e-Governance; Integrated Financial Management System replacing PERSAL; aging IT government systems: Treasury & SITA

Public Service and Administration

31 May 2017
Chairperson: Dr M Khoza (ANC)
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Meeting Summary

The Portfolio Committee on Public Service and Administration was briefed by the Department of Public Service and Administration (DPSA) on the progress in implementing e-governance; by National Treasury on the status of the Integrated Financial Management System (IFMS); and by the State Information Technology Agency (SITA) on the ageing Information Technology System in government.

Briefing by DPSA

DPSA e-governance responsibilities included creating awareness from executive level up to ICT management level. DPSA had conducted awareness training to more than 2 000 persons from national departments, provinces, municipalities, public entities and industries. The implementation of e-governance was monitored by the Department of Planning, Monitoring and Evaluation (DPME) since 2013. There were still departments and provinces that were performing below level three. The number of auditees that were assessed as good increased from 13% in 2013/14 to 29% in 2015/16. Auditees that required intervention declined from 21% to 16% during the same period. The challenges of e-governance are that most departments adopted the framework without customising for their environment; The Chief Information Officer and ICT managers did not fulfil the responsibility of ensuring compliance with the controls established to secure and regulate departments.

Briefing by SITA

A consolidated technical architecture drove the modernisation of the legacy application environment and supported much faster introduction of new services. The new approach had forced SITA to view systems in the context of various public service value chains which had enabled it to identify the roles and responsibility of different members of a context ecosystem.

There were five migration or modernisation options which could be applied in migrating applications to a cloud environment. Phase 1 was re-hosting which was application via a lift-and-shift model with little to no configuration. Phase 2 was re-factoring which was application via a lift-and-shift model with some level of reconfiguration and phase 3 was revise, rebuild, replace and this was modernisation of legacy applications that could not be adopted for cloud via reconfiguration. The implementation plan and road map will be reviewed once all inventories had been included and bench marking exercise had been done.

Briefing by National Treasury

IFMS was automating resource management with a system that tracked events and summarised information as well as supporting adequate management reporting with a view to bringing the government to the digital age. The possibilities included allowing officials transact remotely and to contribute to more informed decision-making. Time of reflection was 10 years (1998-2007). Cost of project and operation was 57 million to 71 million Euros and the value benefit was 372 million to 402 million Euros. The difference between IFMS 1 and IFMS 2 was that IFMS 2 was a business change and not simply a systems implementation. Through a procurement process, a contract was concluded with a company called Oracle. National Treasury would start involving business owners in the next phase of the programme that would represent the interest of business in the IFMS as well as co-ordinate policy reviews/development within their respective functional areas. Implementation approach for phase 1 was completed with contractual agreement with Oracle, phase 2 focuses on the development of the generic template and phase 3 was national roll-out.

Members said structure was important but the turnaround time was more important. They wanted to know what the Committee could do to assist key role players on abuse of HR policies. Members asked how much had been spent on ICT, the cost of expertise brought to SITA and the measures in place to deal with the security of government information. It was worrisome that ICT Managers were not fulfilling their responsibilities and the Committee wanted to know if there was a possibility of job losses in the merging of systems.

Members felt that the Department had not learnt from its previous challenges. Ghost employees and duplication of data were real issues and they asked if the four institutions (DPSA, DPME, SITA, and National Treasury) had met to assess the impact of digital revolution.

Meeting report

Opening Remarks

An apology was read from the Minister, Ms Faith Muthambi and the Chairperson advised the Members to refrain from discussing some reports that came up over the weekend concerning the Minister as they were issues that may have happened when the Minister was with the Department of Communications. The matter would be discussed at a later date if the need arose. Apologies were also read from the Deputy Minister, Mr Y Cassim (DA), Mr M Booi (ANC) and Mr M Hlengwa (IFP).The Minister and her Deputy was attending official functions.

Briefing by DPSA

Mr Walter Mudau, GCIO, DPSA, briefed the Committee on the progress in implementing e- governance. He said e-governance weaknesses included the heads of departments not taking responsibility for ICT, lack of structures, policies and procedures. The corporate governance of the ICT policy framework required departments to follow a three-phased implementation approach which are Phase 1: creating an enabling environment to integrate the policy framework by March 2014; Phase 2: business and ICT strategic alignment must be achieved by March 2015; and Phase 3: continuous improvement through an interactive process by April 2015.

DPSA e-governance responsibilities included creating awareness from executive level up to ICT management level. DPSA had conducted awareness training to more than 2 000 persons from national departments, provinces, municipalities, public entities and industries. The implementation of e-Governance was being monitored by the Department of Planning, Monitoring and Evaluation (DPME) since 2013. Compliance increased from 1.3 in 2013 to 3 in 2016. There were still departments and Provinces that were performing below level 3. The number of auditees that were assessed as good increased from 13% in 2013/14 to 29% in 2015/16. Auditees that required intervention declined from 21% to 16% during the same period. The challenges of e-governance are that most departments adopted the framework without customising for their environment; The Chief Information Officer and ICT managers did not fulfil the responsibility of ensuring compliance with the controls established to secure and regulate departments.

Briefing by SITA

Dr Setumo Mohapi, CEO, SITA, briefed the Committee on modernisation of infrastructure and services. He said the new approach informed SITA’s new key modernisation programmes. A consolidated technical architecture drove the modernisation of the legacy application environment and supported much faster introduction of new services. The new approach had forced SITA to view systems in the context of various public service value chains which had enabled it to identify the roles and responsibility of different members of a context ecosystem.

Dr Mohapi also spoke on the application of the modernisation programme. He said there were five migration or modernisation options which could be applied in migrating applications to a cloud environment. Phase 1 was re-hosting which was application via a lift-and-shift model with little to no configuration. Phase 2 was re-factoring which was application via a lift-and-shift model with some level of reconfiguration and phase 3 was revise, rebuild, replace and this was modernisation of legacy applications that could not be adopted for cloud via reconfiguration. The implementation plan and road map will be reviewed once all inventories had been included and bench marking exercise had been done.

 Briefing by National Treasury

Ms Lindy Bodewig, Chief Director, National Treasury, briefed the Committee on the Integrated Financial Management System (IFMS). She said IFMS was automating resource management with a system that tracked events and summarised information as well as supporting adequate management reporting with a view to bringing the government to the digital age. The possibilities included allowing officials transact remotely and to contribute to more informed decision-making. Time of reflection was 10 years (1998-2007). Cost of project and operation was 57 million to 71 million Euros and the value benefit was 372 million to 402 million Euros. The difference between IFMS 1 and IFMS 2 was that IFMS 2 was a business change and not simply a systems implementation. Through a procurement process, a contract was concluded with a company called Oracle. National Treasury would start involving business owners in the next phase of the programme that would represent the interest of business in the IFMS as well as co-ordinate policy reviews/development within their respective functional areas. Implementation approach for phase 1 was completed with contractual agreement with Oracle, phase 2 focuses on the development of the generic template and phase 3 was national roll-out

Discussion

Ms R Lesoma (ANC) said the structure was important but the turnaround time was equally important. What informed the Department of Defence not to be included in the rationalisation of the HR system? What policy or criteria was used to prioritise the Western Cape? Was there policy that guided this? If anything happened and all the documents disappeared or an office was burnt down, he wanted to know if there a back up? What could the Committee do to assist key role players such as SITA, DPSA and National Treasury on the issue of abuse of HR policies? How much had been spent on ICT and what could be done to save on what does not give value for money?

Mr M Dirks (ANC) said that National Treasury had reported that it had brought expertise for SITA. What was the cost of the expertise? Were there consultants from the private sector and what was the cost? What was the private view of Dr Mohapi? How much would it cost the government and was it really worth it? It had been over 19 years and why was it taking so long to implement?

Mr M Ntombela (ANC) said the presentation from SITA spoke about service delivery through SITA. It should be localised and given some specific intervention so that there would be clarity. What measures were taken to consolidate your approach? He wanted an explanation on the paradigm adopted to deal with this programme.

The outsourcing of government information will always be a cause for concern. What proactive measures were put in place to deal with security? How much had gone into the exercise? Had it been canned? If so why? On the issue of licensing, for each license there was a payment. How much did each Department have to pay for a licence for over a period of 22 years? The first phase was a disaster. He asked what support there was as far as provinces are concerned for this to succeed and what or who was Oracle. There was information that Oracle was an Austrian company and he wanted to know if local expertise been exploited. What was the involvement of local black small business as far as Oracle was concerned?

Ms D Van Der Walt (DA) said one of the biggest challenges as seen in the Department of Basic Education in ICT was the staff component. How did SITA intended to get over that? There were about 1.3 million public servants in government. What was the time frame for this? How much would be given up to get to that phase?

Ms Z Jongbloed (DA) said given the stories in the newspapers about suspicion of Russian interference in the American election last year, How secured was our system? What was in place to secure the entire systems of government? Mr Mudau had said that part of the challenges was that ICT managers were not fulfilling their responsibility. It was worrisome that there was lack of consequent management and she asked what was in place to deal with it? How vulnerable was South Africa when people were not doing what they were supposed to do? What was the extent of fraud and financial mismanagement? Mr Mudau had also said in the presentation that the DPSA was merging systems and she wanted to know if there was a possibility of job losses.

Mr S Motau (DA) said the punch line was lack of consequences management. What was being done about consequences management? Was the DPSA working to ensure that people were punished and did the Department have the requisite skills to carry out the good plans? Dr Mohapi should be candid and tell the Committee if there were enough technicians to do good jobs. Did you have the champions (In this case Ministers and CEOs) who would say this was going to happen and it would happen?

Ms W Newhoudt-Druchen (ANC) asked who the clouds belonged to and who managed the clouds. Many of the pensions paid out were delayed because the documents were missing. Would there be a central pay so that when there are resignations or retirements the pension pay outs are expedited. She asked what disaster recovery included and why nothing had been said about public service innovation.

Mr Dirks said the Committee was concerned about IFMS. There was engagement with American systems and he asked if the BRICS nations had been exploited. The Americans had not been the friends of South Africa during the anti-apartheid struggle. What security measures were in place?

The Chairperson said she had listened to the three presentations and did not get the sense that the Department had learnt from its past challenges. All the Committee heard was a presentation that was technical in nature. The Department had only come to massage the Committee with words. This Committee had heard from DPSA in 2010 that it was migrating to IFMS. The issues of duplication of data and ghost employees were not just figments of the imagination but were real issues. Had DPSA, SITA, National Treasury and DPME ever met to assess the impact of digital revolution? There should be more textbooks for students on tablets. There were two main platforms that made South Africa a third world country: water and ICT. Who controlled where data was stored? What would happen if where data was stored crashed tomorrow? How was the security of data ensured? The systems should be integrated to the point where a child received a social grant, free basic water, free electricity, etc. There was no accurate data on how much it cost the state to educate a child because there was no integration of the system. If the systems were such that in the age of biometrics a person could be duplicated, something was fundamentally flawed in the system. Most departments were frustrated with the system and he wanted to know what has been done to turn SITA around. The Committee was concerned that National Treasury was not prioritising the issue. The Committee had been told that the collapse of the system was imminent. What was happening with migration? If migration was slow, the nation will be overtaken. Was SITA a vehicle that could be depended on by the government? It was a messy situation. A report had said that by 2050 Africa would have 2 billion people. If the IT systems are sorted there was going to be problems and the Department would not want to be at odds with the tax payers. Are we really giving the people value for money?

Ms Van Der Walt said National Treasury last week found out from a report that 12 000 people who had passed away “was still doing business with the State” and the system did not pick it up. There was a decision to black list public servants who were still doing business with the government. There were 14 000 public servants who were currently doing business with the Government.

The Chairperson wanted to know how this could be and is SITA was current.  

Responses

Mr Mudau said there was a need for the three institutions including DPME to work together as a centre of government to deal with the challenges facing public service. Within the team dealing with IFMS project there were components within the DPSA looking at HR matters. The presentation on e-governance was an effort to ensure that there were systems in place for proper controls. Corporate governance was on the verge of coming out with structures that would take control of ICT decisions taken within a department in order to curb fraud.

On the issue of consequent management, he replied that it was a question of increasing awareness within the Department. If it was a problem that involved loss of money, people knew they would be taken to the Standing Committee on Public Accounts (SCOPA). Through awareness creation there will be consequence management for   ICT Managers who flouted the rules on corporate governance.

The Chairperson said this would require a written answer. The Committee wanted to know the vacancy rate of Information Officers for last year, because there was need to get a picture of what was happening throughout the State. The country cannot move forward if it critical positions are not filled.

Mr Dondo Mogajane, Acting Director-General, National Treasury said the team from the National Treasury appreciated the engagement with the Members. Since 1994, there were a number of challenges from a systems point of view. It took the National Treasury 10 years to really know what it was doing from 1998 and it was learning as it was going along. A historical point of view was important and what Apartheid brought should not be forgotten. There were people who had left because they did not like transformation. Those who came in were directly from university. It was important to take all of this into account on why things did not go very well in the first 10 years.

National Treasury would come back to give the Committee the cost in terms of IFMS 1 and IFMS 2. The team would have to go back to the systems and archives and make the cost available.

Phase 1 and 2 which should have taken about 15years. There should have been financial implications and decisions as well as discussions about it.

The Chairperson said the Members wanted some definite information.

Mr Mogajane said Treasury acknowledged that there were two phases. It was not advisable to rush and give figures that National Treasury was not certain of. I did not have the right figures with me now

The Chairperson said National Treasury would come back to give the figures.

Ms Bodewig responded on the procurement processes and said that National Treasury got advice from the World Bank and from an IT research company on the role players and also a view from another company on the architectural environment on what the project should be.

The Chairperson said it was almost impossible to speak without reference to Oracle.

Ms Bodewig replied that National Treasury spoke to two other companies in other countries on what they were doing. Treasury specified the type of technology, functionality and solution it wanted and had oversight over the process and through that process it was awarded to Oracle. Treasury had signed up with Oracle on designer shares and the latter will not play a role in the implementation of the solution. They will not be able to access the information and the systems. On Clouds, she replied that all Treasury wanted was a software licence and there was no risk of the data leaving the country. Treasury had to get a specification from SITA that the solution that was provided met a certain standard, that the solution was secured and it was up to National Treasury to keep it from cyber hacking. The license was a once off cost paid for by government. There was an annual fee and a there would be an agreement on cost recovery model.

 In terms of who would roll it out, National Treasury relied on SITA. Treasury was mindful of using SMMEs and there needed to be an understanding of what their roles and expertise was. Oracle was playing an oversight role and Treasury had developed a simple control framework to ensure segregation of duties and information was appropriately stored to avoid fraud.

On border roll up, she replied that the big activities were cleaning up the data, transferring the historical data and training. This initiative involved basic accounting training.

On champions she replied that stakeholder buy-in was important. National Treasury was on the road last year speaking to heads of departments and MECs to get guidance on how to deal with Ministers.

In terms of pensions pay out, Treasury wanted to have storage of documentation. There were many manual documents that had to be completed. Departments would be empowered to have that functionality going forward.

Dr Mohapi said the painful reality cannot be ignored until the issue of skill was addressed. SITA had its finger on the pulse of the problem but there was a journey to make. The calls for short term solution were there but the sustainable solution was to generate the right skills. Some companies had brought their skills and people were trained in business proposition. There was further training on coding and out of that group; only about 20% were technically inclined. The rest were software developers. These people modelled an environment where there was integrated data and were giving solutions to problems raised by the Chairperson. Those people were being generated to take care of the problem. It would take long but not too long to get to the end of the tunnel. There was need for inspired leadership. SITA was not signing automatic three-year contracts with the suppliers, but one year agreements to have the opportunity to do the work themselves and the suppliers did not like that. There was a link to the Department of Human Settlements (DHS) for guidance on housing. SITA was in the middle of a journey and had gotten the police as well as the defence to address the issue of certificates. The 136 000 individuals affected in the issue of certificates had been reduced to only 5 000. What could not be done within 5 years had been achieved within one year. The sentiments that had been expressed by the Committee today were in the context of the past and the present. There was a future that was being painted

In terms of the clouds, he replied that it was government’s private cloud that was controlled by government. SITA would do a classification that sat on private systems that did not share with anybody. No organisation had even been allowed to do local public cloud.

The Chairperson said the Committee would forward to the Department a list of a written questions and it would require written responses. National Treasury, DPSA, DPME, as well as SITA should work around ways to resolve these issues. Parliament will hold the four institutions accountable. The Committee was encouraged by the story it had heard today from the presentations as well as the responses from the presenters.

Mr Ntombela asked in terms of procurement of Oracle, how much had been paid to the shell company and what was the validity and lifespan of the licences.

 Mr Zukile Nomvete, Chairman, SITA, said there should be a central direction so that the systems could talk to one another. There should also be a separation between the State and government so that the State was permanently there and their delivery was ensured.

The Chairperson said the private sector model been adopted. There was a need to separate the State and the government. There was tendency to reduce the State to the level of the government. It was not good for the State to keep having new people all the time. The Committee would give the time line on when the responses should be submitted.

Adoption of minutes

Minutes dated 15 March 2017, 3 May 2017, 04 May 2017, 10 May 2017 and 16 May 2017 were adopted.

The meeting was adjourned.   

 

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