Department of Agriculture, Forestry and Fisheries Budgetary Review and Recommendations Report

Meeting report

The Chairperson announced that this was an important session on the Budgetary Review and Recommendations Report (BRRR). He explained that the Constitution talked about the Money Bills and to an extent that meant Parliament had say in any budgetary process. Until this legislation was put in place in 2009, Parliament did not have a way of doing so. This was one process that Members of Parliament could get to be engaged in processes of budget, usually they would just be in favour of increasing or engaging departments on budgets, now they were able to emphasize powers as Parliament but they must be knowledgeable about the content as it needed to be applied. It was a very important bill because it could make or break any government or department.  It was important to engage with Mr Mkhize who had been doing this programme for a long time. The appropriation committee also became very critical in this process as they continued with their recommendations. This was just the background to emphasise the importance of this exercise. The Committee should exhaust the subject that was before it because it was the only item for the day and Members must really pay attention to the workshop before them.

Presentation by
Mr Mkethwa Mkhize, Unit Manager of Parliament, thanked the Chairperson and the members of the Committee for letting him come and talk to them about this important issue. The Constitution allowed for Parliament to amend budgets. In the past however, there was no procedure for Parliament to amend money bills. In 2009 an act was enacted so that now Parliament had a procedure to do so. It was called the Money Bills Amendment Procedure and Related Matters Act. The act applied to all Committees in Parliament but made specific mention of finance and appropriations Committees.  Section 5 provided that the National Assembly, through its committees, must assess the performance of each National Department on an annual basis.  

A BRRR must be submitted annually for tabling in the National Assembly and it must be submitted to the Finance Minister and Cabinet Member of a vote. The point of BRRR is that the Constitution required Parliament to exercise oversight over the executive’s actions, which should ensure that service delivery took place for improvement of life for South Africa’s citizens.

BRRR was a tool that attempted to help answer questions about the budget. These included finding out if the department had achieved its strategic objectives, and the effective and efficient use of non-financial and financial resources. It included strategic priorities and objectives, an evaluation of strategic and operational plans as well as an analysis of the annual report and financial statements. BRRR also considered SCOPA’s reports, and included a conclusion and recommendations.

Strategic Priorities were a summary that had a view to use them as a threshold level. Measurable objectives were a summary to also view to use them at a threshold level. The Strategic and Operational plans were evaluated against the outcomes of the Department’s service delivery and financial performance. In order for a committee to evaluate performance it should use a variety of sources as evidence.

Section 32 of the Public Finance Management Act provided for the publishing of reports on the state of a vote’s budget. It was publishable by the National Treasury and it identified spending patterns of under or over spending. It also considered the Spending Trend Analysis (STA) by the National Treasury, which was only for the Committee’s purposes and not the public.

STA included spending trend per budget vote, an analysis on a number of variables that were provided per departments programme and sub-programme. The Committee should also consider the reports done by the Standing Committee on Appropriations.

The Annual report and financial statements must be tabled by latest at the end of September of each year. The Committees were required to report on the annual reports and financial statements. BRRR should include a report on the actual annual report and financial statements that should be submitted in October of each year.

The Money Bills Amendment Procedure and Related Matters Act provided that committees must consider SCOPA’s report on a department’s annual report. This was to verify the existence of fruitless and wasteful expenditure, irregular expenditure, overspending and unauthorized expenditure. Other sources of information would include: the State of the Nation Address, Reports of the Planning Commission and Ministry in the Presidency, reports of the Auditor General, recommendations of the Financial and Fiscal Commission, fact finding reports, prior BRRR’s and reports on budget votes.

The Committee’s final finding should be summarised in a coherent and logical format; it should also be based on analysis mentioned previously. The Committee’s recommendations must have content that conforms to the Constitution and should acknowledge the principle of separation of powers and the principle of cooperative governance.  Equally important was that the recommendations should be clear about what action was expected. They should also be practical in terms of achievability and set realistic time frames.

Discussion
The Chairperson said that was a brief synopsis of what was expected of BRRR. Ideally this was a process that should have started before annual reports. It did not however take away the importance of it. He wanted to know what the implications were if the Department allocated funds to something and those people did not come to the Committee to show its proper use.

Ms A Stein (DA) wanted to add that she was concerned that a big chunk of the Department’s funds went to provinces but the Committee did not get oversight on provinces. The link towards the provinces spending needed to be advised upon.

The Chairperson asked Mr Mkhizeto to address the issues raised.

Mr Mkhize explained that the Committee was allocated a budget which was given to the Department to distribute to different entities. The Department was supposed to have its own oversight over the entities. When the Department came to Parliament could not blame any failures on it entities because it was supposed to oversee these entities. Parliament could call the entity to appear before it with the Department. Parliament could also amend the budget and it could put conditions on how the money should be used. Section 10 of the Money Bills Act said that Parliament could have special conditions and this would affect the entities as well as the relevant department. In addition implementing agents of the Department must be supervised.

The Chairperson asked what the implications were for an entity coming to the Committee and Members did not want to “entertain” their submission.

Mr Mkhize said that it could be because the entity did not have the correct information or if it was poor performance so the Committee should go there to conduct oversight and engage with the Department. It could also be that they came to Parliament and told something was not true. They could be asked to come to Parliament again but be asked under oath. If the entity withheld information then Parliament could summon any person for information as long as it was not classified. Those were the avenues available to Parliament.

Ms M Pilusa-Mosoane (ANC) thanked the Chairperson and noted that some of the things were being done but other recommendations made by the Committee were not being followed by the Department. Even if the Committee checked the Department’s plans it did not matter because it deviated from its strategic plan. In terms of overspending how did Members establish what was being spent? This Committee did not even have a proper secretary to help them and committees in Parliament were working in silence. Sometimes the Committee did not even follow up on SCOPA recommendations. The Committee had weaknesses on its side but even when it had wanted a forensic report previously it had taken a long time to get it.

Ms Steyn thanked the presenter because it gave a clear understanding of what to do. The Committee had some work to do before it could work and finalise its report.

Ms Steyn requested all the Committee’s oversight reports so that Members could look at them. She also wanted recommendations from other committees as well as the STA. Members should also revisit what was happening with quarterly reports so they could refresh themselves. They needed to do a lot of reading and homework again.

Mr L Van Dalen (DA) said that after having this presentation, this Committee was more powerful than Members had known. The documents were very important and he had not even heard of them. He wanted to know what had happened to previous recommendations, and said the researcher should track these. He wanted to know who checked the recommendations and who was listening to the Committee. The Committee should use the power that it had.

The Chairperson said that the cycle that they had should be looked at so it could be internalised because it really guided them in how they did their work.  They were now at a stage to adopt a report but where did it go after that. In November the Committee was expected to conduct oversight work.  He raised an issue of capacity again and explained that the secretaries were now full time and were dedicated to the Committee. He asked Mr Mkhize to respond to some of the issues raised.

Ms Pilusa-Mosoane wanted to know if the Committee had received the annual report from September because she had not been at the Committee the past few meetings.

The Chairperson replied that the Committee had gone over it during the past two meetings.

Mr Van Dalen said he would feel very uncomfortable compiling a report without getting all the information and reports. He did not think that the Committee could make recommendations without getting the reports. There might be time constraints but he reiterated that he would feel very uncomfortable making decisions or recommendations without reading the reports. Members would not be doing their duty without reading them.

The Chairperson said that Mr Mkhize had to leave soon so he should now answer the questions.

Mr Mkhize thanked the Chairperson and the Members and said that it was very important to follow up on the recommendations. He said that when a Department came to the Committee it should report on how far it had come with the recommendations. The Committee must insist and do oversight over all entities and the Department must send senior officials to accompany the Committee. This would show that the Committee meant business.  In terms of departments or entities changing their strategic plans; it was up to them to convince the committee that it was reasonable to do so. Parliament could say that they must do what they say and that they can be held accountable to what they said to Parliament. In terms of shifting of funds, the departments will say they were savings when they were really under expenditures, which meant they took the money from somewhere else. It was very important that the Committee knew what was going on in other committees as well. He agreed with Mr Van Dalen that Members must read the reports. He also agreed that the Committee researcher could assist and summarise reports for the Committee. He said that they did research by using various sources and if they found three sources that pointed to the same thing then it was probably correct. He was not happy that it took so much time to get reports to the Committee. Parliament was given the power to summon any person including the Minister.  He again agreed with Mr Van Dalen that the Committee had more power. Information from other Committees was very important. He went to explain that committees were allowed to go on a retreat so that they could figure how they were going to do their work and get things done on time.  Once the Committee had a business plan they must try by all means to stick to that business plan which would create much better results then not planning at all.  Mr Mkhize said that he had to leave it there because he had to run to another meeting.

The Chairperson said that this was an ongoing exercise for the Committee and that it was very important that Members kept this in mind as they did their oversight. Mr Van Dalen had made the point that the Committee needed the set of documents and the auditor general was coming the next day to take the Committee through the same exercise but more in a practical way. On Thursday they were supposed to do the consideration and adoption of the BRRR which was where Mr Van Dalen’s point came into effect. He was not sure about practicality of doing that on Thursday and asked for Members to comment.

Mr Van Dalen said that the reports were already done but they just needed to copy them and get them to the Committee so they could be fixed. He would love to read the documents so that he could make the right recommendations.

Ms Steyn said that she supported getting any reports that the Committee could by the next day.

The Chairperson said they must get the reports by the end of the business day and wanted clarification on what documents Members wanted.

Mr Van Dalen said he wanted Section 32 of the Public Finance Management Act, the Operation Plan and the Performance and Evaluation report.

The Chairperson asked if they were fine with that list of documents.

Ms Steyn said that she wanted the spending trend analyses in the future.

The Chairperson said that they should also receive the financial and fiscal recommendations

The Chairperson thanked Mkise and explained that they were expected to do minutes but they don’t had them so they could not do them but they would adopt them before the end of the term. Next week they expected feedback from the Red Meat Producers' Organisation (RPO) and the Wool Growers' Association (WGA) but the venues needed to be worked out.

Ms Steyn said that they also needed the 1st quarter report so that they could take it into consideration.

Ms Pilusa-Mosoane said that concerning the oversight in November she was worried that all the oversights on Friday were usually not well attended so they needed to know if Members would be there or not.

The Chairperson said that he had asked a question to Mr Mkhize that he did not answer about implications and what would happen to entities that did show or changed their strategic plans.

Ms Phaliso (ANC) thanked the Chairperson and asked for the operational plan of the Department so that the Committee could assess the operations and relevance of the documents.

Mr Cebekhulu (IFP) wanted to know about provincial funds that had disappeared without trace. He wanted provincial entities to come in to Parliament and he gave an example of a KZN farm that was given funds of R30 million that vanished.

The Chairperson corrected Mr Cebekhulu and said it was actually funds of R35 million.

Mr Van Dalen said that the Committee needed to look over the forensics reports of the Department of Fisheries because of the corruption. It was supposed to be published on the Internet but Members should be given it in person. It was very important that they get that document.

The Chairperson said that Mr Van Dalen seemed to have the document and asked if he could share it with the Committee.

Mr Van Dalen handed over report saying that it was put in his post box.

The Chairperson said that this was the kind of approach that they should adopt, working together with different parties and that they should work as a team and not trivialise each other which would really take them further.

The meeting was adjourned.