Signing and Filing of Performance Agreements by Heads of Department: briefing by Public Service Commission

Meeting report

Public Service Commission (PSC)
Ms Balungile Mbanda, Chief Director, Public Service Commission, presented on compliance with the signing and filing of performance agreements by Heads of Department (HoDs). She informed the Committee that Heads of Department were responsible for ensuring that Departments achieve their service delivery objectives. They could be considered administrative drivers of government’s programmes and therefore they had to be held accountable for achieving their objectives within their scope of responsibility. She told the Committee that the Commission relied on a Performance Management Development System (PMDS) as a basis for their evaluation of HoDs; this had been previously developed by the PSC. She noted that it was issued as a directive by the Minister for the Public Service and Administration in 2001.

 

The PMDS required all senior managers including HoDs to enter into Performance Agreements (PAs) by no later than April of each year, she noted however that this had been moved to May of each year. In the case of newly appointed members they were required to sign their PAs within the first three months of their post. She stressed that PAs form the basis of required performance and accountability. They also serve as a point of reference for HODs and Executive Administrators (EAs) in terms of performance management. She informed the Committee that the content of PAs was required to come directly from the departments’ strategic plan. Along with this HODs are also required to include the Regional Integration, Minimum Information Security Standards and Integrated Governance.

 

She noted that it was important for two half yearly performance reviews to take place during the financial year, ideally before the annual performance assessment as HOD evaluations are usually based on PAs yet these do not usually take place. With regards to the role of the PSC she informed the Committee that they kept a database of all PAs of HoDs and EAs dealing with both compliance and quality aspects.

 

The PSC also facilitates the performance evaluation process, issues annual guidelines, chairs all evaluation panels and manages the process. She noted that EAs were required to complete PAs with HoDs each financial year and that the judging of performance based on PAs is the responsibility of EAs. She also informed the Committee that EAs are responsible for providing the documents for evaluation of HoDs, this includes the PA, the verification statement signed by the HoDs and the EA and the annual report. The onus is also on the EA to arrange for evaluation to take place this is done by appointing a panel to assess the HoDs performance.

 

She noted that overall within Department there had been a poor management of PAs particularly in terms of development, compliance and quality assurance. This was particularly the case where PAs had not been submitted or signed. She stated that the stipulated expected compliance rate was 100% as all PAs are expected to be handed in yet in the 2009-2010 year they were sitting at only 65%. For 2008-2009 she noted that were 38 HoDs posts in this cycle and 3 were vacant. Out of this 35 PAs were expected yet only 28 were received. She informed the Committee that those outstanding included Housing, Land Affairs, National Treasury, Sports and Recreation, Stats SA, National Intelligence Co-ordinating Committee (NICOC) and South African Secret Service (SASS).

 

 For 2009-2010 financial year she stated that they were still missing PAs from Agriculture, Arts and Culture, Basic Education, Higher Education and Training, Human Settlement, NIA, SASS, Water and Environmental Affairs. She noted that reasons that there may be reasons for non compliance such as Director Generals (DG) being on leave but she also highlighted that SASS had appeared on both lists over both financial years as non compliant. In the case of Arts and Culture, Basic Education and Higher Education the DG had been there all along and so she noted that they had no excuse. With regards to Human Settlement she informed the Committee that they had just received a new EA but the DG was still present. Regardless of these specific situations she highlighted that the PSC did send out reminder letters and had communicated with these Departments.

 

With regards to provincial level there has also not been 100% compliance but she stated that some provinces were at far higher levels than others. She noted that the issue of elections in 2009/2010 may have affected issues of compliance. In terms of HoD evaluation for the 2008/2009 cycle she noted that it seemed that they were heading for the worst compliance level ever registered. The cut off point for evaluation would be July 2010; thus far only one evaluation had been conducted with seven not qualifying leaving thirty outstanding. She stressed that it was compliance by both EAs and HoDs that were responsible for this problem.

 

There may be reasons for non-compliance these included the fact that PAs were not accorded high priority, bad management in offices of EAs and HoDs, lack of support from HR compliments, especially in cases where there were new EAs or HoDs and fundamental unmediated differences between EAs and HoDs.

 

The PSC’s recommendations included the need for EAs to fulfil the role stipulated for them in the Evaluation Framework and ensure that the performance management process was adhered to, PAs should be signed and filed with the PSC timeously and that the performance contracts introduced by the Presidency for the Ministers should ensure that EAs are held accountable for managing the performance of HoDs and Departments. She was aware that the Chairperson had communicated the possibility of the last point being included in the Ministers Agreement. She noted that if the process was going to be strengthened in any way Parliament would need to pay more attention to it.

Discussion
Ms A Dreyer (DA) noted that the PSC had pointed out that performance was becoming weaker. She referred to the current period as exactly the opposite of what the President called the year of action. She also was disappointed by the absence of the Minister and stressed that problems in this area were his responsibility and that he must be called to account. She questioned the role of the new Minister in the office of the Presidency responsible for monitoring and evaluation, noting that it had been a year since his appointment and yet there continued to be an attitude of dismissal among departments with regards to PAs. She dismissed the reasons for non-compliance offered by the PSC as unacceptable. She asked for clarity on the suggestion that there may be tension between HoDs and EAs.

The Chairperson stressed that the work before them was part of their long term strategic plan as a Committee. They had become aware that there were documents such as the Auditor-General’s Report which was before Parliament which they could utilise to perform their oversight role. The Committee was beginning to look into the backlog of reports and prioritise them.

Ms H Van Schalkwyk (DA) noted the importance of the submission of PAs. She asked what the repercussions for non-compliance were. She noted the responsibility and role of the Executive Authority in ensuring the PA was signed and that this was not simply the fault of the HoD

Ms F Mbikane (ANC) suggested that the DPSA, in their role as overseer of Performance Appraisals, should come before the Committee and explain what was happening with PAs. She asked if there was an office overseeing this, if so what were they doing? Perhaps the Committee would need to go to relevant provinces and investigate. There was a budget for Performance Management Appraisal Offices but nothing was visibly happening in regards to this. She also suggested Human Resources Management would need to explain what was happening in these offices

Mr L Suka (ANC) said if HoDs were falling short, they must be ignoring the call of government and letting down the Presidency. He questioned whether or not these people could be called before the Committee to explain why they were not complying. Departments needed to be called to account and provide time frames in which they would fix these issues. He questioned whether the Committee had this sort of power. He also suggested that letters be sent out to Premiers calling departments to account.

Mr L Ramatlakane (COPE) confirmed that the report verified issues that had been raised by the Committee previously. He noted the Committee’s role in management of departments. He suggested that the problem was not simply one of DGs and Human Resources. He explained that the President signed agreements with Ministers outlining delivery, the Minister then signed with DGs outlining delivery expectations. He questioned the role of Ministers and the existence of these agreements. He questioned how Ministers were able to hold DGs to account if they had not signed agreements. Those who were not complying needed to be brought before the Committee and asked why they were not complying.

 

He asked the PSC about the meaning of directives as set out by Ministers and the meaning of non-adherence in terms of this. He questioned whether non-adherence would fall into the category of misconduct. He also asked for clarity on the PSC’s use of the explanation that there may have been a fundamental disagreement with the Minister and the DG. He questioned how it was possible for this to exist; noting that if it did exist the DG was surely the wrong person to do the job. It was time to start setting dates to see the people that had not signed agreements.

Ms M Mohale (ANC) suggested that the Committee support the move to have performance contracts introduced by the Presidency for Ministers ensuring that EAs are held accountable for the signing of PAs. The Minister in the Presidency was the relevant person to suggest that this was introduced.

Ms Mbikane asked for more clarity on how research work was carried out particularly with regards to sampling.

Mr Suka raised issue with some of the numbers and questioned who was included in the research.

Dr Ralph Mgijima, Chairperson of the Public Service Commission, suggested that perhaps the use of the words “fundamental differences” was not entirely correct. He explained that there may be a difference between the EA and the HoD in terms of how many objectives are put forward and the indicators used to measure them. He referred to these as differences of substance and interpretation. It would be surprising if there were no differences in terms of understanding and meaning of terms. He stressed though that these needed to be mediated and compliance remained of central importance. In terms of accounting he highlighted that the law was clear that PAs had to be signed between HODs and EAs.

 

He suggested that it was problematic to call out a singular minister as responsible for all the other ministers’ non-compliance. He noted the issues around misconduct and stated that it required greater research in order to conclude whether or not it was misconduct that was taking place. He touched on various aspects that influenced this process. He stressed that all departments were required to comply and submit to them; in terms of this there was no need for sampling they simply looked at who had submitted a performance agreement and who had not. Numbers were absolute and exclusions were made where an HoD was absent or where relevant problems had been raised.

Mr Mashwahle Diphofa, Director General, Public Service Commission, highlighted that in terms of directives the EA can implement disciplinary processes especially in situations where there was clear non-compliance on behalf of the HoDs. He highlighted that the signing of performance agreements were considered a high priority issue in the Presidency, noted by its mentioning in the State of the Nation Address. It was an important step for the President to hold ministers accountable, the critical issue being the need for monitoring of outcomes and key result areas. These were key issues going forward particularly at the level of provinces. Premiers would have to comply thereby improving compliance levels going forward.

Ms Mbanda wanted to present on HoDs that were in compliance with their evaluations and how EAs are managing in this regard in the future. She noted that this was a major basis for the whole programme.

Ms Dreyer asked for clarity on the submission date of PAs highlighting the mix-up of dates in the document.

Dr Mgijima stated that the Minister and DG should have signed the PA by the 1 April. The law requires it should be submitted to the PSC by the 1 June. In terms of evaluation the PAs they were receiving currently were for 2010/ 2011. Evaluation of these would only happen in August 2010. He noted that there was a bit of dilemma on this issue.

The Chairperson noted that what was happening was backdating to 2008/ 2009 in order to show that the Committee was serious about compliance. She noted that their intention was to assist with compliance.

Department for Public Service and Administration (DPSA)
Ms Collette Clark, Acting Director General, Department of Public Service and Administration presented on the audit findings for financial year 2008-2009. She informed the Committee that there was a necessity for controls to be in place within entities that the DPSA was required to transfer money to. In the years under review they had transferred money to Skills Education Training Authority (SETA) and Public Sector Education Training Authority (PSETA) and that they would have to account for those transfers to the Auditor-General (AG) as these would be audited.

 

The PSETA had two funding sources, one from the budget vote of the DPSA and one under the Department of Labour (DoL). The DoL funded two accounts of the PSETA called the National Skills Fund and the National Disbursement Fund. The DPSA had no jurisdiction or control over that arrangement; the DoL would have applied directly to Parliament for the money that was given. In the light of the Audit findings they would not find any audit of money that was not transferred by the DPSA’s particular vote.

 

For the year under (2009/09) review the Centre for Public Service Innovation (CPSI) became a government component and was allocated budget vote nine under programme seven. She noted that they did not have to submit any separate papers for the purpose of auditing due to the fact that the DPSA provided most of their services. She stated that there were no audit findings for Programme Seven because the DPSA administered that directly. She noted that anything under government compliance and in areas where money was given, there were no issues raised and it was considered a clean audit for DPSA.

 

She highlighted that for the purposes of money given that the DPSA only received operational funding for the PSETA, the governance funding came from the DoL. With regards to Programme Two and the operational funding there were no specific audit findings for the specific funding that the DPSA was given for PSETA in their specific budget vote, this was utilised under Programme Two. She informed the Committee that the DPSA had requested a reclassification of the money; in order not to transfer it directly, because in terms of their evaluation of the mechanisms for control and management of the money they were not satisfied. Due to this they did not transfer the money but rather provided corporate services under a memorandum of understanding to pay for goods, services and personnel.

 

She stressed though that if there were any audit findings of other money given to PSETA with regards to the National Skills Find as well as the Disbursement Fund, which she noted was an historical fund for learnership, this would appear under the budget for the DoL for the 2008/09 year. She informed the Committee that they had also been provided with a letter written by the Minister of Labour to Parliament raising concern around the lack of financial statements for the money that had been given.

 

In explanation she stated that in the instance of PSETA there should be two financial statements: one for the operational funding under the DPSA and the financial statements for the money that was being given under the DoL. She reiterated that the financial statement under the DPSA had been recorded under the DPSA and audited with no audit findings. Pointing to the letter from the Minister she highlighted that there were issues with PSETA in terms of their annual report and financial statements from their side.

Turning to the DPSA audit findings she informed the Committee that there were two areas in which the AG had raised concern. The first was non-compliance with legislation in that the DPSA did not have any updated strategic human resource plans. The second was that they lacked a key governance responsibility in terms of the Risk Assessment Fraud Prevention Plan. She noted that the Committee had requested that the DPSA inform them what remedial action had been undertaken in order to rectify these two issues. She noted that in terms of the HR Plan that it had been in development since April 2010 and was being reviewed according to their needs. The plan had to be submitted annually to the Minister, she also highlighted the fact that the DPSA was one of 146 departments, which had to internally comply with the external legislation that they produced. In terms of the HR plan when the DG came in this plan was in existence but it had not been reviewed in the three-year process in which it had been operational.

In terms of the Risk Management Strategy she informed the Committee that this had been developed as specified by the AG for the DPSA internally as one of the 146 departments.

Mr Solly Molo, Director General, Public Administration Leadership and Management Academy (PALAMA), informed the Committee that the audit report had reduced its suggested areas of improvement from 24 to seven. He explained that the management report highlighted audit findings from the audit of financial matters, financial reporting systems, governance matters, performance information and human resource management. He noted that financial reports of both PALAMA’s entities: the Training Trading Account (TTA) and the vote had been cleared of any material misstatements. 

 

He noted that PALAMA had not complied with a circular issued by the DPSA relating to HR management. He also informed the Committee that the AG had expressed an unqualified audit opinion on the financial statements of both the Vote and TTA for 2008/09 financial year.

 

He informed the Committee of the seven areas that were put forward as areas of improvement by the AG. The first being the fact that the PALAMA HR Plan did not meet minimum requirements he informed the Committee that this had, as of the 1 September 2009 been submitted to the DPSA. The second area was the understatement of trade and other payable. He informed the Committee that a formal ordering process had been implemented in order to eliminate the finding by the 30 April 2009.

 

In terms of issues with regards to administrative matters, the AG found that bank and cash management, clearance accounts and transfer payments did not have documented, approved and implemented policies and procedures. To rectify this he informed the Committee that PALAMA had completed and implemented the Department Financial Instruction manual.

 

He also stated that it had been brought to their attention that VAT had been paid to a supplier without a valid VAT number. This VAT was recovered from the supplier. In terms of financial improvement he stated that the AG had highlighted that during the execution of revenue and receivables some debtors had been incorrectly disclosed as debtors less than one year in note 12 of the financial statements of the vote. He stated that this would be tested in the final audit but that in the mean time procedures had been implemented to ensure that this did not reoccur.

 

The AG had also highlighted that some unallocated receipts were only allocated after submission of the financial statement for audit. He stated as previously that this would also be tested during the final audit but that procedures had been put in place to ensure against this happening in the future. Finally the audit had noted that there was a calculation error with regards to interest calculations. He informed the Committee that the interest rate had been rectified.

 

Please refer to “PALAMA: Audit findings 2008/09 Financial Year” powerpoint presentation attached for further details.

Discussion
Ms Mbikane asked PALAMA for details and a full explanation of the TTA.

Mr Carlo Venter, Chief Financial Officer, PALAMA, explained that the Training Trading Account is PALAMA’s trade account, which was also audited.

Mr Ramatlakane asked when the risk management strategy was finalised because there was an audit finding on that. He also asked at what level PALAMA was at, in terms of auditing.

Ms Dreyer took issue with the lightness of the current presentation and the fact that other documents supported it but were not spoken to. She noted that PSETA had been a problematic issue for quite some time and that a forensic report on them had recently been done. She asked the DG where this report was and whether or not the Minister had seen it. They needed the report and they had not received it.

Ms Mbikane suggested that things were becoming dysfunctional in the Department - there were problems with its monitoring and evaluation systems. She stated confusion about the status of SETA and whether or not it fell under the DPSA or the DoL. She also asked for clarity over the Vote, the DPSA, TTA and PALAMA. She addressed the financial officer directly and suggested that his operations within PALAMA were very unclear. She requested a detailed lay out from the CFO in terms of the money that went into PALAMA.

The Chairperson noted that PSETA had recently appeared before the Committee and that the Committee had also received the Auditor General’s report on PSETA. She informed the Department that the PSETA meeting was not satisfactory and that they were sent back. In the light of this she expressed dissatisfaction with the handling of the issue of PSETA on the part of the Department. She also expressed irritation and highlighted the time wasting that was taking place with regards to PSETA and whether or not it fell within DoL. She informed the acting DG that everyone was aware that PSETA did not report to the DoL and that the DoL had in fact complained about PSETA.

Ms Clark informed the Committee that many of the issues that they were raising were going to be dealt with in her later presentation. The PSETA is covered by the Skills Development act, which falls under the DoL. All 23 SETAs report to the National Skills Authority. She stressed that the agreement with the PSETA was not signed with the Minister of Public Service and Administration but rather with the Minister of Labour through the National Skills Authority. The performance of PSETA was managed by the National Skills Authority. She stated that the only difference was that the funding for the other SETAs originated through the levies though the employers that came from the budget vote via Treasury.

 

In terms of PSETA she explained that there were two funding sources - the one for its operations which comes through the DPSA and the other for the actual running of the PSETA governance issues in terms of the Skills Development Strategy. This was not managed in any way by the DPSA but rather by the Minister of Labour.

 

In terms of PALAMA she explained that as long as they had two different accounts, essentially two different sources of money, they would have to account for these separately through the financial statements. She explained to the Committee that PALAMA would therefore need a financial statement for their trading account and for their budget vote.

 

Returning to PSETA, she noted that similarly if they have two funding sources – the money from the DPSA and the money from the National Skills Fund – all the issues of contention around financial problems mentioning those have to be taken to the DoL because they gave them the money. She stressed that the only responsibility of the DPSA was to respond to issues with money relating to operational problems such as the payment of salaries and goods and services issues. She reiterated that DPSA had implemented a specific agreement as to how they would pay for those particular services.

 

She put forward a suggestion on behalf of the DPSA that the DoL/ The Department of Higher Education because they were the two key entities involved, should take over responsibility. In order to do so they would need to come collectively to the DPSA, to work out how to respond to and deal with the two separate financial statements. She noted that the concern of the Minister for the DoL was that as yet there had been no financial statements from PSETA dealing with the money that they had given them.

 

The board for the PSETA reported directly to the Minister of Labour. The only accountability the DPSA had for the operational budget was under programme two and in this she informed the Committee they had been doing as mandated. In terms of PALAMA she stressed that they are a fully-fledged schedule one department with exactly the same legal authority as the DPSA in terms of the Public Service Act. She stressed that it was not an entity due to the fact that it was already registered within another piece of legislation under the Public Service Act as a schedule.

 

She explained that the budget vote did not affect the legal authority of PALAMA, the only responsibility the DPSA had was to ensure that PALAMA had controls and systems in place in order to utilise the money the DPSA transferred to them. She explained that it was central to separate the legal status of the entities that fell under the Minister and the Minister’s relationship to them. With regards to access to the forensic investigation she told the Committee that she would get an update from the Acting Chief Financial Officer on the process and what money was being investigated under that particular forensic audit.

Mr David Mulovhedzi, Acting Chief Financial Officer, DPSA, suggested that PSETA be allowed to speak.

The Chairperson asked members whether this was necessary since PSETA had not been invited to present. She suggested the Acting CFO answer instead.

Mr Mulovhedzi informed the Committee that the audit that was performed was conducted under the DoL and that the report from this had not been issued.

Mr Mollo, Director General, PALAMA, thanked the Acting DG for adequately explaining the place of PALAMA. He reiterated that PALAMA was a stand alone Section 21 Department that reported to the Minister of Public Service and Administration. He highlighted the narrative handed out by PALAMA explaining the details they could not give in the presentation.

Mr Venter, Chief Financial Officer, PALAMA, clarified that the CFO together with the DG was required to look at both the vote entity and the trading entity. He explained that PALAMA had a vote which was vote eight from which they received money; from this vote they also transferred money to the trading entity for training and operations that would need to be covered. The DG and CFO were then responsible for the financial management of both entities. He explained that because they are separated into two entities they need to report two sets of financial statements back to the AG. He also informed the Committee that there are different accounting rules for each entity. He noted that this did present some difficulty as PALAMA is required to manage two set of accounts but present itself as a singular entity.

Mr Mollo asked the CFO to clarify the level at which the audit was at

Mr Venter informed them that PALAMA was at about four and half

The Chairperson asked if there were any other questions

Medium Term Human Resource Plan
Ms Clark presented on the Department’s Medium Term Human Resource Plan noting that it had been a work in progress since the previous year. The updated version would be implemented from the 30 June. She noted that in terms of the strategic framework the requirements were that if a department underwent major changes the HR plan had to be reconsidered in order to ensure it continued to align with strategic plans and objectives.

 

The Public Service Regulations Paper One required that all departments plan and implement a medium framework with human resources planning aligned to it. The Medium Term Strategic Framework must be approved annually and be submitted to the Minister of the DPSA on or before the 1 June. She explained that a difference existed between DPSA externally and DPSA internally.

 

The DPSA externally created the documents for the rest of the public frameworks and DPSA internally had to comply. The auditor’s report with regards to HR review was dealing with the non-compliance of DPSA internally. She noted that in terms of the plans status for the period that the DPSA did have a plan, it had expired because it had not been reviewed for the prescribed period. The new plan was simply the old plan but reviewed. She also mentioned that it would be reviewed again.

 

Turning to the staff data for the DPSA she stated that as of the 30 April 2010, 385 posts were filled and 106 were not filled. In terms of employment equity the DPSA had matched and exceeded its targets in all areas apart from women in middle management. She informed the Committee that the DPSA was required to include the Employment Equity figures in the HR plan, which had been done. In terms of the age profile of the workforce she noted that the DPSA was considered to be young with the average age of staff being 44. They had to keep this in mind when performing HR planning.

 

The plan had to be aligned with the strategic objectives of the Department to ensure enhanced performance and service delivery. She noted that the HR plan directly impacted on the previous configuration of the DPSA. Accordingly, structural issues such as changes within the Department as well as the transfer of functions between branches directly affect the HR plan, she noted that when there was change in these areas that would have to return to the HR plan and adjust it accordingly.

 

The transfer of staff to new components was an HR function, which is ongoing within the DPSA. They were aware that the workforce analysis moving forward would have to be informed by the need to work at optimum efficiency. She noted that the demand for posts within the Department was determined by the functional mandate of the Department, she pointed out that they had considered current status capacity versus future status capacity. She noted that they had discovered particular issues in terms of service delivery requirements and their mandate. She explained that capacity needed to conform to their particular requirements in terms of roles and mandates in order to enable efficient delivery.

 

It was impossible for the DPSA to do the work of provincial administration at the provincial level, mechanisms would need to be implemented to ensure that they could do it and that the DPSA was not required or did not fall into the trap of doing it for them. She noted a need for greater oversight in terms of policies the DPSA was putting out. In terms of capacity it was explained that in order for DPSA to carry out certain plans, mandates and functions they would need to be at particular capacity levels. In terms of vacant posts she stressed that core business posts were being prioritised about corporate services posts.

 

Treasury had recently raised the issue that a number of line departments were bloated in their corporate service posts but lacking in core business areas. They were currently reviewing this. In terms of planning and priority issues she informed the Committee that as pilot users of the HRConnect program they were now in a position to utilise it fully.

 

The DPSA has also looked at its compensation budget. This was done to clarify the number of posts the Department envisaged it needed versus what it had currently in the system as far as personnel goes. She noted that the employee rewards and recognition system was an issue that was included in the report. The Department required capacity growth in order to reach it strategic objectives and this would require a restructuring in certain areas. She explained that currently 90% of DPSAs workforce is made up of permanent staff. Although they do have critical short-term employees and a internship and learner programme running as well.

 

In terms of the turnover rate in the DPSA, she admitted that this was quite high and this often compromised the Department’s ability to deliver on its strategic goals. She noted that this was not necessarily negative as the majority of people leaving the DPSA were simply moving to other departments on promotion, suggesting that the DPSA was being used as a poaching ground for other line departments; in terms of this they regarded themselves as a teaching ground.

 

The young age of the staff has also affected the number of people they expected to retire over the medium term. Individuals who occupy key posts would have to be planned for as their replacement was paramount. They had relooked at the compensation budget in terms of this. They were struggling to find or attract the right people with the correct level of competency for the correct job. She also stated that often people with specific skills were needed; training presented a huge cost to the DPSA. They struggled to retain these staff post training. She highlighted that they had a performance bonus system, which is implemented annually and high performing employees benefit from this. The DPSA faces a shortage with regards to skills internally but they do have a vibrant internship and development programme. In terms of employee health and wellness, she noted that they were doing quite well employees were provided with an on-site gym and an on-site canteen. All aspects of balance within the workplace have been adequately catered for.

Discussion
The Chairperson asked about information on expenses.

Ms Clark highlighted that this was in the narrative provided.

Mr Ramatlakane asked what the budget for staff was and whether or not it was currently covering staff. He also raised the issue of vacancies, particularly with regards to middle management; he asked if the department was functioning optimally in the light of this and how the Department was surviving.  Were the empty posts of a critical nature?

Mr Suka asked the Department if they envisaged a rollover or under expenditure in terms of staff budget for the next financial year. He raised the issue of employee work life balance. He stressed that these were critical areas particularly within the public sector unions who claimed people entered departments healthy but due to workloads and underfunded posts, ended up unhealthy. Why was it taking so long to deal with the fundamental issue of vacant posts? He also asked about the Department’s strategy to retain staff and suggested that they needed to be more innovative. He also noted the fact that Department did not speak about people with disabilities in terms of their targets and outputs. He also pointed out the documents lack of time frames.

Ms Mohale agreed with Mr Suka and stressed that it was not about targets but the issue was now about the Department’s plan. She asked the Department how it planned to reach the relevant target. In terms of retention she asked how the Department was retaining those disabled at work and how they planned to assist other Departments in drawing up their human resource plans with regards to those with disabilities.

Ms Clark highlighted the difference between DPSA externally and DPSA internally and offered to present on this and the gaps that they had identified and were covering currently. She also highlighted the separation between the Employment Equity Plan and the HR plan. Disability was laid out in the Employment Equity Plan. She noted the issue with disabilities and stressed that it should be part of the HR plan and that this was an oversight on their part. She informed the Committee that a retention strategy existed and this was played out in terms of counter offers. She also highlighted the fact that the Succession Planning Policy had not as yet been implemented.

The Chairperson noted the eagerness on behalf of the Committee to talk about the external DPSA such as Batho Pele and Anti-Corruption.

DPSA’s Risk Management Strategy and Fraud Prevention Plan
Mr Mulovhedzi spoke on the DPSA’s Risk Management Strategy and Fraud Prevention Plan, which was done as a result of the findings by the AG. He stated that the Department was informed by Section 38 of the Public Finance Management Act which required an accounting officer for a department to ensure that the Department maintains effective, efficient and transparent systems of financial and risk management and internal control.

 

Treasury regulations also require the accounting officer to have an effective risk management strategy, which must include a fraud prevention plan. The Risk Management Strategy of the DPSA was created through a consultative process through DPSA management. The Treasury then issued a framework; the strategy was then endorsed by the Treasury and the DPSA’s Audit Committee.

 

He informed the Committee that the DPSA’s Audit Committee and the Executive Committee, which is also its Risk Management Committee, monitor the implementation of the risk management process. The strategies’ purpose can be summed up into three major areas. The first area deals with ensuring that significant risks are effectively managed. If this did not happen it would be impossible for the DPSA to deliver on its mandate. Its second purpose is to assist the DPSA management in making informed decisions and thereby improving business performance. Lastly, it should promote good corporate governance through effective risk management and internal control systems.

 

The strategy consists of a Risk Management Policy and a Fraud Prevention Plan. The Risk Management Policy focuses on management’s responsibilities in relation to risk, governance structures established to support and oversee the risk management process and risk management methodologies and processes. He noted that the DPSA was of the belief that the management strategy needed to be owned by those involved and this was part of the consultative process that took place in its creation. In relation to this he highlighted that the Fraud Prevention Plan was a key issue and therefore a separate issue.

 

He stated the importance of having a plan in order to guide employees in situations where there were allegations or suspicion of fraud. He noted that the DPSA encouraged employees to conduct themselves at the highest level of ethical integrity on behalf of the Department. He stated that awareness of this matter would take place through workshops, newsletters and e-mails.

 

The key aspects of the Fraud Prevention Plan include the fraud policy and response, a code of conduct and fraud awareness processes, systems and procedures for detecting and dealing with fraud, protection of whistleblowers and investigation and disciplinary processes. In terms of whistleblowers he explained there were two options available, the first being to utilise the hotline, in this case the whistleblower would remain anonymous or the second being the reporting of the fraud directly. All cases would be reported to the Director who would inform the accounting officer who would inform the relevant channel depending on whether it is an internal audit or if it required a legal audit. He noted that in terms of financial losses prosecution would recover these.

 

He assured the Committee that a culture of Risk Management had been prevailing in the Department through the work plans that everybody was required to complete. These were used to consider core challenges and how these challenges could be mitigated. He noted that the document should have been created and implemented sooner but that capacity challenges had posed a problem in this regard.

Discussion
Mr Ramatlakane was concerned about the conclusion of the document and asked for the plan or strategy to be on paper and workable in terms of implementation. He asked the DPSA if they had a person who had been assigned to implementing and managing the risk management strategy.

Mr Mulovhedzi stated risk management is the responsibility of everyone in the Department although the DG had appointed a person at level twelve to ensure it is implemented and risks were assessed thoroughly.

 

Mr Suka asked if there were other people working with this person or tools available for this person.

The Chairperson questioned whether it was implementable.

Ms Clark noted that at management level a risk committee out of management members had been established. In November last year the risk management strategy was approved. She noted that DPSA was a small department and one person overseeing this strategy was enough. She also highlighted that each of the managers in their core competencies were required to identify risks and balances in their quarterly reports. She stressed that the processes were in place and that there are checks and balances and that controls had been implemented and institutionalised.

The meeting was adjourned.