PRESENTATION TO THE PORTFOLIO COMMITTEE ON PUBLIC SERVICE AND ADMINISTRATION

1. PRESENTATION TO THE PORTFOLIO COMMITTEE ON PUBLIC SERVICE AND ADMINISTRATION 27 October 2010

2. INTRODUCTION • The Public Service Commission (PSC) has been requested to brief the Committee on the implementation of section 195 of the Constitution, 1996, by the other entities reporting to it • These entities include the Department of Public Service and Administration (DPSA), Public Administration Leadership and Management Academy (PALAMA) and the State Information Technology Agency (SITA) • In order to assess the implementation of section 195 of the Constitution, the PSC normally applies its Transversal M&E Systemto a department, a process which usually takes a few months • The PSC applied its Transversal M&E System, that evaluates departments against a specific set of indicators and standards that assess the performance of departments against the nine values in section 195 of the Constitution, in the DPSA in the 2007/08 research cycle • The system has not been applied in PALAMA • SITA is established by the SITA Act, 1998 and is governed and controlled by a Board of Directors, appointed by the MPSA after consultation with Cabinet. As it is a public entity, the PSC has not applied its M&E System to SITA 2

3. approach • For each of the entities, the following indicators were used in respect of the 2007/08, 2008/09 and 2009/10 financial years: • Financial Management (Based on previous annual reports, plus interim expenditure reports from National Treasury) • Service Delivery Outputs (Based on Annual Reports) • Human Resource Management and Labour Relations (based on Annual Reports and PSC records) • Ethics and Anti-Corruption (Based on PSC Records) • The National Treasury format for annual reports does not apply to the SITA, and some information normally available in Public Service reports was therefore not readily available, e.g. HR oversight report

4. DPSA

5. DPSA: application OF THE m&e sYSTEM • The DPSA’s performance and compliance with the nine Constitutional values and principles for the 2007/08 evaluation cycle was 82%, which is excellent performance against several of the standards

6. DPSA: application OF THE m&e sYSTEM (cont)

7. DPSA: application OF THE m&e sYSTEM (cont)

8. DPSA: FINANCIAL MANAGEMENT • In the 2007/08, 2008/09 and 2009/10 financial years the DPSA obtained unqualified audit opinions. • No recurring issues emanating from the audits were identified • In the 2009/10 financial year the DPSA incurred irregular expenditure to the amount of R4 464 000 • The AG noted that in 2009/10, the Accounting Officer did not provide Parliament with the strategic plan at least 10 days prior to the discussion and the strategic plan does not include indicators for the department’s programmes

9. DPSA: PERFORMANCE INFORMATION (2009/10) • The AG indicated that– • the DPSA has not reported on all the predetermined objectives • the planned and reported performance targets were not specific, measurable and time bound • Changes to the objectives from the approved strategic plan for the year under review were not disclosed and explained • Some of the planned and reported indicators were not verifiable, as it was not possible to adequately validate the processes and systems that produce the indicator • The PSC’s assessment of the performance information found that - • there is a confusion between the output, indicator and target columns in the sense that all three columns give additional descriptions of the output

10. DPSA: PERFORMANCE INFORMATION (2009/10) • the actual performance column in some instances describes completed activities that will lead to the production of the output, and it is not possible to determine whether the output had been achieved, e.g.

11. DPSA: PERFORMANCE INFORMATION (2009/10) • it is in some instances not possible to establish whether the output has been achieved • the reasons for non-achievement were not reflected

12. DPSA: HUMAN RESOURCES MANAGEMENT Ideal vacancy rate in the Public Service is at between 7 – 10%

13. DPSA: HUMAN RESOURCES MANAGEMENT (cont) • In the 2006/07 financial year, the AG noted that the DPSA had not updated its Human Resource (HR) Plan for the year ended 31 March 2009. The HR Plan was subsequently revised and approved on 30 March 2010

14. DPSA: LABOUR RELATIONS Must hold a hearing within a month or 60 days

15. DPSA: ETHICS AND ANTI-CORRUPTION

16. PALAMA

17. PALAMA: FINANCIAL MANAGEMENT • In the 2007/08, 2008/09 and 2009/10 financial years PALAMA obtained unqualified audit opinions • No recurring issues emanating from the audits were identified • In the 2009/10 financial year, the AG found that the strategic plan of PALAMA did not include measurable objectives, expected outcomes, programme outputs, indicators (measures) for all the objectives

18. PALAMA: FINANCIAL MANAGEMENT (CONT) • In the 2007/08, 2008/09 and 2009/10 financial years PALAMA Trading account obtained unqualified audit opinions • No recurring issues emanating from the audits were identified

19. PALAMA: PERFORMANCE INFORMATION (2009/10) • The AG indicated that for the selected objectives 31% of the planned and reported targets were not: • specific in clearly identifying the nature and the required level of performance • measurable in identifying the required performance • In addition, the AG reported that the internal policies and procedures of PALAMA do not adequately address the process pertaining to the planning and monitoring of predetermined objectives at the overall performance level • 29 of the 57 outputs were fully achieved, which constitutes 51% achievement of service delivery outputs. A further 25 (44%) outputs were partially achieved • Reasons for non-achievement include- • Service providers could not confirm their availability for the dates set • Lack of participation by key external stakeholders • Delay in donor funding • Financial constraints

20. PALAMA: HUMAN RESOURCE MANAGEMENT Ideal vacancy rate in the Public Service is at between 7 – 10%

21. PALAMA: HUMAN RESOURCE MANAGEMENT

22. PALAMA: LABOUR RELATIONS

23. PALAMA: ETHICS AND ANTI-CORRUPTION • No finalised financial misconduct cases were reported to the PSC during the 2007/08, 2008/09 and 2009/10 financial years

24. SITA

25. SITA: FINANCIAL MANAGEMENT • In the 2007/08, 2008/09 and 2009/10 financial years SITA obtained unqualified audit opinions • In all three financial years, the AG noted that a contract management system that facilitates a fair, equitable, transparent, competitive and cost-effective procurement and provisioning system was not in place • In the 2009/10 financial year, irregular expenditure to the amount of R214 million was incurred as a proper procurement and provisioning process was not followed • The Strategic Plan and budget for the 2010/11 financial year had not been approved by the EA of SITA within the prescribed periods

26. SITA: FINANCIAL MANAGEMENT (CONT) • In regard to non-adherence to legislation, the AG found that in some instances- • service level agreements were not signed or concluded • the invitation to tender occurred without an approved business case • the business cases did not include a budget for the required goods and services • a procurement schedule for the execution of a request for a bid was not submitted for approval to the designated official at the government department • bid responses received after the approved bid closing date were evaluated • the declaration of interest form was not completed and signed at meetings • the information used in the evaluation reports did not agree to bid responses submitted by the bidder • quotations were requested from suppliers who were not on the list of preferred suppliers

27. SITA: PERFORMANCE INFORMATION (2009/10) • The AG indicated that for the selected objectives – • 44% of the planned and reported measures were not clear, with an unambiguous definition to allow for data to be collected consistently • 22% of the planned and reported targets were not specific in nature and measurable in identifying the required performance • 13 of the 22 outputs were fully achieved, which constitutes 59%achievement of service delivery outputs • Reasons for non-achievement include- • Decrease in spending by customers and SITA tariffs were not increased • Challenges with regard to debt collection from clients • High leadership turnover and the impact thereof on staff morale

28. SITA: HUMAN RESOURCE MANAGEMENT • The turnover on critical skills and best performers was 1.78%, as compared to the target of 7% • 22% of the training budget was spent on leadership development

29. SITA: ETHICS AND ANTI-CORRUPTION • The AG noted the following in respect of the 2009/10 financial year: • The Special Investigation Unit is investigating four cases relating to procurement irregularities • As at 31 March 2010, internal audit had completed 15 investigations. These investigations related to- • Irregularities within the procurement process (12) • Human Resources matters and contract and invoicing disputes (3) In addition, one case was handed to the Commercial Crime Unit of the SAPS • As at 31 March 2010, there were 20 cases under investigation by internal audit. These investigations related to procurement irregularities, conflicts of interest and irregularities in the human resource and payroll departments

30. CONCLUSION • This presentation has highlighted areas that impact on the performance of the DPSA, PALAMA and SITA in respect of key issues over a period of three financial years • The PSC trusts that the information highlighted in this presentation addresses the Portfolio Committee’s request to be briefed on the implementation of section 195 of the Constitution, 1996, by the other entities reporting to it

31. THANK YOU