate this amount for roll-over. Funds had been earmarked for major projects such as IT (see document).

Department Forensic Audit conducted during August 2005
The CFO explained that towards the last quarter of the previous financial year a large number of suppliers had complained that there were delays by the Department with payments as well as the delivery of goods and services. The officials responsible for effecting payments and maintaining records in this regard could not explain these anomalies and signals had been sent to management that there were problems. The Forensic Report was presented to the Director of Finance in December and was distributed to the Accounting Officer, Chief Financial Officer and the Director of Internal Audit. Since the suspension of the officials involved, the Department had reprioritised and streamlined its process.

Department Response to the Disclaimer on 2004/05 financial statements
The CFO told Members that the Department had come up with corrective measures after having a lengthy discussion with the Auditor-General. The Auditor-General had eventually issued the final audit report on 19 May 2006. This had facilitated the process of printing the delayed 2004/05 Annual Report.

Discussion
Mr S Swart (ACDP) commented that he was under the impression that the Minister did not have a copy of the forensic report. He asked if the money taken from the department amounted only to R1 million or if there was more money involved. When had they discovered that some officials were taking money from the Department? He commented that the disclaimer was a major wake-up call for the Department.

Mr M Sibande (ANC) asked why the BAS system was not in accordance with the Auditor General’s system. He requested more details on a project that was not completed in Limpopo.

Mr K Morowamoche (ANC) commented that he did not agree with Auditor-General on some comments that were made.

With reference to the matters leading to the disclaimer, Mr W Skhosana (ANC) asked if they had obtained the vehicles from the National Department of Transport. Did sick leave form part of the disclaimer?

Ms S Kaylan (DA) asked who was responsible for the internal audit. She asked for clarity on the housing guarantee.

Mr M Swart (DA) asked why they did not issue receipts like the bank so that everyone knew what was happening.

The Director-General replied that the forensic report could not be handed over to the Minister because he did not have all the information. Currently there are disciplinary hearings taking place. Once this was completed he would then hand the report to the Minister and make copies available to the Committee.

The CFO said that the housing guarantee was for Home Affairs officials that were purchasing houses. He said that the Department would then stand surety for them. A Director headed the internal audit directorate. This was an independent office and did not fall under the CFO.

The Chairperson asked why the Director was not present.

The Director-General replied that he was in the DRC doing an internal audit at the office there.

Mr M Sibande (ANC) commented that this state of affairs was not acceptable. This was the fourth year that there were problems with the Department's report.

The CFO explained that not all the offices were connected to the electronic system because there was no infrastructure to do so. They could not operate like a bank because they have a basic government accounting system. They had injected capital into the trading account for cars. Some were still in the process of being delivered. A letter had been received from the Gauteng Transport Department on how the cars would be delivered.

The Chairperson asked if there was any formal agreement between Home Affairs and the Department of Transport. He said that one could not only have a letter.

The Director-General replied that there has been no agreement. There had always been only correspondence. The issue would be whether they could account for the money, which they had spent.

An official from the Office of the Auditor General replied that R66 million was accounted for. She said it was their responsibility to find out how it was spent. The letter only acknowledged how many cars have been received and how many still need to be delivered. They did not know whether the Gauteng Transport Department would claim the cars back after a certain period. They needed to know whether the cars were being bought or whether they were being hired. This was one of the reasons for the disclaimer.

The CFO explained that the cars were for the officials to ensure that there was service delivery.

Ms S Kaylan (DA) wanted more clarity on the cars and the R66 million paid for them. She asked if they were being leased.

The CFO replied that one could say that they were leasing the cars. They were being utilised exclusively for Home Affairs and not any other department.

An official from National Treasury commented that the Auditor-General had had an issue around the agreement for the cars. This was mostly about the documentation needed as there should be supporting documents. Home Affairs was aware that there were major issues around internal controls. The Department had a good strategy in place but did not know how to implement it.

The Chairperson told members that the meeting would continue on Wednesday 31 May 2006 as there were still more questions, which needed to be answered.

The meeting was adjourned.