DEFENCE SECRETARIATBriefing to the Portfolio Committee

on Defence

First Status Report FY05/06

23 AUGUST 2005

Aim

To Brief Members Of The Portfolio Committee On Defence On The Status of

The Defence Secretariat

Scope• Background• Secretary for Defence Performance Agreement• Organisational Structure• Strategic Profile• Overview of the Human Resource Picture• Events and matters impacting on the Defence

Secretariat• Divisional Overviews

SecDef Performance Agreement• Specific Outputs Related To The Mod Outcomes

(In conjunction with the C SANDF)1. Defence Against Aggression. Successful defence of South Africa’s sovereignty and territorial integrity against potential external military aggression or threat.2. Promoting Peace and Security.External deployment of forces that enhances regional stability.3. Support to the People.Support to other Departments when requested, thereby contributing to the protection and well-being of the country’s people and resources.

SecDef Performance Agreement (2)• Priorities Identified By The Mod For Fy 05/06

1. To provide support for Government diplomatic drive/initiatives in Africa.

2. To promote regional security in the form of peace missions, including post-conflict reconstruction.

3. To restore and maintain the conventional defence capabilities of the SANDF.

4. To systematically reduce the SANDF’s routine internal deployment to zero by 1 Apr 2009.

5. Address all critical challenges to the implementation of Human Resource (HR) Strategy 2010 as a matter of priority.

SecDef Performance Agreement (3a)• Departmental Key Result Areas

1. Fulfill the defence commitments as ordered by Government.2. Provide contingency-ready and cost effective defence capabilities as specified by approved policy.3. Administer the DOD within the prescripts of the law and Government policy.4. Assure sustainability, constantly improving output quality and reducing the cost of the DOD processes and the accounting thereof.

SecDef Performance Agreement (3b)

• Departmental Key Result Areas

5. Assure the continued quality improvement of people, equipment and facilities in the DOD.

6. Assure quality command and management information in the DOD.

7. Ensure that the Batho Pele principles are institutionalised in the DOD.

Defence Secretariat Organisational Structure

Policy & PlanningDivision

Acquisition & Procurement

Division

Defence Inspectorate

Finance Management

Division

Chief Directorate HR Policy &

Planning

Government Information Technology

Officer (GITO)

Office of the SecDef inclDirector Research & Analysis

Secretary for Defence

Equal Opportunities

Chief Directorate

Strategic Profile

• MissionTo effect civil control, the Secretary for Defence provides specified managerial, administrative and advisory services to the Department of Defence, through the Defence Secretariat

• VisionExcellence in Defence Management and Administration

Defence Secretariat: HR Status FY05/06

Race Composition

40%

8%1%

51%

African

Coloured

Indian

White

Defence Secretariat: HR Status FY05/06

Gender Composition

54%

46%

Male

Female

Defence Secretariat: HR Status FY05/06

PSAP/ DAP Composition

84%

16%PSAP

DAP

Defence Secretariat: HR Status FY05/06Gender Composition per Rank/Level

0

50

100

150

200

250

300

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

Rank/Level

No

of E

mpl

oyee

s

Male Female

Defence Secretariat: HR Status FY05/06Race Composition per Rank/LevelGeneral Support & Administration

0

50

100

150

200

250

300

02 03 04 05 06 07 08

Rank/Level

No

of E

mpl

oyee

s

African Coloured Indian White

Defence Secretariat: HR Status FY05/06Race Composition per Rank/Level

Middle Management

0

10

20

30

40

50

60

70

80

90

100

09 10 11 12

Rank/Level

No

of E

mpl

oyee

s

African Coloured Indian White

Defence Secretariat: HR Status FY05/06Race Composition per Rank/Level

Senior Management

0

2

4

6

8

10

12

14

16

18

13 14 15 16

Rank/Level

No

of E

mpl

oyee

s

African Coloured Indian White

Policy & Planning DivisionPolicy & Planning Division

VisionExcellence in defence policy and planning

MissionTo provide defence policy, strategy, plans and instructions for the DOD that are fully aligned with government policy and defence needs of South Africa. This is achieved by means of a fully representative team of appropriately skilled people and technology

Organisational StructureOrganisational Structure

Note: DIMS moved back under command of CPP during 2005. Final guidelines will influence above structure, ito HR Pol & Plan*, Int Pol and R&A. Total restructuring will follow. D Strat envisaged.

C O N V E N T IO N A L A R M S C O N T R O L

SU P P O R T S E C T IO N

L EG A L S U PP O RT

IN T EG R A T ED M A N AG EM EN T SY ST E M S

PL A N N IN G A N D P R O G R A M M ING

S T R A T E G IC M A N A G E M E NT

H R P L A N N ING

H R S ER V IC E SY S T E M S

R E SE R V ES A N D V E T ER A N S

H R P O L IC Y M A N A G E M E NT

H R P O L IC Y A ND P L A N N IN G *

F O R E IG N R EL A T IO NS P O L IC Y

O P ER A T IO N S P O L IC Y

M A T E R IA L R ES O U R C E S P O L ICY

R E SE A R C H & A N A L Y S IS

D E F E N C E PO L IC Y

C P P

Core ObjectivesCore Objectives

• Divisional Direction. To provide strategic direction to the Policy and Planning Division.

• Strategic Management. To provide strategic management services to the Head of Department (HOD) through professional staff work in order to enhance the effectiveness, efficiency, economy and image of the DOD.

• Defence Policy. To formulate and manage defence policy in alignment with government policy.

Core Objectives (2)Core Objectives (2)

• HR Policy and Plan. To provide an accountable, effective, efficient and economical DOD Human Resource Policy and Planning service to meet organisational and individual needs.

Core ObjectivesCore Objectives• Conventional Arms Control. To administer the

regulation and control over the manufacture and transfer of conventional armaments in accordance with the provisions of the Conventional Arms Control Act as determined by the National Conventional Arms Control Committee.

• Legal Advice and Support. To provide efficient, professional legal advice and support to the Ministry and DOD.

• Support Section. To provide administrative, personnel management and logistical support to Policy and Planning Division.

Strategic ObjectivesStrategic ObjectivesCPP’s Contribution to the Attainment of DOD Strategic Objectives During FY 2005/06 to FY2007/08.– Execution of Defence Commitments as ordered. – The administration of the DOD within the prescripts of

the law and government policy. – Assurance of sustainability, continuous improvement

of output quality and reduction of cost of DOD processes as well as the accounting thereof.

– The assurance of the continuous quality improvement of people in the DOD.

CPP Highlights

• Compilation, printing and approval of DOD Strategic Business Plan for FY 2005/06 by Parliament.

• Compilation of Annual Reports FY 2004/05 for Pol & Plan, DefSec & DOD.

• Good progress on the Defence Update 2005 (White Paper, Defence Review).

• Projects “NTUTHWANE” and “LOQUACIOUS” were approved by the PDSC and are progressing well (Details provided later)

CPP Highlights (2)

– The Certain Conventional Weapons Bill was complete and submitted to Cabinet for approval.

– Completed the drafting of the implementation Instruction on the Prohibition of Anti-Personnel Mines Prohibition Act.

– DOD inputs to DFA wrt Arms Control Treaties and Conventions.

– Defence co-operation agreements with Governments of Mali & Tunisia (signed during May 05).

CPP Highlights (3)

– Completion and admission on time of the prescribed Annual Report to the United Nations Arms Register.

– Participated in the workshop on the UN Arms Register held in Kenya to assist the UN in introducing the Arms Register to other African Countries.

– Number of permits issued during first quarter totaled 1293 compared to 1134 during previous quarter

CPP Highlights (4)– Approval (5 May 2005) for unilateral implementation of

Mobility Exit Mechanism (MEM).– Mandating Committee Work Group on issues in the

Military Bargaining Council (MBC) has been established.

– New performance appraisal system for DOD implemented.

– First group of 105 military veterans reported as CAT for Military Veterans Skills project funded by National Skills Fund.

– Annual Report for CEEAB presented to Min Def and Portfolio Committee on Defence (PCD).

CPP Challenges– Additional workload associated with Instr 13/04 &

14/05, (Organisational Restructuring) especially in the DIMS environment.

– Multiple ad hoc tasks impact negatively on achieving core objectives.

– Insufficient policy advisor capacity to deal with 226 policy documents awaiting advisory services.

CPP Challenges (2)– Shortage of staff due to unfunded posts.– Reconciling legal advice with consequences of

specific administrative actions in the DOD.– Input delays due to vetting process handled by

NIA. NCACC Chairperson to be requested to discuss the matter with the Minister of Intelligence.

– Inability of unions (esp NEHAWU) to co-operate in PSAP Bargaining Council until issue of ARMSCOR takeover of Naval Dockyard has been finalised.

CPP Challenges (3)

RisksRisks

• Capacity (staffing) constraints and the need to identify people with relevant skills.

• Financial constraints wrt foreign obligations, visits, and secondments.

• Funds not available to staff critical vacancies and staff turnover.

CPP Projects

• Project LOQUACIOUS• Project Balanced Score Card (BSC)• Project Departmental Organisational

Structuring System (DOSS)• Project NTUTHWANE

Acquisition & Procurement Acquisition & Procurement DivisionDivision

VisionThe Acquisition and Procurement Division (DAPD) satisfies the Department of Defence materiel requirements every time, on time

MissionDAPD is to direct and manage the acquisition and procurement of the Department of Defence specified operational and technological requirements and services in a fair, timely, innovative and cost effective manner, according to approved policies in order to provide appropriate, operationally effective materiel and services, by means of a representative, motivated and competent work force and to support Departmental and Government initiatives

Chief of Acquisition and Procurement

Office Manager and Secretary

Chief Director Acquisition Chief Director Procurement

Director Army Acquisition

Director Air Force Acquisition

Director Navy Acquisition

Director Technology Development

SSO Common Weapon Systems

SSO GSB Procurement

SSO Procurement Systems

SSO Army In Service Procurement

SSO SAAF In Service Procurement

DD Alternate Service Delivery

Officer in Charge : Central Procurement

Service CentreOfficer in Charge

Simon’sTown Procurement Service

Centre

SSO Pol & Plan

SO1 Staff Support

Organisational Structures

Core ObjectivesCore Objectives• To satisfy armaments requirements of the Services

and Divisions according to force design and force capability master plan in order for the DOD to adequately respond to contingencies that may arise

• To pursue appropriate technologies• To dispose and procure required equipment and

stocks• To ensure an efficient effective and economical

DAPD staffed structure within the constraints of budget and available resources

• To manage the Division in a cost effective manner

Highlights:CD Acquisition

• Common Weapon System– The PO’s presented their yearly business plans and most

have been approved. Some minor changes still need to be completed and additional guidelines for control were provided. Project RADIATE.

Highlights:CD Acquisition (2)

• Directorate Technology Development. The financial management of technology development reflected a good performance for the 2004/05 financial year achieving 100% commitment and 91% cash flow of a total of RM 303,6 budget allocation. The 2005/06 financial year started with a 63% commitment of the RM 269,0 budget allocation (white book).

Highlights:CD Acquisition (3)

• Directorate Naval Acquisition. Project WILLS. S102, the second Type 209 Submarine for the SA Navy was named and launched on 04 May 2005 in Emden. Project SITRON, the successful firing of the exocet anti-ship missile on 22 apr 05 was historic in as much as the target, the decommissioned Strike Craft SAS Shaka, was the smallest target ever engaged by an exocet missile.

Highlights:CD Acquisition (4)

• Directorate of Army Acquisition. Project Vistula evaluation of supply support platforms is progressing according to plan. project Hoefyster completed the evaluation of the Denel proposal for a new generation Infantry Combat Vehicle, and Project Warrior is currently completing its project study report.

Highlights:CD Acquisition (5)• Directorate SAAF acquisition•  The following highlights occurred during this period:

– DAFA involvement in the successful contract negotiations for project CONTINENT.

– The successful closure of the project WINCHESTER project office in Borough (UK) and the relocation of the project team in SA.

– The re-location of the DOD team members on Project FLANGE. The secondment of the Project Officer of FLANGE to Armscor expires 30 June 05.

– The approval of the project UKHOZI Tranche 3 decision by the Minister of Defence

Financial Management Division

(FMD)

Strategic Business Plan

VisionThe FMD is the source of FM excellence in the DOD

MissionTo provide a cost-effective FM service to the Minister of Defence, Secretary for Defence and CSANDF within the evolving regulatory framework bmo a professional, representative civilian FM Corps and appropriate FM system

Finance Division

Chief DirectorBudget

Management

Chief DirectorFinancialServices

Chief DirectorAccounting

Office Manager

Chief FinancialOfficer

Secretary

Strategy

• To translate Defence from a cash–based to an accrual-based financially managed institution (Possible risk in itself.)

Highlights for the Period

• The DOD submitted its financial statements for the General Defence Account (GDA) and the Special Defence Account (SDA) on 31 May 2005 to the National Treasury (NT) and the Auditor-General (A-G) in the format as required, including the financial statements of the public entities under the control of the DOD being Armscor and the Castle Control Board.

• The audit on the SDA has been completed and had no qualifications.

Highlights for the Period (2)• The debtor administration system has

successfully been implemented during the reporting period and the necessary training has been completed. The implementation of this system will greatly contribute to the management of departmental debt. 

• Discussions are in process with SITA regarding the enhancement of the FMS and PERSOL in order to pay S&T advances into bank accounts of DOD members/officials.

• The SDA budget was submitted and approved by the Ministers of Defence and Finance on 25 April 2005 

Highlights for the Period (3)

• SCOPA. Replies on SCOPA Resolutions submitted to SCOPA on 1 June 2005. Letter on SCOPA commitments (signed by Sec Def) was sent to relevant members for answers to be submitted by 15 July 2005 – feedback to be given during 2nd quarter.

Challenge for the FMDDelayed advertisement of vacant posts is seriously hampering the achievement of equity targets as per Equity Plan as well as staffing targets as per Personnel Plan.

New Emerging Risks• Guidelines regarding the restructuring of the

FMD are awaited; currently it is “business as usual”.

• The uncertainty regarding the restructuring is adversely affecting the morale of staff; it would favour the DOD to have restructuring of the FMD resolved as soon as possible.

• Amendments to VAT legislation have a ± RM44,0 impact on the budget allocation to Armscor starting from the FY 2005/06.

• Funding of Rm788.064 for the A400M still to be addressed during the current FY.

Defence InspectorateVision• The Defence Inspectorate is unrivalled world leader

in defence internal audits, inspections and forensic investigations

Mission• To provide independent and objective assurance

and consulting service through the provision of quality internal audit, inspections and forensic investigations in order to add value and improve DOD operations

Defence Inspectorate Organisational Structure

Directorate Performance

Audit

DirectorateAnti-Fraud

Sub-Directorate Resource

Management

Directorate Regulatory

Audit

Office of the IG DOD

IG DOD

Highlights

• The newly appointed Inspector General (IG) DOD and Chief Audit Executive for the Department of Defence assumed duty on 1 Apr 05.

• The Department of Defence Audit Committee was re-established with two new members. The Audit Committee now comprises of Dr D. Konar – Chairperson, Mr D.S. Molapo, Mr K.A. Ross, Ms J. Jolie, Mr G.R. WiHhöft and Ms J. Kumbirai

Highlights (3)• The Defence Inspectorate assists the DOD in

accomplishing its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. Their clients include, inter alia, the Secretary for Defence, Chief of the SANDF, Chiefs of Service, Heads of Divisions as well as the Audit Committee who are served by the provision of timely internal audit reports of superior quality to enable corporate decisions-making and to promote the achievement of Departmental objectives.

Highlights (4)• DPA planned to cover 6 of the 25 identified risks

during the First Quarter of FY05/06. Of the aforementioned the Directorate Performance Audit (DPA) has audited and reported on 3 risks, this represent 50% of the planned output, however, during the said period a total of 19 risks were selected of which 16 are currently in the process of being investigated. The number of attitude and opinion surveys planned for during the First Quarter of FY05/06 was 19. The Centre for Effect Analysis has completed 12, this represents 63% of the planned output. The Centre for Effect Analysis took on a total of 21 surveys of which 9 are currently still in process.

Highlights (5)

• Directorate Regulatory Audit has planned 26 audits for the first quarter of which 27 audits are in process and 13 have been completed. The targets have been affected by the implementation of COSO. Auditors are currently familiarising themselves and normality will prevail as all of them have submitted their first audits. Preparations for external audits took longer than it was planned for. This created a backlog in planned audits.

Highlights (6)• The forensic investigation section is currently

involved in the fraud and corruption investigation, which includes providing assistance as regards the process of recourse and monitoring of cases. The status is as follows:– 53 cases were under investigation.– 7 cases are being monitored.– 28 cases were completed.– 18 cases were referred to Military Police Agency

(MPA) and the National Prosecuting Agency.

Divisional Risks

The MOD GSB’s inadequate procedures and processes with respect to procurement and maintenance of equipment that hinder the achievement of the Defence Inspectorate’s objectives

Divisional ProjectsTo implement the COSO framework for internal audit reporting enhancing improved communication with the Defence Inspectorate’s clients.Implementing the TeamMate suite for electronic working papers in order to improve the Defence Inspectorate’s reports and analysis of findingsGuiding research and development regarding the Effectiveness Model in order to provide valid quantitative assessments of combat readiness  

Equal Opportunities Chief Directorate

Vision– Our diverse and dynamic team is committed

to professional and credible Equal Opportunities services based on human dignity and respect.

Mission– To facilitate professional, credible and

efficient human resource intervention in the DOD in order to meet the Equal Opportunities needs of the organisation and individuals. 

EOCD Organisational Structure

Directorate Policy & Plans Directorate Evaluation,Development & Research

Support Elements

Chief Director EO

Highlights

• The Integrated Gender Mainstreaming Strategy. The said strategy was presented to both the Secretary for Defence and the Chief of the South African National Defence Force. They were convinced of the importance of the project and expressed their support for the initiative. The strategy will now be presented to the Plenary Defence Staff Council (PDSC) in order to sensitise and inform them on the matter.

Highlights (2)

•– Revision of the DOD Disability Policy: The

review and renaming of the existing DOD Policy Guidelines on the Prevention and Elimination of Unfair Discrimination towards People with Disabilities has been finalised. The said policy will now be known as the DOD Disability Equity Policy and will be presented to the Human Resource Staff Council (HRSC) and PDSC in the second quarter for approval.

Highlights (3)

• The DOD Fast Tracking Assessment Board (FTAB): The FTAB gave feedback to Services/Divisions on the status of the Fast Tracking Implementation Instruction and requested them to utilise the instruction as a tool towards reaching their transformation objectives.

Highlights (3)

• EO and AA Awareness Seminars: Participants on the EO and AA Awareness Seminars responded positively regarding the need to change their perceptions, stereotypes and attitudes on equity matters. Although discrimination, racism and affirmative action are in general very emotional issues, participants displayed a willingness to discuss these issues openly and with the necessary sensitivity.

EOCD Risks

•  The removal of Multi Skilled Functionaries (MSFs) on level 4 who served as a force multiplier for the EOCD has serious consequences for the DOD. With a lack of dedicated EO Advisors, no personnel are available to execute EO functions such as the monitoring and evaluation of EO activities, EO sensitisation of DOD personnel and the implementation of the EO and AA Policy on levels 3 and 4.

EOCD Risks (2)

• Divisional and Service Chief limitations wrt reaching and maintaining of equity.

• The perception in the DOD that the EOCD is the executing authority of the DOD EO and AA Policy.

Government Information Technology Officer (GITO)

• Vision– “To ensure that defence information and ICT is managed in

a structured, yet clearly defined manner in accordance with strategic defence requirements as per an approved plan and robust control mechanisms.”

• Mission– “That the office of the Defence GITO will serve as the

benchmark for all SA Government departments in its ability to realise defence objectives in support of national commitments and initiatives.”

GITO Organisational Structure

GITO

DEISA

Secretary

PA / PSO

D/Dir ICS D/Dir ICS Pol A/Dir ICT Supt

A/Dir ICS SD A/Dir Info/KM A/Dir Pol Cntrl

Secretary

Filled Posts Vacant Posts

Highlights

• FY 04/05– The GITO function only established 1 Jan

05.– No highlights for this period.

• FY 05/06– Approval of the GITO structure.– Approval of the Defence Enterprise

Information System (DEIS) Framework.

Challenge

• Review and refinement of the DOD Info Strat. The DOD Info Strat is to be aligned with the DOD Strategy which must still be developed during FY 05/06 (refer to Accounting Officer’s Planning and Budgeting Guidelines) If not aligned the required strategic direction will not be provided for DOD Information Resources. This will negate the CMIS Div’s ability to support and enable transformation objectives.

Challenge (2)

• Participation in Process. The weak or non-participation of stakeholders and role-players in the design and execution of the CMIS Policy Development and Maintenance process. This could either be due to the lack of interest or due to that, the Service and Divisional Chiefs, to support this project, task no internal “responsible” entity.

•  

Challenge (3)

• Responsibility. The practical influence (either positive or negative) of the continuous “change” or “re-design” of the current structures in the SANDF. The responsibility about “who” is the driver or manager for Policy Development within the particular structure (Service/Division) is shift around and no perpetual participation could be obtained. These abovementioned functions seemed to be “over and above tasks” and not attended to as a priority objective or outcome of their core function.

Challenges (4)

• Functional Knowledge. The functional knowledge of policy development in the DOD and the difficult terminology in the Information and Communication Technology (ICT) field hamper the positive inputs and actions by other stakeholders and role-players.

Challenge (5) • Non-compliance. The non-compliance to the

identified CMIS regulatory framework and prescribed DOD Policy Development Process and Procedures. The execution of the processes as laid down in the DODI and JDP on the development, promulgation and maintenance of policy must be followed as prescribed. No short cut will be allowed to compile and review CMIS policy and directives. 

DISCUSSION

Adverse Audit Findings GDAGDA 01/001/0

2202/002/0

3303/003/0

4404/0504/05

Departmental Revenue EOM EOM Q QSummary of FindingsSummary of Findings

Completeness of revenue could not be confirmed due to:• Insufficient independent management reconciliation / reviews • Non-compliance with policies & procedures

Action PlansAction Plans• Revenue Management Forum under control of Director Budgeting

established on 1 Feb 05.• DOD busy benchmarking with National Treasury and other

government departments on tariff management. • Level 4 commanders are continuously trained to comply with the

Revenue Management DODI by FMD (CD Acc).• DOD is budgeting for revenue other than the Vote, focusing on

disposal of equipment.• Improvement objective for 1 Apr 06 is to include all other income,

e.g. flights against repayment.

Adverse Audit Findings ….GDAGDA 01/001/0

2202/002/0

3303/003/0

4404/0504/05

Receivables - - - QSummary of FindingsSummary of Findings

• Validity and accuracy of amount could not be confirmed. • Original amounts of debtors were amended when new FMS

Debtors Sub-System was implemented.• Weaknesses in internal controls over management of receivables.

Action PlansAction Plans• Department in the process of addressing the system error and

the adjustments will be followed up in the next audit cycle.

Adverse Audit Findings ….GDAGDA 01/001/0

2202/002/0

3303/003/0

4404/0504/05

Irregularities and Losses - - Q QSummary of FindingsSummary of Findings

Inconsistent application of policies and procedures resulting in:• Internal control weaknesses and• Inability to verify completeness & accuracy of the amount

disclosed

Action PlansAction Plans• DOD Instruction is in the process of being reviewed to enhance

accountability.• Monthly forum has been established for cash losses w.e.f. 1 Jan 05.• A computerized loss control process being investigated to ensure

complete reporting.• Staff visits are conducted by FMD and C Log to ensure that losses

are properly administrated.