Department of Women in the Presidency progress report on Audit Findings and BRRR, with Minister

Meeting report

An apology was received from the Office of the Auditor-General; they would be present upon finalisation after 24 November 2017.

Briefing on the BRRR Action Plan by the Department of Women (DoW)
Mr Mbhazima Shiviti, Chief Director & Acting CFO, DoW, commenced the presentation by running through the Audit Action Plan, highlighting the objectives thereof and emphasising the three commitments of the Minister to the Auditor General of South Africa (AGSA), which include commitments to investigations and consequence management, compliance with laws and regulations and integrated planning. The Department’s action plans in response to AGSA’s findings, and commitments of the Department in relation to these where applicable, were also provided with a focus on Supply Chain Management (SCM) and the status of completion of these actions, as at 30 September 2017.

The presentation document also gave insight into action plans for findings related to the Internal Audit, Human Resource Management, Internal Control and Risk Management and Financial Management. The Internal Audit (IA) review and follow-ups verify that management action plans have been implemented and are effective in preventing repeat audit findings, including the mitigation of risks. A commitment was made to conduct a follow-up audit on AGSA and the IA findings monthly based on the Audit Action Plan’s progress reporting.

The AGSA and the Internal Audit Summary Statuses were discussed in relation to the number of findings in each area of responsibility, the number of findings resolved and unresolved and who the responsible person is.

Proceeding to the BRRR Financial Performance In Year Monitoring (IYM) Report, which serves as an early warning system to assist the Department in monitoring budget and expenditure, Mr Shiviti recalled section 40 (4)(b) and (c) of the Public Finance Management Act. He then ran through the overall financial performance per economic classification as at 30 September 2017 (slides 29 through 31). These included: Compensation of Employees, Goods and Services, Transfers and Subsidies, Capital Payments/Expenditure. The adjusted budgets and actual expenditure of each were discussed. The overall financial performance per programme as at 30 September 2017 (slides 32 through 35) was discussed, which looked at four programmes: (1) Administration, (2) Social, Political, Economic Participation and Empowerment, (3) the Commission for Gender Equality and (4) Policy Stakeholder Coordination and Knowledge Management.

An overview of the Financial Accounting as at 30 September 2017 focused on the Department’s expenditure commitments in relation to Department Revenue, Fruitless and Wasteful Expenditure, Irregular Expenditure, Deviations from normal SCM procedures (details provided in the slide 38) and Instruction Note 34, which considers the number of invoices paid after 30 days, which have since been resolved.

Ms Val Mathobela, Chief Director: Strategic Management, DoW, presented the section devoted to Internal Control and Risk Management, ensuring the Portfolio Committee that annual departmental assessments are conducted to measure management practices at levels of strategic management. The Committee was provided with an analysis of comparative scores in Key Performance Areas: Strategic Management, Governance and Accountability, Human Resources Management and Financial Management. Comments were also provided. These indicated overall improvement in these areas since 2014, except in Financial Management.

There had been improvements compared to the previous financial year (2016/2017), especially in the risk management function of the Department, which has been attended to by chief directorates, and Human Resource Management. The scores also reveal improvement in the quality of reporting and attention was drawn to slide 44, which discusses ethics standards being withdrawn and the Department reminded the Committee that its organisational structure is in the process of being restructured.

The strategic management structure and risk management within the Department were discussed, where the roles of Chief Director in Strategic Management; Director in Internal Operations Efficiency; and Deputy-Director in Risk Management are concerned. A Deputy Director Risks Management has been appointed as of October 2017, a Risk Mitigation Committee has been established to review the Department’s risk management systems and an Audit and Risk Committee has been established to strengthen management of internal control and risks.

An overview of risks of Programme 1 (Administration), specifically pertaining to Department Management, Corporate Management and Financial Management, their root causes, current controls, mitigation actions and progress thereon, was provided in slides 52 through 72. Following, was an overview of risks forming part of Programme 2 (Social Transformation and Economic Empowerment), on slides 73 to 81 and Programme 3 (Policy, Stakeholder Coordination and Knowledge Management) on slides 82 to 85. Those that were highlighted included the risk of inadequate implementation of legislation to promote women and gender mainstreaming, monitoring and “inadequate awareness amongst external stakeholders on socio-economic empowerment and women’s rights” (on slide 85).

Overall, the Department’s compliance with Management Performance Assessment Tool (MPAT) standards has improved and risk mitigation remains a priority, as is identification, review and monitoring around the implementation of mitigation plans.

To conclude, Mr Shiviti provided insight on Human Resources at the Department, the status of vacant posts during the second quarter of 2017/2018 and the status of suspensions, pointing to the Deputy Director General’s appointment on 1 November 2017 and the rights of employees that are currently under suspension.

The Chairperson interjected, asking if the matter has been settled yet and, if not, that this only be reported on once settled.

Annual Report 2016/2017 and Recommendations: Internal Audit Committee of the Department of Women in the Presidency
Mr W Huma, Chairperson of Internal Audit at the Department, presented the report on progress made by the Department on issues raised in the 2016/2017 Annual Report and the implementation of the Portfolio Committee’s recommendations. The Audit Risk Committee met a week ago, where they conducted a mid-term assessment of the state of internal controls at the Department. No copy of the presentation was provided to the Committee, nor a presentation projected, however, a copy could be sent to Members.

There is concern about the Action Plan not being ready and how findings can be addressed without such. Management has been requested to speed up the process of assessing progress, hopefully facts will be verified by Friday 17 November 2017. Of concern, is the internal control environment, which has not changed substantially, especially in areas of finance, supply chain management, and non-compliance with legislation. The biggest challenges are posed by the need of a Chief Financial Officer (CFO) and other vacancies and supply chain management. This said, supply chain management needs to be strengthened and a CFO needs to be appointed as soon as possible. The Acting Director General has been requested to handle this with extreme urgency, as the AG has identified it as a risk to audit processes.

On to the second request, the report as at 31 August 2017 shows that resolutions are implemented at a slow pace and too late to achieve the desired and intended impact, therefore, recommendations and resolutions need to be implemented as soon as possible, especially where there are no limitations around resources. With regards to financial management, 45 out of 55 findings were resolved, however, the audit report says only 23 were. Internal audit must verify what management says and unresolved findings remain high at 43 per cent. Strategic Management has performed well, and ICT have two outstanding findings.

On the Department’s performance, serious challenges are posed at core programmes two and three, where vacant positions need to be filled. Two Deputy Director Generals (DDGs) have been appointed for the two programmes and they will have to work hard alongside the Chief Directors to improve the Department’s performance. Because compliance poses a risk, the Acting Director General (ADG) needs as much support as possible. Another issue at the Department, is that policies are disregarded because of a lack of consequences. He appealed to the Acting DG to set an example, recalling that twenty senior managers were charged. Consequence management in supply chain management required to get the Department a clean audit.

Discussion
Ms C Majeke (UDM) sought clarity about the role of project managers at national dialogues, which are a key function to the Department, if they are not monitoring? She asked if there were mechanisms to ensure that what has been recommended has been implemented for monitoring and evaluation purposes.  With regard to financial management and expenditure, what mechanisms are there to prevent fruitless and wasteful expenditure and are there measures for those who do not comply?

Ms T Stander (DA) requested information about where the Department is in in the process of recruiting and appointing, employing a CFO, the permanent appointment of the DG and other top-level vacancies and when this will have happened by. When will cases pertaining to fruitless and wasteful expenditure be finalised?
She agreed that there should be consequence management, however, all cases should be investigated and handled equally. Are there performance management contracts in place and could the Committee see these? She added that the Department is requested to submit reports timeously to the PC.

Ms L van der Merwe (IFP) expressed concern that the second presentation had apparent apathy to responding to the AG findings. On repeat transgressions, could the Department devise an urgent consequence management proposal and provide a time frame around this process? Targets are either met or not met; they cannot be partially met. She sought clarification on when the vacancies would be filled and the case of suspension (referred to at the end of the first presentation) will be settled, since the person remains on the payroll. Lastly, she asked when the gender responsive framework will be finalised and why the Departments of Social Development, Health and Education were not included in drafting the Sanitary Dignity Framework policy framework, and where was the Department of Cooperative Governance and Traditional Affairs?

Ms P Bhengu (ANC) commented that the report’s findings lacked insight on actions to be taken and mitigation controls, especially where it concerns supply chain management. She asked the Minister if there are plans in place to deal with these issues.  

Ms M Khawula (EFF) commented that, though suppliers are paid on time, the impact is not felt on the ground. When joining the Committee on Agriculture, Forestry and Fisheries (DAFF), for example, she saw that women are willing to work but do not have support. She requested that the Minister address needs on the ground, especially those of youngsters and in rural areas.

Mr M Dirks (ANC) drew attention to the importance of the Portfolio Committee’s oversight functions over the Department and suggested that the Committee be given reports, so that it is provided with an overview of challenges that arise and plans of action, once these have been finalised.

Ms Susan Shabangu, Minister of Women in the Presidency, responding to the questions of oversight, said that the Committee should have called the Minister of Agriculture, Forestry and Fisheries when overseeing agricultural activities, as the Portfolio Committee has the authority to call any ministry to account. All government departments are meant to report back on the economic development of women in different provinces. They have adequate resources to do so.

In response to Ms Majeke’s question about systems, the Department is on the right track, progress is being made.

Concerning the matter of a CFO, it is not easy to find the right candidate, since the CFO will be employed at the level of Chief Director, not DDG level as in other departments. The previous DG left as recently as the end of October 2017. Is the goal to merely fill a post or ensure efficiency? Therefore, it is uncertain as to when these vacancies will be filled.

In response to Ms van der Merwe on cases that need to be settled, these processes are tedious. She assured the Committee that the Department will deal with transgressors at an individual level and will follow legal procedures, especially in SCM. The Department is committed to settling these matters.

There is no delay around the Sanitary Dignitary Framework (SDF), including inter-ministerial and inter-departmental contributions. Cabinet has given its own input, mandating the Department to rework it, and the Department is working out the timeline. The next time the Department returns to a meeting with the PC, it will report on its timeline and deadlines, so that the PC is informed of the Department’s activities and deadlines.

With regard to dialogues, the Department has conducted four dialogues and findings were Cabinet-approved and Eastern Cape dialogues lie ahead for the remainder of 2017. The Department does not have enough capacity and resources to go it alone; it collaborates with civil society and other role players. A framework will assist in setting up systems and the new DDG will be particularly useful.
On questions around the outsourcing monitoring and evaluation function, people brought into the Department ought to assist.

Ms Bhengu commented that the Department is not an implementing department, but needs to collaborate with others. She asked about consequences of not having a CFO and DG, as these are decision-making roles.

Ms van der Merwe thanked the Minister for her comprehensive answers and acknowledged the limit of resources. She raised the issue of the lack of gender mainstreaming, commenting that if the Committee were to know about processes at Cabinet and time frames the it would feel assured. Since there is an issue of resources, and linked to this, the Commission for Gender Equality has said that the dialogues of Department are the same as its activities (legal clinics).

There is also a need for an overarching plan to deal with gender based violence; could the Department not take the lead in this and manage other departments and civil society? Who will be held accountable for the activities of the previous DG’s actions and what does consequence management around this issue look like? It appears to indicate a “lack of accountability on the DG’s behalf”.
She asked the Chairperson of the Internal Audit to share his thoughts on how to go about finding a new CFO.

Ms Khawula expressed dissatisfaction with the Minister’s response, as it is the Department’s responsibility to see to it that women in South Africa are not exploited and that they are catered for.

Mr Dirks asked how many and which positions are the most senior pertaining to vacant positions in the SCM.  

Ms Stander asked whether there were any qualified persons that could fill the role of acting CFO, whilst the Department is headhunting.

Minister Shabangu responded that the Department can advertise, as they did for the position of DG, but no suitable candidates were identified. It appears to be a better option to mentor and equip current staff until they are ready for those roles and positions. The Department went to the Department of Public Service and Administration (DPSA) and Department of Trade and Industries (DTI) for assistance on the matter.

The judiciary’s decisions about cases will be respected, citing the case of former Deputy Minister of Higher Education and Training, Mr Mduduzi.

In response to Ms van der Merwe’s comment; the CGE has never invited the Department to attend legal clinics. The Department reaches out to the CGE and there is no intention of duplication of activities. On 3 December, the Department is going to Strand, where they have been requested to engage. On to gender based violence, it is more important for the Department to work and implement a plan instead of taking the lead. How are we going to work and ensure that the system works together to ensure that the courts, police are being effective, to tackle gender based violence?

Where it concerns the SDF, the Department is working with Cabinet, National Treasury, public institutions and Higher Education have been included.
With regard to pilot projects, a comprehensive plan needs to be developed and Gauteng is being looked to as a study, not part of the pilot project, but the three rural provinces (Eastern Cape, Kwa-Zulu Natal and the Eastern Cape) will be focused on. The Department will also consider the value chain and supply chain for the SDF, especially women-owned cooperatives.

Mr Huma confirmed that there are no vacant positions at SCM, except for that of director, which was unfunded since 2015. National Treasury said support would be provided for core programmes.  The Minister had already responded to Ms van der Merwe’s question about who will be held accountable and referred her question to the Department’s Chief Director of Human Resources Management.

Ms Khawula asked what the Committees responsibility is in addressing indecent apparel and attire of celebrities, which gets shared across social media platforms. What about a case of murder of children by a jealous woman. What about these cases as degrading to women? What about the harassment of women?

The Chairperson brought up the issue of farmers raping farm workers’ children.

Minister Shabangu said the Committee needs to be cautious as to how it intervenes and responds, to not criminalise women. The Department’s role is to ensure that women are free from violence, to ensure that their rights and interests are protected. Returning to dialogues, she added that policemen need to be counselled and that gender and race issues in the country need to be addressed.

The meeting was adjourned.