Film and Publication Board & Government Printing Works Annual Reports 2005/06

Home Affairs

05 March 2007
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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report

6 March 2007

Mr H Chauke (ANC)

Documents handed out:
Film and Publication Board Annual Report (available shortly at
Film and Publication Board PowerPoint Presentation
Gov. Printing Works Annual Report (in Home Affairs Annual Report at
Government Printing Works PowerPoint Presentation

Relevant document:

Home Affairs Intervention Task Team: briefing - 8 Mar 2007

Audio recording of the meeting

After introductory remarks by the Deputy Minister of Home Affairs, the Committee was briefed on the Film and Publication Board annual report for 2005/06. While Members had much praise for the work of the Film and Publication Board especially in combating child pornography, concerns were raised on the continued unregulated sale of pornographic material, the performance bonuses paid to almost all managers and the process that accompanied it, the classification process as well as the board’s provincial representation. There were also concerns about how the Board would reprioritise its spending in the light of its proposed budget not having been approved. The Chairperson noted that the absence of the FPB Board chairperson suggested that there might be tensions in the manner in which the board and the administration worked together.

Government Printing Works also presented its annual report but the Committee decided that another briefing, focussed on finding solutions to its ongoing problems, was needed. Members raised questions about the dismissal of the CFO, the institution’s inability to recruit and retain staff as well as key issues emanating from the Auditor General’s report. The Chairperson felt that greater political leadership was needed if they were to successfully address the institution’s ongoing challenges.

Chairperson’s opening remarks
The Chairperson said that there were a number of outstanding issues related to the Film and Publication Board (FPB) that would need to be improved upon in the coming financial year. Government Printing Works (GPW) also had outstanding issues. Deputy Minister Gigaba had made a few announcements about programmes for the coming financial year, and would be afforded the opportunity to comment on the progress of those programmes.

He appreciated the work the FPB had been doing in their anti child pornography campaign. The opening of new offices was also an indication that the FPB was committed to its work. The Department of Home Affairs (DHA) had given them a lot of money and it was now time to account for that spending. Though the Auditor General did not go into much detail in the FPB audit report, the Committee was aware that the FPB had experienced some problems.

He raised concern that the newly appointed FPB Chairperson was not present. He wondered whether the secretariat and the board functioned separately. The CEO explained that due to an international conference, the chairperson was unable to attend but that she had sent her apologies. The Chairperson pointed out that the FPB’s Chairperson was accountable to the Committee. He had been given the assurance that since the appointment of the board members had been made, the gap between the administration and the board had been closed. He felt as though the Committee was dealing with ghosts. The Committee would decide how to deal with the matter.

Deputy Minister's opening remarks
Deputy Minister, Mr Malusi Gigaba, said that the Portfolio Committee as well as the DHA leadership had over a number of years expressed concerns about the leadership of the FPB. Some work had been done to address the concerns and although all challenges had nit been met yet, he was able to report that as was indicated in the annual report some progress had been made. He said that one of the governance challenges that had to be dealt with was that members of the board also functioned as examiners (an administrative function). This dual function resulted in tensions between the secretariat and the board. He reported that a task team had been set up to address issues related to child pornography. The Committee would at some point receive a presentation on the progress of its work.

Deputy Minister Gigaba reported that although the GPW had been plagued by some challenges the efforts for its corporatisation were on course. Certain measures had been put in place to address the matters related to its governance and structure. He emphasised that the CEO had to be able to make sure that the budget and strategic plan of the organisation were compatible.


The Chairperson asked what the process as far as the relocation of the GPW was. The Committee as well as the DHA had been concerned about the matter for a long time now. At some point they had believed that the relocation would take place in 2007. He felt that the conditions at the current site, which had previously been a mental hospital, had contributed to the challenges the organisation had been experiencing. He said that the Department of Public Works (DPW) was delaying the process, the Committee would at some point have to call a meeting with them.

The Deputy Minister responded that the problem was not political; there were technical processes that needed to be followed up on. He did not feel that there was any need for an intervention from the Committee, because work on the matter was carrying on. The relocation would probably not be complete by December 2007 yet. The site had been identified, funding was available and agreements were in the process of being finalised. The technical work would begin as soon as agreements had been signed.

He stressed that although the GPW had not been able to relocate to a site that would make their printing and other activities more secure, steps had been taken to increase the level of security in the current facility. These measures included the hiring of a security company, and that anyone visiting the site would be accompanied at all times. These measures had been put in place to ensure the security of the factory, up until the time of the relocation. He was sure that the CEO would be able to give greater clarity.

The Chairperson said that the GPW would elaborate on the matter after their presentation.

Film and Publication Board Presentation
Ms Shokie Bopape (CEO) and Mr Zolile Ngamzu (CFO) made the presentation, which detailed the FPB’s performance and financial overview as well as its challenges and priorities. The FPB reported successes in areas such as governance and administration, communication and marketing as well as provincial compliance monitoring. It had also received an unqualified audit report. Their key challenges included budgetary constraints, segregation of duties and human resource capacity in key programmes. In 2007 the FPB would amongst others streamline its business processes and enhance its corporate governance, it would increase human resources in key programmes and would review and review and amend its legislation.

Kgoshi Morwamoche (ANC) congratulated the FPB on all the improvements that they had made. He wondered whether they could t request the DHA to provide them with the funds needed to improve their performance as far as compliance and monitoring, which was suffering due to their staff shortages.

Ms Bopape responded that the FPB had not looked at approaching the DHA for assistance with their staffing because that department appeared to be struggling with its own load. After negotiating with the DHA in 2006, they had received an extra R13 million. The CFO of the DHA did not approve extra funding and there was an indication that National treasury would not either. The FPB would try them in any case.

Kgoshi Morwamoche said that one of the matters that the Auditor General had emphasized related to employees having been paid overtime compensation exceeding 30% of their monthly salaries. He wondered whether this practice had been eradicated.

Ms Bopape assured the Committee that the FPB no longer had this problem. One could only work overtime after the CEO had approved the relevant manager’s recommendation that overtime be worked.

Kgoshi Morwamoche said that a further matter of emphasis related to the FPB not having gotten any approval from National Treasury to accumulate surplus in the 2005 financial year. He wondered what the situation was now.

Mr Ngamzu explained that since that time the FPB had gotten approval to rollover funds from that financial year to the current one.

Kgoshi Morwamoche wondered what the FPB was doing to address their challenges around internal controls.

Mr Ngamzu explained that that the Auditor General had in previous years raised concerns about the FPB’s internal control environment. It was a contentious issue at the time. The FPB’s administrative staff consisted of about 30 fulltime employees. Three of them were employed in the finance office. The FPB had felt that there was not enough work to engage all of the finance people and had not segregated their duties. The DHA had subsequently undertaken a business review process and made recommendations on how best the matter could be dealt with.

Mr M Sibande (ANC) was concerned about the FPB’s capacity challenges particularly as far as the provinces were concerned. He did not think that it was practical to have combined Mpumalanga and the Limpopo provinces. These provinces were vast, and he did no see how one monitor could cover both these provinces.

Ms Bopape reminded the Committee that the FPB had monitors in all provinces except the Free State, Limpopo and Mpumalanga and the North West. They thought it would be best to assign one person to deal with Mpumalanga and Limpopo, and another to deal with the North West and Free State provinces. She admitted that this plan had not worked and that the FPB could have operated more effectively in this regard.

Mr Sibande was irked that all over the country pornography was still being sold on the streets.

Ms Bopape responded that this was a major battle and she was not sure whether the FPB would be able to win it. The Deputy Minister had also been involved in a raid that had been a collaborative effort between the DHA, the South African Police Service (SAPS) and the FPB. They tried to undertake such raids as they become aware of activities. The public had to assist in this regard. Unfortunately such raids had to be undertaken in conjunction with the police, who gave the FPB as much support as they could, but often had ‘more serious’ crimes to attend to.
Mr Sibande noted that Ms Bopape had indicated that the FPB had no money to use for training. This was a serious concern. The Committee should recommend that enough money be allocated to the FPB to ensure that it had enough money so that they could train individuals to perform their task.

Ms Bopape reiterated that training and Human Resources in general remained a serious challenge. Issues around wellness needed to be addressed for example. Many examiners worked with all forms of pornography including child pornography on a day-to-day basis. The Internet content analysts that had just been hired did the same. The images they were exposed to every day were extremely stressful. In this context employee wellness programmes became exceedingly important. The FPB wanted to, had their budget been approved, prioritise such programmes. They had thus decided to collaborate with DHA and to, where possible, become part of their training programmes. They had a training development plan, but no independent training programme.

Mr Beukman said that the audit committee as well as the Auditor General had raised concerns around internal controls. The financial statements indicated however that 7 of the 8 management members received performance bonuses. Performance had to be linked to what had been going on in the department. No job evaluations took place. He wondered who had decided on whether bonuses would be paid or not.

Ms S Kalyan (DA) wondered what criteria had been followed in the awarding of the performance bonuses.

Ms B explained that the performance agreements, based on the operational plan for the year, were agreed to at the beginning of the financial year. The operational plan detailed what had to be achieved throughout that year, and they agreed on dates etc. This was cascaded down to the different unit managers. Every three months a performance assessment was done and at the end of the financial year the performance was assessed in relation to the achievement of goals set out in the operational plan. Bonuses were awarded according to managers’ contribution. The FPB’s Performance Management Development Programme (PMDP) required that a committee be established that consisted of at least three managers with the CEO to consider performance agreements and assess performance to determine the success rate. The monitors did not receive their performance bonuses because they failed to achieve what they had set out to achieve. The Human Resource manager made a recommendation, the PDMP committee then made a recommendation to the CEO, and she then approved the bonus.

The Chairperson asked whether the FPB had performance contracts and asked the CEO to share exactly what had been achieved in order for the managers to have received the bonuses they received. He wondered who bonuses could have been awarded to the CFO when the reports indicated that there were no internal controls in place.

Ms Bopape, who did not receive a bonus, responded that the Committee had to bear in mind that one could not simply look at a single matter, such as the lack of internal controls and based on that decide that decide that the CFO did not perform. The committee considered the overall position of the FPB. The fact that they had received a clean report was an achievement for her. She said that one of the challenges the FPB had been faced with was that there were no policies and no separation of duties. They then decided on however many policies and systems would be put in place and who would be responsible for them. All of this was taken into consideration when determining who qualified for bonuses.

The Chairperson asked what the salaries of provincial monitors were.

Ms Bopape said that a provincial monitor earned R245 000 per annum.

The Chairperson asked how much had been spent on bonuses.

Ms Bopape replied that R303 000 had been paid in bonusses.

Mr Beukman commented that the current structure was not ideal. He thought that perhaps an independent body should decide who bonuses were paid to.

Ms Bopape said that the final decisions lay with the audit committee.

Ms Kalyan too felt that there was no measure of objectivity in a process where everyone sat together and “had a tea party and said I scratch your back, and you scratch my back” at the end of which an agreement that could be sent to the audit committee was reached.

Ms Bopape responded that, since she did not get a bonus, her involvement in the process brought some measure of objectivity to the process. The audit committee who were non-executives, also added to the objectivity. She agreed that the FPB could be “more stringent” in the matter.

The Chairperson thought that at some point the matter would have to be reviewed. He asked the FPB to forward the performance contracts to the Committee because members needed to be convinced that the managers had earned their bonuses. The matter was serious. R303 000 had been spent on bonuses, while the Board still faced some challenges. The managers agreeing to give themselves bonuses did not make sense. An external independent body should perhaps get involved in the process.

Ms Kalyan thought it might also be useful to provide the Committee with the information related to how the bonuses were quantified.

Kgoshi Morwamoche commented that the moneys spent by the FPB at the moment fell under unauthorised expenditure in the DHA budget. DHA had not adhered to the PFMA and National Treasury regulations that required them to include the transfer payments to the FBP and GPW. This oversight gave the FPB the right to do whatever they wanted.

The Chairperson said that that the Committee would have to take the matter up with the DHA.

Ms Kalyan found it interesting that the FPB said that compliance monitors had a public relations function too. She wondered whether the compliance monitors were aware of this fact. She had seen these monitors removing whole stock that had been legally acquired and was in compliance with the law, from video outlets because the stock fell onto zone 1. She wondered whether they were overstepping the line.

Ms Bopape said that monitors were aware of the PR function they were supposed to play. There has been some resistance, especially from people who had been in the system for a long time and were used to doing things in a certain way, to this aspect of their job. In the last strategic planning meeting she had been asked why monitors had to be involved in anti child porn initiatives. He response had been that because of scarce resources everyone would have to assist where needed. There had been complaints but the FPB was working on it.

Ms Bopape said that parallel import was a serous challenge. They had tried to get help from the Department of Trade and Industry (DTI) who a while ago also dealt with the same problem. The law on the matter was very clear. If one wanted to exhibit any material in the country, that material had to be classified by the FPB. Classification information had to be displayed. Any material that did not have this classification was not in compliance with the FPB legislation.

Generally she trusted that the monitors took fair action where necessary. Durban presented serious challenges. People were aware of what the law required of them, but “were just trying their luck”. The FPB could not confiscate material themselves and thus required the police to work with them. There was a clause in the legislation that said that the CEO could make any decision in order to make sure that the law was administered effectively. At times of desperation this very broad provision.

The Chairperson said that kit was necessarily to speed up the process as afr as the law was concerned.

Ms Kalyan wondered why there were different classification rules for films shown in the movies and films for distribution by video outlets. Often the classification for movies to be shown in the cinema was much more severe than for those that were to be distributed. She wondered why retail stores were excluded from the rating system.

Ms Bopape responded that retailers were not excluded. All of them have now been on board as afr as registration and classification was concerned. She responded that when classifying a film they looked at how many times classifiable element appeared in it. Films to be shown in cinemas were classified differently because a film viewed at home could be stopped and reviewed and thus was potentially more harmful.. The FPB was thus much stricter in the classification of DVDs for example.

Ms Kalyan said that that was exactly the point she was trying to make. The FPB dropped certain elements from the cinema film, while they retained it for the ones to be distribution. The explanation just given defeated what they were trying to achieve.

The Chairperson said that this would be noted and would be taken up again in later interactions with the FPB. He himself was grappling with the explanation just given.

Ms Kalyan noted that the FBP had budgeted for R79 million but was awarded only R19 million. She wondered whether their budget had perhaps been ambitious and asked what would now have to fall by the wayside.

Ms Bopape responded that the FPB had hoped to get the R79 million it had proposed so that they could run the programmes envisaged for the 2007/8 financial year. They did not think that their budget had been ambitious. For a solid information technology structure for instance, they would have required R25 million. In addition monitors spent 90% of the time travelling and not working. The DHA recommended that the FPB needed at least 4 monitors in each province. Classification also required greater staff numbers: it was recommended that there should be at least 10 fulltime classifiers. She added that the FPB could come back to share the plans they had had with the Committee.

Ms Kalyan sought information on the two court cases against the FPB.

Ms Bopape responded that in one they were the FPB was a second respondent and have entered a plea to defend. The other had been passed onto the DHA.

The Chairperson wondered whether the Deputy Minister had an update on these cases. The matter would be noted and would be taken up with DHA at a later stage.

The Chairperson said that the FPB would have to review their budget now that their budget proposal had not been approved. The Committee would consider what recommendations it could make as far as influencing resource allocation. He wondered what the relationship between the FPB and their stakeholders was.

Ms Bopape said that there was greater cooperation between the FPB and their stakeholders but that the cooperation was specific to their compliance with the FPB legislation. The FPB had been concerned that they were not registered as distributors, when in terms of the legislation they distributed content and thus should have been registered. They have since registered and discussions around how the FPB would classify their content were underway.

The Chairperson said that the FPB should request these stakeholders to assist them in meeting some of the targets that would other fall to the wayside due to the rejection of their budget proposal. It could form part of their social responsibility work. He said that if the government did not have the money to deal with matters such as protecting children from some of the material that they distributed, stakeholders should be engaged for their assistance.

Deputy Minister Gigaba pointed out that the day before the DHA had met with Microsoft and discussed issues related to amongst others children and pornography. The Ministerial Task Team had invited all the mobile phone service providers to the hearings on child pornography that were held in 2006. Mobile phone service providers and computer companies displayed a great willingness to work alongside the DHA to combat child pornography and children’s access to pornography in general. The public and private broadcasters however still posed a major challenge. The task team had now set itself the task to engage with these broadcasters. The SABC had removed pornography from the programming and ETV had now scheduled their screening of pornographic material to after midnight. He received many letter still from people who pointed out that at weekends older children did not necessarily go to bed before midnight. The DHA had decided to seek voluntary cooperation as far as combating children’s exposure to pornography and had told the South African National Editors Forum (SANEF) and others that should work together to protect children. Freedom of expression and making profit should not be championed to the detriment of our children. They should work together to see how they could protect children “without interfering with freedom of expression and the bottom line.” Internet service providers had not yet been engaged.

He said that in the United Kingdom Internet and mobile phone service providers funded the Internet Watch Foundation. If they were better organised they would be able to achieve their objectives in this regard. The platform to engage with the relevant institutions needed to be exploited.

Mr Ngamzu said that towards the end of the 2006 financial year the FPB had engaged with the National Treasury and with the DHA to see how much money could be sourced towards the programmes to be undertaken in the new financial year. They were able to give them R13 million that could be used towards the funding of the programme they had indicated for the following financial year. The money in the 2005/06 Annual Report was recorded as deferred income because it was meant for the following year. There was a huge increase in their current liabilities.

Mr Sibande recalled that during the workshop that had been held in Port Elizabeth many presentations and recommendations were received from participants, which included stakeholders. He wondered what had become of those recommendations because in his opinion they could be used as a checklist against which to measure progress in this area. He pointed out that the Committee had always been clear that South Africa should not be seen as a dumping ground for pornographic materials. Some of the recommendations the Committee had made, such as broadcasting pornography on pay channels, were worthy exploration.

The Chairperson said that in terms of the regulations it was against the law for adult shops to be in residential areas, and yet that still remained the case in some areas. He was also not sure whether the SAPS was aware that to distribute pornography in residential areas or on street corners was against the law. He wondered what the details of the FPB’s relationship with the SAPS were. He did not have a sense that such cooperation was effective.

Ms Bopape said that the FPB struggled to deal with this issue. They also had a problem with dealing with individual municipalities that were fragmented, had different bylaws and functioned differently. Municipalities were the ones that had to license adult shops. The FPB had thus decided to approach it from a South African Local Government Association (SALGA) perspective, rather than dealing with the individually.

She said that generally the relationship between SAPS and the FPB was good most of the time. It made better sense to consolidate matters to be addressed. The FPB tried to work with law enforcement agencies. They had for instance been involved in training prosecutors around issues of child pornography. The FPB had developed a three-day course and had so far trained 72 prosecutors and police officers. There was talk that the United Nations might fund the programme.

Ms Bopape said that there had been progress as far as the outcomes of the Port Elizabeth conference. The FPB was dealing with creating more awareness and education, they had also started on capacitating the board. Although small, their research unit was already impacting on the work that needed to be done. There was also progress in terms of amendments to the legislation and interactions with stakeholders were ongoing.

Mr Beukman sought clarity on the considerable growth in the FPB’s internal audit fees, on the DPW liability to the value of R91 570, 00 that had been written off, and details on the conference that officials had attended in London. He thought it necessary that the Committee be given the details of oh had attended the conference, what it was about and perhaps even some of the papers that had been presented there. This information was necessary as far as Parliament’s oversight responsibilities. He commended the FPB for its gender and racial representivity.

Mr Ngamzu explained that the increase in the internal audit fees resulted because in the middle of the financial year the contract of the service provider they had used came to an end. The FPB then considered the creation of an in house audit facility. They appointed a fulltime auditor to create that kind of capacity within the board. That person had been overwhelmed and the FPB, due to financial constraints, could not provide him with resources. The FPB then reverted to an outside service provider once again. Tendering had involved using additional funds, hence the increase. IT was also the first time that the FPB had run with an audit committee. They had frequent meetings to deal with the issues emanating from the FPB’s previous bleak audit reports.

As far as the DPW money that had been written off, Mr Ngamzu explained that the money had merely been moved from one account to another. Due to the way the accountants had interpreted the statements, the FPB had had to lump sum all of its lease obligations and then add them together. This was referred to as straight lining the lease and involved taking the total obligations of the agreement and dividing it by the duration of the contract, and then accounted on an annual basis in terms of annual lease payments. The money was thus reclassified and consolidated.

Ms Bopape added that the audit report was late due to a delay in the Auditor General’s office. The FPB only learnt about these problems at a later stage. There had also been a number of unplanned special meetings to address the matter.

Ms M Maunye (ANC) and Ms Kalyan wondered whether the CFO could supply the committee the findings of the forensic audit.

The Chairperson said that the report had not been received.

The Chairperson said that the absence of the Chairperson of the Board limited the Committee’s understanding of some of the issues. The Committee was now limited to dealing with administrative issues only. The matter would have to be addressed. The Deputy Minister had indicated that if the FPB was better organised they might be able to tackle some of the issues they were grappling with. The synergy that was meant to exist between the Board and the Administration was absent from the interaction as well as from the presentation.

The Chairperson said that it was very difficult to call for the adoption of the FPB’s annual report in the absence of the Chairperson of the Board. The Committee needed to have more information on their activities. He said that the FPB’s report would be adopted when the DHA presented theirs. The FPB’s Board would then be given an opportunity to present their activities and plans to the Committee. He emphasised that it was important that the Committee engaged with them too. He felt that the FPB was doing very good work.

The Deputy Minister said hat the DHA appreciated that E tv had moved their adult programming to after midnight. This was an indication that voluntary collaboration and self-regulation worked better than forcing people to cooperate.

The Chairperson commented that although the programmes were scheduled for after midnight, the adverts for adult entertainment and products were now broadcast throughout the day. It would have to be dealt with.

The Deputy Minister said that the current problematic resourcing of the FPB was a result of their historical baggage. Due to its history of disclaimers, qualified reports as well as the manner in which it was regulated, he FPB had a low budget, which was not compatible with the work they had to do. Even if its budget was radically increased, their ability to spend it would be hampered due to human resource constraints. These matters would have to be at addressed at a later stage.

He said that the FPB and the DHA sought the Committee’s assistance in relation to the amendment legislation. The current legislation said that the board would also be the examiners. He said that having policy makers also be part of the operations simply did not work, especially not in terms of cooperative governance. This was a situation that was created by the legislation and the Committee could assist in having that provision amended. The DHA was anxious to get the cooperative issues deal with.

Mr Sibande suggested that the report be adopted. The Chairperson felt that the report raised a number of various serious questions and he felt that it could not be adopted yet.

The Chairperson reminded the Committee that, though it ha had hearings in other parts of the country, it still had to have hearings at Parliament on the Film and Publication Amendment Bill.

Ms Kalyan said that during the programming meeting the previous week the leader of government business received a letter from the Minister of Home Affairs saying that she had withdrawn the Bill and that she would bring an amended version back in May.

The Chairperson said that the formal withdrawal of the Bill was not yet before the Committee. The Bill was. He said that when a bill tabled before Parliament it became Bill of Parliament. A letter announcing the withdrawal would go to the Speaker and she would then communicate it to the Committee. That had not happened. Everyone was asking about it. He had checked with Parliament’s legal desk and the Bill was still before the Committee. The Committee would announce a way forward during the following week.

Government Printing Works Presentation
Mr Tom Moyane (CEO) and Ms Amanda Pretorious (Acting CFO) represented the GPW. Mr Monyane gave the Committee a grief overview of the GPW’s mandate, its background as well as its products and services. Its key strategic objectives were to ensure and maintain high-level security printing, to ensure technological competence, to ensure efficient and effective service delivery and to ensure the effective implementation of the corporatisation plans. The GPW listed a number of successes, which included the recruitment of senior managers, the coordination of the printing of ballots for the elections in the Democratic Republic of Congo as well as offering forensic assistance to the South African Revenue Service (SARS). High staff turnover, lack of effective leadership, outdated technology and its inappropriate location remained challenges. Mr Monyane was pleased to report that although its audit report was not ideal, it did represent an improvement on the past year’s disclaimer reports.


Kgoshi Morwamoche said that the GPW like DHA was plagued by many problems. He was concerned that Committee, due to time constraints would not be able to do justice to the presentation.

The Chairperson suggested that the Committee proceed with their questions. If questions could not be completed the Committee would continue their interactions with GPW at a later stage. Budget processes and annual reporting were ongoing processes.

Mr Beukman noted that the GPW had a vacancy rate of 43%. The Auditor General said that in his previous audit report he had indicated that due to capacity constraints the internal auditor had not executed all the planned audits and that no reliance could be placed on the work of the internal audit. The situation remained the same in the 2005/6 financial year. He wondered why the internal audit, which was an important function, had not been prioritised so that liability could be contained.

Mr Monyane responded that the area had been beefed up. The internal audit was being evaluated on an ongoing basis. The GPW did not have an audit committee and depended on the one from the DHA. That in itself was an indictment to the organisation. Such a committee had since been appointed with the approval of the Minister and would now deal with the oversight aspects The GPW took seriously the issues raised by the Auditor General and had tried to deal with them in very specific ways.

Mr Monyane pointed out that the establishment of 1004 was an old outdated establishment. As the organisation turned around, and with growing technological advances the GPW could not afford to have a convoluted staff compliment. The staff compliment at present stood at 570. That was the most ideal staff compliment in a security organisation. The large staff compliment resulted because post 1994 the GPW merged with the TBVC (Transkei, Bophutatswana, Venda and Ciskei) states. People from these states had to be accommodated within the GPW because the state could not dismiss them. He reiterated that the GPW would not have a staff compliment of 1000 because it would neither be productive not cost effective. The GPW was migrating with technology and international benchmarking indicated that institutions that run security printing as core business should run with a staff compliment of 3-500 officials.

He admitted that the GPW had a problem with specific skills. He had inherited an institution that had had no competent skills to deal with the technological migration. One would need to be patient with the recruitment process. It was not easy to find printing industry artisans. The GPW would have to recruit individuals from the institutions of higher learning. The institutional problems were not problems that could be solved immediately but would require specific long-term processes. The envisaged corporatisation of the organisation would assist, as it would then be able to attract the necessary professionals.

Kgoshi Morwamoche noted that the Auditor General said that because staff was being underpaid, the GPW could not perform their function. He wondered how the GPW could then afford to have consultants such as Price Waterhouse Cooper to assist them with some of their duties.

Mr Monyane shared the Member’s concern but pointed out that they could not pay market related salaries. The subscribed to the DPSA Act and needed to adhere to its salary scales. Central to the argument for corporatisation was that the institution would then be able to offer market related salaries. After a comparative study of the Bank Note and themselves it was found that a factory manager at the Bank Note was paid close to R700 000, while a factory manager at the GPW was paid only R300 000 to R400 000. In the private sector factory managers were also paid very highly and thus the public service ran the risk of losing their good managers to it. He pointed out that while he appreciated the criticism, the GPW had no choice but to, when work had to be done, approach private service providers who were able to do the work.

Kgoshi Morwamoche pointed out that the Auditor General had found that no provision had been made for pension and medical aide benefits for staff. This was a recurring complaint and he wondered why this was not addressed. He congratulated for the continuous success in protecting the integrity of matric examination papers.

Mr Monyane denied that the GPW did not provide pension benefits. He pointed out that the law required that employers provided these benefits. Medical benefits were also offered. The context in which the report made that statement would have to be discussed with the Auditor General.

Mr Sibande noted that the Auditor General’s report indicated that many documents had not been submitted on time. He wondered why that had been the case.

Mr Sibande said that the Auditor General’s report found that the IT weakness was the most significant challenge. Considering the sensitivity of the information GPW dealt with this was a most serious problem. He wondered how corruption could be curbed if officials shared passwords.

Mr Monyane agreed that if one wanted to guard against corruption it was vital to have highly secured IT systems. The GPW had found that employees were exchanging passwords. He assured the Committee that that practice had now been stopped. The GPW now monitored the processes of how a person entered the system.

Mr Sibande was also concerned that a formal policy for dealing with doubtful debts had not been put in place.

Ms Maunye wondered why it was the CEO and not the accounting officer that had signed financial statements.

The Chairperson said that the forensic report, which had not yet been published, would probably highlight many other issues. He realised that the CEO had put much effort into turning the GPW around. There had been a little bit of improvement. The Committee would now have to consider what they could do to assist the GPW in improving even further.

The Committee had invited the Auditor General to the meeting but he had not responded. He added that the Committee also still needed to get clarity on why the CFO had been dismissed. If he had squandered money the law should take its course because it involved state money, despite the fact that the GPW was not allocated a budget.

Mr Monyane explained that the CFO had been dismissed for dereliction of duties, supplying misinformation to the Minister and the Deputy Minister and the executive of the DHA, breach of security because he had brought people to the plant after hours despite the fact that it was a restricted area, keeping an unregistered car on the premises for months and failing to execute duties in terms of addressing the concerns raised by the Auditor General. An internal consultant was then assigned to address the matter.

The Chairperson asked when the GPW submitted its annual report for printing.

Mr Monyane responded that the GPW’s annual report was sent to the DHA who then printed it along with theirs. He said that while he could not recall the exact date that the GPW’s report was submitted to DHA, he could confirm that it had been done long in advance of its publishing.

The Chairperson said that he was trying to reconcile Mr Monyane’s responses that the matters had been dealt with, with the fact that in the Annual Report these matters were still highlighted as challenges. He wondered when these corrective measures had been out in place.

He said that everyone was aware that the GPW was faced with serious problems. Mr Monyane had brought a weak ray of light as far as dealing with some of the structural problems that had been in existence for many years and many of them still remained.
The CFO and his dismissal was a serious matter. He had been central to the running of the GPW’s finances.

He wondered what had informed the decision that the GPW should be corporotised. Despite the progress that had already been made to turn this into a reality, the Committee would have to engage with the DHA on the matter. He proposed that the Committee should take time to thoroughly study the GPW. The Ministerial Task Team could perhaps also brief the Committee on what the DHA planned on doing with the GPW.

He felt that a number of measures had already been put in place to address the issues, but that now political guidance was needed. Comparing the 2004/5 report to the latest one had revealed that while there was a slight improvement, the problems had generally remained the same. The Committee would await the forensic report, study it and then decide on how they could assist the institution. Members were committed to trying to support the institution so that it could improve. Having said that, he referred to the recommendations the Committee had made the year before. Virtually none of them had been improved upon. He felt that it was time to come up with solutions.

The Committee would consider what it could contribute to ensure the GPW’s success. He emphasised that he was not disregarding all the work Mr Monyane had put into the GPW. It had become time however for the Committee to add its voice to the efforts already made by the DHA to turn the organisation around.

He felt that he had listened to the Deputy Minister’s pronouncements that the DHA would speed up corporatisation of the GPW. He warned that that process would not make the challenges disappear. They still needed to be addressed. The GPW and DHA could on 14 March present the Committee with a fuller understanding of what the way forward would be. He said that issues around the budget could be engaged upon until there was certainty that public money was being accounted for. The GPW should feel comfortable accounting to the Committee, and should feel that Parliament was supporting it.

He added that the Committee had met with the DHA and SETA on the security of documents, but the security still remained a challenge for the country. He said that Parliament had failed to deal with the problems this entity was faced with. He felt that superficial interaction with the GPW would not assist in addressing issues. He urged members to in the meantime also discuss the issues amongst each other.

The Deputy Minister wondered what kind of report the Committee expected the DHA and the GPW to prepare for the coming engagement. He felt that that day’s engagement had been “a victim of time constraints.” The engagement could still proceed as far as he was concerned. All of the concerns could be discussed. Issues around staff retention had already be raised. It had been found that since the GPW did not pay market related salaries, it could not compete with the private sector. Issues such as these would be addressed through the corporatisation.

The Chairperson said that corporatisation should be considered especially in relation to how would address the problems GPW was currently facing. The Committee should receive a presentation that made this aspect clear.

The Deputy Minister asked whether the purpose of that day’s interaction had been to consider the annual report.

The Chairperson said that the presentation of 14 March should focus on the strategic plan, which would in any case be informed by the challenges highlighted in the annual report. The same process would apply to the DHA, and should also have been done with the FPB. He added that time was not a problem, but should not be wasted through meaningless interaction. He would distribute copies of the SCOPA report, which identified the GPW’s challenges among members.

The meeting was adjourned.



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