Government Printing Works on its Annual Performance Plan, with Minister

Home Affairs

09 May 2017
Chairperson: Mr B Mashile (ANC)
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Meeting Summary

The Government Printing Works (GPW) presented their the strategic plan for 2017 to 2021, and the annual performance plan (APP) for 2017/18, focusing mainly on the work they had done in the last financial year and what they would be doing in the current financial year.

The GPW produced identity documents (ID’s), smart ID cards, passports and visas, birth and education certificates, as well as Department of Home Affairs (DHA) forms, licence forms, court forms, Administrative Adjudication of Road Traffic Offences (AARTO) books, and many other printed items. The DHA was their main client. It had been established as a government component in 2009. Once it became a state-owned company (SOC) this would change, and they would be guided by the Companies Act. They were accountable to the Minister, who would be the executive authority of the company. In terms of job creation, they should look at the printing industry itself and how, as the GPW, they could create more jobs. They planned to develop further in the field of printing and security printing technology. They pointed out that the three strategic goals that had been approved by the Portfolio Committee in the last financial year had been for it to become a state-owned company, to optimise processes and facilities, and to develop the workforce.

The Members urged that the Bill to change the GPW’s status needed to be taken speedily through Parliament. They asked what was preventing the GPW from getting a clean audit. What would happen to the machinery that had been used in the production of ID books? Would the modernisation and new automation not be a cause of job losses? What were the benefits of converting to a SOC?  Was the GPW registered with ISO 9001 and the SA Bureau of Standards? Had an additional budget been set-aside to pay market-related salaries once the GPW became a SOC?
 

Meeting report

Government Printing Works: Strategic and Annual Performance Plans
Ms Nomthandazo Moyo, Acting Chief Executive Officer(acting CEO) of the Government Printing Works (GPW) said that the presentation would cover the Strategic Plan (SP) for 2017-2021, and the Annual Performance Plan (APP) for 2017/18. However, her main focus would be on what they had done in the last financial year and what they intended to do in the current financial year.

GPW was South Africa’s state security printing specialist with experience spanning more than 125 years.
The work they produced had to be very accurate and reliable because they were at the heart of the security of the state. They produced identity documents (ID’s), smart ID cards, passports, visas and permits, birth and education certificates, examination materials, as well as government stationery and publications. Their major clients were the Department of Home Affairs (DHA), the Department of Transport (DoT), the Department of Justice and Constitutional Development (DJCD), and National Treasury (NT), and they served all the other departments. It also produced DHA forms, licence forms, court forms and Administrative Adjudication of Road Traffic Offences (AARTO) books.

The GPW currently had 563 filled positions, but their structure allowed for 668. This included warehouse management and the regional offices. They also had 23 graduates, 22 apprenticeships and seven internships which the organisation placed in different branches to be trained, and in this way capacity was built.

Ms Moyo said that in 2008, the GPW was converted into a government company, and currently they were preparing for it to become a state-owned company (SOC). In terms of job creation, they should look at the industry to focus on this aspect, particularly the development of artisans and specialists. The GPW also thought that they could develop further in the field of printing and security printing technology. This could be done by ensuring they had a research unit that was well informed about what was happening internationally.

She referred to the three strategic goals that had been approved by the Portfolio Committee in the last financial year:

  • To further develop the government component to become an SOC;
  • To optimise processes and facilities to increase operational effectiveness and to improve customer services; and
  • To have an efficient, effective, well-trained and developed workforce and a special remuneration dispensation for the government component.

Goal1: State-Owned Company

Currently, the GPW was a self-funded national government component. They received revenue from the services they provided to the different clients and used that for the operations of the company. It would be the fourth year that it funded itself. Initially, there had been a Bill called the Security Printers Bill, which had aimed at doing two things -- to achieve the conversion to a state-owned company, and to regulate the security printing for the state. As a result of the amount of time the consultations took, the Bill had been split into two. It had then been called the GPW SOC Bill, which was the state-owned company on its own. The second part was the Security Printers Bill, which was currently being drafted by the legal team. Therefore there were two documents instead of one.

The draft Bill had been signed by the Executive Authority in January 2017.The socio-economic impact assessment had been approved by the Department of Performance Monitoring and Evaluation (DPME) in January 2017, and presentations to JCPS Development Committee had taken place in February, March and April 2017. Presentations to the National Intelligence Coordinating Council (NICOC) had been made on 31 March. On 2 May, presentations was made to the Justice, Crime Prevention and Security Cluster (JCPS). The GPW had also received a preliminary legal opinion from the State Law Advisers, and were currently processing some of the recommendations made. Tabling of this Bill to Parliament would take place by the end of August 2017.

Ms Moyo said a similar process for the Security Printers Bill would take place, as soon as the DHA handed them the draft. Some departments feared that a monopoly would result if the printing industry was regulated. She said that GPW only do security printing and some government stationery.

For 2015-2016, the GPW had received an unqualified audit, and the 2016-2107 audit was still in progress. The profile for its financial sustainability for 2016 looked healthy, and consistent revenue growth was predicted throughout the year.

Goal 2: Optimise processes and facilities

Currently they were completing the Pavilion 3 construction project, and it was scheduled for completion at the end of 2017 at a cost of R257 million. The new building would accommodate a state of the art digital printing room. It would have the capacity to produce examination papers in a highly secure environment. It would also house a document sorting system for large volumes of printed documents, such as passports and ID cards. The new production line would mechanise the sorting and packaging process. This would result in no human intervention in the production of smart ID cards.

The GPW had acquired the ABSA building opposite its Visagie street factory. Currently it was being renovated to be the head office, which meant all the staff that were at Bosman and Visagie Streets would be located at one place. They were currently being shuttled between the two factories. The overall cost of this renovation was estimated at R49 million, and the completion was planned for December 2017/January 2018.

The GPW was also planning to acquire a multi-unit web-fed printing press, because at present they had a single web-fed printing press. The press was used for the production of security documents such as residency permits, visas, birth certificates and others. It would acquire an additional press with similar capacity to provide for redundancy, in support of its present limited capacity.

The E-gazette system was launched in 2012. Customers apply for the publication of gazettes electronically using PDF files. In this way, large volumes of paper were being saved every year. The Enterprise Resource Planning (ERP) was launched in 2012. It was an Information Communications Technology (ICT) driven system.

Goal 3: Developed Workforce

In the 2016/17 financial year, 205 posts were filled, six of which were senior management service (SMS) posts. In the coming financial year, the plan was to make sure that the priority posts that were vacant in the last financial year would be filled. The GPW’s plans for training and development would continue. Senior and middle management would continue with the Leadership Development Programme. The performance enhancement training had to be linked to the performance agreements and personal development plans. There was also an internship and a graduate development programme. An apprenticeship programme was also available. The GPW was also affiliated to two unions, the Public Service Association (PSA) and the National Education, Health and Allied Workers Union (NEHAWU).

It did not get any funding from the fiscus, but generated revenue in order to cover its operations. The DHA was GPW’s largest client and the revenue targets were linked to the targets the DHA had included in its annual performance plan (APP). It had five cost centres for budget purposes.

The GPW priorities for 2017-2018 were to manage the state-owned entity conversion process, to continue to implement its MTEF strategic plan and APP commitments, to implement the asset recapitalisation and optimisation of facilities programme, and ensure a return on investment and sound financial management and sustainability. Its long term vision was to be the state security printer of choice. That would allow them to pursue SADC and African Union member states to use the GPW as a service provider for state and non-state printing. It would also capacitate and train the workforce to meet market and client demands.

Discussion
The Chairperson questioned the quarterly targets in respect of human resources. He also wanted to know if Skynet accounted to the DHA or GPW.

Prof Hlengiwe Mkhize, Minister of Home Affairs, also noted that the Bill needed to be taken speedily through the Cabinet processes. The Bill was basically about enhancing the security of documents, and was not about the GPW being an SOE for its own sake. The second aspect was that if the GPW were to succeed in establishing itself as a credible entity, it would have major opportunities.

Ms N Mnisi (ANC) wanted to know what prevented the GPW from getting a clean audit. She also wanted to know why they had only one platform, and what prevented them from making use of other platforms. What would be happening to the printing machinery that was used for the production of the ID books? Had an additional budget been set-aside to pay market-related salaries once the GPW became a SOC?


Ms H Hlophe (EFF) wanted to know the role of the GPW in the E-gazette system. She also wanted clarity on how 563 staff members could produce such a large volume of documents. What were the benefits of a SOC, since the DHA would no longer make use of the green ID book, but the Smart card? What would happen to the staff that packaged these ID books? Also, if GPW was aiming to move into the South African Development Community(SADC) market, would they be biting off more than they could chew?

Ms N Dambuza (ANC) wanted to know how certain the GPW was that the vacant posts would be filled. She said that the procurement processes should be planned quarterly and a report back should be done.

Ms D Rhaputi (ANC) said that the National Development Plan spoke about the creation of jobs. If the introduction of the new automation was going to cause job losses, then she was very sceptical. She also wanted to know if the GPW would have the proper competency after being converted into a SOC, since SOCs were based on proper governance.

Mr M Hoosen (DA) asked why the GPW had to be converted to a SOC. He pointed out that the presentation had indicated that the medium-term targets decreased, and if the case was that it would be making more money as a SOC, then the long-term targets should be much higher than what was predicted in the slides. What was the plan to maintain the current profit margin?

The Chairperson said that the issue of moving to a state-owned entity had been agreed on long ago, and had been explained.

Mr D Kekana (ANC) wanted to know the number of consulting companies being used, and why. He was also concerned about the legal matters and the matters raised by the Auditor General (AG) in the previous year. How were these issues going to be resolved?

Ms S Nkomo (IFP) wanted to know the risks involved in converting the GPW into a SOC. How would they capacitate their staff to become world class?

Mr A Figland (DA) wanted to know what would be happening to the machinery that produced the ID documents. Staff would be reduced because of the new system, but the Acting CEO had said that it would contribute to job creation. How would jobs be created if staff was cut?

Mr D Gumede (ANC) wanted to know if the GPW was registered with the SA Bureau of Standard (SABS) and ISO 9001 certified, to vet their quality. How far were they with vetting? Was there was a guarantee that the workers would not leak the exam papers and reproduce identification documents? What were they planning on becoming a government enterprise, or a public entity?

The Minister said that all issues which had been raised would be addressed.

The Chairperson wanted to know how the GPW would ensure that trainees/artisans would be retained. Why was there no risk management component, unlike the strategic management component? Currently who was guarding GPW’s premises, and what were the risk levels? Also, nothing had been mentioned about internal auditing.

Mr Joe Engelbrecht, General Manager Operations: GPW said that Skynet did the dispatching of the documents that had been produced. The contract was between the courier and the DHA. The GPW had been approached by the DHA and by the end of this year, documents would no longer be handed over to the DHA, but direct dispatch would be done.

The staff who were producing ID books would be transferred to other divisions. The only equipment that was unique in the production of ID books was the cutting machine. It was more than 25 years old and would simply be written off. The government gazette was one of the services they provided, but no money was made from it. He also explained that the reason the Western Cape Gazette was not printed on e-Gazette was because after 1994, they had been approached by some provinces and the Western Cape was not one of them.

The GPW had also embarked on ISO 9001 quality assurance standards. The new passport factory in Visagie Street was ISO compliant and a high premium was placed on quality. When the market for IDs became saturated, new products and customers would be considered.

Ms Josephine Meyer, General Manager: Financial Services, answered questions on the audit report matters.She said that the GPW had not complied with Treasury’s procurement prescripts the previous year, and in order not to have the same finding , they had updated their processes and aligned their policy to all the directives Treasury had issued. Training had also been done on the various prescripts. Internal audit had been approached to do an audit on whether they had complied with the processes, and the audit had been positive. To support the business, they were looking at creating a 15-20 year financial sustainability projection.

Michelle Modise, General Manager: Human Resources responded on the issue of job security. She said that they looked at future developmental needs when recruiting, and whether the recruits were trainable and could be upscaled. This would give the employee the security that his/her job would not be terminated. On the issue of salaries during the conversion, they would be embarking on a process of salary benchmarking. They were confident they would be able to fill the 105 vacant positions.

Ms Alinah Fosi, General Manager: Strategic Management, said she could confirm that the Auditor General (AG), with the risk committee, had provided them input which had been included in their final plans. This was then approved by the Minister. Each general manager had a business plan with quarterly targets. She also said that they did have multiple platforms, as well as one-on-one platforms where they engaged potential customers. Whether they were biting off more than they could chew, she said that when they marketed themselves, they ensured that their marketing strategy was adaptive with the back-office management. She also agreed with the Members’ comments on quality and reputation. An audit plan had also been put in place. They had a risk management framework and plan which they reviewed on annual basis. The unit was also being capacitated by appointing a director in order to ensure risk management was at the top of the agenda. Regarding security vetting, more than half of the staff had been vetted. The security staff had also been vetted, and a security assessment had been done at the factory. A security company was already on board, and they made use of sophisticated equipment to guard the premises.

Ms Moyo said that the institution had its own systems and infrastructure in place, and was not dependent on any individual. The conversion to a SOC would change the legal status of the entity. It would also provide them access to private sector markets. The sustainability and reputation of the GPW depended on how it was marketed and its success.

The SOC would assist them to position themselves as printers of choice on the continent. Currently they had produced passports for heads of state and for the ministers of international relations. Once they were converted to a SOC, they would have their own remuneration framework.

Concerning the risk issues involved in converting to a SOC, there were two matters that required their attention. One was the conditions of service for the staff, because currently the employees were in the public service and wanted to benefit from government pension fund. The question was how they phased it out until retirement, and what about those who wanted to transfer to a private fund. The Department of Public Service and Administration (DPSA) had come on board to assist with this issue.

The other issue was the key clientele .They hoped to increase and keep them, so that this could contribute to sustainability. The SOC would be accountable to the executive authority of Home Affairs. They also reported to the Ministerial Council on a quarterly basis. Currently, internal audit had over nine people who were full-time. They reported directly to the acting CEO and it was a fully fledged unit. Risk management was a unit, and security was also under the general management strategy. The most important functions concerned strategy planning, monitoring, evaluation and reporting.

Ms Moyo said that they would always make use of consultants in the area of ICT infrastructure and ICT auditing. Answering the question concerning platforms, she said that their target was three platforms, but this might increase with the ring-fencing of the state security printing. The issue of accumulative plans in human resources (HR) had been noted. When the APP was rolled out, they would ensure HR had its own quarterly targets. She added that the staff complement was quite small for the big corporation they ran.
The revenue and profit they made went to recapitalization, or to improve its technology.

The Chairperson said that the GPW was supposed to have aimed for a clean audit, in terms of their APP. He also wanted to know whether the salaries would double when they converted to a SOC. The question about bench marking and growth had not been answered. He suggested that they should break their targets into small portions, as this would assist them in managing their activities.

Ms Moyo said she agreed with his comments on the clean audit. In the current financial year, they hoped to receive an unqualified audit, with no matters requiring attention, which would mean a clean audit. With regard to whether they had budgeted for becoming a SOC, based on current and projected revenue they should have enough finance. The proposal of a public entity 3(b) had been recommended, because 3(b) would allow them to remain under government ownership.

She added that both the interns and graduates signed agreements, but some found better jobs and it was difficult to get in the way of someone’s growth. The remarks on reputation and quality had been noted.

Mr Gumede (ANC) said that section 3(b) referred to a provincial government business enterprise, and the Acting CEO should revisit what she had said earlier.

The Chairperson said that there was still one question that needed to be answered. The GPW had employed guards from a private security company (Fidelity) to guard national keypoints. What was the status of those guards? If they had been vetted, at what level? No answer had been given. The Chairperson said that it must be noted that the question had been officially raised.

The meeting was adjourned.

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