The Deputy Minister of the Department of Home Affairs briefed the Committee on the current situation in the Department of Home Affairs and on the steps that the Ministry had taken, including the setting up of the Support Intervention Task Team, to address the various problems in the Department apparent over a number of years. He indicated that a new Director General and Acting Chief Financial Officer had been appointed. The Ministry regarded the disclaimer for this financial year very seriously, although it had expected it, and was addressing it as part of a comprehensive programme of rebuilding DHA. The 2005/06 disclaimer was indicative of deep structural problems faced by the Department, and thus bold and decisive action was taken by the Ministry, and the Support Intervention Committee and Task Team was established. The disclaimer for 2006/07 reflected that sufficient steps had not yet been taken by the Department to address all underlying problems, although the findings of the Task Team were being addressed. A new Director General was appointed in May and an Acting Chief Financial Officer was also appointed. National Treasury (NT) had provided funding for the turnaround. Phase 1 had focused on transforming service to citizens and Phase 2, to run from December 2007 to December 2009,l would transform the Department as an organisation, and deliver services effectively and efficiently. He noted that the 2006/7 period had been one of instability and all problems were not able to be eliminated. The same applied to the Government Printing Works, on which the Department was hugely dependent. The Ministry was not attempting to offer excuses, shared the concerns of the Committee and looked forward to robust engagement.
Members were concerned that the Department had never, in the previous thirteen years, received a clean audit, and felt that too little had been done after the recommendations were presented, and the Deputy Minister was asked specifically what steps had been taken by the Ministry to address the lack of internal controls, what was the situation with the former Chief Financial Officer and other suspended officials, and how vacancies had been dealt with. It was noted that the Ministry was yet to give guidelines for amendment of the Immigration Act, and specific queries were asked on what plans were set up for service delivery and for compliance with Treasury Regulations and the Public Finance Management Act. The Chairperson commented that intervention at a political level was supposed to prevent the problem, and asked what discussions had been held between Ministry and Department around the problems.
The Director General had prepared a presentation but it became apparent that this addressed not the Annual Report but the problems identified and how these were currently being addressed. For this reason he was asked not to continue with the presentation, but instead to address the Annual Report and financial statements for 2006/07, to prepare a new presentation and return to the Committee. If necessary the Committee would call in the previous incumbents of the Department to account for this period. Only after dealing with this financial year could the next year’s issues be dealt with by the Committee
Annual Report 2006/07: Department of Home Affairs (DHA)
The Chairperson welcomed the Deputy Minister.
The Chairperson indicated that the media were constantly running reports detailing complaints against the Department of Home Affairs (DHA) and there remained the challenge to change the perception, and to successfully turn around the Department. However, he felt that there had been some significant progress. He specifically asked that a report be given on the delays in relation to the submission of the Annual Report. It was vital also to ensure that the delays in issuing and verifying identity documents be addressed. The Department should also be reflecting on pertinent issues and reflecting upon how best to be building bridges and dealing with unfortunate incidents. He indicated that this Annual Report would be processed in detail, and the recommendations made over the years would be revisited to assess how far they had been addressed.
Address by Deputy Minister of Home Affairs
Mr Malusi Gigaba, Deputy Minister of Home Affairs, tendered the apologies of the Minister, who was unwell and unable to travel to
The Deputy Minister noted that he was not attempting to offer excuses, but looked forward to robust engagement. He acknowledged the need to change leadership and management, financial and IT systems and controls, and ensure the correct human resources were deployed at appropriate levels, so that all South Africans and visitors to the country were assisted. DHA was fully committed to addressing the challenges.
The Chairperson noted that there had been an Intervention task team deployed to the Department and that a number of changes had taken place. The Committee had been concerned that too little was done after the recommendations were presented. The Committee had accepted the report of the Minister, but had noted that it was not a complete report as other sub-committees were still to consolidate. The lack of action had again led to the current disclaimer, and he noted that this was of concern as taxpayers' money was involved. He asked what the Ministry was doing about the insufficient internal controls, which were the main reason for the disclaimer. He also asked that the situation with the former Chief Financial Officer (CFO) and senior managers be explained, and also how the vacancies had been dealt with. It would be difficult for DHA to engage properly if those who were supposed to be monitoring were not in position. At no point in the past thirteen years had the DHA ever received a completely clean audit report. He noted that this was extremely serious.
Mr Gigaba noted that the Ministry shared the feelings of the Committee around the report and the history of negative reports. In 2006, on receiving the disclaimer from the Auditor General (AG), steps were taken to request other departments’ assistance. That caused much uncertainty and anxiety, which led to a period of instability during the introduction of new systems. The resignation of the then-Director General, a few months into the SIT's work, and the departure of other senior managers, had been a further problem. In 2007 some other senior managers, including the Chief Financial Officer (CFO) were suspended as they had not been moving in the direction that would enable the DHA to deal properly with the challenges. The Ministry felt that serious consideration must be given to whether the CFO and / or the Accounting Officer should be held responsible for financial management, so that the trend of negative audit opinions could be ended. Perhaps clauses to this effect should be included in the performance agreements. The qualifications by the AG could indeed be addressed, and people were being employed to address the reasons for those qualifications. Part of the turnaround programme therefore looked specifically at what was to be done with financial management, which of course happened throughout the organisation. A problem experienced by the DHA related to how the districts and regions had failed to account properly for finances, and the absence of system and management at the financial levels, which in turn facilitated corruption. The current Acting CFO and Director General (DG) would give more detail on what was being done. Better skills were required, and people were being brought into the DHA to address these challenges.
Kgoshi K Morwamoche (ANC) asked why no one had been charged for breaches of the Public Finance Management Act (PFMA). In regard to the recurring failure to comply with the PFMA and Treasury Regulations, he also noted that the political heads should be giving guidelines to amend the Immigration Act. The Auditor General had continued to comment on this issue, but nothing had been forthcoming from the Ministry.
Mr M Sibande (ANC) noted that the accounting officer should take certain steps to collect money, and this had not happened. He asked what had been implemented in this regard. He also asked what plans had been set up for improvement of service delivery, as required by Section 5 of Treasury Regulations.
Mr S Swart (ACDP) endorsed the Chairperson's concerns. Whilst he too appreciated that this had a historical basis, he felt that the situation was crucial, and he wanted to know what had been done specifically in regard to the internal audits. He also enquired what had happened in regard to the suspension of the Chief Financial Officer. He hoped that proper service delivery would be achieved by the turnaround.
Ms H Weber (DA) asked if anything had been done to advertise how much people were supposed to pay for ID documents. She said it was particularly important at this time of year, when so many new documents were needed.
Mr Gigaba noted that the reason for the further disclaimer was attributable to the period of uncertainty that he had referred to, and this was of no surprise to the Ministry. However, drastic action had been taken to focus on the issues that led to the disclaimer, and the DHA was working towards an unqualified audit. In that process, the Immigration Act would be dealt with, as well as the other issues referred to. The turnaround. would include all the concerns being raised. This would include delivery of ID documents, which should ideally occur within 14 days. The DHA must know its clients, with their diverse needs and expectations, and should be able to deliver to all. That work had already commenced in Phase 1, although it largely had to do with redesign. Implementation would happen during Phase 2 and the effective changes in service delivery should soon be felt by the citizens. The work would succeed if the necessary tools and human capacity were correctly in place. There would be better communication and information to citizens. The new Director General, who also had a weekly communication mechanism through the intranet, to get the buy-in of all staff, was dealing with the issues. In regard to the costs, he noted that the first application for an ID was free, but a re-application cost R15. No further fees were involved, and the Director General was taking a zero tolerance approach and stringent steps against all those involved in corruption. Not only did DHA want to combat corruption, but to prevent it altogether, and this would involve ethical staff, and efficient IT systems that would preclude corruption at the various processes.
The Chairperson noted that the Ministry had foreseen that there would be a problem. However, the intervention at a political level was supposed to prevent the problem. He asked if there had been some cooperation between the Ministry and the Department to discuss the problem. He also would like to hear from the Deputy Minister himself about the former CFO. He also wanted specific details around who was in positions of senior management. The Director General could not be expected to run the Department alone. If need be, the previous incumbents would be called in to account for what had happened during their tenure.
Ms N Mathibela (ANC) asked if the officials had been suspended with or without pay.
Mr Sibande asked if there was any mechanism to force those who had left to be accountable.
Mr Gigaba responded that he had hoped, during his introductory remarks, not to deal with the administrative matters, as the political executive was not running the Department.
The Chairperson intervened at this point to say that the accounting officer accounted to the political head, who was accountable in turn to Parliament. For this reason he had asked for a specific response from Mr Gigaba. The separation of powers meant that the Executive was accountable to Parliament. The Committee could of course also call upon the officials. However, the political heads appointed the officers, and it was in that context that he would like to hear from the Deputy Minister.
Mr Gigaba said that to the extent that the Ministry was to exercise political responsibility, it had done so. The letter suspending the CFO had been signed by the Director General. That fine separation of responsibilities must be understood, and the Minister must assign certain functions. The Ministry, in exercising political responsibility, had invited the Intervention Task Team to give a thorough analysis of the problems. The turnaround team was invited to come in to the Department, with the various specialists in different fields, including the field of design, to recommend a response to the problems. The finance specialist had suggested that certain systems be followed to deal with the issues raised by the AG. The suspension of the CFO resulted from the issues that the Director General had to deal with, and there was also suspension of the Deputy Director General: Civic Services, Director: IT, and others. To the extent that the political Executive had had to propose systems, it had done so via the Task Team. Other matters, such as other resignations, were to be dealt with by the Director General. This had provided a chance for others to be appointed to develop the necessary systems. |
Mr Gigaba indicated that because there was as yet no conclusion of all cases, the officials were suspended with pay. By the end of February the hearings should be concluded. The DHA had followed all necessary processes, the officials were charged within 60 days and the hearings were in progress. Once they were concluded, the Ministry would report again. He reiterated that the political Executive had taken the necessary steps to intervene in the Department, in the correct manner. A number of comprehensive suggestions had been made as to the changes required, and the new vision and processes had already been detailed to the Committee. Political oversight and leadership of the Department was being exercised. Discussions with top managers around the administration were taking place. The Ministry needed to consider whether the audit issues should be included as part of the performance contract.
Kgoshi Morwamoche said that the issues raised by the AG were of concern. He wondered whether some of the concerns around this could not be moved to the forthcoming workshop.
Briefing by the Director General, DHA
Mr Mavuso Msimang, Director General, DHA, introduced Mr Sagren Naidoo, Acting CFO, and noted that it had been necessary to appoint an Acting CFO, pending resolution of the disciplinary matters.
Mr Msimang, answering the concern of the Chairperson, noted that the submission of the Annual Report and financial statements had been delayed for four reasons. The strike in July 2007 had an impact upon collection of data by the AG's team, and extensions were granted. In addition, the AG had deployed a new external auditor, who had not been familiar with DHA's processes, and the AG conceded that this had led to some further delay. The suspended CFO had signed the original statements, but when he was suspended, the AG correctly pointed out that the integrity of this report might be compromised. A new page was therefore prepared on his advice, and was then signed by Mr Msimang. Finally, the report had to be submitted to the independent audit committee of the DHA for its imprimatur. That report was finally submitted in December.
Mr Msimang wished to emphasise that the SIT was invited to come in during July 2006, around the middle of the financial year under review. It had presented its report in January, and the final product came out around March. All of the matters pointed out in the SIT's report were confirmed in the audit report. The comments made by the AG had to be taken into account, as also the audit done prior to the current report, the findings of the audit group, the Standing Committee on Public Accounts and others, totalling over 600 matters.
Mr Msimang then commenced with a presentation highlighting the main areas of difficulty, and setting out what had been done to address those challenges. However, Members interjected to ask when the Annual Report would be dealt with.
Mr Msimang said he had understood that the Annual Report had been distributed, and that the AG had recommended that corrective measures should be taken. Therefore he had thought that the Members would merely raise questions arising from what was contained in the Annual Report, and so he had rather structured his presentation around the deficiencies identified and had thought to detail what had been done to address the issues.
The Chairperson explained that normally the Department would present its Annual Report, tabled in parliament on 15 January 2008, and would detail matters such as the Strategic Plan, the budget, the achievements and other issues. If this had not been prepared, then the DHA would need to prepare a presentation of what had been done in the financial year. This would include a response as to what was contained in the audit report. It might be necessary for the Committee to call in the previous Director General to explain certain issues. The Committee could not approve a budget without an accounting for the last financial year. The strategic objectives would inform the programme.
Mr Msimang wondered if the section in the current presentation on the financial report would suffice.
The Chairperson said that it would not, because all programmes would have to be set out when asking the Committee to approve the budget vote. The presentation would also have to deal with the issues of the AG, and specify how the spending had taken place. Clear time frames would also need to be set out.
Dr S Huang (ANC) suggested that perhaps this meeting should be postponed.
Mr Swart noted specific difficulties that he would have raised. Page 73 of the Annual Report said that the Department had been engaged in an extensive process of capturing assets. However, the AG had reported that the asset register did not agreed with the figures. The Department was currently in the process of updating the register. The Committee would need to know what had happened to the difference of R1 billion of assets. Although Mr Swart fully appreciated the update, and would like to address these issues separately, he pointed out that the Committee still had an obligation to deal with the situation up to March 2007.
The Deputy Minister supported the idea that another date be set, stating that a different delegation would be brought to address all facts relating to that period. Few of the delegates present today could account for that period and answer the kind of questions that would be asked.
The Chairperson agreed that another date would be set. He reiterated that the DHA needed to account for all the funding, for the programmes and set out what had been achieved. If there were problems, he asked that the DHA should call upon the Committee, who had the powers to call in the former DG. In order to move forward, all the previous ground had to be levelled. A further date would be arranged for the Annual Report presentation, and this should happen before the next financial year. The document that had been prepared would be a useful guide for future discussions. The same would apply to the presentation from the Government Printing Works, which would also be postponed.
The meeting was adjourned.