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31 March 2021 - NW1000

Profile picture: George, Dr DT

George, Dr DT to ask the Minister of Finance

In light of the scourge of violent crime in the Republic, how does the National Treasury justify the 5,27% nominal cut to Vote 28: Police for the 2021-22 financial year relative to the 2020-21 financial year?

Reply:

Parliament approved a fiscal framework that proposes significant adjustments to spending over the medium term in order to stabilize government debt and reduce the pace of growth in debt servicing costs in October 2020. This approval by Parliament meant all spheres of government and all department’s budgets would be reduced to achieve debt stabilization. Furthermore, Parliament passed the 2021 fiscal framework tabled by the Minister of Finance in February 2021 proposing the same fiscal consolidation through lowering the levels of expenditure. The decision to reduce departmental budgets was not a National Treasury decision but a Cabinet decision.

Table 1 provides a summary of expenditure trends and estimates for Vote 28: Police. Between 2020/21 and 2021/22, the department’s budget for compensation of employees is expected to decrease from R76.1 billion to R75.3 billion, while its budget for goods and services is expected to decrease from R19.2 billion to R16.3 billion. The main items influenced under goods and services are non-essential in nature, e.g. advertising, consultants, catering, and travel and subsistence, and will be managed through cost-containment. Reductions on compensation of employees will be managed through salary freezes and non-filling of less critical post vacancies.

                                   

Table 1. Expenditure trends and estimates: Vote 28 (Police)

Economic classification

 Audited outcome

 Adjusted

appropriation

Average

growth

rate

(%)

Average:

Expen-

diture/

Total

(%)

 Medium-term expenditure

estimate

Average

growth

rate

(%)

Average:

Expen-

diture/

Total

(%)

R million

 2017/18

 2018/19

 2019/20

 2020/21

 2017/18 - 2020/21

 2021/22

 2022/23

 2023/24

 2020/21 - 2023/24

Economic classification

 

 

 

 

 

 

 

 

 

 

 

Current payments

82 469.3

86 118.7

92 232.1

95 366.4

5.0%

95.7%

91 570.7

92 036.9

92 097.1

-1.2%

95.2%

Compensation of employees

67 124.5

71 282.4

76 357.7

76 147.0

4.3%

78.1%

75 300.5

75 299.7

75 297.1

-0.4%

77.5%

Goods and services

15 344.8

14 836.3

15 874.5

19 219.4

7.8%

17.5%

16 270.2

16 737.2

16 800.1

-4.4%

17.7%

Transfers and subsidies

1 049.3

1 268.5

1 225.1

1 613.7

15.4%

1.4%

1 333.5

1 258.4

1 267.2

-7.7%

1.4%

Provinces and municipalities

44.5

49.5

52.8

53.2

6.1%

0.1%

55.6

57.6

61.4

4.9%

0.1%

Departmental agencies and accounts

39.7

45.6

52.9

51.0

8.7%

0.1%

49.9

51.4

53.5

1.6%

0.1%

Non-profit institutions

  –

1.0

  –

1.0

0.0%

0.0%

  –

  –

  –

-100.0%

0.0%

Households

965.1

1 172.5

1 119.5

1 508.5

16.1%

1.3%

1 228.0

1 149.4

1 152.2

-8.6%

1.3%

Payments for capital assets

2 947.9

2 894.7

2 440.6

2 580.8

-4.3%

2.9%

3 451.3

3 562.3

3 719.3

13.0%

3.4%

Buildings and other fixed structures

575.4

686.3

513.3

497.7

-4.7%

0.6%

946.7

960.9

1 003.2

26.3%

0.9%

Machinery and equipment

2 340.4

2 201.4

1 927.3

2 078.7

-3.9%

2.3%

2 497.3

2 593.8

2 708.2

9.2%

2.5%

Biological assets

5.9

7.0

  –

4.4

-9.2%

0.0%

7.3

7.6

7.9

21.4%

0.0%

Software and other intangible assets

26.2

  –

  –

  –

-100.0%

0.0%

  –

  –

  –

0.0%

0.0%

Payments for financial assets

13.9

15.6

32.3

  –

-100.0%

0.0%

  –

  –

  –

0.0%

0.0%

Total

86 480.4

90 297.5

95 930.2

99 560.9

4.8%

100.0%

96 355.5

96 857.6

97 083.6

-0.8%

100.0%

 

 

Over the medium term, compared to other departments in the Peace and Security function group, Table 2 confirms that the Police services baseline decreases least, i.e. a marginal rate of only 0.2 per cent. Government’s support to the attainment of the objectives and outcomes set out under priority 6 (social cohesion and safer communities) of the 2019-2024 medium term strategic framework is therefore corroborated.

Table 2. Peace and security function expenditure

 

2020/21

Medium term expenditure estimate

Percentage of total MTEF allocation

Average annual MTEF change

R million

Revised estimate

2021/22

2022/23

2023/24

   

Defence and state security

53 968

46 656

47 811

48 132

22.5%

-3.7%

Police services

106 603

104 570

105 946

105 994

49.9%

-0.2%

Law courts and prisons

48 263

48 482

49 632

49 919

23.3%

1.1%

Home affairs

9 780

8 862

9 463

9 372

13.4%

-1.4%

Total

218 615

208 570

212 853

213 417

100.0%

-0.8%

31 March 2021 - NW896

Profile picture: Powell, Ms EL

Powell, Ms EL to ask the Minister of Finance

Whether the National Treasury intends to take any action against government departments that fail to publish the details of personal protective equipment procurement on the website of the National Treasury in accordance with the instruction to all government departments by the President, Mr M C Ramaphosa; if not, why not; if so, what are the relevant details?

Reply:

In terms of Instruction No.11 of 2020/21 (PFMA institutions) and Circular 105 (MFMA institutions), all institutions are required to report procurement transactions on a monthly basis. All procurement transactions related to the emergency procurement for COVID-19 PPE items, fabric masks as well as other goods, works or services that were procured to prevent an escalation of the national state of disaster, declared on 15 March 2020 (the Disaster) or to alleviate, contain or minimise the effects of the Disaster, must be reported. This includes, inter alia, expenditure for quarantine and isolation services, humanitarian relief, etc.

The reports are published monthly in the public domain and serves as a transparency mechanism to lay bare non-compliant government institutions. It is therefore the responsibility of the accounting officers and accounting authorities to ensure that the information provided to the National Treasury is credible, accurate and auditable.

National Treasury has thus far followed up with National Departments, in writing, to make the accounting officers aware of the non-compliance to Instruction no. 11 of 2020/21. It must, however, be noted that not all non-reporting is necessarily regarded as non-compliance as some departments do not procure on a monthly basis. There are instances where departments have not reported in a certain month because no procurement was done in that month.

National Treasury has also engaged the Auditor-General to request that AGSA follow up with selected government institutions whether any expenditure was actually incurred and whether the institutions reported the expenditure in accordance with Instruction no. 11 of 2020/2021 or Circular 105. This will be included in the next annual audit cycle.

31 March 2021 - NW130

Profile picture: Schreiber, Dr LA

Schreiber, Dr LA to ask the Minister of Finance

(1)With reference to his reply to question 2000 on 14 October 2020 wherein he required the identification numbers, will he now advise whether any public funding of any nature whatsoever has been paid to (a) a certain person (name and details furnished) and (b) a certain person (name and details furnished) since 27 April 1994; if not, what is the position in this regard; if so, what are the relevant details; (2) whether there was an application of any nature to obtain state funding and/or tenders by the specified persons; if not, what is the position in this regard; if so, what are the relevant details

Reply:

1(a) National Treasury only has access to payments information from national and provincial departments using the BAS payment system. In order to search for information against individuals, the National Treasury would need the identification numbers as a search by names may result in inaccurate results.

1(b) A search was done on the BAS payment system for the period 1 April 2017 to date and no payments were found that were made to the entities or initiatives mentioned. (name and details furnished)

2 The National Treasury is not aware of any application of any nature to obtain state funding and/or tenders by the specified persons, entities and/or initiatives.

26 March 2021 - NW601

Profile picture: Hendricks, Mr MGE

Hendricks, Mr MGE to ask the Minister of Finance

In view of the Government’s plans to launch a state-owned bank and whilst interest-free banking services may be the first step to reduce the draconian interest choking every South African, (a) what total amount was budgeted to fund interest on debt in the (i) 1995 budget and (ii) latest budget and (b) has he found this to be in line with inflation and/or poor fiscal frameworks year after year?

Reply:

It is generally not possible in South Africa for the state, or any bank or company, to secure loan funding without paying interest except, possibly, for small amounts of concessional funding. No bank in South Africa is likely to lend to customers without covering the full cost of capital, including interest. Some institutions may be able to structure a small part of their loan market for non-interest or sharia-related lending but such lending is very limited, and uses other mechanisms to recover their costs.

The question of whether any state bank can lend at lower interest rates than commencial banks, and whether such a business model will be sustainable, and bring no additional risk to the fiscus, is a separate question that the management of each state bank has to consider, including the extent of non-performing loans and affordability of its customers. It is imperative that no state bank must be a burden on the fiscus and that all state banks must be able to generate sufficient own-revenue to fund their operations. State banks which engage in lending activities need to develop robust lending and risk management models, so that they do not depend on fiscal transfers, or impose losses on depositors. As such, no funds have been budgeted to fund any interest-free lending, by any bank.

a) The amount of funds budgeted to fund interest on the national debt is available in the annual Budget documentation, including the Budget Review.

(i) The total amount of funds that was budgeted to fund interest on the national debt in the 1995 Budget for 1995/96 was R39,5 billion.

(ii) The total amount of funds budgeted to fund interest on the national debt in the latest, 2021 Budget is R232,9 billion for 2020/21.

b) As announced in the 2021 National Budget, the cost of servicing government’s debt, at R232,9 billion or 11,3% of consolidated expenditure in 2020/21, and rising in the next few years, is not sustainable. Hence, in the 2021 Budget, government has undertaken several measures which are expected to stabilise government debt at 88,9% of GDP in the 2025/26 financial year, and for the ratio to decline thereafter.

26 March 2021 - NW846

Profile picture: Steyn, Ms A

Steyn, Ms A to ask the Minister of Finance

(1)(a) What reasons did the Department of Agriculture, Land Reform and Rural Development (DALRRD) give to the National Treasury for spending only 49% or R1,3 billion of its allocated funds for its Agricultural Land Holding Account (ALHA), which was allocated R2,7 billion, by the end of the 2019-20 financial year when it requested a rollover of the unspent funds and (b) what proposed spending changes did the DALRRD provide in their application to the National Treasury for a rollover of funds that were originally meant for the ALHA; (2) whether the DALRRD provided the National Treasury with a schedule indicating the month(s) in which the expenditure is expected to be incurred; if not, what is the position in this regard; if so, what are the relevant details?

Reply:

1. (a) The DALRRD’s requested the National Treasury to retain the surplus from the 2019/20 financial year due to underspending on a number of projects for the following reasons.

  • Recapitalisation and development projects: Non- Accountability of previous disbursements.
  • Guarantees on Land Acquisition: The DALRRD indicated that there were lengthy negotiations on some projects between sellers of land and the department which concluded at the end of quarter 3 and beginning of quarter 4. After conclusion of agreements, the projects had to go for conveyancing and registration process by Deeds Office which delayed the payments.
  • Contracted one Hectare one Household projects: were not completed due to slow mobilization of the projects due to lengthy stakeholder consultation process, and disputes amongst beneficiaries.
  • Contracted Land Development Support: The DALRRD indicated that they had to request Section 66 and Section 72 approvals (PFMA restrictions on borrowing, guarantees and other commitments) from the National Treasury to enter into contracts with ABSA and FNB for the purpose of mitigating the risk of farmers misusing the funds as experienced in the past with the Recapitalization and Development Programme (RADP) program. The approval was granted during December 2019. A team of agricultural engineers from former the Department of Agriculture, Forestry and Fisheries (DAFF) were assembled and deployed to the farms to reassess the infrastructure. Transfers were made after receipt of the assessment reports of relevant infrastructure required on farms, and some of these project assessments were only concluded during the 2020/21 financial year.
  • Contracted forensic audit: delays due to ongoing forensic audit. The DALRRD indicated that the amount would be paid after close up report is received on forensic audit performed. The expenditure was expected to be disbursed within 30 days after receipt of invoice.
  • Open orders: Valuations for land acquisition projects not yet concluded at the end of the financial year.
  • Further ALHA received an additional R277 million towards the end of March 2020 (end of 2019/20 financial year) for COVID-19 Disaster Fund.

2. 

(b) The DALRRD, did not provide any proposed spending changes. The retained surplus is supposed to be spend during the 2020/21, during which the approval would be valid.

  • The DALRRD provided the cash flow / expenditure disbursement terms, which ranges from 2 days after registration of land by Deeds Office; 30 days after receipt of invoice; and some projects expenditure to be disbursed within 1 year.
  • The table below indicates the disbursement terms, project values and project terms.

Table 1: List of commitments at the end of 2019/20

Commitment description

Project term (years)

Cash flow disbursement term

Reason for slow spending

Project budget (R’000)

Project Surplus (R’000)

Recapitalisation and Development projects

5

1 year

Non Accountability of previous disbursements

122 436

122 436

Guarantees on Land Acquisition

0.5

2 days after land registration by Deeds

Lengthy negotiations on some projects between seller and department which concluded end of quarter 3 and beginning of quarter 4, after agreement projects have to go for conveyancing and registration process by Deeds Office.

146 436

146 436

Contracted one Hectare one Household projects

unlimited

1 year

Slow mobilization of the projects due to lengthy stakeholder consultation process. Disputes amongst beneficiaries These commitments are mainly second or third tranches, which are earmarked to be finalised this financial year.

28 257

28257

Contracted Land Development Support

5

1 year

The Department had to request Section 66 and Section 72 approvals from Treasury to enter into contracts with ABSA and FNB for the purpose of mitigation the risk of farmers misusing the funds as experienced in the past with the RADP program. The approval was granted during December 2019. A team of Agricultural Engineers from DAFF were assembled and deployed to the farms to reassess the infrastructure. Transfers were made after receipt of the assessment report of relevant infrastructure required on farms. Some of these project assessments were only concluded in the current financial year.

716 990

716 990

Contracted forensic audit

1

I year

Retention amount will be paid after close up report is received on forensic audit performed.

1 710

1 710

Contracted project management

1

30 days after receipt of invoice

Balance for project will be paid after final review and sign off the close up report.

477

477

Open Orders

0.5

30 days after receipt of invoice

Valuations for land acquisition projects not yet concluded.

2 828

2 828

Total

     

1 019 135

1 019 135

COVID Disaster Fund

0.5

30 days after receipt of invoice

Current financial year, funds received from department during 2019/20.

513 844

513 844

Grand Total

     

1 532 979

1 532 979

26 March 2021 - NW810

Profile picture: Powell, Ms EL

Powell, Ms EL to ask the Minister of Finance

Whether he will furnish Ms E L Powell with proof of all deviations for the purposes of personal protective equipment procurement that was authorised by the National Treasury in respect of the Travel With Flair (2004/028611/07) tender contracted by the Department of Human Settlements, Water and Sanitation from 1 January 2020 to 31 January 2021?

Reply:

National Treasury has not received nor approved any requests for deviations from procurement processes from the Department of Human Settlements (DHS) or Department of Water & Sanitation (DWS) for the procurement of personal protective equipment from Travel with Flair (2004/028611/07) for the period 1 January 2020 to 31 January 2021.

The National Treasury does, however, notice the Covid-19 transactions that were reported by DHS against Travel with Flair to the amount of R939 349.00. These transactions were undertaken by the authority of the accounting officer and not as a result of any deviation that NT approved.

National Treasury did not find any transactions for DWS against Travel with Flair on the Covid-19 Reporting Dashboard.

Human Settlements – Extract from the Covid-19 Reporting Dashboard

18 March 2021 - NW507

Profile picture: Walters, Mr TC

Walters, Mr TC to ask the Minister of Finance

(1)Whether any staff member in the National Treasury (a) performed work in addition to the responsibilities related to his or her work, outside normal working hours, in the past five financial years and (b) has been performing such work during the period 1 April 2014 up to the latest specified date for which information is available; if not, in each case, how is it determined whether such work is being performed or not; if so, in each case, (i) what number of staff members and (ii) in what job or work categories are the specified staff members employed; (2) whether approval for such work was obtained in each case; if not, what is the position in this regard; if so, (a) what is the policy of the National Treasury in this regard, (b) by whom are such applications considered and approved, (c) what number of contraventions of this policy were brought to the attention of the National Treasury in the past five financial years and (d) what steps have been taken against the transgressors?

Reply:

(1) (a) Yes

(b) The Public Service Regulations in this regard came into effect in August 2016. It should further be noted that the approval is only valid for a period of one year from date of approval. Below are the current valid cases:

(i) Number of Staff Members (25)

(ii) Job or work categories are the specified staff members employed

11

Economic Cluster

1

Human Resources

1

Security Management

11

Financial Cluster

1

Information Technology

(2) Approval was granted to all employees doing other remunerative work outside public service.

a) National Treasury is guided by the provisions of the Public Service Regulations, 2016 and associated procedures

b) All cases are sent to the Director-General for consideration and approval

c) No contraventions were identified following an investigation of such cases

d) There were no transgressors

18 March 2021 - NW606

Profile picture: Shivambu, Mr F

Shivambu, Mr F to ask the Minister of Finance

Whether procurement legislation will be adhered to in the procurement of COVID-19 vaccines; if not, what is the position in this regard; if so, what are the relevant details?

Reply:

Please note that the procurement of the Covid-19 vaccines is a line function responsibility of the Department of Health. The Department of Health is the sole procurer of Covid-19 vaccines in South Africa on behalf of the public and private sector.

The National Treasury plays an advisory; compliance monitoring; and oversight role in the procurement of the Covid-19 vaccines.

Insofar as the role of the National Treasury in this regard is concerned, the NT will ensure that procurement legislation is complied with which includes the appropriate requests and approvals for departures from procurement procedures in line with Treasury Regulation 16A6.4 and SCM Instruction Note 3 of 2016/2017 (Preventing and Combating Abuse in the SCM System).

The National Treasury engages with the Department of Health on an ongoing basis prior and during the vaccine procurement process, particularly in respect of departures from procurement procedures.

The funding and procurement of the vaccines are kept central (through the National Department of Health). This allows for comprehensive central control of procurement, governance and the spending of funds. This approach also minimizes the opportunities for corruption, provides for central record keeping of agreements and centralised contact with manufacturers.

18 March 2021 - NW580

Profile picture: Brink, Mr C

Brink, Mr C to ask the Minister of Finance

Whether the National Treasury has undertaken any studies and/or assessment projects to determine the reason why certain municipalities consistently fail to collect more than 80% of debt owed to them by consumers in any given financial year; if not, why not; if so, what (a) were the main findings of the assessment and (b) measures do municipalities have to put in place to ensure consistent and effective debt collection?

Reply:

Yes, National Treasury has appointed Revenue and Budget Advisors in seven (7) provinces. These advisors have undertaken a baseline assessment on revenue and budget management in municipalities in each of the seven Provinces through a tool called the “Survey Monkey” which is a questionnaire based assessment. The results of the assessments are collated into a support plan for the respective municipality.

a) The following are the main findings impacting on the revenue potential of the municipality:

Covid-19 impact - During the total lockdown some businesses had to close and a large number of customers lost their jobs and did not earn an income, consequently, their ability to honour the municipal account was affected, thus, increasing the consumer debt drastically. As the result unemployment increased and these consumers failed to register as indigent beneficiaries, causing the outstanding debt to increase.

On the municipal operations side:

Effective Credit Control - Although municipalities have Credit Control Policies in place, the ability to implement them efficiently is a challenge. The officials are reluctant to implement the credit control for various unethical benefits and there is no political will to support the implementation thereof. Additionally, municipalities lack of resources to implement the credit control policy effectively.

Bad Debt Write-off – Where the situation warrants a debt write-off, municipalities fail to correct their records timeously especially in cases where there is uncollectable debt due deceased estates and indigent households.

An effective Customer Care strategy is most neglected in municipalities. This unit is not well capacitated and lack the prerequisite skill to manage a “Help Desk” with a proper control over the handling of queries. Subsequently, feedback to the customer regarding their queries are very poor resulting in a very unhappy customer.

Poor Infrastructure (Water and Electricity Networks) - Due to the poor and dilapidated infrastructure, proper credit control cannot be implemented. With poor infrastructure, illegal connections cannot be controlled. The Free Basis Services of the indigent households cannot be monitored and the indigent household cannot be restricted or disconnected when the allocated consumption is exceeded.

Billing System and Inaccurate Billing - Incorrect and inaccurate billing pose a challenge in the municipalities. The communities in the various municipalities are dissatisfied with the municipal bills and public confidence suffers, communities are unwilling to pay for the bills issued and as such, municipal debt gradually accumulates and the municipal collection rates fall.

Illegal Connections is a huge area of concern. A lot of consumers use adverse methods not to pay for the consumption. In some municipalities the technical staff seems to promote illegal connections by bypassing the system for a bribe. This behavior is unacceptable and seriously impacts on the finances of the municipality.

Indigent management – The observation is that most municipalities do have an approved and adopted Indigent policy. Indigents are not properly vetted and several households that can afford to pay for services are benefiting unjustly.

Customer information – Capturing of customer information is a critical task in municipalities. Incorrect information and outdated information makes it difficult to implement credit control when required. Equally, credit checks are not adequately undertaken and municipalities lack the methodology to do credit check for new accounts.

Non-payment Culture - Culture on non-payment for municipal services is throttling the finances. Even customers that can afford to pay are reluctant to pay due to fear that municipal finances will be misappropriated.

b) The first and foremost the responsibility rests with the municipality to self-correct, put in efficient processes and procedures. These are underpinned by adequate policy formulation and oversight responsibilities. This means that governance and leadership is essential and critical to ensure that prudent financial management practices are carry out. This is complimented with well-functioning system as an enabler to bill and collect what is due to the municipality. Proper asset management serves as a conduit for efficient revenue generation in municipalities. Many municipalities underperform on their budgets for repairs and maintenance which is allocated to ensure that their revenue generating infrastructure are optimized thus impacting on a sustainable and reliable delivery of service.

18 March 2021 - NW84

Profile picture: Cebekhulu, Inkosi RN

Cebekhulu, Inkosi RN to ask the Minister of Finance

What are the full relevant details of the shortfall in businesses receiving 40% of the R500 billion stimulus package in loan (details furnished)?

Reply:

I presume that the Honourable Member is referring to the R200 billion Loan Guarantee Scheme (LGS), which is 40 per cent of the broader government-led R500 billion package that was announced by the President on 20 April 2020.

Firstly, there is no shortfall, or grant or loan, that any business is entitled to receive directly from the R200 billion scheme. Since it was introduced on 4 May 2020, the purpose of the loan guarantee scheme was to assist financially distressed businesses due to the Covid-19 pandemic. As stated in my response to a previous Parliamentary Question, No 1346 [NW1716E] on 24 August 2020, National Treasury entered into a partnership with the South African Reserve Bank (SARB) and the Banking Association South Africa, to launch the Covid-19 loan guarantee scheme on May 2020, to make it easier for banks to lend more than they normally would have, to small businesses during the lockdown, to assist them in their efforts to survive the pandemic. When the scheme launched, it applied to small businesses with a turnover below R300 million. On 27 July 2020, the scheme was improved and this turnover limit was abolished and replaced with a maximum loan R100 million per loan to qualifying businesses. Banks were to fund such loans from their own funds, using their own balance sheets. Government would only pay from the fiscus if these small businesses defaulted on their payments to their bank, and only after the bank had taken the initial losses, as follows:

  • First loss is absorbed by the lending bank, 2% on each Covid-19 guaranteed loan;
  • Second loss is indirectly absorbed by the lending bank – there is a guarantee fee with the SARB of 0.5%;
  • Third loss is also absorbed by the lending bank to a maximum of 6% of the Covid-19 guaranteed loans; and
  • Fourth loss is the guarantee provided, to be paid by Government.

As of February 2021, banks had provided R17.8 billion in relief to 13 173 approved beneficiaries. It should be noted that the actual take-up was lower than initially expected, as the demand for such loans was low, possibly because many small businesses were reluctant to take up additional debt, given the uncertainty around how long the pandemic would last. Companies may not want to re-invest and borrow more until they feel more confident about the future strength of the economy. In addition, even before the loan guarantee scheme took effect, many banks took their own initiatives to assist their customers, by allowing for payment holidays and other forms of forbearance, which provided significantly more relief than the loan guarantee scheme.

It is important to note that the National Treasury and the SARB never intended for the guarantee to be called in full, and expected only a relatively small portion of the R200 billion to be paid. Any call on the guarantee would impact negatively on our fiscal framework and our efforts to stabilise the debt-to-GDP ratio. As such, any underutilized portion of the scheme cannot be regarded as a “shortfall” nor should there be any expectation that it can be used to fund other programmes, as it would effectively increase such debt-to-GDP.

There is regular information on the take-up of the loan guarantee scheme, which is published in Treasury documents like the 2021 Budget Review, as well as on the website of the Banking Association South Africa at https://www.banking.org.za/news/jan-loan-scheme-update/ .

11 March 2021 - NW10

Profile picture: Marawu, Ms TL

Marawu, Ms TL to ask the Minister of Finance

(1)Whether the National Treasury approved the funding of the SA Health Products Regulatory Authority by the Bill and Melinda Gates Foundation; if not, what remedies will he implement; if so, what procedure was allowed; (2) what is the total value of irregular expenditure on the COVID-19 funds; (3) whether any person has been arrested or taken to court for corruption in the procurement of personal protective equipment; if not, why not; if so, what are the relevant details?

Reply:

1. National Treasury does not need to approve donations to public entities. Treasury Regulation 21.2.1 permits accounting officers to accept gifts, donations and sponsorships.

2. National Treasury is not able to quantify the irregular expenditure at this point.  Irregular expenditure is incurred when the resulting transaction is recognized in the financial records of a department, constitutional institution or public entity in accordance with the relevant Accounting Framework. For a department or a government component applying the Modified Cash Standards (MCS) to incur irregular expenditure, the non-compliance must be linked to a financial transaction. Although a transaction may trigger irregular expenditure, a department or government component will only record irregular expenditure when a payment pertaining to the non-compliance is actually made (i.e. when the expenditure is recognized in accordance with the Modified Cash Standards). For a government component, a constitutional institution, a trading entity or a public entity listed in Schedules 2 or 3 to the PFMA applying Generally Recognised Accounting Practice (GRAP) or International Financial Reporting Standards (IFRS) to incur irregular expenditure, the non-compliance must be linked to a financial transaction. Although a transaction may trigger irregular expenditure, a constitutional institution, government component, trading entity or public entity will only record irregular expenditure when a transaction is recognised as expenditure in the Statement of Financial Performance in accordance with GRAP or IFRS, whichever is applicable. The National Treasury only receives applications for condonation of irregular expenditure once it is declared as such and this is usually for previous financial years as a result of audit findings.

3. The National Treasury supports the work of the Fusion Centre with the review of bid processes followed. The reviews are conducted on cases referred and based on an assessment of specific procurement processes followed by a given institution in line with the principles of the definition of emergency procurement and its adherence with various COVID Emergency Instruction Notes. Findings are then submitted to the Fusion Centre for further handling. Further detail on the outcome of cases investigated can be provided by the Fusion Centre.

The Centre is compromised of the Special Investigating Unit (SIU), State Security Agency, SA Revenue Service, the Hawks and the Financial Intelligence Centre, and acts as the coordinating body of law-enforcement agencies tasked with looking into Covid-19 related graft.

24 February 2021 - NW144

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Joseph, Mr D to ask the Minister of Finance

Whether a feasibility study was done on zero-based budgeting; if not, why not; if so, what (a) were the findings and recommendations in this regard and (b)(i) are the terms and references and (ii) time frames for identified departments that will participate in the pilot project?

Reply:

National Treasury is working on designing a Zero-based budgeting (ZBB) framework that will be implemented for the National Treasury and Department of Public Enterprises during the 2021/22 medium term expenditure framework. The framework will aim to reduce unnecessary government expenditure to create space for other priorities including prevention of deficits and spiraling of government debt. The objectives will include:

  • Improving the performance of programmes/projects
  • Identifying redundant programmes/projects
  • Identifying bottlenecks within government’s finance supply chain
  • Identifying possible duplication of activities between and within departments
  • Improve and optimizing resource allocation, to prevent wasting available resources

The framework to implement the ZBB will be mainly through utilising expenditure reviews, which are used by several countries that have implemented ZBB before. The elements of the framework will include, amongst others:

  • Identifying objectives and outcomes
  • Roles and responsibilities and required skill sets
  • The link between ZBB and the budget process

23 February 2021 - NW91

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Hill-Lewis, Mr GG to ask the Minister of Finance

With reference to the 2019-20 Annual Report of the Financial and Fiscal Commission, what are the reasons for the exceptionally high levels of average leave days taken by each employee according to the annual and sick leave table, with the exception of salary levels 14 - 15?

Reply:

There are several factors that determined employees’ annual leave entitlement in 2019-20;

  • employees are entitled to a maximum of 22 – 27 days per annum (depending on years of service);
  • employees have a period of six months within which to take all annual leave days that they may have accumulated in respect of the previous calendar year;
  • employees may have had annual leave days from before the previous calendar year, as prior to a leave policy change, employees were allowed to maintain a carry-over balance of 10 days in accrued leave; and
  • some employees received once-off additional leave credits, to correct for leave unduly lost owing to an electronic leave system error.

 

 

SIGNATURE PAGE

NATIONAL ASSEMBLY

QUESTION FOR WRITTEN REPLY

QUESTION NUMBER: 91 [NW94E]

Deadline = 19 February 2021

Recommended / Not recommended

DR. KAY BROWN

CHIEF EXECUTIVE OFFICER: FINANCIAL AND FISCAL COMMISSION

DATE:

 

Approved / Not approved

DR. DAVID MASONDO, MP

DEPUTY MINISTER OF FINANCE

DATE:

23 February 2021 - NW92

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Hill-Lewis, Mr GG to ask the Minister of Finance

With reference to the 2019-20 Annual Report of the Financial and Fiscal Commission, what are the reasons that there were initial material misstatements that had to be corrected after being pointed out by the auditor?

Reply:

There was instability and a lack of leadership and oversight in the Finance Division. This was related to the disciplinary hearing of the now dismissed chief financial officer, leading to the commission having to appoint acting Chief Financial Officers (CFOs) while finalizing the disciplinary process. This resulted in weaknesses in the processing and reviewing of transactions during the compilation of the Annual Financial Statements. The commission has appointed a permanent CFO and has capacitated the internal control systems.

23 February 2021 - NW216

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Chetty, Mr M to ask the Minister of Finance

Whether value-added tax (VAT) was paid on the sale of tickets for the 2010 FIFA World Cup; if not, what are the reasons that no VAT was paid; if so, what total amount was paid?

Reply:

Value-added tax was levied at the standard rate of 14% on all 2010 World Cup ticket sales.

VAT revenue from such sales amounted to R318 million.

19 February 2021 - NW101

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George, Dr DT to ask the Minister of Finance

Whether, with reference to a certain news report (details furnished) on alleged money-laundering activities committed by Mr Shepherd Bushiri and his wife, Mary, the Financial Intelligence Centre (FIC) flagged any suspicious financial transactions directly related to Mr Bushiri and his wife; if not, who was the authority that flagged the close to 20 000 suspicious transactions within a single month; if so, what (a) are the relevant details and (b) actions were taken in response to the transactions?

Reply:

The Financial Intelligence Centre (FIC) receives and analyses regulatory reports, which the Financial Intelligence Centre Act, 2001 (Act 38 of 2001) (FIC Act) requires certain institutions to submit to it. These regulatory reports include those that relate to suspicious and unusual activities and/or transactions (as per section 29 of the FIC Act).

Provisions in the FIC Act preclude the FIC from divulging information about the receipt of regulatory reports, their content, the subject(s) of reports and the identities of reporters. These provisions protect reporters and subjects of reports, and safeguard sensitive information concerning the FIC’s analysis of reported information.

The confidentiality requirements in the FIC Act also serve to avoid disruption of investigative processes that the competent authorities may undertake, based on the financial intelligence reports they receive from the FIC.

19 February 2021 - NW290

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George, Dr DT to ask the Minister of Finance

With reference to the 2019-20 Annual Report of the Financial Intelligence Centre what are the reasons that there were numerous internal control deficiencies identified by the Auditor-General?

Reply:

The FIC received an unqualified audit report with no findings (“clean audit report”) and there were no internal control deficiencies identified.

The Audit Report indicates:

“The matters reported below are limited to the significant internal control deficiencies that resulted in the annual performance report and the findings on compliance with legislation included in this report.

And below it recorded:

“I did not identify any significant deficiencies in internal control.”

19 February 2021 - NW289

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George, Dr DT to ask the Minister of Finance

With reference to the 2019-20 Annual Report of the Financial Intelligence Centre, what were the reasons (a) for the internal delays in processing payments that caused the Financial Intelligence Centre not to meet its obligation to pay invoices within 30 days and (b) that one verbal warning and five written warnings were issued to employees?

Reply:

(a) Internal delays in the payment of invoices resulted mostly from the following:

  • Suppliers often send invoices directly to business units instead of directly to the Finance business unit (Finance) which is responsible for payment. This results in a delay in the processing of invoices and the subsequent late payment.
  • There are incidents where relevant documentation is not timeously approved or submitted to Finance, resulting in Finance having to follow up on the status of the documentation which subsequently results in undue delays.
  • These internal inefficiencies have been identified and addressed and although not fully eradicated, the results have been improving. The FIC is committed to achieving and maintaining 100% compliance to the target.

 

(b) The reasons were extended to the relevant employees.

16 February 2021 - NW131

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Hill-Lewis, Mr GG to ask the Minister of Finance

(a) What specific line item budgets will be cut in order to fund the R10,5 billion bailout to SA Airways (SAA) that he announced and (b) how does he envisage the projected losses at SAA over the next three financial years will be financed?

Reply:

a) All the changes to departmental budgets for the implementation of the SAA Business Rescue are reflected in the 2020 Adjusted Estimates of National Expenditure (AENE). Changes to each departmental appropriation are reflected in Table 3 of the AENE, while Table 2.1 outlines the changes per economic classification, including shifts between votes for all adjustments, mostly the SAA Business Rescue and the extension of the Social Relief of Distress allocations.

b) The Business Rescue Plan of SAA has been activated and envisages the establishment of a new, restructured airline. In this regard, any previously projected losses will ha to be reduced and finally eliminated and the business rescue plan is specifically designed to achieve this objective, which is the reason for the allocations towards its execution. The allocations made for SAA in this Second Adjustments Appropriation Act will include payment of severance packages for staff, and other requirements to reduce costs over the long term.

15 December 2020 - NW2951

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Hill-Lewis, Mr GG to ask the Minister of Finance

With reference to the 2019-20 Annual Report of the Financial and Fiscal Commission, what are the reasons that sufficient appropriate audit evidence was not obtained that goods and services with a transaction value below R500 000 were procured by means of obtaining the required price quotations as required by the National Treasury Regulation 16A6.1?

Reply:

All evidence pertaining to the above audit query was obtained, however at the time it was finally collated, the Auditor General indicated that they were no longer accepting documents for audit purposes as they were then at their reporting phase. In addition to the staff turnover, which in the institution’s small-sized finance division presented challenges of continuity - during May 2019, the erstwhile CFO issued a directive in the finance section to de-activate the automated requisitioning functionality on Pastel. This decision led to challenges being experienced with regard to the storage of documents on the system and affected the audit trail with regard to the linking of requisitions, quotations, approved memos and other supporting documentation to a transaction. The requisitioning functionality has been re-instated on Pastel, which will ensure that all and sufficient evidence documents e.g. requisitions, quotations & other supporting documentation are stored and retrievable for audit purposes.

15 December 2020 - NW2949

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Hill-Lewis, Mr GG to ask the Minister of Finance

With reference to the 2019-20 Annual Report of the Financial and Fiscal Commission, what are the reasons that the financial statements that were submitted for auditing were not prepared in accordance with the (a) prescribed financial reporting framework as required by section 40(1)(a) and (b) Public Finance Management Act, Act 1 of 1999?

Reply:

The error contained in the financial statements related to misclassification and reconciliation mistakes in respect of certain assets, liabilities and expenditure. No such error had occurred in the prior year and corrections were effected before final submission of the Annual Financial Statements. There were several challenges that led to the audit query raised, which were predominantly in relation to staffing in the finance section. Some of the reasons noted by the Audit and Risk Committee and the Commission are:

The institution is small with only a few people in the Finance Section. There were three CFOs heading up the finance section in respect of the execution and audit preparation phases for the 2019/20 statutory audit. Although contracted by the Commission to cover the financial year and preparation of audit (prior to the Covid-19 situation, for the period estimated to conclude end August 2020), permanent employment opportunities led to CFO resignation and absence of continuity. Given a short period for handover during Covid-19 lockdown, this affected the preparation of audit process. In addition, key staff members left during the financial year e.g. Procurement Officer in November 2020, Financial Controller in October 2020 and the Management Accountant went on maternity leave in December 2019. This all resulted in new recruitment and/or temporary staff which had to be sought. This absence in continuity of the majority of staff members affected the preparation for the audit process.

To prevent the above finding from recurring, the institution is in the process of filling the position of the Chief Financial Officer on a permanent basis and this is key in implementing the plan developed and being executed, to get the institution ready for the audit process. The plan developed is designed to ensure that the misstatements raised by the Auditor General on the annual financial statements are not repeated.

15 December 2020 - NW2950

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Hill-Lewis, Mr GG to ask the Minister of Finance

With reference to the 2019-20 annual report of the Financial and Fiscal Commission, (a) what are the reasons that some tenders awarded to bidders were based on preference points that were not calculated in accordance with the requirements of the Preferential Procurement Policy Framework Act, Act 5 of 2000, and its regulations?

Reply:

The audit finding in question involved an instance of appointment of a recruitment agency which was not the cheapest based on the Preferential Procurement Policy Framework Act,2000 (Act 5 of 2000) (PPPFA). It was an oversight on the side of management for failing to document reasons and acquire approval to not appoint the cheapest bidder, as required by section 2(1)(f) of the PPPFA. Measures have now been put in place to prevent any other recurrence of this error. This was also related to the staffing capacity challenges then in the procurement domain, which are now addressed.

15 December 2020 - NW3003

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Hill-Lewis, Mr GG to ask the Minister of Finance

(1)With reference to the 2019-20 Annual Report of the Financial and Fiscal Commission, what are the reasons that payments were not made within 30 days or an agreed period after receipt of an invoice, as required by the National Treasury regulation 8.2.3; (2) what are the reasons that effective and appropriate steps were not taken to prevent irregular expenditure amounting to R46 761, as disclosed in note 20 of the financial statements, as required by section 38(1)(c)(ii) of the Public Finance Management Act, Act 1 of 1999 and the National Treasury Regulation 9.1.1?

Reply:

a) The late payment of invoices during 2019/20 financial year is due to various reasons, which include circumstances where the FFC had to perform reconciliation on disputes raised with the suppliers. Controls have been strengthened wherein on a weekly basis, as opposed to monthly, the supplier age analysis is generated to enable the weekly payment of suppliers, which allows ample opportunities to resolve issues. Where the internal controls are not adhered to, resulting in late payment and interest charged by a service provider, steps have been taken against staff as part of consequence management to achieve compliance and to manage such performance of staff.

b) The expenditure in question is relates to the remuneration of the FFC Chairperson which dates back to the time of appointment of the late Chairperson, wherein there was a difference between the remuneration and the salary determination by the Independent Commission for Remuneration of Public Office Bearers, as ascented to by the President. In respect of this amount, the contributing factor is the delay in the proclamation of salaries of office-bearers for 2019/20, which potentially might have rendered this amount not to be unauthorised. In July 2020, the FFC sought condonation of this expenditure from National Treasury and to date has not receive an outcome, although making follow-ups. A further request for condonation in this regard, for the period 1 April 2020 to 10 October 2020 and amounting to R23,000, was made in November 2020 and we equally await feedback. Should the condonation be approved, as was the case for such amounts in the prior financial years, this irregular expenditure would be resolved and this would be removed from the disclosure note and reflected in the annual financial statements for the 2020/21 financial year.

15 December 2020 - NW3004

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Hill-Lewis, Mr GG to ask the Minister of Finance

With reference to the 2019-20 Annual Report of the Financial and Fiscal Commission, what are the reasons that the (a) Business Continuity Plan, (b) Disaster Recovery Plan, (c) Document Feasibility Study and (d) Compliance Charter projects were not completed?

Reply:

a) The Business Continuity Plan was undertaken in the 2020/21 APP and has already been developed. It could not be completed during the financial year 2019/20 due to the responsible employee having resigned from the FFC.

b) In terms of the Disaster Recovery Plan, the process of developing it is underway and also linked to the ICT rejuvenation implementation that is underway. It should be completed before the end of 2020/21 financial year. It could not be completed during the financial year 2019/20 due to the responsible employee having resigned from the FFC.

c) The Document Feasibility Study was not done in the 2019/20 financial year because the secondment of an expert, who was supposed to assist with the feasibility study could not be made be available by their institution. The FFC subsequently engaged SALGA to conduct a feasibility study and a report has now been provided.

d) The Compliance Charter was not completed in 2019/20 financial year, this due to the fact that the FFC has to benchmark it against institutions of a like nature and other constitutional institutions.

15 December 2020 - NW3005

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Hill-Lewis, Mr GG to ask the Minister of Finance

(1)With reference to the 2019-20 Annual Report of the Financial and Fiscal Commission, what are the reasons that Salary Level 16 has been left out of the following data tables, (a) Employment and vacancies by salary band on page 35, (b) Appointment and terminations on page 35 and (c) Performance reward by salary band on page 38; (2) on what grounds were two employees dismissed?

Reply:

1. The level 16 posting is that of the Chairperson of the Commission who is not an employee in terms of the definition and who serves on a five-year fixed term contract. The Chairperson’s remuneration is a Presidential determination after recommendation by the Independent Commission for the Remuneration of Public Office Bearers. Accordingly, the Chairperson of the Commission is not a recipient of performance rewards.

2. Two employees were dismissed after having been found guilty of the charges they were served with at their respective disciplinary hearings. The one employee was found guilty on a charge of sexual harassment, while the other was found quilty on a variety of charges relating to the transgression of the Public Finance Management Act, 1999 (Act 1 of 1999, as amended) and FFC Policies.

15 December 2020 - NW3008

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George, Dr DT to ask the Minister of Finance

(1)With reference to the 2019-20 Annual Report of the Financial Intelligence Centre, what are the reasons that no inspections were conducted by the (a) Independent Regulatory Board of Auditors, (b) Limpopo Gambling Board, (c) Free State Gambling and Liquor Authority, (d) KwaZulu-Natal Gambling and Betting Board, (e) Western Cape Gambling and Betting Board, and (f) North West Gambling Board; (2) what are the reasons that the Northern Cape Gambling and Racing Board failed to submit its investigation figures?

Reply:

(1) What are the reasons that no inspections were conducted by the:

(a) Independent Regulatory Board of Auditors (IRBA):

Reply from IRBA:

The institutions that fall under the Financial Intelligence Centre Act 38 of 2001 (the FIC Act) supervisory responsibilities of IRBA are similarly supervised by the Financial Sector Conduct Authority (FSCA) for FIC Act compliance under Item 12 of Schedule 1 of the FIC Act.

It is due to this overlap that in 2012, IRBA and FSCA concluded a Memorandum of Understanding wherein FSCA agreed to supervise those institutions that fall under IRBA’s supervisory responsibility for purposes of FIC Act compliance.

As such, IRBA has not conducted any FIC Act compliance inspections during the 2019/20 financial year as these institutions are supervised for FIC Act compliance by FSCA on the IRBA’s behalf.

Due to this overlap and at the request of IRBA, the FIC has proposed to the Minister of Finance an amended Schedule 2 of the FIC Act that will exclude IRBA as a supervisory body.

The proposed amended Schedules to the FIC Act are currently before the Minister of Finance for consideration and further consultation.

(b) Limpopo Gambling Board:

No reply received from Limpopo Gambling Board.

Reply from the FIC:

In 2018, the Limpopo Gambling Board was informed by the FIC that then Minister of Finance had approved the process to consult on the exit of the provincial gambling boards as supervisory bodies and transfer their FIC Act supervisory responsibilities to the FIC.

Based upon previous discussions, the FIC believes that in anticipation thereof, the Limpopo Gambling Board did not plan or execute any FIC Act inspections during the 2019/20 FY.

(c) Free State Gambling and Liquor Authority:

Reply from Free State Gambling and Liquor Authority:

The Free State Gambling and Liquor Authority was unable to conduct FIC Act inspections during the 2019-20 financial year due a lack of resources, with only one (1) inspector responsible for conducting FIC Act inspections for the entire province.

(d) KwaZulu-Natal Gambling and Betting Board:

No reply received from KwaZulu-Natal Gambling and Betting Board.

Reply from the FIC:

In 2018, the KwaZulu-Natal Gambling and Betting Board was informed by the FIC that then Minister of Finance had approved the process to consult on the exit of the provincial gambling boards as supervisory bodies and transfer their FIC Act supervisory responsibilities to the FIC.

Based upon previous discussions, the FIC believes that in anticipation thereof, the KwaZulu-Natal Gambling and Betting Board did not plan or execute any FIC Act inspections during the 2019/20 FY.

(e) Western Cape Gambling and Betting Board:

No reply received from Western Cape Gambling and Betting Board.

Reply from the FIC:

In 2018, the Western Cape Gambling and Betting Board was informed by the FIC that then Minister of Finance had approved the process to consult on the exit of the provincial gambling boards as supervisory bodies and transfer their FIC Act supervisory responsibilities to the FIC.

Based upon previous discussions, the FIC believes that in anticipation thereof, the Western Cape Gambling and Betting Board did not plan or execute any FIC Act inspections during the 2019/20 FY.

(f) North West Gambling Board:

Reply from North West Gambling Board:

During 2019/20 financial, the North West Gambling Board conducted 650 inspections in terms of the North West Gambling Act 2 of 2001, which included checks and verification for FIC Act compliance.

Reply from the FIC:

For an inspection to qualify as a FIC Act inspection, it must be instituted in terms of section 45(B) of the FIC Act.

Since the 650 inspections conducted by the North West Gambling Board were instituted in terms of the provisions of the North West Gambling Act 2 of 2001 and not the FIC Act, these do not legally qualify as FIC Act inspections.

As such, the FIC’s annual report for 2019/20 reflected a nil figure for FIC Act inspections conducted by the North West Gambling Board.

(2) What are the reasons that the Northern Cape Gambling and Racing Board failed to submit its investigation (inspection) figures?

Reply from Northern Cape Gambling and Racing Board:

On 14 July 2020, the FIC was verbally informed that no FIC Act inspections were conducted for the 2019/20 financial year.

Reply from the FIC:

The FIC confirms that the Northern Cape Gambling and Racing Board had on 14 July 2020 verbally confirmed that it had not conducted any FIC Act inspections for the 2019/20 financial year.

The FIC had however requested that such be formally confirmed in writing on the institutions letter- head but no such written confirmation was received.

As such, the FIC reflected in its annual report that the Northern Cape Gambling and Racing Board had failed to submit its inspection figures.

The Northern Cape Gambling Board has not provided an explanation as to why their inspection figures were not formally confirmed in writing.

15 December 2020 - NW3009

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George, Dr DT to ask the Minister of Finance

With reference to the 2019-20 Annual Report of the Financial Intelligence Centre what are the reasons that the SA Mint, a wholly-owned subsidiary of the SA Reserve Bank, failed to (a) update information related to registration and (b) report cash thresholds for which they received a sanction of R1,3 million?

Reply:

On 25 March 2019, the Financial Intelligence Centre (“the FIC”) conducted an inspection on SA Mint, with the following compliance deficiencies identified:

a) Failure to update information related to the SA Mint’s registration:

1. The SA Mint was registered with the FIC as a reporting institution with effect from 27 November 2013.

2. With the introduction of FIC’s goAML registration system in 2016, the notification to register on the new system was sent to an employee that had left the SA Mint, resulting in SA Mint not being aware of the notification and thus not updating its information on the new online registration system.

3. In August 2019 and subsequent to the inspection, SA Mint updated its registration information with the FIC.

(b) Failure to report cash threshold transactions:

1. In terms of the inspection conducted, the FIC found that SA Mint did not report cash transactions at its retail store, Coin World, as well as direct cash deposits made into its bank account.

2. Furthermore, the FIC found that the internal classification of funds received, did not differentiate between cash or electronic payments.

3. In addition, there were two instances of cash received at the retail outlet, which were reported late and not in accordance with the FIC Act time frames.

4. SA Mint confirms that where the information was available, the relevant cash threshold transactions have been reported to the FIC subsequent to the inspection.

5. Further, SA Mint confirms that it continues to timeously report all relevant cash threshold transactions in accordance with section 28 of the FIC Act.

6. Currently, the SA Mint is in full compliance with the FIC Act and the relevant training, processes, procedures and monitoring systems are in place to ensure full compliance with its FIC Act obligations.

 

08 December 2020 - NW2576

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Hill-Lewis, Mr GG to ask the Minister of Finance

With reference to a certain person who was recently appointed in his Office (name and details furnished), (a) what is the specified person’s specific job description, (b) what are the person’s key performance targets, (c) on what date was the appointment made, (d) what process was followed in making the appointment and (e) what is the person’s total remuneration?

Reply:

a) The person is responsible for amongst others: liaising with the constituency office of the Minister of Finance, interacting with communities on the services of the Ministry of Finance and interacting with political stakeholders on the services of the Ministry of Finance.

b) Percentage performance targets against service delivery and implementationindicatorshave been set in accordance with the Department of Public Service and Administration determined measurement scale of 1-4 against the Key Performance Areas of:

  1. Liaising with the constituency office of the Minister of Finance;
  2. Interaction with communities on the services of the Ministry of Finance;
  3. Interaction with international and domestic stakeholders of the Ministry of Finance; and
  4. Support to the Minister on public outreach programmes.

c) The appointment was made on 5 June 2020

d) The appointment was made in terms of section 9 of the Public Service Act, 1994, in conjunction with regulation 66 of the Public Service Regulations, 2016. Regulation 66 authorises the filling of positions in the Office of an executive authority without advertising.

e) The total remuneration is R863,748.00 per annum

07 December 2020 - NW2685

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Buthelezi, Mr EM to ask the Minister of Finance

Whether he had considered accessing unclaimed pension benefits in the industry to assist in alleviating the devastating effects of the COVID-19 pandemic on workers in vulnerable sectors such as domestic services, agriculture and indigent communities; if not, what is the position in this regard; if so, what are the relevant details?

Reply:

No, as such funds are not centralised and held in one fund, and hence neither Government nor any of the financial sector regulators hold or manage such funds, so there has not beenany consideration to use unclaimed retirement fund benefits as a Covid-19 pandemic related relief measure.

Unclaimed benefits are no different from any other retirement fund benefits, meaning these benefits belong to members and beneficiaries. They are therefore held and managed by boards of trustees of these funds, and not Government. Government is therefore not in a position to access or utilise unclaimed retirement fund benefits. Three recent related Supreme Court of Appeal judgements[1] have also considered the mannerin which such funds may be utilised under the current legislation.The use of unclaimed benefit funds needs to be appropriately legislated for, and the coming Conduct of Financial Institutions Bill (COFI Bill) takes the first steps in this direction, but is only expected to be enacted into law late next year.

We sympathise deeply with the plight that South Africans are facing as a result of the COVID-19 pandemic, and it is for this reason that government has put in place a number of measures to alleviate the pressure on workers. Further, as announced in the recent Medium-Term Budget Policy Statement, government will introduce necessary legislative amendments next year to allow for limited withdrawals from retirement funds under certain circumstances but linked to mandatory preservation requirements.

1.Supreme Court of Appeal Judgments - Hortors Pension Fund v Financial Sector Conduct Authority and Another (Case no 054/2020) [2020] ZASCA 141 (2 November 2020); Vrystaatse Munisipale Pensioenfonds v The Minister of Finance and Another (Case no 1161/18) [2020] ZASCA 143 (2 November 2020); and Southern Sun Group Retirement Fund v The Registrar of Pension Funds and Others (Case no 215/2019) [2020] ZASCA 142 (2 November 2020)

07 December 2020 - NW2631

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Van Minnen, Ms BM to ask the Minister of Finance

With reference to the presentation by the Special Investigating Unit to the Standing Committee on Public Accounts on 20 October 2020, (a) what are the reasons that the municipal-level data on COVID-19 relief funds expenditure for April 2020 to August 2020 was not available at the time of the report, even though data on expenditure related to COVID-19 for 15 March 2020 to 2 October 2020 was already available on municipal level and (b) on what date will the municipal-level data on COVID-19 relief funds expenditure for April 2020 to August 2020 be available?

Reply:

a) According to the report from the presenters to the Standing Committee on Public Accounts, the information was available in the presentation pack. The graphs attached as an Annexure to this response illustrates the COVID-19 expenditure per category (Graph 1), expenditure by municipalities (Graph 2) and expenditure per province (Graph 3).

b) The information is available in the Annexure as Graph 1, 2 and 3 attached. National Treasury introduced a weekly reporting mechanism to track COVID-19 related expenditure. These numbers are not verified numbers. The 4th Quarter ending June 2020, Section 71 of MFMA report presents verified numbers and is published on the Treasury website and can be accessed on the link:

http://mfma.treasury.gov.za/

In addition, the National Treasury issued MFMA Circular 105 to municipalities on 25th of August 2020 which introduced further reporting requirements that municipalitiesmust adhere to, these are specific to procurement at the transaction level data. This circular requires municipalities to report on all their COVID-19 transactions on supplier level and items bought. The reports, received from the municipalities, are imported into the data warehouse and published on the Treasury website and can be accessed on the link:

http://ocpo.treasury.gov.za/COVID19/Pages/Reporting-Dashboard.aspx

Annexure

Graph 1

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Graph 2

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Graph 3

cid:HITUISQJTOXR.GW_00004.png

07 December 2020 - NW2644

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Graham, Ms SJ to ask the Minister of Finance

(1)With reference to municipalities that deduct pension fund contributions from employees every month, but in many cases do not pay such contributions over to the pension funds, (a) which municipalities have failed to pay over pension fund contributions since 1 April 2020 and (b) what (i) is the breakdown by municipality of the value of the specified contributions for each month, (ii) is the number of employees’ pensions which have lapsed as a result of such non-payment by the municipality, (iii) is the number of employees who are due to retire but are precluded from doing so because their pensions are on hold due to non-payment of the contributions and (iv) is the value of the interest accrued on the outstanding contributions; (2) what action will be taken against the specified municipalities for jeopardising the pensions of their employees?

Reply:

1. We are unfortunately, not able to currently provide a comprehensive response to this question. The National Treasury will engage with the Financial Sector Conduct Authority (FSCA) to start collecting such data as part of the regular statutory returns by municipal retirement funds. However, such practice of non-payment of pension contributions to the pension fund by employers, is a criminal offence in terms of section 13A of the Pensions Fund Act, after the Act was amended in 2013. The Act also makes employers personally liable in respect of non-payment of pension contributions to a pension fund.

We have however, received some limited information from municipalities, indicating that there are three provinces that are mostly affected by the default in pension fund contributions. These are Free State (FS), North West (NW) and Northern Cape (NC). The provinces that do not seem to have cases of non-payment of pension fund contributions are Gauteng (GP), KwaZulu-Natal (KZN), Mpumalanga (MP) and Western Cape (WC). The details as per the Honourable Member’s specific questions are attached as Annexure A.

23. National Treasury will engage with the relevant authorities (provinces, regulators and national departments) to consider more effective and quicker responses for such non-payment of contributions to retirement funds by any organ of state, including making such reporting to the National Treasury or provincial treasuries as part of the current financial reporting system in terms of sections 65(2)(f) and 125(1)(c) of the MFMA. In addition, the Financial Sector Conduct Authority, has published a Draft Conduct Standard for public comment in May 2020, related to requirements for payment of pension fund contributions. The FSCA is currently processing such comments to revise the Draft Conduct Standard andwill thereaftersubmit to the Minister of Finance to submit to Parliament as required by the Financial Sector Regulation Act.

07 December 2020 - NW2703

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Hill-Lewis, Mr GG to ask the Minister of Finance

Whether he has found the continuous bailouts of the SA Airways by the Government to be an abuse of dominance by a dominant firm in terms of the provisions of the Competition Act, Act 89 of 1998; if not, what are the reasons for the continuous bailouts; if so, what are the further relevant details?

Reply:

The decision to recapitaliseState Owned Companies is done following a collective decision-making process which includes Cabinet and the Minister’s Committee on the Budget (MINCOMBUD), before being considered and ultimately approved by Parliament. The Minister of Finance therefore does not provide opinions of individual or entity specific recapitalisation outcomes as these decisions are approved through a collective process.

07 December 2020 - NW2687

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Buthelezi, Mr EM to ask the Minister of Finance

How does he intend on inspiring confidence in pension fund contributors and administrators that they should invest in the Government’s planned infrastructure development projects, given the brazen display of corruption, negligence and incompetence that the Republic has witnessed during the COVID-19 pandemic as well as previous infrastructure development projects initiated by the Government?

Reply:

Yes, the best way to inspire confidence in any Government project is to generate economic growth,rid our country of corruption and inefficiency and to ensure that the people of our country can trust public servants who manage the projects in which they invest their funds. Government does not determine where retirement funds invest. It is the Board of Trustees of a retirement fund that determines the investment policy for that retirement fundas part of their fiduciary duty to the fund and its members.

Trustees of retirement funds, like most investors, want to invest in a project, be it in the public or private sector, as long as they have confidence in those managing such projects in a way that generates the returns that such investors expect. The extent to which retirement funds can invest in any asset class is governed by Regulation 28 of the Pension Funds Act (Act 24 of 1956).

The recent Medium-Term Budget Policy Statement outlines steps which Government intends to make to stabilize our debt and generate more confidence, investment and economic growth.

23 November 2020 - NW1690

Profile picture: Opperman, Ms G

Opperman, Ms G to ask the Minister of Finance

(1)Whether he has found that the cost of employing consultants to assist municipalities in managing their finances often outweighs the benefits they bring, given that only 15 out of 183 municipalities who used consultants in the 2018-19 municipal financial year managed to achieve clean audit results; if not, what is the position in this regard; if so, what are the relevant details; (2) whether he has found that the use of consultants results in the transfer of skills to municipal employees; if not, what is the position in this regard; if so, what are the relevant details?

Reply:

1. The HonourableMember to note that information provided in the General Report 2018/19 by the Office of the Auditor-General and other reports, on the use of consultants generally, is equally of concern. Municipal appointment practices are also a direct contributing factor. The use of consultants and support provided must however be contextualised within the FM reforms for municipalities and the varies capacity levels in municipalities.In an attempt to address these concerns, the National Treasury issued MFMA Circulars and Guides assisting municipalities with best practices in financial management, covering a range of financial disciplines, the establishment of Budget and Treasury Offices, supporting the rollout of minimum competencies, supporting the appointment of appropriately qualified staff with the requisite skills to perform financial management responsibilities. These have been coupled with awareness and training initiatives. The efforts to improve financial management practices in municipalities and the resultant improved audit outcomes, may require a number of financial cycles to show desired changes, but is receiving attention by both the National and Provincial Treasuries. It must however be recognised that in some instances, the use of consultants with specialists’ skills and knowledge will be required. Therefore, it may not always be cost effective for municipalities to appoint these scarce skills on a permanent basis.

2. The design of national and provincial support programmes has at its core specific focus on the transfer of skills and capacity, on-the-job training, to municipal officials, covering institutional and technical areas.For example, a total of 1 434 capacity building sessions were completed, with 9 716 officials capacitated during the 2018/19 financial year, from the national support programme to selected municipalities. The principles of skills transfer are also embedded in the Cost Containment Regulations for Municipalities issued in 2019, where measures must be implemented by municipalities when appointing consultants to perform specific responsibilities. The absorption capacity of municipalities also must be factored. The details relating to the use of consultants and transfer of skills, for those contracts entered into by municipalities would be best obtainable from the municipality directly, given the different specialised areas and contractual arrangements.

23 November 2020 - NW1899

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Wessels, Mr W to ask the Minister of Finance

(1)Whether the Government Employees Pension Fund is experiencing any cash-flow problems; if so, what are the relevant details; (2) whether he will make a statement on the matter?

Reply:

The GEPF is not experiencing any cash-flow problems.

23 November 2020 - NW1600

Profile picture: Opperman, Ms G

Opperman, Ms G to ask the Minister of Finance

(1)Whether he has found that the cost of employing consultants to assist municipalities in managing their finances often outweighs the benefits they bring, given that only 15 out of 183 municipalities who used consultants in the 2018-19 municipal financial year managed to achieve clean audit results; if not, what is the position in this regard; if so, what are the relevant details; (2) whether he has found that the use of consultants results in the transfer of skills to municipal employees; if not, what is the position in this regard; if so, what are the relevant details?

Reply:

1. The HonourableMember to note that information provided in the General Report 2018/19 by the Office of the Auditor-General and other reports, on the use of consultants generally, is equally of concern. Municipal appointment practices are also a direct contributing factor. The use of consultants and support provided must however be contextualised within the FM reforms for municipalities and the varies capacity levels in municipalities.In an attempt to address these concerns, the National Treasury issued MFMA Circulars and Guides assisting municipalities with best practices in financial management, covering a range of financial disciplines, the establishment of Budget and Treasury Offices, supporting the rollout of minimum competencies, supporting the appointment of appropriately qualified staff with the requisite skills to perform financial management responsibilities. These have been coupled with awareness and training initiatives. The efforts to improve financial management practices in municipalities and the resultant improved audit outcomes, may require a number of financial cycles to show desired changes, but is receiving attention by both the National and Provincial Treasuries. It must however be recognised that in some instances, the use of consultants with specialists’ skills and knowledge will be required. Therefore, it may not always be cost effective for municipalities to appoint these scarce skills on a permanent basis.

2. The design of national and provincial support programmes has at its core specific focus on the transfer of skills and capacity, on-the-job training, to municipal officials, covering institutional and technical areas.For example, a total of 1 434 capacity building sessions were completed, with 9 716 officials capacitated during the 2018/19 financial year, from the national support programme to selected municipalities. The principles of skills transfer are also embedded in the Cost Containment Regulations for Municipalities issued in 2019, where measures must be implemented by municipalities when appointing consultants to perform specific responsibilities. The absorption capacity of municipalities also must be factored. The details relating to the use of consultants and transfer of skills, for those contracts entered into by municipalities would be best obtainable from the municipality directly, given the different specialised areas and contractual arrangements.

23 November 2020 - NW1955

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Mashabela, Ms N to ask the Minister of Finance

Whether he reappointed the acting board of the Public Investment Corporation led by a certain person (name furnished); if not, what is the position in this regard; if so, how did a certain newspaper (name furnished) gain access to information that was not publicly communicated by any official National Treasury platform?

Reply:

The COVID-19 pandemic and the national lockdown had a negative effect on the appointment process of the new Public Investment Corporation (PIC) Board which was to be effective from 1 August 2020. In accordance with the Memorandum of Incorporation of the PIC, the terms of office of the Interim Board was extended until the appointment process is finalised or 15 months after the expiry of their initial term of office, whichever is earlier.

The Ministry isnot aware of the information accessed by the certain newspaper (name furnished) and how the newspaper gained access to the information.

23 November 2020 - NW1900

Profile picture: Wessels, Mr W

Wessels, Mr W to ask the Minister of Finance

(1)What is the prescribed period within which a member of the Government Employees Pension Fund (GEPF) should receive the first retirement payment after completing and submitting all relevant documentation; (2) what (a) number of members of theGEPF have been affected by delays in first payments after retirement in the each of the financial years from 2010-11 to 2019-20 and (b) were the reasons for each of the specified delays; (3) what was the total amount of interest paid due to the late payments since the 2010-11 financial year; (4) whether the GEPF has put in place any measures to ensure that delays in the payment of pensions are mitigated; if not, why not; if so, what are the relevant details; (5) whether he will make a statement on the matter?

Reply:

1. A benefit is payable to a member, pensioner or beneficiary entitled to such benefit within a period of 60 days from the benefit becoming payable to the member, pensioner or beneficiary.

2. (a)The under mentioned table details the retirements paid within 60 days and those retirements paid outside of 60 days

Financial Year

Total Retirement Cases Paid

Claims paid within 60 days

% age paid within 60 days

Claims not paid within 60 days

%age Not paid within 60 days

2011

23,913

23171

97%

742

3%

2012

29,391

26830

91%

2,561

9%

2013

27,699

22849

82%

4,850

18%

2014

29,546

22043

75%

7,503

25%

2015

28,802

24797

86%

4,005

14%

2016

31,845

27693

87%

4,152

13%

2017

32,196

26848

83%

5,348

17%

2018

35,571

29966

84%

5,605

16%

2019

35,931

32236

90%

3,695

10%

2020

34,134

29944

88%

4,190

12%

(b) The reason for delayed benefit payments varies and arises due to many factors.  The delays amongst others include:

  • Claim documentation has not yet reached the GPAA. Claimants should ensure that their HR departments send all required documentation to the GPAA once finalised
  • Incomplete or incorrect documentation which requires the documents to be referred back to employee departments for rectification
  • Incorrect payment information such as incorrect bank accounts which results in bank verification process failing thereby payment cannot be made
  • GPAA awaiting tax directives from SARS before payment is made.
  • Issues with members’ tax affairs requiring members to attend to these with SARS. Member’s tax affairs need to be in order to ensure that the required tax liability is paid over to SARS before benefits can be paid to members.
  • Required divorce documentation outstanding to pay benefits
  • Other reasons pertaining to specific claims.
  • The impact of the lockdown regulations has impacted operational activity of the GPAA since March 2020.

3. The table below depicts the interests paid in respect of all benefits paid by the GEPF and not specifically in respect of retirements only. The interest paid would be in respect of retirement, resignation, death, ill-health retirement, and transfer benefits.

Financial Year

Benefits Paid for the year

R’000

Interest Paid for the

R’000

2010 – 2011

31 098 727

653 748

2011 – 2012

35 581 583

881 093

2012 – 2013

39 769 902

756 179

2013 – 2014

52 570 775

1 158 520

2014 – 2015

78 341 762

1 421 880

2015 – 2016

85 196 350

1 845 820

2016 – 2017

86 290 613

1 883 182

2017 – 2018

91 071 319

1 954 491

2018 – 2019

94 876 686

1 469 311

2019 – 2020 (Unaudited)

108 742 851

1 752 019

4. The Government Pensions Administration Agency (GPAA) which administers payments for the Government Employees Pension Fund (GEPF) like many other organisations, was negatively impacted by the Covid-19 pandemic. In support of the national agenda in combating COVID-19 the entity was also initially closed for a short period of time during the first lockdown until it was subsequently classified as an essential service. The GPAA has implemented various measures to increase production since the declaration of the National State of Disaster.

These measure include:

• The acquisition of additional technology and mobile devices to enable and increase remote working arrangements;

  • A combination of remote working and staff coming into the office is being followed in order to ensure improved capacity;
  • Implementation of automation of processes, where possible, to allow for faster capability in processing of pension claims;
  • A dedicated focus on processing pension retirement claims to accelerate claims of retirees.
  • Continuous improvement of processes are being attended to allow for remote and faster capability of processing of claims

It is important to emphasise that these initiatives notwithstanding, service to members, pensioners and beneficiaries is impacted by COVID-19 and delays may still be experienced as staff contract COVID -19.

5. It is not necessary for the Minister to make a statement on the matter as there has been acknowledgement by the GEPF and GPAA of late payments.

19 November 2020 - NW2577

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

What total number of (a) international lenders does Government still have in their State-Owned Entity (SOE) debt portfolio and (b) facilities of international lenders who have exited the SOE debt were called prematurely?

Reply:

a) There are 9 international development finance institutions that lend to the SOEs as listed below. The typical financing instrument they use are foreign currency and domestic currency bilateral loans. MIGA is listed below as one of the institutions, however, their participation is usually in the form of providing credit enhancing guarantees on behalf of the SOE and to the benefit of other lenders that would otherwise not lend to a South African SOE owing to the credit rating.

China Development Bank

African Development Bank

International Bank for Reconstruction and Development

New Development Bank (BRICS Bank)

European Investment Bank

AgenceFrançaise de Développement (AFD)

World Bank

KreditanstaltfürWiederaufbau (KfW)

Multilateral Investment Guarantee Agency (MIGA)

In the case of SOEs that issue bonds in foreign jurisdictions, information of registered holders is not recorded in such a manner as to be able to establish how many different individuals or institutions (hedge funds for example) are the ultimate beneficial holders of those bonds.

b) There are no facilities that have been called prematurely in the sense of accelerating debt is due. Rather, some guaranteed debt has been called to service interest and capital payments that became due, but these facilities did not accelerate. The call on guarantees to international lenders for the current fiscal year were in respect of the Land Bank and amounts to R74 million.

19 November 2020 - NW2647

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George, Dr DT to ask the Minister of Finance

(1)With reference to his statement in his Budget Speech on 26 February 2020 that provisional allocations will only be confirmed once certain requirements have been met, and considering the fact that SA Airways (SAA) has now been allocated its initial provisional allocation of R6,5 billion in the 2020 Medium Term Budget Policy Statement (MTBPS), what (a) were the requirements that had to be met for SAA to qualify for the provisional allocation of R6,5 billion, (b) were the reasons for the specific requirements that were chosen and (c) date/s was/were each requirement met; (2) whether he has found that the allocation in February of R16,4 billion, along with the MTBPS bailout of R10,5 billion, coupled with the confirmation of the R6,5 billion allocation, puts the total monies allocated to SAA in the 2020 calendar year at R33,4 billion; if not, (a) what total amount has he found the total allocation for the 2020 calendar year to be and (b) how did he calculate it; (3) what framework did he use to determine whether it was worth spending yet more money on SAA compared to rather being able to cover the costs of building more than 66 000 RDP houses?

Reply:

1. Provisional allocation

The R6.5 billion formed part of the R16.4 billion announced by during the February 2020 budget speech for payment of guaranteed debt and interest. This amount was split as follows:

(i) R10.3 billion in 2020/21

(ii) R4.3 billion in 2021/22; and

(iii) R1.8 billion in 2022/23.

Of the R10.3 billion in 2020/21, only R3.8 billion was included in the Appropriation Act (7 of 2020) leaving R6.5 billion unappropriated. SAA had R3.6 billion government guaranteed debt maturing on 31 July 2020 and the amount already included in the Appropriation Act was utilised to settle this debt.Additional government guaranteed debt of R6.7 billion matured on 31 August 2020 for which section 6 of the Appropriation Act (7 of 2020) was invoked in order for the debt to be settled.

2. Total allocation to SAA for 2020/21

Of the R16.4 billion allocated to SAA at the time of the February budget speech, R10.3 billion was allocated in the current financial year to pay for maturing government guaranteed debt. The balance of R6.1 billion will be allocated to SAA over the next two fiscal years as and when the airline’s government guaranteed debt matures.

An additional R10.5 billion was allocated to SAA in 2020/21 to provide for the implementation of the airline’s business rescue.

Therefore, the total amount that has been allocated to SAA in the 2020/21 fiscal year amounts to R20.8 billion.

3. Framework used to determine funding allocation to SAA

SAA was placed into voluntary business rescue on 6 December 2019, following which the business rescue practitioners concluded a creditor approved business rescue plan which required additional funding for implementation.

Cabinet advised by Inter-ministerial Committee (IMC) on SAA, took a decision not to place SAA under liquidation but rather to support the business rescue plan. The allocation of the R10.5 billion for the implementation of SAA’s business rescue plan is proposed by Cabinet for parliament’s consideration and approval.

19 November 2020 - NW2633

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Hill-Lewis, Mr GG to ask the Minister of Finance

(1)What (a) total number of government guarantees have been granted to the SA Airways for the purposes of assisting the public entity to secure loans from credit providers since the Minister of Public Enterprises took charge of the airways on 31 March 2007 (details furnished), (b) was the monetary value of each government guarantee, (c) was the date of each government guarantee that was granted and (d) was the justification for each government guarantee that was granted; (2) which of the specified guarantees have had to be paid out to creditors, either partially or in full, by Government due to SAA not being able to repay the loans on its own?

Reply:

Government guarantees granted to SAA

SAA GUARANTEES

Date issued

Amount (R' Million)

Going Concern Guarantee

March 2007

1 300

Going Concern Guarantee

September 2009

1 600

Going Concern Guarantee

July 2012

5 006

Going Concern Guarantee

December 2014

6 488

Going Concern Guarantee

September 2016

4 720

Total Guarantees issued

 

19 114

SAA has been granted several guarantees since being unbundled out of the Transnet Group in 2007. All the guaranteed issued to SAA were for the granted to allow the airline to meet the going concern requirements for signing off the airline’s financial statements. Total guarantees granted from 2007 to date amount to R19.1 billion.

Due to the poor financial performance and deteriorating solvency position of the airline, SAA could not raise debt funding on the strength of its balance sheet. Local and international lenders thus required any funding provided to SAA to be backed by a sovereign guarantee. Each of the guarantees provided to SAA was based on business plans which forecasted that the airline would attain financial sustainability and be able to settle its debts from internally generated funds.

Government guaranteedobligations settled through recapitalisations from government

Since June 2017, R26.4 billion of the recapitalisations that government provided to SAA have been made to settle the airline’s government guaranteed obligations. This includes R10.3 billion of the R16.4 billion announced in the February 2020 budget that will be provided to SAA over the 2020 Medium Term Expenditure Framework (MTEF) for the settlement of government guaranteed obligations but excludes the R10.5 billion for business rescue implementation announced in the 2020 Medium Term Budget Policy Statement (MTBPS).

Historically, once SAA’s guaranteed obligations have been settled, the airline had used its freed-up guarantee facility to raise additional government guaranteed debt. Conditions have been put in place to reduce this risk to the fiscus.

19 November 2020 - NW2632

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Hill-Lewis, Mr GG to ask the Minister of Finance

What (a) number of cash recapitalisation cases have been granted to the SA Airways by the National Treasury since the airline was placed under the Minister of Public Enterprises on 31 March 2007 (details furnished), (b) was the monetary value of recapitalisation that was granted in each case, (c) was the date of each cash recapitalisation that was effected and (d) was the justification for each cash recapitalisation that was granted?

Reply:

HISTORIC SAA RECAPITALISATIONS

Purpose

Date

Repayment of debt (R')

Working Capital Requirements

Total

SAA Labour Restructuring Plan and provision of working capital

2007

 

744 000 000

744 000 000

 

2009

 

1 560 000 000

1 560 000 000

Repayment of Government guaranteed debt

Jun-17

2 208 000 000

 

2 208 000 000

Repayment of Government guaranteed debt

Sep-17

1 800 000 000

1 200 000 000

3 000 000 000

Repayment of government guaranteed debt; settlement of outstanding creditors and provision of working capital

Dec-17

3 600 000 000

1 192 000 000

4 792 000 000

Repayment of domestic lenders

Feb-19

5 000 000 000

 

5 000 000 000

Working capital requirements

Aug-19

 

2 000 000 000

2 000 000 000

Repayment of domestic lenders

Sep-19

3 500 000 000

 

3 500 000 000

Repayment of government guaranteed Post Commencement Funding

Aug-20

10 300 000 000

 

10 300 000 000

Total

 

26 408 000 000

6 696 000 000

33 104 000 000

SAA has been recapitalised by R33.1 billion since being unbundled out of the Transnet Group in 2007. Of the total amount historically provided for recapitalization, R26.4 billion has been provided for the repayment of government guaranteed debt whilst R6.7 billion has been for the provision of working capital.

10 November 2020 - NW2578

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

On what basis did he decide to relent on the question of wasting more taxpayer money on SA Airways instead of refusing to provide yet another bailout to the airline?

Reply:

SAA’s Board of Directors placed the airline into voluntary business rescue on 6 December 2019 as a result of ongoing liquidity constraints and the airline’s inability to meet its financial obligations as and when they became due.

Upon being placed into business rescue, the Business Rescue Practitioners subsequently assumed responsibility for the management of the airline and finalised a business rescue plan to restructure SAA. Additional funding is required for the successful implementation of the plan as without funding the airline will be placed under liquidation.

Subsequently, Cabinet resolved to support the restructuring of SAA in order to avert the liquidation of the airline and the additional R10.5 billion allocated to SAA will therefore be utilised for the implementation of the business rescue plan.

22 October 2020 - NW2208

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Schreiber, Dr LA to ask the Minister of Finance

Whether any portion of the $4,3 billion loan granted to the Republic by the International Monetary Fund (IMF) will be used to pay the salaries of public servants; if not, what mechanisms have been put in place to ensure that no portion of the IMF loan will fund the salaries of the public servants; if so, what are the relevant details?

Reply:

The loan of $4.3 billion loan granted to the Republic by the International Monetary Fund (IMF) will not be earmarked specifically for the payment of salaries. The loan is a special facility created for member countries experiencing emergencies. It is called a Rapid Financing Instrument (RFI), and does notbear conditionalities, nor does it require the implementation of an IMF structural programme. Countries, however, receiving IMF emergency financing have committed totransparently utilising and reporting spending.Thus, the loan receipts (or disbursements) will form part of the National Revenue Fund to be used to support existing government programmes, which could include salary payments.

Access to the RFI was specifically expanded to help countries deal with the balance of payments (BOP) problems arising from the COVID-19 pandemic. The loan provides a low-interest opportunity for South Africa to provide counter-cyclical support to the economy and fund COVID-19 related emergency support. In other words, it mitigated the need for massive spending cuts in response to the dramatic revenue shortfalls of government, and avoided an explosion in the financing needs brought on by high-cost borrowings.

The reporting on the loan’s use will form part of the general responsibility of government of publishing all information related to COVID-19-related support programmes, including procurement.

22 October 2020 - NW2201

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Hill-Lewis, Mr GG to ask the Minister of Finance

(1)What amount has been refunded to the State by a certain political organisation (name furnished) in respect of the irregular use of an SA Air Force jet to transport a delegation of the specified political organisation to Zimbabwe for talks with a political party in that country; (2) whether the specified amount is the (a) full and (b) final amount with which the specified political organisation will refund the State; if not, what action is the National Treasury taking to recover the full cost of the irregular flight; if so, what are the relevant details?

Reply:

Any revenue due to the state flows to the National Revenue Fund (NRF) through departments concerned before it is surrendered to the NRF. As it stands, the Department of Defence is still working on the matter and will inform the National Treasury accordingly once the matter is finalised.

14 October 2020 - NW2000

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Schreiber, Dr LA to ask the Minister of Finance

(1)Whether public funding of any nature has ever been paid to (a) certain persons (names furnished) and/or certain entities or initiatives (names and details furnished); if not, what is the position in this regard; if so, what are the relevant details; (2) whether there was an application of any nature to obtain state funding and/or tenders by the specified persons, entities and/or initiatives; if not, what is the position in this regard; if so, what are the relevant details?

Reply:

1(a) National Treasury only has access to payments information from national and provincial departments using the BAS payment system. In order to search for information against individuals, the National Treasury would need the identification numbers as a search by names may result in inaccurate results.

1(b) A search was done on the BAS payment system for the period 1 April 2017 to date and no payments were found that were made to the entities or initiatives mentioned.

2 The National Treasury is not aware of any application of any nature to obtain state funding and/or tenders by the specified persons, entities and/or initiatives.

14 October 2020 - NW1885

Profile picture: Ndlozi, Dr MQ

Ndlozi, Dr MQ to ask the Minister of Finance

(a) What total amount has (i) the NationalTreasury and (ii) all entities reporting to him spent on (aa) Covid-19 related activities and (bb) personal protective equipment from 1 March 2020 to 29 July 2020, (b) what goods and/or services were procured, (c) what procurement processes were followed, (d) what are the details of each company that was awarded a contract, (e) on what date was each contract awarded and (f) what was the monetary value of each contract?

Reply:

NATIONAL TREASURY

(i) The department procured the following goods and services connected to the Covid-19 pandemic:

(d)

Name of company

(aa)

Covid-19 related activities

(bb)

Personal Protective Equipment

(c)

Method of procurement

(b)

Service and/or product that each company rendered

Lechoba Medical Technologies

R182 263.50

-

Three quotations

Hand sanitizers

Masana Hygiene Services

R156 302.26

-

Three quotations

Hand sanitizers liquid dispensers

 

R121 446.00

-

Three quotations

Building decontamination

 

R3 801.00

-

Three quotations

 
 

R10 500.00

-

Three quotations

 

Nesoscope Holdings (Pty) Ltd

R68 410.50

-

Emergency deviation on existing contract

Surface sanitizers

MPM Enviro Enterprise

-

R342 125.00

Three quotations

N95 masks and latex gloves

Class Three Medical Solution

R12 128.82

-

Three quotations

Thermometers

Tsuamo Civils (Pty) Ltd.

R9 000.00

-

Three quotations

Building decontamination

 

R1 900.00

-

1 quotation amount below R2000.00 SCM threshold

 
 

R75 950.00

-

Emergency deviation memo approved

 
 

R80 850.00

-

Three quotations

 

Khulanathi Black Ginger

-

R135 125.00

Three quotations

Cloth masks reusable

Benixo Utility Services

R98 640.00

-

Three quotations

Building decontamination

Armani Office Solutions

R5 900.65

-

Three quotations

Face shields

Techcon Systems Pty Ltd

(f)

R332 062.50

-

Three quotations

(e)

Contract signed on
7 July 2020

Rental, supply, installation, replenishing and maintenance of foot operated hand sanitizer dispensers.

TOTAL

(a) R1 636 405.23

   

ACCOUNTING STANDARDS BOARD

(a)(aa) R2 592.29

(bb) R2 681.00

(b)

Lockdown expenditure to enable staff to work from home

 

What?

From whom?

Process

Month

Amount

1 Printer cartridge

Reimbursement of staff member

Internet purchase by staff member from Takealot

30 June 2020

R229.00

DATA top up

MTN

Existing contract

May, June, July

R2 104.00

Zoom license

Zoom

Internet purchase

15 July 2020

R259.29

PPE

       

3 COVID 19 posters

UVO Communications

3 written quotes

28 May 2020

R414.00

3 Ply facemasks

Takealot

3 written quotes

30 June 2020

R370.00

1 infrared thermometer

Alphabetsoup

3 written quotes

8 May 2020

R1 897.00

CO-OPERATIVE BANKS DEVELOPMENT AGENCY

The CBDA did not send on Covid-19 related activities since CBDA is housed in the National

Treasury (NT) building and follow NT protocols.

DEVELOPMENT BANK OF SOUTH AFRICA

a) ii) (aa) R 57,530,574-20

(bb) R 27,578,337-70

 

b) Drilling and equipping of borehole pumps

Isolation Pods

Screening Units

PCR Testing machinery and consumables

Microbial Fogging

Deep Cleaning

PPE

 

c) Drilling and equipping of borehole pumps – open advertised tender

Isolation Pods – single source emergency COVID19 procurement

Screening Units – open advertised tender

PCR Testing machinery and consumables – sole source

Microbial Fogging – 1 quote emergency COVID19 procurement

Deep Cleaning – Request for Quote to 3 service providers

PPE – where value was less than R10,000, 1 quote. Where value exceeded R10000, competitive Request for Quotation to 32 companies.

The following section constitutes responses to sections (d), (e) and (f) in tabular format:

Description of goods and services

(d)

(e)

(f)

 

Company name

Company Registration

Date contract was awarded

Contract

Amount

Drilling and equipping of borehole pumps

MVULA TECH

2001/046344/23

25 June 2020

R 807,058.50

 

MICROZONE PROJECTS

2014/114267/07

 

R 2,962,860.00

 

KOLWANA

2010/102453/23

 

R 2,684,675.00

 

NDZALO

2016/294581/07

 

R 1,674,342.50

 

BLUE STAR

2011/036213/23

 

R 2,218,177.50

 

MAGISTRA

2015/170215/07

 

R 2,205,700.00

 

ZHEMVELO

2016/412151/07

 

R 769,860.00

 

ZITHUNZUZO

2006/103795/23

 

R 377,775.00

 

ZITHUNZUZO

2006/103795/23

 

R 368,000.00

 

MTHOMBELI

2008/190157/23

 

R 855,660.38

 

MSK CONSTRUCTIONS

2014/174945/07

 

R 442,218.13

Isolation pods

Everblock SA

 

24 June 2020

R 14,124,600.00

Description of goods and services

(d)

(e)

(f)

 

Company name

Company Registration

Date contract was awarded

Contract

Amount

Screening units

Abacus Space Solutions - Division of Waco Africa

 

02 July 2020

R 827,087.48

 

Container Conversions

   

R 1,054,099.20

 

Kwikspace Modular Buildings

   

R 2,345,550.81

PCR Testing machinery and consumables

LTC Tech SA Pty Ltd

 

15 May 2020

R 22,341,159.74

Microbial Fogging

Kagollo

2012/024874/07

26 March 2020 and 28 April 2020

R 480,000.00 and

R 480,000.00

Deep Cleaning

Lapeng la gae

2009/032219/23

18 March 2020 and

05 May 2020

R 241,500.00 and

R 270,250.00

Description of goods and services

(d)

(e)

(f)

 

Company name

Company Registration

Date contract was awarded

Contract

Amount

PPE

Supra-Health Care (Pty) Ltd

2007/027848/07

21 May 2020

R 1,815,401.50

 

BEADICA 423 CC

2011/085389/23

03 July 2020

R 3,010,781.25

 

PSR Solutions (Pty) Ltd

2014/183355/07

18 June 2020 and

03 July 2020

R 2,547,000.00

and R770,525.00

 

DPA Diesel and Electrical Services (PTY) LTD T/A DPA Chem

1961/000129/07

18 June 2020 and

03 July 2020

R 4,990,198.00

and R 2,325,250.00

 

GTL Consulting (Pty) Ltd

2016/202388/07

18 June 2020

R 11,765,000.00

 

Tumis Projects

2014/073200/07/23

29 July 2020

R 85,750.00

 

Melokuhle

2012/197977/07

18 May 2020 and 21 May 2020

R 75,637.82

 

Mmusi

2009/101050/23

15 June 2020 and

05 August 2020

R 9,400.00

And

R4,700.00

 

Steiner

1969/005893/07

from 30 March 2020 to 13 July 2020

R 37,557.68

Description of goods and services

(d)

(e)

(f)

 

Company name

Company Registration

Date contract was awarded

Contract

Amount

PPE

KPRG

1996/051772/23

18 March 2020 and

24 March 2020

R 32,056.25

 

Protechnik Laboratories

1968/008611/30

18 May 2020

R 9,394.70

 

Life Occupation

2012/07783/07

30 March 2020

R 1,185.30

 

Servest

1997/006391/07

04 June 2020

R 4,844.20

 

Hamisi

2015/077626/07

30 April 2020

R 93,656.00

FINANCIAL INTELLIGENCE CENTRE

FINANCIAL SERVICES CONDUCT AUTHORITY

FSCA spent for Covid-19 related activities and personal protective equipment is as follows:

a) The total amount of R341 884.20 was spent from 1 March 2020 to 29 July 2020.

b) goods and/ services that were procured are:

  1. Cloth masks;
  2. Hand sanitizers;
  3. All-purpose wipes / cloths;
  4. Digital body thermometer infrared non-contact;
  5. Disposable gloves; and
  6. Sanitizing/Disinfecting of FSCA and FST Buildings;

c) All items were procured from existing cleaning, hygiene and pest control services contract with Masana Hygiene Services except for cloth masks which were procured from The Express Penguin Consultancy (Pty)Ltd identified from the list of SMEs provided by National Treasury.

d) Details of suppliers:

(i) Masana Hygiene Service (Pty) Ltd, Registration number - 2014/110265/07, Business Address - Block 1 Falcon Crest Office Park, 142 South Street, Dooringkloof, Centurion; Contact numbers - 012 663 1626; 071 571 7311. Owned by TSHILILO CYNTHIA MKHOMBO and MIKATEKO RICHARD MKHOMBO;

(ii) The Express Penguin Consultancy (Pty) Ltd, Registration number 2015/194676/07, Business Address - 33 Dane Road, Castenhof, Midrand, contact numbers – 084 974 0016, Owned by Pamela Lozizwe Ngwenya

e) No new contract was awarded between 01 March 2020 to 29 July 2020.

f) Not applicable, see (a) and (e) above.

GOVERNMENT EMPLOYEES PENSION FUND

(aa) The GEPF spend a total of R74 462.45 on Covid-19 related activities.

(bb) The GEPF spend a total of R35 552.23 on personal protective equipment

(b) The GEPF purchase the following personal protective equipment:

  • Masks
  • Cloves
  • Face shields
  • Bottle spray trigger
  • Sanitizer
  • Protective overalls
  • Infra red thermometer
  • Multi surface wet wipes

The GEPF disinfected its office space on two occasions after positive Covid-19 cases were reported.

(c) Emergency procurement processes were followed to disinfect the GEPF’s offices and the existing contract with a cleaning service was utilized. All personal protective equipment was purchased from suppliers.

(d) MasanaHigiene Services disinfected the GEPF’s offices.

(e) The GEPF’s offices was disinfected on 6 May and 8 June 2020.

(f) The total value was R38 910.23

GOVERNMENT TECHNICAL ADVISORY CENTRE

a) Total spent on:

aa) Covid19 activities is R446, 562.27

bb) PPE from 1 March 2020 to 29 July 2020 isR27,500.00

b) Goods procured include:

  1. 500 branded face masks for GTAC employees.
  2. Clear Perspex screens to serve as desk dividers.
  3. Additional data sim cards were procured to enable staff to work from home.

c) All procurement took the form of Requests for Quotations. Data sim cards were requested on the existing Vodacom RT15 contract.

d) See table below.

e) See table below.

f) See table below.

SUMMARY TABLE FOR COVID-19 RELATED ACTIVITIES FOR GTAC

Description

Method of Procurement

Request No

Date Procured

Service Provider

Companies Registration Nr

Quantity

Total Invoice

GTAC branded 2-ply netted face masks

RFQ

RFQ/2020-21/185

2020/05/28

Mothizamo Trading

2016/445473/07

500

R27,500.00

COVID19 clear perspex screens for all GTAC desks: Phase 1 (Programme 1 and 3)

RFQ

RFQ/2020-21/191

2020/07/06

Maverick Business Solutions

Agreement with NT Reg: 2012/111721/07

305.7m

R165,385.81

COVID19 clear perspex screens for all GTAC desks: Phase 2 (Programme 2)

RFQ

RFQ/2020-21/195

2020/08/21

Pheladi Maisa Trading

2009/214327/23

84.4m

R53,500.00

Mobile Voice and Data - Working From Home

Existing Vodacom RT15-2016 Contract

N/A

April - August 2020

Vodacom

N/A

7 Voice Lines

39 Data Sims

Data claims from staff without Vodacom connectivity up to maximum of R487.50 per month

R200, 176.46

GOVERNMENT PENSIONS ADMINISTRATIONS AGENCY

The Government Pensions Administrations Agency has kept a spreadsheet to monitor the Covid-19 expenditure incurred.

Please find attached the most recently updated spreadsheet to answer (aa), (bb), (b), (c), (d), (e) and (f).

INDEPENDENT REGULATORY BOARD FOR AUDITORS

1 - COVID-19 related activities between 1 March and 29 July 2020

     

GOODS AND SERVICES PROCURED

PROCUREMENT PROCESSES FOLLOWED

COMPANIES APPOINTED

COMPANY REGISTRATION NUMBER

DATE OF APPOINTMENT

VALUE OF EACH CONTRACT

(b)

(c)

(d)

(d)

(d)

(f)

SANITISERS AND WET WIPES

3 QUOTATIONS

SERVEST

1997/006391/07

11/03/2020

3 795.00

SURFACE DISINFECTANT, THERMOMETERS

3 QUOTATIONS

WE CLEAN IT ALL SHOP

2017/509402/07

29/04/2020

5 500.00

           

HAND SANITIZER REFILL SACHETS

3 QUOTATIONS

WE CLEAN IT ALL SHOP

2017/509402/07

11/06/2020

10 800.00

       
  1. (aa)

20 095.00

2 - Spent on procurement of PPEs

         

GOODS AND SERVICES PROCURED

PROCUREMENT PROCESSES FOLLOWED

COMPANIES APPOINTED

COMPANY REGISTRATION NUMBER

DATE OF APPOINTMENT

VALUE OF EACH CONTRACT

(b)

(c)

(d)

(d)

(d)

(f)

180 x FACE MASKS FOR STAFF MEMBERS ( Note 1)

 3 QUOTATIONS

RITA HATTINGH (employee of the IRBA)

IRBA STAFF MEMBER - NO COMPANY ESTABLISHED

09/06/2020

3 150.00

HAND SANITISERS

3 QUOTATIONS

SERVEST

1997/006391/07

29/04/2020

6 513.60

RECEPTION DESK SCREEN

3 QUOTATIONS

SIGNARAMA

2011/099901/23

03/06/2020

4 143.43

GLOVES

3 QUOTATIONS

WE CLEAN IT ALL SHOP

2017/509402/07

29/04/2020

1 850.00

SANITATION STATIONS

3 QUOTATIONS

WE CLEAN  IT ALL SHOP

2017/509402/07

11/06/2020

12 150.00

       
  1. (bb)

27 807.03

Note 1:

The face masks were obtained by obtaining 3 quotes and the IRBA employee was the cheapest. A first batch of 90 masks were ordered and when the OHS regulations were published an additional batch of 90 were purchased. Total transaction value of R3 150.

PENSION FUNDS ADJUDICATOR

LAND BANK

(aa) Covid-19 related activities:

(bb) personal protective equipment from 1 March 2020 to 29 July 2020, (b) what goods and/or services were procured, (c) what procurement processes were followed, (d) what are the details of each company that was awarded a contract, (e) on what date was each contract awarded and (f) what was the monetary value of each contract?