ATC231114: Report of the Joint Standing Committee on the Financial Management of Parliament on the Parliament of the Republic of South Africa’s 2023/24 First Quarter Report, dated 14 November 2023.
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 2023/24 First Quarter Report, dated 14 November 2023.
The Joint Standing Committee on the Financial Management of Parliament having considered the Parliament of the Republic of South Africa’s performance in the first quarter of 2023/24, 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 of the Republic of South Africa, 1996 (the Constitution).
1.2 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 within five working days of receiving it, for the consideration of the oversight mechanism i.e., the Joint Standing Committee on the Financial Management of Parliament. The 2023/24 First Quarter Report was accordingly tabled on 4 August 2023, and referred to the Committee on 10 August 2023.
1.3 The Executive Authority, and the senior management team led by the Secretary to Parliament, appeared before the Committee in a meeting held on 22 September 2023 during which the institution’s performance in the period under review was interrogated.
1.4 This report comprises five parts: Part A, the background to the work of Parliament and the Committee; Part B, containing a summary of the new reporting framework, Part C, an overview of the first quarter performance report; Part D, a summary of the institution’s financial and performance information for the period under review; Part E, the Committee’s observations; and Part F, the Committee’s recommendations.
1.5 This report should be read along with Parliament’s Strategic Plan for 2019-2024, the 2023/24 APP and budget, and the Committee’s reports in respect thereof.
Part A
2. Background
2.1 Mandate
2.1.1 Parliament derives its mandate from:
- Chapter 4 of the Constitution;
- the FMPPLA which regulates the institution’s financial management;
- the Money Bills Amendment Procedure and Related Matters Act, 2009 No 9 of 2009 which provides procedures to amend money bills; and
- the Powers, Privileges and Immunities of Parliament and Provincial Legislatures Act No 4 of 2004 which defines and declares the national and provincial legislatures’ powers, privileges and immunities.
2.2 Mission and vision
2.2.1 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 by 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.
2.3 Strategic Priorities
2.3.1 Parliament has identified only two strategic priorities for the Sixth Parliament i.e., to strengthen oversight, and to enhance public involvement in Parliament’s activities.
2.3.2 In order to achieve the above outcome, the Sixth Parliament will:
- improve committee oversight work in relation to the budget cycle in particular, through allowing more time in the parliamentary programme for oversight activities and by encouraging committees to undertake such activities jointly.
- improve the effectiveness of public hearings through greater public participation, expanding public education, better dissemination of information, effective use of broadcasting, technology and social media, the use of more official languages, and encouraging committees to undertake joint public hearings.
2.3.3 To aid in the above activities, the institution will:
- enhance research and legal support in respect of oversight activities;
- improve members’ capacity through capacity-building programmes that will empower parliamentarians to be effective and efficient in executing their oversight responsibilities;
- improve oversight and accountability through better monitoring, tracking and evaluation in respect of Parliament’s own work, as well as the work of the Executive;
- ensure openness and accessibility with modern technology in respect of social media, tools-of-trade, workflows and automation; and
- cut costs to allow for operational sustainability.
Part B
3. Improved reporting framework
3.1 Constitutional imperative
3.1.1 Section 42(3) of the Constitution provides that the National Assembly is elected to represent the people and to ensure government by the people under the Constitution. To this end, the National Assembly elects the president of the country, provides a national forum for public consideration of issues, passes legislation, and scrutinises and oversees executive action.
3.1.2 Section 43(4) of the Constitution stipulates that the NCOP represents the provinces to ensure that provincial interests are considered in the national sphere of government. This is done, in the main, by participating in the national legislative process and by providing a national forum for the consideration of issues affecting the provinces.
3.2 New reporting methodology
3.2.1 The new macro framework for Parliament has been designed to ensure a parliament that is transformative, responsive, and collaborative (through effective stakeholder engagement). The parliamentary administration will be effecting a series of improvements to its reporting framework to align it to the new macro framework which focusses on Parliament’s outcomes and impact.
3.2.2 The new reporting framework will focus on Parliament’s transformative work i.e., it will measure the extent to which Parliament impacts the daily lives of people in South Africa. This impact will be measured through the National Development Plan (NDP) impact indicators related to poverty alleviation, unemployment reduction, and inequality eradication. To assist in the above measurement new outcome indicators will be established in respect of Parliament’s oversight work, with a specific focus on medium term strategic framework (MTSF) indicators tabled in Parliament. The new outcome indicators will include indicators focussed specifically on Parliament’s the identified oversight priorities.
3.2.3 Performance reporting will include indicators related to oversight priorities, key development trends and how Parliament has impacted the quality of life of people in South Africa in respect of the following: economic empowerment, education and skills development, access to quality health care, infrastructure development, social cohesion, and environmental stability.
Part C
4. First Quarter Performance
4.1 Overview
4.1.1 In the period under review 63 per cent of all targets were met. Of the 63 per cent targets met, 91 per cent were service and operations targets, and 47 per cent were transformative targets. While achieving service targets were important for the smooth operation of the institution, the achievement of transformational targets was crucial to long term and sustainable change. Balancing service and transformational targets will ensure improved service to parliamentarians, as well as progress towards attaining comprehensive and meaningful development goals.
4.2 Programme-by-programme summary of performance information
Paragraphs 4.2.1 to 4.2.24 provide a summary of Parliament’s performance across programmes.
Programme 1: Administration
4.2.1 Programme 1 provides strategic leadership, management and corporate services to Parliament, and comprises the following sub-programmes: Executive Authority, Office of the Secretary, and Corporate and Support Services. Of the targets under this programme 67 per cent were met. Of the targets achieved, 100 per cent were service targets, and 57 per cent were transformational targets.
Transformational Performance
4.2.2 In order to improve public trust and confidence in Parliament the institution has undertaken to, in 2023/24, develop an institutional strategy towards this goal. In the first quarter the target was to review available information on public trust in Parliament. This target could not be met owing to a delay in the appointment of a service provider to conduct the survey.
4.2.3 The institution intends developing a broadcasting strategy for the Seventh Parliament in 2023/24. In the first quarter a draft of the strategy was to be circulated after which consultation with various stakeholders would have taken place. This target was not met and the failure to do so was ascribed to the delay in the Public Broadcasting Bill.
4.2.4 In 2023/24 the institution must implement the plan for the restoration of the buildings affected by the 2022 fire on the parliamentary precinct. In the first quarter the institution aimed to approve the restoration implementation plan, establish safe access routes, perform asset verification, and renovate offices in the 90 Plein Street building for those affected by the fire. While the first two targets were met, the renovation of the offices was delayed owing to the contractor who had won the bid withdrawing, delays in securing permits from the Department of Labour, and delays in receiving security clearance for sub-contractors.
4.2.5 In respect of professionalising the parliamentary service, the administration set out to, in 2023/24, develop and implement a new plan for the organisational realignment project, to develop and implement a change management plan, and to develop and implement a policy review plan. In the period under review the administration set out to review the realignment plan, and to conduct analyses in respect of the change management and policy review plans. All three targets were met.
4.2.6 The institution was moving towards outcome and impact driven business analytics and in 2023/24 aims to develop a big data and analytics implementation plan. The target for the first quarter was to assess structured data and develop a data management policy. The institution met this target and succeeded in developing the policy which has been submitted for review.
Operational performance
4.2.7 The results of the members’ satisfaction survey revealed an 81,31 per cent satisfaction rate in respect of the Facilities Management service i.e., 6,31 per cent above target. The Institutional Support Services (ISS) division has undertaken various initiatives to enhance efficiency and safety within the work environment. These efforts include replacing of older vehicles in Parliament’s fleet with newer and safer ones thereby contributing to the provision of reliable and safe ground transport for parliamentarians, staff and guests attending parliamentary activities.
4.2.8 The results of the members’ satisfaction survey revealed an 82,80 per cent satisfaction rate in respect of the Digital service i.e., 2,80 per cent above target. The ICT department succeeded in ensuring the availability and integrity of the institution’s digital infrastructure. On average on-premises systems stood at 99,95 per cent in the period under review, while the average availability of cloud-based services reached 99,88 per cent.
Programme 2: Legislation and Oversight
4.2.9 Programme 2 provides for support services for the effective functioning of the National Assembly (NA) and the National Council of Provinces (NCOP) including procedural, legal and content advice; information services and record keeping; and secretarial and support services for the houses and their committees. The programme covers the core business of Parliament and focusses on the outputs, activities and inputs related to legislation and oversight functions.
4.2.10 The programme comprises the following sub-programmes: National Assembly (House; Committees); National Council of Provinces (House; Committees); Public Participation and External Relations; Shared Services; Sectoral Parliaments and Joint Business.
Transformational performance: transformative Parliament
4.2.11 Parliament was working towards developing and implementing an oversight priority model for the Seventh Parliament to ensure focused oversight. In the period under review the administration was to establish a multi-disciplinary team but this target was not met. Appointment letters for members identified to serve on the team were only issued in July 2023. No reason was provided for the variance.
4.2.12 The institution will develop and implement a committee planning framework to align committee oversight with oversight focus areas. In the period under review the administration was to compile a research report on benchmarks for committee planning, budgeting and reporting. This target was not met. No reason was provided for the variance.
4.2.13 In 2023/24 the institution will develop and implement a country indicator dashboard supporting the measurement of progress towards the attainment of the NDP goals. In the period under review the administration was to establish multi-disciplinary team to deliver this outcome. Appointment letters for members identified to serve on the team were only issued in July 2023. No reason was provided for the variance.
4.2.14 In the period under review the administration was to appoint a multi-disciplinary team towards the implementation of data modelling and scenario tools to improve the quality of oversight. This target was not met. The establishment of the multi-disciplinary team would have been formalised through appointment letters in July 2023 however it is not clear whether this was achieved. No reason was provided for the variance.
4.2.15 The institution will develop an impact assessment framework for bills in 2023/24 and was to establish a multi-disciplinary team towards this in the period under review. This target was not met. Appointment letters for members identified to serve on the team were only issued in July 2023. No reason was provided for the variance.
4.2.16 In 2023/24 the institution will develop and implement an oversight monitoring and tracking mechanism. In the period under review the target set was met i.e., a concept for the oversight monitoring and tracking system was developed.
Transformational performance: responsive Parliament
4.2.17 In 2023/24 Parliament will implement the recommendations made by the Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector including Organs of State. The target set for the period under review was met i.e., a quarterly report on the implementation of the President’s Plan on recommendations of the State Capture Commission was completed.
Transformational performance: collaborative engagement
4.2.18 The institution will be developing a new partnership framework on oversight in 2023/24. In the period under review a concept for an oversight partnership framework was to be developed. This target was not achieved, and no reason was provided for the variance in actual and targeted performance.
4.2.19 Parliament will be reviewing support for constituency offices and in the period under review the first quarter target to compile a review report of current support to such offices was met.
4.2.20 In 2023/24 the institution’s strategy and capability to implement its international priorities—which are aligned to the national agenda—will be reviewed. Parliament’s international engagement policy was to be reviewed in the first quarter. Although the draft position paper was available the target for the quarter was not met. No reason was provided for the variance between actual and targeted performance.
Transformational performance: stakeholder engagement
4.2.21 The institution intends to in 2023/24 implement a new stakeholder framework ensuring participation and cooperation. In the period under review Parliament’s approach, policies and practices regarding stakeholder management were to be reviewed. Although the concept document on co-operation was drafted and internal stakeholders consulted, the quarterly target was not met. No reasons were provided for the variance in targeted and actual performance.
4.2.22 Parliament will develop and implement an integrated petitions framework in 2023/24. The target set for the period under review was met i.e., research and benchmarking towards the framework was undertaken.
Operational performance
4.2.23 All first quarter targets in respect of the programming service were met i.e., the NA and the NCOP each adopted 1 term programme.
4.2.24 Table 1 below sets out the results of the members’ satisfaction survey for the period under review. No explanations were provided for the variance actual and targeted performance.
|
Parliamentary Service |
Indicator |
Quarter 1 Target |
Quarter 1 Performance |
Variance |
Reasons For Variance |
|
Capacity building service |
% Member satisfaction |
73% |
76,47% |
+3,47% |
- |
|
Research service |
% Member satisfaction |
75% |
81,99% |
+6,99% |
- |
|
Content advice service |
% Member satisfaction |
75% |
80,38% |
+5,38% |
- |
|
Procedural advice service |
% Member satisfaction |
75% |
78,64% |
+3,64% |
- |
|
Legal advice service |
% Member satisfaction |
75% |
76,42% |
+1,42% |
- |
|
Committee support service |
% Member satisfaction |
75% |
82,48% |
+7,48% |
- |
|
Public participation service |
% Member satisfaction |
75% |
73,97% |
-1,03% |
- |
Table 1: Results of the members’ satisfaction survey (Source: Parliament of the RSA)
5. Financial Performance in the period under review
5.1 Overview
5.1.1 Table 2 below illustrates the spending across programmes in the period under review. Parliament spent 92 per cent or R588,978 million of its appropriated budget of R639,351 million for the first quarter. It is projected that the full appropriated budget of R4,351,486 will be spent at the end of the 2023/24 financial year.
5.1.2 The spending on direct charges was R135,4 million or 110 per cent of the first quarter budget of R123,2 million. The overspending is attributable to the payment of the loss of office gratuities over and above the payment of members' salaries.
5.1.3 There is projected overspending of R61,7 million at the end of the financial year, which is attributable to the increase in salaries of members for the 2022/23 financial year, the payment of loss of office gratuities exit gratuities, and to the budget reductions. This projected overspending will be a direct charge against the National Revenue Fund in line with section 23(4) of the FMPPLA.
|
|
April – June 2023 |
Annual |
||||||
|
Main Division |
Budget R’000 |
Actuals R’000 |
Variance R’000 |
% |
Annual Budget R’000 |
Actuals R’000 |
Budget available R’000 |
% |
|
Administration |
230 720 |
181 875 |
48 845 |
79 |
2 155 015 |
181 875 |
1 973 140 |
8 |
|
Legislation and Oversight |
200 554 |
199 302 |
1 252 |
99 |
894 037 |
199 302 |
694 735 |
22 |
|
Associated Services |
208 077 |
207 801 |
276 |
100 |
830 725 |
207 801 |
622 924 |
25 |
|
Sub-Total |
639 351 |
588 978 |
50 373 |
92 |
3 879 777 |
588 978 |
3 290 799 |
15 |
|
Direct Charges |
123 201 |
135 470 |
(12 269) |
110 |
471 709 |
135 470 |
336 239 |
29 |
|
TOTALS |
762 552 |
724 448 |
38 104 |
95 |
4 351 486 |
724 448 |
3 627 038 |
17 |
Table 2: Expenditure across programmes (Source: Parliament of the RSA)
5.1.4 Table 3 below details spending across economic classification. The table is summarised in paragraphs 5.1.5 to 5.1.8.
|
|
April – June 2023 |
Annual |
||||||
|
Economic classification |
Budget R’000 |
Actuals R’000 |
Variance R’000 |
% |
Annual Budget R’000 |
Actuals R’000 |
Budget available R’000 |
% |
|
Compensation of Members |
123 201 |
135 470 |
(12 269) |
110 |
471 709 |
135 470 |
336 239 |
29 |
|
Compensation of Employees – PARMED |
20 135 |
20 130 |
5 |
100 |
83 872 |
20 130 |
63 742 |
24 |
|
Compensation of Employees |
267 927 |
270 099 |
(2 172) |
101 |
1 239 182 |
270 099 |
969 083 |
22 |
|
Goods and Services (APP) |
164 949 |
108 155 |
56 794 |
66 |
659 331 |
108 155 |
551 176 |
16 |
|
Goods and Services (Members’ entitlements) |
47 500 |
47 241 |
259 |
99 |
182 095 |
47 241 |
134 854 |
26 |
|
Transfers |
136 125 |
136 292 |
(167) |
100 |
544 500 |
136 292 |
408 208 |
25 |
|
Capital Expenditure |
2 715 |
7 061 |
(4 346) |
260 |
1 170 797 |
7 061 |
1 163 736 |
1 |
|
TOTALS |
762 552 |
724 448 |
38 104 |
95 |
4 351 486 |
724 448 |
3 627 038 |
17 |
Table 3: Spending across economic classification (Source: Parliament of the RSA)
Compensation of Members
5.1.5 The spending on compensation of members was R135,470 million or 110 per cent of the first quarter budget of R123,201 million. The overspending was due to the payment of loss of office gratuities. The projected overspending for the financial year is R61,700 million attributable to budget reductions, an increase of 3 per cent for the 2023/24 financial year, and the payment of loss of office and exit gratuities.
Compensation of employees
5.1.6 The spending on compensation of employees was 101 per cent or R270,099 million of the first quarter budget. The overspending was due to the appointment of staff. Funds will be shifted from the centralised key vacancies budget in the Office of STP during the adjustments budget, to offset the negative variances. Indications are that the full budget will have been spent by the end of the financial year.
Parmed Medical Aid Scheme
5.1.7 The spending on the Parmed Medical Aid Scheme was 100 percent or R20,130 million of the first quarter budget of R20,135 million and indications are that the full budget will have been spent by the end of the financial year.
Goods and services (APP)
5.1.8 The spending on goods and services, which relates to the APP, was 66 per cent or R108,155 million of the first quarter budget of R164,949 million. Indications are that the full annual budget will be spent by the end of the financial year.
5.2 Expenditure across Programmes
Programme 1: Administration
5.2.1 The Administration programme spent 79 per cent or R181,875 million in the first quarter. Indications are that the full R2,155,015 million annual budget for this programme will be spent will be a full have been spent by the end of the financial year.
5.2.2 The spending on compensation of employees stood at 101 per cent or R131,545 million of the first quarter budget. Indications are that there will be a full spend of the R644,407 million annual budget at the end of the financial year.
5.2.3 The spending on goods and services stood at 44 per cent or R43,304 million for the first quarter. The underspending was the result of delays in the implementation of the restoration and rebuilding of Parliament. Parliament was awaiting the invoices/supporting documents for the expenses incurred by Development Bank of South Africa (DBSA) on behalf of Parliament, for the period April to June 2023. According to projections the full R346,360 million annual budget will have been spent by the end of the financial year.
5.2.4 The spending on capital is 298 per cent or R7,026 million for the first quarter. The overspending was ascribed to the bulk purchases of computer equipment, equipment, and vehicles in the period under review that were not initially budgeted for. Indications were that there will be a full spend of the R1,164,248 million annual budget at the end of the financial year.
Programme 2: Legislation and Oversight
5.2.5 The Legislation and Oversight programme spent 99 per cent or R199,302 million in the first quarter. Indications were that the full R894,037 million annual budget would be spent by the end of the financial year. The National Assembly sub-programme spent R14,110 million or 98 per cent of its R14,333 million first quarter budget. Spending by the NCOP sub-programme stood at 101 per cent or R8,576 million of the budgeted R8,475 million for the first quarter. The public participation and shared services sub-program spent R167,862 million or 99 per cent of the R170,402 million first quarter budget. The underspending was the result of outstanding invoices related to travel for public hearings and international study tours.
5.2.6 The Sectoral Parliaments had spent R 8,576 million by the end of the first quarter, representing a 19 per cent overspend. The overspending was the result of the appointment of staff. The budget for the filling of the positions will be shifted during the adjustment budget. The budget for vacancies was centralised in the office of Secretary to Parliament. Indications were that the full budget will have been spent by the end of the financial year.
5.2.7 The spending on goods and services stood at 96 per cent or R64,620 million for the first quarter. The 4 per cent underspending was due to outstanding invoices for travel relating to public hearings and international study tours. Indications were that the R308,546 million annual budget will have been spent in full by the end of the financial year..
5.2.8 Spending on capital expenditure was 10 percent or R35 000 in the first quarter. The underspending was due to no equipment and furniture having been acquired for newly-appointed staff. Indications were that the entire R6,549 million annual budget will be spent by the end of the financial year.
Programme 3: Associated Services
5.2.9 The Associated Services programme spent 100 per cent or R207,801 million of its first quarter budget. Indications were that the full R 830,725 million annual budget will have been spent by the end of the financial year.
5.2.10 Spending on compensation of employees, which includes medical aid contributions for former Members of Parliament and Provincial Legislatures, stood at 100 per cent or R24,037 million for the first quarter. Indications were that the entire budget will have been spent by the end of the financial year.
5.2.11 The spending on goods and services, which includes Members’ entitlements, was 99 per cent or R47,472 million of the first quarter budget. Spending on goods and services was dependent on the use of entitlements by current and former members of Parliament. Indications were that the full annual budget will have been spent by the end of the financial year.
5.2.12 Spending on transfer payments, which relates to transfers to political parties represented in Parliament was 100 per cent or R136,292 million in the first quarter. Indications were that the entire allocated budget will have been spent by the end of the financial year.
Part D
6. Observations
6.1 Revised reporting framework
6.1.1 The Committee welcomes the new reporting framework that will focus on Parliament’s efforts to live up to its constitutional obligations. Concerns were raised about the institution’s capacity to gather and analyse the data required to measure the impact of the new framework.
6.2 Variances between actual and targeted performance
6.2.1 The Committee notes with concern that the administration does not provide detailed explanations for the variances between targeted and actual performance, or the measures introduced to mitigate under-performance.
6.3 Transformational performance
6.3.1 The Committee has noted that under Programme 2 several targets related to Parliament’s transformational impact had not been achieved. This is a cause for concern especially as much of the work that should have been completed will lay the groundwork for the Seventh Parliament.
6.4 Broadcasting Strategy
6.4.1 The Committee notes the explanation that the broadcasting strategy for the Seventh Parliament is not on track owing to the delays in the Public Broadcasting bill.
Part E
7. Recommendations
The Executive Authority should provide the Committee with a response to the recommendations below within 30 days of the adoption of this report by the NA and the NCOP.
7.1 Revised reporting framework
7.1.1 The Committee should be provided with a breakdown of the resources required to ensure that the administration is able to successfully implement the revised reporting framework.
7.1.2 The Committee recommends that the administration fills all vacancies that may impede efforts to report in line with the new framework. All vacancies should be filled before the start of the Seventh Parliament.
7.2 Variances between actual and targeted performance
7.2.1 The Committee recommends that all future performance reports should include the detail of why targets were not achieved and how the under-performance will be mitigated, as well as why targets were exceeded where such over-achievement is notable.
7.3 Transformational performance
7.3.1 The Committee recommends that the administration provide detailed quarterly progress as far as the achievement of targets related to the transformational aspects of Parliament’s work e.g., the development of the Oversight Priority Model for the Seventh Parliament, the country indicator dashboard to measure progress towards the achievement of the NDP goals, and the strategy towards improving public trust and confidence in Parliament.
7.4 Broadcasting Strategy
7.4.1 The Committee recommends that the strategy be developed within the existing legislative framework and that the developed strategy be reviewed once the Public Broadcasting bill has been finalised.
Report to be considered.