Department of Defence Annual Performance Plan & Quarter 4 performance

Meeting report

Mr Max Ozinsky, Acting Director-General: DMV, said that the overall expenditure of the DMV as at the end of the fourth quarter amounted to R600.7 million, or 97% of the total annual allocation of R622.1 million. It had underspent by R21.4 million.

The cost of employment (CoE) was ahead of budget by 2%. This was mainly due to the imbalances in the DMV’s organogram. To overcome the structural imbalance and ensure continuous delivery of service, it had been necessary to use contractors and interns. Approval had been sought to lift the CoE ceiling by R4 million, so there had been a subsequent underspending of R1.6 million.

The overall spending for the administration programme was behind budget. This was mainly driven by an underspending on office accommodation, linked to the inability of the DMV to procure provincial offices. Despite the overall underspending in the socio-economic support programme budget, cost pressure on education support was noted and had been defrayed by shifting funds from less performing benefits, such as housing and skills development. A deviation of 23.92% on the 30-day payment of legitimate invoices had been reported. This was due to a catch-up on travel, cell phone and State Information Technology Agency (SITA) services invoices.

The Department had planned to achieve 17 performance areas during the quarter under review. Six targets had been achieved, which constituted to 35% overall performance. In the administration programme, it had achieved three targets out of nine; in the socio-economic support programme, two out of three targets were achieved, and in the empowerment and stakeholder management programme, one target out of five was achieved. The Department’s vacancy rate was standing at 26%. There were 44 vacant positions.

The DMV’s strategic objectives for 2018/19 included:

• recognising and honouring military veterans in life and memorialising them in death for their sacrifices on behalf of the nation;
• improving the quality of life for military veterans and that of their dependants;
• strengthening structures, systems, policies, processes and procedures;
• ensuring a smooth and seamless transition of military veterans from active military service to civilian life;
• ensuring that military veterans as a resource enhanced the national work force and contributed to the prosperity and development of the country; and
• contributing towards reconciliation and nation building.

During the medium term, the Department was committed to focusing on the achievement of targets set by the Forum of South African Directors-General (FOSAD). The following priorities, amongst others, set out by FOSAD would be implemented and monitored by the Department:

• ensuring that the performance agreement of the Accounting Officer was signed by the Executive Authority and submitted to the Office of the Public Service Commission (OPSC);
• developing, approving, and effectively implementing and monitoring the Service Delivery Improvement plan for the DMV, and submitting it to the Department of Public Service and Administration (DPSA) on time;
• ensuring that feedback on all cases from the national Anti-Corruption Hotline was provided and all cases were concluded within the stipulated period determined by the OPSC;
• ensuring the status of obtaining an unqualified audit outcome with no matters;
• ensuring that all financial disclosures of senior managers were concluded, and that copies were filed with the OPSC.

Mr Ozinsky said the DMV was currently faced with the challenge of improving its management practice levels in accordance with the Management Performance Assessment Tool (MPAT). For the 2018/19 financial year, the Department would continue to improve its performance and service delivery to the military veterans and their dependants by annually assessing its management practices and improving its main areas of concern, such as:

• the critical importance of management and leadership;
• the importance of accountability and consequences;
• its inability to implement corporate governance of information communication technology (ICT).
• poor management of diversity;
• its inability to manage and finalise disciplinary cases on time;
• non-payment of suppliers within 30 days, as prescribed by the Public Finance Management Act (PFMA) and Treasury regulations.

For the 2018/19 financial year, 17 000 military veterans were targeted to have access to healthcare services. 1 000 military veterans would be provided with newly built houses per year. The total number of bursaries to be provided to military veterans and their dependants per year was 10 700. Three memorial sites for military veterans were targeted to be erected every year.

95% of military veterans and their dependents would be verified and captured on the National Military Veterans’ Database. 5 000 military veterans and their dependents would be provided with approved funding to participate in the skills development programme, while 110 businesses of military veterans would be provided with access to empowerment opportunities.

(Tables and graphs were shown to illustrate MTEF financial allocations; budgets per economic classification; the vacancy rate per quarter; transformation or equity statistics; and 4th quarter budget expenditure. See attached documents)

Discussion

Mr S Esau (DA) wanted to know how the imbalance in the budget implementation was going to be addressed, because education took a lot of the budget, and bursary applications per individual had been reduced to R20 000. It seemed education was going to be a mid to long-term programme. He asked how many military people have been buried so far. He added that not achieving the target indicators they were supposed to achieve was problematic. He also asked for clarity on the R16 million Treasury had given to the DMV, while the Department claimed it had received R31 million.

Mr Ozinsky said the Department had managed to deal with the problems of expenditure allocated, but it had had to attend to internal problems first. Consequently, money got shifted around. It had not decided how it was going to spend the rest of the budget because there was a wrong distribution of resources in the Department. The DMV had spoken to Treasury, and he assured the Committee all matters would be finalized by the end of July 2018.  The numbers were not in dispute -- it was only the breakdown of them that was causing a problem.

He explained that the education policy would be adjusted to suit the decisions taken at the beginning of the year. R20 000 bursaries were for basic education. They had come down from R42 000 to avoid continued overspending. Discussions continued to take place with Treasury. The higher education bursary for an individual was R72 000, and the DMV had engaged with the National Student Financial Aid Scheme (NSFAS) on how to save money for the Department. Discussions were continuing on the funding of post-graduate studies.

The Department was also in discussions with National Treasury for more money to support the pension policy, and it was going to be rolled out next year. The Department had to take initial steps with Treasury to prove it was able to spend money on education.

Ms Nontobeko Mafu, Deputy Director-General: Empowerment and Stakeholder Management: DMV, said that a report with full names and areas of military people buried so far would be sent to the Committee.

Mr Sibongiseni Ndlovu, Chief Financial Officer (CFO): DMV, reported that they had submitted a request to roll over R16m from the R21m, not R31 million. They had requested less, as that had been dictated by the Treasury procedures.

Ms B Dambuza (ANC) asked if there were any strategic posts among the 44 vacant positions that had not been filled. She remarked that the housing issue was a thorny matter, because military veterans were complaining they were not getting a good service. She suggested the Committee should be forwarded the actual numbers of skills development beneficiaries, and the type of skills provided.

Mr Ozinsky admitted they were not doing what they were supposed to do with the Department of Human Settlements (DHS) regarding housing. The main problem was that the DHS and the provinces were not able to provide housing for military veterans. Some of the houses built had been illegally occupied. He said this was largely a political issue which needed a political answer. The Department was now refocusing on a new model to be used. There was a proposal that was being discussed internally.

The DMV had advertised the vacancies in March and a few posts had been filled. The positions of chief directors still needed to be filled, because they were important for departmental procedures, and this included the position of director-general.

The Chairperson remarked the Department had presented a grand plan in terms of the framework and what it wanted to achieve. He suggested it should go to the dashboard, where progress would be reported quarterly.

Ms Dambuza commented it would be important to get information on the 110 military veterans’ businesses which were being supported, because this had been going on since 2008. The Committee needed to know how much had been achieved up to now. She also said the target of 1 000 houses needed to be changed, because the DMV was experiencing problems with the DHS. This was becoming unfair to the DMV, because it was setting targets it could not meet. It was going to be seen as a failure. She asked the DMV to send the Committee previous research outputs on liberation history so that it could make a comparison. Lastly, she requested the DMV to respond in writing to questions on why there was an increase in the consultants’ budget, and the number of litigations that were before the Department.

Mr Esau remarked there were huge increases in sub-programmes, but no breakdowns had been provided, while there had also been big decreases in certain sub-programmes. He suggested a detailed breakdown should be submitted to the Committee. He doubted whether the DMV would be able to achieve all the things that needed to be done, seeing that there were lots of vacancies in the Department. The skills audit report which the Committee had been waiting for to improve the capacity of the DMV, had not been tabled yet. The benefits of the military veterans must not be compromised just because an official had been recruited wrongly and could not do his job. He asked for clarity on a number of issues around progress made on the Advanced Technological Services; details on the communication budget in order to communicate with military veterans; inconsistencies in vacancy figures; finalisation of the transport and pension policy; progress on the verification of the military veterans’ database; costs expected on the establishment of provincial offices; and the current status of the already created memorial sites.

The Chairperson said the concerns of the Members should be put on the dashboard so that the DMV could respond to them first during its quarterly reports.

Ms Dambuza said the Department should provide the Committee with a breakdown of the information that was contained in the APP. The DMV must provide figures, geographical areas and challenges experienced when doing work, not only percentages.

Mr S Marais (DA) agreed that percentages meant nothing if they were not substantiated. The Committee wanted to know about the changes made to the lives of military veterans.

Mr Ozinsky said the details existed in the document submitted to the Committee, and they had been presented according to how the National Treasury wanted it done.

Ms Dambuza said what the DMV and National Treasury had done was not assisting the Members with information they needed when they debated issues in Parliament for the benefit of the general public.

The Chairperson urged the Department to be strict in its adherence to the 30 days’ payment process, because if it got delayed, it would breed corruption. There should be explanations for the delays. Lastly, the DMV should check its “SWOT” analysis so that it was clearly defined, and it would be able to tell the Committee of its external and internal weaknesses.

The meeting was adjourned.