Departmental Annual Report: briefing

PUBLIC SERVICE AND ADMINISTRATION PORTFOLIO COMMITTEE
9 November, 2001
BRIEFING BY DEPARTMENT ON THE ANNUAL REPORT

Documents handed out:
Annual Report 2001
Department of Public Service & Administration Presentation (See Appendix)

Chairperson: Mr P J Gomomo

SUMMARY
The Department of Public Service and Administration presented a new policy focussing on  implementing a range of human resource practices for transforming public service delivery institutions and enhancing service delivery.

The Government Information Technology Officer's Council has been created to enhance co-ordination of information technology efforts across government

The Department and the Public Service Commission have worked together to facilitate government efforts on anti-corruption. A programme and strategy to augment government capacity to fight corruption has been established.

MINUTES
Briefing by Ms Kubeshni Govender, Head of Communication and Ministerial support.
Ms Govender outlined the challenges that were initially faced by public service departments. She said departments were confronted with a range of challenges that necessitated fundamental changes to the operation and management of national and provincial governments.

She pointed out that given the rapid pace of change, the past year provided the Department with an opportunity to focus its attention on supporting transformation efforts by national and provincial departments.

Ms Govender informed the committee that at the centre of the new policy focus was a concerted effort on supporting departments to implement a range of human resource practices that will transform public service delivery institutions and enhance service delivery.

The Department has over the last year intensified efforts to modernise systems in government through the use of appropriate information technology. In addition to the department's ongoing efforts to enhance the role of the State Information Technology Agency (SITA), and to ensure that it serves as an effective vehicle for government information technology efforts, the Department has created the Government Information Technology Officer's Council (GITO). The GITO Council serves as a vehicle to enhance co-ordination of information technology efforts across government.

Ms Govender said that in response to the growing concerns of corruption and unethical practices in the public service, the Department has worked closely with the PSC in an endeavour to enhance government efforts on anti-corruption. These efforts have resulted in the establishment of a programme and strategy to augment government capacity to fight corruption.

The Department's critical success component has been its organisational structure, which reflected the challenges that it was confronted with. The organisational structure is based on its interpretation of the changing public service environment as well as an ambition to rise to the challenge of transforming the public service.

DPSA has redefined its role to align itself with the new implementation focus of government as well as the priorities of the Governance and Administration Cluster (G & A Cluster) which entails strengthening of the centre of government and support service delivery institutions. It also encompasses providing support for decision-making and policy development and strengthening inter-governmental systems while dealing with corruption and supporting e-Government.

As for the envisaged future structure for the financial year 2001/2002, Ms Govender said that the DPSA intends to strengthen its alignment to government priorities, particularly those of the governance and administration cluster. It is envisaged that in future, the structure of the Department will consist of the value adding operational components. These components are; Public Service Management and Leadership, Integrated Human Resources, Anti-Corruption and High Profile Cases, Information and Information Technology Management and Service Delivery Improvement.

In the area of  human resources, Ms Govender informed the Committee that by the end of 2000/2001 financial year, DPSA employed 221 people out of which women made up 51% of the number with 11% in senior management positions. Employees in senior management positions comprised 16,7% of the total number of occupied posts. Blacks occupied 73% out of the total number employed and that 16% of them were senior managers.

Despite recruiting 38 employees in the ratio of 15:23 males to females, 50 positions were vacant by the end of the financial year and that 47% of the appointments and transfers to the DPSA were made on salary levels 1-8 and 53% were made on salary levels 9-15. She said that 64% of the vacant positions were on salary level 10 and lower, while 20% were on salary level 11 and 12 and the remaining 16% were senior management positions.

On job evaluation, the Department evaluated 37 posts in terms of the EQUATE system which resulted in 69% of the evaluated posts remaining on the same level while 17% were upgraded and 14 were downgraded. All those downgraded were all vacant posts at the time of the exercise.

As regards affirmative action, Ms Govender said that by March 2001, the Department had achieved and exceeded the minimum level of set requirements in terms of the White Paper on Transformation of the public service.

At least 50% blacks and 30% women were in management by 1999 and at least 2% of people with disabilities by 2005. By the end of the financial year 2000/2001, DPSA had employed 0.08% of people with disabilities at various salary levels.

Although these national targets have been achieved, the Department, in line with its strategic objectives, is reviewing its targets with a view to setting new equity goals to be reached by the year 2004.

On training, several employees were awarded bursaries, which were screened by a central committee. The total amount of awarded bursaries was R228, 338.86 which amount she added, included the cost for ABET learners which was R5, 016.00 in total.

In future DPSA would allocate financial resources to training and development in terms of its human resource development plan and strategy. These allocations would be done centrally for improved efficient utilisation of funds, and to improve the management of information on training and development.

On remuneration, personnel costs account for over 80% of the DPSA budget. The Department has prioritised senior-level vacancies to build its internal capacity in line with its new strategic direction.

In 2001/2002, costs will increase by a further 18% to fund the setting up of the Public Service Sector Training Authority (PSETA), as well as increased capacity required in information technology and management. Personnel costs are anticipated to grow by an average of 5,2% thereafter.

Ms Govender noted that the Department concluded an audit of Public Entities as well as a cabinet submission on an interim framework for the establishment of public entities. She said that this initiative arose out of concern that whilst public entities can be viewed as an innovative organisational form of service delivery, the ad hoc way in which they are established and monitored is undesirable.

The interim framework which is due for submission to Cabinet in 2001/2002 proposed a rigorous procedure be adopted for the creation of public entities. Key factors that tend to drive departments to create such entities should be addressed directly so that dedicated entities can be created only when truly needed.

Ms Govender  stated that the aim of the Department is to lead the modernisation of the public service. This would be achieved by assisting government departments in implementing their own management policies, systems and structural solutions within a generally applicable framework of norms and standards, in order to improve service delivery.

Briefing by Coleen Robinson; Executive Manager, Corporate Management.
Ms Robinson informed the Committee that due to  the labour intensive component of  work done by the Department, the main expense is on human capital, with personnel costs amounting to approximately 70% of the core budget. The Department underwent major restructuring toward the end of 1999 and that the total number of posts remained fairly constant with the Department prioritising senior-level vacancies to build its internal capacity.

The internal audit component facilitated a risk assessment of the Department, which is to be utilised in the development of the three-year Internal Audit Plan. Questionnaires were issued to senior managers of the Department where they were requested to identify the objectives, risks and controls in their areas of responsibility.

On the basis of information received, one-to-one interviews were conducted to clarify issues and to rank the risks in relation to the objectives identified. This assessment is intended for use as a basis for reassessing the system of internal control in order to manage significant risks identified due to any significant weakness in current internal controls.

Ms Robinson informed the Committee that the draft Fraud Prevention Plan for the Department has been submitted for approval and implementation will follow soon. Its effectiveness could not be measured at this stage as it still requires to be marked within the Department through fraud awareness campaigns and workshops to ensure that buy-in from employees in the Department is achieved.

The change management process which was undertaken within the Department highlighted the need for an internal approach within the Department towards efficient, effective and economic usage of the Department's IT resources, better work flow, as well as knowledge management and sharing of information. This was also emphasised in the cabinet decision that agreed to each Department creating a post of Departmental Chief Information Officer.

Contract RT 911 GP for the appointment of consultants to develop an information Management and Information Technology Strategy for the public service was awarded through the State Tender Board. The tender agreement had to be terminated due to insufficient budget availability for full implementation of the tender.

A verbal agreement was reached between the Director-General of the DPSA and representatives of the successful tendered to cancel the tender with no penalties payable by the Department. The State Tender Board was approached and permission was granted to cancel the tender.

However, all attempts to obtain written undertaking from the holder of the tender to this effect have failed. In February 2001, the company indicated that they were no longer willing to sign the cancellation of the contract, as a contractor had claimed compensation for work rendered in terms of the project.

Ms Robinson said that no invoice in respect of the claimed expenditure has been forwarded to the Department to date. An estimated amount has, however, to be shown as contingent liability in the financial statements until the matter has been finalised.

In October 2001, the IT Policy Launch was held hosted by the Department. A marketing company's services were obtained for certain events, which were to take place as part of the launch. The official from DPSA responsible for this aspect did not follow official procedures, and that the contract was cancelled at very short notice.

After lengthy negotiations a final agreement was reached whereby an amount of R118, 978 was paid to the company for costs incurred but that after further discussion a refund of R45, 600 was made by the company to the Department.

She revealed that this incident led to the suspension and dismissal of the individual concerned. All financial delegations within the Department were withdrawn and managers within the DPSA had to re-accept the roles of Responsibility and Programme Managers.

The individual in question disputed his dismissal and the case was referred for arbitration. The outcome is still under review but that it is considered probable that the outstanding amount will be reclaimed through this process. Should that fail, the Office of the State Attorney has been approached to attempt to recover the balance of R73, 378, which is considered fruitless expenditure, from the individual concerned.

Discussion
Mr Mohlala (ANC) asked how much of the expenditure goes to personnel training in terms of office designation.

Mr Rapea replied that the budget on training benefit for the most part targets senior and middle level cadres explaining that this is an area where capacity building is in dire need.

Mr Moss (ANC) faulted the Department's policy of channelling most of the training resources to senior management training yet the real interface between the people and the Department occurred at the lower cadre of employees.

Ms Robinson replied that the aim of training is to build the skills level especially at the middle level cadres. The lower cadres of employees are often encouraged to apply for training opportunities.

Mr Abrahams (UDM) sought clarity on the savings made on unfulfilled vacancies and how such savings are dealt with in the Departmental budget.

Ms Robinson replied that a request for the funds to be rolled over has been submitted to Treasury. Such funds, once the National Treasury has approved the rollover would be applied in the financial year 2001/2002.

Ms September (ANC) asked how many people of disability had been employed so far.

Ms Robinson replied that the Department is committed to broadly reflecting the national demographic profile of the country. By the end of the 2000/2001 financial year, DPSA had employed 0.08% of the people with disabilities at various salary levels.The Department is in the process of upgrading buildings so as to be suitable for the needs of people with disabilities.

Ms Mbulawa-Hans (ANC) asked how the Department's programmes on personnel training tie in with the needs of the Provinces in this regard.

Mr Rapea said that the Department would supply the Committee with the particulars of expenditure on personnel training. The Department's role is to provide consulting services to Departments on how to run business professionally with an intended spillover effect to the Provinces.

Ms Mbulawa said that the legal stalemate between the Department and tender holders should not remain pending indefinitely. The matter has already been pending for the last two years and the issue should be resolved.

Ms Robinson while noting members' concerns clarified, however, that the Department is legally bound by the contract and that once the necessary inventory is made available payment would be made accordingly. She added that the claimant is by law required to lodge his claim within three years.

Mr Sithole (ANC) said that it was objectionable that large sums of money are spent on workshops when there are other pressing priority issues on service delivery. Rollovers and the incident of outstanding large unspent amounts does not indicate a healthy organisation.
He felt that there was a big problem with this future expenditure. He argued that in a way it tended to suggest that the Department had over-budgeted for that particular financial year.

Mr Bell (DP) concurred with Mr Sithole and added that the under-expenditure pointed to the fact that the Department probably did not need this kind of budget. He lamented that this had been the trend with all Departments and that it should cease forthwith.

Mr Rapea said that while members concerns on this issue have been taken note of, the main problem with roll-overs has to do with project timing which in most cases calls for re-prioritisation. The Department is moving forward to repositioning its budget in order to avoid the recurrence of such rollovers.

Mr Moss (ANC) requested the Department to provide the Committee with a breakdown of what constituted lower level and senior level employees.

The meeting was adjourned.

Appendix
Department of Public Service and Administration
Annual Report Presentation
9 November

Introduction
· Our role in the transformation process
· Supporting government departments

Human Resources
· Employment
· Affirmative Action
· Training
· Remuneration

Programme Reports
· Overview
· Key Objectives and Programmes

· Human Resource Management
· Senior Management Service
· Job Evaluation
· PSETA

· Conditions of Service, Labour Relations and Negotiations
· Collective Agreements
· Resolution 3 of 2000: undesignation of
Departmental/Provincial Bargaining Councils
· Resolution 5 of 2000: implementation of the dispute
resolution procedures of the PSCBC
· Resolution 7 of 2000: improvement in the conditions of
service of public service employees
· Resolution 9 of 2000: Senior Management Service
· Public Service Job Summit: framework agreement

· Information Technology
· IT Policy
· State Information Technology Agency
· GITO Council
· Inventory of Government-wide Information Systems

· Service Delivery and Improvement
· Curbing Corruption and Mal-administration
· Information and Analysis
· Learning Networks
· Centre for Public Service Innovation
· Support to Departments
· IPSP
· Project TIRO

Annual Financial
Statements : 31 March 2001

· MANAGEMENT REPORT
· Spending Trends
· Risk Management Approach
· Internal Audit Component
· Governance (Audit Committee)
· New Activities
· Anti-corruption & High Profile Cases
· Info Technology & Knowledge Management

· AUDITOR GENERAL'S REPORT
· EMPHASIS OF MATTER
· Asset Control
·Audit on all procedures in Logistical Services
· Treasury instructed to implement LOGIS in all National Departments
· Internal Audit & Audit Committee
· Internal Audit component in place (Manager, 2 IA, 1 A)
· Shares in SITA
· Being dealt with by SITA, DP5A (L5) and Treasury

· FINAL SPENDING
· Under-spent by R3,3m
· R2,154m Personnel expenditure
· R512 000 Equipment (Library Security, Building Security & Computer Equipment)
· R544 000 Professional Services (SMS, Legal Costs)
· Rollovers:
· Equipment            R506 000
· Furniture            R1,418m
· Batho Pele Initiatives            R750 000