Audit outcomes: DPSA, PSC, CPSI, NSG: AGSA briefing; BRRR recommendations; with Minister & Deputy Minister

Meeting report

The Chairperson opened the meeting by welcoming the Minister of Public Service and Administration, Mr S Mchunu (ANC), and the Deputy Minister, Ms S Chikunga (ANC). The AGSA’s delegation and the representatives from the PSC, the CPSI and the NSG were welcomed and acknowledge. The purpose of the meeting was to receive presentations from the Department and its entities on its annual reports for the 2018/19 financial year.

In terms of the Money Bills Amendment Procedure and Related Matters Act 9 of 2009, the National Assembly (NA) provided that its Committees must annually combine budget and recommendation reports and assess the financial and non-financial performance of the Department and its entities. This process will culminate in the Committee’s adoption of budgetary reviews and recommendation reports. The AGSA was invited to present their Annual Report on the audit outcomes of the sector for the 2018/19 financial year.

Briefing by the AGSA on the 2018/19 audit outcomes:

Ms Rabelani Muligwe, Senior Audit Manager: AGSA, introduced herself to the Committee and commenced with presenting the audit outcomes.

Overall audit outcomes

In the 2018/19 financial year, the AGSA’s report showed that the Department, the PSC and the NSG TTA obtained unqualified opinions, with findings. The CPSI was commended for retaining its clean audit from the previous financial year, and the NSG VOTE recognised for obtaining a clean audit. It was reported that neither the Department or any of its entities regressed in its audit outcome from the previous financial year. All the auditees submitted their financial statements by the legislated date.

However, it was stressed that the preparation of financial statements remains a concern at the PSC and the NSG TTA, as material adjustments had to be made to their annual financial statements submitted for auditing. At the Department, the PSC and the NSG TTA, material non-compliance with laws and regulations were reported, giving rise to concern. The PSC and the NSG TTA only achieved unqualified opinions after correcting the misstatements identified during the auditing process.

Credible performance reporting and compliance

CPSI was commended for submitting their performance report without errors. Except for the PSC, the quality of all the auditees’ final submissions was acceptable. The Department and the NSG had no material findings made against them only because they corrected the misstatements identified during the auditing process. Except for the PSC, all other auditees presented reliable reports of their achievements. As a collective, the auditees were commended for presenting reports that are useful indicators of their performance and achievement of their targets, showing a notable improvement from the 2017/18 financial year.

Legislative compliance, internal controls and assurance

The PSC showed various concerning areas of non-compliance, being: the management of procurement and contracts, the insufficient quality of its financial statements, and the inadequate prevention of unauthorised, irregular and fruitless and wasteful expenditure.

When assessing the status of internal controls at the auditees, the AGSA rated the categories of ‘leadership’, ‘governance’ and ‘proper record keeping’ of all the auditees as good. The state of the PSC’s ‘daily and monthly controls’ were rated as concerning, with all other auditees obtaining a green (good) rating in this category. The ‘review and monitoring compliance’ area of internal control were regarded as concerning at the Department, the PSC and the NSG TTA, with only the NSG VOTE obtaining a green rating. An assessment of the CPSI’s internal controls were not included.

In terms of assurance provided, the senior management of all the auditees obtained a yellow rating as ‘providing some assurance’. With the rest of its entities obtaining a green rating of ‘providing assurance’, it was only the Department’s accounting authority that obtained a yellow rating. In the remainder of the categories (‘executive authority’, ‘internal audit unit’, and ‘audit committee’) all the auditees obtained a green rating. The level of assurance provided by the CPSI was not included in the presentation by the AGSA.

Financial health and management

There were collective concerns noted relating to the financial health and management of all the auditees. The NSG’s concerns related to its revenue management and its inability to facilitate effective collection of monies owed. Regarding asset and liability management, the Department and the PSC reported deficits for the financial year. Liquidity issues were indicated for all auditees which raised the concern that they will not be able to pay their creditors when payment becomes due. The Department faces the possible risk of not being able to continue its operations at the desired levels, due to a negative net liability position. Negative operating cash flows were reported for the NSG TTA, which resulted in uncertainties surrounding the auditee’s financial viability and optimal operation. Intervention into these concerns are required.

None of the auditees incurred unauthorised expenditure in the 2018/19 financial year, indicating that there were no overspending or expenditure not in accordance with the budget. The AGSA reported an increase in the fruitless and wasteful expenditure over two years for the collective auditees. R10 000 was incurred in during the 2017/18 financial year, which grew to R20 000 during the 2018/19 financial year. The increase was attributed to the R11 000 that was incurred due to two officials not attending scheduled training at the NSG VOTE, and a payment of R8 000 at the CPSI for services that were not rendered.

Irregular expenditure decreased over two years for the auditees as a collective, indicating a decrease in the expenditure incurred in contravention of legislation and regulations. The AGSA noted the marked decrease from R7.44 million in the 2017/18 financial year to the current amount of R2.56 million in the 2018/19 financial year. Of the amount reported for 2018/19, R2.04 million included expenditure for ongoing multi-year contracts, indicating non-compliance with key legislation and the prescribed processes. An improvement in the SCM compliance were reported with the AGSA’s recommendation that all SCM findings must be investigated.

Root causes and recommendations

The AGSA identified the root causes of non-compliance as the slowed or absent response from management to improve the key internal controls and addressing risk areas. Senior management and the accounting authorities of the auditees fail to respond with the required urgency to the call for addressing risks and improving internal controls.

The Department and its entities were recommended to adopt timely review of their performance reports and financial statements, and to more closely monitor their compliance with laws and regulations. At the NSG TTA, adequate systems for the collection and recording of revenue received from training should be implemented. At the CPSI and the NSG VOTE, management should regularly monitor quarterly reporting to maintain their clean audit outcomes.

The Committee was recommended to monitor implementation of commitments by accounting officers and the executive authority by requesting feedback from the management of the auditees on the implementation and progress of action plans to ensure the improvement of portfolio audit outcomes.

Discussion

Ms M Ntuli (ANC) thanked the AGSA for their recommendations and sought clarities on a few matters. The AGSA’s presentation mentioned that there was no policy in place for dealing with misconduct and an enquiry was made whether there is any policy currently in place. Regarding irregular and wasteful expenditure that is reportedly caused by non-compliance, what measures does the AGSA put down to push the Department for action? If no measures are put down and non-compliance is clearly costing the Department, how do we diminish it? The allegations under fraud are costing the Department as we can see the allegations, but we are waiting for the investigations to be completed. The AGSA is looked as to be the Messiah here, to bail these people out and in pushing the Department to action to ensure its audit outcome to be green (unqualified opinion with no findings).

Ms M Clarke (DA) raised the issue of the two officials who did not attend their scheduled training courses (of R10 000 and R8 000 respectively). There should be a clear policy that when employees reneged on their attendance that they would be personally liable for payment of training not attended. The Department should not be paying for officials who do not go to their training. The Committee would welcome the report on the fruitless and wasteful expenditure as it would allow the Committee to see exactly who the culprits are and why the expenditure was incurred and to analyse the information.

Ms C Motsepe (EFF) stressed the need to investigate the fruitless and wasteful expenditure incurred during the 2018/19 financial year, in particular.

The AGSA started its response to the questions raised by wanting to first clarify its mandate and indicate what it does and does not do. It stated that it acts as the watchdog in ensuring accountability for non-compliance as reported in the audit outcomes, but that its mandate does not allow it to act on the consequences thereof as there are other role-players tasked with this duty. The question relating to the non-attendance of training by officials were referred to the Department for answering.

Ms Motsepe asked what the AGSA’s criteria is for deciding whether to investigate fruitless and wasteful expenditure. The green legend on page 18 of the AGSA’s presentation indicated such expenditure that was investigated, and the red legend indicates when such expenditure was not investigated. Reasons for not investigating were requested and an enquiry into how the AGSA investigates the cases.

The AGSA replied by explaining the legends used on page 18 of their presentation. The policy question was referred to again and it was stated that the Department will be required to give an update regarding the financial misconduct reported by the AGSA in terms of irregular and fruitless and wasteful expenditure.

Ms Clarke noted that the Committee fully understands that the Department must give them the reports on request. There must be a clear timeline in place for when that policy will be finalised.

Mr B Maneli (ANC) raised a question regarding irregular expenditure and the separate R2.04 million in expenditure of the ongoing multi-year contracts. Was the issue one of reoccurrence of the same issues that have been going on or new issues coming up relating to irregular expenditure? Is the gap as a result of the regularisation process or the contract itself? Is the R500 000 a point of reoccurrence of what happened in the previous financial year? Regarding the recommendations made to the Committee, the AGSA should come to the point to give the Committee another layer of  assurance. It was enquired whether the report’s lack of reflection on the portfolio in terms of assurance was because there were no issues that were referred to the Committee before, or if there are any issues that the Committee will be subjected to in the next year.

The AGSA responded that the process of investigation must determine whether any losses are made in the multi-year contract and if there were any illegalities or lack of parties acting in good faith relating to the contract. To say we have done the investigation, we are not making any losses and we are acting in good faith takes a lot of time and information to say they are making the right decision. Measures need to be put into place to address the non-compliance with key legislation and regulations. Regarding the assessment of the Committee as one of the assurance providers, the AGSA does act in this regard, but it must be reflected upon that this is the first year of this new Parliament and the Committee has been here for the past year to refer to as well. Speaking in terms of the NSG’s contracts, measures were taken to investigate a contract which is currently awaiting condonation by National Treasury. The contract did come to an end and a new company has been appointed. The old contract was subsequently extended, but proper processes were not followed. Some measures have been taken to remedy the situation. On the nature of the findings of non-compliance, some of the issues are new and some of it are recurring, it is a combination of both. The question relating to the timeline of implementing a policy relating to the investigation of financial misconduct were referred to the Department for answering.

Ms Fezeka Baliso, Business Executive (Institutional Cooperation), AGSA, cemented the question about assurance providers. The assessment of the Committee relating to its rule of oversight is something that will be assessed next year, because the position has not changed from the AGSA as a third level of assurance. The information from the AGSA is very necessary for the Committee to perform its oversight functions. The action plan of the Department is aligned with the recommendations made. The assessment is not about the Committee doing its work but relates to their oversight function as the AGSA pushes the accountability chain the model for the sake of the democracy of our country.

The Chairperson welcomed the report and the findings made by the AGSA.

The Minister reflected on the report of the AGSA and promised to align the Department and its associated entities with the overall work done by the AGSA. Although the reports reflected good efforts in terms of accountability, there are measures that must be implemented relating to the findings made. The Department must make a move going forward, improvements must be made to the wrongs they were to correct. The Department is not relaxed but has its head above water as far as accountability is concerned. The Director-General for the Department will address the questions referred to it by the AGSA in the presentation of the Department’s annual report for 2018/19. Relating to the policy on the investigation into financial misconduct, consultations have been facilitated, and a submission made to the Department which is under consideration. The Department will inform the Committee of the date by which it ought to be finalised. Discussions are underway with relevant Ministries where there are vacancies to ensure that various officials in their capacities, whether accommodated or not, be placed if they have not yet been placed.

Briefing by the Department on its 2018/19 annual report:

Before the Department commenced with their briefing, Ms R Lesoma (ANC) requested that a five-minute highlight be given in response to the issues the AGSA have raised and what the Department plans to do in terms of those issues. The Committee requested a sense of comfort in terms of the Department’s 2019/20 plan to address the concerns raised by the AGSA in their auditing process.

The Department responded with assurances that any targets that have not been achieved will be carried over for implementation during the 2019/20 financial year.

Prof Richard Levin, Director-General for the Department, introduced himself to the Committee and commenced with the presentation of the Department’s 2018/19 annual report as audited by the AGSA. The achievement of the Department’s targets as outlined in its 2018/19 Annual Performance Plan (APP) were specifically covered, and it was noted that any annual targets not achieved will be carried over to the 2019/20 APP and its progress monitored on a monthly basis.

Summary of audit outcomes

The Department received an unqualified opinion with findings from the AGSA, but no material findings were raised regarding the usefulness and reliability of the Department’s performance. However, the AGSA raised some material findings relating to the Department’s compliance with key legislation, particularly with reference to their prevention of irregular expenditure which amounted to R310 000.

Achievement of targets

During the last five years, the Department’s number of annual targets achieved has decreased slightly, with a 5% increase in targets not achieved between the 2017/18 and 2018/19 financial years. Seven of the 33 set targets for 2018/19 were not achieved.

For Programme 1 (Administration) 5 of the 6 targets were achieved (83%). Financial statements were submitted to National Treasury, bi-annual reports on compliance with the Broad-Based Black Economic Empowerment (BBBEE) and quarterly reports on the implementation of the APP were compiled timeously. Progress reports on the implementation of the Internal Audit and Risk Management Plans and the status of the Department’s compliance to Financial Management, Human Resources and Labour Relations Prescripts were also complied with. The target not achieved related to the implementation of the Department’s Bilateral and Multilateral Agreements and Programmes. The progress report was delayed due to late submission of inputs, but it was submitted in April 2019.

For Programme 2 (Policy Development, Research and Analysis) all the targets were achieved (100%). This has included continued consultations on the draft Strategic Framework for Norms and Standards, compilation of the business case research report relating to the operationalisation of the Office of Standards, compilation of the compliance report on the monitoring of selected Public Service Norms and Standards, the draft proposed model for the configuration of the Centre of National Government, conducting consultations on the draft White Paper for the Transformation and Modernisation of Public Administration, conducting 11 workshops on the application of the Productivity Measurement Tool, and producing a draft Organisational Functionality Assessment Tool.

For Programme 3 (Public Service Employment and Conditions of Service) 4 of the 6 targets were achieved (67%). Reports on the average percentage of funded vacant posts on PERSAL were compiled. Policy support was provided regarding the implementation of the revised Senior Management Service Performance Management and Development System to address some of the challenges experienced with its implementation. Quarterly reports on the GEHS were produced, and the annual report on the appointment of persons into developmental programmes within the Public Service. The two targets not achieved related to the drafting of the annual report on the implementation of the Graduate Recruitment Scheme Framework which was delayed due to a data validation process and finalised in May 2019, and the quarterly reports on the duration of resolving disciplinary cases by national and provincial departments, which was only finalised in May 2019. Out of 1 448 reported cases of misconduct for national departments, 904 (62%) were finalised at a cost of R27.16 million. For provincial departments, out of 1 819 reported cases of misconduct, 656 (36%) were finalised at a cost of R19.04 million.

For Programme 4 (Government Chief Information Officer) all the targets were achieved (100%). These targets related to the development of the Public Service Digitalisation Strategic Framework, the Public Service Cloud Policy, the Public Service ICT Value Management Framework, and the Public Service ICT Security Assessment Standard. The revised Corporate Governance of ICT Assessment Standard and the report on progress made by national and provincial departments in managing the cost related information technology procurement within the Public Service were produced.

For Programme 5 (Service Delivery Support) only 4 of the 7 targets were achieved (57%). The report on the implementation of the Operations Management Framework and the 2017/18 and 2018/19 assessment reports on the Batho Pele standards were developed. The report on the implementation of the Public Service Charter were produced, and the framework towards the improvement of the implementation of the Community Development Workers Programme was developed. The targets that were not achieved related to the framework for the establishment, promotion and maintenance of service centres and the report on the implementation of the Service Delivery Improvement Plans were developed, but not timeously submitted due to administrative challenges before being finalised in April 2019. The Cabinet Memorandum for the establishment of the African Peer Review Mechanism could not be prepared, since it can only be prepared following the establishment of the National General Council, pursued in the 2019/20 financial year.

For Programme 6 (Governance of Public Administration) 7 of the 8 targets were achieved (88%). The report on the retention of Heads of Department in the Public Service was developed, with an increase in the retention of heads of department (HODs), rising from 3.1 years in the 2017/18 financial year to 3.3 years in the 2018/19 financial year. It was noted that some HODs have remained in their posts beyond their contractual period, due to extensions and some HODs were newly appointed following the expiration of the contracts of previous incumbents. The report on the progress of the Guideline on Mentoring and Peer Support were developed as well as the report on departments’  Internal Human Resources Capacity. The report on the adherence of employees to the Electronic Disclosure of Financial Interests (e-Disclosure System) was developed, but the projected 100% adherence rate has not yet been achieved. Disciplinary measures will be implemented against non-adherence employees. The report on the adherence of Public Service employees to the Directive on the Performance of other Remunerative Work and the legislative framework prohibiting them from conducting business with an organ of state were developed. Five consultative workshops were conducted to support departments with the implementation of the Framework for the Management of Protected Disclosures. The target not achieved was the timeous development of the report on the departments’ adherence to the Directive on Public Administration and Management Delegations, which was delayed due to administrative challenges but was submitted in April 2019.

Other financial information

The Department reported underspending of their budget (97.4%), and attributed this to unfilled vacant posts, the postponement of the African Peer Review Mechanism Second Generation Review Process, and the fact that the budget for the Government Employees Housing Scheme (GEHS) was based on the assumption that the GEHS would become a separate entity, which has not materialised.

No unauthorised or fruitless and wasteful expenditure were incurred during the 2018/19 financial year. Irregular expenditure amounted to R310 000, with the Department noting that the relating outstanding cases will be investigated during the 2019/20 financial year.

Human resource management

The Department reported their vacancy rate as 13% as at March 2019 with 62 of 482 posts being vacant. Fluctuating vacancy rates were attributed to transfers, resignations and the reduced compensation budged of the National Treasury. The racial profile of employees shows an African majority of 86.01%, but also showing a demographic representation of white, coloured and Indian individuals. In addition, an increase in the employment of people with disabilities were reported between October 2018 (2.65%) and March 2019 (3.03%). An 1% increase of the employment of females in the Department were reported.

Briefing by the CPSI on its 2018/19 annual report:

The Chairperson, with agreement of the Members, stated that questions for the Department, the CPSI and the NSG will be combined in the interests of saving time.

Ms Lakela Kaunda, Executive Director of CPSI, introduced herself to the Committee and commenced with the presentation of the CPSI’s 2018/19 annual report as audited by the AGSA.

Summary of audit outcomes

The CPSI maintained its clean audit outcome in the 2018/19 financial year, obtaining an unqualified opinion with no findings from the AGSA. The only finding made related to the number of their Audit and Risk Committee members between November 2018 and April 2019. The CPSI noted that the legislative requirement is a quorum of three members and is finalising the appointment of another member to their existing of two members.

Highlights of the 2018/19 financial year

The CPSI noted its main highlights for the 2018/19 financial year, being: the development of a Funding Mechanism for Innovation, the comprehensive overhauling of the CPSI’s Guide to Public Sector Innovation, and the strengthening of its Strategic Foresight capacity by developing a programme in response to the pressures of a Volatility, Uncertainty, Complexity and Ambiguity (VUCA) world. The CPSI presented lessons from this initiative at the 2018 High Level Political Forum and the creation of an online portal (foresight.org.za) has been developed. Together with the United Nations Development Programme (UNDP), the CPSI played a key role in furthering pilot and replication projects as innovative solutions to contemporary issues, such as gender-based violence.

Achievement of targets

Out of its ten annual targets, the CPSI achieved six (60%) during the 2018/19 financial year. The first target related to optimally spending the operational budget. Only 90% of the operational budget was spent, despite an annual projection of spending 97%. CPSI attributed the 7% deviation to the costs saved by the relocation of the organisation and no longer paying lease and property payments, vacant posts, and the non-realisation of projected payments. The second target of 98% implementation of internal and external audit recommendations could not be achieved timeously due to a delay in the revision of its ICT Governance and Operational Plans brought about by the organisation’s relocation to new premises. Thirdly, the development of two innovative solutions as identified in 2017/18 was not concluded due to a significant staff turnover at the two partners, namely the CPSI and the Innovation Hub, but noted that solution development will be concluded in 2019 after which piloting will start. The last target not achieved relates to Volume 9 Issue 2 of the journal, which was compiled but not published due to the relevant procurement processes not concluded.

Other financial information

The CPSI reported spending R18.8 million during the 2018/19 for the compensation of its employees, making up 96.74% of its compensation budget. Four vacant posts resulted in R633 000 of the compensation budget remaining unspent by the end of the financial year. R14.2 million was spent on Goods and Services, making up 90.65% of the relevant budget, and provided reasons for the unspent amount in this economic classification, relating mostly to savings from vacant posts and the non-realisation or reduction of certain expected costs, such as the lease payment not being paid due to CPSI’s relocation to the Batho Pele House.

Human resources management

The CPSI reported their vacancy rate as 11%, with 32 positions in their organisational structure. The responsibilities of the post of Executive Director was extended from 1 April 2018 until 30 September 2018, after which it was assigned to an employee seconded from the Department to the CPSI with effect from 1 October 2018. The employment of people with disabilities were reported as 5.8% and the employment of females were reported as 66.67%. Two vacant posts are filled on a contract-basis, and the CPSI placed a moratorium on filling positions in the Corporate Services Units to allow the finalisation of an investigation to streamline its functions within the Portfolio.

Briefing by the NSG on its 2018/19 annual report:

The Director of Strategic Management, NSG, introduced himself to the Committee and presented an apology from Ms Phindile Mkwanazi, Acting Principal of the NSG. The NSG commenced with the presentation of their annual financial and non-financial report for the 2018/19 financial year.

Summary of audit outcomes

The NSG VOTE obtained a clean audit outcome which is a marked improvement from its 2017/18 audit outcome of obtaining an unqualified opinion with findings. The NSG TTA obtained an unqualified opinion with findings made when audited by the AGSA for the 2018/19 financial year. 

Highlights of the 2018/19 financial year

The NSG noted its main highlights for the 2018/19 financial year, being: the training of participants on the Emerging Management Development Programme, the successful completion of the SMS Pre-Entry Programme (Nyukela), the convening of workshops on topics of community participation, economically empowering the youth, and the training of government employees.

Achievement of targets

For Programme 1 (Administration), 5 of its 8 performance targets were achieved (62.5%). Targets that were achieved involved obtaining an unqualified audit opinion from the AGSA and facilitating debt collection within 60 days. However, the target paying all suppliers within 30 days of receiving a valid invoice or services rendered was not achieved, and the average to facilitate such payment was reported at 45 days. Other targets achieved involved maintaining a vacancy rate of less than 10%, resolving disciplinary cases within 60 days of receipt and employing an effective ICT Disaster Recovery solution. The NSG deviated from its target of implementing three agreements to support international exchanges and capacity building initiatives by only implementing two such agreements, thus failing to meet its target.

For Programme 2 (Public Sector Organisational and Staff Development) all 16 of the performance targets were achieved (100%). The NSG exceeded its targets in completing research projects and training needs analyses to inform training and development needs and opportunities. Annual research colloquia workshops were hosted, leadership platforms convened, and papers submitted for publication to promote thought leadership, knowledge creation and dissemination. A framework aimed at establishing national competency assessment measures and a database for the Public Service were developed. All evaluations were carried out by the end of the financial year and all the planned application of learning studies progress reports were completed for the identified training programmes. Programmes and courses were developed annually, and its quality assured by the NSG Quality Assurance Committee. The NSG maintained its accreditation as a training provider and offered 25 online courses on a quarterly basis. It was reported that 56 614 new and current public services underwent training, exceeding the target of 45 764 (123.7%). In its BB2E Programme, 4 391 unemployed youth graduates and interns were orientated, exceeding the planned target of 2 750 (159.67%). The Executive Coaching Programme was implemented with 12 coaches were enrolled, exceeding the target of enrolling 9 coaches (133.33%). As a collective, the delivery of training measures has amounted to 61 005 against the target of 48 514 resulting in a 126% achievement of the target.

Other financial information

A virement amounting to R3.8 million was approved by National Treasury during the 2018/19 financial year. R470 000 and R767 000 were reported in irregular expenditure for the NSG VOTE and NSG TTA, respectively. Against a target of R1.17 million, a revenue of R 1.39 million was reported for the NSG TTA.

Human resources management

The NSG reported their vacancy rate as 9%, with 21 of 229 posts being vacant. The racial profile of employees shows an African majority of 79.3%, but also showing a demographic representation of white, coloured and Indian individuals. In addition, the employment of people with disabilities were reported as 3.4%, of females as 60.6% as employment of the youth as 25.5%.

Discussion

Ms Lesoma relied on the evidence provided by the AGSA to state that the Department is not only a Public Service Department, but also encompasses other departments that are directly appointed to Parliament. The human resources aspects were briefly addressed, with approval of the level of employment of people with disabilities, however that vacancies in senior management needed to be filled for the NSG. The highest percentage amongst the entities (5%) of employing people with disabilities were noted at the CPSI and the entity was commended. The issue with the GEHS was noted that the account is putting on interest, which must be given attention to. The Department’s non-achieved target of failing to compile the Graduate Recruitment Scheme on time must be reported with its turnaround time. To CPSI, the request was made to encourage new innovations that have been discovered and to explore the adoption and implementation of such innovations by other provinces, such as piloting in Gauteng as the whole intention is to assist government to do things better and faster. While we do not initiate, but identify things relevant to innovation, the Department are the key service providers and must be included in its implementation.

Mr L Schreiber (DA) commended the NSG VOTE for obtaining a clean audit. Given the fact that this portfolio is required to set the standard for the Department and its entities, there must be a push for all entities within the portfolio to obtain clean audits in the 2019/20 financial year. Relating to the Report on Conducting Business with an Organ of State, the Department was requested to make the Report available to the Committee. It was stated that many departments identified public officials who did not resign but are continuing to conduct business with an organ of state. While the number of public servants that are referred to was unclear, the seriousness of the situation is clear. It was stated that the departments are required to provide feedback on the disciplinary measures taken against such public officials. This has shown clear contempt in an abrasive, arrogant ignorance of the rules. The Department was asked what steps will be taken against such officials and the departments failing to implement disciplinary steps. Referring to page 14 of the Department’s presentation, a concern was raised on the alarmingly low rate of the finalisation of disciplinary cases associated with a high cost of finalising these cases. What is the Department doing to improve the situation to get the finalisation rate of cases up to 100%, finalised in the given timeframe with as little cost to the taxpayer as possible?

Ms Motsepe enquired what the curriculum of the NSG’s Nyukela programme entailed and asked CPSI whether there was any improvement in their efforts to bring their vacancy rate down to under 10%.

Ms Clarke referred to page 11 of the Department’s presentation and asked how we could measure the outcome of the conducted workshops on officials undergoing training and is working and worth the costs. The Department were complimented on its alignment with a 30-day payment plan and the lack of unauthorised expenditure being reported during the 2018/19 financial year. Timeframes need to be put to the filling of vacant posts. Referring to page 15 of the CPSI’s presentation, there is a clause that stated that money was saved by not paying the lease payments of the organisation. What was the cause of the lease payments not being paid and the consequences of this in terms of the legal lease agreement? On page 8 of the NSG’s presentation, it is stated that more than 2 500 employees have been trained on planning, monitoring and evaluation measures. What measurable impact does this have on the officials attending the training and how can this be monitored with regards to their day-to-day work routine and quality?

Ms Ntuli asked for clarification on the non-implementation of some of the recommendations made by the Committee. The Department was commended on its progress to submit regular reports and on the audit outcomes for the 2018/19 financial year as presented by the AGSA.

Mr Maneli appreciated the entities obtaining clean audit outcomes and asked for clarification on the implementation and application of the African Peer Review Mechanism (APRM) during the election cycle.

Ms M Kibi (ANC) appreciated the finalisation of the organisational structures of the entities. Service delivery plans were not submitted on time for approval and the Committee enquired whether there was any impact on service improvement that could be attributed to the late submission of these plans.

The Department noted that some of the issues raised are difficult to control in the current audit outcomes. Prof Levin stated that the Department must set an example for the entire Public Service. On the GEHS, there has been too much focus on the corporate form, but the GEHS is in motion. The gap in terms of employees who would qualify for the benefit or is not using it optimally needs to be addressed. The Minister commented that entity formation has gone too far in the state, and another entity does not necessarily need to be formed to run this particular scheme. It is a macro benefit managed by the Department. Issues such as bond origination and aiding employees in managing their debt prior to entry to the scheme is the real substance rather than its corporate form. The ways in which the Department can best support this is a matter that will be engaged with the Committee going forward.

On the Graduate Recruitment Scheme, although the report was late, there were achievements reported to the Committee prior to the fifth administration. The reality is that for the financial years of 2018/19 and 19/20 there is commitments of over R10 million to support graduates coming in, which is a rather high commitment. This issue will need to be addressed in greater depth in the future.

For the issue of the disciplinary cases it is important to emphasise that public administration is decentralised in South Africa and that the actual responsibility of implementing the provisions of the Public Service Act of 1994 is the responsibility of the departments. The Department must adopt a more interventionist approach in this regard to take a stronger line towards non-compliance. The Committee should consider inviting those who do not comply to appear before them and account for their non-compliance. With the implementation of the Public Administration and Management Act 11 of 2014 and its regulations which are currently under deliberations, there will be additional powers on ethical matters and disciplinary management. This will provide a space for the Department to be more activist in its interventions.

On the productivity measures, a lot of the workshops focuses more on the testing of the new mechanisms. When the organogram is finalised, the Department will be in the position to being testing across the system and monitor the mechanisms implemented. The finalisation of the organogram is down to its final stages now and should be finalised within the next few weeks.

On the APRM, the issue of its implementation refers to that all members of the African Union (AU) are not members of the APRM. It is a separate membership. With the timing of the review itself, the Secretariat of the APRM made a strong recommendation that there should be no application of the APRM during an election cycle, given the overarching nature of the framework, the work that needs to be done by government and different sectors of society, and that it could get caught up in election dynamics. The issue of non-delivery of certain outputs and the relationship to the findings in the performance audit are things that the Department could look at. While the analysis could be performed in a more rigorous manner, it was not necessary the reason for non-delivery. It can in part be attributed to the report not being timeously compiled. The Department needs to focus on enhancing the quality of service delivery rather than just ticking boxes. The departments themselves are plagued by service delivery problems manifesting itself through protests. Departments have many services it provides, but a focus should be on improving the core and essence of those services.

The Minister added that in relation to the disciplinary cases, the matters referred to the Department requires meeting with the PSC twice a year to receive cases where recommendations have been ignored or implemented in different ways than recommended. The work is done, but their findings get ignored because it is not necessarily binding. There is a lot of sense in the findings made and the gap in its implementation must be closed. The law provides for the escalation the Department’s action in terms of the Public Service Management Act 11 of 2014, and the Department needs to step up.

The Deputy Minister addressed the filling of vacancies by stating that the reconfiguration of government and the physical matching of the departments, there will be two Director-Generals or Chief Financial Officers coming from different departments. We are employing Director-Generals and we had a surplus, now we are waiting until the Department’s process is completed to place people where they are needed to avoid an excess of employees even where positions are advertised. The CPSI did not pay its lease payments as it newly occupied a building of the Department, therefore not having to pay for a lease going forward.

Ms Clarke reminded the Minister to answer the question on when the organogram would be finalised, as referred by the Director-General of the Department.

The Department noted that the Minister and the Director-General would meet after the current meeting with the Committee were finished to determine the date for the organogram’s finalisation. This would entail determining the standing on the matter of the timeline for finalising the organogram on the side of the Minister and the Director-General respectively. The Department will arrive at a practical date and will inform the Committee of such date.

Mr Schreiber welcomed the Minister’s undertaking to follow up on the recommendations of the PSC. Those recommendations are not necessarily the same thing as the disciplinary cases the Committee were referring to. It is worth noting that the Committee’s role in following up on disciplinary cases and recommendations, as noted by the Director-General of the Department, are not being handled as they should be. The Committee must consider how it can link with the Department and the PSC to ensure effective coordination to achieve the goals outlined above.

The NSG responded to the questions posed to it. Senior management are required to complete a Pre-Entry Programme and the outline of the programme will be made available to the Committee. The Programme focuses on matters surrounding citizenship, patriotism, African leadership, understanding government and the self as an individual. The recommendation of the Committee on the turnaround time has been adopted by the NSG having met with the National Treasury to improve the revenue of the NSG TTA. Measuring the effect of training does pose a challenge when the learners go back to their departments in trying to understand the impact of the learning they received. The application of learning studies is included in the NSG’s APP which allows the understanding of the outcomes the training interventions are having before and after the training is presented. An analysis of the impact of the training will be provided to the Committee.

The CPSI emphasised that the lease had already expired when the organisation moved to the Batho Pele House, so there were no financial losses. On the vacancy rate, the 11% only indicated two vacant posts. Both posts are in the process of being filled. Piloting projects outside the province have commenced.

Briefing by the PSC on its 2018/19 annual report:

Dr Dovhani Mamphiswana, Director-General of the PSC, introduced himself to the Committee and commenced with the presentation of their annual report for the 2018/19 financial year.

Summary of audit outcomes

The PSC obtained an unqualified opinion with some material findings made by the AGSA’s during their auditing process. The findings in respect of the usefulness and reliability of the reported performance information were corrected only in respect of grievance management, with the findings made in relation to complaints not being addressed. Corrective actions were taken through enacting warnings to improve administrative oversight by requiring management to put the appropriate internal controls in place.

Achievement of targets

In the 2018/19 financial year, the PSC reported that it achieved all its targets outlined in its APP (100%). All targets relating to Programme 1 (Administration), Programme 2 (Grievance Management), Programme 3 (Monitoring and Evaluation) and Programme 4 (Investigation of Administrative Complaints) were achieved.

Other financial information

The PSC spent 99.8% of its budget for 2018/19, with a variance of 0.2% between the projected budgetary costs, leaving a surplus of R504 000 which will be surrendered back to the National Revenue Fund. Irregular expenditure of R266 000 were reported and was attributed to non-compliance with SCM legislation, the carry-through effect of a multi-year contract with Data Warehouse providing a mandatory service that was not procured through the State Information Technology Agency (SITA), and administrative oversight. No unauthorised or fruitless and wasteful expenditure were incurred in 2018/19.

Human resources management

The PSC reported two vacant Commissioner’s posts. The employment of people with disabilities were reported as 1.95% and of females as 46.5%.

Discussion

Ms Clarke emphasised that the PSC made 153 recommendations were to the Department, but only 43 were implemented, some of these only partially. The Committee needs to assist the PSC, because to do all the hard work and then have departments not complying with recommendations amounts to a blatant disrespect of the work done within this Committee. The only way the PSC will be able to gain more traction in the work they do, is to broaden their powers legislatively and is critical to better service delivery within the public sector, as targets are reached.

Mr Schreiber indicated the Committee’s expectation that the PSC should have obtained a clean audit, not a yellow rating of an unqualified opinion with findings made. The expectation of the PSC is as an organisation in a similar position as the Public Protector (PP). What is the proposal on how we should accommodate the flexibility required from Chapter 9 and 10-institutions with the audit process? The Committee can legislatively intervene in the issue of the PSC’s recommendations not being legally binding.

Mr Momeka Zwelinjani, Chief Financial Officer, SC, responded to the questions. Without commenting on the PP who has improved significantly, the problem with the PSC is that while it is a constitutional institution, it is continually treated as a department. The commissioners have no say in the matters relating to the budget and the Minister usually deals with National Treasury and make presentations on the budget. While responsible for a mandate it is still implemented by a department of state creating a messy situation. Recommendations must be made so that the PSC can come to the Committee with the National Treasury on its activities and not just officials deciding on their own what the PSC should be doing.

The Deputy Minister responded on behalf of the Department by reminding the Committee that it has the right to subpoena anyone to appear before them to come and account why they have not complied. It is recommended that the Committee utilise this right to improve accountability.

Ms Clarke stated that there is a clear guiding document that the Committee can use to utilise the right mentioned by the Deputy Minister to act against the departments who are not in compliance.

The Chairperson thanked the Department and its entities for the outstanding work it has done, and the recommendations made. It was stated that the draft reports will be made available by the secretariat by Monday, 14 October 2019 at noon for consideration by the Committee.

The meeting was adjourned.