PRESENTATION TO THE PORTFOLIO COMMITTEE ON HUMAN SETTLEMENTS

CAPACITY OF THE DEPARTMENT OF HUMAN SETTLEMENTS IN SPENDING THE

BUDGET ALLOCATED ACCORDING TO THEIR BUSINESS PLANS AND ANNUAL

PERFORMANCE PLANS

14 October 2013

PRESENTATION OUTLINE

Introduction Financial Management Expenditure vs. Performance Current Expenditure trends Development orientation Accountability Professional Ethics Transparency Good HR practices Employment Equity Concluding remarks

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INTRODUCTION The Public Service Commission (PSC) is required by the

Constitution to provide an evaluation of the extent to which the values and principles governing public administration, contained in section 195, are complied with.

The PSC was requested to brief the Committee on the capacity of the Department of Human Settlements in spending the budget allocated according to their business plans and annual performance plans.

In its briefing to the Portfolio Committee, the presentation will focus on the Constitutional values and principles.

The PSC has used data from the – Annual Reports for the 2011/12 to 2013/14 financial years Other data available, e.g. PSC tools, Auditor-General,

Department of Planning, Monitoring and Evaluation, National Treasury and Vulindlela.

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FINANCIAL MANAGEMENT

Financial year

Audit finding Comments

‘12/13 Unqualified with

findings

• Invoices received amounting to R22,4 mil for office accommodation, whereas the department does not occupy the building

• Material under-spending of the Rural Household Infrastructure Grant.

‘13/14 Unqualified with

findings

• Only 14% of the budget was spent in respect of Programme Implementation Facility, consequently the objectives of supporting human settlements projects were not achieved

• 81% of the budget was spend pertaining to the implementation of the Rural Household Infrastructure Grant

• R106 721 000 allocated for municipalities was only transferred in March 2014. As a result a significant portion of these grants were unspent at 31 March 2014

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Audit outcomes

EXPENDITURE VS PERFORMANCE

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Except for 2012/13, spending was within the generally accepted margin of 2% set by National Treasury.

Although almost the entire budget was spend over the past four years, the achievement of predetermined outputs remained fairly low (67% on average).

Major reasons for under-spending: Delays in the filling of vacancies. Delays in the migration from Novel to Microsoft. Funds for Special Investigation Unit were not fully utilised. Delay in the implementation of the National Upgrading Support

Programme which takes up 30% of the Programme 3 budget.

% of budget spent Achievement of targets

10/11 11/12 12/13 13/14 10/11 11/12 12/13 13/14

98% 99% 67%97% 98% 53%77% 70%

EXPENDITURE VS PERFORMANCE (2)

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With regard to reporting on performance information in 2013/14, the

AG found that – Material changes were made to indicators and targets reported in

the annual performance report without these changes being

approved. 28% of the reported indicators and targets are not consistent with

those in the approved annual performance plan. The required performance for 26% of the targets could not be

measured. 58% of the targets were not specific as prescribed by the

National Treasury’s Framework for managing programme

performance information (FMPPI).

Spending in the 2014/15 financial year as at 31 August 2014 Monthly level of expenditure is below the norm.

CURRENT EXPENDITURE TRENDS

Total appropriation

Apr May Jun Jul Aug Year to Aug

R 30,521,392 R 727,445 R 1,166,835 R 1,629,432 R 3,958,524 R 2,007,447 R 9,489,683

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The Development Indicators 2012, launched by the Presidency in

August 2013, reflects the following in respect of households with

access to sanitation:

DEVELOPMENT ORIENTATION

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Achievements through the Urban Settlements Development Grant: 3 308 sanitation service points

(toilets) were installed for informal settlement dwellers.

14 539 additional households were provided with sewer connections.

The backlog in the provision of basic sanitation services was 1 438 895.

The Development Indicators 2012, launched by the Presidency in

August 2013, reflects the following in respect of households with

access to electricity:

DEVELOPMENT ORIENTATION (2)

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Achievements through the Urban Settlements Development Grant:

21 860 additional households were provided with electricity connections.

1 728 600 households were provided with access to free basic electricity

The backlog of electricity connections to consumer units is 971 879.

ACCOUNTABILITY

2010/11 2011/12 2012/13 2013/14 2014/15

Submitted after the due date

Submitted on time

Not submitted Not submitted

Filing of Performance Agreements by HoD EAs and HoDs should visibly support performance management processes

and ensure that this cascades down to other levels in the SMS, if the principle of accountability is to be achieved in the Public Service.

Submission of the PA of the HoD by the due date:

The current HoD was appointed on 22 April 2014 and did not qualify for evaluation in the 2014/15 financial year.

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ACCOUNTABILITY (2) Filing of Performance Agreements by SMS members

The Department indicated that it had initiated the process for validation of performance agreements against annual performance plans, including verification of individual performance against programme and organisational performance as per the Performance Management Development System.

The Annual Report Guide for National and Provincial Departments prescribes that information regarding the signing of PAs by SMS members, the reasons for not complying within the prescribed timeframes and disciplinary steps taken must be presented. This information was however omitted from the 2013/14 Annual Report.

The Department paid performance rewards to 19.5% of SMS members (17 out of 87), amounting to R556 000.

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PROFESSIONAL ETHICS

Cases Referred

% Feedback Received

% Cases Closed

Outstanding Cases

Aug ’12 113 7% 2% 111

Sept ‘13 268 4% 1% 265

Sept ‘14 187 6% 2% 184

National Anti-Corruption Hotline (NACH) Cases received from the NACH are forwarded to national and

provincial departments in accordance with agreed protocols for investigation.

The strategy to refer cases for investigation to departments is premised on the assumption that departments have the capacity to deal with cases.

The figure shows that the feedback and closure rate remains unsatisfactory.

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PROFESSIONAL ETHICS (2)

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Financial Disclosure Framework All members of the Senior Management Service are required to

disclose the particulars of all their registrable interests (e.g.

companies and properties) to their respective Executive

Authorities (EAs) by not later than 30 April each year. EAs to submit copies to the PSC by not later than 31 May of

each year.

According to the report on the e-Disclosure System, only 19

SMS members from the Department has submitted their

disclosures to the Ethics Officer.

PROFESSIONAL ETHICS (3)

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FYNo of people on

suspensionAverage no of days

on suspensionCost of suspension

(R'000)

2010/11 3 126 R 118

2011/12 0 - -

2012/13 2 123 R311 733

2013/14 5 60 R2 148 021

Precautionary suspensionsSuspensions should not exceed 60 days and extended periods of

suspension has a negative effect on service delivery, the management of discipline in the workplace and also on the employee, who has a right to work.

It is noted that although the number of employees on suspension increased, the period of suspension did not exceed 60 days.

Financial Misconduct Departments are compelled to report on

finalised financial misconduct cases to,

amongst others, the PSC. In the 2012/13 financial year, the

Department submitted a nil input,

indicating that no cases of financial

misconduct was finalised. It is noted that irregular expenditure, as

well as fruitless and wasteful expenditure

were incurred during the 2013/14 financial

year, and that the Department was still

investigating these matters.

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PROFESSIONAL ETHICS (4)

TRANSPARENCY

• The Department’s Website is user friendly and most documents are easily accessible.

• The Promotion of Access to Information Act, 2000, Act 2 of 2000 (PAIA), gives effect to the Constitutional right of access to information held by the State and any information that is held by another person that is required for the exercise or protection of any rights.

• Section 14 of the PAIA stipulates that the information officer of a public body must compile a manual containing prescribed information.

• PAIA is available on the Website. This is an improvement from the previous financial year.

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TRANSPARENCY (2)

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The Annual Reports (AR) are a key accountability mechanisms, but it

only serves to promote transparency if it is comprehensive and easily

accessible. The AR for the 2013/14 financial year is available on the

Department’s Website. However, as already indicated, the AR does

not reflect all HR information required. As at 06 October 2014, the Strategic Plan and Annual Performance

Plan could not be located on the Department’s website. The AR should, amongst others, reflect information on the

Department’s Service Delivery Improvement Plan and a report on

consultant appointments using appropriated funds. The 2013/14 AR indicates that 271 consultants were utilised in 55

projects at a cost of R 83 985 008.

GOOD HR PRACTICES

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The Department did not have a Human Resource Plan in place as required.

Vacancy RateAverage period in months of

post vacant2012/13 2013/14 Aug ‘14 2012/13 2013/14

22% 22.2% 20.9% 24.18 20.75

Highest vacancy rates per Critical Occupations – March 14

No of Posts Number of Posts Filled

Vacancy Rate

Engineers & related professionals 16 11 31.3%

Economists 38 22 42.1%Financial, economics & related professionals

73 48 34.2%

Senior managers 75 53 29.3%TOTAL 915 712 22.2%

• The MPAT 2013 departmental scorecard:

GOOD HR PRACTICES (2)

1 Non compliance

2Partial compliance

3 Full compliance

4Full compliance and doing things smartly

Standard 2012 2013

HR Planning 2 2

Organisational Design and Implementation 2 2

HR Development Planning 1 3

Pay sheet certification 3 2

Application of recruitment and retention practices 2 2

Management of diversity 1 1

Implementation of level 1-12 Performance Management System 2 2

Implementation of SMS Performance Management System 1 3

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Grievance managementThe promotion of sound and fair labour relations in the workplace is an essential aspect of human resource management. Given the importance of human resource management, which is pivotal to effective public administration and service delivery, it is essential that grievances are well-managed.

GOOD HR PRACTICES (3)

Financial yearDealt with within the Dept. Referred to PSC

Lodged Resolved Lodged Resolved2011/12 7 2 2 12012/13 4 0 3 22013/14 12 3 3 3

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The nature of grievances: Salary problems (75%) Unfair treatment (17%) Filling of posts (8%)

EMPLOYMENT EQUITY

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Designated Group 2011/12 2012/13 2013/14

Black people 93.5% 93.3% 86.3%

Women

Target: 50% at SMS level by March 2009

36.4% 39% 45%

People With Disabilities

Target: 2% to be achieved by 31 March 2010

0.3% 0.3% 0.1%

Public administration must be broadly representative of South African people, with employment and personnel management practices based on ability, objectivity fairness and the need to redress the imbalances of the past to achieve broad representation

The Department is still grappling with the employment of women at SMS level and people with disabilities.

The Department has maintained its audit record of unqualified audits over the past two years. Effective spending of the Rural Household Infrastructure Grant remains a challenge.

Spending trends as at August 2014 point to inadequate financial management and a need to put mitigating strategies in place to ensure spending in line with predetermined objectives and targets.

Similar to the previous financial year, the Auditor-General made findings in respect of the usefulness and reliability of performance information reflected in the Annual Report. In addition, not all required information in respect of Human Resources was reported. There is therefore a need for the Department to improve accountability.

The PSC has noted achievements in respect of access to sanitation and electricity. The Department would have to put measures in place to eliminate the backlogs reported.

CONCLUDING REMARKS

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There is concern regarding the maintenance of professional ethics

in the Department. There has been no improvement in the

Department’s ability to deal with cases reported to the NACH and

no Financial Disclosure Forms were submitted to the PSC by the

due date. The latter impacts negatively on the EA’s ability to

monitor and deal with potential and actual conflicts of interest. Although the MPAT results shows improvements in some areas of

compliance, areas around the submission of Financial Disclosure

Forms, having a human resource plan in place, the filling vacancies

and employment equity requires immediate attention. It is of

concern that since the last report to the Portfolio Committee there

had been no improvements in these areas.

CONCLUDING REMARKS (2)

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24National Anti-Corruption Hotline for the Public Service: 0800 701 701

Thank you

Siyabonga

PSC Website: PSC Website: www.psc.gov.zawww.psc.gov.zaNational Anti-Corruption Hotline for the Public Service: National Anti-Corruption Hotline for the Public Service:

0800 701 7010800 701 701