ATC201104: Report of the Joint Standing Committee on the Financial Management of Parliament on the Parliament of the Republic of South Africa’s performance in Quarter 1 of 2020/21dated4 November 2020

Joint Standing Committee on Financial Management of Parliament

Report of the Joint Standing Committee on the Financial Management of Parliament on the Parliament of the Republic of South Africa’s performance in Quarter 1 of 2020/21dated4 November 2020

 

The Joint Standing Committee on the Financial Management of Parliament, having considered the Parliament of the Republic of South Africa’s performance in Quarter 1 of 2020/21, 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 52 of the FMPPLA requires that the accounting officer must, within 30 days of the end of each quarter, report to the Executive Authority on Parliament’s quarterly performance in respect of the implementation of the Annual Performance Plan (APP). The Executive Authority in turn, and in terms of section 54 of the FMPPLA, must table each quarterly report five working days of receiving it for the consideration of the oversight mechanism i.e. the JSC Financial Management of Parliament. The 2020/21 Quarter 1 report was duly tabled, and on 28 August 2020 the acting Secretary to Parliament—the accounting officer—and her senior management team appeared before the Committee at a meeting at which the institution’s performance and expenditure in the period under review were interrogated.

1.5        This report should be read with the Strategic Plan of the Sixth Parliament and the 2020/21 Annual Performance Plan and budget.

1.6        This report comprises four parts:

-           an overview of the performance in the first quarter of 2020/21 (Part A);

-           an overview of the expenditure in the first quarter (Part B)

-           observations (Part C); and

-           recommendations (Part D).

 

PART A

 

2.         Overview of 2020/21 Quarter 1 performance

2.1        Background

2.1.1     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 will be implemented as of 2021/22. The Quarter 1 report was drafted as per indicators and targets of the 2020/21 APP that was tabled on 31 May 2019, and not in line with the revised 2020/21 APP tabled in July 2020.Quarter 1 performance should be assessed in the context of the COVID-19 pandemic and the implications that has had for Parliament’s operations.

2.1.2     The Quarter 1 report tracks 16 indicators. Ten of the indicators have quarterly targets, and six have annual targets that were not measured in the period under review. Of the 10 targets that were measured, only 8 were achieved. Overall, the institution’s performance stood at 80 per cent at the end of the period under review.

 

2.2        Programme performance

Programme 1: Strategic Leadership and Governance

2.2.1     Programme 1provides for political and strategic leadership, governance and institutional policy, executive communication and coordination, and for oversight of 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, and joint services, i.e.  Office for Institutions Supporting Democracy (OISD), the Parliamentary Budget Office (PBO) and the Treasury Advice Office (TAO).

2.2.2     The number of budget-related analytical reports produced by the PBO exceeded the targeted six reports: 13 analytical reports were produced in the period under review. The over performance is ascribed to increased demand from parliamentary committees.

2.2.3     The OISD succeeded in meeting all quarterly targets: strategic, procedural and legal advice and support was provided within the stipulated timeframes; all analytical reports on ISD-related matters were produced within the agreed timeframes, and the targeted single report on ISD-related resolutions was produced.

 

Programme 2: Administration

2.2.4     Programme 2 provides for strategic management, institutional policy and governance, development programmes for parliamentarians, internal audit and financial management, the Registrar of Members’ Interests, and the overall management and administration. The programme comprises the Office of the Secretary to Parliament, Legislative Sector Support (LSS), Strategic Management and Governance, the Finance Management Office, Internal Audit, and the Registrar of Members’ Interests. Of the two indicators measured in the period under review, only one was met.

2.2.5     The Administration Programme tracks indicators within the LSS programme, including the number of capacity building programmes implemented for parliamentarians, and the number of reports prepared for the implementation of Sector Strategy.

2.2.6     In the period under review one report on the implementation of the sector strategy was produced. Although parliamentarians were able to register with the universities of Johannesburg and the Witwatersrand, capacity building programmes could not be implemented.owing to the impact of COVID-19 national lockdown on academic institutions.

Programme 3: Core Business

2.2.7     Programme 3 provides for procedural and legal advice, analyses, information and research, content, language, and secretarial and legislative drafting services for meetings of the National Assembly (NA), National Council of Provinces (NCOP) and their committees. It also provides for public education, information and access, and analysis, advice and content support for Parliament’s international engagement. The programme comprises the NA Table, NCOP Table, Core Business Support, Knowledge and Information, and International Relations and Protocol divisions. The quarterly target set in relation to this programme was not met.

2.2.8     The Service Charter comprises advisory and information services produced to support plenary and committee deliberations. Of the 13 sub-indicators, 8 met their targets i.e. 83.77 per cent of services were delivered within the required timeframes. The 10,3 per cent under-performanceis ascribed toseveral challenges experienced under lockdown e.g. staff shortages due to illness, restricted access to the precinct, unavailability of staff members with comorbidities; inadequate tools of trade for those working from home, and limitations on the availability of technology.

 

Programme 4: Support Services

2.2.9     Programme 4 provides facilities and support services including institutional communication services, human resource management, information communication technology, institutional support services, and members’ support services. The programme comprises the Parliamentary Communication Services, Human Resources, Information Communication Technology (ICT), Members’ Support Services and Institutional Support Services.

2.2.10   All five indicators in Programme 4 have annual targets, however the ICT indicator on universal access can be measured every quarter. For quarter 1 the indicator on Universal Access (ICT) stood at 93,75 per cent, well above the targeted 80 per cent. The over-performance is ascribed to key interventions that had to be implemented to enable remote working.

Programme 5: Associated Services

2.2.11   This programme provides parliamentarians with travel, communication and other facilities to fulfil their duties as elected public representatives, and financial support to political parties represented in Parliament, their leaders and constituency offices.

2.2.12   The programme measures two indicators, i.e. the average number of days to reimburse parliamentarians, and the percentage of payments compliant with policy. One hundred percent of the payments made to political parties were in compliance with the policy, and the average number of days it took to process reimbursements exceeded the 2.3 day-target by 0.2 days.

 

Part B

3.1        Expenditure Report

Programme expenditure

3.3.1     For Quarter 1 the institution had a budget of R536,222 million and succeeded in spending all of it. Indications are that by the end of the financial year the entire R2,705,533 billion annual budget will be spent. Table 1 below, outlines the expenditure across all five programmes. As illustrated above, the institution succeeded in spending exactly as projected for every programme.

	April 2020 – June 2020				Annual
Main Division	Budget R’000	Actuals R’000	Variance R’000	%	Actuals to date R’000	Projections R’000	Totals R’000	Annual Budget R’000	Variance R’000	%
Strategic Leadership & Governance	21,079	21,079	0	100	21,079	91,139	112,216	112,216	0	100
Administration	29,530	29,530	0	100	29,530	147,088	176,618	176,618	0	100
Core Business	126,371	126,371	0	100	126,371	583,511	709,882	709,882	0	100
Support Services	86,426	86,426	0	100	86,426	392,932	479,358	479,358	0	100
Associated Services	151,950	151,950	0	100	151,950	568,352	720,302	720,302	0	100
Sub-Total	415,356	415,356	0	100	415,356	1,783,020	2,198,376	2,198,376	0	100
Direct Charges	120,966	120,966	0	100	120,966	386,191	507,157	507,157	0	100
TOTALS	536,322	536,322	0	100	536,322	2,169,211	2,705,533	2,705,533	0	100

Table 1: Programme expenditure (Source: Quarter 1 Report presentation by the Parliament of the RSA)

Spending per economic classification

3.3.2     Table 2 below, reflects the spending patterns per main division. As illustrated, the institution spent 50 per cent of its budget on compensation of employees, 23 per cent each on compensation of parliamentarians and transfers to political parties, 3 per cent on goods and services in terms of the APP, and 1 per cent on goods and services in terms of parliamentarians’ facilities. In this case too there was no variance in terms of the planned and actual expenditure.

 

 

 

 

	April 2020 – June 2020				Annual
Economic classification	Budget R’000	Actuals R’000	Variance R’000	%	Annual Budget R’000	Actuals & Projections R’000	Variance R’000	%
Compensation of Members	120,966	120,966	0	100	507,157	507,157	0	100
Compensation of Employees	266,728	266,728	0	100	1,222,654	1,222,654	0	100
Goods and Services (APP)	15,983	15,983	0	100	326,513	326,513	0	100
Goods and Services (Members’ entitlements)	6,392	6,392	0	100	120,000	120,000	0	100
Transfers	124,184	124,184	0	100	500,302	500,302	0	100
Capital Expenditure	2,069	2,069	0	100	28,907	28,907	0	100
TOTALS	536,322	536,322	0	100	2,705,533	2,705,533	0	100

Table 2: Expenditure per economic classification (Source: Parliament of the RSA presentation on 2020/21 Quarterly performance)

 

PART C

4.         Observations

4.1        Parliamentary Budget Office

4.1.1     The Committee has noted the PBO’s continued over-performance, and the explanation that such over-performance is due to the fact that the demand for PBO products was difficult to predict which frequently resulted in positive performance variances or over-performance in respect of the targets set.

4.1.2     As previously reported the Committee remains deeply concerned about the long delay in the recruitment of a director to the PBO. The delay causes undue anxiety among the PBO staff and has the potential to destabilise the unit.

 

4.2        Office on Institutions Supporting Democracy

4.2.1     The Committee has noted the OISD’s improved performance and that all targets were met. It is also noted that the detailed quarterly reports and weekly schedules the OISD prepares have resulted in timely communication and tracking of resolutions.

 

4.3        Working remotely

4.3.1     The Committee has noted the impact the national lockdown has had on the performance of Programme 3 in particular. While the institution has for the most part performed admirably in respect of remote working, more could be done to build to ensure that all employees are able to work efficiently from home.

 

4.4.       Financial reporting

4.4.1     The Committee noted the expenditure in terms of programmes and economic classification, which, as reported, is exactly as projected.

4.4.2     The Committee has noted the high level information provided in respect of spending on goods and services, and is of the view that it is insufficient for oversight purposes.

 

4.5        Treasury Advice Office

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

 

4.6        Critical vacancies

4.6.1     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.

 

4.7        Accessibility of Parliament to the public

4.7.1     As indicated in previous reports, the Committee supports all efforts to increase public participation in Parliament’s activities. Ensuring that more people have access to information about Parliament through television, radio and social media would contribute greatly towards that goal.

 

PART D

5.         Recommendations

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

 

5.1        Parliamentary Budget Office

5.1.1     The Committee notes that the PBO continuously over-performs in respect of the number of analytical reports it produces, and the Committee recommends that the impact and quality of the reports should also be assessed.

5.1.2     The Committee recommends that the recruitment of a director for the PBO should be fast-trackedand that a director should be appointed by no later than the end of the 2020/21 financial year. The Committee should be provided with detailed quarterly progress reports.

 

5.2        Office on Institutions Supporting Democracy

5.2.1     The Committee notes that the OISD has succeeded in meeting all its targets and, as in the case of the PBO, recommends that the impact and quality of the services should also be assessed.

 

 

5.3        Working remotely

5.3.1     The Committee notes that the institution has developed a policy to govern remote working, and recommends that it be reviewed regularly as more lessons are learned. The Committee also recommends that the lessons learnt under lockdown be incorporated to make the institution’s overall operations more efficient going forward.

 

5.4        Financial reporting

5.4.1     The Committee notes that the expenditure in the period under review was exactly as projected. The Committee should be provided with an explanation for how this was achieved, especially in light of, for example, the lockdown restrictions and their impact on operations, as well as the vacancies that are still to be filled.

5.4.2     The Committee recommends that the institution should every quarter provide a detailed breakdown of spending on goods and services.

 

5.5        Treasury Advice Office

5.5.1     The Committee recommends that the TAO should be fully operational by no later than the end of the 2020/21 financial year, and that the necessary appointments should be made as a matter of urgency. The Committee should be provided with detailed quarterly progress reports.

 

5.6        Critical Vacancies

5.6.1     The Committee recommends that the Secretary to Parliament, CFO and Chief Audit Executive posts be filled as a matter of urgency, and before the end of the 2020/21 financial year. The Committee should be provided with detailed quarterly progress reports.

 

 

 

5.7        Accessibility of Parliament to the public

5.7.1     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 meetings should not be aired on pay-to-view channels, but should be broadcasted on the SABC’s platform. The Committee should receive quarterly updates on the progress the Parliamentary Communication Service has made as far as expanding Parliament’s reach.

 

Report to be considered.