ATC121026: Budgetary Review and Recommendations Report of the Standing Committee on Finance on the Performance of the Statistics South Africa, dated 25 October 2012

BUDGETARY REVIEW AND RECOMMENDATIONS REPORT OF THE STANDING COMMITTEE ON FINANCE ON THE PERFORMANCE OF THE STATISTICS SOUTH AFRICA , DATED 25 OCTOBER 2012

The Standing Committee on Finance, having assessed the performance of Statistics South Africa (Stats SA) for the 2011/12 financial year, reports as follows:

1. Introduction

In terms of section 5(2) of the Money Bills Amendment Procedure and Related Matters Act No. 9 of 2009, committees must annually submit budgetary review and recommendation reports for tabling in the National Assembly for each department. A budgetary review and recommendation report must provide an assessment of a department’s service delivery performance given available resources, an assessment on the effectiveness and efficiency of a department’s use and forward allocation of available resources, and it may include recommendations on the forward use of resources.

2. The Mandate and Role of the Committee

The Standing Committee on Finance was established in terms of section 4(1) of the Money Bills Amendment Procedure and Related Matters Act No. 9 of 2009. The mandate of the Committee is conferred to it by the Constitution, legislation, the standing rules or a resolution of a House, including consideration and report on the following:

• The national macro-economic and fiscal policy;
• Amendments to the fiscal framework, revised fiscal framework and revenue proposals and Bills;
• Actual revenue published by the National Treasury; and
• Any other related matter set out in the Money Bills Amendment Procedure and Related Matters Act No. 9 of 2009.

Furthermore, the mandate encompasses the committee’s function to legislate, conduct oversight on the Executive’s actions and its entities. The Money Bills Amendment Procedure and Related Matters Act No. 9 of 2009 makes provisions for a procedure for this committee to amend money bills.

3. Methodology.

In complying with section 5(2) of the Money Bills Amendment Procedure and Related Matters Act, Act No 9 of 2009, the Standing Committee on Finance held a meeting on the 2011/12 Annual Report of Stats SA. The Office of the Auditor-General was also invited to give input during the budget review and recommendation report process. The report therefore reflects key issues that were identified by the Committee.

4. Mandate and role of Stats SA

Stats SA is a national government department accountable to the Minister in the Presidency responsible for the National Planning Commission. The activities of the Department are regulated by the Statistics Act, which ensures independence from political interference in the production and dissemination of official statistics.

According to the Statistics Act, the purpose of official statistics is to assist organs of state, businesses, other organisations and the public in planning, decision-making, monitoring and assessment of policies.

Stats SA is also mandated to:

• Promote coordination among statistical producers in South Africa in order to improve the quality, consistency, comparability and optimum use of official statistics and thereby avoid unnecessary duplication;

• Provide statistical advice to organs of state; and

• Liaise with statistical agencies of other countries and international agencies.

The aim of Statistics South Africa is to provide a relevant and accurate body of statistics to inform users on the dynamics in the economy and society by applying internationally acclaimed practices.

5. Organisational Performance

The Annual Report shows that Stats SA’s budget is divided into 7 programmes, these programmes are the following:

5.1 Programme 1: Administration

The purpose of the Administration Programme is to manage the department and provide centralised support services.

The division coordinated the compilation of the 2012/13 work programme, quarterly reports on organisational performance and the 2010/11 annual report. A Strategy in Action programme was rolled out with the intention of communicating the new strategic direction to different levels across Stats SA. Managers were trained to communicate the new strategic direction and Stats SA’s value system.

5.2 Programme 2: Economic Statistics

The purpose of the Economic Statistics Programme is to p roduce economic statistics to meet user requirements.

This division produced quarterly GDP estimates reporting on 10 sectors of the economy, independent annual GDP estimates on 34 sectors of the economy and GDPR estimates as scheduled. The division also produced information on the level of economic activity through timely releases on supply and use tables, a research document on input/output tables, discussion documents on information and communication technology and non-profit institutions and a report on updated Tourism Satellite Accounts (TSA) for South Africa . Information on sustainable resource management and use was produced through a feasibility study on the availability of water data, and discussion documents on fisheries, minerals and energy.

5.3 Programme 3 - Population and Social Statistics

The purpose of the Population and Social Statistics Programme is to p roduce population, demographic, labour market and social statistics to meet user requirements in line with internationally recognised practices.

This division conducted the Income and Expenditure Survey. Data collection, editing and validation were completed. A clean dataset for the CPI basket was not compiled as scheduled as further data verification had to be done. It is expected to be completed in July 2012.

5.4 Programme 4 - Methodology and Standards

The purpose of the Methodology and Standards Programme is to p rovide expertise on quality and methodology for official statistics, standards for conducting surveys and business sampling frame.

Methodological and systems solutions support was provided to survey areas through the drawing of samples for economic and social surveys and the development of technical solutions as per requirements from survey areas. Research reports were compiled on automating the generation of snapshots and the use of electronic questionnaires for data collection. A major achievement of the division was conducting an independent survey, the Post-enumeration Survey (PES), to determine the census undercount. PES activities included matching and reconciliation visits, the review of PES methodologies, and the conducting of PES fieldwork during November. Challenges faced by the division included the development of technical solutions.

5.5 Programme 5 - Statistical Support and Informatics

The purpose of the Statistical Support and Informatics is to e nable service delivery programmes through the use of technology in the production and use of official statistics, and to promote and provide better access to official statistics.

Development and maintenance of the dwelling frame included the completion of 10 ,8 million points and the displaying of 1 million number plates. 15 800 place names and 47 000 EAs were maintained. Support to Census 2011 included the production of 80 000 EA summary books, the creation of 50 000 maps and the listing of 103 000 EAs .

5.6 Programme 6 - Corporate Relations

The purpose of the Corporate Relations Programme is to p rovide statistical information to support policy makers, to manage stakeholders and to interact with international statistics agencies, as well as providing effective communication services.

Census 2011 provided an opportunity to build the Stats SA brand by bringing the census message to every household in the country. Key communication initiatives included informing and consulting a wide variety of civil society organisations, engaging the media and mobilising Parliamentarians and public officials at all spheres of government. These key stakeholders became important advocates of the census message in their various constituencies. Other achievements of the division included the coordination of two general staff meetings, press conferences for the GDP and QLFS, and monthly press releases for CPI and QLFS. Capacity constraints hampered the production of internal and external newsletters, the training of product specialists on media communications, and media training on the provinces.

5.7 Programme 7 - Survey Operations

The Purpose of the Survey Operations Programme is to provide collection and processing support to produce official statistics.

5.7.1 Census 2011

The numerical profile and social dynamics of a country are essential for any democracy to measure the effect of its programmes and policies. It is part of an integrated national statistics system and forms the benchmark for the population count at national and local levels. Census information becomes the demographic, population and economic baseline information that is collected periodically to inform planning, monitoring and evaluation across government and is also essential for monitoring internationally adopted MDGs .

Stats SA conducted the third democratic population census in October 2011. The importance of census information cannot be overemphasised as it becomes the baseline and benchmark for statistics in the national statistics system.

The population count is the key denominator for both economic and social information. The census information is the only data source that provides statistical information at a sub-national level and therefore informs planning, monitoring and evaluation, and decision-making at all levels of the state. The census information is also used to update the master sample which becomes the sample frame for all household surveys to be conducted in future. Thirteen days were added for non response follow-ups by supervisors to ensure maximum coverage of households. The census management team has overcome many challenges and constraints across the different census work streams. The team has closely monitored the census operation on the ground and steered this massive logistically complex project during the listing, publicity and collection phases across the country.

The census questionnaire was translated in all official languages. As part of the publicity programme, the ‘Know your enumerator’ campaign was rolled out. Every dwelling structure in the country across 103 000 enumeration areas was listed to ensure that the more than 150 000 contract field staff visited the 14 million dwellings. Special arrangements were made to count the homeless, people in hospitals, retirement facilities, in transit, etc. Partnerships were established with various stakeholder groups that assisted the census team in gaining access to ‘difficult to count’ areas such as high-walled areas, security complexes, and farms, to mention a few. The census collection phase was successfully completed as planned. The census results will be released during October 2012.

6. Overview of the service delivery environment for 2011/12

Stats SA produces and disseminates statistics under two broad statistical programmes, namely Economic Statistics and Population and Social Statistics. Both these programmes involve data collection through censuses, surveys and administrative data sources. The statistical programmes are supported by the six clusters that provide support to survey operations; expertise on methodology and standards for official statistics; IT services for the production and effective management of official statistics; provincial support, stakeholder management services, corporate communication services and international relations; and financial and human resource services.

6.1 Economic Statistics subsystem

The following was achieved in these areas:

• Economic growth

Without proper and accurate measurement of the economy, sound economic policies that meet the demands of both growth and the reduction of poverty are difficult to achieve.

The overarching objective of measuring the economy is to ensure that both the level and growth of GDP are credible. The strategic thrust to improve the measurement of economic growth is twofold, namely to maintain the credibility of the level and growth of GDP by upgrading, adapting and introducing new series to deal with an evolving economy; and to enhance the relevance of economic statistics to meet the demands of users and policymakers by focusing on the most relevant aspects of the economy.

Stats SA published quarterly and annual GPD estimates, and also published 149 monthly, quarterly, annual and periodic industry statistics releases.

• Prices

Timely and accurate information on price changes is an important prerequisite for determining monetary policy. It would not be possible to determine appropriate interest rates in the absence of a comprehensive consumer price index (CPI). Similarly, the compilation of producer prices plays an important role in determining where price pressures in the production side of the economy are coming from. Any policy instrument relies on evidence from these price changes. The CPI and producer price index (PPI) are the key economic indicators informing price stability.

Stats SA published monthly CPI and PPI releases and finalised Income and Expenditure Survey (IES) data collection.

• Sustainable resource management

Statistics related to this objective is governed through the system of environmental economic accounts (SEEA). Stats SA’s role in implementing SEEA is mainly a coordinating role, as the required basic statistics fall outside the scope of national statistics offices. The full development of SEEA requires increased capacity in Stats SA to interact and advise other role players in the statistics system. The actual compilation of the accounts will be undertaken by Stats SA.

Stats SA compiled discussion documents on environment and sustainable resource management.

• Employment, job creation and decent work

To build a more inclusive and equal society, South Africa needs a marked expansion in employment. This is not only an economic objective; putting more people to work contributes to human development, income redistribution and social cohesion. Broadening economic participation assists in curbing dependency, countering crime and reducing poverty, illness, alienation, and mental stress, and contributes to social cohesion (Budget Review: 2010).

Stats SA published quarterly employment and earnings statistics as well as quarterly labour force survey. There was also improved collaboration with SARS on employment statistics.

6.2 Social statistics subsystem

• Life circumstances, service delivery and poverty

One of the country’s key objectives is to halve poverty by 2014. This is also one of the eight global objectives of the Millenium Development Goals ( MDGs ). South Africa ’s poverty reduction commitment was at the centre of the Reconstruction and Development Programme to ‘meeting basic needs’.

Stats SA published results of annual General Household Survey (GHS) and published a series on development indicators.

• Population dynamics

The demographic profile and population dynamics of a country are used for a variety of purposes across national priorities and programmes, including for resource allocation; to monitor social and demographic changes; to underpin policy development and monitoring; to support the statistical infrastructure for the country; and to aid investment decisions. The changing patterns of migration, mortality and fertility are key datasets where policy responses would seek understanding for informed and appropriate interventions.

Stats SA finalised fieldwork for census 2011, commenced with data processing, published monthly and annual vital statistics as well as mid-year population estimates

• Safety and security

The rule of law is the foundation of a fair and just society. The National Crime Prevention Strategy advocates a dual approach to safety and security – effective and efficient law enforcement and the provision of crime prevention programmes to reduce the occurrence of crime. Crime statistics are indispensable tools of knowledge for any society that aims to reduce its crime rate and improve its administration of the justice system. There are a number of organs of state that produce statistical information on ‘Safety and Security’. These are primarily based on administrative records and include institutions such as the South African Police Service, Department of Justice and Department of Correctional Services.

Stats SA published results of Victims of Crime Surveys, established a partnership with SAPS and provided technical support and advice on crime statistics.

• Health

Stats SA produces annual statistics on causes of death, which is a key indicator of the health profile of South Africa . This series is based on sources of data received from the Department of Home Affairs. The main producer of health statistics is the Department of Health through the district health information system, as well as the demographic and health survey. The Department of Health deprioritised the undertaking of the demographic and health survey, but Stats SA is of the view that this survey is important in providing national outcome data on the health profile of South Africa and therefore proposes to undertake the functions and funding of this survey in the future.

Stats SA published Causes of death survey.

• Education

Stats SA produces annual statistics on education through the general household survey. The population census is a valuable source of information on the education levels of the population. The main producer of education statistics is the Department of Basic Education through the education management information system and annual surveys. Stats SA have been in a longstanding partnership with the Department of Basic Education. Statistical education standards have been developed by the Department of Basic Education in partnership with Stats SA, and discussions on the continent are ongoing in this regard. The Department of Basic Education requested Stats SA to support it in the self-assessment phase of its registers against South African Statistical Quality Assessment Framework (SASQAF) in order to identify quality gaps, and to certify education statistics as official.

Stats SA published statistical information on education.

• Rural development, food security and land reform

The status of agricultural statistics in South Africa is a highly uneven effort in terms of coordination among data producers. There is a variety of data producers, with each producing data in a specific area of interest. There is a lack of information concerning the size of South Africa ’s total agricultural land, the number of livestock and human population deriving a livelihood from small-scale farming. Often, conflicting data is disseminated, creating uncertainty in the sector, and important characteristics of the sector that need to be measured are not being addressed as it should. Stats SA conducted an agricultural census in 2007, with a funding from the Department of Agriculture, and all farms registered for tax were covered.

Stats SA published statistical information on food security.

7. Financial performance

7.1 Expenditure trend

Stats SA’s original allocation for the 2011/12 financial activities was R3 ,241 billion which included R2,201 billion earmarked for the Census 2011 project. An additional allocation of R486 ,994 million was received during the Adjustment Estimates of National Expenditure to address the shortfall on Census 2011 requirements. This included a R287 million rollover of Census 2011 funds. The final appropriation for the 2011/12 financial year was R3 ,730 billion.

Actual expenditure as at 31 March 2012 amounts to R3 ,674 billion, representing 98,5per cent of the total allocated budget.

Actual spending for voted funds amounts to R1,521 billion, which represents 99,5 per cent of the total allocation of R1,529 billion, whilst actual spending for Census 2011 amounts to R2,153 billion, which represents 97,8 per cent of the earmarked funds.

The Department under spent on the allocated budget by 1 ,5 per cent, which amounts to R55,746 million. Savings on Census 2011 amounting to R47 ,048 million have been requested to be rolled over to the 2012/13 financial year in line with Treasury Regulation 6.4 to finalise Census 2011 activities.

Table 1 below represents the expenditure trend.

Table 1: Expenditure trend spikes dramatically (Stats SA, 2012)

7.2 Expenditure per programme

Table 2 below represents the expenditure per programme.

Programme	Adjusted Appropriation	Virement	Final Appropriation	Actual Expenditure	Variance	Expenditure as per cent of final appropriation
	R’000	R’000	R’000	R’000	R’000	per cent
Administration	413 370	2 387	415 757	414 941	816	99.8
Economic Statistics	194 146	(9 735)	184 411	183 980	431	99.8
Population & Social statistics	102 555	(8 204)	94 351	89 646	4 705	95.0
Methodology & Standards	72 320	(4 813)	67 507	66 651	856	98.7
Statistical Support & Informatics	192 596	(15 407)	177 189	175 722	1 467	99.2
Corporate Relations	445 248	25 660	470 908	470 669	239	99.9
Survey Operations	2 309 892	10 112	2 320 004	2 272 772	47 232	98.0
Total	3 730 127	-	3 730 127	3 674 381	55 746	98.5

Table 2: Expenditure per programme (Stats SA, 2012)

8. PFMA audit outcomes for the 2011/12 financial year

Stats SA received a qualified opinion based on incomplete and inaccurate accruals.

8.1 Key focus areas

8.1.1 Supply Chain Management

Four a wards to the value of R379 017 were made to suppliers owned by employees of Stats SA. 58 officials with an interest in suppliers to other state institutions did not obtain approval to perform or engage in remunerative work outside their employment.

The requirement to comply with the applicable laws and regulations was not emphasised enough for all employees to support and to understand the importance of compliance with the internal control objectives as well as the applicable laws and regulations. Stats SA lacked adequate internal control processes and systems to identify employees with interest in contracts.

A contract to the value of R3 935 760 was only signed after the services were rendered. The contract management section did not ensure that all contracts were signed before services were rendered by the supplier.

8.1.2 Human Resources

The organisational structure of Stats SA was not approved by Minister . A memorandum dated 6 October 2011, was sent to the Minister to approve the recommended changes to the organisational structure, however at the date of the audit report such approval was not yet obtained.

Employment verifications / checks (i.e. criminal record check, qualification verification, reference checks, etc.) were not performed before appointments of employees were recommended. Management did not review and monitor compliance with the Public Service Regulations relating to recruitment activities. Stats SA also struggled with timely responses from the institutions that are dealing with the verifications.

Payroll reports were not returned to the CFO as required by the Treasury Regulations. Stats SA lacked monitoring processes to identify and follow up on pay points not returning payroll reports in a timely manner. Some payroll payments were made after termination dates of employment. There was a lack of review processes to identify resigned employees and timely remove them from the payroll.

Leave was not captured timely on PERSAL. Stats SA did not monitor the implementation of action plans to address internal control deficiencies identified during prior year audits. There was a lack in the review process to ensure that all leave approved was captured.

Stats SA did not have a policy on suspensions of employees. Management did not established and communicate policies and procedures to enable and support understanding and execution of internal control objectives, processes and responsibilities.

8.1.3 Information Technology Controls

Stats SA’s IT strategic plan and IT governance framework/charter was not approved , the IT strategic plan did not make provision for approval by the duly authorized management, whether DDG: Corporate Services or Chief Director: IT and had therefore not been submitted for approval.

Stats SA did not have a process in place to ensure that the system administrators’/ controllers’ activities would be reviewed on the network. Stats SA l acked management oversight to ensure that all user access control processes were appropriately documented in the network user account management procedures , and lacked management oversight to ensure the review of the network system administrators’ activities.

8.1.4 Material Errors/Omissions in AFS submitted for Audit

The accounting officer submitted financial statements for auditing that were not prepared in all material aspects in accordance with the modified cash basis as required by section 40(1)(a) and (b) of the PFMA. The material misstatements identified by AGSA with regard to the disclosure items were subsequently corrected.

There was a lack of adequate review of AFS by those charged with governance (incl. Audit Committee).

8.1.5 Financial Health Status

Of the approved capital budget, Stats SA underspent by R24,55 million. The savings related to capital assets were due to the economies of scale realised during the mass procurement of assets for the Census activities. Furthermore, the department leased printers, projectors and laptops for Census training in the 2 200 venues instead of making outright purchases.

Significant accruals in the current year - all voted funds approved for the next year will not be available for use; i.e. current year expenditure need to be paid from next year’s voted funds. An accrual-adjusted surplus for the year was not achieved.

Accruals increased as a result of an increase in the total number of transactions due to Census 2011. Stats SA only managed to pay about 70 per cent of invoices within 30 days as required due to the increased number of transactions.

Material losses were incurred . Irrecoverable damages and losses to government and hired vehicles amounting to R34, 396 million were written off by the department.

A further R33, 449 million of damages and losses to government and hired vehicles are under investigation.

8.2 Unauthorised expenditure

There was no unauthorised expenditure incurred during the current financial year.

8.3 Fruitless and wasteful expenditure

The opening balance for fruitless and wasteful exenditure was R480 000. New cases for the financial year amounted to R788 000 and mainly relate to “no shows” for travel and subsistence (hotels and plane tickets).

8.4 Irregular expenditure

The opening balance of irregular expenditure was R6,223 million. Irregular expenditure recorded during the year amounts to R2,768 million, of which R576 000 relates to non-compliance with SCM procedures, R1 million of a transfer payment to a university without the prescribed approval from National Treasury and the remaining R1,190 million to staff appointments that were not according to prescripts. Irregular expenditure to the vaue of R144 000 was condoned during the year. The balance for irregular expenditure under investigation at the close of the financial year was R8,847 million.

8.5 Investigations

Prepayments and advances disclosed in the 2010/11 and 2011/12 financial statements, included an amount of R7 ,762 million in respect of services procured and paid by Government Communications and Iinformation System (GCIS) on behalf of Stats SA during 2010-11 but the services were never rendered. This matter is still not resolved and the department has asked the Accountant General to investigate the matter.

Goods and services disclosed in the 2011/12 financial statements, include an amount of R35 ,770 million paid to a supplier for services rendered in the 2011/12 financial year. The evaluation criteria used to award the contract could not be determined by the audit team to form a conclusion whether the award was fair, equitable, transparent and cost effective. Stats SA requested the office of the Accountant General to investigate the matter in order to determine whether the award was fair, equitable transparent and cost effective.

8.6 Performance Audits

No performance audits were conducted during the year under review.

9. Deliberations

Following the interaction with the Statistics South Africa, the Standing Committee on Finance made the following comments:

· A concern was expressed about the Census 2011 results being released after the tabling of the MTBPS, considering that the results may have implications on the national budget going forward.

· A question was raised in terms of the two key issues that Stats SA can improve in order to attain a higher standard than the current achievement.

· Stats SA was requested to come up with a better model or method for handling the payments of fieldworkers especially those from a rural background.

· A question was raised on the extent to which Stats SA’s infrastructure needs for new premises contributed towards the qualified audit outcome.

· Stats SA was requested to comment on the monitoring mechanisms for material losses.

· The Committee indicated that Stats SA needs to provide for timeous appointment and training of Service Providers especially SMMEs within rural areas.

· A question was raised regarding how communities view the role of Stats SA and Census and whether they understand the importance of being counted.

· The Committee enquired whether all service providers were paid within 60 days as this may have had an impact on the audit opinion.

· A concern was expressed in relation to system deficiencies as reflected by
333 deviations worth R71.930 million, damages and losses worth
R16.210 million.

· In addition, concerns were raised regarding contract management.

· The Committee noted that the material losses of R34.679 million written off were investigated internally however a suggestion was raised for a possible external investigation.

· The Committee requested a detailed report on unresolved payments, procurement of goods and services, damages and losses written off as irrecoverable and it was indicated that this report will enhance the oversight role of the Committee.

· A question was raised in respect of actions that could have been taken to avoid losses including remedial steps that were put in place to minimize the losses.

· In reference to the paragraph under Facilities Management, Logistics and Security on page 21 of the annual report; Stats SA was requested to specify the year in which the indicated project was piloted. In addition, they were requested to specify the timeframes during which the service level agreements with the 3 indicated service providers would be finalized.

· A question was raised whether any of the fieldworkers of Census 2011 were absorbed into Stats SA for other employment opportunities.

10. Responses by Stats SA

With regard to questions raised and comments made by the Standing Committee on Finance, the Stats SA responded/commented as follows:

· Stats SA indicated that they have taken the tabling of MTBPS into consideration and the Council has therefore undertaken to make the Census 2011 results available to the Director General of National Treasury before they are officially released. They explained that Stats SA data is produced for use by the State and public and that there was therefore a need to safeguard the credibility of the data from political and other interferences. In view of this, the decision for the pre-release of Census 2011 results to the Director General of National Treasury was subject to a confidentiality clause.

· Stats SA expressed their disappointment with the qualified opinion but acknowledged that given the scope of Census 2011 there were unavoidable matters which contributed to the qualification. However the agency has made strides in strengthening their capacity and as a result thereof was able to continue operations with other core business while undertaking Census 2011. In addition, they have rendered support to other African countries with their Census.

· Stats SA explained that the qualified audit opinion pertains to accruals of R127 ,798 million whereby service providers who had already rendered services were not paid within 30 days as a result of the malfunctioning of BAS (Basic Accounting System). They indicated that the 333 deviations of R71 ,93 million were disclosed to National Treasury and the Auditor-General as per regulations and are therefore not regarded as irregular expenditure. In addition, they explained that the deviations were unavoidable given that conventional methods had to be used for the Census as a result of insufficient funding.

· An amount of R7.762 million was noted to have been paid for services never rendered. These services were procured by GCIS on behalf of Stats SA. It was indicated that this matter is being investigated by the National Accountant and due to be reported on to the Portfolio Committee and Standing Committee on Public Accounts.

· Stats SA indicated that a cost-benefit analysis was conducted in terms of an external investigation pertaining to the material losses. It became apparent that the costs of an external investigation would outweigh losses to be recovered. They assured that there is a segregation of duties with the internal investigation being conducted.

· Stats SA indicated that the following attempts were made to mitigate potential vehicle damages and losses:

i. Requesting the Department of Education on board whereby teachers would have been utilized as supervisors. Stats SA conducted a pilot in this regard, however the strike disrupted the pilot and Stats SA could not bear the risks and impact that such a strike would have on the Census.

ii. Stats SA also indicated that they solicited the services of the military however the management thereof proved impossible.

iii. In addition they considered renting cars with drivers however this option was costly. Insurance was also not a possibility because no insurance company was willing to bear such a risk.

iv. Ultimately Stats SA had to bear its own risk and in order to minimize the risk they branded the vehicles and installed tracking systems.

· Stats SA reported that the project referred to on page 21 of the annual report was piloted from October 2011 to December 2011 and that the projected time for finalization of service level agreements with the 3 service providers is March 2013.

· Stats SA reported that the securing of new premises had gained momentum and that it is currently in the second phase for approval of PPE and service providers. Stats SA currently engaging with National Treasury to reduce negotiation period for Evaluation of Bid. Projected timeframes for moving into the new building is October 2016.

· Stats SA reported that 2000 fieldworkers were absorbed into the data processing centre and 100 within the organization however all fieldworkers were on Stats SA’s database and would be utilized periodically when the organization conducts other surveys. They emphasised that what is important are the skills which were transferred to the fieldworkers during Census 2011 and that other agencies such as the Independent Electoral Commission can pool from this human resource.

· Stats SA assured the Committee that they are considering better models for handling of payments of fieldworkers. They also proposed the following measures in order to improve their current Census processes

i. Reconsidering the period within which the Census is conducted. October is close to the holiday season and also overlaps with exam period in schools. August or March was proposed as possible months.

ii. Collaborative effort between municipalities and Stats SA to ensure that all human settlements or dwellings had addresses.

iii. Continuous registrations against addresses (e.g. births, deaths, migration).

iv. Timeous provision of training and development opportunities to small to medium enterprises for services such as catering to ensure that they comply with supply chain management regulations and processes. Stats SA acknowledged that they did not succeed in this area during Census 2011 and ended up utilizing the services of established service providers due to SCM constraints however they were having discussions with National Treasury on how to navigate the SCM regulations to ensure development of the SMMEs.

· Stats SA made concluding remarks and indicated that they will extend an invite to the Committee to be part of the launch of Census 2011 results which is due to take place end October 2012.

11. Conclusion and Recommendations

Based on the deliberations with Statistics South Africa, the Standing Committee on Finance recommends that the Minister in the Presidency: National Planning Commission should ensure that:

11.1 Statistics South Africa considers the possibility of reviewing the process of releasing future census results .

11.2 Statistics South Africa provides the House with a detailed report on interventions to rectify errors highlighted by the Auditor-General, within 90 days after the adoption of this Report by the House.

11.3 Statistics South Africa provides the House with a report on proposals to address proper coordination with regard to an Integrated Financial Management System that is not yet implemented, within 90 days after the adoption of this Report by the House.

11.4 Statistics South Africa considers a capacity building workshop on compliance to internal controls for all employees of Statistics South Africa.

Report to be considered.