DMV & CCB 2022/23 Annual Performance & Responses to AGSA reports on Status of Records Review; with Deputy Minister

Meeting report

Castle Control Board Annual Performance Report 2022/23

Mr Calwyn Gilfellan, CEO, presented a briefing on the Board’s annual performance plan (APP) and budget for the 2022/23 financial year. The budget allocated to the CCB was R10 million, and it had already secured R6 million through the COVID-19 recovery plan. The presentation provided a breakdown of the costs per programme and how the budget would be applied. The four programmes were administration, maintenance and conservation, tourism, and increased public access.

The presentation gave a progress report on previous issues flagged by the Committee. The CCB assured the Committee that it addressed issues raised by the Auditor-General of South Africa (AGSA). “Operation clean audit” was on track.

There was a decrease in visitors to the Castle due to Covid-19 and thus a decline in revenue generated through tourism. However, the Castle was recently the location for a Netflix shoot. Further, the CCB has implemented initiatives to increase public attendance, such as book launches, movie screenings, and seminars.

There was an issue with human resources and multiple vacancies to fill. It was suggested that the CCB should review its personnel structure.

The CCB had reached out to the homeless communities who had settled next to the Castle’s walls. They worked together with the City of Cape Town to resolve the issue.

See presentation for further details.

Discussion

Mr M Shelembe (DA) applauded the CCB for its efforts and clean audit operations. He asked how the programme would be run by only two staff members and two interns. Did they have the skills and capacity to obtain a clean audit? Was this efficient?

He asked about the lost staff members and the vacancies to fill. Why had they left? Did they find better opportunities, or were they currently unemployed? He understood the need to cut costs, but rendering ten people unemployed was not the best way.

He inquired about what was happening with the informal settlements around the Castle. It was a security concern since they could easily throw rocks over the wall or enter the premises. What were the discussions with the municipality to resolve the issue?

Mr T Mmutle (ANC) thanked the speakers for their enthusiasm and presentations. However, he wanted to question the staff reduction. COVID-19 was difficult for all departments, but why were many staff let go? Was this the best decision amid the unemployment crisis South Africa was facing? Were the staff that were currently employed overworked? He asked why there was a recommendation to reform the human resources structure.

Responses

Mr Gilfellan said the capacity of the staff members was not a concern. A bookkeeper with adequate experience supported a qualified chief financial officer (CFO). The interns were both qualified. The four had developed a clear plan to deal with accounting issues that the Auditor-General had pointed out.

He cleared up a misunderstanding. It was not ten staff members who no longer worked there, only three. There were specific reasons why they no longer worked there, and it was not a way to cut down on costs. The first staff member relocated to Austria. The second staff member accepted a better work opportunity. The third staff member departed in unfortunate circumstances. A process to fill the vacancies was set in motion but paused in 2020 with the outbreak of COVID-19.

He agreed that the informal settlements produced a problem and increased the level of responsibility for safety. However, according to the by-laws, residents could not be evicted without a court order. During COVID-19, there was a high court order to prevent evictions, and the CCB was reapplying to the high court. However, there needed to be collective responsibility in solving the homelessness problem in the City of Cape Town.

Department of Military Veterans Annual Performance Plan 2022/23

Ms Irene Mpolweni, Director-General (DG), DMV, wished to clarify some issues before the presentation. She said discomfort was sometimes expressed that the Department was not keeping its political principles fully informed about its work. She assured the Minister and Deputy Minister had been consulted in the drawing up of the APP and that both had signed off on it. 

Mr Sandisa Siyengo, Chief Director: Research and Policy Development, led the presentation on the APP for 2022/2023. He told the Committee that the mission of the Department was to facilitate delivery of benefits and coordinate all activities that recognised and entrenched the restoration of dignity and appreciation of the contribution of military veterans to freedom and nation-building.

There were three main delivery programmes. Programme one was administrative, programme two was socio-economic support, and programme three was empowerment and stakeholder management. The majority of the budget would go to programmes two and three.

The main focus areas for the Department this year:

-Assisting with job creation for military veterans through skills development and training.

-Progress development and implementation of Integrated Database Management System.

-Benchmarking for medical cover and costing exercise for a low-cost medical scheme.

-Intended expansion of the medical benefit to dependents.

-30-days target for payment invoices increased from 90% in the previous financial to 100%.

-Education support shifted programmes 2 to programme 3 – necessary human and financial resources.

-No interns to be appointed this financial year.

-Process to establish Provincial Offices: Limpopo, KwaZulu-Natal and Gauteng

-Appointment of three auditors and a service provider to assist in Internal Audit Unit.

-Finalisation and implementation of organisational design

-Maintain an unqualified audit opinion.

-A new sustainable development and empowerment agenda for Military Veterans to enable them to sustain themselves with minimal assistance from the Department.

-Benchmarking exercise medical cover.

-Policies: transport, compensation and pension policies still not been finalised

The Department’s budget will increase from R666.4 million to R692.8 3 million over the medium-term period.

Programmes 2 and 3, the two main delivery programmes will be allocated around 80% of the budget to assist the DMV in delivering on its mandate.

Programme 2 is the largest with a R378.6 million (57.10 % ) allocation. It is also the main service delivery programme as it disburses eight of the 11 military veterans’ benefits.

Programme 3, the other service delivery programme, is allocated the second largest portion of the budget with 23.29%, while the Administration Programme receives around 20.24%,

See presentation for further details.

Status of record review report

Mr Siyengo then led a second presentation on the status of the record review report, reporting on issues previously identified. According to the previous assessment, the key focus areas were oversight and monitoring, financial management, performance management, procurement and contract management, compliance management, human resources management, IT management and financial health. The performance of financial management had regressed while the other vital areas remained unchanged.

Discussion

Mr Shelembe stated that previously, his main concern was veterans’ access to their benefits. However, the presentation did show that there were measures to ensure that the benefits were more accessible. He asked when provincial offices would be fully functional in facilities and capable staff. Out of the nine provinces, two remained unattended.

He was concerned about the vacancies. Why has the Department been experiencing issues filling those vacancies since 2019? He inquired about the registration and verification of assets. What were those assets? Were they tangible assets? He was dismayed by the involvement of a presidential task team because it made it seem that the Committee had failed to reach its objectives.

He raised a previous concern about a skills audit in the Department. He had not received any updates. There was a need for skills development within the Department.

He asked for clarity on the vacancy on the audit committee. Was anything being done to fill this vacancy? Why had the issue not been raised until the auditor-general commented on it?

Mr Mmutle inquired about military veterans' benefits, specifically education and housing. Every year, the Department reduces its deliverable targets. What was the rationale behind this if housing and access to education were still in high demand? What was the budget for educational benefits? Were different figures allocated for basic schooling and tertiary education? Some military veterans or dependents received educational funding from the National Student Financial Aid Scheme (NSFAS). How could the Department ensure that the beneficiaries actually received the funding amid the challenges that the NSFAS faced?

Ms A Mthembu (ANC) complimented the Department for doing its best to ensure a clean audit outcome. She noticed that the Department was planning to appoint three auditors to assist with this. Why did the Department need that many auditors?

Dr M Basopu (ANC) responded to the concerns of the Director-General and reaffirmed that they could not afford a situation where the right hand did not know what the left hand was doing. His biggest concern was the relationship between the Department and municipalities regarding the various projects that were being undertaken, such as housing and free public transport. Municipalities played a vital role because they needed to implement these projects and provide the services. The Department needed to work closely together with municipalities to reach objectives. 

Mr S Marais (DA) asked whether the Department had done all the calculations to understand what would be required to provide pensions, housing, and education. His assessment was that the current budget did not provide enough money to cover the needs of military veterans. He asked about the process for receiving pensions. The Department received inquiries from people who qualified for pensions, but the process had not been finalised. How did this affect the budget? Were the pensions guaranteed?

He asked about housing guarantees for military veterans. How much money was allocated for housing? Did the policy include repairs to houses, especially houses that still contained asbestos? What was the policy in terms of new housing or bond repayments?

He referred to the military veterans’ access to education. Did this include disabled veterans or dependents? His last question was about the reaction time. He knew that immediate responses were not realistic. The Department had shown some improvements in registering veterans on the database, but the reaction time had regressed again. What was the reason for this? Many veterans applied for medical benefits but had to wait for months for approval. Were the delays based on a lack of money? If the Department did not have enough money to provide for all veterans, how did they decide who qualified for assistance?

Responses

Mr Siyengo said that, unfortunately, the Department faced a high employee turnover rate, especially at the senior management level. However, they were now focused on team-building exercises to improve how employees related to one another. 

There were only two provincial offices that were not secured, Limpopo and Gauteng. The Department was working on it, and information and communications technology had been upgraded in the offices. 

It was not the Department’s policy to provide housing repairs. That was the responsibility of the Department of Human Settlements. The DMV provided up to R190 000 for bond repayments if the veteran or dependent could prove that the bond was in distress. The Department did provide new housing.

The Department worked with National Treasury to comprehensively understand how much the benefits would cost. It was impossible to provide a straight-line answer, as different scenarios would have additional costs. The military veterans were opposed to a means test.

The Chairperson asked for a more specific answer on the cost-benefit ratios in providing education, housing, and pensions because this directly affected the budget.

Ms Phumeza Dzuguda, Director: Communications, DMV, said the Department currently had  2 940 learners in primary and secondary school. The current budget allowed for R20 000 per learner. The Department was finalising a review which would increase the threshold to R30 000 for primary school learners and R35 000 for secondary school learners. The Department currently has 590 students in tertiary education. Out of those students, 39 percent were in private institutions, and 61 percent were in public institutions. The Department paid internally to students in private institutions, and the students in public institutions were paid through the NSFAS. The Department is currently waiting for a meeting with NSFAS to ensure that all veterans and dependents receive funding. The Department supported learners with special needs. Those students were paid above the threshold depending on their learning abilities and required equipment.

The Chairperson referred to the age of some veterans and asked whether they were doing special or general programmes.

Ms Dzuguda replied that most learners were in formal education streams.

The Chairperson asked if the Department insisted on unabridged birth certificates to ensure that the dependents qualified.

Ms Dzuguda responded that the Department insisted on unabridged birth certificates for dependents to ensure that at least one parent was a military veteran. If the veteran was deceased, the Department needed a maintenance order from the court or a letter from a sibling. The Department also accepted paternity tests. It was necessary to ensure no one was taking advantage of the policies and to ensure that the Department was aiding those who qualified. 

Mr Siyengo answered the question about the presidential task team. There had been a need for a consultation with the presidential task team and the executive authority to determine how the Department could interface with provinces and municipalities. A mechanism to support this interface was being developed, and it was still in the consultation phase. The presidential task team was not meant to take away responsibility from the Committee, but it was meant as an intervention.

 Ms Zintle Gcasamba, DMV, addressed the queries around asset management. The Issues were mainly related to more minor, moveable assets. There were instances where assets could not be found on registers. However, the cases were minimal. The Department had intensified the process of verifying assets, and all assets were verified twice.

The DG, Ms Mpolweni, elaborated on consequence management within the Department. Disciplinary processes were still unfolding, and the four suspension cases had not yet been finalised. This was an urgent issue. The Department applied consequence management and sent the audit findings to the relevant branches.

She addressed the status of the internal and external audits. There were three vacant posts in the internal audit section. The Director was acting as the Chief Financial Officer. They had listened to concerns about a conflict of interest. The position was not vacant but held by an employee on suspension. There was also a mitigating mechanism in place. The structure did not allow them to advertise for new positions. The terms for the external auditors expired on 30 April 2022. The Departed tried to get the terms renewed, but it was unsuccessful. They were currently advertising for new positions. They were trying their best to get all statutory institutions to support the Department.

The Chairperson thanked the Department for its presentation. According to Section 3 (c) of the Act, he noted that all military veterans should be subjected to a means test to determine their eligibility. The Department needed to consider this issue when amending the legislation. 

The Deputy Minister, Mr Thabang Makwetla, said plans needed to be improved and finalised. The President expected the presidential task team to improve the performance of the Department and collaborate with provincial governments and municipalities. He admitted that the Department still faced many challenges in several areas. The Department would return to the Committee to clarify specific budgetary concerns. The pensions issue had already been concluded regarding policy and administrative machinery. Further information about health services would be communicated later. The presidential task team was committed to health support for military veterans and was working to overcome challenges.

The meeting was adjourned after the adoption of minutes.