Department of Communications & GCIS 2015/16 Annual Reports with Auditor General input & Minister

Meeting report

Briefing by Committee Staff on Department and its entities 2015/16 Annual Reports

Mr Mbo Maleka, Committee Content Advisor, Parliament, gave an overview of the content of the presentation which would included a fact sheet, approach to accountability, non-financial as well as financial information. A highlight on the fact sheet indicated that the Public Finance Management Act (PFMA) stressed the need for accounting officers to regularly monitor and report on the performance of their departments against the agreed budgets for the year. This was not a mechanistic requirement to “tick boxes” but only one element in a process designed to improve the use of limited financial resources in the delivery of services to the community.

He explained that in-year management, monitoring and reporting had to take place monthly, quarterly and annually to ensure departments were consistent with their operational plans. He then elaborated on the accountability cycle for Performance Information and the role-players in this cycle. The functions and powers of National Treasury (NT) was described as it prescribed uniform treasury norms and standards and enforced the PFMA and its prescripts amongst other things. NT support to stakeholders included to provide input into the oversight process and implement and provide support on legislation.

Mr Maleka explained the purpose of annual reports which included linking financial and non-financial information to show how resources and strategies influenced results. The contents of annual reports included information that was general, performance, governance, HR and financial related. He gave some matters for the Committee to consider when they were reading the annual reports and stressed the importance of governance.

According to the annual report for 2015/16, the Department received a total allocation of R1.29 billion of which R1.28 billion was spent. The Department organised its expenditure into four programmes. Expenditure for the 2015/16 financial year was 99.8%. There was a total of R2.84 million which remained underspent and represented 0.22% of the total budget. This saving was mainly attributed to the fact that the R10 million for the Digital Terrestrial Television (DTT) Awareness Campaign was only made available by the Department of Telecommunications and Postal Services (DTPS) in the third quarter of the financial year, and spending only took place from the fourth quarter due to planning and procurement processes. He noted that the Department made a request of the sum of R1.3 million as a roll-over for the DTT project.

Mr Maleka explained the total revenue of R1.29 billion. The total current expenditure, inclusive of compensation of employees and goods and services, for 2015/16, was R79.27 million whilst the total expenditure was R1.28 billion. The Department spent R47.59 million on the compensation of employees which represented 4% of total expenditure. An amount of R1.21 billion went towards transfers and subsidies whilst R2.41 million went to legal services. The Department had only incurred fruitless and wasteful expenditure of R13 000. Staff debt amounted to R28 000.

Discussion

The Chairperson indicated that the presentation was an analysis by the content advisor and researcher and was not the presentation by the Department of Communications. There were holes in the expenditure as per the presentation and he felt that Members had to be aware of these issues once they went into the discussion. The AG’s presentation would follow and then the Departments’.

Briefing Auditor-General of South Africa (AGSA) on the audit outcomes of the 2015/16 Annual Reports of the Department of Communications and its reporting entities

Ms Alice Muller, Corporate Executive, AGSA, explained the mandate and role of the AGSA to assist the Committee in its oversight role of assessing performance of the entities. She explained that the annual audits examined three areas which were:

(1) Fair presentation and reliability of financial statements

(2) Reliable and credible performance information for predetermined objectives; and

(3) Compliance with key legislation and performance management

 

She provided the various definitions on unqualified opinion with no findings, unqualified with findings, qualified, adverse and disclaimed opinions. The portfolio comprised of the following entities:

(1) Department of Communications (New Department)

(2) Government Communications and Information Systems (GCIS)

(3) Independent Communications Authority of South Africa (ICASA)

(4) South African Broadcasting Corporation (SABC)

(5) Media Development and Diversity Agency (MDDA)

(6) Brand SA (BSA) and;

(7) Film and Publication Board (FPB)

 

Ms Muller then gave an overview of the audit outcomes over the past three years, which showed that the total percentage of entities which achieved an unqualified audit with no finding had increased from 17% to 43% in 2015/16. These entities were the DoC, BSA and GCIS. Another 43% of the entities, which were ICASA, MDDA and FPB, were found to be unqualified with findings. The only entity which received a qualified audit with findings was the SABC. There had been an improvement over three years in areas on which the SABC had received qualified opinions and the only area in which it had received an opinion in 2015/16 was irregular, fruitless and wasteful expenditure. The number of areas had gone down from seven in 2013/14 to three in 2014/15 and to one in 2015/16.

Ms Muller spoke about performance management linked to programmes or objectives tested. For 2015/16, ICASA and the SABC had audits on performance information with findings for the usefulness of annual performance information. The reasons for these were that indicators and measures were not well defined, performance targets were not measurable and reasons for variance were not supported. On the reliability of performance information, the SABC was the only entity which received an audit on performance information with material findings. This was because the reported information from the SABC was not complete, not valid and not accurate.

With regards to compliance, Ms Muller noticed a slight improvement in compliance with legislation and the quality of financial statements. She then gave a definition of irregular, fruitless and wasteful expenditure which read as follows: “Fruitless and wasteful expenditure is expenditure incurred in vain and could have been avoided if reasonable steps had been taken. No value for money. Irregular expenditure is expenditure incurred in contravention of key legislation; goods delivered but prescribed processes not followed.” She highlighted it was important to know the difference between the two definitions. In 2014/15 fruitless and wasteful expenditure by the entities amounted to R21 million and this figure increased to R36 million in 2015/16. Irregular expenditure also increased from R451 million in 2014/15, to R772 million in 2015/16.

Ms Muller said that the AGSA had noted a regression and/or stagnation in controls of leadership, financial and performance management as well as governance. The biggest regression where intervention was required was with the SABC’s leadership.

She then spoke about the improvement in assurance provided by key role players. The SABC and MDDA provided limited assurance in the first level management and leadership to the accounting officers and authorities. Ms Muller gave key recommendations for improvement which were as follows:

(a) Financial statements had to be thoroughly reviewed for reliability and credibility before submission for audit purposes. Assurance providers must play a critical role in this.

(b) Implement a performance management system to ensure reliable reporting on performance information.

(c) Fill key vacancies with competent personnel.

(d) Implement a record management system, especially for procurement and contract management.

(e) Stabilise governance structures to provide effective oversight.

(f) Establish and implement action plans in response to external and internal audit findings. These must be monitored by the assurance providers.

(g) Implement daily and monthly internal controls of transactions recognition and reduce the overreliance of consultants, and

(h) Implement an individual performance management system, which must be aligned to consequence management.

 

Ms Muller ended her presentation by giving the follow up on commitments by the Minister which was still in progress. Letters had to be written to all the entities that incurred irregular expenditure requesting details of expenditure and progress on consequence management. The establishment of an audit committee forum and filling of vacancies at senior management level was needed. The Minister had to conduct frequent assessment of the implementation of action plans to address internal and external audit findings and the record management of financial and performance information had to be strengthened.

 

Discussion

The Chairperson thanked the presenters and said this would assist the Committee to look at issues which will be reported by the Department and its entities. He would allow for members to ask for clarity.

Mr J Selfe (DA) noted it was obvious only one entity was different to the others which was the SABC. He wanted to know if it was possible to get a detailed audit report for the SABC. Also, in the opinion of the AG, had the SABC fulfilled its fiduciary duties?

Ms Muller said that a full management audit report tool was available and the Committee was welcome to request it. Unfortunately, the AG did not do a full governance review so it was difficult to answer the question on whether the SABC had fulfilled its fiduciary duties. However, the SABC made an effort to address financial management.

Mr M Kalako (ANC) highlighted that some questions would be addressed directly by the SABC. On previous occasions, the SABC had an attributing deficit but the AG had shown an improvement. The SABC said it had an unfunded mandate and were always arguing around it. He picked up on a lack of controls and wanted to know why those existed.

Ms Muller commented that it was the responsibility of the SABC to ensure its financial health and in order to do that it needed to put mechanisms in place.

Ms W Newhoudt-Druchem (ANC) noted that in the GCIS annual report page 108 it referred to an unaudited supplementary schedule. Why was this not audited?

Ms Muller said this was compiled as additional information and the AG did not express an opinion on it.

Mr M Gungubele (ANC) pointed to one of the recommendations on page 22 of the AG’s presentation which read “financial statements must be thoroughly reviewed for reliability and credibility before submission for audit purposes.” He asked whether the AG had internal audit structures. Also, on page 22 of the presentation “implement a performance management system to ensure reliable reporting on performance information”. Did a performance management system not exist? He also wanted clarity on the other recommendations referring to record management, governance structures and appraisal systems.

Ms Muller replied that there was a performance management system but it needed a review. It was not effective. The same went for the record management system; it was there but it was “broken”.

The Chairperson agreed that internal auditing had to be in control.

Ms Muller commented there were internal and external audit committees established since this was a legislative requirement.

Mr R Tseli (ANC) said he was looking at the recommendations and one point was not coming out clearly - the impacts on work done. Targets were not well-defined yet at some stage it was approved as targets but who approved it and why was the issues not picked up when it was approved? In the analysis, the issue of using consultants came up. Why were consultants used so frequently in some of the entities?

Ms Muller said there were two issues related to the use of consultants. Highly technical skills were required which the SABC did not have on TV licensing and tax related matters.

Ms V Van Dyk (DA) referred to page 23 of the presentation which indicated the follow up on commitments by the Minister. Were the letters written to all entities that incurred irregular expenditure requesting details of the expenditure?

Ms Muller replied that letters were sent out and sessions with the entities were held on numerous occasions. As a result ICASA had reduced its irregular expenditure. The challenge was still the SABC. If it was allowed additional time to correct and submit relevant documents, perhaps it would have had a different audit outcome.

Ms N Tolashe (ANC) congratulated the entities on their audit outcomes. She wondered whether there were action plans in place in response to external and internal audit findings. The Department was fairly new but some of these entities had been around for 20 years. She feared there were no systems in place.

Mr Gungubele asked to what extent auditing work was considered to be proactive.

Ms Muller replied auditing work was historic in nature. The constitution directed auditing to take place and then reporting. The AG engaged quarterly and continuously during the year. Therefore before the AG received the financial statements from the SABC, it knew the possible audit results.

Ms R Van Schalkwyk (ANC) questioned whether the AG was able to measure targets set versus actual monies spent. For example, if an entity spent 98% of its budget but only achieved 40% of its targets set, how would that be measured?

The Chairperson agreed with Ms Schalkwyk that work done and work audited should be possible since it had an impact on service delivery. Finances could be clean but how did it translate to improving lives?

Ms Muller said that the AG engaged entities on the root causes of impact versus work done and worked together with them but did not assess impact on service delivery.

Mr Gungubele added that it was not the intention of the Committee to change the historic nature of auditing but questioned whether there was a better way to assess performance. What difference did the Committees decisions make?

Ms Muller replied that decisions the Committee made was very important. The AG took assessments proactively until the Committee approved them. It would do its best to tighten issues and elevate it to the Committee.

Mr Tseli noted that Mr Kalako raised a question earlier about the unfunded mandate of the SABC.

Ms Muller said she did not have the amount and the Committee would have to ask the SABC directly. It was not however linked to the qualification audit the SABC received. That was due to procurement processes not followed.

Ms Tolashe asked what Ms Muller meant by the process of issuing tenders was “broken”.

Ms Muller corrected her statement by saying she meant there was a system where documents were stored but it was an ineffective system. If the AG could not get hold of those documents which apparently went missing, it could not do a proper audit.

The Chairperson commented that the Committee needed to delve deeper into the tender question. It was not only about the money given but the mandate to manage the national broadcaster for the people.

Briefing by the Department of Communications on its 2015/16 Annual Report and Financial Statements

Ms Faith Muthambi, Department of Communications Minister, gave an introduction to the Department’s presentation. She highlighted that the Department took the AG findings very seriously. There was a CFO forum in the Department and its entities to monitor progress. Quarterly monitoring looked at entities that incurred irregular expenditure and those entities then had to report to the Department and give reasons for that and progress on consequence management. An issue that the AG raised was the use of consultants. When it came to DoC, it managed to achieve 63% of its planned targets and this was done with only 95 employees but according to the approved organogram the Department was supposed to have 400 employees. The work was all completed without the use of consultants. Some employees had to work extra hours and some even three times the normal call of duty. At times, the Department had to “borrow” staff from GCIS as it was a shared service. For example there was a time before DoC recruited its own CFO and had to make use of the CFO of GCIS.

The Minister highlighted some of the achieved targets for the year under review. At the start of the financial year, the Department had a vacancy rate of 63% and this was reduced to 25% at the end of the financial year. A discussion paper on media transformation was developed by the Department. In consultation with the DTPS and Ellies, young people in the Northern Cape were trained where the DTT was launched. The training programme was to be launched in all municipalities with a target of 2800 persons. With regards to GCIS, in June 2016 it celebrated its 100th edition of the government newspaper Vuk’uzenzele which was first produced in 2005.

Funding constraints were an issue in the Department as compensation for employees accounted for 58% of its budget and 30% for goods and services after transfer to entities. Challenges related to performance information and uselessness of information provided. It cut across all the entities and it was found that targets were not specific and not well defined. Office space was still an issue as DoC was still sharing office space with GCIS and the space was proving to be inadequate. The process of acquiring space for DoC had been put on hold due to lack of funding. As an interim measure, a MoU had been signed between DoC and GCIS which allowed GCIS to provide certain corporate services to the Department. 

Mr Ndivhuho Munzhelele, Acting Director-General, Department of Communications gave the presentation on the 2015/16 annual report. He spoke around the contextual framework and Department’s mandate and legislative responsibilities. The four strategic goals of the Department were:

(1) A responsive communications policy and regulatory environment

(2) Improved government communication and country branding

(3) Effective and efficient strategic leadership, governance and administration, and

(4) Transformed communications sector

 

Mr Munzhelele explained that these strategic goals were aligned to strategic objectives and continued to elaborate on them. He then gave a summary of the Departments overall performance. The Department had 82 targets planned for the 2015/16 financial year. Of these, 52 targets were achieved and 30 targets were not achieved. Overall, the Department achieved 63% of the 2015/16 planned deliverables. In addition, the Department also managed to overachieve on 5 of its planned targets.

 

He explained how these overachievements were done. In 2015/16 the Department had an annual target of producing 235 000 Set Top Boxes (STB’s) and managed to exceed this number by 68 360, in total producing and delivering 303 360 STB’s to South African Post Office (SAPO) warehouses. Another overachievement was related to the annual target of having 55% of content reflecting South African perspectives and cultural diversity which was overachieved by 5% bringing the total to 60%. On the improvement in South African national identity based on self-description studies the Department targeted to reach 53% but had actually gone over this figure to show a 65% improvement in South African national identity. The Minister launched a Public and Consumer awareness campaign on 3rd July 2015 and targeted to reach 6.5 million TV-owning households through programmes such as Izimbizo, Evening News coverage and TV Breakfast shows. The Department managed to overachieve that figure by reaching over 20 million TV-owning households. The Department also wanted to show that 35% of South Africans were proud to be South Africans through Domestic Perception Studies. The results indicated that in fact 84% of respondents were proud to be South African.

 

Mr Munzhelele then spoke about Programme 1: Administration. He explained that one of the core priorities of the DoC during the year under review was to become fully operational as pronounced by the President in 2014. In order to do this, the Department signed a Memorandum of Understanding (MoU) with GCIS. This allowed the GCIS officials to provide corporate services related support to the Department until such time that the Department was able to fully perform these functions. As at 31 March 2016, the total number of funded posts was 87 of which 65 (75%) were filled and 22 (25%) posts vacant. Females at SMS level accounted for 8 (40%) and males 12 (60%). The number of employees with disabilities was 2 (3%). The vacancy rate was reduced from 53% to 25%.

 

Mr Munzhelele said that although the Department received an unqualified audit opinion with no material findings, it still had challenges. There were targets identified with the belief that the DoC would acquire its own building. However, the Department could not procure a building due to financial constraints. The Department was also unable to participate in the youth development programmes such as learnerships and internships as it was in its first year of operations and the focus was on prioritising filling posts for the core functions of the Department. In respect of Pogramme 2: communications policy, research and development, the Department had a target set for 2015/16 to provide five community radio stations with broadcasting infrastructure and it had achieved this target. Another target was to have the Media Transformation policy developed and approved by Cabinet. This target was not achieved as consultations and engagements with relevant stakeholders were coordinated before the finalisation of the policy and would be carried into the 2016/17 financial year.

 

On Programme 3: industry research and analysis, Mr Munzhelele gave an overview of set targets versus actual achievement. One of the targets within this programme was to compile four quarterly reports showing consumer access to digital broadcasting in particular those supported by government programmes. The Department only managed to compile one of the four reports because STB’s were only produced and installed in the third quarter in December. On Programme 4: entity oversight, he highlighted a target which was the 100% implementation of Performance Management System of the ICASA Chairperson and Councillors. However, this was not done due to on-going negotiations with the remaining Councillors of ICASA.

Ms Dikeledi Thindisa, CFO, DoC, gave the financial information on the Department’s annual report. The Department had a total budget of R1.29 billion and had spent R1.28 billion resulting in 99.8% total expenditure against budget. She then gave a breakdown of budget per programme and per economic classification. She noted that the budget allocations for the next three financial years as per the ENE indicated the departmental budget decreasing from R80 million in 2015/16 to R77 million in 2016/17. This could be a challenge for the Department as it had not yet procured suitable facilities and core staff.

She concluded the presentation by highlighting that even though the Department had received a clean audit, the following areas needed improvement:

(1) Approved standard operating procedures to be put in place

(2) Performance indicators documented in the annual performance plan need to be well-defined

(3) Targets need to be supported by reliable evidence

(4) Reconciliation of accruals disclosure to be performed regularly

(5) Fixed asset register needs to be reconciled properly to ensure proper disclosure in the AFS

(6) Risk assessment needs to be performed according to the TR 3.2.1, and

(7) User access control needs proper management and controls.

 

Discussion

Mr Tolashe thanked the Minister for the political overview. Her strategy bore fruits. The CFO forums gave relief on some areas and a lot had been done. He thanked the CFO from GCIS who was prepared to help other entities. Posts that were not funded might have negative findings from the AG. How was it best to deal with this matter? The Department was established late but it had a big mandate to fulfil. Government needed to prioritise because this was one saw transformation; people had access to television. The SABC however was another matter that had to be dealt with.

The Minister explained that the extent of the lack of funding was far reaching with regards to not having adequate manpower to do the work that needed to be done.

The Chairperson recommended that an audit on government properties owned versus rentals had to be done to address the shortage of office space for certain entities.

Mr Gungubele felt that there were a lot of people hard at work and it would take more than the SABC to “mess it up”. Performance information had to be implemented so that less was spent on risk management. He commented that there was an inconsistency in language in the report as the Department used “strategic objectives” and in its annual report it read “strategic goals”. This could provide confusion. He added that the narrative of 90% local content had to be balanced with business. Over time the SABC was running the risk of losing viewer audience. The investors in the SABC were entitled to be happy.

The Minister said that even if the SABC was funded by government with only 1%, it was governed by the PFMA, Broadcasting Act, Companies Act and she had a shareholder compact that was signed with them which stated that the responsibility still rested in being accountable to Parliament. According to the Broadcasting Act, the SABC had to contribute to democracy, gender equality, nation building and the provision of education amongst other things. Together with the Department of Arts and Culture, the SABC was part of an intiative called Mzanzi Golden and it was expected to promote local content.

Ms Van Schalkwyk noted that 63% of targets were achieved and 5% were overachieved but the money spent was problematic. The Department was emphasising service delivery which included the distribution of set top boxes. She was from the Northern Cape and wanted to know how the five community radio stations were identified because the Department had to make sure it was spread evenly. She noted that there was a 25% vacancy rate as per the annual report. Where were the additional 25 employees coming from? How far the Department with updating the posts of DG and DDG?

Mr Munzhelele replied that the DTT was an inherited programme which was transferred to DoC without resources. Hence the contract was for one year to get the programme off the ground. On the 20th of October the Departmen would be switching on the first analogue transmitter in the Northern Cape in Carnarvon. By the end of November the Department was planning to do another 4. Door to door campaigns were taking place to help with connectivity. But the system on DTT remained underfunded.

Mr Tseli said the challenge of lack of funding was linked to the fact that only 0.22% of the money could not be spent. It was time to take it up with Treasury to increase funding. Also, the shareholder compacts was initially only linked to the SABC but now extended to the rest of the entities. What had been agreed upon between the entities and the Department for oversight to keep them accountable? There was a lack of consequence management as the Department was talking about people who have transgressed instead of people who did not perform. The Department should not wait for more contribution towards fruitless expenditure and instead tighten consequence management. In the DG’s report he noted that 3% of employees were people with disabilities. At which levels were they employed?

Mr W Madisha (COPE) said that he sensed real work was being done by the Department themselves and even though they did not have offices they were operating well. Why had the Department not employed staff even though it was given the finances to do so? Was the non-employment a reason for the lack of performance?

The Minister replied that it was easy to employ people but the right skills were needed in order to create enough capacity. By the end of October the rest of the vacancies would be filled.

Mr L Mbinda (PAC) said that even though the vacancy rate had dropped, he wondered what the norm was.

Ms Matshoba said the Department was a true reflection of service delivery. However, the number of targets not reached had to be reduced to zero. There was a lot of capacity work to be done within the Department. He noted that STB’s were delivered to all SAPO branches but what was happening now? He requested that the Minister explain why the application for a community radio station in Gugulethu got the response that there was a limited number of frequencies and wanted her to help get Gugulethu its license.

The Minister responded that the question was linked to the one from Ms Van Dyk on the moratorium of the radio stations. ICASA issued a moratorium with regards to the licensing of community radio stations based on the frequency spectrum as mentioned. This was issued on 22 September 2015 in respect of applications for community radio stations and for radio frequency spectrum for the purposes of community broadcasting services. ICASA was in the process of developing a new regulatory framework for community broadcasting in 2016/17 financial year. However, the moratorium did not apply to pending applications that were received before September 2015 and also applications for special events licences. MDDA would also be able to answer some questions when it presents.

Ms Van Dyk wanted to know why the contractors for the STB’s were from outside the Northern Cape as this was also where she came from.

The Minister replied that contractors were from outside the Northern Cape because when the project was handed over to the Department procurement had already been done. The Department was planning to develop the capacity and skills of local people with DTPS especially targeting young people. Transferring of skills was included in the SLA with Service Providers. 

Ms Newhoudt-Druchem noted that 3% of people employed were persons with disabilities but in the annual report it did not mention these persons and the profiles of these employees such as whether their posts were upgraded.

Ms Thusi said that these persons with disabilities were employed at levels 13 and 5. None of these employees were upgraded.

The Chairperson wanted to know more about the MoU between the Department and GCIS. Was it legal and was GCIS being compensated?

The Minister responded that this was indeed legal and the only workable solution as required by Treasury. They were being compensated according to law.

Briefing by the Department of Government Communications and Information System (GCIS) on its 2015/16 Annual Report and Financial Statements

Mr Donald Liphoko, Acting Director-General, GCIS, gave an overview of its mandate and strategic goals. The core business of this entity was to develop a communication strategy, campaign management as well as content development. He then gave a breakdown of performance per programme. In Programme 1: Administration, the GCIS had five sub-programmes. A total appropriation of R144 921 million was allocated for this programme and R144 920 million was spent. There was a decrease of R21 306 million when compared to the 2014/15 financial year. On programme two: content processing and dissemination, the Department had spent R74.9 million of its R75.1 million appropriation.  Some of the achievements within this programme were that GCIS offered a wide range of communication services which included editing, audio-visual, photographic translations and copywriting to Departments. These activities provided consistency and coherence of message even though they severely strained staff across the programme. Media buying clients increased from 40 in 2014/15 to 53 in 2015/16. The number of campaigns also increased from 272 in 2014/15 to 280 in 2015/16. He elaborated by explaining the targets set versus actual performance.

One planned target was to have one annual edition of the 2014/15 SAYB and Pocket Guide to South Africa published and 4 000 DVD’s produced. The Department overachieved this target by producing 4 200 DVD’s. For the sub-programme Products and Platforms, a target set was to produce 20.4 million copies of Vuk’uzenzele in all official languages and 9 600 Braille copies. GCIS managed to produce 18.7 million copies of its original target. A challenge for GCIS was that some governmental departments were still not making use of its media bulk-buying and the media production services and continue to produce and place adverts directly or through advertising agencies as there was no directive that forced government departments to use media buying and media production services which would enable GCIS to negotiate better discount rates for departments and ensure coherence in terms of governments messaging and adherence to the corporate identity.

Under Programme 3: intergovernmental coordination and stakeholder management, the Department had spent its entire budget. Through the provincial and local liaison sub programme, GCIS implemented 1 920 development communication projects, reaching more than 47 million people through community radio programmes, door-to-door household crusades, print-media  features/advertorials, outreach campaigns, community dialogues, seminars, mall/taxi rank activations and road intersection drives, among others. District and provincial offices conducted 2 170 community and stakeholder liaison visits and GCIS supported political principals in 326 imbizos where they interacted with communities. He went on to explain programme four and elaborated on the fact that the Marketing and Distribution unit successfully implemented a Government Exhibition Day event which will now be an annual event.

Discussion

Mr Tseli asked for some clarity and wanted to make a few comments. He was impressed with the meetings between GCIS and government officials to discuss policy issues. This was a very serious development and one that was needed so that people could take responsibility. The spending of 99% of its budget was very good as departments and entities were complaining about a lack of funds but failed to spend all its monies.

Mr Liphoko replied that GCIS held quarterly cluster briefings reporting on its plan of action. Officials did an in depth brief with analysis and other stakeholders to reach consensus.

Ms Van Dyk noted that in the previous year the vacancy rate was 8.5% yet this year there was no indication of the vacancy rate. She also wanted to know how many acting posts were occupied and for how long this had been going on. Has these posts been advertised? It was good that GCIS spent 99% of its budget but 57% of the budget was spent on personnel instead of operational costs. She wanted to know whether performance agreements had been signed by everyone.

Mr Liphoko said the reason for the big spending on personnel was because its operations were done primarily by people hence the cost.

Mr Momeka added that GCIS was a human oriented department. Its goods and services budget was shrinking and this was a concern. Salary increases for 2015/16 was 7% according to DPSA but GCIS had lower increases varying between 2% and 4%. The vacancy rate was at 8.9%.

Ms Newhoudt-Druchem asked why this was the case.

Mr Mbinda noted that manning levels were overstretched and asked if an organogram had been proposed or approved? 

Ms Van Schalkwyk commended GCIS for its corporate identity efforts. She noted the R847 000 in staff debt which was currently at R745 000. Were there challenges in trying to recoup the monies or was it going according to plans? She also wanted to know to which activities this staff debt related to.

Mr Momeka explained that the staff debt was related to funds that were due or collectable, as a result of various things. Employees went to study through bursaries and if they did not complete their courses or failed it, they had to pay back their monies. Systems were strict and the increase in amounts indicated that the system was working. A committee of theft and losses were also implemented whereby individual cases were investigated. Based on information given they would determine whether the employee was negligent or the employer was negligent for example by not giving the employee a laptop key.

The Chairperson thanked the Acting DG and CFO for the presentation. He felt that the day had been very fruitful and a lot of information was shared with the Committee and vice versa so that improvement could take place. He believed the Department and Committee could succeed together.

The meeting was adjourned.