ATC210528: 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 3 of 2020/21dated28 May 2021
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 3 of 2020/21dated28 May 2021
The Joint Standing Committee on the Financial Management of Parliament, having considered the Parliament of the Republic of South Africa’s performance in Quarter 3 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 3 report was duly tabled, and on 12 March 2021 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 3 performance
2.1 Background
2.1.1 The Quarter 3 report was drafted in line with the indicators and targets contained in the revised 2020/21 Annual Performance Plan (APP) that was tabled in July 2020. The amended APP responded to the revised budget that was tabled in Parliament in May 2020, in which Parliament’s 2020/21 budget was reduced by R115 million.The APP targets were based on the normal operating environment.
2.1.2 The Quarter 3 Report tracked fourteen targets: eight were measured quarterly, and six were annual indicators which were not tracked. Of the eight targets that were tracked, seven were met.
2.1.3 The acting Secretary to Parliament emphasised that the institution’s performance in the period under review continued to be impacted by significant budget reductions and the Covid-19 pandemic.
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 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, 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 Parliamentary Service failed to produce 90 per cent of all procedural and legal support to Parliament on ISD-related matters within seven days. Although all seven such reports were produced, four were not delivered within the required timeframe. No reasons were provided for the variance.
2.2.3 All analytical services (research, content and secretariat support) to support Parliament on ISD-related matters were delivered within the agreed timeframe.
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, Strategic Management and Governance, the Finance Management Office, Internal Audit, and the Registrar of Members’ Interests.
2.2.5 All targets under his programme were achieved. All three of the targeted members’ capacity building programmes were delivered, i.e. the University of Johannesburg Continuing Education Programme (CEP), 10 to 18 November 2020; the University of Witwatersrand Graduate Certificate programme, 01 to 11 Dec 2020; and members continues to participate in online post-graduate programmes at the University of the Witwatersrand.
2.2.6 In respect of Legislative Sector cooperation, the targeted report on the implementation of Sector Strategy was delivered as planned.
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.
2.2.8 Of the six indicators under this programme, four are measured quarterly and were met. Performance in respect of the two annual targets was not measured. The notable over-performance in respect of advisory, research and information service being available in line with the Service Charter was ascribed, in the main, to the implementation of mitigation strategies reported to ensure the allocation of tools of trade to all staff with comorbidities to ensure that they were able to provide Hansard services remotely.
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, Members’ Support Services and Institutional Support Services.
2.2.10 All four indicators have annual targets. In terms of the performance trends the institution reported the following:
- the Facility Management Services-indicator measured services provided by the ISSD and whether customer expectations were met or exceeded;
- in respect of Talent Management Services, the organisational realignment project was progressing in line with the timelines;
- the universal access indicator is a cumulative target for the year and was on track to meet its annual target.
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 In respect of Members Support Services, the institution reported that, amongst others:
- members had a customer service or claim submission channel;
- policy reviews to support members’ needs in changed times have been prepared and presented;
- much work has been done to include changes in airline offerings, especially in relation to traveller experience and financial control;
- extensive work was done to propose alternate travel allocations and costs applying to former members of Parliament and the executive;
- the internal audit control review of the members’ self-service offering had been completed, and that the pilot phase allowing members to submit all claims electronically would commence shortly; and
- business requirement specifications were prepared for a customer logging and engagement system to provide an array of services to members whether they are in Parliament or working remotely, as well as to track service levels and customer satisfaction.
2.2.13 In respect of the transfers to political parties all transfers were processed timeously and in line with the applicable policy.
Part B
3.1 Expenditure Report
Table 1 below, outlines the expenditure across all five programmes.
3.3.1 Table 1 reveals that by the end of the period under review, Parliament had spent 87 per cent or R510,340 million of the R583,708 million allocated for the third quarter. Indications are that by the end of 2020/21 the institution will have underspent by R120, 476 million or 6 per cent of the R 2,114 billion annual budget.
3.3.2 The spending on direct charges amounted to R121,953 million or 96 per cent of the R126, 915 million allocations for the third quarter. It is anticipated that owing the October 2020 budget reduction the institution will overspend on this item by R16,167million. The over-expenditure will be a direct charge against the National Revenue Fund.
Table 2 below illustrates the expenditure per economic classification in the period under review
Table 2: Spending per economic classification
|
|
October 2020 – December 2020 |
Annual |
||||||||
|
Economic class. |
Budget R’000 |
Actuals R’000 |
Variance R’000 |
% |
Actuals to date R’000 |
Projections R’000 |
Totals R’000 |
Annual |
Variance |
% |
|
Comp. of Members |
126,915 |
121,915 |
4,962 |
3,9 |
364,052 |
128,589 |
492,641 |
476,474 |
(16,167) |
-3,4 |
|
Comp of Employee |
319,173 |
312,676 |
6,497 |
2 |
841,958 |
337,438 |
1,170,396 |
122,654 |
43,258 |
3,5 |
|
Goods and Services (APP) |
93,686 |
41,161 |
52,525 |
56 |
90,510 |
93,008 |
183,518 |
250,040 |
66,522 |
26,6 |
|
Goods and Services (Member entitlemts) |
38,476 |
27,265 |
11,211 |
29,1 |
51,410 |
44,549 |
95,959 |
99,940 |
3,981 |
3,9 |
|
Transfers |
125,966 |
123,471 |
2,495 |
1,9 |
368,511 |
125,076 |
493,587 |
500,302 |
6,715 |
13,4 |
|
Capital Expendit |
6,407 |
5,767 |
640 |
9.9 |
9,082 |
31,752 |
40,834 |
40,834 |
_ |
_ |
|
TOTALS |
710,623 |
632,293 |
78,330 |
10,9 |
1,725,523 |
760,412 |
2,485,935 |
2,590,244 |
104,309 |
4,03 |
(Source: Parliament of the RSA presentation on 2020/21 Quarterly performance)
Table 2 above is clarified below.
Compensation of Members
3.3.5 The spending on compensation of Members was R121,953 million or 96 per cent of the third quarter budget of R126, 915 million. Indications point to a likely R16,167 million over-expenditure at the end of the financial year. This is due to the R30.6 million budget reduction effected during the MTBPS budget period.
Compensation of employees
3.3.6 By the end of the third term spending on compensation of employees stood at 98 percent or R312,676million of the allocated R319,173million. It is expected that there will be a R43,258 million under-expenditure in respect of this item due to terminations and delays in the filing of critical vacancies as a result of slow recruitment processes (as a result of restrictions during lockdown).
Goods and services (Annual Performance Plan)
3.3.7 The spending on Goods and Services relating to the APP stood at 44 per cent or R41,161 million of the third quarter budget of R93,686million. It is expected that there will be a R66,522 million under-expenditure in respect of this economic classification. The underspending was also ascribed to the travel restrictions and precautionary measures introduced as part of the national lockdown.
Goods and services (Members’ entitlements)
3.3.8 The spending on Goods and Services that relate to members’ entitlements stood at 71 percent or R27,265million of the third quarter budget of R38,476million. It is expected that there will be a R3, 981million under-expenditure in respect of this item because members were not able to use their travel entitlements during the hard lockdown.
PART C
4. Observations
4.1 Performance Information
4.1.1 The Committee remains concerned about the key performance areas that are only being tracked annually. That some areas of performance are only assessed on an annual basis is unacceptable, as it leaves no room to address shortcomings that may result in under-performance by the end of the financial year.
4.1.2 The Committee has noted the continued under-performance in respect of the delivery of all strategic, procedural, legal support and advice within stipulated timeframes, and that no plans have been put in place to address this challenge.
4.1.3 The Committee notes that R6.497 million had not been spent on compensation of employees owing to vacancies in a number of critical posts. The Committee also notes that in all of the areas where under-performance was reported, the under-performance was not ascribed to a shortage in critical skills or resources.
4.1.4 The Committee is concerned about the turnaround time for legal and procedural advice. While in many cases advice was received late, there were several incidents in the National Assembly, for which advice was never received. It must be emphasised that for advice to be useful, it must be received as soon after the incident as possible. In addition, the Committee is concerned that where procedural is received, it is often of poor quality and When striving to meet deadlines, the quality and useful of the products should not be neglected.
4.1.5 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.
Financial performance
4.1.6 The Committee remains frustrated with the slow progress in relation to matters related to the Treasury Advice Office, specifically the appointment of a head. The office will play an integral role in ensuring the Executive Authority is adequately advised on matters related to Parliament’s budget, and adequately prepared for engagements with National Treasury.
PART D
5. Recommendations
The Executive Authority should respond to the following recommendations within 30 days of the tabling of this report.
5.1 Performance Information
5.1.1 The Committee again recommends that all key performance indicators be tracked quarterly, and that detailed update be provided on the progress that has been made.
5.1.2 The Committee recommends that the institution develops mitigation plans to address all shortcomings that have led to under-performance. These plans should be provided to the Committee when performance information is tabled.
5.1.3 The Committee recommends that Parliament should provide clarity on how it has managed to mitigate any negative impact from the vacancies, especially the shortage of critical skills it has reported.
5.1.4 The Committee should be provided with reports on the NA and the NCOP’s challenges in respect of the provision of procedural advice that is of high quality and delivered in the shortest possible time.
5.1.5 The Committee had in the past recommended 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 a detailed report on why this has not been possible and how the matter will be addressed.
Financial performance
5.1.6 The Committee had in the past recommended 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 a detailed report on why this has not been possible and how the matter will be addressed.
Report to be considered.
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