Hon Chairperson, once more greetings to you, the members, special delegates and the Minister, let me take this opportunity to table the report of Joint Standing Committee on Financial Management of Parliament on the mid-term performance of Parliament for the 2019-20 financial year. I do so in compliance with section 54 of the Parliament Financial Management Act, which requires the executive officer to table the mid-term report to Parliament, for the referral to the committee for consideration and report. Thus, I will highlight key issues entailed in this report.
At the end of the period under review - the mid-term period, which includes first and second quarter, Parliament has spent R1,262 billion or we could say 101% of the budgeted amount of
R1249 billion, which signifies an overspending of R12,336 million. This expenditure also means that Parliament has spent 48% when it is compared against the annual budget of R2,609 billion for the 2018-19 financial year. It is important to note that the majority of funds were spent to produce, amongst others, 469 committee minutes, 230 committee reports, 220 translations and 336 research within time allocated.
The institution only succeeded in achieving 6 out of a total of 9 targets or 66,7% it had set to achieve for the period under review. The annual performance plan, APP, sets out a total of 16 targets, of which seven of them are annual targets, which will only be reported on at the end of the financial year since they are only measured at the end of the financial year.
In spite of the above, the committee has noted with concern the discrepancy between the expenditure and the actual achievement or
the performance in other words. This might signify two things: firstly, the prudent financial management by Parliament, meaning that they do more with the little they have, which the committee will need to applaud and encourage considering the tight economic situation we are faced with as a country; and lastly, nonalignment
of nonfinancial performance and financial performance due to the annual performance plans and budgets which are not properly aligned and the performance targets which are not specific, measurable, achievable, realistic and time bound, Smart.
Allow me to deal with overexpenditure recorded by Parliament at the end of this period. Let me start by saying that it is painful to say to this august house that this overexpenditure is projected to increase to R140 million by the end of the year if it's not dealt with precisely. The main drivers for this overexpenditures are the overexpenditures from direct charges and Programme 5 - the associated services.
The overexpenditure under direct charges is due to the payment of exit gratuities and loss of office to nonreturning members after the May 2019 general elections. The number of nonreturning members was larger than the anticipated one whilst the overexpenditure under associated services on Programme 5 is due to the payment of medical aid contributions for former members of Parliament and provincial legislatures. This has placed an enormous burden on the budget of Parliament.
Parliament reported that it has approached National Treasury during the Medium-Term Budget Policy Statement, MTBPS, period to fund this gap, in particular, for direct charges. Only R73 million was provided by the National Treasury out of R111,987 million, which was required. The question remains as to where will the Parliament get the difference of R66, 667 million? It is on those grounds that the committee recommended that Parliament should submit a proposal on how it plans to deal with this budget shortfall.
I think it is high time that we invoke some of the resolutions the ANC has taken to deal with aforesaid challenges. In its 53rd conference, the ANC resolved to play a more effective role in the legislatures' budgets, structures and human resource issues. As it was highlighted when I was presenting the annual report that this resolution was further reiterated at the 54th conference, whereby the ANC resolved to undertake an assessment to establish whether legislative sector is properly configured and adequately resourced. I say so, because this matter is no longer an administration matter but needs some political expediency to deal with.
Even though Parliament has performed at a rate much more similar than it performed during the same period in 2017-18 mid-term performance, it is however, worrisome to note a continued trend of
nonachievement of some performance targets, such as the average number of days taken to reimburse members, dated back from the previous financial year.
Subsequently, the committee has resolved to be furnished with proper mitigation plans detailing how such nonachievement would be addressed. Those plans should be provided on a monthly basis until the constraints that have led to nonachievement are addressed.
It is important to note that the legal costs related to employer employee relationship, which were increasing by almost 100% from 2014-15 have since decreased by more than 100% to date ... read the message between the lines ... This is accompanied by a 100% decrease in cases for Parliament employees in either CCMA or Labour Court. Since the 20-17 financial year, there were no cases, which were ever referred to CCMA or Labour Court. These all points to a stabilizing labour environment which we all appreciate despite one or two outstanding matters: firstly, relates to the tragic suicide of Mr L Garane, of which the committee is still waiting to receive a progress report on the implementation of the recommendations made by the Public Services Commission, PSC.
Secondly, is the case between Parliament and Protection Services, which is at the Labour Court. We recommend that an amicable out of court settlement be reached as a matter of urgency.
Lastly, we have learnt through Parliament reports that it is restructuring. The committee has not yet been afforded the presentation of such realignment. However, we learnt that Parliament has already moved to the implementation phase of the restructuring. An amount of R147 000 of the R13 million budget has been used in this regard. To this effect, the committee recommended to be furnished with a detailed report containing the reasons and objectives for such restructuring, and the budget breakdown of how the R13 million will be spent.
In conclusion, reporting on both financial and nonfinancial performance is important in measuring the performance of this institution. While financial information - expenditure and revenue - is critical for determining the costs and the efficiencies of programmes, nonfinancial information is equally important for assessing progress towards achieving predetermined service delivery or performance targets. Thus, quarterly assessment of performance targets assists in tracking of ongoing performance of Parliament.
Furthermore, reporting on performance targets on a quarterly basis provides progress on the implementation of Parliament's plans with particular reference to monitoring delivery against the specific quarterly performance. [Time expired.] Thank you very much hon Chairperson. [Applause.]
Question put: That the Report of Joint Standing Committee on the Financial Management of Parliament on the Parliament of the Republic Of South Africa's performance in the first quarter of 2019-20, dated 4 December 2019 be adopted.
Voting: Second Order