Statistics South Africa Annual Report 2006/7: briefing

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Finance Standing Committee

16 October 2007
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Meeting report

FINANCE PORTFOLIO COMMITTEE

FINANCE PORTFOLIO COMMITTEE
17 October 2007
STATISTICS SOUTH AFRICA ANNUAL REPORT 2006/7: BRIEFING

Chairperson:
Mr N Nene (ANC)

Documents handed out:
Statistics South Africa Annual Report 2006/07 presentation
Statistics South Africa Annual Report 2006/07

Audio recording of meeting

SUMMARY
Statistics South Africa briefed the committee on their annual report.  The briefing focused on their strategic overview, organizational performance, supporting initiatives, financial performance and their objectives for the future.  They outlined strategic themes, aims and achievements with regard to some surveys, challenges they were faced with and the surveys that would be focused on in the next two years.

The committee commended Stats SA on their presentation but noted that there were many challenges and issues that would be discussed.  The committee focused on incomplete projects, under spending, the lack of good leadership within the department, job vacancies and security issues.  The committee and Stats SA thereafter discussed their progress and how they would overcome these challenges.

MINUTES
The Chairperson welcomed the committee and Stats SA and informed them that there were certain members who were not able to attend the meeting. 

Presentation by Statistics South Africa (Stats SA)
Mr P Lehohla (Statistician-General) said that the meeting was an occasion for Stats SA to account for their actions.  They would focus on problems previously encountered. Mr Lehohla wanted the committee to see that they were moving in the right direction.  The report consisted of five strategic themes.

Strategic Overview
Mr Lehohla said the vision was for Stats SA to be the preferred supplier of quality statistics.  They aimed to provide relevant and accurate statistics to inform users about the economy and society.

The five strategic themes consisted of providing relevant information to meet user needs, enhancing the quality of products and services, developing and promoting statistical coordination and partnerships, building human capacity and enhancing effective governance and accountability.

Organisational Performance and Current Surveys
Mr Lehohla touched briefly on the Consumer Price Index (CPI) saying that the aim would be to indicate price changes over time.  The key achievement was the roll-out of direct price collections from outlets in 2006/07.  Stats SA had also developed a plan to reweight the CPI.

Mr Lehohla also discussed the Income and Expenditure Survey.  He reminded members that the aim of the survey was to provide information on income and spending patterns in SA and to update the basket of goods and services for the CPI.  A key achievement was the finalisation and collection of data collection.  The results would be released in November 2007 and would enable them to inform the public of their performance. 

The Community Survey would provide service delivery information at the municipal level.  Mr Lehohla told members that a key achievement had been to mobilise 6000 field workers to visit approximately 280 000 households.  The Community Survey would be used to build technical and human capacity for Census 2011.

The Labour Force survey would measure the dynamics of the labour market.  He focused on improvements commenting on reviewed concepts and definitions of key indicators, frequency, timeliness, the redesigned questionnaire and the process.

Supporting Initiatives
This section focused on improving quality.  Lehohla discussed the business frame and dwelling frame; as well as statistical coordination and partnerships focusing on the Data Management and Information Delivery Project. 

The aim was to manage, monitor and assess the quality of all elements of the statistical cycle.  Mr Lehohla informed members of some achievements had been realised due to implementing the project. Stats SA developed a Statistical Data Management Framework for standardised data production and retrieval.  Another achievement was the development of the South African Statistical Quality Assessment Framework (SASQAF).

Explaining the National Statistics System (NSS), Mr Lehohla said that the rationale for the system was that demand for statistical information outweighed supply. Mr Lehohla informed members that key achievements had been the review of registers and administrative records for Departments of Education and Home Affairs and capacity audits conducted to assess statistical capacity requirements.  The business frame and dwelling frames were important issues to focus on when improving statistical information.  However, many dwellings did not have addresses and that it was a challenge that Stats SA would have to see to.

Financial Performance
Mr Lehohla commented that Stats SA has spent 94.3% of its budget.

Future Plans
Mr Lehohla informed members of the direction that Stats SA was heading in.  He focused on the need for accurate, relevant and reliable statistics, transparent methods, highly skilled professional staff, a numerate society and consolidation and sustainability.

He told members that Stats SA would focus on poverty and tourism surveys in 2008.  In 2009, the focus would be on the reweighted CPI, the Statistical Training Institute and the International Studies Institute.

Discussion
Mr K Moloto (ANC) said that Stats SA had some challenges to address and that he was interested to know how they would overcome them.  He also commented on wasteful expenditures and asked about the circumstances surrounding that expenditure.  Moloto stated that there were some projects that had not been completed.  He wanted to know what the justification was for incomplete projects when the department was under-spending their budget.  He commented on the debt amount that had been written off and wanted to know why it could not be recovered.

The Chairperson stated that there were many issues that the committee would have to discuss and asked for clarification with regard to resource constraints.

Mr M Johnson (ANC) thanked Stats SA for a comprehensive report. There were many discussions about updating the CPI and he wanted to know what problems had previously been encountered with it. Mr Johnson, referring to the Stats SA website, enquired as to the number of people using the site, and if this had any significance to Stats SA.

Mr S Marais (DA) stated that there were issues in the report that were of some concern to him.  Staff were the greatest asset and if they was not treated correctly there would be no return on the asset. Mr Marais said that he had identified many vacancies in the report. There was an absence of leaders, shortage of skills and incompletion of courses. This was alarming and had to be corrected.  He also noticed that there were not as many disabled workers as there should have been. There was under-spending in most departments, which meant that there was a problem as departments were either not spending adequately or that planning was being incorrectly managed, resulting in bad spending.  He warned that under-spending could lead to under-performance and a skills shortage, which could result in their downfall.

Ms N Mokoto (ANC) commented on the re-weighting of the basket of goods for the CPI.  She wanted clarification as to what elements were taken into account asked for clarification on the issue of the skills shortage within Stats SA. Ms Mokoto wanted to know what constraints they had experienced and the reasons for the incompletion of projects.  Also, the report showed that funds were shifted from one program to another. She wanted to know if this was permissible and if it helped them to reach their objectives. Ms Mokoto raised issues related to the poverty line and poverty survey.  She queried the indicators of extreme poverty.

The Chairperson told Stats SA that the explanations in the report were inadequate.  He wanted to know if programs suffered from the shifting of funds and if the shifts were an indication of poor planning.

Mr Marais questioned the issue of financial resources and human resources.  He commented that they had incomplete projects but that they were under spending.  He wanted an explanation as to why they were using consultants and contractors. Mr Marais spoke about the improvement of the business register.  He wanted to know what information would be used and how up-to-date it would be.

Ms J Fubbs (ANC) commented on the Stats SA website, saying that it would enable them to take note of the number of people who required information and would allow them to engage faster and more efficiently.  However, she warned that the information was not easily available or helpful. Ms Fubbs also commented on the resignations within Stats SA.  She wanted to know what skills were missing and why projects had not been completed.

The Chairperson announced that there were many questions that related to human resources (HR) and that Stats SA would have to answer them completely.

Mr Lehohla responded to issues that were raised.  He admitted that the organisation should have planned better and that it was an issue that they would have to face.

He said that the question of wasteful expenditure concerned management and was an issue with accommodating contractors.  He informed members that the problem had been remedied.  He responded to the issue of resignations, saying that there were sufficient funds but not enough people to do the work.  There were specific areas that were in short supply of workers but that other areas had improved. 

Mr P Kelly (Acting DDG: Economic Statistics) said that they had started collecting data for surveys and research for the other surveys was almost complete.

The Chairperson reminded them that there were areas that did not deliver and wanted to know if there was a tracking system in place to ensure that projects were on track.

Mr Kelly spoke briefly about the CPI basket. The current CPI basket held just over 1020 items.  They had developed a method of finding new items for the basket.  He stated that they were using a province by province approach and the aim was to exclude expensive products that were used by few people.  Kelly announced that only 400 items would be proposed for the new CPI basket and that this would be announced in January 2009.  Fewer items would allow the new CPI to be more streamlined, reflecting more accurately the expenditure of the average household.

Mr J Arrow (DDG: Quality and Integration) said that the velocity of information for the business register was based on the assumption that people pay or register their taxes and would therefore be known to Stats SA.  Information on classification was based on standards given by the Department of Trade and Industry.

Ms K Masiteng (DDG: Population and Social Statistics) commented on the HR issue. Stats SA had acquired resources and were awaiting the results.  Tackling poverty issues, she informed members of a report launched with the National Treasury which spoke about the methodology of the poverty line.  They were also looking at subjective poverty and its implications. 

Ms E Gavin (DDG: Statistical Support and Informatics) responded to issues concerning the Stats SA website.  She agreed that the site did not provide all information but said that the actual “clicks” on the site could be significant as it was an effective and efficient way of providing insight.  She said that they knew that the vacancy page was the most popular page and could provide information on the type of people harvesting the information.  The most popular download was the Labour Force Survey.  Stats SA also harvests information by getting users to subscribe to the site.

Mr Lehohla informed members that Stats SA had also used user satisfaction surveys and that there has been progress.

Ms N Mokoena (DDG: Corporate Services) stated that vacancies occurred because of the skills shortage. It was difficult to obtain skilled people for temporary posts but they were looking into permanent posts.  Stats SA was also working to identify problems regarding the shortage and were attracting many people; however these lacked the appropriate skills.  According to Mokoena, people were resigning because there were other organisations that were attracting them by offering better benefits.  A new strategy would be to concentrate on young learners, and they would offer bursaries to people who were interested in studying statistics. It was their intention to double the amount of internships offered to people. 

Ms A Henning (CFO: Stats SA) informed members that a post audit review was to be completed.  She addressed the issue of wasteful spending saying that she commended management for their decision regarding accommodation for contractors.  She added that there was no financial reason for the lack of skills.  Ms Henning also addressed the issue of debt that was not recovered.  She said that there was no positive feasibility in recovering funds and that they were small loans. She informed members that it was a question of how to spend tax payer’s money efficiently and effectively.  Stats SA worked on a basis of an accrued accounting practice and they had actually spent almost their entire allocated budget with the result that under-spending was not such an issue.  Henning also responded to the issue of vacancies.  She stated that surveys were sporadic and did not last all year and so the result was that they could not employ field workers permanently.

Ms C de Klerk (Strategic Planning) informed members that Stats SA had developed a comprehensive economic statistics strategy.  She stated that quality and data gaps had been identified and that it was a priority for Stats SA.  She also said that there could be a lack of coordination between skills and timing. 

Mr Johnson queried their actions for the following year.  He said that he found it difficult to relate to the report and wanted to know how he could remedy that if members have not seen copies if any of the surveys.  Johnson told Stats SA that they would need to improve.

Ms Fubbs questioned security.  She said that it was a reality that they were dealing with highly sensitive issues and that a breach could have a negative impact on the country.  She said that statistics was critical to the country as many people needed it.  Fubbs also wanted to know if they had placed the most competent people in positions of importance.  She then commented that the audit committee had not met regularly and wanted to know what they would do about this.

Mr Marais stated that there were areas that were critically under-spent on and areas that were critically over-spent on.  He pointed out goods and services as an area that they had over-spent on and queried whether this was a result of the shifting in funds. Mr Marais also wanted to know about the employment of disabled workers.  He informed them that the government had set out a target for them to comply with.

Mr Lehohla replied that there was a strategy in place to counter the issue and that somebody was appointed to deal with issue of employment of the disabled.  They would be receiving regular updates from the appointed person.  He said that he did not think that the percentage of employed disabled people would increase this year but that there would be an improvement in the future. 

Mr Lehohla stated that many people did not trust statistics because they did not know how to use them.  He stated however, that Stats SA was making progress in this regard and that the number of people using statistics was on the rise.

Ms Gavin emphasised on transversal systems, saying that they did not have enough people to do the required work, but they were working on this.  They had recruited interns and were monitoring their skills.  She also addressed the issue of security, saying that they had not experienced any breaches in security as yet and had not been hacked for years.  Information security depended on the internal people and they had taken oaths of security. 

Ms Gavin also spoke about the issue of dwellings.  The first step to remedy the problem would be to acquire imagery via satellite or photography.  She informed members that there were areas where there was very little information and where information was very poor.  They would be going in to places to collect data and understand the dwelling dynamics. She said that they had been working with the private sector for two years and were ready for that transition.  They would look internally at their fieldwork force in order to build internal capacity.

Ms Henning responded to the audit committee attendance issue.  She explained that the chairperson had been suffering from heath issues but that there had been feedback from him and members fro time to time.  However, she agreed that there should be greater attendance and compliance at meetings.

Ms Henning also replied to the comments on under- and over-spending.  She said that the most funding had been allocated to the Community Survey but that there were many roll overs related to the survey that could explain spending patterns.  She explained that 3000 people were recruited last year.  These were temp workers who would fall in to the recruitment line item.  She also explained that operating leases were related to regional offices to accommodate field operators for the community survey.  Venues and facilitators were linked to training for field operators all over the country.  This would also contribute to the explanation on the expenditure trends. 

Ms Mokoena looked at the issue of recruitment.  She informed members that they were looking at training teachers.  They would also focus on children at a primary level so that they could encourage them to go in to the field of statistics.  Bursaries would also be awarded to learners.  They had already appointed coordinators in each province to take on this responsibility.

Ms Mokoena addressed other management issues, telling members that Stats SA had started a leadership project to focus on the lack of leadership in the department.  They would also look at the working environment and encourage awareness programs.  They were implementing training programs as a way of encouraging people to remain. She did not think that there would be an increase in the employment of disabled people that year but there would be an improvement the following year. 

The Chairperson thanked members and Stats SA for their participation and attendance.

The meeting was adjourned.

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