ATC231128: Report of the Joint Standing Committee on the Financial Management of Parliament on the Parliament of the Republic of South Africa’s 2022/23 Annual Report, 28 November 2023

Joint Standing Committee on Financial Management of Parliament

Report of the Joint Standing Committee on the Financial Management of Parliament on the Parliament of the Republic of South Africa’s 2022/23 Annual Report, 28 November 2023

The Joint Standing Committee on the Financial Management of Parliament, having considered the Parliament of the Republic of South Africa’s 2022/23 Annual Report, reports as follows:

1. Introduction

1.1 Section 4 of the Financial Management of Parliament and Provincial Legislatures Act, No. 10 of 2009 (FMPPLA) provides for the establishment of an oversight mechanism to maintain oversight of the financial management of Parliament. The Joint Standing Committee on the Financial Management of Parliament (the Committee) was established in terms of the Joint Rules of Parliament. The Committee has the powers afforded to parliamentary committees under sections 56 and 69 of the Constitution of the Republic of South Africa, No 108 of 1996 (the Constitution). In addition, section 4 of the FMPPLA mandates the Committee to, amongst others, consider Parliament’s Annual Report.

1.2 Parliament’s 2022/23 Annual Report was tabled on 31 August 2023 and referred to the Committee on 1 September 2023. The Executive Authority presented the annual report to the Committee on 3 November 2023. On the same day, the Committee received briefings from the Auditor-General of South Africa (AGSA), and the Secretary to Parliament—the accounting officer—supported by the institution’s senior management team.

1.3 This report should be read along with Parliament’s 2019-2024 Strategic Plan, the 2022/23 Annual Performance Plan and budget, the institution’s 2022/23 Annual Report, as well as the Committee’s quarterly reports on the institution’s performance in the financial year under review.

1.4 This report comprises five parts: Part A, containing the background to the institution’s performance in the period under review; Part B, containing a summary of the institution’s financial and performance information for the period under review; Part C, containing the AGSA’s key findings; Part D, containing the Audit Committee’s observations; and; Part E, containing the Committee’s observations and recommendations.

Part A: Background

2. Mandate

2.1 Parliament derives its mandate from:

-chapter 4 of the Constitution, which sets out its composition, powers and functions;

- the FMPPLA which regulates the institution’s financial management;

- the Money Bills Amendment Procedure and Related Matters Act, No. 9 of 2009 which provides procedures to amend money bills; and

- the Powers, Privileges and Immunities of Parliament and Provincial Legislatures Act, No. 4 of 2004 which defines and declares the national and provincial legislatures’ powers, privileges and immunities.

2.2 Mission and Vision

2.2.1 The institution has identified six values according to which it conducts its business i.e. openness; responsiveness; accountability; teamwork; professionalism; and integrity.

2.2.2 In pursuit of its vision to be “activist and responsive” so as to improve the quality of life in South Africa and to ensure enduring equality, the institution has, as its mission, to provide:

- a vibrant people’s assembly that intervenes and transforms society and addresses the developmental challenges of the people;

- effective oversight over the Executive by strengthening its scrutiny of actions against South Africans’ the needs;

- the participation of all citizens in the decision-making processes that affect South Africans’ lives;

- a healthy relationship between the three arms of the State in order to promote efficient cooperative governance, and to ensure appropriate links within the region and the world; and

- an innovative, transformative, effective and efficient parliamentary service and administration that enables Members of Parliament to fulfil their constitutional responsibilities.

2.3 Strategic Priorities: 2019-2024

2.3.1 Having taken into account Parliament’s budgetary constraints in the face of South Africa’s poor economic performance and the low growth forecast, Parliament identified only two strategic priorities for the Sixth Parliament: to strengthen oversight; and to enhance public involvement in Parliament’s activities.

2.3.2 In order to achieve the above outcome, the Sixth Parliament will:

- improve committee oversight work in relation to the budget cycle in particular, through allowing more time in the parliamentary programme for oversight activities and encouraging committees to undertake joint oversight activities; and

- improving the effectiveness of public hearings through greater public participation by expanding public education, better dissemination of information, effective use of broadcasting, technology and social media, the use of more official languages, and encouraging committees to undertake joint public hearings.

2.3.3 To aid the above activities, the institution will:

- enhance research and legal support in respect of oversight activities;

- improve members’ capacity through capacity-building programmes that will empower parliamentarians to be effective and efficient in executing their oversight responsibilities;

- improve oversight and accountability through better monitoring, tracking and evaluation in respect of Parliament’s own work, as well as the work of the Executive;

- ensure openness and accessibility through the use of modern technology in respect of social media, tools-of-trade, workflows and automation; and

- cut costs to allow for operational sustainability.

Part B: Performance in 2023/24 Financial Year

3. Performance across programmes

Parliament performed at 100 percent in 2022/23 financial year meeting all the targets. The institution set nine performance indicators to measure its performance based on overall Members satisfaction the outcome of which is captured below.

3.1 Annual Performance Plan Indicators

3.1.1 As stated above the Annual Report is based on the tabled 2022/23 APP which was aligned to the Sixth Parliament’s Strategic Plan.

3.1.2 The Parliamentary Service provides the support services required by Parliament and its members to effectively fulfil their constitutional functions and obligations. For Parliament to be effective and efficient, and to achieve its objectives, the parliamentary service must provide these key inputs: members’ capacity building, advisory and information services, and facilities and support services utilised in the institution’s activities.

3.1.3 Client satisfaction with services was measured through a survey conducted quarterly with all parliamentarians. Direct feedback was provided about where services could be improved. Services were rated along five dimensions most statistically correlated to client satisfaction: usefulness, reliability, timeliness, ease of access, and for core business services, the dimension of fairness. The results were an average of the feedback received.

3.2 Programme 1: Administration

3.2.1 Programme 1 provides strategic leadership, governance, management, corporate and support services to Parliament, and comprises the following sub-programmes: Executive Authority, Office of the Secretary, and Corporate and Support Services It consolidates three former programmes i.e. Strategic Leadership and Governance, Administration and Support Services.

3.2.2 The administration had identified the following key focus areas for 2022/23:

- addressing the future way of work through the development of a new business model for the Parliamentary Service;

- redesigning and optimising core and support business processes through technology;

- upskilling and re-skilling programmes especially in relation to the effective use of technology;

- specialised skills programmes for expertise and specialisation;

- continuous innovation and improving of processes and skills, allowing for co-creation and value adding;

- integrating service offerings through a collaborative approach where service recipients are offered a holistic response;

- providing policy, tools and facilities for remote conditions; and

- implementing virtual meetings and collaboration platforms.

3.2.2 As illustrated in the table below, targets in respect both indicators under this programme were exceeded.

Parliamentary Service	Indicator	Annual target	Annual Performance	Variance	Reasons for Variance/ Mitigation
Digital service	% Member satisfaction	80%	85,15%	+5,15%	Useful and reliable service
Facilities management service	% Member satisfaction	75%	78,57%	+3,57%	Useful and timeous service was

Table 1: Support Services (Source: Parliament of the RSA)

Digital Support Services

3.2.3 Through its digital support services, the administration aimed to improve the provision, usage, and management of information to meet the information and communication needs of parliamentarians, staff members, and the public.

3.2.4 ICT, broadcasting, and audio-visual services enabled virtual and hybrid plenary sittings and committee meetings via television and digital streaming. These services also enabled oversight activities such as questions for executive reply, members’ statements, notices of motion, mini-plenaries and debates, constituency work, and oversight visits. Broadcasting and audio-visual services were also provided to public hearings held by committees.

3.2.5 The parliamentary website is one of the institution’s primary digital communication platforms. In the period under review the website was available 99.86 per cent of the time to the benefit of the public, citizen interest groups, parliamentarians, and the administration. Parliament’s back-end broadcasting infrastructure was damaged during the January 2022 fire however equipment was hired to enable the broadcasting and/or hybrid broadcasting of committee meetings. Members of the public were able to follow proceedings of the National Assembly, National Council of Provinces and virtual committee meetings live on Parliament TV (DSTV Channel 408), via livestream on Parliament’s YouTube channel, Facebook, and X (formerly Twitter) pages.

3.2.6 In the period under review parliamentarians were provided with technical support as well as the following devices: mobile phones (260), laptops (323) and tablets (329).

3.2.7 In the period under review, Parliament made significant progress as far as digitising and transforming core processes through the rolling out of the oversight monitoring and tracking system, the house resolution tracking system; and the legislative drafting system. The project to modernise committee rooms and the NCOP chamber was also initiated.

3.2.8 The average availability of the network and key systems and applications such as the enterprise resource planning (ERP) system, email, intranet website, the uVimba electronic document management system and Bungeni Parliamentary Information System, was 99,91 per cent. The development of an offsite disaster recovery system was in progress, and life cycle management of institutional end-user tools for staff members was ongoing.

Facilities Management Support Services

3.2.9 Space utilisation remained a significant challenge which necessitated a review of the space utilisation plan, and the finalisation of the remote work policy. The relocation of parliamentarians to the sixth floor of the 90 Plein Street building following the January 2022 fire was completed. An additional 70 offices were allocated to various political parties that were also impacted by the fire. The NCOP was declared safe for occupation and the process of relocating stakeholders there was initiated.

3.2.10 Parliamentarians were transport between the parliamentary villages and the parliamentary precinct, and transport services were provided for staff members for various reasons including work activities, and movement of tools of trade, furniture and goods.

3.2.11 The security enhancement project was initiated to improve security on the precinct and to extend the boundary fence. Building security was provided through patrols, inspections and monitoring facilities. The screening, vetting and the processing of the pre-screening applications of all shortlisted candidates were facilitated as required.

3.2.12 Various additional upgrades were implemented in the period under review including improvements to catering facilities and the refurbishment of members’ consultation rooms.

3.3 Programme 2: Legislation and Oversight

3.3.1 Programme 2 provides for support services for the effective functioning of the National Assembly (NA) and the National Council of Provinces (NCOP) including procedural, legal and content advice; information services and record keeping; and secretarial and support services for the houses and their committees. The programme covers the core business of Parliament and focusses on the outputs, activities and inputs related to legislation and oversight functions.

3.3.2 The programme comprises the following sub-programmes: NA (House; Committees); NCOP (House; Committees); Public Participation and External Relations; Shared Services; Sectoral Parliaments and Joint Business.

3.3.3 As of 2021/22 Parliament implemented a new programming framework with a shift towards dedicated constituency, committee and plenary weeks. The new framework was intended to facilitate scheduling of joint committee and joint inter-sectoral work.

3.3.4 Table 2 below illustrates performance across this programme.

Parliamentary Service	Indicator	Annual target	Annual Performance	Variance	Reasons for Variance/ Mitigation
Programming Service	Number of annual parliamentary frameworks adopted	1	1	0	n/a
	Number of NA programmes adopted	4	4	0	n/a
	Number of NCOP programmes adopted	4	4	0	n/a
Capacity Building Service	Percentage members satisfaction	70	74.31	+4,31	Useful and easy to access service was provided
Research service	% Member satisfaction	75	80,32	+5.32	Useful and fair service was provided
Content advice service	% Member satisfaction	75	79.99	+4,99	Reliable and easy to access service was provided
Procedural advice service	% Member satisfaction	75	77.05	+2.05	Fair and reliable service was provided
Legal advice service	% Member satisfaction	75	76.08	+1.08	Easy to access and timeous service was provided
Committee support service	% Member satisfaction	75	82,77	+7,77	Timeous and easy to access service was provided
Public Participation Service	% members satisfaction	75	75,28	+0,28	Reliable and easy to access service was provided

Table 2: Programme 2 performance (Source: Parliament of the RSA)

Programming Service

3.3.5 Programmes are an essential tool in facilitating the smooth coordination of activities of the NCOP, NA, provincial legislatures and (SALGA). All targets in relation to the programming service were met.

Capacity Building

3.3.6 New controls and administrative processes were implemented to ensure the effective administration of bursaries and training for parliamentarians. This included progress on the capacity-building framework, preparation and consultation on the revised capacity-building policy, and the implementation of a client engagement and ticketing model. Additionally, after the successful launch of the South African Parliamentary Institute (SAPI), a curriculum framework and operational plan was completed.

Research Service

3.3.7 Research services are aligned to the parliamentary programme and entailed support to committee oversight visits, committee processes, proceedings of the NA and the NCOP which included reactive and proactive research services and products. This support was provided to individual parliamentarians, programmes of the NA and the NCOP and their committees, sectoral parliaments (youth and women’s parliaments), and parliamentary projects. In the period under review 1 185 research papers were provided, most in support of oversight and accountability activities.

Content Advice and Committee Support Services

3.3.8 Committee support is provided in multiple varied ways including with outputs relating to the approval of annual budgets and performance plans of the departments and their entities, the assessment of the performance of these entities using the budget review and recommendations report (BRRR) processes. Support was provided for the 75 oversight visits, 1 300 committee meetings, statutory appointments, scrutiny of quarterly and annual reports, processing of 28 bills, parliamentary enquiries, interventions, 198 public hearings, processing of 7 petitions and submissions, as well as international relations related activities.

Procedural Advice Support Service

3.3.9 Procedural advice support service was provided in relation to correspondence, rulings and requests, as well as for House resolutions and research.

Legal Services Support

3.3.10 Legal support took the form of advice given to committees in the legislative process as well as for programming support. For the period under review 33 legal opinions were completed and provided to committees, 31 bills were introduced, 22 act forms were submitted to the President for assent, and 3 acts were submitted to the Constitutional Court for safekeeping.

Public Participation

3.3.11 Public participation interventions were implemented and focussed on the delivery of public education and information programmes, empowering the public to participate in parliamentary processes, mobilising public stakeholders, and capitalising on the use of digital and preferred platforms. In the period under review 198 public hearings were undertaken.

3.4 Programme 3: Associated Services and Transfers

3.4.1 Programme 3 provides facilities and financial support for political parties including leadership, administrative and constituency support; and transfer payments to entities in Parliament. The programme comprises the following sub-programmes: Members’ Facilities; leaderships, administrative and constituency support to political parties; and transfer to the Parliamentary Budget Office (PBO). No performance information is reported under this programme.

Members’ Facilities

3.4.2 Parliamentarians were provided with travel and communication facilities in a manner that was accessible, effortless, accurate and friendly. Internal processes were adjusted to support the changed working conditions and services were managed through a mix of onsite and offsite capabilities. Remote working conditions created the opportunity to explore modern digital solutions, offering greater ease of use and seamless service offerings irrespective of location.

3.4.3 In the period under review the turnaround time for claim processing and reimbursement averaged 1.98 days, with R19.8 million paid out on more than 26 000 claims. Claim volume increased by 44 per cent on the previous year, and the turnaround time improved from 2.15 average working days to 1.98 days.

3.4.4 Air travel ticket volume increased by 3 per cent in the period under review i.e., 21 542 tickets were booked. The cost of air tickets, which has increased by an estimated 40 per cent in 2022/23, significantly impacted expenditure.

3.4.5 Bursary ceilings were changed from an annual limit to a limit per qualification. Parliament funded bursaries to the amount of R2 million. By the time of reporting 51 parliamentarians had already benefited from such bursaries.

Financial and administrative support for political parties

3.4.6 Section 57(2)(c) of the Constitution permits that political parties may receive financial and administrative assistance. Funds are transferred to political parties represented in Parliament in proportion to their representation, in terms of section 34 of the FMPPLA and the policy on political party allowances. The following assistance was provided through transfer payments to political parties: party leadership support; administration allowance, and constituency allowances.

3.3.7 Political parties are required to submit audited financial statements for the previous financial year, to confirm that the funds they received were spent for the purposes they were allocated for. The amounts not spent for the purpose intended were withheld from the current year allocations.

Parliamentary Budget Office

3.3.8 The Parliamentary Budget Office (PBO) is a juristic entity of Parliament headed by a director as its accounting officer. It was established in terms of section 15 of the Money Bills Amendment Procedure and Related Matters Act, No 9 of 2009. The PBO reported on its performance in its own 2022/23 Annual Report which the Committee will report on separately.

Office of Institutions Supporting Democracy

3.3.9 Institutions Supporting Democracy (ISD) tabled substantive reports which were referred to the relevant parliamentary committees by the Speaker of the NA and/or the Chairperson of the NCOP, for consideration and/or report. The rules of both the NA and the NCOP stipulate that committees were authorised to determine their working arrangements. Referrals of such reports were therefore not usually accompanied by instructions to report back or to take specific action unless there was a legal requirement to do so or where there has been a special request in that regard.

3.3.10 In the period under review 26 substantive reports were tabled by the Commission for Gender Equality (8 reports), the AGSA (8 reports), the Public Service Commission (6 reports) the Independent Electoral Commission (1 report) and the Public Protector of South Africa (3 reports).

4. Financial performance

4.1 Budget vs Expenditure

4.1.1 Table 3 below illustrates the institution’s budget versus its actual expenditure.

Line Item	Final Budget R‘000	Actual Amounts R‘000	Variance R’000	Variance in percentage
Compensation of employees	1 286 842	1 213 721	73 121	6%
Compensation of Members	471 709	538 247	-66 538	-14%
Goods and services	751 137	503 686	247 451	33%
Transfer to non-profit organisations	518 572	513 782	4 790	1%
Acquisition of Property, plant and equipment	36 572	13 865	22 707	62%
Total	3 064 832	2 783 301	281 531	9%

Table 3: Budget vs Expenditure (Source: Parliament of the Republic of South Africa presentation to the JSCFMP, 2023)

Compensation of employees

4.1.2 The 6 per cent underspending on compensation of employees was the result of terminations during the year, and delays in filing critical vacant positions, delays in the finalisation of the Voluntary Early Retirement, as well as the non-payment of performance bonuses. As Parliament is not required to surrender unspent appropriated funds, the unspent funds have been allocated to the 2023/24 budget. Parliament is prioritising the timely filling of critical vacancies and therefore does not anticipate underspending in the 2023/24 financial year.

Compensation of members

4.1.3 The 14 per cent overspending was due to the payment of loss of office and exit gratuities to retired/resigned/deceased former parliamentarians, over and above the payment of the salaries and benefits of current parliamentarians. This amount was claimed from the national revenue fund (NRF) in terms of Section 23(4) of the FMPPLA, and was received in August 2023.

Goods and services

4.1.4 The 33 per cent underspending in respect of goods and services was mainly the result of delays in finalising and spending on the disaster management project, and delays in spending in line with operational plans. The amount was made available for spending in the 2023/24 financial year as part of the retained earrings. The administration has established a finance committee where divisions will, going forward, and to prevent underspending, present their performance against the allocated funds.

Transfers to non-profit organisations

4.1.5 The 1 per cent underspending was the result of an increase due to represented political parties only being paid in April 2023, instead of by the end of March 2023. In addition, one political party did not receive its transfer as it had failed to submit its audited annual financial statement of the previous year. To prevent future underspending, increases will be paid within the financial year. Financial support to non-compliant political parties will continue to be withheld.

Acquisition of property, plant and equipment, purchase of intangible and heritage assets

4.1.6 The 62 per cent underspending was due, in part, to assets delivered close to year-end only being paid in the new financial year. The amount owed for these assets was accounted for as part of payables from exchange transactions and was paid in the current financial year. A delay in finalising and spending in respect of the disaster management project also contributed to the underspending. The funds will be reallocated to this project in the 2024/25 financial year. It is anticipated that the monthly reports to the above-mentioned finance committee will contribute to preventing underspending.

4.2 Summary of Financial Position

4.2.1 The institution’s non-current: employee benefit contribution decreased from R1,637,495 billion in the previous year to R1,619,529 billion in the period under review.

Post-retirement medical aid benefit

4.2.2 The employee benefit relates to the post-retirement medical aid plan for all members of Parliament and provincial legislatures, and pensioners who belong to the Parmed Medical Aid Scheme (Parmed). Expenditure in this regard decreased from R1, 262,843 billion in 2021/22 to R1, 214,757 billion in 2022/23. The decrease is the result of a reduction in the number of terminations.

4.2.3 In 1999 Parliament approved that the medical aid contribution for former Members of Parliament and Provincial legislatures would be borne by Parliament. It is for this reason that Parliament currently finds itself in a net liability amounting to R1,125,074 billion. Parliament has engaged National Treasury on this matter on numerous occasions to request it should take over the management and payment of the post-retirement medical aid benefit. These engagements have not borne any fruit.

4.2.4 With the liability, Parliament’s financial position is as follows: non-current liabilities at R408 015 million; current assets at R696 643 million; on-current assets at R122 145 million; and current liabilities at R321 090 million. Without, the financial position would be much improved: non-current liabilities at R1 622 772 billion; current assets at R696 643 million; on-current assets at R122 145 million; and current liabilities at R243 872 million.

Members loss-of-office gratuity

4.2.5 Eligible members of the NA, or permanent delegates who have served five or more years and whose terms of office have ended were entitled to a once-off gratuity benefit equal to four months’ pensionable salary for every five years of service, or a pro-rata part thereof. The 21 per cent increase from R155,415 million in 2021/22 to R187,711 million in 2022/23 was due to an increase in the years of service of members, changes in discount rates, and salary increases.

Exit gratuity

4.2.6 An exit gratuity was payable to eligible parliamentarians who were members of the Political Office Bearers Pension Fund and who exited the fund before or because of the 2019 general elections. The gratuity was calculated as the difference between the value payable based on the new rules and the value payable in terms of old fund rules. This amount increased by CPI each year until it was paid to a member when they exit the fund. The increase of five per cent from R159,702 million in 2021/22 to R168,365 million in 2022/23 is inflation-related.

Post-employment travel benefit

4.2.7 Parliament provides domestic travel benefits to former members, former executives (ministers and deputy ministers) and their spouses. Beneficiaries are given a set travel allocation valid for each calendar year, with the benefit coming into effect on the first day following the date on which they relinquish their office. Unused allocations were forfeited and were not carried over to the next year. The decrease of 25 per cent from R49,178 million in 2021/22 to R 36,699 million in 2022/23 was due to decreases in the average utilisation per annum assumptions and increase in discount rate assumptions.

Long Service Awards

4.2.8 Long service awards were a reward for employees for the years of service to Parliament. An agreement between management and organised labour determined that as of 1 April 2019 employees would be rewarded through a fixed monetary value based on their years of service. The 15 per cent increase from R10 357 million in 2021/22 to R11 997 million in 2022/23 was due to increases in average age as well as past years of service.

4.3 Irregular, and Fruitless and Wasteful Expenditure

Fruitless and wasteful expenditure

4.3.1 The 45 per cent decrease in fruitless and wasteful expenditure, from R53 000 in 2021/22 to R29 000 in 2022/23 was due mainly to the R52 thousand in interest and penalties for late payment to SARS that was reversed and refunded by the revenue service when the filing for prior years was corrected.

4.3.2 New cases of fruitless and wasteful expenditure were identified in the period under review, related to vehicle hire damages and interest. These cases were before the Governance Committee for investigation and recommendation in respect of for actions to be taken.

Wasteful expenditure

4.3.3 The decrease in wasteful expenditure from R2 134 million in 2021/22 to R124 000 in 2022/23 was due to the reclassification of the prior year’s irregular expenditure to receivables (because it had been received from the represented political parties in April 2023). The 2022/23 instances of wasteful expenditure related to transactions that were processed without the necessary approvals. At the time of reporting these cases were before the Governance Committee for investigation, and recommendation for remedial actions to be taken.

Part C: Report of the Auditor General of South Africa

5. Audit Outcome

5.1 Parliament achieved its ninth successive clean audit. The Auditor-General having audited the institution’s financial statements found that the financial statements present fairly, in all material respects, the financial position of Parliament as at 31 March 2023. The financial performance and cash flows for 2022/23 were in accordance with the Standards of Generally Recognised Accounting Practice (GRAP) and the requirements of the Financial Management of Parliament and Provincial Legislatures Act 10 of 2009 (FMPPLA).

Part D: Report of the Audit Committee

The Audit Committee is an independent statutory committee established in terms of section 47 of the FMPPLA. The Committee’s terms of reference are formalised in the Audit Committee Charter as approved by the Executive Authority. Overall, in the period under review, the Committee operated in terms of its mandate as set out in the FMPPLA and the Charter.

6. Concerns and recommendation

6.1 Internal control framework and Information Communication Technology (ICT) Governance

6.1.1 The audit committee reviewed the management reports, and the reports of the internal and external auditors on the design, implementation, and effectiveness of the systems of internal controls. Based on the reasonable assurance provided by management, the internal audit unit, and the AGSA, no material breakdown was reported in the system of internal control. The Committee was satisfied with the resilience of internal controls over supply chain management and fraud risk management. The audit committee encouraged continued efforts to improve controls over information and communication technology (IT) and institutional performance management processes.

6.2 Risk Governance

6.2.1 Parliament was guided by the enterprise risk management framework. The management of the institution was ultimately responsible for maintaining an effective risk management process. A risk management committee comprising senior managers was in place.

6.2.2 The audit committee was concerned, however, about the lack of capacity to ensure implementation of a robust risk management programme for the institution. It therefore recommended further improvement of the risk management practices, in particular, improvements to risk governance processes including the functioning of the risk management committee, and use of the organisational redesign process to determine the most suitable resourcing model for Parliament’s governance, risk management and compliance functions.

6.3 Internal Audit

6.3.1 As per the requirements of section 50 of the FMPPLA, the internal audit unit was independent from the institution’s management. In the period under review, the unit operated in terms of the approved charter and the risk based annual audit plan, and reported quarterly to the audit committee.

6.3.2 The audit committee was satisfied that the internal audit unit had operated effectively and had addressed pertinent risks in its audits. Furthermore, it was encouraging that the AGSA increasing relied on the work of the internal audit unit.

6.3.3 The above notwithstanding, the audit committee remained concerned about the internal audit unit’s structure and resourcing as the frozen positions impacted negatively on the unit’s ability to cover the institution’s audit universe and fully deliver on its mandate.

6.4 External Audit

6.4.1 The audit committee was required to evaluate the independence, objectivity and effectiveness of the audit process of the AGSA, and to discuss the audit strategy, the engagement letter and the audit results. The AGSA was represented in all the audit committee’s meetings and presented the audit strategy, engagement letter and the audit results for its consideration. The audit committee concurred with the AGSA’s audit opinion.

6.5 Combined assurance

6.5.1 The audit committee was responsible for overseeing combined assurance which was still new to the institution. The audit committee was committed to working with the management to further improve this area and to arrive at fully integrated and streamlined assurance provision across all lines of assurance. To this end, a draft combined assurance and implementation plan has been developed for consideration.

6.6 In-year management reports

6.6.1 The audit committee reviewed the quality and the content of the quarterly management reports, including financial and non-financial performance. It was encouraged by the progress made in improving the quality of financial and non-financial performance reporting. There was an increase in the overall achievement of set performance targets as well as the availability of documentation to support the reported performance.

Part D: Observations and Recommendations

7. Observations and Recommendations

7.1 Observations

7.1.1 The Committee welcomes the unqualified outcome with no material findings which the institution has sustained for the past nine financial years.

7.1.2 The Committee notes the audit committee’s positive appraisal of improvements in the internal audit unit, as well as the developments as far as efforts to cement the combined assurance function.

7.1.3 As noted in previous years, the Committee is concerned about the liability posed by Parliament’s obligations in respect of the contributions to Parmed Medical Aid Scheme for former members of Parliament and provincial legislatures. The Committee is concerned about the lack of progress as far as negotiations with the National Treasury to transfer this liability away from Parliament and towards more appropriate vehicles.

7.1.4 The Committee remains concerned that Parliament was funded in the same manner as government departments. That Parliament is reliant on the Executive it is obligated to hold to account, is untenable. The slow progress in negotiations with the Minister of Finance towards a funding process that is appropriate for Parliament as a separate arm of state, remains of grave concern as it impacts on Parliament’s ability to execute its constitutional obligations.

7.1.5 The Committee welcomed the appointment of Mr Xolile George as the Secretary to Parliament during 2022/23, as well as the more recent appointments of a Chief Financial Officer and the Head: Parliamentary Protection Service. Of concern, however, are the remaining senior management vacancies which impacted the stability at senior management level and as well as the vacancies within the internal audit unit.

7.1.6 The Committee notes the reported achievements in relation to public participation but remains concerned that efforts to encourage public participation in the law-making process are inadequate.

7.1.7 The Committee remains concerned about the broadcasting of parliamentary activities on a pay-to-view and data-dependent platforms which, under the current economic conditions, makes it impossible for a significant section of the population to have access to how they were represented in Parliament, and the business of Parliament in general.

7.1.8 The Committee notes with concern that the process to develop regulations to the FMPPLA has been halted indefinitely.

7.2 Recommendations

The Executive Authority should, within 30 days of the adoption of this report by both houses of Parliament, provide the Committee with a report on the implementation of these recommendations, and /or the reasons why implementation is not possible.

7.2.1 Parliament should ensure that the concerns raised by the Audit Committee, in particular those challenges that impact combined assurance are addressed. Progress reports should be made on a quarterly basis.

7.2.2 As in previous years the Committee recommends that discussions around how to resolve the Parmed matter be expedited so as to ensure Parliament did not bear the liability. The Committee should be provided with a progress report detailing the proposals that have been made for an alternative vehicle for this liability.

7.2.3 The Committee should receive a detailed report on all efforts to find an appropriate means for funding Parliament, and why these have to date not borne any fruit.

7.2.4 All posts that are critical, funded and not dependent on the outcome the organisational re-alignment project must be filled as a matter of urgency. The Committee should be provided with quarterly updates on progress made in this regard.

7.2.5 The Committee recommends a review of the processes underpinning the institution’s public participation efforts. Efforts to expand public participation should be continuous and participation should be encouraged on all matters not merely those relating to the passing of legislation.

7.2.6 The Committee notes that the finalisation of the institutional broadcasting strategy was dependent on the finalisation of the South African Broadcasting Corporation SOC Ltd Bill. We recommend that once that law has been finalised, the broadcasting strategy should be completed as a matter of urgency. This strategy should include provision for free access to televised and social media content.

7.2.7 The Committee should be provided with a report on why the regulations have not been finalised, and how the lack of progress will be addressed.

Report to be considered.

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