Postponement of BRRR; Determination of FFC Commissioners’ salaries

This premium content has been made freely available

Finance Standing Committee

02 December 2020
Chairperson: Mr J Maswanganyi (ANC)
Share this page:

Meeting Summary

Video: PC Finance, 2 December

Tabled Committee Reports

The Standing Committee on Finance met virtually to consider the preliminary Budget Review and Recommendation Report (BRRR) on the annual performance of National Treasury for 2019/20. National Treasury had however not yet submitted its audited financial statements and Annual Report for the year under review. Only the South African Revenue Service (SARS) had submitted this on time for the Committee’s consideration. This was the first time such a situation occurred and the Committee did not know how it handle it. Legal services advised the Committee that it could adopt the BRRR basing it off of information the Committee had access to such as quarterly performance.

Members said a precedent could not be set where such non-compliance was allowed especially when National Treasury should be leading by example. Members were not in favour of adopting an incomplete report which would have to be returned to next year. The Committee cannot adopt a report for the sake of it. The Chairperson informed Members he would be meeting with the Auditor-General on the matter and Members would be kept up to speed on developments.

The Standing Committee on Finance, having considered the President’s determination of remuneration of members of the Financial and Fiscal Commission, referred to it, unanimously adopted the report and approves the President’s determination of remuneration of members of the Financial and Fiscal Commission.

Meeting report

Opening remarks

Budgetary Review and Recommendations Report (BRRR) of National Treasury

The Committee Content Advisor said that in October 2020, the Committee received preliminary reports from the Department – including from National Treasury and the South African Revenue Service (SARS). The Committee had been hoping that National Treasury would have tabled the audited Annual Report and financial statements before the time of today’s meeting. Only SARS had done this.

Since the Committee did not have the audited financial statements and the Annual Report from the Department, it did not have enough information to make informed observations and recommendations for the BRRR. Normally the BRRRs came before the Medium-Term Budget Policy Statement (MTBPS) because they were meant to influence that process. The MTBPS had passed and this was the first time this had not happened. He was unsure of how to handle the situation. He said that perhaps legal services could advise whether the Committee could adopt a BRRR without such information being tabled in Parliament.

The Chairperson said it seemed there were challenges between National Treasury and the Auditor- General’s office. A meeting had been requested with the Chairperson; he would be meeting them the following week. There seemed to be serious challenges with National Treasury. When meeting the Auditor-General’s office the following week, he would receive a brief on National Treasury’s problems such that the audited statement could not be signed off on.

He had not been involved in a situation where a Committee would potentially adopt a report without an audited statement. He did not want to influence the views of the Committee Members, but the Auditor-General was there for a purpose and all departments should comply with submission of audited statements. National Treasury should lead by example.

He asked the secretariat and legal services for comment before handing over to the Committee Members.

Adv Frank Jenkins, senior parliamentary legal advisor, said the matter had been a problem. The Act said that committees of the National Assembly annually needed to submit a BRRR. The advice that had been communicated was that committees should see what they could do with what they had at their disposal e.g. unaudited statements or quarterly statements to finalise a report.

In terms of where the Committee found itself on the matter of the non-compliance of National Treasury, preliminary BRRRs had been submitted by some committees due to not having the full information at hand. This had caused the whole oversight cycle to be “pear shaped”. The Committee did not have an overview of the Department from the audit which would influence how it would deal with the Department’s budget in 2021. This had not happened in the past where the Money Bills Act had been fully utilised to change departmental votes. That was where matters were at. The Committee needed to do what it could with what it had. He suggested the Committee was in a situation where it would submit the BRRR and report that it did not have certain information but had done what it could.

The Chairperson said it was unfortunate that the Auditor-General’s office had not been invited to the meeting. The Auditor-General would be present in the next meeting. He said he did not want to do “half jobs” that when Departments did not comply, Parliament condoned it.

He asked Members to discuss how to move forward when the Committee had a BRRR without an outcome from Auditor-General’s office.

Discussion

Mr F Shivambu (EFF) did not think the Committee should agree to it. He did not think the BRRR should be agreed to in its current form. National Treasury should be leading by example.

He did not know what had happened to the meeting on the Public Investment Corporation (PIC). He saw it was supposed to be the following day.  

Mr G Skosana (ANC) shared the sentiments of Mr Shivambu. The Committee should not proceed and do half jobs. As the Standing Committee on Finance dealing with National Treasury, it should set an example in dealing with matters of finance. The Committee could not adopt a report that was incomplete. He did not understand what the aim would be of adopting an incomplete report – the Committee would have to return it once completed with all audited statements. The Committee would be adopting a report for the sake of adopting a report that was incomplete. It would be setting the wrong example to other departments and the wrong precedent for the future.

Ms M Mabiletsa (ANC) said that meetings were set aside properly on time. Members had made time and were present, yet they had to postpone the meeting. The Department had to “come to the rescue this time”. It was not an acceptable situation for the Committee to be forced not to adopt and postpone matters. The Department needed to “try very hard”.

The Chairperson said he would be meeting the Auditor- General the following week with the Committee secretariat to get the other side of the story. The Auditor- General was an important office which derived its existence from the Constitution. It was not an institution that could simply be disregarded. The Committee could not adopt what it received from the Department without a report from an institution supporting democracy. He agreed it would be setting the wrong precedent.

He would meet the Auditor-General and would communicate the outcome of this meeting with Members. He said the Committee did not want to set the wrong precedent by adopting preliminary reports to return to in 2021. He would also communicate with National Treasury to ensure it knew it was “wrong and not condoned” by the Committee. It should lead by example. When reaching the standoff with the Auditor-General, National Treasury should have approached Parliament.
Report of the Standing Committee on Finance on the determination of remuneration of members of the Financial and Fiscal Commission

Adv Jenkins said he had prepared briefing note for the Committee. It set out the background to the matter. At the beginning of 2020, there had been a notice from the President asking the Committee to report to the National Assembly on the matter of approving the draft determination.

The Independent Commission for the Remuneration of Public Office Bearers, in terms of its empowering Act, would make a recommendation to the President. The President would approve it after consultation with the National Assembly. The National Assembly needed to approve matters of remuneration of independent constitutional institutions. The FFC report had been included in the government gazette. It recommended a 3% increase for the FFC chairperson who was a permanent member of the FFC. Part time members were pegged to the Department of Public Service levels 14 and 15.

The President was in favour of the suggestion, but it was up to the National Assembly to approve. The Committee needed to deliberate on it and approve and report on it. It had been done in this way in the past. The President was the person who could refer it back to the Commission and had done so previously. When the President was happy, it was sent to Parliament.

There were certain requirements in the legislation that were required to be taken into account by the Commission. It provided that members of the FCC were entitled to such remuneration, allowances and other benefits as determined by the President, taking into consideration the recommendations from the Commission. Other factors required to be taken into account included: 1) a comparison to the salary, allowances and benefits of members of other institutions; 2) the affordability of the salary, allowances and benefits in relation to the responsibilities of the constitutional institution concerned; and 3) the level of expertise and experience that was required of a member of the constitutional institution concerned. Following these requirements, the Commission had formed a proposal that had been accepted by the President. The President awaited the National Assembly to approve this. Once this was done, the President would publish the final notice and the Chairperson’s salary would be back dated to 1 April 2019. This was how it had been done before and was following precedent.

The Chairperson asked whether the report in regard to the recommendations on salary / remuneration have any movers on adoption or any points of clarity.

Ms P Abrahams (ANC) moved for adoption.

Ms Mabiletsa seconded.

The report was adopted.

The Chairperson said the matter would be taken to the National Assembly.

Closing Remarks

The Chairperson asked when the meeting with the PIC was.

The Committee Secretary said it was that night. He would send the link to the meeting following the conclusion of the current meeting. This had been done in order to avoid confusing Members. The meeting was from 18:00-21:00.

The Chairperson said the PIC meeting was that night. He asked whether there was any other business.

The Committee Secretary said the meeting that night would be the last Committee meeting. There would be no Committee sittings after that.

The Chairperson thanked the staff and Members. The Committee would adjourn the meeting and meet again at 18:00.

The meeting was adjourned.
 

Audio

No related

Download as PDF

You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.

See detailed instructions for your browser here.

Share this page: