Report of the Joint Budget Committee on the Hearings of the Justice and Protection Cluster 2006

1. INTRODUCTION

The Joint Budget Committee identified the Justice and Protection Services’ Cluster for its first oversight exercise on a sector. During the deliberations on the Section 32 monthly financial management on a quarterly basis reports, the Committee identified expenditure patterns which called for more focused engagement with certain departments, to seek among other issues, a further clarification of the relationship between expenditure and strategic outputs and outcomes.

1.1 Joint Budget Committee Mandate

The Committee’s mandate regarding the Medium Term Budget Policy Statement (MTBPS) requires it to consider the distribution of available financial resources for expenditure against government policy priorities. This mandate is distinct from that of the Portfolio and Select Committees on Finance, which deliberate on the macro-economic, fiscal and intergovernmental dimensions of the MTBPS respectively.

The Committee has interpreted its mandate to mean that it should consider:
the likely impact of expenditure allocations in the MTBPS on the effectiveness and efficiency with which departments can respond to government’s stated policy priorities; and
whether departments are making the tough choices required by ensuring planned expenditure is informed by priorities, and choosing effective strategies and pursuing greater efficiency in implementation.

The Joint Budget Committee (Committee) on a regular basis monitors monthly revenue and expenditure as published by the department to determine whether expenditure is in line with budget projections in respect of outputs and outcomes. The intention of the Committee is to explore whether the department’s expenditure encompasses the following principles and best practices:
effective expenditure on identified policy priorities including the principle of value for money;
strong linkages between expenditure and stated objectives in strategic plans;
ascertaining whether strategic plans are measurable, achievable and sustainable; and
identification of critical success factors.

1.2 Process

The Committee conducted the hearings between 14 and 15 November 2006. It planned to hear submissions from the National Departments within the Justice and Protection Services excluding the Independent Complaints Directorate. The Committee also identified the Department of Home Affairs as requiring further scrutiny. After deliberating on the submissions and studying the relevant documents the Committee has made certain recommendations. The Committee expressed its concern that the Department of Home Affairs did not present themselves for the submission as requested. The hearings are a valuable part of the exercise of the Committee’s oversight on the Budget process which include the Appropriations Bill, the Division of Revenue, the MTBPS, the Adjustments Bill and the monthly Section 32 reports which on which the Committee reports on quarterly.

2. DEPARTMENT OF CORRECTIONA SERVICES

The Department of Correctional Services highlighted their strategic objectives during their presentation to the Committee. These strategic objectives are: Master Information Systems Plan, Seven Day Establishment, Integrated Human Resource Strategy, Other Corporate Projects, Human Resource Development, Security Equipment, Management of Remand Detainees, Overall of Social Reintegration, New Generation Correctional Centres and Development and Care.

2.1 Financial management aspects

During the current financial year the Department has focused on several improvements to increase the compliance with internal controls. These improvements were necessary as previous years’ audit reports highlighted queries regarding internal control issues. However the Committee learned that compliance has been improved in internal controls. These include on-site verifications conducted by the departmental inspectorate and Internal Audit Units, as well as the training of managers in logistics and financial management.

According to the adjusted estimates per programme (2006/07), inter-programme shifting of funds occurred. The bulk of the funds shifted were to Compensation of Employees from the Programme Security to align the budget allocation with new approved posts. Inter-programme shifting of funds also occurred from Programme Facilities to Programme Care. The specific shifting of funds came from Goods and Services to finance nutrition under the Programme Care.

From the current state of expenditure per programme, it is clear that after six months of the current financial year, most programmes have been spending more or less the same as the total spending for the vote (41.87%). Only one programme, the Programme: Facilities has spent at 31.96% of its budget by 30 September 2006. In terms of the ENE Baseline Allocations per Programme, this programme has also been allocated 2.21% less from the previous year.

Capacity constraints arising from the non-employment of staff were given by the department as an explanation for the delay in the construction of the Kimberly Prison Facility.

Allocated budgeted funds were insufficient to begin the construction of the New Generation Correctional Centre in Kimberley which the department indicated had led to serious financial challenges. The new design based on the White Paper on Correctional Guidelines required the appointment of private quantity surveyors re-cost expenses relating to the facility. These increased costs and the significant escalation in the price of materials led to the initial estimates projected. The construction and related costs will be incurred over two years and the estimated expenditure for the 2006/07 financial year will be R 180 million.

With reference to the outsourcing of catering for correctional facilities the Department stated that it made more “practical sense while upgrading” and would also “reduce costs”. This would be an interim measure during the installing of the new planning system, training of offenders, and renovations. Consequently a pilot process of mobile kitchens was introduced.

In the Committee’s opinion the achievement of strategic objectives poses a serious challenge to the department which acknowledged that the objectives were too broad, which hindered the measurement of the objectives. The department assured the Committee that they were working on improving the strategic process.

During the current financial year the department has taken proactive steps to monitor expenditure. The monitoring of expenditure became important since the department has in previous financial years surrendered funds to National Treasury. The department has committed to set better time frames and also to ensure improve expenditure management.

A shift occurred in funds from the sub-programme under Programme 4 Care which the department indicated was a consequence of an escalation in medical treatment – thus necessitating an adjustment.

The department confirmed they had experienced problems on extending the Correctional Facilities at Leeuwkop and Pollsmoor. It had withdrawn these plans to build on prime site which had been objected to by the private sector. The department indicated that they were continuing their interaction with the Portfolio Committee on Safety and Security in respect of the announcement of eight prisons in the State of the Nation address during 2000, 2002 and 2006. The Committee was not entirely satisfied with the department’s response that the escalation in terms of costs in the building industry would determine whether four or five facilities announced by the State President 2005, 2006 would be finally constructed.

The Committee intends engaging the department during the fourth quarterly report regarding these costing analysis. The department assured the Committee they it was not their practice to accelerate expenditure in the final quarter.

2.2 Human resource and capacity aspects

Provision has been made in the budget for salary increases of level 6 and 7 personnel. To address the screening constraints experienced, as projected to 2009, the department has established a section to screen staff for selected positions dealing with sensitive documents.

The Committee learned that the integrity of the new IT security system during its implementation had been compromised at Durban Westville Correctional Facility and in some instances staff had caused the system to fail. The department indicated that IT facilities are centralised from head office. It further indicated that not all centres have IT specialists. At present the department has a system whereby the 241 correctional facilities countrywide are connected through a system of five dedicated centres. All centres are connected but not are systems are installed.

The department is in the process of implementing the Balance Score Card (BSC) The department is striving to have the BSC in place through their strategic plans, and would strive towards excellence with implementation.

The department stated that the implementation of the recommendations of the Jali Commission would have financial implications for which funding would have to be sought. However they confirmed that internal capacity had been established.

2.3 Concluding requests and comments on Correctional Services

The issue around budgetary allocations for new Generation Correctional Facilities and other unanswered questions should be responded to within seven days in writing. During the next engagement with the Committee the department should ensure their preparations include the linkages between stated outputs in their strategic plan and expenditure utilised as well as projected expenditure to ensure a more constructive oversight process.

3. DEPARTMENT OF SAFETY AND SECURITY

The department’s should note that the key public spending priorities defined in the Medium Term Budget and Policy Statement of 2006, among other objectives is an emphasis on visible policing and improvement of court case flows.

Spending as outlined in the New Economic Reporting Format Expenditure table shows that current payments at 45.6% appears to be on track. Nevertheless the Committee believes the low expenditure of 21.6% on buildings and other fixed structures gives cause for concern. However it welcomed the department’s 73.1% transfer and subsidies to provinces and municipalities which should support effective and efficient expenditure in these two spheres of government.

The department stated that it was operating under the principle of value for money for projects it was involved in. It had linked the strategic plans with strategic objectives, which are measurable, achievable and sustainable, but that time would really tell if they would be sustainable.

3.1 Financial management

The Committee was impressed with close linkage of the information submitted and responding engagement with the oversight requirement mandate of the Committee. The department pointed out the growth of the budget from R17 billion six years ago to the current budget of R28 billion. During the last financial year the department had a net surplus of only R1 000 which they surrendered to National Treasury which underpins the robust financial management.

One of the innovations to manage the maintenance budget while sustaining the policy priority of effective police response time, was to change the procurement approach for maintenance by giving selected garages permission to work on a threshold basis rather than following the previous tender procedure route. In line with the department’s maintenance model, associated with its assets, the vehicle crime response units were upgraded with a new fleet of cars for the purpose of increasing response time. However the vehicle maintenance budget spent about R1 billion on fuel, which was largely related to global market increases. With respect to improving the response time to crime the Committee believes the department could increase its engagement with the private sector to support its efforts in this direction. Perhaps the relevant Portfolio Committee could also pursue this matter when exercising oversight of the department.

The department assured the Committee that it would be able to spend the funds allocated for the 2010 World Cup, which included the acquisition of Water Canons and Command Vehicles. The department illustrated this with their expenditure patterns for their commitments in the Rugby and Cricket World Cup. Furthermore the experience they would gain from their contract to co-ordinate the security arrangements at the 2007 Cricket World Cup in the West Indies would be of great value. The department reemphasized that expenditure was informed by priorities.

3.2 Human resources and capacity

According to the department, the information technology system is regarded as efficient to indicate staff turnover. It took the South African Police Services four (4) years to develop and locate issues internally. The department has a remuneration system for police officials to improve their quality of life, with incentive systems similar to the merit system in education.

In response to the Committee’s questions on salary challenges and performance the department indicated that the salaries of the police officials who fall between the ranks of constable and senior superintendent has been raised by more than 34% over the last three years. Further all employees have the right to promotion but most importantly the promotion policy of the department is based on performance. Staff must now convince the department of performance, which is in sharp contrast the former practice of automatically promotion of officers.

3.3 Rural location of police stations

Much progress was evident in the linkages between allocative efficiency and expenditure nevertheless the department needed to also link allocations to government rural policy and locate police stations closer to rural people. However the department indicated that often the most suitable location was on land that belongs to the chiefs. The Committee believes that negotiations with chiefs regarding location of police stations in rural areas should be pursued.

4. JUSTICE AND CONSTITUTIONAL DEVELOPMENT

The Department of Justice and Constitutional Development has a history of under spending and has received qualified audits for the last four years. The key challenges highlighted in the MTBPS are the improvement of court case flows, capacity, skills development, administration of justice, the Justice College Programme, the Construction of the new head quarters in Mpumulanga and Limpopo, and the management of Monies in Trust.

4.1 Financial management aspects

At the end of September 2006, the department had spent 38% in terms of current payments. Goods and services, which form part of this category, have the slowest expenditure with 33% expenditure, while compensation of employees spent 42%. Overall, the expenditure department stood at 41% of the budget at the end of six months of the current financial year.

The department has a history of huge under spending and this pattern is not seen as good – last year’s under spending was R1 million, and under spending is projected at R500 000 for the current financial year. The repeat under spending is not good for the department since court services are regarded as the department’s main focus. The Department could not respond to the Committee’s inquiry on its involvement in multipurpose centres (MPC).

Both virements and rollovers occurred during the first six months of the year. The shifting of unspent funds was used to provide for expenditure for a digital network system to the amount of R41.8 million. The digital network system was introduced to replace the old analogue system in courts. R35 million was rolled over to finance X-Ray machines and metal detectors at courts, while R114.8 million was used to fund digital court recording equipment.

Approximately R101 million was shifted from Compensation of Employees and Machinery and Equipment to Goods and Services. The shifting of funds from Compensation of Employees to Goods and Services was as a result of the non-filling of posts. Between programmes, funds were also transferred from Machinery and Equipment to Buildings and Software. Virements for software were as a result of the March payment for software licences.

In response to the Committee’s observation on the high March expenditure patterns the department indicated that the institutions for which they provide services close down during November and December, which led to the expenditure peak in the final financial quarter.

The department informed the Committee that National Treasury had agreed to its need to obtain an emergency certificate to procure the necessary security equipment related to the re-prioritisation of services. However National Treasury had warned the department that this departure from regular tender procedures should not be seen as the norm.

The department also reported that they made payments to psychiatric services, which was later claimed back from other departments, however this may reflect negatively when analysing their financial position.

4.2 Resource constraints including human, equipment and capacity

Insufficient and under-utilised courtrooms contributes to the huge case backlog which department said necessitates an increased budget for capital works. The department confirmed that the Magistrates Commission was looking into 500 to 600 courts. Location of courts in largely urban areas had also contributed to long waiting lists. Lenasia and Protea courts were not easily accessible to the community. The Committee believes that in the short term the department could also explore alternative measures to better utilise existing court facilities with low case loads. The provision of transport and the use of alternative facilities that could be cost effectively converted.

While the Committee acknowledged the difficult working conditions staff are experiencing with no air conditioning, and no proper functioning facilities in some courts, it also believes that if the budget of the department is stringently analysed against its core priorities it may be able to resolve the problems cited in capital works.

With respect to the current HR capacity challenges the department stated that its problems are governance and systemic in nature. It added that it is investigating a shortlisting process and are also considering outsourcing the HR function to respond to the exercise of short-listing of candidates.

However it had employed temporary staff as an interim measure. Retention was also a huge problem especially below the salary 8 level which accounts for the high under-expenditure. In dealing with the management of caseloads and the Court Roll, the department has re-employed retired and recruited new staff in an attempt to bring trial dates nearer in managing of case backlogs. This process is expected to cost approximately R60 million to implement. The department indicated that currently the National Prosecuting Authority (NPA) has been advertising posts.

Notwithstanding the measures already taken the Committee expressed the opinion that the department had not analysed its core business, which the Director-General acknowledged. The type of employee required for the department’s core business, which is advisory services, should be at a higher skills level and administrative in nature. The minimum qualification in the department nowadays is a tertiary qualification with two years experience. To address the currently employed staff, who do not having the degree qualification; the department confirmed that they would be trained through SETA’S accredited training programmes.

Most stenographers became redundant with the implementation of a digital system, however those who could be employed in alternative clerical positions would be retained and re-skilled through SETA programmes.

4.3 General Comments

The Committee recognised that the department was working on matters where they were experiencing major challenges but advised the department to work with the relevant portfolio Committee. The Committee reminded the department that it should prepare to make a submission on either the fourth quarterly expenditure in May or the first quarterly expenditure in the 23006/07 financial year. The Committee also pointed out to the department the need to re-examine their classification of under expenditure as savings in certain line items.

5. THE DEPARTMENT OF DEFENCE VOTE 21

The Department of Defence made submissions to the Committee, but did not have either the executive authority or accounting officer present, which is one of the requirements when accounting to the Committee nevertheless the Committee agreed to continue the process of submission and engagement, but only after warning the department it would not do so again. This is a requirement to comply with the PFMA and also to respect and comply with the constitutional oversight mandate of Parliament.

The Committee also noted that the department had a practice of not attending the MTEF hearings. The Committee also cautioned the department to focus on the strategic plans, objectives achieved and the corresponding budget projections and expenditures associated to programme spending.

5.1 Financial management aspects

The Department of Defence has nine programmes. These include Administration, Landward Defence, Air Defence, Maritime Defence, Military Health Support, Defence Intelligence, General Support, Force Employment and Special Defence Account.

The Committee noted with concern the low spending performance for the two project descriptions in the Programme Special Defence Account, falling below the average spending of 33% for the entire programme. The recorded pattern of 21% has been spent on projects in excess of R15 million as part of the first six months of the year. Likewise, only 16% spend on Special Projects.

A comparison between the total estimated expenditure (2006/07) and the available funds (include adjustments) reveal that an over expenditure is expected in all programmes. The Government Finance System (GFS) classification in terms of the New Economic Reporting Format reveals that an over expenditure of almost R21 million is expected for Compensation of Employees. A protracted procurement process has delayed expenditure in Goods and Services for approximately R18 million.

The Committee noted that an expected over expenditure is anticipated for which no funds are available despite the provision made for transfers to foreign governments and international organisations, The department explained that this over expenditure will be offset by a saving in the transfers to public corporations and private enterprises for the same amount. Under expenditure as shown through the cash flow report is due mainly to the delayed payment of goods and service the integration of logistics systems, and the industry’s capacity to deliver maintenance and repair services for B-Vehicles.

In the previous financial year the department’s capital expenditure programme of R72 million was spent on prioritised capital projects. This year department increased its expenditure to R74 million due to the nature of the built environment in terms of cost escalations. At present the department has two projects administered by Public Works, which will result in a slight rollover.

Facilities have been devolved from Public Works to the Department of Defence however with regard to Municipal Services for which the department receives R80 million the department hopes to receive an equitable return but Public Works is not yet in a position to confirm the allocation of funds. As the department is the custodian, it is liable for payment. The department is in the process of working with Public Works to ensure that its priorities are taken into consideration.

The Department of Defence has numerous strategic plans. One of the key issues in the department is dealing with the complex costing nature of defence-related budgets. This is as a result of the challenge the department faces due to its heavy reliance on technological developments in the defence industry. This reliance on the defence industry developments requires that the budget baseline figures should be amended so as to make provision for new developments and to help facilitate the costly operation of new defence systems.

The department stated that sale of goods and services refer to equipment of S.A. armoury, Caspirs, normal vehicles, aircraft, spares from the navy, and the SAS Outeniqua.

The disposal of assets by the department is a fairly standard process when it relates to furniture and office equipment through auctions. However in relation to other military equipment, Armscor processes the disposal of aircraft and military vehicles. When acquiring items from foreign countries the department is contractually bound to do it through the National Conventional Arms Control Committee (NCACC), who approves the sale and/or disposal of assets. Due to the scale of activities the department had to start a Directorate for the NCACC and assigned a manager responsible for this.

Transfers from the department comply with legislation and is VAT compliant. Armscor transfers funds to a government department; the government department transfers out and the Department of Defence then charge VAT.

The department confirmed that its internal audit systems are in place, reporting to the audit Committee on a quarterly basis.. Reporting to the budget Committee happens monthly. The department’s logistics agency is responsible for monitoring the internal systems. With inspectors to ensure that the necessary structures and logistic training are in place. Internal audits of systems are conducted. The department has contracted a training company at a cost of R70 000 to train internal staff on the new system. It also confirmed that an objective Committee is in place consisting of internal and external personnel for the internal audit process.

The department has received qualified audits for the past five years and cannot do much about it. In response to the Committee’s inquiry as when it could expect an unqualified audit report the department stated it was not expecting one in 2007. In explanation the department pointed out that the new expenditure and systems implementation challenges associated with arms procurement, specifically naval vessels, posed problems with other costs, such as the need for more navigation time, increased training time, and increased fuel consumption.

National Treasury had informed the department that the Integrated Financial Management System (IFMS) will be provided to the department and that therefore the department should not be spending funds on a new accounting system. The new system will only be implemented and ready for use by 2015. The department concluded by stating that these equipment resource constraints impeded progress towards achieving an unqualified audit. The Committee did not accept that there was nothing the department could do to overcome this challenge and advised the department that it would be engaging them further and also National Treasury.

The department stated that it performs an agency function when it comes to the UN payments. The Department of Defence receives these payments but the funds are paid over to the National Revenue Fund. The Committee intends seeking further clarification on how this system works within the PFMA. The department stated that the budget allocation for the Sudan Peace Support Operation was R95 million. All Peace Support Operations’ budget allocations totaled R836 million. The Sudan Peace Support Force budget projections were inaccurate due to the practical problems encountered in the field. The department projects a shortfall at the end of the financial year, given experiences of unaccounted for allocations previously when conducting field operations. The shortfall encountered by the department was finally sourced from its internal budget.

The department projects some losses due to differences in the accounting doctrines of the UN and South Africa, but the department is attempting to control losses. Future Peace Support Operations will hopefully be linked to a computerised system.

The department explained that for a typical 10-year deployment they under estimated by 40%. A factor contributing to under estimating their budget was the nature of Peace Support Operations, which needed to be, met immediately the political directive was issued.

The Committee recognised the challenges posed by peace keeping operations and advised the department to develop a risk model that could be used for such spending priorities be scrutinised by the department. It intends engaging the department on this issue during the Fourth Quarterly Report deliberations.

The department has a proactive programme focused on preventative maintenance, and new facilities development. The department has identified mission critical areas relating to the upgrading of military hospitals and large projects such as the upgrading of Waterkloof Airbase. The final phase of completing the Thaba Tshwana Hospital is scoped within an 18-month period. An amount of R50 million has been allocated for the upgrading of Military Hospitals 1, 2, and 3. The Committee stated that it would follow these commitments in the next Quarterly Report.

The department said it faced capacity issues on the technology provision side, which were mainly due to contractors diverting their attention to high-profile projects such as Gautrain. The department is liaising with the Department of Foreign Affairs for the timely, rather than annual, submission of invoices for payment of the Foreign Affairs Military Officers’ VIP protection programme. This will improve cash flow.

5.2 Human resources and capacity aspects

The department has embarked on a programme to acquire scarce technical skills. The department has programmes in place to build scarce technical expertise skills, which has implications on the budget. A proactive measure is making bursaries available in the areas of scarce technical skill.

The human resource challenges that the department experiences are no different from those faced by other departments when it comes to staff mobility. The department acknowledges that it is unable to compete with the larger salaries of the private sector. Despite the public official contractually bound for contract period, firms do not find it difficult to buy the official out of the contract with the department.

There are various incentive schemes in place to retain scarce skills for placement in rural areas, especially for Navy officials. The Department realises that incentive schemes are not enough. The environment officials work in, plays a huge role in retention strategies. The department pays the tertiary studies of staff, expressing interest in enhancing skills of its existing employees. The department is currently conducting research with international institutions to find out how these institutions succeed in retaining staff. The inflexibility in the budget was regarded as a problem that impacts on the department’s ability to retain staff. The department is developing the internship programmes to enhance the acquisition of new skills.

The department is in the process of capacity development by aligning capabilities from defensive to supportive. One aspect is the alignment of the accounting systems, which were manually operated before. In general, the defence capabilities were not ready for supportive operations abroad through its internally computerised system. Other practical problems, such as little or no electricity supply in the Burundi mission, further highlighted the department’s capability challenges.

The department has not addressed investments in information and communication technology (ICT) fully or running the PERSAL system. In the area of logistics management, the department is running separate systems of the different segments, such as the Army and Navy. These systems are based on cash accounting, while other government entities have progressively moved towards accrual accounting systems. The department intends to pilot a new system for logistics, and lessons learned here would serve the implementation of systems in other areas. There are projects underway to integrate electronic maintenance and cooperation of all systems.

The department stated that the situation with the protracted procurement process is a difficult one as the department shares it logistically with other departments. The approval needed at various levels poses a constraint to the department. The department is busy recording suppliers on its supplier database to facilitate the procurement system, which is still being developed. The department’s asset register is a major challenge and deals with the reconciling of the 10 or more systems used by the various segments of the department. The department is in the process of ensuring a more accurate register. Part of the reason for the inaccurate asset register was the size of the department when the transformation process started.

5.3 General Comments

The Committee noted that further follow-up on this will have to be conducted with regards to the payments for UN and other peace support operations as accounted for in the MTEF.

The Committee noted that although the department has correctly identified its spending priorities, the department struggles to effectively strategise in terms of allocations to these priorities.

The Committee also noted that the department seems to fail to plan properly for the implementation of some of its programmes and that there are no apparent plans or procedures in place to remediate this lack of planning.

In its closing remarks, the Committee noted that clarity must be provided on issues the department is not clear on. The Committee assured the department that they will keep an eye on the budget and that the line is closed if they were to ask for more funds.

The Committee referred to the graphical representation by the department to explain the 2006/07 cash flow in detail. The Committee noted that it is always best to show information against a baseline measurement.

6. CONCLUSION

The mandate of the Committee is to scrutinise the budgetary implications of service delivery. It would be in the interest of departments to gain a better understanding of this mandate to enable them to be better prepared for future engagements with the Joint Budget Committee.

Financial Management problems proved to be an over-riding challenge in all the departments that presented in this cluster. In performing its oversight role, the Committee will continue to track the expenditure patterns of departments in this cluster. This will be done thorough the relevant monthly expenditure reports and the Section 32 reports on a quarterly basis. The principle of accountability and transparency which is the foundation of good fiscal governance, should inform expenditure management, asset management and revenue management to ultimately achieve more robust financial management and leading to improved service delivery.

Financial management problems proved to be an over-riding challenge in all the departments that presented in this cluster. In its oversight the Committee will continue to track the expenditure patterns of departments in this cluster closely through the relevant Section 32 monthly expenditure reports on a quarterly basis. The principle of accountability and transparency which is the foundation of fiscal good governance in departments should inform the management of allocations and expenditure to achieve more robust financial management leading to improved service delivery.

The Joint Budget Committee studied the relevant Sector Committee reports on this cluster to achieve better oversight over the cluster and it believes its own report would be of value to the same Sector Committees. The Committee appreciates the presence of the Head of Departments that attended the hearings on the Security Cluster and urged all departments to send their highest level of delegations in future; preferably the executive authority and/or the accounting officer as prescribed by the PFMA. Departments can anticipate further constructive engagements with the Committee. Furthermore, departments should strive towards conforming to the reporting requirements of the PFMA and the Committee. The Committee thanked all departments for its sincerity in reporting to the JBC during these hearings.

7. RECOMMENDATIONS

7.1 Robust implementation of Financial Management and compliance with the PFMA to achieve more effective outputs leading to efficient delivery and services should receive greater focus particularly in the areas of:

Internal controls
Cash flows
Tracking of expenditure commitments
Supply chain management checks and balances
Asset registers
Allocation and monitoring of all resources including human capital, buildings and equipment ensuring quality assurance
Development of financial management systems, procedures and processes

7.2 The Human Resource capacity challenges relating to departments in the Security Cluster requires the urgent development of measures to retain skilled staff, and to capacitate if necessary re-skill existing staff to overcome current constraints to service delivery.

7.3 Inter-departmental and inter-governmental co-ordination and co-operation should be strengthened.

7.4 Measurable objectives should be developed within the strategic plan to support more effective and efficient expenditures. A more robust monitoring system should be developed that tracks achievement of outputs against expenditure Departments that have not already done so should develop a risk management model that can assist it in managing its cost drivers in dealing with other expenditure challenges.

Report to be considered.