Parliament Quarter 3 performance 2017/18: briefing by Acting Secretary to Parliament

Meeting report

Research and Content Analysis Report on Parliament’s Quarter 3 performance 2017/18
Mr X Mgxaji, Content Advisor, referred to slide nine of Parliament's Presentation. The slide, titled “Overall Performance per Quarter”, shows in graphical format, the performance levels of the Parliament Office’s activities for Quarter 1, 2 and 3 for 2017/18. Against a benchmark labelled “Annual”, the measurements were, “Met”, “Not Met” and “No Target”. He expressed his dismay at this style of reporting which does not provide sufficient detail. No information is provided on milestones necessary to achieve the annual target which inhibits any assessment of what milestones were achieved in a particular quarter. This makes tracking progress difficult and obscures the Committee’s oversight role especially on expenditure of funds. For instance, where external service providers are contracted to perform a task, it is impossible under the format presented to compare the rate of expenditure to the pace of execution of the task. Further, the annual target levels shown on the slide are not similar across all quarters which compounds the difficulty of interpreting quarterly performance levels. The annual target should be consistent throughout.

A concern was the consistent underachievement in meeting a number of targets. Programme 1: Strategic Leadership and Governance shows a 16.67% under performance rate on the timely tabling of governance documents. According to Mr Mgxaji’s recollection, underperformance on this measure has persisted over the past two years with vague reasons provided each time and no mitigation plans proposed. This is worrisome.
Mr Mgxaji pointed out anomalies in spending on three expenditure line items under Programme 2: Administration: “Secretary’s Office”, “Legislative Sector Support” and “Projects” which had only spent 54%, 49% and 53% respectively of their allocated annual budget by the end of the third quarter. This level of under expenditure led him to query the likelihood of the remaining amounts being spent by the end of the financial year. “Projects” reported in quarter two that 55.2% of the annual budgeted amount had been spent, while the Quarter Three report was now showing 53%% of the annual budgeted amount having been spent. This is confusing and requires clarification.

Lastly, Mr Mgxaji drew the Committee’s attention to overspending under “Programme 3: Core Business”, specifically the line item for “Deputy Secretary: Core Business” which showed 115% of the annual budgeted amount spent by the third quarter. The reasons cited for this were the settlement of invoices for payments relating to the Women’s Parliament which were raised in the second quarter and paid in the third quarter. This however contradicts the explanations cited for under expenditure in “Programme 2: Administration”, line item “Legislative Sector Support” which stood at 49% of the annual budgeted amount as of the third quarter. The reason cited here was the cancellation of the Women’s Parliament which was converted into a seminar. This is all very confusing and leaves one wondering if the Women’s Parliament took place or not. If it did take place, how is it that expenditure associated with it is now appearing in a different Programme i.e. “Programme 3: Core Business”, line item “Deputy Secretary: Core Business” instead of appearing under “Programme 2: Administrative”, line item “Legislative Sector Support”. Clarity on this is needed.

Mr M Hlekiso, Committee Researcher, drew the Committee’s attention to section five of the Research paper titled “Performance Information Review” which assesses the performance of the programmes of Parliament.

Programme 1: Strategic Leadership and Governance
Main Division of Programme:
• Office of the Speaker
• Office of the Chairperson of the National Council of Provinces
• Treasury Advisory Office
• Parliament Budget Office
• Office of the Institutions Supporting Democracy

Performance indicators of Programme:
• Percentage of governance schedule implemented
• Percentage of governance documents tabled for referral
• Number of analysis reports presented to the Finance & Appropriations Committees in both Houses of Parliament

Mr Hlekiso pointed out that one performance indicator was not achieved i.e percentage of governance documents tabled for referral. The likelihood that this performance indicator, which measures the timeliness of document submissions, including the monthly submission of Parliament’s financial statements, is unlikely to ever be achieved for the month of November. This is because Parliament closes for the year on 15 December which is before the due date for submission of the previous month’s financial statements. This situation is likely to make it appear as if Parliament is failing to comply with the relevant Act compelling submission of financial statements on a monthly basis. Indeed, due to non-achievement of this particular indicator, the overall average performance for Programme 1 was 66.7%.

Mr Hlekiso drew the Committee’s attention to the Treasury Advisory Office which has been vacant for a long time. This is despite the Office function being a requirement of the relevant Act. He emphasized the need for the Office to be functional and perform its role of supporting the Office of the Speaker. However, at present the Speaker's Office relies on Parliament’s Chief Financial Officer (CFO) for support on financial matters. This could pose a potential conflict of interest as Parliament’s CFO is required to account to the Office of the Speaker and not provide support. This situation compromises the oversight role the Office of the Speaker is meant to have over the CFO who, as things stand currently, is in a position to influence how they should be held accountable.

Programme 2: Administration
Main Division of Programme:
• Secretary’s Office
• Finance Management Office
• Internal Audit
• Strategic Management & Governance
• Registrar of Members Interest
• Legislative Sector Support
• Projects

Performance indicators of Programme:
• Number of member capacity building programmes implemented
• Percentage completion rate
• Percentage of Speakers Forum and SALSA resolutions followed up and actioned
• Percentage compliance with prescripts and regulations

Mr Hlekiso echoed the Content Advisor’s concerns about the reporting format where annual targets are not broken down into quarterly milestones. This makes tracking quarterly performance difficult. Instead, the Parliament Presentation only shows the percentage achieved of the Programme’s annual target. For Programme 2, as of the third quarter, 75% of the annual target had been achieved, but one cannot determine how activities in the third quarter contributed towards this achievement.

Programme 3: Core Business
Main Division of Programme:
• Deputy Secretary: Core Business
• National Assembly
• National Council of Provinces
• International Relations and Protocol
• Core Business Support
• Knowledge Information Services

Performance indicators of Programme:
• Percentage of service provision as per Service Charter
• Percentage population having access to participate in parliamentary process
• Percentage population participating in parliamentary processes

Mr Hlekiso explained that Programme 3 previously had several performance indicators, and in actual fact had the most indicators of all Programmes. However, this have since been reduced to three following the review of the “PAA” and the Programme now has the fewest indicators. The first performance indicator, encapsulates lots of activities such as research, content, advice, legal advice and so forth. For this reason it would have been useful to report on the specific activities rather than provide an overall measure which does not reveal how performance of the specific activities fared. Mr Hlekiso pointed out that the service rate of the entire programme fell to 33.3%, yet the “Service Charter” performance, the only performance indicator reported, was 94.6%. This looks problematic and is likely not to be a true reflection of how the Programme performed. The reporting format does not provide sufficient information to help determine how the Programme performed and efforts to improve the reporting format should be given serious attention.

Programme 4: Support Services
Main Division of Programme:
• Deputy Secretary: Support Services
• Human Resources
• Parliamentary Communication Services
• Information Communication and Technology
• Members Support
• Institutional Support Services

Mr Hlekiso explained no information on performance indicators was provided for Programme 4 and instead only annual targets were listed. This essentially means no reporting was done for Programme 4 in the third quarter and as a result the Research Team rated the programme’s performance as zero according to their rating system. In reality, there was performance on the Programme but this could not be assessed due to the absence of information.

Programme 5: Associated Services
Main Division of Programme:
• Member Facilities
• Transfer to Political Parties

Performance indicators of Programme:
• Phase of integrated services strategy implementation
• Handbook published by 31 October
• Average number of days to reimburse Members
• Percentage of payments made compliant to policy (transfers to political parties)

Mr Hlekiso explained the overall success rate of the Programme was 75% on account of meeting two performance indicators and exceeding one. Performance indicators met were the timely publishing of the handbook and timely payments to political parties, while the performance indicator measuring reimbursement to Members was exceeded.

Financial Performance Review
Mr Hlekiso went through financial performance of each programme on a quarterly and annual basis. The third quarter’s budget of Programme 1 “Strategic Leadership and Governance”, was exhausted with zero percent left at the end of the quarter. Although this indicates optimal performance, one of the Division’s within the programme, the “Office of the Institutions Supporting Democracy” exceeded its quarterly budget by 32% and annual budget by 17%. As a consequence the annual budget of Programme 1 is depleted reflecting that there shall be no funds available for the fourth quarter, unless funds are allocated from elsewhere within the overall budget for Parliament.

Moving on to Programme 2 “Administration”, Mr Hlekiso pointed out that one of Division’s, “Internal Audit”, has significant underspending only spending 40% of its quarterly budget in the third quarter. This requires clarification as it indicates planned activities were not carried out fully during the quarter. On an annual basis Internal Audit had spent 70% of its annual budget allocation as of the third quarter. Looking at other Divisions within the Programme overspending was noted in “Registrar of Members Interest” and “Projects” which exceeded their quarterly budget allocations by 19% and 30% in the third quarter. On an annual basis both these Divisions have exceeded their budgetary allocations by 3% and 2% respectively.

For Programme 3 “Core Business”, Mr Hlekiso alerted the Committee that all divisions within the programme except one overspent their third quarter budgetary allocations. Overspending was noted as follows: “Deputy Secretary: Core Business” 2%, “National Assembly” 10%, “International Relations and Protocol” 12%, “Core Business Support” 14%, and “Knowledge and Information Services” 1%. The Division “National Council of Provinces” underspent its budgetary allocation for the third quarter by 4%. As a result, the entire programme overspent its budget allocation for the third quarter by 9%. However, Mr Hlekiso pointed out that there seems to be some misalignment between how the quarterly budgets are allocated for this programme and its planned activities which may explain why there are frequent cases of overspending.

Mr Hlekiso suggested topics to be considered by the Committee when engaging Parliament’s staff:
• Parliament did not comply with the Financial Management of Parliament and Provincial Legislatures Act (No 10 of 2009) in terms of tabling monthly financial statements
• Some targets were regarded as annual targets and the progress made was not reported quarterly
• Some measureable and quantifiable targets were not costed. The budget should be linked to the performance indicators and not merely allocated evenly across all quarters.
• Compliance with prescripts and regulation. This target was achieved in the third quarter after having not been achieved in previous quarters. A lack of administrative coordination in the Office of the Secretary that had previously hampered achievement of the target was resolved through the strengthening of operating procedures.

Discussion
Mr M Waters (DA) was concerned about the availability of funds to cover Parliament’s expenses for the remainder of the year. Given that the quarter under discussion was the third quarter he expected roughly 75% of the annual budget to have been spent. For Programme 1, all line items were significantly above 75% except one, “Goods and Services” which was at 45%, in itself a cause for concern for being so low. Programme 2 “Administration”, the same trend is evident with only two line items below 75% and all others significantly above. Similarly with Programme 3, expenditure on the line items was significantly high. This indicates Parliament is close to running out of funds and may not have sufficient funds to cover operations and staff salaries in the fourth quarter. Answers as to why this is the case must be provided.

Co-Chair, Mr V Smith (ANC) clarified that some of the expenditure figures Mr Waters had highlighted were quarterly and not annual. Hence, although quarterly budget allocations may have been depleted for certain line items, the overall annual budgets still had sufficient room. Therefore, the question that ought to be asked is why was the quarterly budgeting process is off the mark which indicates activities were not being planned to match expenditure.

Mr Waters acknowledged while this may be the case for some of the line items, there were others where the annual budgetary allocations had indeed been exceeded. A case in point was the line item “Registrar of Members Interest” under Programme 2 where 103% of the annual budgeted amount had been spent. Another line item was “Compensation of Employees” where 102% of the annual budget had already been spent by the third quarter.

The Content Advisor, Mr X Mgxaji, said that there appeared to be some confusion. Mr Waters was reading from the first Presentation distributed by Parliament which contained incorrect information. There had since been a second report with updated figures which was distributed a week prior. He went on to explain this became apparent during an informal meeting held the previous week with the Parliament team where the discrepancies were noted. For instance, for the two line items Mr Waters had just highlighted, “Registrar of Members Interest” and “Compensation of Employees” the correct year to date amounts were 75% and 71% respectively.

Mr Waters took note of the clarification but expressed alarm that Parliament could have produced such a document in the first place. This was frustrating as he had taken time to read through the first version and had based his observations on that.

Mr J Steenhuisen (DA), speaking from the updated Presentation, sought clarification on what were the line items that led to over expenditure in the Speaker’s Office in the third quarter where the budgeted amount was R10.4 million versus an actual amount spent of R10.9 million.

Ms C September (ANC) raised her concern over the qualitative nature of the Third Quarter Performance Report. She said a significant amount of time has elapsed and indeed this Committee meeting was taking place well into the fourth quarter. She thus advised the Committee Research and Content Advisory Team to consider their analysis alongside the objectives set in Annual Performance Plan (APP) for the year which would enable a better assessment of the success or otherwise of the financial targets and service delivery.

Ms September referred to underspending in certain areas and asked what happens to unspent funds. In particular, at present it would appear a large portion of such funds would be re-directed to ancillary services and not to the engine room of Parliament, the Committee Section, which carries out the core business of Parliament of holding Government accountable. In her view, the Committee Section was under resourced and whatever influence this particular Committee could muster in addressing this, would be useful in ensuring any unspent funds are applied in a manner that maximises the primary objectives of Parliament.

Ms September’s last concern was to do with entitlements to Political Parties and associated entities which the Report seemed to suggest as an over expenditure. In her view terming such spending as an over expenditure seemed incorrect as Political Parties formed the core of Parliament and Parliament’s business was driven by the existence of Political Parties. Therefore financial support for Political Parties was paramount.

Mr. Mgxaji, Content Advisor, agreed with the need to align spending with performance indicators on a quarterly basis. The focus on annual targets in the Parliament Presentation in several areas is meaningless as overspending or underspending per the annual target does not reveal much information on whether planned activities set out in the APP were actually met. For instance, the APP may indicate that most activities for a particular programme will be carried out in the first quarter. Looking solely at the utilisation of the annual budget allocation will not reveal this and may indicate overspending when in fact very little spending was expected in the subsequent quarters.

Mr Hlekiso reiterated that Parliament does not provide detailed information in its reports. For example, no information was provided to explain the over expenditure in the Speaker’s office as noted by Mr Steenhuisen.

Mr Steenhuisen, as a follow up to his earlier question, remarked that this has been the problem from day one. Without line items it is difficult to enforce accountability as budgets can be moved around leaving the Committee and analysts in the dark. This inhibits transparency and renders the whole oversight process somewhat meaningless. The need to see how funds have been moved around and whether funds applied to cover budget gaps have been utilised in the most efficient way possible. Further, with the belt-tightening expected under the latest national budget it will be of great importance to ensure maximum value for money is obtained, hence transparent reporting will be essential going forward.

Ms September drew attention to the fact that several sections of the Programmes are subject to political decisions which are likely to have an impact on spending outcomes. For example, a decision is made in the National Assembly in December to give back pay dating back to April then the spending outcome in that Programme will certainly show over expenditure. Due to the nature of such decisions, it would be useful to separate spending actions that were not necessarily part of the APP at the start of the calendar year from those which have little chance of exposure to unexpected political decisions.

Co-Chair, Mr Monakedi thanked Research Team and said the Committee had taken note of what to raise with Parliament’s Management Team in particular quarterly versus annual budget reporting and misalignment between the budget utilisation and execution of performance targets.

Parliament’s Third Quarter 2017/18 performance
Acting Secretary to Parliament, Ms Penelope Tyawa, spoke about progress in recruitment to fill vacancies for critical posts. Referring back to the year prior, she advised Members that an initial number of 71 posts had been identified. This was subsequently reduced to 52. So far ten of the posts have been successfully filled with 33 in various stages of recruitment.

Following the last presentation to the Committee where a R342 million deficit towards sufficient compensation of employees had been identified, National Treasury had since written to Parliament advising that R95 million had been redirected towards compensation. However, simultaneously certain amounts were deducted muting the effect of R95 million and leaving no change to the baseline of the budget. Further, another R2 380 million was reduced for medical aid contributions for 114 former employees of Parliament. This burden was initially carried by National Treasury who had since discovered doing so was irregular as Parliament does not fall under the Public Service Act nor the Collective Bargaining Act. In addition to these changes the expected reimbursement of R342 750 million from the 2016/17 MTEF has not materialised, R228 430 million of which was reductions on compensation of employees. Due to these funding pressures, Parliament is left with no choice but to revisit plans around recruitment for critical posts and re-prioritising areas with other vacancies. Nonetheless, efforts to adequately staff Parliament with the right skills continue and the expectation is that up to 43 critical posts would have been filled by the end of the financial year.

The Acting Secretary reminded the Committee of a prior commitment made by the Committee to work with the Executive Authority to arrange a meeting with National Treasury on the review of Parliament’s operating budget. This is still much needed since subsequent engagements with National Treasury have not yielded desired results. For instance, submissions made for funding of the Parliamentary Budget Office and Treasury Advisory Office and one for the better funding of the Office of the Institutions Supporting Democracy has been met with nil responses. Notwithstanding this, Parliament continues to have meetings and engagements with their counterparts at National Treasury - the Director General and Deputy Director General - but the need for intervention at a higher level preferably with the Minister remains.

The Acting Secretary spoke about the results of the review of the APP. Revisions were made to the APP on the turnaround times of various services offered to Members of Parliament such as research, content advisory and legal services. This led to the creation of a Core Services Business Charter indicator as a means to measure the output. This is in line with an articulation made previously of Development Modules and the need to develop indices which will involve Members of Parliament. The team at Parliament has looked at the United Nations Development Programme’s Human Development Index which identifies certain indices that look at oversight and a range of other things, and determined that instead of measuring the oversight module, it could be useful to measure the extent to which certain indicators are able to capture the different aspects of Parliament’s oversight role. As such, in the review of the APP, the Team reviewed the modules which will ultimately lead to the introduction of indices that will be developed with the participation of Members of Parliament to assist with measurement of the work Parliament performs on its oversight role.

Overall Performance for Quarter Three
The Acting Secretary took the Committee through the actual operational and financial performance for Quarter 3 as contained in slides 6 – 38 (see document).

Discussion
Mr De Beer referred to slide 31 “Progress against annual targets” citing that despite the title one cannot make out the progress. In any annual programme, something must happen every quarter and it is imperative that this information is made available to Members. Without it, tracking progress is impossible. He advised that National Treasury has a format for quarterly reporting which could be useful if adopted by Parliament. He referred to slide 9 and sought clarity on Quarter Three where eight indicators are shown versus an achievement rate of 42.11%. How was this derived?

Mr Waters asked the Acting Secretary if she was aware of the first presentation that was circulated containing errors and incorrect figures. How did this happen? This was not the first time the Committee had been furnished with reports containing inaccurate information and asked what remedial measures, if any, had been instituted. Secondly, on slide 27 which details spending for Programme 3: Core Business, he asked for details on the overspending in the Office of the Deputy Secretary: Core Business which exceeded its quarterly budget by 2% in the third quarter and had exceeded its annual budget allocation by 15% as of the third quarter. The notes provided indicate this was related to the Women’s Parliament invoices. He asked if this was budgeted for and if not, where had the funds come from, or what other expense items had been affected to cover these invoices. He asked for the total costs for the Women’s Parliament

Response
On the tracking of quarterly performance, the Acting Secretary explained that this had been done in the form of bar graphs. Therefore the information could be re-presented in the form of a table and this will be done with columns showing the quarterly spend against budget allocations for the quarter and the overall annual budget. Additionally, the narratives in the Presentation can be used to assist with tracking performance. However, the need for improvement was acknowledged and would be taken on board going forward.

The Acting Secretary agreed with Mr Waters that the circulation of incorrect information was unacceptable and must stop and an apology to the Committee was certainly in order.

Co-Chair, Mr Smith, interjected and said while the apology was accepted the Committee wanted to know if those responsible for this lapse had been identified and if the necessary disciplinary measures had been taken. The Acting Secretary gave an assurance that this was under control.

On the Women’s Parliament, the Acting Secretary explained that Parliament usually meets the expenses upfront and then awaits reimbursement from provinces who subsequently send in their respective contributions. So while a given amount for the Women’s Parliament was budgeted for within Parliament’s budget, the covering of upfront costs which are to be shared with Provinces occasioned the over expenditure in the third quarter. This will however be normalised as the reimbursements from the Provinces start coming in, which should all be received by the fourth quarter. With respect to the overall cost of the Women’s Parliament, the Acting Secretary advised the Committee that her Team will revert with the information in due course.

Co-Chair, Mr Monakedi, asked if the Women’s Parliament took place or was it replaced with a Women’s Seminar as reported in the last quarter.

The Acting Secretary explained that the Women’s Parliament for the current year was expanded into an International Women’s Conference where speakers were invited from the various Parliaments within the SADC region. This may explain the confusion but basically the Women’s Parliament did take place but as an international event rather than the traditional all South African event.

Ms N Mente (EFF) picked up Mr Waters concerns on overspending citing that it has not only been observed for the Women’s Parliament but for the National Assembly (slide 27) and Human Resources (slide 32) under Programme 4: Support Services. According to the narrative provided, the overspending is a result of settlement of second quarter invoices in the third quarter. What happens in the interim to cause the overspending – do prices change, are new invoices issued? How do expenses differ from those on invoices initially received? Secondly, who in Parliament was responsible for managing the European Union funding for empowerment and training? Several delays in payments to higher learning institutions have been observed which greatly inconveniences Members of Parliament as they are unable to enrol for studies on time. An ongoing example is an outstanding payment to Wits University from 2017. Thirdly, Ms Mente asked whether translators used by Parliament are outsourced or insourced, and services such as cleaning and catering which are outsourced, where do their costs appear?

Ms September referred to recruitment and asked why the categories chosen as critical posts were not aligned to the core areas identified in the Strategy Plan. For instance, the position of Binder had been listed as a critical post. While Ms September has nothing against an individual who performs this role she wondered how this aligns to efforts to go green and use less paper. She requested that the critical posts listed be relooked at especially since key aspects of Parliament’s core role do not feature especially its developmental and activist objectives. The current list seems more managerial oriented. She asked why unspent funds were constantly being returned to Treasury whilst there were areas where critical services impacting the ability for Members of Parliament to perform their functions were short of funds. She asked if Parliament was a contributor to the National Skills Fund. If so, why was Parliament continually relying on European Union funds for capacitation.

The Acting Secretary clarified that all staff who work for Parliament are in-sourced with the overall staff complement being 1 200 members which includes translators as well as researchers. With respect to cleaners, Parliament does have contracts with Bidvest as well as another service provider for catering services. A benchmark exercise is currently being performed by the Division Manager in charge of the outsourced services to determine how other institutions in the country are managing similar services with a view to see if the outsourced services can be brought into Parliament as they are core to the functioning of Parliament as well as the needs of Members.

Co-Chair, Mr Smith, interjected and asked the Acting Secretary to clarify where the costs of the outsourced services were reflected as per the question.

The Acting Secretary advised that the costs of out-sourced services are reflected under Goods and Services.

On the delayed payments toinstitutions of higher learning, in particular University of Johannesburg and Wits, the Acting Secretary acknowledged the problem and explained that the delay was occasioned by a disagreement about the contents of the Service Level Agreement between the Institutions and Parliament. This took a while to resolve but has since been resolved. Nonetheless, Parliament acknowledges that as a result of the delay, Members were quite unhappy and felt compromised. Ultimately, there is a need to address how training and development for Members of Parliament, as well as staff, can be funded without dependence on funds from the European Union. This discussion needs to take place at a much higher level involving the Executive Authority.

On the delay in settlement of invoices, the Acting Secretary explained that it was mostly due to travel costs for Members of Parliament whereby invoices for travel services rendered in Quarter 1 are issued in the following quarter by the travel agencies.

On whether Parliament contributes to the National Skills Fund, the Acting Secretary replied that this would need to be confirmed before reverting to the Committee with a response. Nonetheless, Parliament has structured an Internship and Learnership Programme which will come on stream in the new financial year.

On the critical positions and the seeming absence of positions core to the business of Parliament, the Acting Secretary explained that the initial number of critical positions identified was 71. However due to budgetary constraints as explained earlier, there has been a need to scale back the number of positions. Nonetheless, positions key to the business of Parliament are still on the schedule and a comprehensive report will be made available to the Committee to illustrate this.

Ms Mente referred to travel invoices. According to her understanding, authorisation for travel is given prior to Members embarking on travel so she asked why the invoices are delayed to such an extent that they are only received in the following quarter.

The Acting Secretary replied that although travel authorisations are sought and issued before Members travel, invoices are only received in subsequent quarters.

Mr A Masondo (ANC) sought to establish the number of positions in Parliament that currently have persons occupying them in an acting capacity. He wanted to establish exact timelines to fill the vacancies and not the general explanation offered of “at various stages of recruitment”. His concern was that if this was not properly addressed the problem was likely to perpetuate.
 
Mr N Gcwabaza (ANC) asked how the shifting of budgeted funds is effected for delayed payments that spill over into the next quarter, and where is this shown in a visible manner as justification for over expenditure in the subsequent quarter. Referring to slide 18, he pointed out that the budget for capital expenditure for the year seems to have been exhausted as of the third quarter. He thus wanted to know if this meant there would be no capital expenditure in the fourth quarter. On slide 19 under “Economic Justification” where “optional staff salaries savings in December” are shown as being the reason for the 5% overspend on compensation of employees, he asked, assuming it was related to monthly employee savings accumulated over the months leading to December, if it could be reflected elsewhere. If not, it would perpetually reflect as an over expenditure in the month of December when it was paid out as it would always bump up the regular budgeted salaries expenditure for employees.

The Acting Secretary explained that the set turnaround time to fill a vacant position is 23 weeks. However, there are challenges especially for five-year contracts for candidates residing outside Cape Town and who would be required to relocate to Cape Town to take up a position with Parliament. This is even more challenging for female candidates with families. As much as the intention of the five year contract is to ensure performance based employment it does hinder recruitment with several posts taking a long time to fill. The Human Resources Executive is currently looking into the matter to see how best the recruitment challenge can be resolved. The Secretary acknowledged that as a result of challenges with recruiting, several posts continue to have individuals occupying them in an acting capacity. The Acting Secretary asked the Chief Financial Officer to provide an explanation on the optional staff salaries savings matter.

The Chief Financial Officer (CFO) acknowledged that while the optional staff salaries savings paid in December does impact cash flow in December, it does not impact the overall cost to Parliament. However, as it does interfere with effective budgeting there is a need to enhance predictability of the savings that staff elect to make and the timing upon which they choose to withdraw them. With regards to depletion of the capital expenditure budget, the CFO confirmed that this was indeed the case and no further capital expenditure would be incurred until the next financial year for that programme i.e. Strategic Leadership and Governance.

Co-Chair, Mr Smith, asked if the exhaustion of the capital expenditure budget was only applicable to Programme 1 or whether there would still be funds available for expenditure on capital expenditure.

The CFO explained that Programme 1 had exhausted its capital expenditure budget for the year. Programme 1 would still be eligible to receive new computers because the funds to purchase new computers are held in a centralized budget that covers all Programmes.

The Committee approved adoption of minutes of the 29 November 2017.

Meeting adjourned.