State Information Technology Agency; Public Administration Leadership & Management Academy: Annual Reports 2007/08 & Strategic Plans 2009-11

Public Service and Administration, Performance Monitoring and Evaluation

27 January 2009
Chairperson: Ms M Matsomela (ANC)
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Meeting Summary

The Public Administration Leadership and Management Academy's (PALAMA) training drive was linked to accelerated development strategies. The broadly based strategy for PALAMA had changed from provider (when it was known as SAMDI) to facilitator of training. Management training was conducted in collaboration with universities. Partnerships and leadership forums had been established, and collaborations with India, France, Brazil and Harvard. Programmes were aligned to SA foreign policy priorities, with international knowledge exchange occurring. There was participation in capacity building on the African continent.

PALAMA had received an unqualified audit for the fifth year running.

Discussion centered on PALAMA’s ability to be effective at the level of local government; to deal with geographical uniqueness and to maintain sensitivity to rural and environmental issues. Interest was also expressed in Information and Communication Technology strategies and distance learning.

State Information Technology Agency (SITA) stated a commitment to service delivery, with the government as customer. They maintained a Black Economic Empowerment focus, and attempted to align government Information and Communication Technology with world trends. SITA aimed at a better understanding of government departments, in order to be a partner.

The Committee interrogated the referee/player role of SITA, which coincided with being both an agent of, and a supplier to government. This had led to perceptions of SITA having a monopoly, with overcharging on the mandatory components of its services. SITA came out with a very clear response that it “did not want to play in that space”. There were in fact still a number of government departments that could not be persuaded to join the SITA network. Furthermore, not all procurements were through SITA referral. The Department of Public Service and Administration intended a review of the SITA mandate, to facilitate compliance with the SITA Act.

Concerning financial results, it was stressed that SITA did not pursue profit, but had to be self-sustaining. Profitability and running costs had to balanced, as it did not receive money from government. These challenges had been well met.

Meeting report

Public Administration Leadership and Management Academy (PALAMA) presentation
Dr Mark Orkin, PALAMA Director General, commenced with a breakdown of officials who were eligible for PALAMA training, and identified the training drive as part of an accelerated development strategy.

The public service profile amounted to 75% African, 9% Coloured, 4% Asian and 12% White. 54% were Female. Dr Orkin pointed out that the training landscape was complicated

With the context established by Dr Orkin, Mr Rufus Mmutlana, PALAMA Deputy Director General: Organisational and Training Development, launched into the Annual Report with a year-on-year comparison of PALAMA performance. 80% of participants expressed satisfaction with training.

Regarding posts and vacancies through the transition from SAMDI, the percentage of females employed dropped during 2008, but a recruitment drive had been set up.

Growth in racial representivity had occurred during the previous 3 years, and disability employments exceeded the required minimum of 1.6%

Mr Oliver Seale, PALAMA DDG: Business Development, noted that the broadly based strategy for PALAMA had changed from provider to facilitator of training. Management training was conducted in collaboration with universities. Training was aligned to state development objectives. The change from old South African Management Development Institute (SAMDI) to new PALAMA objectives saw a trend towards service delivery and stakeholder relations.

Professor Ann McLennan, PALAMA DDG: Executive Development, noted that management development provided for 10 000 Senior Management Service (SMS) members, in partnership with Higher Education. Partnerships and leadership forums had been established, and there were collaborations with India, France, Brazil and Harvard. An induction programme was launched for new Ministers and Members of Parliament (MPs). Leadership development’s goal was to train individuals to lead at any level.

Regarding curriculum and materials, there had been a quality audit of 50 PALAMA courses. Ten had been eliminated, and of the remaining 40, 50% were to be revised. There was curriculum sharing with provincial academies.

With respect to provider mobilisation, the challenge was to get good providers with staff to roll out programmes. Professional development of trainers proceeded unevenly across provinces. Areas like Northern Cape and Mpumalanga had been obliged to import people.

Dr S Muthayan, PALAMA Head of International Projects, stated that programmes were aligned to SA foreign policy priorities. There was engagement with international knowledge exchange. Capacity building initiatives on the African continent had been launched. There was co-operation with India and Brazil to challenge Western models. Experience gained in India of rural access, had been incorporated. Joint ventures were engaged in with Burundi, Rwanda and South Sudan to build Management Development Institute (MDI) capability.

Training co-ordination involved electronic linkup with users, and post-training support.

Concerning corporate services, she noted that 23000 applications for posts in the new Academy had been received. These were for SMS and Middle Management Service (MMS) positions.

Mr Carlo Venter, PALAMA Corporate Finance Officer, referred to an unqualified audit being received for the fifth year running. There had been a natural progression in money generated by PALAMA through training. A surplus had been generated, which would be retained for future organisational development.

Dr Orkin concluded the presentation by noting that the Minister had enquired about orientation for MPs. After the election, ministers would be approached. He expressed a commitment by PALAMA to tackling “barriers to access” for unemployed graduates.

Ms Matsomela remarked that the transition from SAMDI to PALAMA was proceeding well. She invited questions from Members.

Ms P Tshwete (ANC) enquired about recruitment strategies employed to fill posts and vacancies.

Dr Orkin responded that a fair, compliant and manageable strategy was needed. There had been 23000 applicants for 43 SMS positions. PALAMA acknowledged and ‘databased’ every application. DPSA notification of vacancies were used. There were a broad range of advertising agencies that could put candidates forward. Temporary PALAMA staff could also apply, to consolidate their positions. Concerning employment, PALAMA was ahead of the female target.

Mr N Gcwabaza (ANC) enquired about fluctuations in the race profile of SMSs, reflected in the presentation.

Dr Orkin replied that if the SMS consisted of only 30 people, one person joining could make a huge difference, percentage wise. This also applied if, for example, a female was appointed in place of a male.

Mr C Morkel (ANC) asked about inter-governmental relations, and interactions with local government. Was resistance to training from municipalities experienced? What about geographical uniqueness? Distinctions did not only exist between urban/rural communities. There were seasonal service delivery priorities based on agricultural production, for instance.

Mr Mmutlana answered that interaction with local government was new to PALAMA. But no deliberate resistance to training had been found. The National Treasury subsidised training, and institutions had responded well. That included municipalities.

Geographical uniqueness was accommodated through customisation of training content. Policies existed with regard to that. Concerning partnership with institutions, the approach was that the training cake was big enough for everyone. The question was what value every partner could add. In the past, there had been a winner-takes-all situation with regard to universities offering certain programmes, now there were training consortiums. There were roadshows conducted to try and get everyone on board.

Adv M Nonkonyana remarked that he served a rural constituency, and that quality service delivery was a problem. Quality people, who proved themselves in the rural areas, were inevitably transferred to the cities. Was there sensitivity in PALAMA to these issues? Concerning intergovernmental relations questions, he noted that an Act had been passed to promote an integrated approach. Were Intergovernmental Relations (IGR) forums assisting PALAMA in working towards a Single Public Service?

Dr Muthayan replied that partnerships had been set up since 2006 for the purpose of intervention at the local government level. This applied especially to the Eastern Cape, KZN and Northwest Province. There had been training of municipal managers. What did finance management mean for municipal managers? Such questions were considered. Rural and local challenges were taken into account. Work was undertaken with India, to learn from their experience with rural access programmes. It was easy to forget about and neglect rural areas. There was a commitment to learning to work with local government.

Dr Orkin added that a project had been engaged in with the Netherlands to sensitise trainers to rural needs.

Mr Gcwabaza referred to recent violent changes in climate, with disasters occurring in KZN, the Western Cape and the Eastern Cape. Had a programme for training rural officials in disaster management, been considered? Was there a capacity to rescue affected people?

Dr Muthayan answered that managers were trained to be sensitive to the environment, as they were trained to be sensitive to the budget needs of women, for instance.

Mr Morkel enquired about Information and Communication Technology (ICT) services. Who were the providers referred to in the presentation?

Dr Orkin replied that training had grown up in one area. Supply chain management had been established with SITA assistance. PALAMA was assisted by a range of outsource providers. SITA would see to it that there was no profiteering. The outsource provider has more resources. The PALAMA experience had been that outsource providers were as good as they were managed. When quality standards were enforced, such providers became better.

Mr V Gore (ANC) also enquired about ICT strategies and distance learning. He noted that the transition from SAMDI to PALAMA had led to more outsourcing. Yet it had to be acknowledged that SAMDI had had success. Was accumulated knowledge being carried over?

Prof Mclellan responded that an E-learning platform would be established. The question was whether all government departments had the broadband required. SAMDI courses were still used. The approach was to take the best from them and to take that to scale.

Dr Orkin added that reconstitution implied that what had been workable, would be brought forward. SAMDI had initiated E-learning, and Information Technology (IT) systems. These initiatives were being expanded. There were no big bang approaches.

Nkosi Nonkonyana congratulated PALAMA on the good audit received, but wondered where a detailed auditors report could be found.

Dr Orkin replied that there had been no disclaimer or qualification. Audit Committee findings had to be approved by the Auditor General. But PALAMA had been congratulated.

Ms Matsomela remarked that it was up to the DPSA to ensure that training was implemented. This was an oversight responsibility.

SITA presentation: Corporate Strategy 2009/10
Ms Z Manase, SITA Chairperson, remarked that government departments no longer had IT silos. A merger of the South African Police Service Act (SAPS) and SITA Acts provided for Information Technology and services. SITA was an agent of government.

Ms F Pienaar, SITA Acting CFO, noted a SITA commitment to service delivery. The customer was government. ICT costs were high, and had to be reduced.

SITA maintained a BEE focus, and strove to align government ICT with world trends. SITA provided a broad spectrum of IT services, which included client services, professional and procurement services, and research and development.

Challenges, based on client feedback, included the perceived lack of a fully executed IT Service Management Framework (ITSM); overcharging on the mandatory components of its service
(“monopoly”) and the lengthy procurement lifecycle.

Strategic imperatives maintained a focus on client relationship building. SITA had to improve its understanding of government departments, in order to become a partner. The aim was to optimize ICT infrastructure and to extend a footprint to local government. Tenders and new technologies had been developed.

SITA was a Section 21 company and had to be sustainable. Key initiatives were geared towards taking ICT worries away from government. A strategic imperative was to modernize the public service. E-government was envisaged, through enabling electronic transactional capability for citizens.

Transparency, service delivery and prudence were adhered to as organisational values. There was a commitment to develop own leadership consistency. An IT Service Management Framework would be implemented. The International IT library (ITAL) could provide tools to monitor progress.

There was a commitment to a shared services model, an IT asset management strategy would be developed and implemented with the DPSA. Cost reduction had to be achieved through implementation of procurement specific interventions. Long term funding strategies had to be developed. Client relationships would be forged through development of a service portfolio database, and the implementation of Customer Relationship Management (CRM).

Ms Matsomela referred to the SITA commitment to set the hands of government free, by taking ICT responsibilities on board. A distinction had been drawn between “may” and “must” services. Were all departments adhering to “must” services?

Mr Morkel added questions of his own to the above. Regarding the services provided to PALAMA, as reported, what constituted “must” and “may”? Section 7 of the Act supporting SITA, defined “must” functions, especially regarding wide area networks. Where SITA could not provide a “must” service, it had to outsource. Hence SITA was perceived as a referee (“must”), or a player (“may”).

“Must” provided SITA with a monopoly. Procurement had to be via SITA. There was the perception that the monopoly was used to inflate pricing. The Act gave SITA teeth, but what administrative teeth were there to ensure compliance? Were there errant departments? If so, how could it be dealt with administratively, and not politically? What was the first instance forum for SITA?

Ms Pienaar responded that the SITA “must” services were not used by all. There were 14 government networks. It was hard to get everyone on the SITA network. Justice opted for Telkom, for instance, and could not be accommodated. Land Affairs had a Telkom network. SITA needed someone to take on Land Affairs. Negotiations were underway to get government departments into the core.

Regarding service delivery, there was the perception that the SITA infrastructure was expensive. 30% of SITA costs were for Telkom telephone connections, and Telkom refused to grant SITA government discount. Hence Telkom was in fact competing with SITA. SITA was investing in infrastructure to get all on board.
To have both referee and player roles, amounted to being an agent versus a supplier of government. But SITA did not want to play in that space. The Act stipulated that SITA would provide referrals for procurement. But transversal tenders had been established. A government department could ask SITA for a proposal, or approach a transversal tender. SITA would facilitate the tender for them. There was an ICT or industry option. Procurement went through SITA, who would wait for client payment, in order to pay industry.

Network costs were going up. Agency transactions had been categorised. The question was how to cover administrative costs. And SITA had to carry government departments’ debts. Upon implementation of the envisaged portal, SITA could get rid of the costing model. Teeth to enforce standards could be developed together with
Government’s Information Technology Officers Council (GITOC).

Concerning reported deviations, she noted that SITA reported to the Government Chief Information Officer (GCIO) to assist enforcement of the SITA Act, and to seek solutions to compliance with it.

Ms Manase pointed out that the DPSA wanted a review of the SITA mandate. This would include another look at the referee/player role.

SITA presentation: Financial Results for the year ending March 2008
Mr A Pretorius, SITA Acting CFO, noted that cash was always a focal point, SITA being self-funded. Although SITA was not committed to profit, it had to be self-sustainable. A distinction was drawn between cash on hand and ring-fenced cash.

Capital expenditure was increasing. The 2006 figure had been R81m, which had grown to R262m in 2008. With respect to current liabilities, he noted that complaints had been received from creditors regarding timeous payment. SITA was working on that.

Financial performance in terms of revenue over a five-year period, saw an increase from R2304 million in 2004, to R3608 million in 2008. Net surplus had increased dramatically over the 5 year period, from R35 million in 2004, to R299 million in 2008. This was due to income from services.

Ms Manase added that challenges had been experienced, but improvements had also been made. Profitability and running costs had to be balanced. No money was received from government.


Ms Matsomela expressed appreciation for improvements made. She was concerned, however, about the 65 day debt collection period. This could be too long. It was the trend in industry that government departments were usually very slow in paying.

Mr Pretorius replied that government debtors tended to be very slow during the year, with an improvement during the last 2 months. Cash flow dropped in midyear. He agreed that 65 days was rather much. There was no easy answer. A new, more aggressive policy for debt collection was being developed. This policy involved people at ministerial levels.

Ms Manase added that SITA had talked to the Auditor General. Government departments did not pay. SITA was owed R1,1 billion, and 50% for longer than 90 days. If SITA had to pay at less than what it received, there would be a situation where salaries could not be paid.

Ms Matsomela thanked all and adjourned the meeting.



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