The meeting took the form of a general discussion rather than a presentation followed by questions. This was so that the Committee could address specific issues, in particular the fact that qualified audits were being given every year by the Auditor General despite the strategies set out each year to address the problems. The Committee was looking to increased accountability.
Questions asked by Members sought to address the real challenges and problems underlying the lack of progress, the reasons for resignation of the Director General and Deputy Director General, the capacity constraints and high staff turnover. It was noted that the Unemployment Insurance Fund and the Compensation Fund would be presenting separate reports to the Committee. The effectiveness and impact of the decentralisation process, the staff retention plans, management difficulties, the number of vacancies and the asset evaluation were then addressed. Questions were also raised and discussed around the internal controls and finance management, and it was stated that guidelines were now in place. Clarity was provided on current statistics, noting that the Annual Report had presented the position as at 31 March 2007. The issue of departments poaching staff from each other was raised, and it was noted that this, and the long periods of Acting appointments, should be raised with the Department of Public Service and Administration. The Acting Chief Financial Officer, and other divisions gave brief updates on their work. Information on the budget was explained. The question of debt management was also raised, and Members further commented that there was no mention as to how the spending was reflecting the State of the Nation Address imperatives. It was noted that the Committee would discuss the matters raised further and make the necessary recommendations to the Minister.
Department of Labour (DoL) Strategic Plan and Budget Vote: Discussion by Committee
The Chairperson and the Committee proposed that a discussion ensue instead of the usual proceedings with a presentation and a following discussion. She indicated this was imperative and necessary as the Committee had questions on important issues on which they were wanting information on as a matter of urgency. The DoL had been briefing the Committee on the same strategy every year, yet qualified reports from the Auditor-General and the Standing Committee on Public Accounts (SCOPA) were still being received, and very little progress was seemingly made in addressing problems. The Committee was therefore requesting accountability from the Department.
Mr M Mzondeki (ANC) concurred with the Chairperson’s suggestion. He commented that the Department year after year presented initiatives to address the same problems. He asked to know the real challenges and problems that were behind the lack of progress and the persistence of the same issues.
Mr Mzondeki also asked to know the reasons behind the resignation of the Director-General (DG) and the Deputy Director General (DDG).
The Chairperson indicated that the SCOPA report and performance reports both stressed capacity constraints and a high staff-turnover as central to most of the problems faced by the Department. She added that the Committee would proceed to intervene were it felt necessary.
Ms A Dreyer (DA) reiterated the Chairperson’s view point regarding the high staff turnover and cited the 21,7% vacancy rate indicated on page 179 of the Annual Report as an example of the skills challenges facing the Department.
Mr Les Kettledas, Acting Director General, DoL, replied that the Department had engaged in an intense verification process of posts occupied since the reported 21, 7% vacancy rate. He added that at the end of February 2008, the DoL had 7 457 approved posts on its organogram, and 6 633 had been filled and 482 were vacant, translating into a 11, 3% vacancy rate. This was almost half the rate at the end of the 2006/07 reporting year. He further indicated that this was the first phase of a planned programme. The second phase was beginning on 5 March of the current year and involved a skills assessment of the vacancies identified through the verification process.
The Chairperson asked to know the time frame set for filling in the vacancies.
Mr B Mkongi (ANC) asked Mr Kettledas to relate the verification process, the filling in of the vacancies and the time frame of the programme to the Department’s Human Resources Plan indicated on page 61 of the Annual Report.
Mr Kettledas replied that the Department would be with its programme managers from 5 March 2008 to determine the essentialness of the current vacancies. He added that the Unemployment Insurance Fund (UIF) and the Compensation Fund (CF) had been excluded from the Human Resource Plan on page 61 of the Annual Report, as they would present separate reports to the Committee.
Mr Mkongi asked to know the effectiveness and impact of the decentralisation process as part of the Department’s Human Resources Plan.
Mr Mkongi stressed his concern over the redundancies in managerial positions.
Mr Mkongi asked to know the role the Department played in ensuring the competency and effectiveness of its staff complement.
The Chairperson commented that it might be necessary for the Committee to request the Minister of Labour to account for the competency of the staff in the Department. She added that the Committee would meet after the briefing and deliberations to determine the appropriate cause of action.
Mr Kettledas replied that the DoL would be happy to provide the Committee with the same quarterly updates, including progress made on the internal Human Resources Programme, requested by SCOPA. He added that the DoL had complied with the requirements of the nineteenth SCOPA report and had submitted responses on 11 January 2008. The hearing on 30 January indicated that progress was being made on the delivery of issues highlighted in the nineteenth SCOPA report. Progress had been made in addressing the qualifications received in the Auditor-General’s report. Specifically, the Department instituted an asset management team to undertake a stock take of all assets in December 2007, in response to the Incomplete Asset register qualification. The asset evaluation would be completed by April 2008, following which the Auditor General would determine the reconciliation of the assets.
The Chairperson asked whether the asset evaluation covered assets acquired through the Public Private Partnership (PPP) initiative.
Mr Kettledas confirmed that the asset evaluation process also covered assets acquired through the PPP initiative. He added that the SCOPA report also indicated administrative problems, in a particular poor administration of leave. It was found that leave forms were not properly signed and on occasion employees would exceed their allocated leave. This was addressed through meetings held by the Minister with managers of labour centres in the various provinces, and the Deputy Director-Generals. The central theme of the meetings was “Managers need to Manage”. The issue of debtors identified partly related to current and former DoL employees, since the Department’s finance division would in certain instances not know that the employee who owed the Department money had left. Nonetheless, the Department had a process to recover such debts and was guided by a debt management policy. Approximately R1 million would be recovered through this process. The Department was also found not to have a proper environmental management plan and subsequently drew up one, which was approved and was now in place. With regards to the Auditor General’s finding that the DoL internal audit system could not be relied on, the Department responded through several initiatives. These included the establishment of a Risk Management Unit whose progress was being monitored by a project team. In cognisance of the initiatives and corrective measures, the AG had expressed intentions to utilise the Internal Audit system more.
Mr Kettledas commented that the DoL would have to address the capacity constraints it was currently facing, which included the skills shortage, which was particularly acute in the inspectorate division. The 1 140 inspectors trained would be filling up vacancies and complement the division. He added that most of the capacity constraints directly or indirectly related to poor administration; for example the leave and vacancies, and thus the Minister had emphasised the need for managers to manage in the December meeting and at the beginning of the current year.
Ms B Matebesi, Acting Chief Financial Officer (CFO), commented that the Auditor General had also not been happy with the DoL’s internal controls and finance management, in terms of guidelines that were not stipulated. She added that guidelines for the internal control system and finance management system were subsequently drawn up and had been circulated to all provincial departments and labour centres.
The Chairperson indicated that the Committee would definitely follow up on the filling of vacancies.
Mr Kettledas noted that the Department had received a moratorium to fill in the vacancies last year. It was nonetheless impractical to do so whilst the verification process was underway. The process was finished and the filling in of the vacancies would commence.
Ms Dreyer aired her concern over the Annual Report as a public document, whilst the DoL delegation kept saying that the information was updated.
Mr Kettledas replied that the report provided information on the status of programmes as at 31 March 2007 and thus the information was outdated.
Mr Mzondeki (ANC) asked to know if the DoL conducted exit interviews and if it did, the reasons given for leaving.
Mr Kettledas replied that the most of the employees who had left the Department had either left for better positions in other government departments or had left for better remuneration packages offered in the private sector.
The Chairperson commented that there had been reports that some employees had left the Department due to mistreatment.
Mr S Siboza (ANC) commented that the DoL had previously indicated its employees were being poached by other government departments. He asked to know what measures had been put in place to address the situation since then.
Mr Kettledas replied that the Department had staff retention programmes in place, but these could only do so much and could not completely dissuade employees from leaving for better opportunities.
Mr Mkongi asked to know the progress the DoL had made since the SCOPA report hearing on 31 January.
Dr U Roopnarain (IFP) commented that the problems being experienced by the DoL were strongly related to management and skills shortage. She further commented that she had on several occasions made calls to the Department pertaining to various issues and requests, and the officials she had spoken to had promised to get back to her, yet they had not done so.
Ms Dreyer commented that she had also gone through similar experiences of not receiving any reports back from the Department.
Mr T Anthony (ANC) asked whether the Department had received an unqualified report since 2004.
Ms Moss (ANC) suggested that the Directors General from the different government departments cooperate on the skills shortages being experienced by all departments and agree to desist from poaching each others employees.
The Chairperson asked whether there were not already discussions or forums taking place between the Directors General regarding the skills shortages.
Mr Kettledas commented that thee DoL had received a directive from the Department of Public Administration and Service (DPSA) to fill in the vacancies within six months. He added that government departments appeared to be headhunting each other’s employees, and that the issue would be taken up with Government Administration.
Mr Siboza commented that the DoL needed to also consider raising the issue of employees staying in an Acting position for a long period. This had the possibility of creating job insecurity, leading to employees leaving. This could be used as part of the Department’s staff retention programme.
In response to the committees earlier request for accountability, Mr Kettledas indicated that all the occupants of the six posts outlined in the organogram on page 3 of the presentation were present to report on the various programmes they were leading. However, the CF and the UIF were required to provide separate annual reports and would thus provide separate presentations to the Committee on 25 and 26 March.
Mr Kettledas replied to Mr Mkongi’s question that the decentralisation process related to specific functions decentralised to different provinces. He added that the necessary authority had also been delegated to ensure the efficient functioning of the processes.
Mr Mkongi aired his concern over the efficiency of the decentralisation process, citing the managerial and administrative challenges currently being faced at the provinces as compounding factors.
Mr Kettledas indicated that the process was augmented by delegating necessary authority to ensure efficiency and effectiveness, as well as a strong emphasis on service delivery.
Ms Mzondeki commented that she had only been in her current acting position for only one month and was therefore only able to provide limited information on current initiatives. She added that the DoL had revamped its service delivery programme and currently had 1 082 inspectors and a 13% vacancy rate. The vacancy rate included leadership vacancy posts which were not directly inspector posts. Last year the DoL initiated an inspector enforcement strategy that addressed various issues, including salary structures. This was completed and in terms of systems capacity ensured that inspectors were Information Technology (IT) literate. The competency requirements of the inspectors were revisited, as part of a professionalisation process, with a particular focus on occupational health and safety requirements. She added that the high staff turnover in the inspectorate division was being addressed through a staff retention programme that would reassess the salary structures and provide career guidance and counselling. Good progress was being made in meeting the targets set for the inspectorate division. She added that the inspectorate division at the labour centres had vacancies for EP2s and EP3s. The Employment Services System established in 2007 was also assisting in addressing these and other challenges noted. There were also strategic projects running at provincial level that were part of the service delivery programme.
The Chairperson asked whether EP2s and EP3s were inspector categories and whether the initiatives mentioned by Ms Mzondeki had any focus on alleviating unemployment amongst the youth.
Mr Ketteldas replied that the ESP stood for employment service practitioner and ESP2 and ESP3 were occupational categories, with the latter being a occupational grade higher than the former in terms of qualifications, salary and so forth.
Mr E Mtshali (ANC) indicated that there were children in the Eastern Cape who were discovered last year to have been using a shack as a school. He commented that it was not only a Department of Education (DoE) problem but that of the DoL as well.
Mr Mkongi asked to know the key focus areas of the professionalisation process of the inspectorate division.
Mr Kettledas replied that the professionalisation process, with an emphasis on competencies and qualifications, sought to ensure that the inspectors were appropriately skilled.
Mr Mkongi asked to know more about the programmes that were being conducted to capacitate the inspectorate division, and more information on the levels of inspectors.
Mr Mkongi asked to know more about the inspectors’ salary structure that was being revised.
Mr Ketteldas replied that the revision of the inspectors’ salary structure sought to provide market related salaries as a means of retaining the inspectors and ensuring that they did not get lured away by the private sector.
Mr Mkongi commented that the health and safety had been an issue since 2005, yet it still had not been addressed.
The Chairperson asked for information on budget spending.
Mr Kettledas referred to page 288 of the budget vote document handed out. He indicated that budget expenditure in the Administration programme had been increasing at an annual rate of 5% from R316 million in 2004/05 to R366 million in 2007/08, and would be R387 million in 2008/09 according to the Medium Term Expenditure Framework (METF) indicated. Budget spending in the Service Delivery programme would be R225 million in 2009, with R155 million spending on Employment Services, as indicated on page on 290 and 291. He added that the funding allocated to all the programmes had increased, with the exception of the withdrawal of the R400 million that had been previously allocated to the Umsobomvu Youth Fund (UYF) which was now under the Employment and Skills Development Services and Human Resource Development programme. The Department of National Treasury indicated that it was not convinced of the need to provide more money to the Fund and the issue had to be resolved at a political level. The UYF only got an allocation of R5 million from the National Treasury. He added that it could be necessary to dissolve the Fund and place the commitments made under the fund to other DoL programmes.
Mr N Phasha, Acting DDG: Corporate Services (CS), DoL, continued with the summary of the budget expenditure. He indicated that he had only been in his current acting position for three months and that the Department had a policy that posts be filled as soon as a vacancy arose so as to provide exposure to incumbents. The CS directorate covered human resources development, debt collection/management system and the internal audit division. He added that the information provided by Mr Kettledas was accurate and essentially covered all relevant issues in the CS directorate.
Mr Mkongi asked Mr Phasha if he was happy with the skills and competencies of the incumbents in the financial department.
Mr Phasha replied that the CFO and the DDG:CS reported to the Director-General, who was thus the most appropriate person to provide an answer.
Mr Kettledas replied that the DoL had highly skilled people, although it was facing problems and needed to supplement the staff.
Ms Matebesi commented that the bulk of the budget spending was in Service delivery, Labour Policy and Labour Market Programme and transfers to the different programmes under the DoL directorates.
The Chairperson indicated that the Committee would meet the Commissioners of the UIF and CF on 25 March for a briefing on their directorates’ Annual Reports.
The Chairperson asked for information on the development and administration of the debt management policy.
Mr Phasha replied that a debt management policy was developed by the Department although it took a long time because of due processes. He added that debt collection was not merely governed by the debt management policy but by law as well. The Department partly assessed the debts owed in terms of time and amount. Some of the debt owed to the Department included study loans and debts owed by former employees going as far back as 1993 and were therefore difficult to recover. If a debt was small and insignificant, such as R200, the Department would write it off as a bad debt. The recovery process at times needed the involvement of the State Attorney, and in such instance could take as long as five years to recover the amount owed. Recent debts were more easily recoverable.
The Chairperson asked whether the DoL had followed the Department of National Treasury and the Department of Public Service and Administration requirements.
Mr Phasha replied that the DoL complied with the regulations of the Public Service Act 1994 and the Public Service Amendment Act, which were both administered by the Department of Public Service and Administration. He added that the decentralisation of functions process and the Human Resources Development were some of the programmes that particularly took cognisance of these regulations and requirements.
The Chairperson indicated that the Committee needed to meet to discuss how the DoL spending was addressing the State of Nation Address imperatives. She added that there had been comments that the Committee had not been doing enough to monitor the Department and ensure that they were performing. The delegations needed to take cognisance of this.
Mr Mzondeki asked to know whether the I.T. PPP programme was delivering.
Mr Kettledas replied that there had been challenges experienced with the PPP programme due to the upgrading of the Information Technology (IT) Service that aimed to enhance the UIF and CF. The upgrading was being done through a Business Process Reengineering programme and would result in an IT system with a database for the Employment Services System (ESS) that would capacitate the labour centres.
The Chairperson asked for more information on the issue of subsidised vehicles that had been reported.
Mr Kettledas replied that thirteen vehicles had been sequestrated from employees who were not complying with the Department’s policy
The meeting was adjourned.
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