Department of Defence & Military Veterans 1st Quarter 2012 Expenditure report

Meeting report

Chairperson’s Opening Remarks
The Chairperson assured Members that everything was under control, at the Department of Defence and Military Veterans (DOD or the Department) to ensure that former President of the ANC Youth League, Julius Malema, would not be permitted to address the military. There was nothing in the legislation that required Mr Malema to set his foot on any of the military bases, given that defence forces formed part of the national security structures. This matter was fully under control, and did not need to be debated.

Mr D Maynier (DA) welcomed the announcement by the Chairperson and supported the Minister of Defence and Military Veterans’ hard-line attitude to Mr Malema’s intention to address the soldiers.

Mr Maynier was concerned that he had received the documentation for this meeting very late, making it difficult for him to prepare thoroughly for the meeting.

The Chairperson explained that there was a miscommunication regarding the meeting date, which led to the delay. This would not happen again.

Department of Defence and Military Veterans 1^st quarter 2012 performance & expenditure report  
Mr Mziwonke Dlabantu, Chief Financial Officer, Department of Defence (DOD), stated that the DOD derived its mandate primarily from Section 200(2) of the Constitution of the Republic of South Africa, 1996 (Act 108 of 1996). Further substance was added to it by the Defence Act, 2002 (Act 42 of 2002), the White Paper on Defence (1996), the Defence Review (1998) and delegated legislation.

The DOD comprised of the Defence Secretariat which was established in terms of Section 204 of the Constitution, and the South African National Defence Force (SANDF), which was established in terms of Defence Act. He explained that the various sub-programmes of the Defence Secretariat included units dealing with the Departmental direction, the Government Information Technology Officer (GITO), Defence Policy, Strategy and Planning), Financial Services, Acquisition Services for Defense Matériel), Defence Supply Chain Integration, and Defence International Affairs. The SANDF consisted of the programmes for Administration, Force Employment, Landward Defence, Air Defence, Maritime Defence, Military Health Services, Defence Intelligence, and General Support.

Mr Dlabantu summarised the Ministerial priorities for the 2012/13 financial year. He then summarised the performance against the targets in respect of Maritime Security, Forward Deployment Capability, DOD Works Capability, Landward Defence Renewal, Revitalisation of Reserves, National Youth Service, Job Creation, Restructuring and Support of the Defence Industry (see attached presentation for full details). He outlined the divisions responsible for each indicator.

In respect of each, he tabled a document that summarised the projections, or targets, in respect of the 2012/13 financial year, broken down further into quarterly targets, and then summarised the progress in each to date, compared to those targets.

Other performance indicators had to include general compliance with the Southern African Development Community (SADC) Standby Force agreements, and the South African pledge. There were also selected targets for the average number of personnel deployed daily in external operations, and the number of health care activities per year.

Mr Dlabantu summarised the quarterly performance targets where the performance indicators showed that the current performance was not up to scratch, and where therefore the DOD would have to take major action to bring matters back on track. The first was in respect of the compliance with the six DOD ICT Portfolios of the Defence Enterprise Information Systems Master Plan. DOD was also shown to be lacking in its research capability status. The percentage of the budget allocation that was received for renewal of the DOD main equipment also fell short, in relation to the total DOD Vote.

He noted that a promulgated Department of Defence Information Strategy must be in place to guide the Department of Defence Information and Communication Technology Strategy, in order to allow information to be utilised as a strategic resource.  Continuous scanning of the external environment was done to determine the validity of the Department of Defence Information Strategy, and this would give an indication of when it must be revised and tabled for promulgation.

Discussion
Ms H Daniels (ANC) in reference with page 10 posed a question asked about the SADC Standby Force agreement, and requested further details on what it was doing and for how long it had been prepared.

Ms Daniels, referring to slide 14, asked about the percentages shown for compliance and asked why the red highlights appeared. ICT solutions were supposed to be addressing the issues of assets.

Mr Duminsani Dladla, Acting Chief of Defence: Strategy and Policy, Department of Defence, responded that the plan set out six specific ICT solutions that the IT department needed to effect. These had not been realised in the 1^st quarter, so the red highlights were intended to note that this was a high risk area needing major intervention.


Ms Daniels wanted to know what the retention strategy entailed.

Ms Daniels asked why the Department had set itself a very low target of 40% of finalisation of disciplinary cases within 120 days. She pointed out that failure to attend to improving this caused problems between the Department, Ombud, Commission and unions.

Ms Daniels commented that the DOD needed more money to address some of its challenges. She asked who was dealing with force structure and force employment, and also requested clarity regarding the processes of employment to the Defence Ombud, and whether these processes were being properly followed.

Mr M Nhanha (COPE) agreed with Ms Daniels that indeed the Department did seem to need more money, and the Committee would keep supporting the call. However, this would be difficult if the Department continued to lose money. He made reference to an incident in Potchefstroom, where about R500 000 was stolen from a safe, but nobody had picked up the problem. He asked for an explanation of the full extent of the problem, and how far the investigations had gone.

Mr Maynier asked for an explanation as to why, if there was a claim of a shortage of funds for acquisition, the amount of R1.3 billion remained “hidden” and uncommitted, in the Special Defence Account.

Mr Dlabantu conceded that the Department was indeed under-resourced. He noted, in regard to the Special Defence Account, that there had historically been under-performances in achieving what was already committed, for reasons that were both external and internal to the Department. Part of the internal reasons included processes that were lengthy and repetitive in nature.

Mr Dlabantu added that the DOD was doing a complete review of the DUB1000 Acquisition Programme. There was currently a lot of confusion in structures, and it was necessary to ensure that there was good corporate governance and oversight over the programme. He also highlighted that there was an element of abuse of powers by structures within DUB1000, which did not fall within the DOD mandate. He added that there was a need also to interrogate the processes of external parties. Armscor, the procurement agency, had to be interrogated to ensure that its processes were in line with the Department’s targets. In addition, if Denel, whose major client was the Department, was under-funded, and could not meet its targets, this would impact on the Department.

Mr P Groenewald (FF+) concurred with Ms Daniels that the projected 40% target for disciplinary cases finalised was indeed very low, and asked who had determined that percentage.

Ms H Mgabadeli (ANC) noted that only one of the six ministerial priorities were listed in the priorities for the financial year 2012/13. She suggested that the Department needed to go back and look at those priorities again. The Committee Members had taken a resolution adopting the strategic plans and budget that included these priorities, so they did need to be implemented.

Ms Mgabadeli asked why compliance was regarded a high risk, and also asked which of the stakeholders were considered as moderate risk, as opposed to low risk.

Mr Groenewald noted that slide 21 did not show any indicators in relation to the statistics, but these were highlighted as a low risk. He asked how the Department reached that conclusion. He asked for progress on slide number 32, saying that no indicators were given for the 1^st quarter.

Mr S Esau (DA) suggested that the template for reporting should be cleaned up and there should be greater consistency, to allow for a more correct reading. He suggested that there an indicator as “in progress” was meaningless and said that matters should be shown as done, not done, or done to a named percentage.

Mr Dladla admitted that some of the interpretations would need to be refined so that they are easily understandable. However, he noted that the planning system within the DOD was governed by National Treasury frameworks that stated how plans must be prepared and noted. The DOD, like all other departments, had to adhere to SMART (simple, measurable, achievable, realistic, and timeous) principles. National Treasury provided technical data sheets that laid out the basis of the calculations and interpretations to ensure that these were consistent. He thought that perhaps it would be useful for the Committee to have sight of the data sheets and detailed quarterly reports that were submitted to the National Treasury and the Presidency, for greater clarity.

Mr Dladla added that the DOD intended to introduce more research capabilities by the end of the quarter, but that had not happened because the people who were to have carried out that task were still working with the Defence Review Committee.

Mr Groenewald noted that the Maritime Defence total number of hours at sea was 35 000 for the year, yet in the first quarter the progress on this was listed at only 2584.35. He questioned how, at this rate, it was expected that the projected target could be achieved, and also wanted to know the reasons why the forces were not at sea.

Mr Dladla explained that a projection was made, at the beginning of year, for the number of hours at sea and in the air for the relevant branches. The figure was in fact a yearly figure, so that although it was divided by four to reach a quarterly projection, this did not mean that the hours would be evenly divided across the quarters. If there was a risk that the entire projection would not be attained, remedial action would be taken. Mr Dladla conceded, in relation to the way in which the projects were shown, that the DOD would need to rationalise some of the figures to ensure that Members could interpret them more easily.

Mr Maynier referred to slides 29 and 38, and questioned whether the SANDF Service Commission and Military Ombud were functioning. If not, he wanted to know the reasons.

Mr Groenewald asked for an explanation of what a “3” rating meant for the level of morale.

Mr M Nhanha (COPE) questioned why, if the morale of the soldiers in the SANDF was as high as claimed, the media had reported that soldiers had resolved to appeal to Julius Malema to address them. There were avenues within the DOD for these soldiers to address their grievances.

The Chairperson announced, at this point, that there was no further time to hear the responses. He asked if Members wanted written or oral responses.

Mr Groenewald suggested that the Department must submit written responses to all questions.

Mr Maynier seconded that proposal, but reminded the Committee that on two previous occasions, the DOD had failed to submit written responses as requested.

The Chairperson instructed the Department to submit written responses to these questions, and to outstanding issues raised previously, by 18 September 2012

The meeting was adjourned.