Hon Chairperson, hon Minister and Deputy Minister, members of the judiciary, the director-general and his delegation, ladies and gentlemen, I would be failing in my duties if I did not spend a moment saluting the late Mama Albertina Sisulu, who was an inspiration especially to us young women who grew up being active in the struggle.
Looking at her, with her excellence that was always combined with humility, it was always felt that it was possible that we too as young people had a chance, the capability and the space to lead, not only in the struggle, but in the future South Africa that we were fighting for then. May her soul rest in peace, and may her family, the ANC and the country at large find solace in remembering that when it came to Mama Sisulu it was possible to be excellent and humble at the same time.
I will spend time addressing two areas here: the issues that emanated from the Auditor-General's report which, among other things, were weaknesses around asset management, disciplinary issues, issues of leave, irregular expenditure and third-party fund payments, as well as legal compliance.
I would like to start with the initiatives that the department is putting in place to attain two things. The first issue is to address the issues of concern that were raised by the Auditor-General's report, but largely to move towards an unqualified audit. The department is currently focusing on building capacity in supply-chain management. To this extent, the department has revised the supply-chain management policy. This follows the problems that were identified by the Auditor-General around the inadequacies of the policy on supply-chain management.
The department has also trained supply-chain personnel throughout the country on how to deal with policies regarding public-private partnerships, PPPs. The department has also quantified the values of irregular expenditure that was associated with noncompliance with the Public Finance Management Act, PFMA, and will be approaching the Standing Committee on Public Accounts for condonation to this extent.
In order to try to achieve this objective, the department is working very closely with its own internal audit committee in the process of verifying the formula and in the testing of transactions against the set formula. The department is strengthening its capacity in terms of internal auditing, and some improvements are already visible in this regard. Strategy and risk management still require a bit of focus and attention, so we would like to call the upper department to pay attention to issues of risk management and their strategy overall.
The department has invested capacity in employee benefits, in particular leave management, and the director-general is now receiving monthly reports on this matter. It has also invested in systems and human capacity in the area of asset management. The portfolio committee will be expecting to hear from the director-general regularly on these areas as he begins to receive monthly reports on these issues.
There is also a need for regular reconciliation of assets and a need for updating the asset register. We will also be looking forward to regular reports from the department on this matter. The department's biggest area of weakness has been in disciplinary matters and in the vetting of employees, particularly those who deal with finances. They are currently seeking the support of the National Intelligence Agency, NIA, to fast-track the vetting process of these officials, especially those who occupy strategic areas. They are currently building compliance capacity to manage contracts.
We have received reports on all these issues and we will be tracking these issues on a quarterly basis to ensure that the departments adhere to their own plans that are being facilitated in order to ensure that they receive unqualified audits and, as a result, address the issues that emanated from the Auditor-General's report.
Third-party payments are administered by the Department of Justice and Constitutional Development, and this is also an important vehicle and contributor to social welfare and poverty alleviation. As part of its mandate and strategic objective, the Department of Justice and Constitutional Development administers third-party trust funds in 470 courts in the country. This is at no cost of transfer and it entails maintenance payments between those who are obliged to pay maintenance and those who are beneficiaries - who are supposed to receive maintenance payments. The system ensures support for vulnerable children, families and households through the monthly collection of maintenance funds and transfers to the recipients.
The department has had to suspend an outsourcing project, which was a public-private partnership project during 2010-11, essentially because of funding constraints, but also to address concerns of possible job losses. After mothballing or suspending this, the department had to invest in internal capacity-building measures to improve controls around third-party fund management. The department is currently talking to the SA Local Government Association, Salga, to ensure that municipalities take over the responsibility of the collection of penalties levied by them, instead of this responsibility being discharged by the Department of Justice and Constitutional Development.
Electronic funds transfers, which are more fully set out below, will assist the department in speeding up the turnaround time for payment of funds to the beneficiaries and, by so doing, also reduce the opportunity of possible fraud and corruption which has been associated with manual payment of these funds to the beneficiaries.
The department has also introduced controls, including daily reconciliations. It has also put in place a manual that directs how maintenance payments should be managed. It has introduced the separation of roles in terms of the authoriser and the person who makes the payment. The department has also strengthened the management of third-party funds, starting by making several appointments, the first being the appointment of the chief director with the full responsibility of accounting for the funds. This person is supported by a director.
The department is now in the process of appointing an additional 30 personnel or staff members at the levels of deputy director and assistant director and at state accountant level throughout all courts where third- party funds are being disbursed.
The strategy for third-party payments will rest on five pillars, which are: one, the people, meaning that there will have to be an investment in dedicated personnel; two, system development and enhancement - the system that facilitates this will have to be enhanced and developed; three, legislative review - the laws that govern this process will have to be reviewed; and pillars four and five, respectively, will be service delivery enhancement and the locking of the systems where authorisation is not granted by the necessary authority. I thank you. [Time expired.]