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Briefing to the Portfolio Committee on WOMEN, CHILDREN AND PEOPLE WITH DISABILITIES

Briefing to the Portfolio Committee on WOMEN, CHILDREN AND PEOPLE WITH DISABILITIES. For an Equitable Sharing of National Revenue. 9 October 2012. Presentation outline. 1. Background to the DWCPD 2. Non-financial performance of DWCPD 3. Financial performance/Spending trends of DWCPD

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Briefing to the Portfolio Committee on WOMEN, CHILDREN AND PEOPLE WITH DISABILITIES

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  1. Briefing to the Portfolio Committee on WOMEN, CHILDREN AND PEOPLE WITH DISABILITIES For an Equitable Sharing of National Revenue 9 October 2012

  2. Presentation outline Briefing to the Portfolio Committees on WCPD 1. Background to the DWCPD 2. Non-financial performance of DWCPD 3. Financial performance/Spending trends of DWCPD 3. AG Findings 4. Questions for fiscal oversight 5. FFC Recommendations 6. Research on child welfare services

  3. Recent developments impacting on spending oversight of departments Briefing to the Portfolio Committees on WCPD • MBPRMA (2009) • BRR Reports • Section 5(4): “An assessment of Department’s service delivery performance given available resources; an assessment on the effectiveness & efficiency of Department’s use and forward allocation of available resources; and may include recommendations on the forward use of resources” • Government’s 12 outcomes & targets adopted to improve service delivery efficiency and co-ordination • Departmental budget decisions must be informed by these 12 outcomes • Fiscal austerity measures in the face of perceived future economic uncertainties • Savings and reprioritization of budgets and baselines

  4. BACKGROUND TO DWCPD Briefing to the Portfolio Committees on DWCPD Previously under the Presidency in the Office of Special Projects DWCPD established in May 2009, although only started functioning as a sovereign dept in Nov. 2010 due to lack of capacity Purpose is to “Advance, develop and protect the rights of women, children and people with disabilities through mainstreaming, lobbying, advocacy, awareness raising, empowerment & monitoring compliance in government and all relevant sectors” Four main programmes: Administration, Women Empowerment, Children, people who are Disabled Core functions are: Advocacy and Awareness raising, Institutional Development & Capacity Building and Monitoring and Evaluation on empowerment of women, children & people who are disabled DWCPD contributes to Outcomes 1,2,3,5,6,7,8 & 12 as stated in its BS

  5. Key MTEF Priorities Briefing to the Portfolio Committees on WCPD Advocating the protection of rights Monitoring and evaluating gender Ensuring targets for disability and children integrated into macro-compendium of indicators Mainstreaming gender, disability & children’s rights happens at key fora (e.g. Cabinet, DG forum etc.) Strengthening institutional capacity to delivery quality services Strengthening initiatives in bilateral and multi-lateral initiatives

  6. HOW WELL DID THE DEPARTMENT DO IN 2011/’12? • The DWCPD achieved 54% of all its targets in 2011/’12 • By program, Admin achieved 63% of its targets, Women empowerment 37% , Children’s Rights 57% and People with Disabilities 50% • Major reasons cited for outputs not achieved were: lack of staff capacity, some consultations or approval still to take place, financial reasons etc. • In many cases, narrative provided lacked clarity Briefing to the Portfolio Committees on WCPD

  7. Quality of non-financial information for oversight purposes Briefing to the Portfolio Committees on WCPD • Indicators in AR read as objectives /goals (E.g. safe and secure working environment) • Some indicators not measurable • AG reported a total of 50% of indicators for P2 not measurable • Indicators have more than one target • Area of performance not properly defined (E.g. ENE finalized & submitted to Treasury) • AG reported 27% of targets of P2 don’t define nature of performance • AG reported 42% of reported targets not consistent with indicators & targets as per approved APP • Priority indicators hidden among 120 departmental indicators

  8. What does the org. Structure tell us about the perf. Of the dept? • All three programmes have the same three sub-areas. • Performance information reveal some outputs are duplicated across the three main programme areas (E.g. development of M&E tool) • Could the dept. have improved its performance, achieved economies of scale and reduced costs if some outputs were delivered jointly by programmes (e.g. M&E function)? Briefing to the Portfolio Committees on WCPD

  9. Progression of programme spending and mtef budget Briefing to the Portfolio Committees on WCPD Departmental spending increased by 23.5% in real terms in 2011/’12, mainly due to the migration from the Presidency to a stand-alone dept Dept budget over MTEF expands on avge by 9.9% p.a in real terms (i.e. taking infl. into account), increasing from R143 m in 2011/’12 to R214m in 2014/’15 The above avge increase (compared to other national depts) over MTEF is largely to fund the deputy minister’s office (R39.7m), recruit new staff and sustain dept’s annual programmes

  10. Prioritization of spending & mtef budget Briefing to the Portfolio Committees on WCPD Women’s empowerment program largest share of total budget, but decreases significantly over MTEF to 43% in 2014/15. Positively skewed in relation to other sectors, mainly from transfer payment to the Gender Commission which comprises around 70% of the program budget. Admin. expands from 30% in 2011/’12 to 39% in 2014/’15 mainly as a result of increasing capacity & financing deputy minister’s office Share of the Children’s programme remains fairly constant over the period, with Disabilities increasing substantially after coming off from a low base of 3% in 2010/’11

  11. Progression of line item spending & mtef estimates • CoE increased by 56% in 2011/’12 and will increase by 29% p.a in real terms over the MTEF to fund vacant posts. Staff complement expected to more than double between 2011/’12 – 2014/’15 • Goods & services decreases from 25% growth in 2011/’11 to 8% p.a real growth. Major cost drivers are property payments, travel & subsistence and venues. • Transfer exp. to the Gender Commission did not grow in real terms in 2011/’12 and only a 1.2% forecasted real growth predicted p.a. over MTEF. Suggests future budgetary tension betw. Gender Commission & funding dept. programs. Performance and spending not reported on in the AR. The Dept states exercising accountability of the Commission falls outside its mandate given that the Commission is a Ch 9 institution Briefing to the Portfolio Committees on Economic Development

  12. Line item share of total expenditure & mtef budget Briefing to the Portfolio Committees on WCPD The doubling of the staff complement over the period drives up the share of CoE from 21% in 2010/’11 to 37% in 2014/’15 while the share of transfers & subsidies slides dramatically by 17% Transfers still a significant share of dept. budget although no detailed breakdown provided in BS or AR Goods & Services decreases marginally over time, with savings in some line items offset by dramatic increase in travel & subsistence from R9m in 2011/’12 to R24.8m in 2012/’13. No reason cited in the BS.

  13. Spending performance (fiscal discipline) (1) Briefing to the Portfolio Committees on WCPD DWCPD only spent 54% of its total budget in 2010/’11 compared to 117% in 2011/’12 Overspending by Admin program increased from 31% in 2010/’11 to 57% in 2011/’12. The reasons cited for overspending in the 2011/’12 annual report not very clear. Disabilities programme only spent 3% of its budget in 2010/’11 and 87% in 2011/’12 due to posts not being filled, hence projects not being implemented.

  14. Spending performance (Fiscal discipline) (2) Briefing to the Portfolio Committees on WCPD • Overspending on CoE increased from 17% in 2010/’11 to 31% in 2011/’12. Reasons cited were critical posts being filled and Senior Managers being appointed. AG mentioned increases not approved by NT as per Treasury Regulations. • Employees received above 30% of monthly salary for overtime in contravention of PSR • Salary range posts increased based on incorrect grading in contravention of PSR • Spending on G&S increased from 123% in 2010/’11 to 128% in 2011/’12 due to relocation costs not budgeted for and delayed payments • Not clear the reason for under-spending on capital budget in both years

  15. In-Year Spending profile • Dept. spending only commenced in the last quarter of 2010/’11 because of migration issues • Negative amt. noted in Sept of 2011/’12. Not clear why? • The spike of R50m in Oct 2011 could be the transfer amt coming off the Dept. budget • Second quarter (July – Sept) spending in 2011/’12 lower than the other quarters • No significant spike observed in last quarter Briefing to the Portfolio Committees on WCPD

  16. Unauthorized expenditure Briefing to the Portfolio Committees on WCPD An amount of R3.7 m unauthorized exp. in 2010/’11 result of overspending on the vote. Amt. not condoned in 2011/’12 An amount of R25 m unauthorized exp incurred in 2011/’12. No reason cited for unauthorized expenditure.

  17. Irregular expenditure Briefing to the Portfolio Committees on WCPD An amount of R6.6 m irregular exp. recorded in 2010/’11 as a result of savings on capital budget used to defray current expenditure. Amount condoned in 2011/’12 Dept incurred R35m irregular exp in 2011/’12 due to overtime (R973k) & overspending on compensation (R11.3m). Currently investigation under way regarding R21 m irregular exp. In 2011/’12 but reason cited in AR not very clear.

  18. Summary of financial assessment Briefing to the Portfolio Committees on WCPD • Department is facing a challenge in balancing its mandate with available resources. Problem will continue in subsequent years unless addressed in some meaningful way. Some suggestions would be for the Department to: • Re-look at existing projects and activities and assess if some are non-value adding/non-core & can be done away with or reduced (E.g. overseas travel) • Re-look its implementation strategy to find cost-effective means to implement projects and programs (E.g. Similar outputs betw. programs could be implemented jointly, leveraging IT technology such as teleconferencing facilities to reduce travel expenses etc.) • Address issues related to HR raised by the AG • Budget planning, implementation and monitoring currently weak • AG reported AO did not take appropriate steps to prevent overspending

  19. Auditor general’s report 2011/’12 Briefing to the Portfolio Committees on WCPD • Unqualified audit report in both 2010/’11 & 2011/’12 • AG refers to the following matters for attention: • Audit committee did not review effectiveness of internal control systems & institution’s compliance with legal & regulatory provisions • No internal audit function • SCM procedures and regulations flouted (E.g. not applying preference points system) • HR plan did not do budget analysis to ensure sufficient funds available • No effective steps to prevent unauthorized and irregular expenditure • In-year monitoring inadequate & not compliant with laws • Investigation launched into approval of overtime, recruitment and irregular appointments made • found employees were negligent & recommended disciplinary action should be taken

  20. Suggested fiscal oversight questions (1) Briefing to the Portfolio Committees on WCPD • Transversal • Have Committee recommendations in Oversight Reports on the previous Annual Report been implemented and/or reported on? • Can the DWCPD publish the full APP report on it’s website? • How will the department address the issues raised in the 2011/’12 AG report? • How has the DWCPD responded to the recommendations made in the report on the investigation of overtime, recruitment and irregular appointments?

  21. Suggested fiscal oversight questions (2) Briefing to the Portfolio Committees on WCPD • Non-Financial • When and how will Performance Information (SOs, PIs and targets) be streamlined in terms of: • best practice criteria? • better reflecting performance dimension? • measuring efficiencies? • How can Department prioritize key outputs in future AR in order to facilitate better oversight?

  22. Suggested fiscal oversight questions (3) Briefing to the Portfolio Committees on WCPD • Financial • Has an internal control committee been established? • What steps is the department taking to avoid over-expenditure in 2012/’13? • Has the HR plan of the department been costed?

  23. Parliament can dictate the format of the Annual Report • National Treasury Regulation 18.3 (2005) “Contents of annual reports” - In preparing the annual report of an institution, the accounting officer must, e.a: • include any additional informationrequired by Parliament or the provincial legislature. • FFC therefore suggests that the Committee requires the Department to: • publish their responses to previous Committee oversight report; and • publish their progress on priority outputs as defined by the Committee, on first pages of Annual Report

  24. FFC RECOMMENDATIONS Briefing to the Portfolio Committees on WCPD

  25. FFC Recommendation 2013/14 Annual Submission on DoR • FFC presented all previous recommendations relevant to the Committee that it had made last year • For 2013/14 Annual Submission, FFC has made recommendations related to: • Financing e-Education and Achieving Policy Goals in Public Ordinary Schools • Assessing Gender Responsive Budgeting in the Local Government Sphere in South Africa

  26. Recommendations: Financing e-Education • Necessary to understand why the e-education challenge is not being met • Some reasons include the need for concerted cultural and technological adaptation, education is a concurrent function between national and provincial government, requirement for explicit budget allocations for e-education, supporting strategies and funding, building public accountability for policy implementation • National and provincial education sector requires firm and expert guidance on designing e-education • e-Education Commission

  27. Recommendations: Financing e-Education • Limited data available on e-education expenditure and specifically on e-learning expenditure • Should be remedied through making explicit budget allocations in the annual budgeting process and through explicit reporting on expenditure on e-learning and e-education • A well-structured IG financing mechanism should be established with explicit guidelines to provincial departments of education regarding the budget line items that require prioritization

  28. Recommendations: Assessing Gender Responsive Budgeting in the Local Government Sphere in SA • National and Provincial Governments should: • Run a pilot on gender budgeting in a few municipalities • Ensure that gender planning is institutionalised in municipal IDPs by sector • Provide gender budgeting good practice guides and toolkits • Provide guidelines for collecting sex disaggregated data • Local Government should: • Institutionalise gender responsive budgeting process linked to IDPs • Build capacity for gender mainstreaming and gender responsive budgeting at the local level • Ensure gender-responsive appropriations and budget allocations • Ensure gender-sensitive public participation and consultations at local level

  29. ONGOING WORK ON CHILD WELFARE SERVICES IMPACTING ON DWCPD Briefing to the Portfolio Committees on WCPD

  30. Ongoing work on Child Welfare Services • Finalised a draft report on the provision and funding of Child Welfare Services in South Africa • The objectives of the report: • To provide an overview of government policy in the provision and funding of child welfare services in South Africa. • To provide an analysis of child welfare services budgets in South Africa. • To identify key issues to be addressed to improve the provision and funding of child welfare services in South Africa.

  31. Main Findings of the legislative and policy framework Lack of human resource capacity in child welfare service provision, both at NPOs and in terms of the capabilities of Provincial Departments of Social Development to administer and monitor the current grant system. Costing exercises point to a lack of adequate funding of NPOs by Provincial Departments of Social Development through existing subsidies and programme funding in order to delivery on requirements of the Children’s Act. Court cases involving child welfare services affirmed the responsibilities of Provincial Departments of Social Development to implement policies based on adequate funding of NPOs.

  32. Main Findings of the legislative and policy framework A deterioration of Auditor-General audit opinions for Provincial Departments of Social Development since the 2007/08 financial year raise serious questions about the capabilities of these Departments to facilitate child welfare services through their management of social grants and transfer payments to implementing NPOs The main cost drivers for child welfare services include the growth of vulnerable child populations, growth of poor households, and growth of parental deaths due to HIV/Aids.

  33. Main Findings of the analysis of Child Welfare Service Budgets Fiscal space: With government expenditure growth slowing down and impacting on the flow of funds to DSD, the fiscal space for child services is limited at a macro level, with little manoeuvrability, unless the state reallocates between the sectors. Funding trends: Funding of child services more than doubled in almost all provincial SD departments (except Northern Cape) between 2007/’08 – 2014/’15 Internal prioritization: The results from the internal prioritization exercise reveal that some provincial departments are not giving sufficient consideration to child services (e.g. Kwazulu- Natal, Eastern Cape and North West), especially when interpreted in the context of demographic data and per capita child expenditure for these regions.

  34. Main Findings of the analysis of Child Welfare Service Budgets Per capita spending: A distinct two-tiered system of delivering child services in South Africa is apparent. Social development departments classified in tier one (i.e. Western Cape, Gauteng, Northern Cape and Free State) spent between R264 – R336 per capita on child services in 2010/’11 compared to R60 – 124 per capita for tier two SD departments (i.e. Eastern Cape, Limpopo, Mpumalanga, Kwazulu-Natal and North West). Unspent funds: Total unspent funds by SD departments over the four year period (i.e. 2007/’08 – 2010/’11) amounted to R1.2 billion, with unspent funds in 2010/’11 accounting for more than half this amount (R690 million). NGOs and transfers: While 8 provincial departments allocated more than 50% of their child care budget to transfers in 2010/’11, no instances were recorded for crime prevention.

  35. Main Findings of the analysis of Child Welfare Service Budgets Unspent Transfers: Total unspent transfer funds for child care over the two years amounted to R69.5 million compared to crime prevention, which ran up a deficit on its transfer budget of R4.4 million

  36. Ngo’s in a crisis Briefing to the Portfolio Committees on WCPD • Certain provinces reduce transfer payments to fund CoE & ICS pressures & absorption of social work graduates • DSD policy does not accommodate ‘full funding’ of social welfare NGO’s • Subsidy model/partial funding – NGO’s expected to ‘raise own revenue’ • Certain services are statutory (foster care, children’s homes) but still not fully funded by government • Free State NOWONGO court case has forced DSD to relook at its approach to funding NGO’s • Court rulings were not prescriptive but advised on a fair and transparent process • Looking at a process of ‘prioritising’ services according to legislative requirements • Fund according to how services are prioritised • Norms & Stds for welfare services poorly designed, not costed and implication of emerging NGOs meeting these stds and qualifying for funding not properly thought through

  37. NGO’s Closing down • Not a full picture • Range of services affected – substance abuse, foster care, ECD, services to older persons, OVC’s etc • Services slowed down, organisation closed, staff retrenched • Donors no longer/reduced funding • Government not adequately funding – some provinces concentrating on delivering services internally which is more expensive because of OSD and full funding Briefing to the Portfolio Committees on WCPD

  38. Rising to the challenge Briefing to the Portfolio Committees on WCPD NGO’s provide bulk of social welfare services Crisis situation – especially for well being of children Focus on ‘transforming NGO’s’ – whilst positive, the impact on well established NGO’s are negative. Well established NGO’s have a strong presence and foothold and the clients they service are the same as emerging NGO’s. Provincial DSD’s should play a much bigger role in supporting NGO’s in terms of reporting, governance, administration and financial management – these are often the reasons for non transfer of funds. Transfers to NGO’s should be protected in provincial budgets

  39. Thank You. Financial and Fiscal Commission Montrose Place (2nd Floor), Bekker Street, Waterfall Park, Vorna Valley, Midrand, Private Bag X69, Halfway House 1685 www.ffc.co.za Tel: +27 11 207 2300 Fax: +27 86 589 1038

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