Heads of Department Evaluations; Financial Disclosure Compliance: briefing by Public Service Commission

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Meeting Summary

The Public Service Commission presented two reports to the Committee. The Commission first reflected on its management of the Financial Disclosure Framework and how this could be improved. The report also discussed various challenges, recommendations and the extent to which conflicts of interest impacted on the Commission. The second presentation provided an analysis of the progress and challenges observed by the PSC in the performance evaluation of Heads of Departments and provided recommendations to address these challenges.

Members posed questions about the cooling-off period, vetting and vacancy rates in the public service. The Committee also scrutinised the Executive Authority’s role and the decline in the evaluation of Heads of Departments.

Meeting report

Opening Remarks by Chairperson
The Chairperson noted that the public service occupied a strategic role in building a developmental state because they were at the forefront of government’s service delivery programmes, and its attempt to build a caring society. All political parties were unanimous that corruption in the public service should be vigorously combated. In that context, the Committee had invited the
Public Service Commission (PSC) to discuss its two reports on the evaluation on heads of departments and compliance by departments and provinces regarding financial disclosure. In concluding, the Chairperson emphasised that that both oversight bodies needed to establish closer relations.

Compliance with the Financial Disclosure Framework for Senior Managers: Briefing by PSC
Dr Norman Maharaj, PSC Commissioner, welcomed the opportunity to interact with the Committee on these two fundamental issues, which had been elevated within the Commission.

Ms Odette Ramsingh, PSC Director-General, explained that senior managers in the public service were entrusted with public funds, and by implication, public trust. As such, it was expected that senior managers and their departments maintain a high standard of professional ethics and integrity. Likewise, senior managers had a responsibility to ensure that their private interests were not in conflict with their official decision making function. It was with this in mind that the FDF for senior managers was introduced and regulated into the South African public service. It was primarily aimed at identifying, managing and preventing real conflicts of interest from occurring.

In addition, Ms Ramsingh mentioned that the PSC conducted an investigation into the management of conflicts of interests through the FDF covering the period 1999/2000 to 2006/2007. The findings of this study illustrated that since the inception of the FDF, the rate of compliance, by national and provincial departments through the submission of financial disclosure forms, had not been satisfactory. Given that the submission of financial disclosure forms were a regulatory requirement, any non-compliance was unacceptable and impacted negatively on the PSC’s ability to do its work. It was disconcerting that certain departments and provinces, namely the Eastern Cape, Northern Cape, Free Sate and the National Health Department, consistently failed to submit their financial disclosure forms. As a result of this dereliction of duty and general delays in the system, the Commission was often not in a position to advise the executing authorities timeously of potential or actual conflicts of interests.

Moreover, a number of cases were found where the PSC could not come to a conclusion on whether a potential conflict of interest existed. This was due to the fact that not enough information was available on the financial disclosure forms of certain managers as well as the fact that not enough information concerning the company was available from the CIPR database. Statistics South Africa, with 92%, the Department of Communication with 90% and the Department of Minerals and Energy with 71%, were identified as the departments whose designated officials had the highest percentage potential conflicts of interest.

Lastly, Ms Ramsingh outlined the challenges faced by the entity, and also listed various recommendations to respond to these challenges. 

Discussion
The Chairperson remarked that the Committee should be preoccupied with this issue and behave like SCOPA. Consequently, he simultaneously proposed that all national and provincial departments be summoned to appear before the Committee, and requested that the Commission be part of that process. Lastly, he voiced astonishment at the levels of non-disclosure, particularly in the Departments of Communication and Minerals and Energy.

Dr Maharaj noted the Chairperson’s impatience concerning the prevalence of corruption in the public service. He gave an undertaking that the Commission would continue to support the Committee in its oversight role.

Ms Ramsingh explained that the Committee carried out technical oversight, while the Committee exercised political oversight. The Commission generated evidence for the Committee to take steps against any department or individual. She maintained that the she was looking forward for the day when the Committee acted like SCOPA and the Commission like the Auditor-General (AG).

Mr Z Ntuli (ANC, KwaZulu-Natal) speculated whether certain individuals did not complete the disclosure forms because they had no conflict of interest. Furthermore, he perceived that there was a general tendency amongst public servants to disregard instructions and not implement policies. Lastly, he criticised the KZN Education Department for not even knowing how many teachers it employed.
The Chairperson commented that the Eastern Cape Education Department was equally ignorant about the number of teachers under its employ.

Ms F Mnyandu (ANC, Mpumalanga) commented that the Mpumalanga Education Department faced similar problems because it was confronted with the issue of ghost schools.

Mr Le Roux (DA, Eastern Cape) stated that the Committee would be forsaking its duty if it did not act on the information provided by the PSC. Also, he voiced concern that there were no penalties imposed on individuals that did not comply.

Kgoshi L Mokoena (ANC, Limpopo) commented that the Committee’s engagement with the entity was long overdue. Thereafter, he declared that it was unfair that senior managers were not punished, while parliamentarians were, for not disclosing their interests.

Ms Ramsingh confirmed that the Commission planned to impose fines and or penalties for non-compliance with the Framework.

Mr A Moseki (ANC, North West) wondered whether there was any example, where an Executive Authority (EA) had taken any action against a senior manager, who did not complete a financial disclosure form.

Ms Ramsingh indicated that disclosure was a regulatory requirement. This implied that an EA could charge an official with misconduct for failing to complete a disclosure form. The necessary legal framework existed, however there was a lack of will by Ministers and senior management to utilise the law in the way it was intended. The Commission had submitted numerous letters to Minister stating that officials did not comply and that the Minister could act. Unfortunately, the response was usually silence. Accordingly, Ms Ramsingh said that she could not give a single example of anybody being charged for misconduct, even though many letters had been sent to Ministers, informing them of their duty.

Members were generally upset by this confession, and maintained that Parliament would intervene to give the Commission more “bite”.

The Chairperson proposed two issues. Firstly, he believed that the FDF should be part of the performance agreements of HoDs and senior managers. Secondly, he suggested that the Commission consider assessing the lifestyle of public servants, to determine their wealth.

Ms Ramsingh supported the idea of conducting lifestyle audits on public servants. She mentioned that this was done in Finland.

Dr Maharaj commented that it would be pointless to include this as part of their performance agreement if those were not even evaluated.

The Chairperson claimed that government departments, at all levels, blocked tender processes and usually gave contracts to family and friends.

Ms Mnyandu added that most government departments had a database of service providers and therefore ignored proper tendering processes.

Mr Mokoena alleged that when a department advertised a tender or a post, this process was artificial and just a formality because the outcome was already known beforehand.

Mr Moseki questioned the accuracy of the disclosure forms.

Dr Maharaj acknowledged that the entire Framework needed to be reviewed to guarantee the reliability of the information in the disclosure forms.

Ms Ramsingh recognised the inadequacy of the forms. As a result, the Commission had sent a memo to Cabinet concerning the loopholes that needed to be tightened, and was still waiting for a response.

Mr Ntuli sought to determine the vacancy rate in government departments.

Ms Ramsingh stated that SCOPA had posed a similar question to the Commission. Unfortunately, the Commission could not give a definitive answer because there was a 74% discrepancy rate between the payroll and what the Department’s said.

The Chairperson asked whether the Commission had sufficient forensic capacity, when compared to the AG.

Ms Ramsingh clarified that the AG had substantially more resources and capacity than the Commission. 

Mr Mokoena suggested that the Commission develops a mechanism to vet everybody that entered the system.

Ms Ramsingh confirmed that some kind of vetting took place. However, she expressed doubts on whether it was done adequately.

Mr Mokoena posed several questions. Firstly, he sought the Commission’s position regarding the proposed “cooling-off period” for senior government officials.

Ms Ramsingh stated that the Commission had been particularly vocal on the issue. While the Commission was in favour of such a restriction, it nevertheless remained mindful of the complexities involved and of the restraint of trade principle.

The Chairperson asked whether the Commission considered any other measures to ensure disclosure.

Ms Ramsingh stated that Commission had names of many high-ranking officials who deliberately flouted the law. As a result, she advanced that the Commission ought to consider the naming and shaming route as an extra deterrent.

The Chairperson thanked the Commission for their honest answers. He asserted that Parliament was ready to take on the executive when the Commission could not succeed. He insisted that the PSC should be strengthened to ensure that “we have a clean public service”. Finally, he advised that in executing its function, the Commission should work with SARS, the Intelligence Agency and all other relevant agencies.

Update on the Evaluation of the Performance of Heads of Departments in the Public Service
Ms Balungile Mbanda, Chief Director: PSC, explained that HoDs were the administrative drivers of government’s programmes, and therefore needed to be held to account. Cabinet adopted the Framework for the evaluation of HoDs in 2000. In terms of the Framework, the authority to evaluate resided in the EA. The EA was tasked with appointing an Evaluation Panel (EP) to help with the assessment and generate advice. The PSC chaired all the EPs and managed the process.

She highlighted that god progress was made in the first evaluation cycle of 2000/2001 where 80% of HoDs qualifying to be evaluated, were evaluated. However, the PSC noted with concern the steady decline in the number of HoDs evaluated in subsequent years.

The Commission identified that some HoDs submitted their Performance Agreements (PAs) long after the due date or in some instances, did not submit at all. This was problematic because PAs formed the basis for accountability and also served as a point of reference for the HoD and EA in the performance management cycle. Furthermore, Ms Mbandla summarised the other challenges encountered by the entity, which entailed the role of the EA, the quality of documents and the role of EPs.

Lastly, she specified various recommendations and asserted that the entity would continue to monitor the process of evaluating HoDs and report on the progress.

Discussion
The Chairperson argued that this was a fundamental inquiry because it “goes to the core of service delivery”. He reasoned that if HoDs were not evaluated, it would not be possible to know where a department was heading.

Mr Ntuli commented that the presentation revealed some disturbing facts and statistics.

The Chairperson believed that the filling of vacancies should be included in the evaluation assessment of HoDs. He could not understand the high vacancy rates in a country that had so much unemployment.

Mr Le Roux agreed that the presentation provided a gloomy picture of the situation. He appealed to the Committee to act on the information shared today otherwise it would be equally guilty.

Ms Ramsingh said that the symptoms in relation to financial disclosure were prevalent in the current discussion. Basically, there was a lack of political will by the Executive authority to act against senior management. She added that the Commission had undertook a study, which showed that bonuses were paid out to officials, even though they did not sign a performance agreement

Mr Moseki commended the Commission for doing a good job and assisting the Committee to understand the problems the country was confronted with. The worrying issue was the failure of the EAs to play their role. Additionally, he sought an explanation for the decline in the evaluation of HoDs.

Ms Ramsingh commented that poor administrative support in the offices of the HoDs and the EAs contributed to this decline.

Mr Mokoena said that the Committee was fortunate to have an entity that would assist it in its oversight role. He proposed that on the days of the discussion with the departments, the Committee invite the AG to be part of that process.

The Chairperson mentioned that the AG had reached out to the NCOP recently, and was certain that they would adhere to such a request.

The Chairperson noted that there were discussions that the PSC should be funded by Parliament and thereby become an instrument of Parliament and not fall under the Department of Public Service and Administration. This step would strengthen the Commission and not diminish it. Also, he applauded the Commission for doing a good job, and reiterated that the two oversight bodies should strengthen their partnership.

Dr Maharaj sensed that Members were serious, and was pleased that there would be decisive follow up.

Mr Moseki thanked the Commission on behalf of the Committee.

The meeting was adjourned.

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