An Interim Management Team was appointed by President Thabo Mbeki late in 2002 to identify and diagnose chronic administrative and management problems in the Eastern Cape and to identify ways to turn them around. The Interim Management Team dealt with four provincial Departments out of eleven. The Team is accountable to the Premier of the Eastern Cape and through the Minister of Public Service and Administration, the President.

The Report of the Interim Management Team (IMT) notes that the Eastern Cape is characterised by uneven development which has resulted in a "bi-modal" economy composed of two relatively developed port cities and impoverished outlying rural areas. The seaports provide a small import substituting manufacturing sector, mainly auto manufacturing, while the rural areas provide the basis for a livestock economy.

The Eastern Cape is home to 15,4% of South Africa’s population. It is the poorest province in SA with a GGP per capita of only half the national average; 64% of the population live in poverty, meaning there is a household income of less than R800 per month; 43% of households earn less than R500 per month. The poverty rate rises as high as 80% in the former Transkei where households survive mainly on grants and allowances. There has been a gradual decline in the province’s own revenue for the last three years but it has still been above budget expectations. However, the effect of overspending has been negative on the ability of the Eastern Cape to maintain a healthy surplus. Donor support projects exceed R500 million. About R 3.4 million has been targeted for infrastructure projects in the current financial year.

The overall goal of the IMT is:

- To ensure that service delivery backlogs are addressed.

- To establish sound management and leadership in four target Departments: the Eastern Cape provincial Departments of Education, Health, Social Development and Roads and Public Works.

Their specific mandate is as follows:

- To establish turnaround plans for the four target Departments, including the elimination of service delivery backlogs.

- To address cross cutting issues such as disciplinary matters, procurement reform and human resource management.

- To establish appropriate management structures and "back office" or administrative support.

- To monitor the implementation of the turn around plans and other interventions and also the use of conditional grants.

- To execute mandates related to specific challenges granted by the Provincial Executive and Cabinet.

The IMT is made up of the Director General of the Department of Public Service and Administration, the Director General of the Public Service Commission, Director General of the Eastern Cape and the Head of Department of the Provincial Treasury. The Joint Management Teams for each Department included specialists and consultants from the Department of Public Service and Administration (DPSA), Public Service Commission (PSC), National Departments as well as Eastern Cape senior managers.

1. Preparation for IMT work took place between November 2002 and January 2003:

-Infrastructure was set up and teams were established.

- Legal options were assessed.

2. Problem analysis was done between January and February 2003:

-Partnership arrangements with key stakeholders such as the Joint Anti Corruption Task Team (JACTT) and the Auditor General were structured.

-The impact of previous initiatives was assessed.

-A thorough problem analysis was conducted.

-Opportunities for immediate success were identified.

3. Proposals for the way forward:

-Proposals for all identified problems were offered.

-Priorities were agreed on with the Executive Council.

-Priorities were costed and detailed implementation plans were developed.

-A comprehensive programme management system was developed.

4. Implementation from April 2003 - ongoing

-The visibility of delivery has been celebrated and has contributed to a culture of delivery.

5. Evaluation and exit – until March 2004

-Strategies for sustaining the implementation drive need to be developed.

-Evaluation needs to be done and an exit report needs to be drafted.

The JMT leaders worked together while the Head of Department of the Provincial Treasury (HOD) remained the accounting officer. The roles of the JMTs of each Department are now being assessed to improve their effectiveness.

The tasks of each JMT were to:

- Develop plans and strategies to address service delivery backlogs.

- Identify actions in the following areas:

-Leadership and Management.

-Finance and Administration.

-Human Resource Management.

-Service Delivery.

-Ethics and Cultural Issues.

- Implement the turn around plan of the Department.

The IMT’s operations are emerging as a model for integrated governance with a cross-departmental and cross-institutional sharing of skills and other resources. The IMT functions in close co-operation with and receives support from the following partners and stakeholders:

-The Joint Anti-Corruption Task Team (JACTT), led by the National Director of Public Prosecutions (NDPP). The JACTT and NDPP attend to criminal matters arising from the IMT’s work.

- Intelligence and law enforcement agencies.

- The Special Investigating Unit (SIU).

- Office of the Auditor General.

- The Centre for Public Service Innovation and the State Information Technology Agency (SITA).

- Other national and provincial Departments such as the national Department of Health, South African Management Institute (SAMDI) and the provincial Treasury of the Western Cape, who provide specific or cross cutting support.

The poverty of the Eastern Cape province has a negative impact on service delivery. As in other under-developed regions, there is a high dependency on Government for socio-economic development in the Eastern Cape. The Eastern Cape bears the brunt of geographic disparities from a service delivery point of view. There is an oversupply of planning activity not matched by implementation capacity. Given the lack of widely available alternatives for socio-economic development, Government remains the major provider of:

- Infrastructure development;

- Services;

- Social security, and

- Opportunities that stimulate job creation.

Job creation and increased social security are not happening visibly fast enough.

While there are plans and resources for fast-tracking service delivery in under-serviced areas (such as the eastern region), the implementation of these plans remains frustratingly slow. There is often an inadequate focus on results and too much time spent on process.

Current stakeholder perceptions are negative with regard to the following aspects:

- Quality of leadership and management at departmental level.

- Quality of human resource management practices.

- Financial management and general administrative capacity.

- Ability to uphold ethics and reduce corruption.

- Reliability and dependability of public service to deliver on government priorities.

• Overall effectiveness and efficiency of public service.

Number of interventions being implemented as at December 2002:

Education: 28 different interventions

Social Development: 20 different interventions

Public Works: 13 different interventions

Health: 32 different interventions

- There is a shortage of professional/managerial staff.

- Many managers are in acting positions.

- Human Resources management is weak.

- Financial management capacity is inadequate.

- Communication is poor.

- There are huge gaps between macro plans and operational plans.

- There is a culture of "shifting the blame".

The interventions have focussed mainly on the following areas:

- Human resources (which include performance management, payment of backlogs, salary payments etc)

- Service delivery (specific areas such as the payment of grants)

- Financial resource management (payment of creditors, clearing of suspense accounts, budget reviews)

An analysis of these interventions shows that different stakeholders are supporting similar types of activities. In addition, the repetitive nature of implementing activities may be attributed to the fact that consultants’ contracts are not performance based.

- A change in behavioural patterns is lacking but is critical for the turn-around of the Departments.

- Managers continuously fail to take responsibility and are not displaying a strong sense of accountability. Managers, however, always view systemic inadequacies, interference by unions and stakeholders and historic challenges as the cause of problems.

- While Departments continually receive audit disclaimers, no action is taken against any manager and the problems are therefore never rectified.

- Personal responsibility is therefore continually distorted.

- Unions continue to have undue influence over managers and their decisions especially in Education.

- Very high levels of corruption are reported but there is limited follow through action.

- The culture of ill-discipline and acceptance of the poor work ethic manifests in behaviour such as absenteeism and unjustified demands for overtime pay.

- A culture of entitlement prevails.

- Managers rely significantly on outsiders for work that is normal business: donors and consultants are seen as the only solutions.

- The authority and power of the Tender Board far outweighs its level of accountability.

- The approach of the IMT is comprehensive and integrated in the sense that it addresses both actual delivery and the conditions that make delivery possible.

- Their approach combines Department specific and province wide input.

–There are diverse and cross-cutting challenges that have to be addressed to make departmental delivery successful, for example financial management arrangements in the Province.

- Their approach combines both short and long term solutions.

–Some solutions can be implemented immediately but will only realise benefits in coming financial years.

–Some solutions can be implemented immediately and will realise immediate benefits.

The turnaround strategy to address service delivery backlogs for implementation by the administration of the four affected Departments is a mixture of initiatives in a number of areas outlined in 11.1 –11.9 below. The report sets out the significant achievements which have already been made in many of these areas.

- Decentralising financial delegations back to Departments as from May 1.

- Delegating procurement powers up to R5 million.

- Sourcing back office support for two years based on output based contract.

- Sourcing will focus on financial management, systems, closing of books and expenditure management.

- This would include human resource management and cleaning of PERSAL database.

- Separating the process for document management.

- Financial delegations have been provided to departments in line with decentralisation decisions taken by the EXCO.

- Procurement delegations have been provided to the IMT and Departments with effect from 1 May 2003 and are being used for IMT work.

- Tenders were awarded for Phase 1, which will result in the development of a detailed service level agreement for Phase 2.

- Decentralising the internal audit function.

- Departments would have to have their own Audit Committees.

- The internal audit capacity would be outsourced for the first year while capacity is being developed.

- A common audit plan and strategy for rolling out internal audit was developed

- Decentralisation is to be piloted in four JMT Departments; the tender has been awarded and work has begun.

- Guidelines have been developed and Departments are establishing audit committees.

- Implementation of resolution 7 proposals.

- Filling of vacancies.

- Through a strategy for attracting scarce skills.

- Supporting services companies.

- Through incentives for professionals in rural areas.

- Through internships and a strategy for training people in scarce skills.

- Consultation on resolution 7 plans have been finalised. Affected staff were meant to be informed by August 22.

- The process of filling vacancies is to be concluded by September 2003.

- Increasing management to at least 1% of social departments.

• Competency profiling of all senior managers.

- Performance agreements for senior managers.

• Initiating disciplinary processes for managers based on existing forensic and Auditor General reports.

- Through a workplace based management development programme.

- A competency profile of all managers has been completed and a final report is being prepared.

- Prosecutions for old and emerging cases.

- Through education and awareness programmes.

- Through the use of a hotline

- Through forensic audits.

- Priority projects for six Departments.

- Through a framework for monitoring projects.

-Human resourcing and personnel expenditure.

-District development.

-Performance management.

-Financial services.

-Learning support material.

-Matriculation readiness.

-School nutrition programme.

It was necessary to change the management structure by establishing a project management structure and the infusion of managers deployed from national Departments. An interim Head of Department had to be appointed.

- Improving the management of health services.

- Improving targeted front line health services in Eastern region.

- Improving back office support to health institutions.

The strategy focused on priority projects such as roads and buildings through area wide building and maintenance contracts as well as community based public works programmes.

• To rid the Department of corrupt officials.
• To implement initiatives to remove service delivery bottlenecks, particularly to speed up grants registration and the disbursement of welfare grants.
• To celebrate short-term achievements with aggressive targeted communications.

- A reconfiguration of how the Department interacts with the public – also known as "the front office".

- Helping the Department to make the shift from a welfare to a developmental paradigm.

- A redesign of the Department’s back office, especially setting up a processing center in the Department and establishing a contract management center outside the Department but managed by the Department.

- Budgeting issues are hindering progress but initiatives are underway to solve this problem.

- Some concerns are also emerging with regard to the buy-in of certain Departments in implementing the turnaround plans.

–Departmental and cross-cutting interventions will be funded from savings/underspending.

–Departments are busy finalising these allocations, but are experiencing difficult in balancing ongoing work and commitments.

-The success of the turn-around requires the buy-in and support of Departments.

-Management structures must be revised.

–The co-operative nature of the model requires effective lines of accountability, good communication and funding.

The IMT is concurrently developing a critical structure through monitoring and evaluation mechanisms and effective management structures as well as a dedicated function located in the OTP to drive and monitor the progress after March 2004.

- Some solutions will only realise their full impact over time.

- Sound administrative practices are necessary for high level activities to function well.

- A sound foundation is necessary for effective delivery and possible policy shifts.

- National and provincial Departments should be exposed to new ways of delivery through partnerships, alternative service delivery and through the use of Information Technology (IT)

- In order to complete the delivery chain local government needs to be included in turn around strategies. However, the current legislative framework hampers this integration.

- The cooperative model currently applied in the Eastern Cape has limitations and alternative models need to be available for similar interventions. This requires that interventions mandated by the Constitution, Act No. 108 of 1996, be made possible in flexible legislation.

Report by the Interim Management Team to the Portfolio Committee on Public Service and Administration