Amendments to the report are as follows: On page 1545, in paragraph 3, line 3, after "and" to insert "process on".
On page 1545, in paragraph 3, line 7, after "government" to add "and on performance agreements".
On page 1546, in paragraph 4 (c), after "projects" to add "and maintenance".
At the beginning of this year when the President of the Republic of South Africa presented his state of the nation address, he emphasised "Business Unusual" by government. We all looked forward to "Business Unusual" in all government departments and that it would be reflected also in the first- quarter spending by different government departments. Unfortunately, spending in most departments is the same as in the previous year and the year before last. As the committee, we wonder if this is "Business Unusual" or business as usual, because spending must show a difference, but there is none.
The President also emphasised the filling of critical posts within six months. We have recommendations regarding the filling of vacant critical positions, and we would like departments to report to Parliament by September so that when we look at the Medium-Term Budget Policy Statement, MTBPS, and mid-term spending we would check whether those posts have been filled as per Presidential instruction. We expect the Public Service commission to respond or report by September by ensuring that all senior positions are filled and that all senior managers have signed their performance agreements. We want that information so that we can transfer it to various portfolio committees for follow-up.
We have in our oversight function realised that low spending by different departments impact negatively on the lives of women. Remember that this is Women's Month, so if departments do not spend, it means that women who are out in the rural areas, disadvantaged areas, are suffering as a result of departments not spending as expected. This has been taken seriously by the committee. We are still going to follow up to ensure that departments spend and do not go for virement in September or October when the Minister of Finance will be presenting a report before Parliament. In our previous reports we said that we are going to focus on our oversight function and not on government in general. We called the departments of Public Works and Communications. Our interaction with the Department of Public Works was very good and we are happy that Public Works has come up with a plan that will inform us about what they plan doing to ensure that projects with other departments are not delayed. All departments have been complaining about how frustrating Public Works has been. We are going to follow up on that, to ensure that departments are not unnecessarily frustrated by Public Works.
With the Department of Communications serious challenges were experienced and we intend to interact with the Minister at some stage because all is not well with regard to Sentech and Infraco. We support the department for not allocating funds to these two before they submitted their business plans.
We had a challenge in our public hearings with Communications where allegations were made about the Auditor-General for coming up with wrong reports. We wondered how that was possible because this department took part in the planning from the onset, and they agreed with the Auditor- General on when to conduct the audit and who was to provide the Auditor- General with information. We are disappointed that by the time the Auditor- General went for audit, the department had not provided the necessary information. According to the department's report, information was locked away somewhere and the person who had the keys was not available. We can't allow that kind of arrangement. If the person is not there, somebody else must have the keys in order to give documents to the Auditor-General to do the audit.
We expect that departments will co-operate with the Office of the Auditor- General to avoid unnecessary squabbles between the Auditor-General's office and the departments. This is an Office that must be respected. Remember it is part of the Chapter 9 institutions and it must be given the necessary respect and co-operation.
We are very grateful to various portfolio committees. We have observed that since we started reporting to Parliament on a quarterly basis, and debating our reports, portfolio committees are following up with their departments on what they are doing with regard to the issues that we raise and those that are raised by the Standing Committee on Public Accounts, Scopa. We are happy about the co-operation of and support by different portfolio committees.
We are also thankful for our relationship with National Treasury. In 2005, when I joined the Budget Committee, there was a sea between us and the National Treasury that could not be breached. But now the relationship is very good. Whenever we ask for information from them, they respond as per the request. They do not give us what, they want but they give us what we want, for us to do better oversight. That is why they have changed the section 32 report, which deals with monthly spending. The information contained in it is what we requested in order to do our oversight function better.
I also want to thank Parliament. When we started, I used to report on that without their support with research, and without a permanent secretary in the committee, we would not have been able to do our work. We are thankful that at least we have two researchers and a permanent secretary and whenever we need additional assistance, Parliament is in position to give us the support.
We also want to call on members and departments to look at our recommendations. We expect that by September the Department of Public Service and Administration, DPSA, and the National Treasury must come back to Parliament, based on the recommendations that we gave them. The ANC supports the reports. Thank you. [Time expired.]
Thank you, Chairperson. I have four minutes, I will try to cut it down to three so that we can all go home early. Every government in the world has the responsibility to deliver services to its citizens. Such services include the creation of a safe environment for citizens, the creation of a safety net for citizens who are unemployed and poor, the creation of an educational environment, in which individuals are enabled to improve their skills and the creation of an enabling environment for economic growth and job creation. The provision for funding - this is important to make service delivery possible - and ensuring then that the necessary policies, planning, management and control for the efficient usage of funds so provided are in place. Unfortunately it is in the planning, management and control of funding where government departments are failing dismally. We read in the press the reports about the Ikhaya Hospitality Centre, an example of the problems that we have in planning and management, and we are pleased to hear that the Minister of Sport is going to investigate the issue. But the tendency of poor management and control permeates through all three levels of government. The Auditor-General reports that only 2 out of 247 municipalities countrywide have received unqualified audit reports and this at a level of government where service delivery is absolutely crucial.
National government departments owe just five of the metro municipalities in South Africa R602 million in arrears for service charges, and that excludes Pretoria, where the largest number of government departments is housed. How are local authorities expected to fulfil the mandate of service delivery if their counterparts in government display a laissez-faire attitude towards payment of accounts?
There is a general tendency by government departments to underspend on their budgets. After the first quarter of the financial year,the spending patterns in particularly the Departments of Provincial and Local Government, Foreign Affairs, Communications and Public Service and Administration give cause for concern. The same applies to Samdi, the management training arm of the public service, which is also notorious for underspending on their budgets.
The first quarter of this financial year, the Department of Labour spent only 2.67% of its capital budget. Whenever the matter of nonperformance against budget is raised with departments, the stark answer virtually all the time is a lack of skills and the high vacancy rates. This despite high unemployment levels in the country and the fact that thousands of matriculants and graduates are roaming our streets without jobs. The excuses are lame.
Drastic action by government to get rid of poor performance and to appoint managers with the requisite skills to do the job properly is now urgently required. It is only in this way that government will show its commitment to service delivery, thereby ensuring that the daily boycott actions and protest marches throughout the country against poor service delivery are avoided. The DA will support the amendments proposed by the Chairperson of the JBC and will also support the recommendations of the committee. I thank you.
Thank you very much, Chairperson. The hon Minister of Trade and Industry said just now at this podium that some in the private sector require the stick. The same can be said, hon Minister, for many of our government departments, because they also require the stick. If one looks at this report and reads this report in detail, there are some very worrying trends that have been highlighted both by the chairperson of the committee and the previous speaker, and we certainly as the IFP share the committee's disappointment that spending patterns have not changed materially since last year.
Spending as a whole still lacks budget allocation, which is an accurate indicator that departments have not taken the President's instructions very seriously. For example, Chairperson, the vacancy rates in the Department of Sport and Recreation is 45%. There are unspent grants. I mean this is something that we should not accept. In areas like HIV/Aids, where we look at the life skills education, we only spent 9.8%, whereas on the mass sport and recreation participation programme only 10.1% was spent. It is no wonder that we have only produced one silver medal, if money cannot be spent when money has been allocated by this government and this Parliament to those departments. The poor spending on capital projects is also very worrying.
When one notes that the Department of Provincial and Local Government was one of the departments that spent the least of the overall budgets, then clearly services to the public at the lowest level of government are not being delivered in the proper manner. Poor spending reflects poor planning and a lack of expertise. It is therefore imperative that the National Treasury takes the necessary and urgent steps to assist poorly performing departments.
The IFP fully supports the committee's recommendations and the amendments that have been proposed by the hon Chairperson, and we also support the recommendation that National Treasury should fast-track the implementation of the performance information framework so that Parliament could gain an even more accurate picture of expenditure by departments. It is pleasing to note that portfolio committees are taking their oversight roles seriously, but they have to be more vigilant in the expenditure by their respective departments. The IFP will support this report. I thank you.
Thank you, Chairperson. During the budget we have devised programmes of expenditure that we hope will bring delivery in the various portfolios, which will bring us closer to poverty alleviation and develop South Africa.
In view of the Joint Budget Committee's report, the MF is confident that we are well on our way to making this delivery a reality, especially when noting that in comparison to last year's first quarter there is an increased aggregate expenditure this year.
The MF is confident that departments have acknowledged their challenges in the last year's spending trends and are working hard to alter this. At the end of the day we have allocated funds that need to be filtered to the necessary role-players if we are to have effective and efficient delivery and results. The JBC plays a vital role in keeping us informed of the loopholes and the progress we have made to date. The MF supports the report and applauds all departments.
Chairperson, if I can just take half a second to say, this is Women's Month and today I have participated in six debates at this podium. The day when I am not here, and none of you should miss me, then this podium will miss me. I thank you. [Applause.]
Chairperson, comrades and hon members, the report that we are debating today of the Joint Budget Committee covers the period for April to June of this year.
It's also the final first-quarter report of the Joint Budget Committee in this the third democratic Parliament. Total expenditure by departments in this first quarter stands at R139,2 billion or 23% of the appropriation. Whilst we have seen an increase in aggregate expenditure over the period 2005-06 to 2008-09, spending patterns relative to the Budget have remained in the 21% to 23% band. At the same time, there has also been underexpenditure in some of the subprogrammes.
The Joint Budget Committee has not been able to ascertain whether steps have been taken to accelerate not only spending but also actual delivery. If time permitted, the Joint Budget Committee should have required of departments to submit detailed reports of steps undertaken to implement the President's instruction of " "Business Unusual".
In a presentation to the Joint Budget Committee on 1 August, the National Treasury indicated that four departments, namely Foreign Affairs, the Department of Public Service and Administration, and Agriculture and Land Affairs missed their year-to-date spending benchmark in the first quarter by more than 8%. A further two departments, Communications and Public Enterprises, missed their benchmark by 21%.
In the remaining months of this financial year and third democratic Parliament, it is imperative that all departments focus on accelerating spending in an effective and efficient manner, ensuring that government meets its delivery targets. This is obviously going to require greater emphasis on planning as well as improved interdepartmental planning, budgeting and spending.
The JBC is not convinced that departments have clearly identified departmental critical skills and prioritised them accordingly, and is therefore of the view that in fact all departments should make every effort to fill vacant posts by the end of the second financial quarter, especially those at senior management level, as well as those at a lower level.
The committee is also concerned about the delay in the transfer of funds to state-owned enterprises. This is attributed to, amongst others, delays in the submission of business plans, cash flow projections, service level agreements and compliance documents. These delays impact on the ability to spend allocated funds efficiently and effectively. It is important that departments that transfer funds to state-owned enterprises ensure that prior to the commencement of the financial year all the necessary documentation and in particular service level agreements are finalised and submitted.
Emphasis also needs to be placed on the performance and financial sustainability of state-owned enterprises. This includes taking measures to improve their overall operations and identifying and reducing potential risks. The JBC is of the view that measures should be taken to improve risk management in order to reduce situations that could lead to unacceptably high adjustments having to be made.
In some departments we have seen certain instances where, in certain programmes, low or nonexpenditure takes place as a result of allocated funds being placed in suspense accounts. The JBC is concerned about this, because delays in service delivery that occurred due to a lack of expenditure cannot be accepted. Therefore, we intend to exercise greater oversight over this area in the coming months with the Office of the Accountant-General. A number of departments have also indicated slow or low expenditure that took place as a result of delays in the receipt of invoices, and this is also of great concern. Maybe I can just give one or two examples. The Department of Labour, for instance, showed poor spending on goods and services due to delays in the submission of invoices by the Department of Public Works. The Department of Housing experienced delays in the receipt of invoices from the Government Communication and Information System.
Over the past four years, the work of the JBC has contributed to enhancements in budgetary oversight as well as departmental accountability. In the early years of the Joint Budget Committee, departments and in fact portfolio committees as well as select committees were not entirely sure of what the work of the JBC was. However, the JBC has improved its work, has been able to focus effectively on its mandate and has firmly placed itself on the radar screen of departments. During this term of office during this, the third democratic Parliament, we have seen a number of departments implementing the recommendations of the Joint Budget Committee, and one of those, for example, is the Department of Housing. They've put together a special programme, a special division, to monitor and oversee the use of funds. That, for us, is important.
It's also through the initiative of the ANC that we have such a committee as a Joint Budget Committee. It demonstrates the seriousness of the ANC on both oversight and accountability. It is worth noting that under the previous regime there was no such committee, there was no accountability and there was no transparency.
The Joint Budget Committee has made a number of recommendations to National Treasury over the past years. Many of these have been taken on board by National Treasury, and these have assisted the Joint Budget Committee in strengthening its oversight and monitoring role. One of the issues that has been of concern to many of us has been the poor attendance by many of the opposition parties in the work of the Joint Budget Committee, especially during the hearings on the Medium-Term Budget Policy Statement as well as the Budget. I think this clearly indicates to us; in fact it's a clear contradiction to their claims of being the watchdogs of Parliament. This role has been and will continue to be undertaken by the ANC.
In conclusion, the only consistent opposition party has been the DA and, in this regard, I would like to acknowledge the positive and constructive contributions of the hon Swart. We appreciate that. [Applause.] On a more personal note, I would also just like to say that it's been a great privilege to have been part of the Joint Budget Committee from its inception way back in 2002. The ANC supports this report. Thank you very much. [Applause.]
Debate concluded.
Chairperson, I move that the report, including the amendments proposed by the hon L L Mabe, be adopted.
The motion is that the report, with amendments, be adopted. Are there any objections?
Chairperson, the IFP will not say that there is not a quorum. [Laughter.]
Motion agreed to.
Report, as amended, accordingly adopted.