ATC201202: Budgetary Review and Recommendation Report of the Portfolio Committee on Defence and Military Veterans on the 2019/20 Annual Report of the Department of Military Veterans (DMV), Dated 2 December 2020

Defence and Military Veterans

BUDGETARY REVIEW AND RECOMMENDATION REPORT OF THE PORTFOLIO COMMITTEE ON DEFENCE AND MILITARY VETERANS ON THE 2019/20 ANNUAL REPORT OF THE DEPARTMENT OF MILITARY VETERANS (DMV), DATED 2 DECEMBER 2020.
 

The Portfolio Committee on Defence and Military Veterans, having considered the financial and service delivery performance of the Department of Military Veterans (DMV) for the 2019/20 financial year on 17 October 2020 and 25 November 2020, reports as follows:

 

1.  

 

1. Description of core functions of the Department

 

The DMV derives its mandate from the Military Veterans Act (No 18 of 2011), which requires it to provide national policy and standards for socio-economic support to military veterans and to their dependents, including benefits and entitlements to help realise a dignified, unified, empowered and self-sufficient military veterans’ community.

1.2        Mandate of Committee

 

The Portfolio Committee on Defence and Military Veterans (PCODMV) is mandated to oversee the DMV to ensure that the Department fulfils its mandate through the monitoring of the implementation of legislation and adherence to policies, such as the Military Veterans Act and the Military Veterans Benefits Regulations and other related legislation. It must scrutinise legislation which supports the mission statement of Government; the budget and functioning of DMV.

1.3        Purpose of the BRR Report

 

Section 5 (2) of the Money Bills Procedures and Related Matters Amendment Act (Act 9 of 2009) allows for each Committee to compile a Budgetary Review and Recommendation Report (BRRR) which must be tabled in the National Assembly. Section 5(3) provides for a BRRR to contain the following:

1. an assessment of the department’s service delivery performance given available resources;
2. an assessment on the effectiveness and efficiency of departments use and forward allocation of available resource; and
3. recommendations on the forward use of resources.

 

In October of each year, parliamentary portfolio committees compile a BRRR that assess performance given available resources; evaluates the effective and efficient use and forward allocation of resources; and makes recommendations on the forward use of resources. The BRRRs are also source documents for the Standing/Select Committees on Appropriations/Finance when they make recommendations to the Houses of Parliament on the Medium-Term Budget Policy Statement (MTBPS). The comprehensive review and analysis of the previous financial year’s performance, as well as performance to date, form part of this process.

 

Given the above, and in the context of the extended deadline to departments and entities for the submission of annual reports, the PCODMV utilised the 2019/20 quarterly reports as well as draft Annual Reports to compile a preliminary assessment of departmental performance for 2019/20 before a BRRR will be finalised when Annual Reports are submitted from 16 November 2020. Following the submission of the finalised DMV 2019/20 Annual Report, the PCODMV had an engagement with the DMV on 25 November 20201 after which the BRRR was finalised.

 

1.4        Methodology in compiling the report

 

The Report is compiled from the various activities of the Committee. It is inclusive of the Committee’s meetings, oversight visits, reports on budget votes, strategic plans, annual performance plans and annual reports, as well as previously published Committee reports.

 

1.  

 

The PCODMV did not conduct an oversight visit to facilities of the DMV in 2019/20.

 

1.6        Information used to compile the Report

 

Besides the information on the Oversight visits, other information used in the assessment of the service delivery and financial performance included the:

 

• The National Development Plan 2030;
• The 2019 Estimates of National Expenditure;
• The 2020 State of the Nation Address;
• Committee reports on the 2019/20 Budget Hearings, Strategic Plans and Annual Performance Plans reports;
• Draft DMV Annual Report 2019/20; and
• DMV Annual Report 2019/20.

 

1.7        Structure of the Report

 

This Report comprises the following sections:

 

• Section 1: An Introduction which sets out the mandate of the Committee, the purpose of this report.

• Section 2: Provides an overview of the key relevant policy focus areas.
• Section 3: Provides an overview and summary of previous key financial and performance recommendations of Committee(2018/19).
• Section 4: Provides a broad overview and assessment of financial performance of the Department for 2019/20.
• Section 5: Overview of service delivery and performance 
• Section 6: Key Committee findings. 
• Section 7: Key recommendations.

 

1. Overview of the key relevant policy focus areas

 

2.1        State of the Nation Address2019

 

President Cyril Ramaphosa, during his SONA on 7 February 2019, made the following remarks that can be related to the mandate and activities of the DMV:

 

• “We resolved to cure our country of the corrosive effects of corruption and to restore the integrity of our institutions.” This can be related to the DMV’s stated intention to address any corruption and fraud in its midst.
• “Secondly, our history demands that we should improve the education system and develop the skills that we need now and into the future.” As two of the primary benefits, educational support and skills development are being prioritised by the Department.
• “We are duty bound to improve the conditions of life for all South Africans, especially the poor” It is especially the Social Relief of Distress that is a Ministerial priority that is administered by the Department, that assist military veterans in distress with this benefit.
• “Given the key role that small businesses play in stimulating economic activity and employment – and in advancing broad-based empowerment – we are focusing this year on significantly expanding our small business incubation programme.” The businesses access to empowerment opportunities for military veterans as well as the annual target of paying invoices within 30 days, are examples in this regard.
• “This year, we will take a significant step towards universal access to quality health care for all South Africans.” The health benefit for military veterans is underlined against the background of ageing military veterans and the assistance and support of the SAMHS in this regard is noted.

 

2.2.       DMV contributions towards the National Development Plan (NDP) and Medium-Term Strategic Framework (MTSF) (Outcomes)

The Annual Report outlines the Department’s contributions to both the National Development Plan and the Medium Term Strategic Framework Outcomes 2014-2019. It is especially the performance versus the annual targets as at 31 March 2020 which should be noted:

Table 1: DMV Contributions to NDP and MTSF

Outcome No	MTSF Outcomes	Chapter	NDP	Progress as at 31 March 2019	Progress as at 31 March 2020
1	Improved quality basic education	Chapter 9	Improving Education Training and Innovation.	Actual achievement is the number of approved military veterans and dependants for 2018 Academic year (8 086) and 2019 Academic year (3 240) as at 31 March 2019	Actual achievement of 4 449 (2 832 - Basic Education and 1 617 - Tertiary Education) Military Veterans and their dependants being educationally supported during the 2019/20 financial year.
2	A long and healthy life for all South Africans	Chapter 10	Promoting Health	Because of high demand on Healthcare services, 17 197 military veterans had access which saw a significant rise from the planned target of 17 000	Achievement: 18 390 military veterans authorised to access healthcare services. This priority saw 148 military veterans being provided with a once-off compensation payment for their welfare. Provision of 643 military veterans and their dependants with counselling and treatment.
3	Decent employment through inclusive economic growth	Chapter 3	Economy and Employment	Almost 308 military veterans were provided with businesses access to empowerment opportunities	163 military veterans were provided with businesses access to empowerment opportunities.
5	A skilled and capable workforce to support an inclusive growth path	Chapter 9	Improving Education, Training and Innovation	952 military veterans and their dependants were provided with funding for skills development programmes.	900 Military Veterans were provided with approved funding for skills development programme
7	Vibrant, equitable, sustainable rural communities contributing towards food security for all	Chapter 6	An integrated and inclusive economy, human capital, social security, food security and basic services.	To date the department has assisted more than 3 478 military veterans and their dependants with Social Relief of Distress (SRD) to mitigate their suffering	While the AR does not make any reference to how many military veterans has been assisted with SRD’s, the Financial statements refer to an amount of R1 262 000 that has been transferred (p. 192).
8	Sustainable human settlements and improved quality of household life	Chapter 8	Transforming human settlement.	417 (WC: 102; EC: 54; GP: 207; NW: 33; LP: 21) houses against target of 1 000. Reasons under achievement: • Unavailability of service sites in KZN; • Delays with the procurement of contractors at the Provincial Department of Human Settlement (PDHS). • Lack of project management skills at PDHS; • Unavailability of Military Veterans who meet the qualifying criteria. • Lack of coordination between DMV & NDHS	477 military veterans provided with newly built houses during the 2019/20 financial year. Furthermore 28 houses of military veterans in distress on bond were rescued.
12	An efficient, effective and development-oriented public service and an empowered, fair and inclusive citizenship	Chapter 13 and 14	Building a capable and developmental state.	- All the statutory planning, monitoring and evaluation documents were developed and submitted to external stakeholders. • An invoice tracking system has been introduced to strengthen the payment of invoices within stipulated timeframes. • Consultation with NT & SITA underway to implement LOGIS.	DMV entered into 4 agreements between private sector companies and state of organs. An invoice tracking system was introduced however; capacity or volume of transactions causes delays.
14	Nation building and social cohesion	Chapter 15	Transforming society and uniting the country: Promoting social cohesion across society and righting the wrongs of the past	-325 families were provided with burial support. - 41 tombstones were erected to the graves of deceased military veterans	97% of approved burial claims paid within 30 days of receipt in support of bereaved families of Military Veterans.

 

2.3.       Overview of DMV Strategic Plan and Annual Performance Plan

 

The DMV 2019/20 Annual Performance Plan and the Strategic Plan (2015 - 2019) give effect to the mandate of the DMV.

 

Strategic Plan 2015 - 2019

 

The Department’s Strategic Plan (2015 - 2020) outlines its Vision namely “A dignified, empowered and self-sufficient Military Veteran’s community,” while its Mission is “to facilitate delivery and coordinate all activities that recognise and entrench the restoration of dignity and appreciation of the contribution of Military Veterans to our freedom and nation building.” It further outlines the Service Charter that underpins the delivery of service to military veterans, which emphasises inter alia service standards, teamwork, discipline, excellence, ethics, openness and transparency. It lists the Legislative and other mandates with the primary source being the Military Veterans Act (No. 18 of 2011). The various planned policy initiatives are also recorded which are in the process of being finalised and/or approved.

 

Annual Performance Plan (APP)

 

The 2019 APP lists the contributions that the DMV will make to the NDP in the FY 2019/20 and these can be noted in the table in section 2.2. In brief, they contribute to Chapter 3: Economy and Employment through Education, training and skills development; Chapter 8: Transforming Human settlement through partnerships with Department of Human Settlement (DHS) through building houses; Chapter 9: Improving Education, Training and innovation by providing quality basic education through the provision of comprehensive support services to Military Veterans; Chapter 10: Promoting Health by providing comprehensive support services to Military Veterans and where applicable, to their dependants; Chapter 13: Building a Capable State through being an employer for both military veterans and their dependants; Chapter 14: Promoting Accountability and Fighting Corruption through providing an efficient, effective and development oriented public service; and Chapter 15: Transformative society and uniting the country through promoting social cohesion and righting the wrongs of the past; promoting decent employment through inclusive growth.

 

3.         Summary of previous recommendations of the Committee

 

3.1.       2019 BRRR Recommendations

 

The Portfolio Committee, after considering the 2018/19 Annual Report of the DMV, made the following recommendations:

 

a. The continuing unqualified opinion of the DMV relates mostly to leadership and proper control measures and the Committee recommended that these should be improved upon and that it will monitor the Department in this regard. In order to improve its annual performance, the Department should also ensure    that Consequence Management is applied properly and consistently.

1. The Committee recommended that the DMV should prioritise the filling of especially vacancies at top management level to address the leadership instability and the numerous acting positions.
2. The Committee recommended that enhanced focus should be put on Skills development to facilitate military veterans being less reliant on the Department and undertook to monitor the Department continuously in this regard.
3. Although taking cognisance of the efforts of the Department to facilitate a new structure, the Committee stressed the importance of this process and recommended that the Committee be kept abreast of developments in this regard on a continuous basis.
4. The Department indicated that the virements and shifts of funds were to cost pressure areas such as education. The Committee recommended that these should be limited in future and attention should rather          be concentrated on improving the under-performing programmes, as these continuing movements may attest to poor planning.
5. The Department’s responses indicated that part of the reasons for a lack of Consequence Management was the leadership instability and that they have established structure to assist in this regard. The Committee recommended that this structure, the Financial Mismanagement Committee, shouldenhance its efforts to    deal with financial transgressions and that in future it should give the Committee the assurances that it is indeed serving its intended purpose to address the lack of Consequence Management.
6. The Department agreed that the Database is the “center of gravity” to ensure that military veterans and their dependants receive their rightful benefits. It has challenges with SITA and approached the Department of Communications to assist in this regard. The Committee therefore recommended that the Department continue with its undertaking to finalise the database by end 2019 and to keep the Committee informed in this regard.
7. While the Department explained the developments around the SRD, the development of a SRD policy and the migration of certain of these activities to the DMV from Department of Social Development, the Committee recommended that this should be sped up given the relief it is providing to destitute military veterans. The Committee also committed to follow up on this issue on a regular basis. 
8. The Department could only partly explain the various educational institutions frequented by beneficiaries. The Committee therefore recommended that a proper breakdown of the various educational institutions should be provided to it as well as the policy detailing what should happen when a student who failed, applies again for a bursary, or change courses, etc.
9. The Committee recommended that the DMV should explore means to ensure that payments to educational institutions are made timeously or that the Department reassure these institutions of these payments.
10. It was indicated that no real progress has been made with the public transport benefit, except that the             Department has engaged the Department of Transport on how to approach it and that it was engaging municipalities regarding transport subsidies. The Committee recommends that the Department should enhance its efforts in this regard and give feedback to the Committee on this benefit on a regular basis.

 

4.         OVERVIEW AND ASSESSMENT OF FINANCIAL PERFORMANCE

4.1 Budget Allocation and Expenditure for 2019/20

The allocation for Vote 19 for the DMV in the Estimates of National Expenditure (ENE) for the 2019/20 financial year was R652 553 000. The actual expenditure was R447 205 000, which led to an underspending of R175 348 000 or 26.9% of the total budget, as depicted in the table below. The Department has thus regressed with more than 13.3% against the spending of the previous financial year. The figures in brackets refer to the previous financial year.

Table 2: Overview of Budget Allocation and Expenditure for 2019/20

Programme R’000	Adjusted Appropriation	Virement	Final Appropriation	Actual Expenditure	Variance	Percentage Spent
Administration	141 054 (133 565)	0 (7 020)	141 054  (140 585)	139 614 (138 071)	1 440 (2 514)	99.0% (98.2%)
Socio-Economic Support	365 351 (336 772)	0 (0)	365 351  (336 772)	254 843 (334 660)	110 508 (2 112)	69,8% (99.4%)
Empowerment and Stakeholder Management	146 148 (156 750)	0 (-7 020)	146 148  (149 730)	82 748 (69 246)	63 400 (80 484)	56,6% (46.2)
Total	652 553 (627 087)	-	652 553 627 087	477 205 (541 977)	175 348 (85 110)	73,1% (86.4%)

 

The Table outlines that the Department spent less of its budget in the FY2019/20 (73.1%) than in the previous financial year (86.47%). The main contributor to the underspending is Programme 3: Empowerment and Stakeholder Management, where only 56.6% or R82 748 246 was spent against an allocation of R146 148.The spending of in Programme 2: Socio-economic dropped from 99.4% the previous year to 69.8% for the year under review. This is concerning since this is the main service delivery programme dealing with health care, counselling, bursaries, transport and pension, some of the key benefits of the Department.

Underspending

In terms of programme expenditure, all programmes recorded underspending with the highest being Empowerment and Stakeholder Management at 43.4% (53.8% in 2018/19), with Socio-Economic Support at 30.2% and Administration at 1%.

4.2 Programmes:Budget Allocation and Expenditure for 2019/20

Table 3: Programme 1: Administration

Programme 1: Administration
SUB PROGRAMME	Adjusted Appropriation	Shifting of funds	Virement	Final Appropriation	Actual expenditure	Variance	% of final appropriation
Management	12 106	-	-	12 106	12 517	(411)	103,4%
Corporate Service	66 212	-	-	66 212	68 676	(2 464)	103,7%
Financial Administration	14 542	-	-	14 542	20 977	(6 435)	144,3%
Internal Audit	10 864	-	-	10 864	10 640	224	97,9%
Strategic Planning, Policy development and M&E	19 910	-	-	19 910	13 876	6 034	69,7%
Office Accommodation	17 420	-	-	17 420	12 928	4 492	74,2%
Total: Sub-programmes	141 054	-	-	141 054	139 614	1 440	99,0%

 

It is encouraging that this programme has spent 99% of its budget, and the overspending in three of the sub-programmes needs clarity, especially the overspending by R6 435 000 in the Financial Administration. The 74.2% spending on Office Accommodation should be read against the challenges the Department is experiencing with its current headquarter such as the poor drainage system.

 

Table 4: Programme 2: Socio- Economic Support

Programme 2: Socio- Economic Support
SUB PROGRAMME	Adjusted Appropriation	Shifting of funds	Virement	Final Appropriation	Actual expenditure	Variance	% of final appropriation
Database and Benefits Management	14 685	-	-	14 685	7 621	7 064	51,9%
Health care and wellness support	96 095	51 679	-	147 774	144 834	2 940	98,0%
Socio economic support management	254 571	(51 679)	-	202 892	102 388	100 504	50,5%
Total For Subprogrammes	365 351		-	365 351	254 843	110 508	69,8%

 

The Database & Benefits Management sub-programme has underspent by 48.1% and this subprogramme is responsible for the National Military Veteran’s Database. The subprogramme Socio-economic support management is responsible for benefits such as education, public transport, health; all core benefits for military veterans and their dependents. While it can be understood why funds have been shifted to the Health care subprogramme, it needs to be clarified what exactly the challenges were in this subprogramme.

 

Table 5: Programme 4: Empowerment and Stakeholder Management

Programme 3: Empowerment and Stakeholder Management
SUB PROGRAMME	Adjusted Appropriation	Shifting of funds	Virement	Final Appropriation	Actual expenditure	Variance	% of final appropriation
Provincial Office and Stakeholders Relation	63 376	-	-	63 376	37 024	26 352	58,4%
Empowerment and Skills Development	49 040	-	-	49 040	27 807	21 233	56,7%
Heritage, Memorial, Burial and Honours	33 732	-	-	33 732	17 917	15 815	53,1%
Total:Subprogrammes	146 148	-	-	146 148	82 748	63 400	56,6%

 

As with the previous financial year, this is the worst performing programme which list a spending of 56.6% of its allocated budget. This should be seen against the background that this is a service delivery programme responsible for, inter alia, provincial offices where poor performance was recorded.  The programme missed its target for skills development by 4 600, and this should be questioned as this is a much needed benefit to assist military veterans to become less reliant on the Department.   It is encouraging that 97% of burial support claims have been paid within 30 days of receipt and the Department is encouraged to further improve on this benefit to allow dignified funerals for military veterans. The Programme failed to erect the 3 memorial sites for the year and this needs to be improved upon given the importance of memorialising and honouring military veterans.

 

1.  

Unauthorised expenditure: There was no unauthorised expenditure incurred by the Department during the year under review. This is for the third consecutive financial year and Department should be commended in this regard.Fruitless and wasteful expenditure: An amount of R148 000 (R172 000 in FY2018/19) was incurred as fruitless and wasteful expenditure of which the majority was as a result of payments for services not utilised.

Irregular expenditure: An amount of R4 572 000 was incurred as irregular expenditure. This relates to three (3) remaining cases on contracts entered into in prior years where SCM processes were not adhered to by the department. Contingent liabilities: The Department lists its Contingent Liabilities as R 207 620000, with R1 994 000 having been incurred for the year under review. Various companies are listed such as Zeal Health (R198 159 000), B&M Catering Services R2 074 000, and PSA obo J Mocheat R613 000, etc. As in the previous financial year, the Auditor-General of South Africa (AGSA) has expressed its concern in this regard as the Department is the defendant in contract cancellation lawsuits. It stresses that the “ultimate outcome of these matters cannot presently be determined and no provision for any liability that may result has been made in the financial statements.” This is also listed as an Emphasis of Matter, by the AG.

 

1.  

The AGSA audited the financial statements of the Department for the FY2019/20, and the DMV received an unqualified audit outcome for 2019/20, similar to that of FY2018/19. Should this be confirmed in the final AGSA report, 2019/20 will be the fourth consecutive unqualified audit outcome and the Department should be congratulated, albeit that it should attempt to achieve a clean audit opinion.

Report on the audit of the annual performance report

The AGSA evaluated the usefulness and reliability of the reported performance information in accordance with the criteria developed from the performance management and reporting framework, for the following selected programmes presented in the annual performance report for the year ended 31 March 2020:

Programme 2: Socio-Economic Support.: It states that the achievements reported in the annual performance report materially differed from the supporting evidence provided for the indicators: Total number of military veterans with access to healthcare services; and the Number of bursaries provided to military veterans and their dependants per year.

 

Compliance with legislation:

Expenditure management

As indicated in section 3.2 above, the AGSA raised concerns around “Effective steps were not taken to prevent fruitless and wasteful expenditure amounting to R148 000 as the majority of fruitless and wasteful expenditure. “The majority of the fruitless and wasteful expenditure resulted from payments for services not utilised, which is a repeat of the finding in FY2018/19.

Strategic planning and performance management

Specific information systems were not implemented to enable the monitoring of progress made towards achieving targets, core objectives and service delivery, as required.

Consequence management

The AGSA was unable to obtain sufficient appropriate audit evidence that disciplinary steps were taken against officials who had incurred irregular as well as fruitless and wasteful expenditure, as required by the PFMA. This was as a result of significant delays in performing investigations relating to these matters.

Leadership:

The AG states that “Leadership did not exercise adequate oversight over performance reporting, compliance with applicable legislation and related internal controls.” Action plans to address audit matters were not effective in addressing prior year findings. Management did not implement effective controls to ensure that information contained in performance reports was reliable before submission for audit.

 

5.         OVERVIEW AND ASSESSMENT OF PROGRAMME PERFORMANCE

The Department planned to achieve 20 performance targets areas during the 2019/20 financial year. Of the 20 targeted performance areas, nine (9) targets were achieved which constituted 45% overall achievement. This shows a regression from the 50% achievement in 2018/19.

Table 6: Annual Targets and Total Budgets

	Annual Report FY2019/20	Annual Report FY2018/19
Total targets set	20	16
Targets achieved	9/20	8/16
Targets not achieved	11/20	8/16
Success rate	45%	50%
Total Budget Spent (%)	73.1%	86%

 

The spending of 73.1% of the budget versus an achievement of 45% of the set targets for the year is concerning. It means that 73% of the budget has been spent to achieve less than half of the targets set. This decreasing performance should be seen against the 50% success rate and 86% of the budget spend in FY2018/19.

 

5.1        Administration Programme

The main purpose of the programme is to provide management and strategic administrative support to the Ministry, and overall management of the Department.

Table 7: Administration Targets and Total Budgets

	FY2019/20	FY2018/19
Total targets set	7	7
Targets achieved	3	5
Targets not achieved	4	2
Success rate	43%	71%
Total Budget Spent (%)	99%	98%

 

As shown above, the Administration programme had a total of 7 targets for the last two years of which 3 have been achieved leading to a success rate of 43% for the FY2019/20 (71% in FY2018/19).The fact that 99% of this programme’s budget was spent to achieve only 43% of the targets is very concerning as money is spent with little success to achieve its objectives. If the 43% is further compared with the success rate 71% of the previous year, this is cause for further concern and this regression should be investigated and addressed as a matter of urgency.

Table 8: Selected Performance Indicators for Programme 1: Administration

Performance Indicator	Planned Target	Actual Achievement	Deviation	Comment
Percentage of Communication Strategy activities implemented	100%	70%	-30%	Limited resources
Percentage cases from Presidential Hotline resolved	100%	97%	-3%	11 cases where not resolved during the 2019/20 financial year
Fully integrated military veterans’ benefits management system	Integration of benefits and external entities	The system was not delivered, although user requirements specifications were developed. The registration module also developed, however it did not pass the test. Overall, SITA has not been able to deliver the project.	Integration of benefits and external entities	The Department has contracted SITA to develop and implement the IDBMS, however SITA has not been able to deliver the project.
Percentage of legitimate invoices paid within 30 days of receipt	90%	73%	-17%	The variance of was mainly due to payments related to Travel with Flair where there was a catch up on long outstanding invoices.

 

The reasons namely “lack of resources” why the Communication strategy target was missed, is insufficient and the Department should be requested to properly explain the reason.  The Committee should request a full explanation why the target of a “Fully integrated military veterans’ benefits management system” has not been reached as it indicates that SITA could not deliver on the project. Regarding the “Percentage representation of persons with disability” the explanation for the deviation alludes to there being no applications from prospective persons living with disabilities and especially that no targeted recruitment was done.

 

5.2        Socio-Economic Support Programme

Table 9: Socio-Economic Support Targets and Total Budgets

	FY2019/20	FY2018/19
Total targets set	8	4
Targets achieved	3/8	2
Targets not achieved	5/8	2
Success rate	38%	50%
Total Budget Spent (%)	69%	99.4%

 

As shown above, Socio-Economic Support had a total of 8 targets (4 in FY 2018/19) of which 3 have been achieved leading to a success rate of only 38% (50% in FY2018/19). Given the poor performance of 38%, against a spending of 69%, serious attention should be paid to improve on reaching the set targets.

Table 10: Selected Performance Indicators for Programme 2: Socio-Economic Support

Performance Indicator	Planned Target	Actual Achievement	Deviation	Comment
Total number of military veterans with access to health care services	18 000 (1 000)	18 390 (1 320)	390 deviations from the cumulative 17 197 authorizations from 2018/19FY minus 131 deceased Military Veterans in 2019/20FY.  Deviation from the 2019/20FY planned annual target is (320) as 1 320 authorizations were done in 2019/20FY.	Healthcare is in high demand and access cannot be denied to eligible Military Veterans who apply for the benefit, as this will be a contravention of section 27 (2) of the constitution and the Military Veterans benefits regulations
Number of deserving military veterans with decent housing per year	300 houses	477	177	Overachieved due to the improved coordination between different role players.
	100 Bond rescue	28	-72	The benefit is demand driven and as such fewer application than those that were planned for were received. Some were rejected in accordance with  the set Regulation.
Percentage of military veterans who are verified and captured on the National Military Veterans’ Database	30 000	40 892	10 892	The data cleansing project in collaboration with DoD made difference with steady walk-ins that resulted in overachievement
Number of bursaries provided for military veterans and their dependants per year	7 466	4 449 (2 832 Basic Education and 1 617 Tertiary Education)	-3 017	Students previously funded by DMV were referred to NSFAS. There was a moratorium on the intake for new education support applicants during the 2019 and 2020 Academic years. There are still a number of outstanding documents which have delayed the finalisation of the applications.
Number of military veterans provided with compensation payment.	300	148	-152	Payment of compensation to eligible applicants depends on the availability of the SAMHS medical team for assessments and adjudication of the applicants, but due to competing priorities, their availability is a challenge. 25 assessments done in February 2020, but were only paid in during Quarter 1 of 2020/21FY. Not all applicants assessed qualify for compensation due to various reasons.
PPI 206: Number of military veterans and their dependants provided with counselling and treatment.	1 000	643	-357	Challenge with receipt of reports from SAMHS, reports always received retrospectively therefore, distorts quarterly reporting.
Approved policy on military veteran’s pension benefit.	Policy on military veteran’s pension benefit approved	Draft Policy on pension benefit was developed	Policy on military veteran’s pension benefit was not approved	Intense consultations with internal and external stakeholders required before sign off.
PPI 208: Approved policy on military veteran’s transport benefit	Policy on military veteran’s transport benefit approved	Policy Process initiated	Policy on military veteran’s transport benefit was not finalized and approved	Intense consultations with internal and external stakeholders required before finalizing the draft policy.

 

5.3        Empowerment and Stakeholder Management Programme

Table 11: Empowerment and Stakeholder Management targets and budgets

	FY2019/20	FY2018/19
Total targets set	5	5
Targets achieved	2/5	2
Targets not achieved	3/5	3
Success rate	40%	40%
Total Budget Spent (%)	56,6%	46.2%

 

The Empowerment and Stakeholder Management Programme had a total of 5 targets of which only 2 have been achieved, similar to the previous financial year, leading to a success rate of 40 percent. It spent slightly more of its budget (56.6%) than the previous financial year (46.2%). The targets are below.

Table 12: Selected Performance Indicators for Programme 3: Empowerment and Stakeholder Management

Performance Indicator	Planned Target	Actual Achievement	Deviation	Comment
Number of private sector companies and organs of state in partnership with the Department of Military veterans per year	4	4	Target was achieved as planned	There were no deviations
Number of deserving Military Veterans to access relevant training and skills development per year	5 500	900	-4 600	Demand far below the set target
Number of military veterans’ businesses provided with access to empowerment opportunities	110	163	53	Proactive approach and initiatives by the Directorate resulted in the achievement
Percentage of approval burial claims paid within 30 days of receipt	100%	97%	-3%	All the claims were paid within 30 days of the receipt of the claim, however 3 files were not available at the time of verification of the claims processed.
Number of military veterans’ memorial sites erected per year	3	0	-3	This is work in progress - Intergovernmental legacy liberation heritage projects

 

6.         GOVERNANCE

6.1        Effectiveness of Internal Control

The Audit Committee Report noted that “A lot more still needs to be done to stabilize the control environment in the department.” There were instances of non-compliance and internal control deficiencies, such as the following, which Management has committed to strategies and processes to address the control deficiencies.

6.2        Internal Audit

The purpose of the Internal Audit is to provide internal audit and risk management services to the Department by managing and conducting compliance audit services. As noted in Table 4 above, Internal audit has spent R10 640 000 of its allocated budget of R10 864 000. The Annual Report further states that “The department’s internal audit function is performed by the in-house Internal Audit Unit which fulfils an independent assurance function.” And further that “Internal audit findings were communicated timely and management implemented measures to mitigate the risks. Significant matters identified during the audit were reported to the Audit Committee.”

 

6.3        In-Year Management and Monthly/ Quarterly Report

The Department has submitted monthly and quarterly management/financial reports to National Treasury as per the PFMA requirements. Similar to the previous year, the Audit Committee stresses that although there was some improvement in the content and quality of these reports, greater improvement of performance reports is still required especially in the service delivery branches.

7.         HUMAN RESOURCES

7.1        Overview and vacancies

At the end of the financial year, the Department had 32 funded vacant posts, which translates to 19% of the total funded posts.  The 2019/20 financial year saw the re-prioritisation of the Department and the filling of key posts to strengthen human resources and improve efficient service delivery.  As of 31 March 2020, the Department had an approved establishment of 169 posts, of which 137 were filled and had an overall vacancy rate of 19%, down from 25% the previous year. It also had 63 employees additional to the establishment.

 

The vacancy rate for Programme 1: Administration was at 16% during 2019/20 similar to the 2018/19 financial year.  The vacancy rate for Programme 2: Socio-Economic Support was at 2% an improvement on the FY2018/19 when it was 10%. The vacancy rate for Programme 3: Empowerment and Stakeholder Management was at 14% a huge improvement on the 28% for the 2018/19 financial year.

7.2        Skills Audit

As opposed to the previous year, only one reference is made to the Skills Audit namely “Payment made to PTES consulting and recruitment for skills audit - Payment made for 250 officials to be assessed vs 170 who actually participated”  The Department reported in the previous financial year that due to the challenges it is experiencing in attracting and retaining critical and scarce skills, a programme for the implementation for Skills Audit is in place and will be conducted during the 2018/19 financial year. It has also appointed consultants to conduct the Skills Audit to the tune of R478 800.

 

8.         COMMITTEE OBSERVATIONS: DePARTMENT OF military VETERANS

Based on its analysis and overview of the 2019/20 Annual Report, the Committee makes the following preliminary recommendations that will be refined following the submission and interrogation of the final DMV Annual Report:

 

1. The Committee expressed concern that the training and skills development target was missed by 4 600, and the target reached was only a slight improvement of the previous year’s achievement, namely 900 and 952 respectively. The Committee noted the Department’s explanation that the demand was far below the set target.
2. It is of concern to the Committee that the spending in Programme 2: Socio-economic Support, decreased from 99.4% the previous year to 69.8% for the year under review, especially given that this is the main service delivery programme dealing with health care, counselling, bursaries, transport and pension, some of the key benefits of the Department.
3. It was noted that the sub-programme Strategic Planning, Policy Development and Monitoring and Evaluation continues to underspend (69.7% spending for FY2019/20) and the Committee expressed its concern as this subprogramme is responsible for the completeness of performance information; adequate documented and approved internal policies and procedures – all issues identified by the Audit Committee as problematic.
4. The Committee observed that the Database and Benefits Management sub-programme has underspent by 48.1% and noted that this subprogramme is responsible for the National Military Veteran’s Database. The latter has been beset by challenges which were raised continuously by the Defence Committees and the slow progress was found to be disappointing. These included the organogram that is not aligned to the service delivery model; leadership instability as well as lack of progress on amending the founding act.
5. Programme 3: Empowerment and Stakeholder Management was noted for its poor performance of achieving only 40% of its targets and spending of 56.6% against of its allocated budget. The Committee raised its concern given that this is a service delivery programme responsible for, inter alia, provincial offices; training and skills development; burial support and erecting of memorial stones.
6. The Committee noted with concern the continuing challenges with Fruitless and wasteful expenditure; Irregular expenditure and Contingent liabilities, as noted by both the Audit Committee and the Auditor-General, who made recommendations to assist with addressing these issues.
7. The Committee further observed that the Auditor-General also listed challenges with both Leadership and a lack of Consequence Management, and that these are repeat findings which makes it particularly concerning.
8. It was observed that the policies on pensions and public transport benefits have not been finalised and approved as annual targets in Programme 2 and the Committee noted its disappointment with this lack of progress with these two policies given that the Department has been in existence for more than ten years.
9. The Committee noted the decrease in the vacancy rate and the appointment of six senior managers in the year under review, but remains concerned about the vacancy rate of 13% at the Senior management level (Levels 13-16).
10. The Committee has raised the issues of the Skills Audit with the Department on several occasions, and the Annual Report refers to the over-payment of consultants involved with the Skills Audit exercise.
11. Concern was expressed around the accessibility to sickbays and military hospitals for military veterans residing in rural areas or far from these facilities and whether they could utilise the nearest public and/or private hospitals based on referrals from doctors at sickbays. It was explained that it is difficult to arrange preferential treatment for military veterans at public facilities due to the oath and ethical considerations applying to doctors. Military veterans are often reluctant to go to public health facilities.
12. The Committee raised the concern of the AGSA that if the claims against the Department were to be realised, that it would amount to around 85% of the DMVs annual allocation, and requested more clarity on the issues. It was indicated that many of the claims relate to medical expenses and that the SAMHS has been dealing with it. The Department is very positive that they can successfully defend other claims, especially the case related to the Zeal contract.
13. The Committee enquired around the process of prioritising housing for military veterans as announced by the national Department of Human Settlement, Water and Sanitation, which created expectations from military veterans that they will soon be assisted in this regard.  It was explained that part of the challenges is the “reluctance” from provincial housing departments to request funding or top up for housing for military veterans and that they are investigating measures to address this situation.

• The illegal occupation of houses built to shelter military veterans was very concerning to the Committee and it requested more information in this regard. The DMV responded that access to the houses are gained by getting the keys to the houses at the specific site by force, after which occupation takes place. The Department has quarterly meetings with the relevant national and provincial stakeholders to address this situation, as well as allocating sites to military veterans who then follow the building of the houses and in this manner prevent illegal occupation.
• The Committee is concerned about the turnaround time for responses upon receiving applications from military veterans, which is 30 days in terms of the Military Veterans Regulation number 21.  Members cited examples of the non-responsiveness to military veterans from departmental officials and decried the fact that military veterans are sent from pillar to post. An example was made of military veterans who were referred to another official in the Department in writing, while the relevant official could have passed the documentation /application on to his/her colleague.

 

9.         COMMITTEE Recommendations

 

Based on its analysis and overview of the 2019/20 Annual Report, the Committee makes the following preliminary recommendations that will be refined following the submission and interrogation of the final DMV Annual Report:

 

1. The Committee recommends that the Department should interrogate the setting of the target on training and skills development and align it with the current realities as well as enhancing its effort to increase the number of beneficiaries to assist with enabling military veterans to be less reliant on the Department.
2. The Committee felt that the underperformance in Programme 2: Socio-economic Support Management goes to the heart of the challenges in the Department and recommends that the DMV should provide it with concrete plans on how it will unlock these challenges besetting the main service delivery programme. The Committee expects the Department to provide feedback on these action plans on a quarterly basis.
3. Regarding the under-performance by the sub-programme Strategic Planning, Policy Development and Monitoring and Evaluation, the Committee stresses the importance of this sub-programme being fully functional and providing the policy guidance and monitoring as mandated to ensure the effective overall strategic direction of the Department.
4. The Committee took notes of the strides made to finalise the capturing and verification of the Database. It recommended that the DMV should reinforce actions to finalise the Database as a matter of urgency given that a verified Database facilitate effective planning. The DMV should report on progress with the Database at scheduled meetings.
5. The Committee recommends that the Department provide it with the measures it has taken to address the challenges in Programme 3, and to indicate whether these measures have been effective as it concerns core activities such burial support; the erection of memorial sites; and training and skills development.
6. The Committee recommends that the leadership of the Department should pay particular attention to the issues raised by the Audit Committee and the Auditor-General, and provide it with a progress report in this regard since the start of the current financial year (2020/21).
7. The Committee recommends it should be briefed by the Department on progress made to address the Leadership challenges, and especially how it is implementing Consequence Management since the advent of the new financial year (2020/21), given that the Committee itself raised its concerns about the latter.
8. The Committee recommends that the Department should finalise and approve the pension and public transport policies expeditiously to deliver on these benefits and that it should brief it on progress made since the start of the new financial year.
9. The Committee recommends that the Department should brief the actions taken and the progress made to review the organogram and fill the vacancies and especially the appointment of a permanent Director-General for the Department.
10. The Committee recommends that the Department briefs it fully on the Skills Audit exercise given that close to half a million rand has been spent on this exercise.
11. The Committee recommends that the issue of access to nearby public and private hospitals via sickbays and military hospitals should be enhanced, especially the speeding up of processes to authorise treatment for specialised services based on referrals by military health practitioners.
12. The Committee recommended that the Department should, on a quarterly basis, inform it of the status of legal claims against the Department, including the fiscal implications of each claim.
13. It was recommended that the DMV should keep the Committee abreast on their measures to speed up housing for military veterans against the background that there appear to be a lack of eagerness on the part of provincial housing departments, to request such funding from the DMV.
14. Given the Committee’s concern around the illegal occupation of houses earmarked for military veterans, it stressed the importance of addressing this situation and expect quarterly feedback in this regard.
15. The Committee recommends that the Department should enhance its communication with military veterans and ensure that it respond to military veterans within the stipulated timeframe. It should also inform military veterans that if they are not satisfied with a decision by the DMV, that they can register and appeal with the Appeal Board.

 

Report to be considered.