Report of the Auditor-General - RP122/2002 29 January 2003

1. Presentation to the Public Service and Administration Portfolio Committee on the appointment and utilisation of consultants Report of the Auditor-General - RP122/2002 29 January 2003

2. Introduction Reports issued by the Office on the appointment and utilisation of consultants: • RP99/1996 • At certain departments of the Gauteng Provincial Administration - PR242/2001 • At certain departments of the KZN Provincial Administration - included in annual reports of departments • At certain national departments and provincial administrations - RP122/2002

3. Purpose of the presentation • To facilitate public accountability by bringing audit findings and corrective measures to the attention of Parliament • To present outstanding issues and petition responsible role players to address these issues

4. Objectives of the audits • To respond to a request by Cabinet in view of perceptions that the PS had become a major purchaser of consultancy services • To follow up on the corrective measures implemented since the previous audit reported on in 1996

5. Focus areas The audits focused mainly on the following areas: • Appointment of consultants • Control over and monitoring of the execution of the functions of consultants • Responsibilities of departments and implementation of proposals by them

6. Appointment and use of consultants 1. Alternative ways of addressing needs, such as training, capacity building and recruitment, were not always considered.  Filling of vacant posts, setting of productivity standards, networking, information sharing Management competencies Coordination initiatives Maintaining of a database of consultants used Accreditation of consultants and monitoring by National Treasury

7. Appointment and use of consultants 2. Sound procurement principles were not always applied. Strengthen existing guidelines and procurement procedures and determine national norms and standards National Treasury to provide guidance on supply chain management by 1 April 2003 National Treasury and DPSA to coordinate national norms and standards

8. Appointment and use of consultants 3. Consultants without the required experience or competencies were appointed which resulted, in some instances, in staff having to assist consultants.  Departments to consider impact of consultants on internal resources  References of consultants to be followed up  Consultants to provide proof of previous successes  DPSA to introduce a code of conduct or accreditation system for consultants  Departments to put into practice proper contract administration and quality assurance procedures before appointing consultants

9. Appointment and use of consultants 4. Terms of reference did not always provide for skills transfer and the transfer of skills and capacity building were not monitored closely.  Provide opportunities to staff to learn from consultants by creating mixed teams  DPSA and SAMDI to assist departments in following best practice frameworks for skills transfer Departments to identify skills to be transferred Quality of skills transfer and capacity building to be monitored

10. Appointment and use of consultants 5. Appointments were often of a virtually permanent nature or contract periods were continually extended, causing departments to become reliant on consultants.  Vacancies to be filled and periods of appointment of consultants to be more defined  Cost-effectiveness of appointments to be compared with that of filling of vacant posts  DPSA to evaluate remuneration structures for positions in the PS ….. cont.

11. Appointment and use of consultants 5. Appointments were often of a virtually permanent nature or contract periods were continually extended, causing departments to become reliant on consultants. Departments to monitor vacancies on PERSAL Departments to use oversight reporting facility available on DPSA website DPSA guide on hourly fee rates for consultants to be used

12. Appointment and use of consultants 6. The lack of detailed tender specifications led to tenders being extended and, consequently, to non-compliance with the requirements of transparent, fair and competitive procurement.  Departments to substantiate the need for appointing consultants with proof that it cannot be met internally  Appropriate briefs regarding the nature, outcomes and time frames of products to be compiled  TOR to serve as a guide to consultants regarding scope of work. …cont.

13. Appointment and use of consultants 6. The lack of detailed tender specifications led to tenders being extended and, consequently, to non-compliance with the requirements of transparent, fair and competitive procurement. Departments to ensure proper job evaluation and effective management practices Procurement framework to be clear on detailed tender specifications

14. Monitoring and control of consultants 7. The performance, progress and impact on service delivery of the work of consultants were not always monitored.  Management information to be provided for the assessment of the performance of consultants  Regular evaluations to be done during and after assignments  Consultants’ remuneration to be linked to performance  Performance to be evaluated by independent internal auditors …cont.

15. Monitoring and control of consultants 7. The performance, progress and impact on service delivery of the work of consultants were not always monitored. PSC to monitor information on consultants included in annual reports and to establish relevance and usefulness of information Management information available on oversight reporting facility to be used Guide on fee rates to be implemented Departments to ensure that contract management staff is competent and skilled

16. Involvement and responsibilities of departments 8. Departments did not create an environment in which consultants could perform their duties - causing delays.  Departments to create supportive organisational climate  Processes conducive to the achievement of the objective for which the consultant was appointed to be put in place  Departments to plan properly before appointing consultants

17. Implementation of proposals 9. Proposals were not always implemented, due to inadequate human and financial resources, lack of commitment, lack of computer skills. Capacity to implement proposals to be assessed before tender specifications are finalised Management to accept ownership of business plan before the project starts Departments to assess the impact of the work of consultants

18. The way forward • The majority of the key findings of the 1996 special report have not been addressed. • Consultants should be properly managed. • The appointment of consultants should be considered in the strategic planning and budgeting phases. • The framework for supply chain management to be compiled by NT should enhance the management of consultants. • Departments/DPSA/NT should monitor the impact of the appointment of consultants in the public service on a continuous basis.