Forum of South African Directors General

1. RESPONSE TO PUBLIC SERVICE COMMISSION PRESENTATION ON KEY PERFORMANCE AREAS REQUIRING THE ATTENTION OF EA’S AND HODS Forum of South African Directors General 13 June 2012

2. INTRODUCTION 22 2

3. Background • FOSAD is in general agreement with the PSC presentation • We will suggest some additional perspectives in a few areas • We will identify some additional areas requiring the attention of Executive Authorities and Heads of Departments • The President has tasked FOSAD to focus on addressing the administrative management issues raised in the PSC report • In April 2010 the President met with senior public servants with the aim of finding ways to improve the performance of the public service • In his speech to senior public servants, the President identified a number of examples of poor performance • The President posed the following question to the senior public servants: “Why is this the case, given that we have capacity, relatively well-paid and educated staff, and budgets, and given that our administrative systems are not worse than any other in the world?” 33

4. Causes of the problems • Recognition that while some regulatory frameworks may require some improvements, the key cause of the identified problems is that some managers are not managing adequately • The fact that some departments are performing well in the identified areas indicates that it is possible for all departments to do the same • Management culture needs to change • Top management of many departments need to pay more attention to fixing basic administrative challenges where they exist • There is a culture in many departments of viewing administrative issues as non-strategic and therefore not requiring the attention of top management • EAs and HODs need to regularly monitor progress with addressing these issues in their departments 44

5. Government initiatives to address the issues • FOSAD made a commitment to the President that it will work towards addressing the causes of the problems • FOSAD is now regularly monitoring a range of indicators of management performance • Delivery Agreement for Outcome 12 “An efficient and effective public service” focuses on some of the issues raised in the PSC report, and progress in this regard is regularly monitored by Cabinet • Presentation will address the issues raised in the PSC report, with reference to the FOSAD monitoring and the work of NT, DPSA and DPME to address the issues • Above work needs to be complemented by increased accountability for poor performance by individual Heads of Department – Parliament has a key role to play in this regard 55

6. Indicators being monitored by FOSAD, relevant to PSC report • Over the past year, FOSAD has initiated monitoring of the following indicators: • Responsiveness to the Presidential Hotline • Average time it takes to fill a funded vacancy in the public service • Filling of funded vacant posts • Payment of suppliers within 30 days of receipt of a legitimate invoice • Numbers of qualified, adverse and disclaimer audit reports • Timeous submission of quality plans and annual reports to Parliament • Timeous responses to Chapter 9 institutions and the Public Service Commission • Feedback to the public on anti-corruption hotline cases • Finalisation of anti-corruption hotline cases • Numbers of qualified, adverse and disclaimer audit reports • Filing of HoD performance agreements with the PSC • Submission of financial disclosure forms to the PSC • Waiting times and turnaround times for various services Reports on progress per department and province are tabled at FOSAD meetings and periodically to Cabinet and the President’s Coordinating Council 66 6

7. DPME: Assessment of management performance • DPME in collaboration with DPSA, NT and Offices of the Premier is implementing a Management Performance Assessment Tool (MPAT) • Assessment against 31 management standards related to strategic management, governance, HR, supply chain management • Standards based on legislation and regulations • 4 performance levels: • Level 1 Non-compliance with legal/regulatory requirements • Level 2 Partial compliance with legal/regulatory requirements • Level 3 Full compliance with legal/regulatory requirements • Level 4 Full compliance and doing things smartly • During 2011/12 assessments were completed by 103 departments • Assessments will be carried out annually to monitor improvement against baselines • This presentation will mention findings relevant to issues raised in the PSC presentation 77

8. RESPONSES TO SPECIFIC ISSUES 88 8

9. Improve the quality of service delivery (PSC slide 3) • FOSAD agrees with PSC slide on improving the quality of service delivery. We would suggest that attention also needs to be paid to the management of service delivery improvement in addition to addressing other areas of public management • In the MPAT assessment facilitated by DPME in 2011/12, nearly three quarters of national and provincial departments rated themselves as being less than fully compliant with the Public Service Regulations related to service delivery improvement, and nearly half of departments indicated that they do not have a service charter and/or service standards in place, as required by the Regulations • This is a concern, given government’s emphasis on improving service delivery, and considering that since 2001, service delivery improvement plans, service charters, and service standards have been the key instrument of government to improve service delivery at national and provincial level 99

10. What DPSA is doing to improve the quality of service delivery • DPSA will start monitoring the quality of service delivery improvement plans submitted by departments for the 2012-2015 cycle • DPSA is facilitating sharing of knowledge about the management of service delivery improvement through service delivery forums • The Centre for Public Service Innovation is making service delivery awards and service delivery innovation awards in order to acknowledge good performance • DPSA is assisting departments to improve business processes and identify and document standard operating procedures (e.g. Department of Home Affairs) • DPSA is assisting departments to identify appropriate service delivery models 1010

11. Better performance management (PSC slide 4 ) • FOSAD agrees with the PSC that there are problems with indicators and targets in APPs and performance reporting against these in Annual Reports • In the MPAT assessment facilitated by DPME in 2011/12, nearly three quarters of departments assessed themselves as fully compliant (or better) with Treasury guidelines on planning and reporting and indicated that they have adequate performance information policies in place • MPAT assessment results for this area of management not in line with Auditor General ‘s negative findings on the reliability of reporting against predetermined objectives • This points to a need for DPME, the Office of the Auditor General, and National Treasury to engage with departments to develop a common understanding of compliance requirements for smart, measurable indicators and evidence-based reporting against these • Parliament as the receiver of strategic plans, APPs and Annual Reports of departments has a vital role to play in the strengthening of the quality of performance information and reporting against predetermined objectives 1111

12. Improve performance management of personnel (PSC slide 4) • FOSAD also agrees with the PSC recommendation that the performance management of personnel needs to improve • In the MPAT assessments, less than half of departments indicated full compliance with the performance management requirements for the Senior Management Service • FOSAD is monitoring filing of HoD performance agreements with the PSC • Cabinet is currently considering FOSAD proposals for strengthening performance management of HoDs and linking to results of MPAT assessments • DPSA is currently considering the impact of the lack of uniformity in the performance management system for levels 1-12 and will make the required amendments based on the assessment • The current regulatory frameworks do enable management to impose sanctions for non-performance • While it is being utilised by some managers it is worrying that this tool is under-utilised • Again, Parliament has a role to play in holding HODs accountable for this 1212

13. More effective financial management (PSC slides 5-9) • While FOSAD agrees in general with the PSC findings on financial management, we have some concerns about linking the percentage of targets fully achieved to the percentage of budget fully spent in slides 6 and 7 as this might not give a complete picture • The targets in the APPs are meant to be stretch targets and may not be met for reasons beyond the department’s control • It appears that the methodology does not incorporate partially achieved targets even though they could have been 95% achieved • As indicated previously there are problems with the reliability of reports against predetermined objectives 1313

14. Financial management capability maturity model • The financial management capability maturity model (FMCMM) was developed by National Treasury in 2008 to assess the financial management maturity of departments and identify areas of improvement • Model comprises of a set of questions (583 in 2010) based on international best practices, providing a financial management benchmark which departments can work towards • Focus areas include revenue management, asset management, liability management, goods and services, compensation of employees, transfer payments • Model consists of 6 progressive levels of maturity, where levels 1-3 focus on compliance and levels 4-6 measure capability of departments beyond compliance 1414

15. Financial management capability maturity model indicates improvement from 2010/11 to 2011/12 Source: National Treasury FMCMM Report 2011 1515 15

16. What NT is doing to improve financial management • NT is represented in audit committee meetings of almost all national departments, analyses reports, and suggests corrective plans to departments concerned • NT facilitates and funds the Public Sector Audit Committee Forum (NT, IIASA, SAICA, IoDSA, and IRMSA) to train members of audit committees with a view to strengthen their role • NT has embarked on projects to train personnel to ensure understanding and adherence to the applicable accounting frameworks and standards • NT in collaboration with PALAMA revised all financial management courses • NT and DPSA has developed standard delegations for the PFMA and Public Service Act to ensure appropriate delegations (still to be approved by Cabinet) • Reduction in numbers of qualified audits from 2009/10 to 2010/11 as indicated in slide 8 of the PSC’s presentation indicates an improvement in financial management and may be partially contributed to the efforts of NT 1616 16

17. Taking action against financial misconduct • FOSAD agrees that it is critical to act against financial misconduct as raised by the PSC in slide 9 • Recent disciplinary action taken by the KZN provincial government is a good example and shows that it is possible within the current regulatory frameworks • FOSAD is actively monitoring the finalisation of disciplinary cases • Parliament through its oversight function has a key role to play in holding HoDs accountable for taking the required disciplinary action for financial misconduct 1717

18. Improving human resource management (PSC slides 11 – 12) • We agree with PSC analysis regarding shortages of critical skills, problems with skills profiles in some areas, and a need to fill funded vacant posts more quickly • In the analysis of the vacancy rate and period of posts vacant as done by the PSC it is important to differentiate between funded vacancies and unfunded vacancies (PSC’s analysis appears to included all vacancies captured on PERSAL) • Many national and provincial departments capture structures which include unfunded posts on PERSAL • Therefore difficult to ascertain levels of funded vacancies • However, unspent personnel budgets at the end of the financial year are an indication of the level of funded vacancies with the Public Service • General trend for the previous financial years is that close to or above 100% of the personnel budget is spent • Therefore level of funded vacancies at any one time is relatively low (approximately 5%, which would be expected with normal turnover) • Note that this is a generalisation and that there are higher levels of funded vacancies in a few departments 1818

19. What DPSA is doing to improve human resource management • In order to address the problem of unfunded vacancies, DPSA recently issued a circular to all departments instructing them to abolish all unfunded posts and only reflect the approved funded organograms on the PERSAL by 31 May 2012 • DPSA are actively supporting departments in this process and will also monitor the implementation • AGSA will in future audit capturing of appropriate structures on PERSAL • DPSA is instituting special recruitment processes for scarce skills   • DPSA is assisting departments to improve the practice of career management to enhance staff recruitment, development and retention • Average time to fill a funded vacancy in the public service is actively being monitored by FOSAD and improved to 4.9 months for the first 3 quarters of 2011/12 ( 3.1 months for national departments and 5.4 months for provinces) compared to 9 months in 2010 • Target in Outcome 12 Delivery Agreement is for all vacant funded posts to be filled within 4 months 1919

20. Skills profiles (PSC slides 13-14) • FOSAD is of the view that the key problem with skewed skills profiles is at provincial rather than national level • For example the Minster of Health has been highlighting the disproportionate increase in administrative staff in provincial health departments • The tables in slides 13 and 14 of the PSC presentation appear to be based on data from departments’ annual reports • There is a need for DPSA to update the standard formats for the HR tables in the annual reports because they are not aligned to the new occupational classification system • The data in the annual reports does not appear to be giving an accurate picture of skills levels in national departments 2020

21. What DPSA is doing to improve skills profiles • In order to strengthen organisation design DPSA is developing standard organisational structures for generic functions such as social development, corporate services, provincial Offices of the Premiers, Education, Health and EA’s offices • This will assist with addressing some of the imbalances in skills profiles identified in the PSC’s presentation and the skewness towards cooperate services and ministers support identified through other analyses • The consultation process of structures with the MPSA will further contribute towards addressing this issue 2121

22. Critical skills shortages (PSC slide 15-16) • FOSAD agrees that there are shortages in key skills areas such as engineers and medical practitioners • However, the tables in departments’ annual reports indicate the positions that are critical for the department to perform its mandate • Occupations identified as critical in the tables are not necessarily in shortage • Therefore the tables in slides 15 and 16 of the PSC presentation appear to reflect other ‘critical’ occupations in addition to the key critical skills shortages 2222

23. What DPSA is doing to address critical skills shortages • DPSA through HR CONNECT have developed and distributed department-specific and sector-specific reports on the extent and depth of skills gaps and shortages in the Public Service • DPSA is supporting departments in the interpretation of the reports and the development of department or sector-specific intervention strategies, through supply-side initiatives • DPSA is also working with PSETA to upgrade skills of existing staff 2323

24. Ethics and integrity (PSC slides 17-20) • FOSAD agrees with the findings of the PSC on the need to root out corruption and address ethics and integrity in the public service • The submission of financial disclosures is being actively monitored by FOSAD • DPSA in collaboration with PALAMA developed two accredited training programmes on ethics and integrity targeting specific groups of public servants, namely, general employees and anti-corruption practitioners • So far a total of 1666 general employees and 474 anti-corruption practitioners have been trained respectively • Responsiveness to Anti-corruption Hotline is also actively monitored by FOSAD • DPSA is currently finalising the Public Sector Integrity Framework to improve the management of ethics and increase the integrity of public servants 2424

25. What FOSAD and DPSA are doing to address completion of disciplinary cases • In the MPAT assessments, nearly half of departments assessed themselves as non-compliant or partially compliant with the finalising of disciplinary cases within the policy requirements, keeping the necessary documents and submission of relevant reports • DPSA has enhanced the current payroll system to capture the management of disciplinary cases • AGSA will also be auditing capturing of disciplinary cases on the system • FOSAD is actively monitoring the finalisation of disciplinary cases • Sanctioning and precautionary guideline was developed by DPSA • DPSA is reviewing the frameworks for disciplinary and incapacity due to poor performance • DPSA is carrying out labour relations training on disciplinary hearings and dispute resolution 2525

26. Monitoring and evaluation (PSC slide 21) • The MPAT assessments indicated that most departments are not carrying out evaluations of major programmes periodically and using the results of such evaluations to inform changes to programme plans, business processes, and their APP and strategic plan • DPME developed and Cabinet approved the National Evaluation Policy Framework on 23 November 2011, to address this issue • The purpose of the framework is to foreground the importance of evaluation, institutionalisation of evaluations linked to planning and budgeting, improve the quality of evaluations and enhance the utilisation of evaluation findings to improve performance • The framework includes the development of a 3 year and annual national and provincial evaluation plans. The first annual evaluation plan is currently being considered by Cabinet • The policy also includes publication of evaluations and development and implementation of improvement plans 2626

27. What DPME is doing to strengthen M&E capacity • DPME is conducting M&E capacity needs assessments • Improvement plans will be developed in collaboration with the relevant departments, implementation of which will be supported by DPME • DPME has supported PALAMA to develop various courses in M&E • DPME is collaborating with the South African Monitoring and Evaluation Association (SAMEA) to: • Developing minimum competencies for evaluators • Minimum standards for evaluations • DPME are hosting seminars and workshops on topical M&E issues, including local and international experts • DPME is hosting formal quarterly National and Provincial M&E forums to share information on M&E practices and challenges • On line M&E discussion forums are being piloted • DPME has conducted internatinoal study tours with partner departments and Offices of the Premier 2727

28. Other key issues requiring the attention of EAs and HoDs • Supply chain management and payment of suppliers within 30 days • Management of diversity • Public service culture (revitalising Batho Pele) • Management culture (managers must take disciplinary action where necessary, manage performance of subordinates, monitor outputs and outcomes and take corrective measures where necessary, fix basic administrative problems) • Responsiveness to citizens (waiting times, turnaround times, queue management) • Responsiveness to Parliament, Chapter Nines and PSC • IT governance • Facilities management (lack of cleanliness, basic maintenance of facilities) • Debts owed to municipalities by departments Sources: MPAT results, AG reports, monitoring of frontline service delivery, FOSAD monitoring of indicators of management performance 2828

29. Conclusions • FOSAD agrees with the general thrust of the PSC presentation that there needs to be a focus on addressing basic administrative weaknesses • Basic administrative issues which are in a bad state need to be viewed as strategic issues until they are addressed • Need sustained focus on these key performance areas in order to achieve improvements • Accountability is the responsibility of all role players, including Parliament, Provincial Legislatures, EA’s, HoDs, senior managers, and managers • Accountability system needs to be implemented more rigorously at all levels 2929

30. THANK YOU 3030 30