ATC200903: Report of the Joint Standing Committee on the Financial Management of Parliament on the Sixth Parliament of the Republic of South Africa’s Strategic Plan (2019-2024), and the 2020/21 Annual Performance Plan and Budget, dated2 September 2020

Joint Standing Committee on Financial Management of Parliament

Report of the Joint Standing Committee on the Financial Management of Parliament on the Sixth Parliament of the Republic of South Africa’s Strategic Plan (2019-2024), and the 2020/21 Annual Performance Plan and Budge, dated2 September 2020.

 

The Joint Standing Committee on the Financial Management of Parliament, having considered the Parliament of the Republic of South Africa’s 2019-2024 Strategic Plan, and 2020/21 Annual Performance Plan, reports as follows:

 

1.         Introduction

1.1        Section 4 of the Financial Management of Parliament and Provincial Legislatures Act, No 10 of 2009 (the FMPPLA) provides for the establishment of an oversight mechanism to maintain oversight of the financial management of Parliament. The Joint Standing Committee on the Financial Management of Parliament (the Committee) 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.

1.2        Parliament derives its mandate from:

-           Chapter 4 of the Constitution of the Republic of South Africa, 1996, No 108 of 1996, which sets out its composition, powers and functions;

-           the FMPPLA which regulates the institution’s financial management;

-           the Money Bills Amendment Procedure and Related Matters Act, 2009, No 9 of 2009 (Money Bills Act) which provides procedures to amend money bills; and

-           the Powers, Privileges and Immunities of Parliament and Provincial Legislatures Act of 2004, No 4 of 2004 which defines and declares the national and provincial legislatures’ powers, privileges and immunities.

1.3        Parliament has as its vision to be an activist and responsive people’s Parliament that improves the quality of life of South Africans and ensures enduring equality in our society. Its mission is to represent the people and to ensure government by the people in fulfilling its constitutional functions of passing laws and overseeing executive action. To this end, the institution conducts its business in line with the following values: openness, responsiveness, accountability, teamwork, professionalism, and integrity.

1.4        Section 17(1) of the FMPPLA requires that the Executive Authority table the following planning and budgeting documents in Parliament for referral to the oversight mechanism:

-           the draft strategic plan of Parliament, within 10 days of receiving it from the accounting officer;

-           the draft annual performance plan (APP) and draft budget, at least one month before the draft budget must be submitted to the National Treasury;

-           the draft adjustments budget, at least one month before its must be submitted to the National Treasury; and

-           any draft revisions to the approved allocations of Parliament’s own funds.

1.5        This report comprises three parts:

-           an overview of the Strategic Plan (Part A)

-           an overview of the APP (Part B);

-           observations (Part C); and

-           recommendations (Part D).

 

PART A

2.         2019-2024 Strategic Plan

2.1        Background

2.2.1     Section 14(1) of the FMPPLA requires that the accounting officer must prepare and present the draft strategic plan to the ExecutiveAuthority within 6 months of the election of the National Assembly (NA), or by another date determined by Parliament.

2.2.2     Section 14(2) of the FMPPLA requires that the draft strategic plan must:

            -           cover the following five years or another period determined by Parliament;

            -           specify the administration’s priorities for the period of the strategic plan;

            -           include objectives and outcomes for each of Parliament’s programmes;

            -           include multi-year projections of all revenue and expenditure; and

-           include performance measures and indicators for assessing the administration’s performance in implementing the strategic plan.

2.2.3     Members of the NA and the National Council of Provinces (NCOP) participated in the development of the Sixth Parliament’s policy priorities: the NCOP held a strategic planning workshop on 20 and 21 August 2019, and the NA on 12 September 2019. The accounting officer directed the development of the strategic plan based on the policy directives.

 

2.3        Impact

2.3.1     The Sixth Parliament has identified improving quality of life for all South Africans by ensuring that the government/executive implements the National Development Plan (NDP) which aims to eliminate poverty and reduce inequality by 2030.

2.3.2     The Medium Term Strategic Framework sets out the government’s strategic plan for 2019 to 2024. It contains 7 priorities, 81 outcomes with 561 indicators. Parliament will monitor the overall impact of the development indicators contained in it.

 

2.4        Outcome

2.4.1     The Constitution compels Parliament to maintain oversight of the executive so as to ensure a government that is open, responsive and accountable. Therefore, Parliament should ensure that its ability to perform oversight is strengthened.

 

2.5        Output

2.5.1     Each year, Parliament delivers bills, budget recommendations, recommendations in respect of budgets as well as appointments to statutory bodies, international agreements, approved interventions, and other resolutions. In the Sixth Parliament, the main output will relate to the scrutiny and approval of the annual budget in line with the processes set out in the Money Bills Act.

 

 

 

2.6        Actions

2.6.1     If the Sixth Parliament is to strengthen oversight and accountability, it must improve oversight and scrutiny at the committee-level, and ensure mote effective public involvement/participation. The oversight work performed inconstituencies and plenaries must also be improved.

2.6.2     To achieve the above, parliamentarians will need the capacity, and advisory and information services to support their oversight activities. This means that members will require more time for committee oversight activities, capacity-building workshops/training, improved research and analysis, and effective public involvement though hearings, petitions and submissions.

2.6.3     For its long term sustainability Parliament must modernise its processes, make better use of technological advancements, and cut unnecessary costs.

 

2.7        Strategic Priorities

2.7.1     Having taken into account South Africa’s poor economic performance and the low growth forecast, and the reality that Parliament too would have fewer resources to support its work, the above-mentioned strategic planning workshops resolved to adopt only two strategic priorities: to strengthen oversight; and to enhance public involvement in Parliament’s activities.

2.7.2     In order to achieve the above outcome, the Sixth Parliament will:

-           improve committee oversight work in relation to the budget cycle in particular, through allowing more time in the parliamentary programme for oversight activities and encouraging committees to undertake joint oversight activities. Joint the need for more time allocated to committee oversight activities, and the possibility of holding joint briefings and meetings; and

-           improving the effectiveness of public hearings through greater public participation by expanding public education, better dissemination of information, effective use of broadcasting, technology and social media, the use of more official languages, and encouraging committees to undertake joint public hearings.

 

 

2.7.3     To aid the above activities, the institution will:

-           enhance research and legal support in respect of oversight activities;

-           improve members’ capacity through capacity-building programmes that will empower parliamentarians to be effective and efficient in executing their oversight responsibilities;

-           improve oversight and accountability through better monitoring, tracking and evaluation in respect of Parliament’s own work, as well as the work of the Executive;

-           ensure openness and accessibility through the use of modern technology in respect of social media, tools-of-trade, workflows and automation; and

-           cut costs to allow for operational sustainability.

 

2.8        Risks

2.8.1     The Strategic Analysis of the internal and external environment in which the strategic plan willbe implemented, identified a number of risks that may impede the implementation of the plan. These are outlined below.

2.8.2     Slow economic growth at the time that the Fifth Parliament’s strategic plan was adopted had resulted in a number of budget constraints. These demanded that Parliament employed cost containment measures. From 2017/18 to 2019/20 Parliament’s operational budget was reduced.

2.8.3     Although some posts were frozen to reduce the wage bill, compensation continued to place a burden on the institution’s budget.

2.8.4     Parliament’s reliance on the Department of Public Works and Infrastructure (DPWI) for its infrastructural needs has seriously impeded efforts to acquire more space, maintain buildings, renovate and modernise. The unconducive physical environment posed health and safety, as well as security risks.

2.8.5     Budgetary constraints make it impossible to modernise IT infrastructure so as to keep pace with the fourth industrial revolution. Where modernisation has been possible, adaptation to new ways of working has been slow.

2.8.6     Organisational climate surveys reveal that the institution’s ability to execute the strategy is impaired. In addition to external and internal capacity, the institution also requires the cooperation of other stakeholders.

2.8.7     Parliament relies on several external service providers and disruptions on power, water, transport, communication and other services will impede the implementation of the strategy.

2.8.8     In recent years there has been a rise in lobby groups representing the needs of citizens. Social media have become popular platforms for public discourse. If Parliament is seen as ineffective in its responsibility to be the voice of the people, these alternative groups/platforms may take over its role.

 

2.9        Implementation of the Strategic Plan

2.9.1     The implementation of the strategic plan is achieved through annual performance plans and associated operational plans and budgets. APPs outline the outputs that must be delivered to achieve the outcomes in strategic plans. Operational plans in turn focus on the activities and inputs needed to deliver outputs.

 

2.9.2     To implement a strategy one must:

• design programmes and initiatives to implement the strategy;
• implement budget and organisationalstructures for the execution of the strategy;
• collaborate with key partners on mutual goals;
• manage key opportunities and risks;
• allocate funding and resources towards implementation;
• manage change programmes as required; and
• implement a monitoring and evaluation framework to track progress.

2.9.3     Parliament’s 2020/21 APP is summarised in paragraphs 3.1.1 to 3.3.21 below.

 

 

 

 

PART B

3.         2020/21 Annual Performance Plan

3.1        Background

3.1.1     Section 16(1) of the FMPPLA requires that the accounting officer must prepare a draft budget for Parliament and present it to the Executive Authority at least ten months prior to the start of the financial year.

3.1.2     Section 17(2)(b) requires that the Executive Authority must submit the draft annual performance plan and budget to the oversight mechanism at least one month before the draft budget is submitted to the National Treasury.

3.1.3     The draft 2020/21 APP was tabled in June 2019. It was a transitional document to be revised after the institution had finalised its strategic plan, and for that reason was not considered by the JSCFMP.

3.1.4     The revised APP was tabled on 17 July 2020 after the special adjustment budget, which was necessitated by the COVID-19 pandemic. The JSCFMP considered the revised APP and budget on 28 July 2020.

 

3.2        Budget

3.2.1     Parliament’s 2020/21 budget was reduced by R80 million following the special adjustment budget referred to above. A further adjustment may be expected over 2020/21 – 2022/23 Medium Term Expenditure Framework. Table 1, below, reflects the adjustments across all programmes.

3.2.2     Table 1 reveals that the Parliament has received a budget allocation of R2 687 610 billion at the beginning of the 2020/21 financial year. During the budget adjustment, which occurred in June 2020 in response to the Covid 19 outbreak, Parliament’s budget was revised downwards by R80 million to R2 607 609 billion.  Further, Table 1 shows that all programmes were reduced by3,6 percent.

 

3.3        Programme performance

For 2020/21 the institution’s programmes will be structured in the same way as in the Fifth Parliament. This structure will be reviewed in 2020 and a new structure implemented in 2021/22.

 

Programme 1: Strategic Leadership and Governance

3.3.1     This programmeprovides for political and strategic leadership, governance and institutional policy, executive communication and coordination, and to oversee the development and the implementation of Parliament’s strategic plan, APP and Budget. It comprises the following sub-programmes: Office of the Speaker, Office of the Chairperson. Office for Institutions Supporting Democracy (OISD), and the Parliamentary Budget Office (PBO).

3.3.2     The following risks associated with the implementation of the strategy have been identified in respect of this programme: impact of Covid-19 on parliamentary operations; budget constraints and reductions; unsustainable wage bill; aging physical facilities; aging technological infrastructure; ability to execute change initiatives; failure of 3rd party service providers. The APP does not provide information on how these risks will be mitigated.

3.3.3     Table 2 below, contains the performance indicators under this programme. The performance measures of the PBO and OISD will be contained in their individual operational plans. However, the performance indicators for thisprogramme are those that measure the performance of the OISD’s performance. There is no change in the performance indicators and targets which measured the OISD’s performance in the Fifth Parliament.

Table 2 (Source: Parliament of the RSA 2020)

3.3.4     As shown in Table 3 below, in 2020/21 this programme will receive a total budget of R112, 216 million. The bulk of the budget will be spent on the Office of the Speaker, and the Office of the Chairperson sub-programmes.

Table 3 (Source: Parliament of the RSA)

 

Programme 2: Administration

3.3.5     Programme 2 provides for strategic management, institutional policy and governance, development programmes for parliamentarians, overall management and administration, financial management and internal audit, and a registry of Members’ interests. It comprises the following sub-programmes Office of the Secretary; Strategic Management and Governance; Finance Management Office; Internal Audit; Registrar of Members’ Interests; and Legislative Sector Support.

3.3.6     The most significant risks identified under the programme are poor institutional strategy execution, poor governance and decision-making, and non-compliance with statutory requirements. These risks will be mitigated through the implementation of integrated governance and management processes, building institutional capacity, and enhancing the overall strategic maturity of the institution.

3.3.7     Table 4 below shows performance indicators under this programme, and reveals that this programme will amongst others, be measured by the number of programmes implemented to build the capacity of parliamentarians.

Table 4 (Source: Parliament of the RSA (2020))

3.3.8     In 2020/21 this programme will receive a total budget of R176,619 million. The bulk of the budget will be spent in the Finance Management Office and the Legislative Sector Support sub-programmes (see Table 5 below)

Table 5 (Source: Parliament of the RSA)

Programme 3: Core Business

3.3.9     Programme 3provides for procedural and legal advice, analysis, information and research, language, content and secretarial and legislative drafting services for meetings of the National Assembly, National Council of Provinces and their committees. It also provides for public education, information and access to support public participation, and analysis, advice and content support, and support for international engagements. It comprises the following sub-programmes: National Assembly, National Council of Provinces, Core Business Support, Knowledge and Information Services, International Relations and Protocol.

3.3.10   The most significant risks in relation to this programme are the decline in the effectiveness of parliamentary proceedings owing to disruptions, and insufficient access and opportunities for public participation in parliamentary processes, capacity and budget constraints in respect of advisory and information services, shortage of specialised skills in respect of procedural and legal advice. The risks will be mitigated through capacity-building in the application ofHouse Rules, skills development, the filling of critical posts, service and product integration, the development of standard operating procedures, and better utilisation of technology in business processes.

3.3.11   Table 6, below, shows the performance indicators in respect of the development of the Parliamentary Programme.

Table 6 (Source: Parliament of the RSA)

 

3.3.12   Table 7, below, contains the performance indicators in terms of advisory and information services.

Table 7 (Source: Parliament of the RSA)

 

3.3.13   Table 8, below, contains the performance indicators in terms of public involvement.

Table 8 (Source: Parliament of the RSA)

3.3.14   In 2020/21 this programme will receive a total budget of R709,882 million. The bulk of the budget will be spent on the Core Business Support sub-programmes. Table 9 below reflects the budget allocation across sub-programmes.

Table 9 (Source: Parliament of the RSA)

Programme 4: Support Services

3.3.15   Programme 4 provides facilities and support services to Parliament. It comprises the sub-programme Human Resources Management; Information Communication Technology; Parliamentary Communication Services; Institutional Support Services; Members’ Support Services.

3.3.16   The most significant risks identified under this programme are the unsustainable service levels and the pressure on supply chains related to human resources and associated inputs resulting from the decline in dedicated resources, insufficient capital and maintenance budgets, weak business integration and change, and slow adaption to the use of technology.These risks will be mitigated by prioritising funding and effecting efficiency gains, ensuring integrated planning and approaches, unlocking the use of prevailing technological advances, and engagement with stakeholders to cement championing of change.

3.3.17   Table 10, below, reflects the performance indicators under Programme 4.

Table 10 (Source: Parliament of the RSA)

3.3.18   In 2020/21 this programme will receive a total budget of R470,358 million. The bulk of the budget will be spent on Institutional Support Services, and Human Resource Management sub-programmes. Table 11. Below, reflects the allocation across the sub-programmes.

Table 11 (Source: Parliament of the RSA)

 

Programme 5: Associated Services

3.3.19   Programme 5provides for travel, communication and other facilities for parliamentarians to enable them to fulfil their duties as elected representatives, and for financial support to political parties represented in Parliament, their leaders and constituency offices. The programme comprises the following sub-programmes Members’ Facilities, and Transfers to Political Parties.

3.3.20   There are no performance indicators under this programme nor has the institution identified any risks in respect of it. It should be noted that in the Fifth Parliament, the performance of this programme was measured by the average number of days it took to reimburse Members.

3.3.21   As shown in the Table 12 below, this programme has been allocated a budget of R720, 302 million, the bulk of which will go towardsthe Transfer of Political Parties sub-programme.

Table 12 (Source: Parliament of the RSA)

 

PART C

4.         Observations

4.1        The format of the Strategic Plan is inconsistent with what is required by section 14(2)(c) of the FMPPLA. Parliament has applied the Department of Monitoring and Evaluation’s Guidelines for the Implementation of the Framework for Strategic Plans and APPs. Parliament does not yet have a guideline to inform the drafting of its plans, but ought to have ensured that it complied with what the FMPPLA requires i.e. the inclusion of objectives and outcomes for each programme. In order to have the desired impact, it is critical to identify outcomes to be pursued over the period of the strategic plan. The Committee is disappointed that the institution has not used the Strategic Plan of the Sixth Parliament to address longstanding concerns about the fact that it was impossible to measure the performance of sub-programmes.

4.2        Although a number of key risks in respect of the implementation of the strategic plan have been identified, the institution has not indicated whether it has developed mitigation plans. Furthermore, the risks identified are general in the sense that they are not linked to a specific outcome as should be the case.

4.3        The Committeenoted the findings in a recent report on staff engagement levels that the inadequate communication, autocratic management style, inadequate job information and performance management, and inadequate growth and development opportunities were major risk factors.These risks could have a detrimental effect on the implementation of the Strategic Plan.

4.4        The Strategic Plan makes reference to the findings of an ISO 9001 readiness assessment in 2017 which found that business processes in divisions were inadequately mapped, including process mapping across the value chain. According to the report, this had resulted in quality control and business process improvements not being managed formally, and that communication and collaboration processes remained ad-hoc and weak. The Committee notes that such an environment will seriously impede progress towards achieving the identified strategic goals.

4.5        The Committee notes that the Strategic Plan makes reference to challenges in the institution’s governance processes that required attention. These include concerns about slow decision-making, outdated implementation policies, and lack of proper governance charters.

4.6        The Committee is disappointed that the APP once again does not contain milestones that could be measured on a quarterly basis. It is noted that operational plans will contain more targets.

4.7.       The Committee notes the fact that in the revised APP contains Programme 5 does not have any performance indicators. This means that it will not be measured throughout 2020/21, despite the fact that it received the largest portion of Parliament’s budget allocation.

4.8        The Committee notes that the OISD will report directly to the Speaker. We also note that the OISD will develop its own operational plan with performance indicators and targets.

4.9        The Committee remains concerned about the long delay on the appointment of a director to the Parliamentary Budget Office. The leadership instability has caused undue anxiety among the professionals in that office. It will also delay any efforts to expand that office’s mandate to ensure that Parliament reaps the full benefit of the PBO’s expertise.

4.10      The Committee notes the crucial role the Treasury Advice Office will play and remains concerned about the unreasonable delays in establishing the office.

4.11      The Committee notes with concern the long delays in filling key posts i.e. Secretary to Parliament, Chief Financial Officer, and the Chief Audit Executive. Stability in these posts is critical to the functioning of the institution.

4.12      The Committee is concerned that Parliament must, like national departments, apply to the National Treasury for a share of the national budget. Parliament is a separate arm of the state and cannot be expected to rely on the executive for its budget allocation. This reliance has the potential to weaken Parliament’s ability to perform oversight of the Executive.

4.13      The Committee supports all efforts to increase public participation in Parliament’s activities. Ensuring that more people had access to information about Parliament through television, radio and social media would contribute retail towards that goal.

4.14      The Committee notes that the strategic plan provides for capacity building activities for parliamentarians. The Committee agrees that these should be directed towards ensuring that members were able to execute their oversight responsibilities, and that educational pursuits should not distract from those responsibilities.

4.15      The Committee notes that the regulations referred to under Chapter 9 of the FMPPLA have not yet been developed. These regulations will go a long way towards standardizing, amongst others, the institution’s planning and budget processes.

 

PART D

5.         Recommendations

The Executive Authority should respond to the following recommendations within 30 days of the tabling of this report.

5.1        The Committee recommends that it be provided with the rationale for, despite the legal requirement to do so, the institution had not identified objectives and outcomes across programmes to allow for transparency, and easy monitoring of performance.

5.2        The Committee recommends that that mitigation plans for each risk identified be developed as a matter of urgency, and that they be presented to the Committee on their completion. In addition, the identified risks should be linked to a specific outcome of the Parliament.

5.3        The Committee recommends that Parliament implements the recommendations of the report referred to in paragraph 4.3 above. The Committee should be provided with quarterly updates on progress made in this regard. The Committee further recommends that, in light of the severe challenges, staff satisfaction levels be assessed on an annual basis.

5.4        In respect of the findings referred to in paragraph 4.4 above, the Committee recommends that Parliament addresses the shortcomings as a matter of urgency. The Committee should be provided with quarterly updates on progress made.

5.5        The Committee should be provided with a report on all institutional policies that require review, and the timeframes within which the review will take place. In addition, the Committee should receive quarterly updates on how the concerns referred to in paragraph 4.5 above will be addressed.

5.7        The Committee recommends that Parliament should ensure that all performance targets are broken down to be measuredquarterly in order for the Committee to monitor their implementation.

5.8        The Committee recommends that the Parliament should ensure that the all its programmes are measured, that is, they should have performance indicators to pursue, accompanied with performance targets, which are SMART.

5.8        In light of longstanding concerns about the under-utilisation of the OISD, the Committee recommends that the institution revisits the recommendations made by the ad hoc Committee on the Review of Chapter 9 and Associated Institutions, with a view of implementing its recommendations in full.

5.9        The Committee recommends that the PBO Advisory Committee fast-track the recruitment of a suitably qualified director. The Committee should be provided with a monthly report on progress made, or challenges experienced in this regard.

5.10      The Committee recommends that the process of establishing the Treasury Advice Office be fast-tracked and that monthly updates are provided on progress made in this regard.

5.11      The Committee recommends that the posts referred to in paragraph 4.11 be filled as a matter of urgency and before the end of the 2020/21 financial year, and that monthly updates be provided on progress made in this regard.

5.12      The Committee recommends that the Executive Authority engage the President and the National Treasury on how the matter of how Parliament’s budget allocation may be resolved.

5.13      The Committee recommends that every avenue be pursued to ensure that the vast majority of citizens are able to access information about parliamentary committee meetings and plenaries. Parliamentary meetingsshould not be aired on pay-to-view channels, but should be broadcast on an SABC channel.

5.14      The Committee recommends that challenges experienced in respect of some institutions of higher learning at which parliamentarians were registered be attended to as a matter of urgency, and that the engagements around the curriculum pursued by parliamentarians should be finalised in order for training to commence as soon as possible.

5.15      The Committee recommends that the regulations referred to in Chapter 9 of the FMPPLA be developed and finalised as a matter of urgency. The Committee should be provided with quarterly updates on progress made.

 

Report to be considered.