ATC231019: Budgetary Review and Recommendations Report (BRRR) of the Portfolio Committee on Public Service and Administration: Vote 07 of the National School of Government Annual Report for the 2022/23 Financial Year, Dated 18 October 2023

Public Service and Administration

Budgetary Review and Recommendations Report (BRRR) of the Portfolio Committee on Public Service and Administration: Vote 07 of the National School of Government Annual Report for the 2022/23 Financial Year, Dated 18 October 2023

 

1. BACKGROUND

 

The Portfolio Committee on Public Service and Administration (hereinafter referred to as the Portfolio Committee) having considered the directive of the National Assembly, which is in line with Section 5 of the Money Bills Amendment Procedures and Related Matters Act, No. 9 of 2009 to consider and report on the Annual Report of the National School of Government (NSG), reports as follows:

 

1. INTRODUCTION

 

Parliament represents the people of South Africa and it has a responsibility to keep the government accountable to the people. Parliament derives its mandate from the Constitution of the Republic of South Africa. According to Section 55 (2) of the Constitution “the National Assembly must provide for mechanisms (a) to ensure that all executive organs of state in the national sphere of government are accountable to it; and (b) to maintain oversight of the exercise of national executive authority, including the implementation of legislation and any organ of state. 

 

Parliament developed and approved its Strategic Plan for the 06th democratic Parliament. The 6th Parliament reaffirmed its commitment to law making, oversight and public participation but also to its vision of being an activist and responsive people’s Parliament that improves the quality of life of South Africans and ensures enduring equality in our society.

The strategic objectives of the Portfolio Committee are informed by five strategic goals of Parliament. The functions of the Portfolio Committee on Public Service and Administration are as follows:

• Participating and providing strategic direction in the development of the legislation and thereafter passing the laws.
• Conducting oversight over the Executive to ensure accountability to the Parliament towards achieving an effective, efficient, developmental and professional public service.
• Conducting public participation and engaging citizens regularly, with the aim to strengthen service delivery; oversee and review all matters of public interest relating to the public sector.
• Monitoring the financial and non-financial aspects of departments and their entities and ensuring regular reporting to the Committee, within the scope of accountability and transparency.
• Supporting and ensuring implementation of the Public Service Commission (PSC) recommendations in the entire public service.
• Participating in international treaties which impact on the work of the Committee.

 

1. PURPOSE OF THE BUDGETARY REVIEW AND RECOMMENDATIONS REPORT

 

In terms of Section 5 of the Money Bills Amendment Procedures and Related Matters Act, No. 9 of 2009 the National Assembly, through its Committees, must annually compile Budgetary Review and Recommendations reports (BRRR) that assesses service delivery and financial performance of departments and may make recommendations on forward use of resources. The BRRR is also a source document for the Committees on Appropriations when considering and making recommendations on the Medium-Term Budget Policy Statement.

 

The Money Bills Amendment Procedures and Related Matters Act, section 5 (3) highlights focus areas on the budgetary review and recommendation report as:

• Providing an assessment of the department’s service delivery performance given available resources.
• Providing an assessment of the effectiveness and efficiency of the departments use and forward allocation of available resources; and
• Including recommendations on the forward use of resources.

 

 

 

3.1 Method

 

The Portfolio Committee on Public Service and Administration compiled the 2022/23 BRRR using the following documents:

• The National Development Plan: Vision for 2030.
• Medium Term Strategic Framework 2019 - 2024.
• State of the Nation Address 2022/23.
• Strategic Plan of the NSG.
• National Treasury (2023) 4th Quarter Expenditure 2022/23 Financial Year.
• Annual Performance Plan (2022/23) of the NSG.
• Annual Report (2022/23) of the NSG.
• Auditor-General South Africa’s outcomes of audit findings 2022/23.
• The Portfolio Committee also met with the leadership and management of the NSG.

 

1. OVERVIEW OF THE NATIONAL SCHOOL OF GOVERNMENT

 

The National School of Government (NSG) draws its mandate from the Constitution, and with particular reference to 195(1) (h), which stipulates that: “good human resource management and career-development practices, to maximise human potential, must be cultivated”. The applicability of this, and the other values and principles to the three spheres of government, organs of state and public enterprises indicate the requisite depth and the reach of the NSG in order to fulfil this constitutional mandate.

 

The NSG has to ensure that all of the basic values and principles are inculcated into the value system and performance of all public servants and representatives through education, training and development (ETD) initiatives. It does so through its curriculum design, development and delivery approach with the practical application of participatory, people-centred methodologies and the application of indigenous facilitation and learning techniques during the ETD initiatives, in building a caring ethos and citizen-centred service delivery focus amongst public servants. This approach consciously focuses on the application of the principles and values of the Constitution and the realisation of the public administrative justice to all whom we serve.

 

 

1. LEGISLATIVE MANDATE

 

Section 197 of the Constitution provides for a public service within public administration, which must function, and be structured, in terms of national legislation, and which must loyally execute the lawful policies of the government of the day.  The NSG, as a national public service department, thus draws its mandate from national legislation – the Public Service Act, 1994 (Proclamation 103 of 1994), as amended. This is the core mandate which establishes the NSG for it to fulfil a function of providing training or causing the provision of training to occur within the public service. Accordingly, section 4 of the Act provides the following mandate:

 

1. There shall be a training institution listed as a national department (in Schedule 1 of the Act).
2.  The management and administration of such institution shall be under the control of the Minister (Public Service and Administration).
3. Such institution, shall provide such training or cause such training to be provided or conduct such examinations or tests or cause such examinations or tests to be conducted as the Head of the institute may with the approval of the Minister decide or as may be prescribed as a qualification for the appointment or transfer of persons in or to the public service. The School may issue diplomas or certificates or cause diplomas or certificates to be issued to persons who have passed such examinations.

 

Whilst this piece of legislation empowers the NSG to fulfil its mandate, the limitation of the Public Service Act is that it is applicable to the national and provincial spheres of government. Another piece of enabling legislation - Public Administration Management Act, 2014 (Act No. 11 of 2014) - gives effect, inter alia, to the progressive realisation of the values and principles governing public administration across the three spheres of government.

 

1. STRATEGIC GOALS OF THE NSG

 

The NSG set five strategic outcomes for achievement over the five-year period. The performance of these outcomes in this financial year includes the following:

 

 

 

1. Outcome 1: Functional and integrated institution

 

The objective of this outcome is to ensure that the NSG has the appropriate resources, systems and processes to enable the integrated delivery of Education, Training and Development (ETD) intervention. The performance of the outcome is measured through some of the following outputs:

• Implementing an operations management system and a total quality management system.
• Implementing ICT business solutions.
• Ensuring effective financial management systems.
• Positioning the brand of the NSG.
• Effective research and knowledge management for ETD.

 

1. Outcome 2: Competent public servants who are empowered to do their jobs

 

The objective of the outcome is to ensure that public servants are empowered to do their jobs through the ETD interventions. The performance of the outcome is measured through some of the following outputs:

• Providing ETD opportunities to learners through compulsory and demand-led programmes and induction programmes.
• Completing skills assessment reports on training needs for relevant ETD interventions.
• Developing courses/ programmes/ interventions responsive to identified skills gaps and government priorities. 

 

1. Outcome 3: Sustainable partnership and collaboration to support ETD interventions

 

The objective of the outcome is to ensure that trainees satisfied that NSG’s ETD interventions are responsive to government priorities and performance improvement in the public sector. The performance of the outcome is measured through some of the following outputs:

• ETD interventions offered to public servants.
• Active online interventions.
• Developing an online course/programme on how to deal with all forms of discrimination.

 

1. Strategic Priorities 2022/23

 

The key strategic priorities of the Vote set for 2022/23 were:

 

7.1       Delivering on the compulsory and mandatory courses, as mandated by Cabinet

 

Delivering on the compulsory and mandatory courses is in line with the vision of the NDP: Public Service and Outcome 12.2 of the MTSF, which states that the public service must have sufficient technical and specialist professional skills. Skills deficits and insufficient attention to the role of the State in producing the skills remains a challenge. To this end Government, through the Public Administration Management Act, No. 11 of 2014, rebranded and transformed the Public Administration Leadership and Management Academy (PALAMA) into the National School of Government (NSG). The School offers training programmes tailor-made for the upskilling and re-skilling of public servants. Unlike before this provision was introduced, all public servants, including senior managers, have to undergo compulsory induction when they join the public service. The online programme – Nyukela - went live on 15 July 2019, as a compulsory offering in response to the Directive on minimum entry requirements for the SMS. There have been more than 7 000 enrolments for the programme, with more than 2 400 having successfully completed.

 

7.2       Functional and integrated institution

 

This outcome ensures that the NSG has the appropriate resources, systems and processes to enable the integrated delivery of ETD interventions. The performance of the outcome is measured through some of the following outputs:

 

• Implementing an operations management system and a total quality management system.
• Implementing ICT business solutions.
• Ensuring effective financial management systems.
• Positioning the brand of the NSG.
• Effective research and knowledge management for ETD.

 

7.3 Competent public servants who are empowered to do their jobs

 

This policy directive is aimed at ensuring that public servants are empowered to do their jobs through the ETD interventions. The performance of the outcome is measured through some of the following outputs:

• Providing ETD opportunities to learners through compulsory and demand-led programmes, and induction programmes.
• Completing skills assessment reports on training needs for relevant ETD interventions.
• Developing courses/programmes/ interventions responsive to identified skills gaps and government priorities.
• Conducting impact evaluation studies.

 

7.4 Sustainable partnerships and collaboration to support ETD interventions

 

The objective of this outcome is to ensure that partnerships and collaborations advance responsive ETD interventions. The performance of the outcome is measured through some of the following outputs:

• Establishing partnerships and collaborations with thought leaders in the public and private sectors.
• Establishing and hosting thought leadership platforms, partnering with public and private institutions.

 

7.5 Quality ETD Practitioners

 

The objective of this outcome is to ensure that ETD practitioners are professionalised in order to deliver ETD interventions. The performance of this outcome is measured by the implementation of a Performance Management System for ETD practitioners. In the 2020/21 financial year, a draft performance management system framework was developed in order to determine whether or not the school is delivering on the mandate.

 

7.6 Responsive ETD Interventions

 

The objective of this outcome is to ensure that trainees are satisfied that NSG’s ETD interventions are responsive to government priorities and performance improvement in the public sector. The performance of the outcome is measured through some of the following outputs:

• ETD interventions offered to public servants.
• Active online ETD interventions.
• Developing an online course/programme on how to deal with all forms of discrimination.

 

1. BUDGET AND PROGRAMME PERFORMANCE

 

1. Budget Allocated and Expenditure 2022/23

 

The National School of Government spent R222 million or 96.1 per cent of its 2022/23 available budget allocation of R231.1 million as at the end of March 2023. The R222 million in actual spending is R9.1 million lower than the projected expenditure of R231.1 million for this period. The lower than planned expenditure is mainly in the budget for compensation of employees, and goods and services.

 

Lower than planned spending on compensation of employees is attributed to funded senior and middle management vacant positions which were not filled due to the implementation of the new organisational structure. The lower than planned spending on the budget for goods and services, specifically on agency and support/outsourced services, travel and subsistence and training and development, respectively, is due to: Delays in procuring service providers for data capturing, lower than planned spending on travel and subsistence arising from precautionary COVID‐19 management related restrictions that the department still had in place and underspending on training and development attending the decision by most employees to personally pay for their own studies.

 

Total expenditure in the TTA increased by R12.6 million from R181.6 million in 2021/22 to R194.4 million in 2022/23. The increase is related to operating expenses in the uptake of training delivery. The TTA closed the year with a surplus of R26.8 million in 2021/22 and the closing status in 2022/23 is a surplus of R48.1 million. The department did not incur any unauthorised, fruitless, and wasteful expenditure during the current year. The R5,000 fruitless and wasteful expenditure reflected in the report was incurred during 2021/2022 financial year and is still under investigation by the appointed committee.

 

The NSG staff establishment comprises of 239 funded posts aligned with the approved structure, of which 197 are filled posts and 42 vacant as of 31 March 2023, translating to 82% filled posts. In the financial year under review the vacancy rate increased from 10.9 percent in 2021/22 to 17.5 percent by the end        of 2022/23 financial year. The increase was as a result of the employee migration process that required the matching and placement being undertaken first before posts could be advertised. In terms of the matching in line with the approved structure, 43 SMS posts were filled out of 47 posts that highlighted the SMS vacancy rate at 6.3 percent as of 31 March 2023. The NSG also appointed five non-SMS employees additional to the fixed establishment for twelve months.

 

The NSG met the Cabinet targets for employment of people with disabilities, representing 2.5 percent of employees. The major challenge experienced by NSG was meeting the 10% vacancy rate target delayed by the matching and placing process. As 48 posts remain vacant there will be an urgent need in the new financial year to fill the posts in order to improve the vacancy rate of the department as well as meeting all the Employment Equity targets.

 

Appropriation per programme (R’000)

Programme	Main Appropriation	Adjusted Budget	Available Budget	Year End Actual Expenditure	Expenditure as a % of available budget	Under/Over spending	Under/Over spending %
Administration	112.3	113.4	113.4	104.3	92%	9.1	8.0%
Public Sector Organisational and Staff Development	115.7	117.7	117.7	117.7	100%		0.0%
Total	228.1	231.1	231	222.0	96.1%	9.1	3.9%

NSG: Annual Report 2022/23

 

 

1. PROGRAMME PERFORMANCE

 

A total of 27 performance targets were set in the APP, of which 23 were achieved as planned. This translates to an overall performance achievement of 85% of the total planned targets for the financial            year. A summation of performance per programme based on overall performance results.

 

The NSG comprises of two programmes, which are as follows:

 

1. Programme 1: Administration

 

The purpose of this Programme is to provide strategic leadership, management and support services to the School. The programme spent R104.3 million or 8 per cent lower than the projected spending of R113.4 million. The lower than projected expenditure is mainly evident in the budgets for compensation of employees and goods and services.

 

Lower than planned spending on compensation of employees is attributed to funded senior and middle management vacant positions which have not been filled due to the implementation of the new organisational structure. The lower than planned spending on the budget for goods and services, specifically on agency and support/outsourced services’, travel and subsistence and training and development, respectively, is due to delays in procuring service providers for data capturing, lower than planned spending on travel and subsistence arising from precautionary COVID‐19 management related restrictions that the department still had in place. And underspending on training and development attending the decision by most employees to personally pay for their own studies.

 

Programme 1 had six (6) targets and five (5) targets were achieved as planned. This translates into 83 per cent achievement. The achievement of the planned targets has contributed to the outcome at the NSG. Total Quality Management had delayed taking off fully due to capacity constraints.

 

The implementation of the Total Quality Management plan will be undertaken in the following financial year (2023-24). Work had been done in terms of the approval of the TQM Policy and establishment of an inter-branch Quality Management Committee focusing on ETD quality management. The implementation of the communications marketing strategy has contributed to increasing awareness of the NSG in terms of the ETD interventions offered by the school within the public service.

 

The NSG continued its focus on prioritising employment equity numbers. During the period under review the employment equity (EE) statistics reflect 57.3 per cent females; 48.8 per cent of females employed at Senior Management Service (SMS) level, 16.7 per cent of youth and 2.5 per cent of persons with disability employed. Towards improving the EE statistics, the Department will embark on a recruitment drive to fill vacant posts, which will contribute towards the improvement of the EE statistics.

 

Some of the targets achieved by March 2023 include: Four (4) mapped business processes in line with operations management plan were implemented, eight (8) ICT business solutions enabling NSG operations were implemented, 100 per cent (1/1) of material audit findings were resolved by the end of the financial year, a set target of 50 per cent of the NSG brand and marketing strategy was implemented and Twenty-two (22) communication interventions promoting NSG offerings in the public sector.

 

1. Programme 2: Public Sector Organisational and Staff Development 

 

The Public Sector Organisational and Staff Development (Programme 2) is responsible for facilitating transfer payments to the Training Trading Account, which provides education, development and training to public sector employees. The programme transferred R117.7 million or 100 per cent of its projected transfer payment of R117.7 million to the National School of Government’s Training Trading Account (TTA) for the 2022/23 financial year. The National School of Government’s Training Trading Account reported an actual expenditure of R194.4 million, which is R54.9 million lower than the actual receipts (inclusive of a transfer from the Department) of R249.3 million as at the end of March 2023. The low spending is consequent upon the Department’s trading entity’s delayed receipt of invoices from the service provider for the Training Management System, as well as delays in the procurement of other training systems. The main cost driver is, of course, the Training Trading Account, which is the operational account of the Programme as it pertains to the training and development mandate of the school.

The programme had a total of 21 planned targets for the financial year, 18 targets were achieved, wherein three (3) targets were not achieved, and the annual performance translated to 86 per cent achievement.

 

The targets that were not achieved were as a result of delays in the signing of the Memorandum of Agreement with a professional body as part of the process of contributing towards the professionalisation of the public sector. There were also delays in the appointment of a Higher Education Institute that would collaborate with the NSG in the development of a Postgraduate Qualification. The process has continued to the new financial year and therefore it is anticipated that the targets would be achieved in the new financial year. The school only achieved 0.6% (62/9612) of senior managers in the public service trained on how to deal with all forms of discrimination by March 2023. Despite the efforts to make the course free and compulsory for SMS the uptake remained slow during the period under review.

 

There has been a significant improvement within the programme in the achievement of the planned targets that contribute to the Strategic Outcomes of the department. The noticeable increase in partnership agreements has enabled the NSG to increase collaborations and provide access to a variety of ETD interventions contributing to the development and capacitation of public servants. The achievement of the revenue generation and training target is a positive step towards the sustainability of the NSG and recognition by respective public servants across the spheres of Government for various ETD interventions offered by the NSG.

Some of the targets achieved were by March 2023 include R115 million in revenue and other funding sources generated; 83 per cent of business development interventions were undertaken, resulting in the uptake of the NSG offerings; Four (4) areas of good practice in the public sector documented to enhance ETD interventions; Six (6) research reports informing ETD interventions developed;  Nine (9) skills assessment reports on specific departments or public sector informing ETD needs completed;  Six (6) progress reports on the impact evaluation studies conducted by March 2023 and Eight (8) programme courses quality assured by the NSG Quality Assurance Committee.

 

 

 

 

 

1. AUDITOR-GENERAL

 

9.1. Audit Opinion

 

The Auditor-General have audited the financial statements of the National School of Government (NSG Vote) set out on pages 102 to 142 which comprise the appropriation statement, statement of financial position as at 31 March 2023, statement of financial performance, statement of changes in net assets and cash flow statement for the year then ended, as well as notes to the financial statements, including a summary of significant accounting policies.

 

The AG concluded that the financial statements presented fairly, in all materials respects, the financial position of the National School of Government as at 31 March 2023 and its financial performance and cash flows for the year ended in accordance with the Modified Cash Standard (MCS) as prescribed by National Treasury and the requirements of the Public Finance Management Act 1 of 1999 (PFMA).

 

9.1.1 The Auditor-General raised the following concerns

 

The AG performed procedures to determine whether the reported performance information was properly presented ad whether performance was consistent with the approved performance planning documents. The AG performed further procedure to determine whether the indicators and related targets were measurable and relevant and assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete.

The AG did not identify any material findings on the reported performance information for the selected material performance indicators.

 

9.2.2 Internal Control

 

The Auditor-General South Africa considered internal control relevant to audit of the financial statements, annual performance report and compliance with applicable legislation, however, the AG objective was not to express any form of assurance on it.  The AG did not identify any significant deficiencies in internal control.

 

1. OBSERVATIONS AND KEY FINDINGS

 

The Committee made the following observations:

 

1.  The Committee notes that the National School of Government received clean audit outcomes for the 2022/23 financial year. The School achieved 23 targets out of the total of 27 performance targets in the annual performance plan 2022/23, which translates to 85% achievement of planned targets.

 

1. The Committee further notes the progress report regarding the implementation of the Budget Report for the 2022/23 financial year. The main intention of receiving progress report was to track the implementation of the recommendations to inform the Budgetary Review Recommendations Report for the School.

 

1. The Committee commends the NSG for exceeding the target on the revenue generated from the Training Trading Account from R101.3 million to R115 million revenue. It is a sign that the School is striving towards becoming self-sustainable. The pre-paid method of revenue collection is yielding the intended results. 

 

1. The Committee notes that the NSG is finalising a Concept Document on the Future Positioning of the School. The Concept Document proposes among other things that the expenditure of the School is fully funded through the Vote, including compensation of all employees, capital and operating expenditure. It also proposes that public sector institutions must set aside a percentage (at least 50%) of annual training budgets for compulsory education and training to be offered by the NSG and recognised partners/providers.

 

1. The Committee notes the gazetting of the National Framework Towards Professionalising the Public Sector as another step to institutionalise and implement the framework across the organs of state. Despite all the progress made in relation to the framework, the Committee was of the firm view that the NSG and the DPSA have to develop the implementation and monitoring plan on the National Framework. The Implementation and Monitoring Plan of the National Framework would provide immediate information on the efficacy of policy and would allow the NSG and the Department to adjust the framework as it is implemented.

 

1. The Committee notes that the National School of Government did not honour the process of signing Memorandum of Agreements with the professional bodies as part of the levers aimed at professionalising the public sector. Professional bodies as regulatory institutions would play a pivotal role in protecting the public interest with respect to profession, governance and the conduct of registrants. It has to be the requirement that all middle and senior management services be registered with the professional bodies.

 

1. The Committee notes that the School, together with the DPSA, are considering legislating all mandatory training programmes for all public servants and timeframe be given as a way of encouraging enrolment.

 

1.  The Committee notes a high uptake on the Nyukela programme since it was introduced as a mandatory training programme for all aspiring and current senior management. The School had enrolled a total of 7 450 public servants for the course and 5 523 had successfully completed. This will encourage more public servants to enrol for the programme in order to prepare themselves for future responsibility in senior management.

 

1. With regards to the Ethics Course, the Committee notes a decline in enrolment. A total of 13 765 out of 16 753 successfully completed the course in March 2023. The Ethics Course assists public servants to acquire moral legitimacy of their decisions, enabling them to apply moral principles and values in business decision-making.

 

1. The School vacancy was at 17.5%, a rate beyond an acceptable threshold of 10% of the organizational structure. The Committee notes that the School has embarked on the recruitment drive towards the end of the financial year, which will reduce the vacancy rate.

 

1. The Committee notes that the target regarding Total Quality Management was not met.

 

 

1. RECOMMENDATIONS

 

The following recommendations are proposed:

 

1. The National School of Government in collaboration with the Department of Public Service and Administration should develop the Implementation Strategy and Monitoring Framework towards Professionalising the Public Sector. The NSG in collaboration with the DPSA should present the draft Implementation Strategy and Monitoring Framework for the National Framework by the end of May 2024 to the Committee. The strategy should indicate different roles and responsibilities per institution. To closely monitor the implementation of the framework there needs to be timeframes for each area of performance and the report to be submitted to Parliament twice in a year by the NSG and the DPSA, and also from the PSC on how it assessed progress and impact of the framework.

 

1. The National School of Government, as recommended by the Auditor-General, should include key performance indicators and strategic targets for the National Framework towards Professionalising the Public Sector as a way of ensuring successful implementation of the framework.

 

1. The National School of Government in collaboration with the DPSA should ensure that the provisions of the National Framework towards Professionalising of the Public Sector are incorporated into the Public Service Amendment Bill and Public Administration Management Amendment Bill.

 

1. The National School of Government should speed up the process of signing the Memorandum of Agreements with the professional bodies and develop the implementation plan to ensure all public servants are registered with their respective bodies based on profession. Professional bodies should assist government in inculcating ethical values in the public sector.

 

1. The NSG should speed up finalising a Concept Document on the Future Positioning of the School that proposes that public sector institutions must set aside a percentage (at least 50%) of annual training budgets for compulsory education and training to be offered by the NSG and other recognised partners/providers.

 

1. Legislating on mandatory training is a step in the right direction to ensure that every official attend compulsory training and that upward mobility is screened through the Nyukela Programme. The process is, therefore, supported.

 

1. The National School of Government should urgently fill all funded positions in the Department. Priority should be given to youth, women and people with disabilities.

 

1. The National School of Government should continue strengthening its internal controls to avoid regressing from clean audit outcomes to qualified audit.

 

1. CONCLUSION

 

The National School of Government continues to rollout courses and training programmes that are relevant to government officials from entry level to senior management and the Executive. Education, Training and Development programmes offered by the School assist public officials and public representatives to enhance performance and to contribute towards a capable and professional public administration. The funding strategy of the School is improving through the prepaid method of facilitating training programmes. Accountability within the School is improving with responsible leadership and management.

 

Report to be considered.