Western Cape Government Annual Budget; Procurement of SITAs; Audit findings of Funza Lushaka Programme

Meeting report

The Chairperson noted the receipt of the agenda and highlighted the matters the Committee would be dealing with today.

Regarding a standing subject absent from the agenda, the Chairperson invited the Procedural Officer to share any relevant information later in the meeting. He also drew attention to economic development and tourism matters, particularly the Township Revitalisation Programme. He explained that he had intended to consult with Committee Members but could not, due to possible misrepresentation of the item. He proposed discussing the matter further and seeking Members' views on whether it belonged to another committee.

The Chairperson emphasised the importance of Members' engagement on the issue and suggested releasing concerned individuals or referring the matter to a relevant committee if necessary. He urged Members to express their opinions freely. He concluded that silence would be interpreted as concern and would proceed accordingly.

Mr D America (DA) expressed his agreement and said that matters falling outside the Committee's mandate should be referred to the appropriate Committee rather than addressed by their own. He stated his opposition to dealing with issues beyond the Committee’s jurisdiction.

The Chairperson acknowledged the need for additional attendees and temporarily halted the meeting as more Members and officials were being contacted to join, noting that some had initially received the wrong link, resulting in multiple ongoing meetings.

Budgetary Matters as presented by the WCG

Dr Harry Malila, Director-General, Western Cape Government, provided insights into the final allocations and budget alignment processes within departments, typically occurring in February 2024. He explained the significance of standardised indicators in tracking programme targets and highlighted the Department of Health's achievements and budget expenditures.

Dr Malila said that achieving targets does not always indicate full success, as progress is made towards unmet targets as well. He elaborated on the fluctuation of targets and budget utilisation, citing examples such as outbreaks impacting target priorities.

He clarified the role of the Auditor-General in auditing predetermined objectives and mentioned the importance of disclosure rather than solely achieving all targets. Dr Malila proposed quarterly engagements with departments to monitor progress continuously.

He concluded by praising the Department of Health's efforts and governance in maintaining a clean system, particularly during health crises. Dr Malila welcomed any additional remarks before handing over to the Chairperson.

Ms Julinda Gantana, Head of Department, Western Cape Provincial Treasury, emphasised the need for flexibility, particularly evident during the pandemic, which required the Department of Health to adapt swiftly. Despite these challenges, there was reassurance from the Department of Health that they were on course with their objectives.

Ms Gantana highlighted the role of the provincial treasury in conducting credibility checks to ensure alignment between Departments' final Annual Performance Plans (APPs) and the proposed budgets. This process helps verify the Departments' positions and ensures accountability.

Discussion

The Chairperson thanked the Director-General and the Head of Department, acknowledging the explanation provided and the supporting documents circulated to address concerns regarding the discrepancy between targets and expenditure. He invited questions, points of clarity, or comments from the Members.

Mr America noted that he had thoroughly examined the documentation provided and was reasonably content with its content and the explanations provided during the meeting. He extended his appreciation to the Department and the Office of the Premier for their guidance, which contributed to the excellent audit outcomes achieved in the 2023/24 financial year.

Ms N Nkondlo (ANC) thanked the Department for the detailed inputs provided. She mentioned the importance of understanding the process and inputs involved in the audit plan. Ms Nkondlo raised a concern regarding baselines, noting the discrepancy between achievements in the audit year and previous performance. She advocated for baselines to influence targets, allowing for both upward and downward adjustments based on departmental performance records.

Further, Ms Nkondlo highlighted the need to assess not only the quantitative but also the qualitative impact of targets. She cited examples such as the number of patients in hospitals and stressed the importance of understanding the broader impact of service delivery.

In conclusion, Ms Nkondlo expressed her interest in these issues and thanked the Chairperson for the opportunity to raise them.

Responses

Dr Malila addressed the factors influencing target adjustments, citing fiscal environment changes, population growth, and response to pandemics like COVID-19 or measles outbreaks as key factors. Dr Malila said it was important to report these factors in the Department's Annual Report.

Regarding the qualitative aspect of indicators, Dr Malila highlighted how national directives and provincial health indicators shape responses to health issues such as tuberculosis (TB). He discussed initiatives aimed at improving overall population health, including efforts to address water quality, living conditions, healthcare professional quality, and infrastructure.

Dr Malila underscored the economic significance of health and wellness, noting that healthy individuals contribute positively to the workforce and society. He acknowledged the ongoing efforts to monitor and improve health indicators, drawing from international literature and aiming to provide quality service to the population. Dr Malila invited Ms Gantana to contribute further on the matter.

Ms Gantana added to the discussion, highlighting the importance of funding allocated for monitoring and evaluation. She highlighted how this funding enhances the robustness and responsiveness of the planning process. Ms Gantana explained that evaluations provide valuable insights and recommendations, which can prompt departments to refine their approaches or redirect attention to areas needing improvement. She underscored the multifaceted nature of factors influencing target adjustments, indicating that it was not a singular issue but rather a combination of various factors.

Further discussion

The Chairperson thanked the Director-General and Head of Department. He highlighted a pressing concern regarding the mismatch between achieving expenditure targets versus achieving performance targets as discussed in previous annual report meetings. The Chairperson noted that while the information provided was comprehensive, it did not directly address this concern.

However, he acknowledged the progressive suggestion made regarding the implementation of quarterly meetings. He emphasised the potential benefits of quarterly meetings in terms of proactive accountability and keeping the Committee updated on departmental progress. The Chairperson stressed the importance of practical solutions and accountability.

He then observed that Ms Nkondlo wished to speak.

Ms Nkondlo appreciated the Chairperson's input and furthered the discussion by suggesting the use of explanatory notes in annual reports to simplify and clarify changes, especially regarding targets affected by funding adjustments. She emphasised the importance of transparency for both Members and the public.

Ms Nkondlo proposed that recommendations be made to the next administration to ensure robust engagement between Standing Committees and departments during the annual planning process. She emphasised the need for better appreciation of how targets are set to improve understanding among Members during annual report and audit outcome discussions.

Dr Malila concurred with Ms Nkondlo's suggestions, emphasising the challenge of an 18-month gap between the oversight of annual reports and the actual implementation of plans. He supported the idea of taking a resolution to enhance engagement between Committees and Departments throughout the year, ensuring better understanding of departmental performance measures.

The Chairperson acknowledged the conclusion of the presentation and suggested excusing the Department and Head of Department (HOD). However, he noted that the next agenda item, concerning the delay in the procurement of SITA during the 2022 and 2023 financial year, also required the Department’s input.

SITA Procurement Delays in 2022/23 Financial Year

Dr Malila introduced the next presentation, acknowledging Mr Hilton Arendse, the head of the Center for e-Innovation (CeI), who was present in the meeting. He highlighted the significant impact of the State Information Technology Agency (SITA) on service delivery in provincial departments, particularly in the Department of Health, Department of Education, and the Western Cape Government as a whole.

Dr Malila expressed concerns about procurement delays and dissatisfaction with the services provided by SITA. He mentioned efforts made by the provincial government, including a ministerial task team, to address these issues. Dr Malila emphasised management instability as a major issue within the SITA, which is being investigated by the ministerial task team.

He assured transparency by sharing the presentation with the SITA's board, and the ministerial task team. Dr Malila urged the Committee to use the presentation's outcomes to influence the

SITA's operations are for the benefit of the public sector and the country as a whole.

Mr Hilton Arendse, Deputy Director-General: Centre for e-Innovation, WCG, mentioned that recent discussions had shed light on a crucial issue: the problem is not solely within the procurement space but primarily at the leadership level. Mr Arendse outlined the following points:

Leadership Instability

He pointed out that there are continual changes at the Board level and ongoing legal challenges between the Minister and SITA. This, he said, has direct adverse impacts on organisational stability, service delivery to citizens and governments, and overall performance. Mr Arendse also highlighted the lack of management of performance dashboards within the SITA, leading to a lack of visibility since last year. He mentioned the high turnover at the executive level, with 24 CEOs in 16 years, resulting in instability and poor performance.

Impact on Service Delivery

Mr Arendse emphasised the significant staff exits, including retirements, resignations, and suspensions at the technical level, severely affecting services at both local and national levels. He spoke about the conflict between profit motives and service delivery, with SITA prioritising profits over fulfilling its mandate. Mr Arendse also highlighted the culture of poor performance and lack of consequence management.

Procurement Challenges

He talked about the high mark-up rates and bid cancellations due to flawed internal processes. Mr Arendse mentioned the inconsistent procurement processes, with significant cancellations and disputes. He mentioned the analysis of procurement initiatives revealing low success rates, with only 29.2% completed in 2021 and 7.4% in 2022.

Impact of Procurement Delays

Mr Arendse discussed the procurement paralysis with no predictable standards or consistency. He highlighted the lack of visibility on procurement status, hindering effective planning. Mr Arendse also mentioned the excessive red tape, including internal and external audits, and legal reviews, further delaying processes.

Measures Taken

He mentioned the establishment of an escalation protocol between the WCG and the SITA. Arendse talked about requests made to the Minister for increased procurement delegations to the SITA Provincial Offices. He mentioned the implementation of bi-weekly operational meetings with the SITA’s head office officials. Arendse also mentioned the agreement to reinstitute monthly Director-General/SITA CEO Meetings. He discussed the Premier's direct communication highlighting the SITA procurement challenges. Mr Arendse also mentioned the establishment of a Ministerial Task Team to fast-track procurement backlog resolution.

Engagement with the Task Team

He mentioned tough but constructive engagement expressing zero trust in SITA's ability to improve. Mr Arendse discussed the initial positive impact observed from the Task Team and Acting Managing Director showing responsiveness and willingness to address issues.

Way Forward

Mr Arendse discussed continued collaboration with the Task Team and the Acting Managing Director. He mentioned full support offered to the Task Team despite scepticism with hope for positive change. Mr Arendse mentioned that early indications suggest a positive shift providing optimism for improvement.

In conclusion, while challenges persist, proactive measures and engagement with stakeholders offer hope for addressing procurement inefficiencies at the SITA.

(see attached)

Discussion

Ms A Cassiem (EFF) raised two questions concerning slides two and four of the presentation. Firstly, she inquired about the legal disputes between the SITA board members and the Minister, seeking clarification on the nature of the disagreement and the reasons behind its prolonged duration without resolution. Secondly, she questioned the existence of any mechanisms to remove the current SITA board members and replace them with competent individuals who prioritise the entity and the welfare of citizens.

Ms Cassiem highlighted the poor performance of the SITA over the years, citing examples such as service delivery issues at the Department of Home Affairs branches nationwide, leading to inconvenience for citizens, particularly in obtaining identity documents and passports. She expressed concern about the potential impact on people's ability to vote in the upcoming election due to delays in ID and passport applications. Ms Cassiem requested responses to these inquiries.

Mr I Sileku (DA) acknowledged his familiarity with the SITA from his previous role in the NCOP, particularly within the Portfolio Committee on Home Affairs. He highlighted longstanding challenges associated with the SITA as a service provider. He inquired whether there have been discussions or engagements between the Department and the National Government regarding the possibility of seeking an alternative service provider in the near future. Mr Sileku emphasised the need for a service provider capable of effectively fulfilling its responsibilities and assisting relevant departments.

Ms M Maseko (DA) raised concerns about ongoing issues with the SITA. She highlighted the negative impact on service delivery, noting that the public perceives it as a failure of the government rather than an issue with the SITA specifically. Ms Maseko inquired about the department's options in addressing these challenges, asking whether there are any measures in place to empower them to improve service delivery independently or if they are currently limited in their actions until the SITA resolves its issues.

Ms Nkondlo acknowledged the challenges faced by the SITA, which have been highlighted in the news and discussed in the presentation. She emphasised the impact of the SITA's instability on services, noting its significance as a provider of transversal contracts. Ms Nkondlo suggested that, in addition to departmental engagements, it might be beneficial for the Committee to write to the Minister's office urging for a speedy resolution of the matter. She proposed this action to demonstrate the seriousness and urgency of the situation, considering the direct impact on departments relying on the SITA's services.

The Chairperson acknowledged the absence of further raised hands from Members. Before giving the floor to the Director-General (DG) and the Department to respond, the Chairperson commented on the comprehensive report, noting the seriousness of the issues raised regarding the SITA. He indicated that these concerns were not unfounded and likely based on the Committee's experiences with the entity. The Chairperson inquired whether the Department had directly engaged with the SITA on these issues and what the entity’s response had been. While there seemed to be some improvement, particularly in the later slides, with positive relations developing with the acting CEO and the entity, the Chairperson sought clarification on the SITA's cooperation when confronted with these concerns. He expressed a potential need to invite the SITA to address the Committee directly regarding the raised issues and their plans for addressing them.

Responses

Dr Malila thanked the Committee for acknowledging the seriousness of the issues raised regarding SITA and for considering calling the SITA to account before the SCOPA. He emphasised the impact of the SITA's non-delivery on service provision and citizens' lives.

Dr Malila confirmed that the Department had engaged with the SITA directly, both with the previous Management team and the newly instituted one, along with the Ministerial Task team appointed by the Minister of the Department of Communications and Digital Technologies (DCDT). He highlighted that the SITA was aware of the issues raised, particularly regarding management and leadership challenges which were significant hurdles. Dr Malila suggested waiting for the Ministerial Task Team's report before taking further action and recommended the Committee write to the Minister, expressing concerns and seeking clarification on plans to address the issues. He assured the Committee that the Department was exploring all options, including potential intergovernmental actions and reviewing the SITA Act.

Dr Malila mentioned that the matter had been discussed at the Forum for South African Directosr-General and even elevated to the national cabinet level due to widespread discontent among departments regarding SITA's impact. Regarding legal challenges between the SITA board and the Minister, Dr Malila noted that these matters were public and subject to court proceedings, and the department would refrain from involvement pending judicial rulings. He concluded by reiterating appreciation for the Committee's attention to the matter and pledged the Department's continued engagement and commitment to ensuring service delivery despite challenges posed by SITA.

The Chairperson then thanked the Director-General (DG), Head of Department (HOD), Minister, and their delegation for addressing the Committee's concerns. He acknowledged the completion of the delegation's presentation and thanked them for their availability whenever called upon to provide explanations. The Chairperson excused them as the Committee prepared to proceed with discussions on other departments.

Audit Findings of Funza Lushaka Bursary Holders: Western Cape Education Department's Report for 2022/23 Financial Year

Mr Leon Ely, Chief Financial Officer, Western Cape Education Department (WCED), introduced himself and his team, including the Director for Internal Control and the Chief Director for People Management Practices. He apologised for the absence of his Head of Department (HOD), who was engaged elsewhere. Mr Ely requested permission to proceed with their presentation and awaited confirmation from the Chairperson. Once granted, he outlined the contents of the WCED’s presentation, including background information, the Committee's resolution, factors influencing negative audit findings, and mechanisms introduced to prevent the recurrence of issues.

Regarding the background, Mr Ely explained that the Department of Basic Education (DBE) provides a list of eligible candidates for employment based on the Funza Lushaka bursary scheme. However, the WCED relies on accurate information from the DBE and higher education institutions which sometimes face challenges in providing required evidence due to data sensitivities and inaccuracies. He emphasised the significance of the sector output indicator and clarified technical aspects related to it.

He concluded by inviting questions from the Committee, signalling a readiness to provide further clarification.

Discussion

Ms Cassiem expressed gratitude for the presentation and raised two questions regarding Slide 7. Firstly, she inquired about the reason why Funza Lushaka recipients from the province end up being appointed in other provinces. Secondly, she asked whether the province has the capacity to absorb all the graduates who are beneficiaries of this bursary into teaching posts.

Responses

Mr Ely responded by addressing the first question regarding the choice Funza Lushaka graduates have in selecting which province to work in after graduation. He explained that this choice can lead to confusion in the Department of Basic Education's list. Regarding the second question about capacity, he provided background information. Provinces, including the Western Cape Education Department, identify subjects in need of teachers. Based on this, applicants apply, and in the Western Cape, there is typically capacity to accommodate these bursary recipients, especially in high-demand subjects.

The Chairperson thanked the Department for the presentation, thanking Mr Ely and his team for their efforts. He then opened the floor for any further questions, comments, or points of clarity from the Members. Seeing none, he acknowledged the end of the Department's presentation. He took the opportunity to again extend his appreciation to Mr Ely and his team for their availability and assistance in clarifying various issues and challenges faced by the Department.

Committee Matters

The Chairperson noted that the items were exhausted as planned, reminding Members of their decision not to hear presentations from the Department of Economic Development regarding the Township Revitalisation Programme. He then mentioned that he had previously inquired with the Procedural Officer about any ad hoc issues, directing the question to the procedural officer to see if any matters from the ad hoc committee needed to be addressed.

The Procedural Officer then informed the Chairperson of a setback regarding last Friday's EXCO meeting. The support staff were not allowed to participate in the Microsoft Teams meeting. He was currently awaiting feedback from the assignment secretariat regarding the minutes of the meeting, and once received, he would forward it to the SCOPA Members.

The Chairperson then continued, expressing gratitude once again. He addressed the Members, stating that this might be their penultimate meeting if there were no further issues.

Ms Nkondlo interjected, expressing confusion. She mentioned that she did not hear the Chairperson clearly when he mentioned passing on the presentation from the Department of Economic Development, as she thought it was the next item on the agenda.

The Chairperson clarified the situation for Ms Nkondlo, explaining that he had addressed the issue regarding the Department of Economic Development earlier in the meeting. He mentioned that although it was the fourth item on the agenda, it was actually one of the first items the SCOPA discussed. He recounted how the Minister had approached him during the State of the Province Address (SOPA), where she expressed concerns about the Committee's role in interpreting or representing certain issues.

He explained that while the Minister was willing to make the presentation, some Members felt it was not within the Committee's responsibility and could be seen as overreaching. The Chairperson suggested referring the matter to the Committee dealing with economic opportunities and tourism, but there were objections to prescribing what they should hand to other committees.

Given the differing opinions among Members, he decided to request procedural advice on how to handle such matters in the future.

Resolutions & Actions

The Chairperson opened the floor for any resolutions or issues Members wanted to raise regarding the presentations on targets and budget, the challenges faced by SITA, and the matter of Funza Lushaka.

Ms Nkondlo expressed her concerns about two matters. Firstly, she raised a proposal regarding the issue of the SITA and sought clarification on the conclusion reached on that matter. Secondly, she questioned the timeline for receiving procedural advice on the matter of Pick n Pay (the Pick n Pay Market Store project). She highlighted that this issue originated from the audit report during the SCOPA engagement period and argued that matters stemming from such engagements should be heard by SCOPA. She emphasised the importance of addressing the matter promptly instead of delaying it to the next administration, as it would be unfair to those interested and unjust to the current administration.

Ms Nkondlo expressed a desire to hear the procedural advice on these matters as they were on the agenda for the SCOPA meeting.

The Chairperson expressed gratitude to Ms Nkondlo and acknowledged her concerns. He mentioned that procedural advice on the matter could be presented at the next meeting, considering that it is the penultimate meeting before the last one, and certain administrative issues need to be finalised as advised by the Procedural Officer.

Moving on to the resolutions, the Chairperson invited Members to propose a resolution on the matter concerning the SITA. He also expressed his personal interest in hearing from SITA directly, acknowledging that although it is a national entity, the WCCP SCOPA can only invite them and not summon them. He emphasised the importance of understanding their perspective on the issues raised.

Mr America expressed agreement with the idea of inviting SITA to explain the delays in procurement. However, he expressed uncertainty about whether there would be enough time to do so in the current term.

The Procedural Officer talked about the timeline constraints, stating that the Western Cape Provincial Parliament (WCPP) is currently preoccupied with legislation from the National Council of Provinces (NCOP), and the last meeting for SCOPA was scheduled for next Wednesday, 6 March 2024 . After that, Members will be focused on constituency work and preparing for the upcoming elections, with no parliamentary activities expected until after the elections. Therefore, any further discussions or actions would need to be addressed during next week's meeting.

The Chairperson outlined the agenda for the next meeting, which would focus on finalising outstanding administrative issues such as approving reports and annual expenditures. Additionally, the Chairperson requested that procedural advice be presented at the next meeting and encouraged Members to think about how to address the issue of the SITA in the meantime. Finally, the Chairperson thanked everyone for their availability and participation.

The meeting was adjourned.