ATC190320: Report of the Joint Standing Committee on the Financial Management of Parliament on its activities undertaken during the Fifth Parliament (May 2016 to March 2019) dated 20 March 2019
Joint Standing Committee on Financial Management of Parliament
Report of the Joint Standing Committee on the Financial Management of Parliament on its activities undertaken during the Fifth Parliament (May 2016 to March 2019) dated 20 March 2019
1. Introduction
1.1 This report serves as a summary of the work done by the Joint Standing Committee on the Financial Management of Parliament (JSCFMP) in the Fifth Parliament. The report comprises four parts:
Part A, the establishment of the JSCFMP and its method of work
Part B, entities reporting to the JSCFMP;
Part C, summary of JSCFMP performance during the Fifth Parliament; and
Part D, challenges and recommendations to the Sixth Parliament.
1.2 This report should also be read with the various reports the JSCFMP has published during the Fifth Parliament.
Part A
Establishment of the Joint Standing Committee on the Financial Management of Parliament
2. Background
2.1 Parliamentary committees are mandated to:
- monitor the financial and non-financial performance of government departments and their entities to ensure that national objectives are met;
- process and pass legislation; and
- facilitate public participation in Parliament relating to issues of oversight and legislation.
2.2 The JSCFMP oversees the Parliament of the Republic of South Africa.
2.3 The JSCFMP was established in terms of the Joint Rules of Parliament. The Committee has the powers afforded to parliamentary committees under sections 56 and 69 of the Constitution.
2.4 The Financial Management of Parliament and Provincial Legislatures Act 10 of 2009 (the Act) was promulgated to:
- promote and maintain a high standard of professional ethics in the financial management of Parliament and provincial
legislatures;
- promote the efficient, economic, and effective use of resources allocated to Parliament and provincial legislatures; and
2.5 Section 4 of the Act provides for the establishment of an oversight mechanism to maintain oversight of the financial management of Parliament. The legislation provides that the Committee:
- considers instructions in terms of section 37(5) i.e. executive directives with financial implications that are likely to result in unauthorised expenditure];
- considers Parliament’s annual report tabled and referred in terms of section 60;
- considers instructions issued by the Executive Authority in terms of section 66 for the purposes of the implementing the Act; and
- performs any functions specified in the Act and by the rules of Parliament, and that are consistent with the objectives of the Act.
2.6 Broadly speaking, the Committee:
- interrogates the governance documents referred to it,
- manages stakeholder involvement;
- manage collaboration;
- makes recommendations to the National Assembly and the National Council of Provinces
- monitors the implementation of the legislation and policies governing the institution, as well as the implementation of its recommendations to the Executive Authority.
3. Membership
3.1 The Committee comprised the following members from various political parties:
National Assembly
African National Congress
Mr NA Masondo, MP
Ms EM Coleman, MP
Mr NE Gcwabaza, MP
Ms CC September, MP
Mr VG Smith, MP (discharged on 27 August 2018)
Dr MS Motshekga, MP (appointed on 27 August 2018)
Democratic Alliance
Mr JH Steenhuisen, MP
Mr M Waters, MP
Economic Freedom Fighters
Ms NV Mente, MP
Inkatha Freedom Party
Mr N Singh, MP
National Freedom Party
Mr M Shaik-Emam, MP
National Council of Provinces
African National Congress
Ms T Motara, MP (Gauteng)
Mr SJ Mohai, MP (Free State) (discharged on 18 October 2017)
Mr CJ de Beer, MP (Northern Cape)
Mr M Monakedi, MP (Limpopo) (appointed on 18 October 2018)
Democratic Alliance
Mr F Essack, MP (Mpumalanga)
United Democratic Movement
Mr LB Gaehler, MP (Eastern Cape)
3.2 Mr V Smith, MP and Mr SJ Mohai, MP were elected as co-chairpersons of the JSCFMP on 4 May 2016. Mr Mohai was discharged in October 2017 and Mr M Monakedi, MP was elected to take his place as co-chairperson. Mr Smith was discharged in August 2018, and Dr Motshekga was elected to take his place as the co-chairperson.
4. Method of work
4.1 In light of its mandate, the JSCFMP agreed that it would only meet to:
- develop its strategic and annual plans;
- consider Parliament’s quarterly, mid-year and annual financial performance;
- receive preparatory briefings by its research team and the Parliamentary Budget Office before each of the above-mentioned briefings by the Acting Secretary to Parliament, and by the Auditor-General of South Africa before the annual report briefings; and
- have discussions with the Executive Authority as required; and
- consider urgent matters as they arose.
5. Strategic Plan
5.1 Committee strategic plan
5.1.1 The Committee held a strategic planning session on 12 May 2017. The Strategic Plan was considered and adopted on 31 August 2017. The Committee identified the following priorities for pursuit between August 2017 and the end of its term:
- ensuring that Parliament operates according to relevant prescripts and policies;
- ensuring that Parliament is adequately funded, and that it manages its resources efficiently;
- ensuring the effective functioning of Parliament;
- ensuring that Parliament is accountable; and
- ensuring effective oversight.
5.1.2 The strategic goals and objectives the Committee agreed to are reflected in the table below.
|
Goal |
Objectives |
|
Strengthen oversight and accountability of financial management of Parliament |
|
|
Strengthen legislative capacity |
|
|
Strengthen co-operative government |
|
Part B
5. Entities reporting to the JSCFMP
As stated above, the Committee was established to maintain oversight of the financial management of the Parliament of the Republic of South Africa.
5.1 Parliament of the RSA
5.1.1 Parliament is established in terms of Chapter 4 of the Constitution of the Republic of the RSA (the Constitution). Chapter 4 sets out, amongst others:
- the composition of Parliament (section 42);
- the functions and powers of the legislative authority of the Republic (section 43);
- the functions and powers of the national legislative authority (Section 44);
- the joint rules and orders and joint committees (Section 45);
- the role and powers of the National Assembly (sections 46-59);
- the role and powers of the National Council of Provinces (sections 60-72); and
- the national legislative process (sections 73-82).
6. Stakeholders
6.1 Auditor-General of South Africa
6.1.1 The JSCFMP receives briefings from the Auditor-General of South Africa each year during the consideration of Parliament’s annual performance outcomes.
6.2 Parliamentary Budget Office
6.2.1 The Parliamentary Budget Office (PBO) provides the JSCFMP with analyses of Parliament’s quarterly, half-year and annual financial performance.
6.3 National Treasury
6.3.1 The JSCFMP received advice from National Treasury on how best to assist Parliament to formalise its budget processes.
Part C
Summary of JSCFMP’s performance during the Fifth Parliament
7. Overview
7.1 The JSCFMP was established in May 2016. Since then the JSCFMP has been seized with developing a method for overseeing Parliament’s financial management. Much of the Committee’s work focussed on coming to grips with Parliament’s budgeting, reporting and compliance with the policies and legislation that govern it.
7.2 In the period under review the JSCFMP focussed on:
- ensuring that Parliament operates according to relevant prescripts and policies;
- ensuring that Parliament is adequately funded, and that it managed its resources efficiently;
- ensuring the effective functioning of Parliament;
- ensuring that Parliament is accountable; and
- ensuring effective oversight.
8. Overview of number of specific activities
8.1 Key statistics
|
Activity |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
Total |
|---|---|---|---|---|---|---|---|
|
Meetings held |
None |
5 |
9 |
8 |
2 |
24 |
|
|
Legislation processed |
None |
||||||
|
Oversight trips undertaken |
None |
||||||
|
Study tours undertaken |
None |
||||||
|
International agreements processed |
None |
||||||
|
Statutory appointments made |
None |
||||||
|
Interventions considered |
None |
||||||
|
Petitions considered |
None |
||||||
Part D
9. Observations & Recommendations to the Sixth Parliament
The JSCFMP has identified the following challenges for pursuit by the Sixth Parliament.
9.1 Observations
Impact of the JSCFMP
9.1.1 The JSCFMP regrets to report that in the short period of time since its establishment, it has had little impact on how the administration performed. This may be due to the “newness” of the oversight mechanism and the requirement that the Executive Authroity and Accounting Officer should report to it on matters related to the institution’s financial management. Whatever the reason, the JSCFMP’s recommendations have had little impact, and have been responded to poorly.
Reporting
9.1.2 The JSCFMP has since its establishment consistently recommended that the Executive Authority should ensure that the administration develops a sound understanding of effective performance management. In particular, the JSCFMP has recommended that all programmes and sub-programmes should have clear key performance indicators (KPI) or outputs, that are measured quarterly. In order to appropriately and adequately measure performance, each key performance indicator should have targets that are SMART i.e. specific, measurable, achievable, realistic and time-bound.
9.1.3 At the time of reporting, it remained impossible to measure the institution’s true performance, as most sub-programmes were not measured. The absence of KPIs led the JSCFMP to in some instances question the existence of whole divisions within the institution because it was unclear what output they were expected to produce. In many instances where KPIs had been included, the targets that were meant to correspond to them were poorly developed and unmeasurable. In light of the above, the JSCFMP regrets to report that despite our recommendations that weaknesses should be attended to, the institution’s performance information remains unreliable.
Parliamentary Oversight Authority
9.1.4 The Parliamentary Oversight Authority (POA) ceased to exist when the JSCFMP was established. The POA had identified a series of matters that were still outstanding at that time. Members had consistently raised concerns about how those outstandiong issues could be axdressed within the JSCFMP’s work.
Treasury Advice Office
9.1.5 The JSCFMP notes with concern that despite its recommendations for the speedy establishment of the Treasury Advice Office (TAO), that office, which will serve as an advisory to the Executive Authority on all matters related to Parliament’s budget and financial management, is yet to be established.
Budget Process
9.1.6 As indicated in paragraph 5.1.1 above, the JSCFMP had set ensuring Parliament’s adequately funding and efficient management of resources as one of its priorities, but has failed to do so. Parliament has to date, and despite National Treasury’s offers of assistance, not succeeded in developing a budget process. The JSCFMP acknowledges that as the legislative arm of the state, Parliament cannot be subjected to the same budget processes that govern the executive arm (departments and entities).
Regulations
9.1.7 The Committee has noted with concern the delay in the finalisation of regulations in terms of the Act. The regulations would facilitate the full implementation of the Act.
Labour relations
9.1.8 While the JSCSFMP had agreed that it would not become a forum for labour disputes, the strained labour relations that characterised most of the Fifth Parliament cannot be ignored. The JSCFMP noted with concern the deterioration of relations between employees and employer. While labour relations improved dramatically in the last two years of the Fifth Parliament, the high number of resignations and the tragic passing of a senior manager in September 2018 point to a working environment that remains hostile.
Disciplinary proceedings against the Secretary to Parliament
9.1.9 The JSCFMP has noted the placing on suspension (with full benefits) of the Secretary to Parliament following various allegations of maladministration. The JSCFMP has also noted with grave concern the long delay in the finalisation of the disciplinary proceedings, and has serious concerns about the prolonged process, especially given the financial impact the long delays have had for the institution.
Improper monitoring of constituency offices
9.1.10 The JSCFMP has noted with concern that constituency offices, which are funded by Parliament, were inadequately monitored. This has been confirmed by the administration. This has made it impossible to confirm whether the offices exist as indicated, and where they did exist, whether they were operational. Oversight visits rarely, if ever, emanated from the work parliamentarians performed in their constituencies. This could be indicative of constituency offices being under-utilised. The JSCFMP is therefore of the view that the current monitoring system is inadequate.
Parliament’s role in ensuring a responsive and accountable government
9.1.11 The JSCFMP has expressed some discomfort about Parliament’s Oversight and Accountability Model. Of particular concern is whether the model allows for effective oversight of the Executive in order to ensure that the broad objectives of the National Development Plan (NDP) are achieved. The manner in which oversight has been conducted has made it difficult to identify inefficiencies within Executive. In the main, this was because Parliament has in most cases opted to inform the Executive of oversight visits in advance. Unannounced oversight visits—which would allow those who are being overseen very little opportunity to “prepare”, and would therefore make a more accurate assessment of the situation “on the ground” more likely—are seldom, if ever, undertaken.
9.1.12 The JSCFMP has noted with interest that Parliament’s approved 2017/18 Annual Performance Plan (APP) provides for the review and implementation of the model, and that this target was not met. In its approved 2018/19 APP, Parliament rephrases this target but it is not clear whether any work has been done to achieve it.
Benchmarking
9.1.13 The JSCFMP was established half-way through the Fifth Parliament. Although the JSCFMP had planned to undertake a study tour to observe how similar oversight mechanisms in other Parliaments operated and exercised oversight, the busy parliamentary schedule did not allow for such a benchmarking exercise to be undertaken.
Method of work
9.1.14 The JSCFMP has experienced considerable challenges as far as convening meetings. The fact that its membership comprises members who serve on the finance and appropriations committees of both houses, members who are chairpersons of other committees and members who serve as whips in their parties made scheduling committee meetings challenging. The fact that political parties were not required to allocate alternates who could represent fulltime members when necessary. The unpredictability of the parliamentary programme in the last months of the term further frustrated the JSCFMP’s programming.
9.2 Recommendations
Impact of the JSCFMP
9.2.1 In addition to the recommendations below, the Sixth Parliament is encouraged to consider Annexure A of this report, which is a summary of JSCFMP recommendations that were made between 2016 and 2018.
9.2.2 In light of the poor implementation of recommendations during the Fifth Parliament, the JSCFMP recommends that the Sixth Parliament should develop a tracking tool or tracking mechanism, such as the example included in Annexure B, to, on a quarterly basis, track the institution’s response to JSCFMP recommendations.
Reporting
9.2.3 In light of the concerns raised in paragraph 9.2.3, the Sixth Parliament should ensure that the administration has the necessary technical support to ensure that its Strategic Plan, and all annual performance plans are crafted as indicated in paragraph 9.1.1 above. The JSCFMP should be consulted timeously to allow for its recommendations with regard to the drafting of the Strategic Plan to be fully considered. Adequate consultation should also take place when annual performance plans are drafted.
Parliamentary Oversight Authority
9.2.4 The JSCFMP of the Sixth Parliament should accommodate all outatsning matters relating to the POA in its programme. The JSCFMP’s research team should advise on how outstanding matters related to the work of the POA could be incorporated in the new committee’s programme and method of work, and whether it would be advisable to establish a sub-committee to focus entirely on what had previously been handled by the POA.
Treasury Advice Office
9.2.5 The JSCFMP recommends that the Sixth Parliament should closely monitor the establishment and functioning of the Treasury Advice Office as it will ensure that the Executive Authority receives impartial advice, especially in relation to matters referred to it in terms of section 37 of the Act.
Budget Process
9.2.6 The Sixth Parliament should accelerate efforts to, informed by the Act, develop its own budget processes. A clear budget process would allow for transparency and more effective oversight of the institution’s financial management. Clarity around the process would also allow the JSCFMP to use the avenues set out in that process to argue for additional funding for Parliament as and when required.
Regulations
9.2.7 The administration of the Sixth Parliament should prioritise the finalisation of the regulations, and should ensure that sufficient consultation is provided for in that process.
Labour relations
9.2.8 The JSCFMP has proposed that the Fifth Parliament’s administration should conduct a review of labour relations and recommend ways in which the work environment may be improved. The Sixth Parliament should prioritise receiving a report, and should consider reviewing the role the JSCFMP could play in fostering a positive work environment. The matter should receive serious attention to ensure that the challenges experienced in the Fifth Parliament are not repeated in the Sixth Parliament.
9.2.9 Labour relations is a specialised area of work. Many employers in both the private and public sector do not have the expertise to manage the employer-employee relationship. The JSCFMP encourages the institution to ensure that the person employed to manage labour relations and promote a constructive relationship between the employer and employees has the necessary skills and expertise to do so.
Disciplinary proceedings against the Secretary to Parliament
9.2.10 At the time of drafting the disciplinary proceedings against Mr Mgidlana had not yet been finalised, and the JSCFMP therefore recommends that the Sixth Parliament be kept abreast of developments in this regard, in particular the financial and other impact the delays may have had. The matter should be concluded as a matter of urgency.
9.2.11 It is further recommended that upon the finalisation of the matter, the JSCFMP should be briefed on those findings that relate to weaknesses in the institution’s financial controls, and how those will be addressed.
Monitoring of constituency offices
9.2.12 The Sixth Parliament should develop an appropriate monitoring system to assess the functioning of constituency offices, and the JSCFMP should be kept abreast of developments in this regard.
Parliament’s role in ensuring a responsive and accountable government
9.2.13 The Sixth Parliament should give consideration to whether the Oversight and Accountability Model which dates back to the First Parliament, is still appropriate and relevant two decades later. It is further recommended that the 2017/18 target to review and implement the model be included among the strategic objectives in the Strategic Plan of the Sixth Parliament.
Benchmarking
9.2.14 The Sixth Parliament should prioritise a study tour of the JSCFMP to countries whose parliaments have a similar oversight mechanism in order to ascertain what lessons may be learned from those bodies.Preparatory work in this regard should start as early as possible.
Method of Work
9.2.15 The Sixth Parliament should make every effort, including identifying alternates to represent fulltime members when necessary, to ensure that the JSCFMP is able to perform its oversight function with as little frustration as possible.
9.2.16 The JSCFMP of the Sixth Parliament should be provided with its own dedicated support team. During the Fifth Parliament it was supported by officials who all served in the secretariats of other committees too.
10. Acknowledgement
The JSCFMP wishes to express its profound gratitude to its members, its secretariat and to the PBO for their commitment from the time the committee was established, to date. We wish the Sixth Parliament well as it continues to contribute to creating an environment of transparent financial management and accountability within the administration of the Parliament of the RSA.
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