Briefing to the Portfolio Committee on WOMEN, CHILDREN AND PEOPLE WITH DISABILITIES

BRIEFING TO THE PORTFOLIO BRIEFING TO THE PORTFOLIO COMMITTEE ON WOMEN, CHILDREN AND COMMITTEE ON WOMEN, CHILDREN AND

PEOPLE WITH DISABILITIESPEOPLE WITH DISABILITIES

For an Equitable Sharing of National RevenueFor an Equitable Sharing of National Revenue

9 October 2012

PRESENTATION OUTLINEPRESENTATION OUTLINE

1. Background to the DWCPD2. Non-financial performance of DWCPD3. Financial performance/Spending trends of DWCPD3. AG Findings 4. Questions for fiscal oversight5. FFC Recommendations6. Research on child welfare services

2Briefing to the Portfolio Committees on WCPD

RECENT DEVELOPMENTS RECENT DEVELOPMENTS IMPACTING ON SPENDING IMPACTING ON SPENDING

OVERSIGHT OF DEPARTMENTS OVERSIGHT OF DEPARTMENTS • MBPRMA (2009)

– BRR Reports• Section 5(4): “An assessment of Department’s service delivery performance given available

resources; an assessment on the effectiveness & efficiency of Department’s use and forward allocation of available resources; and may include recommendations on the forward use of resources”

• Government’s 12 outcomes & targets adopted to improve service delivery efficiency and co-ordination

– Departmental budget decisions must be informed by these 12 outcomes• Fiscal austerity measures in the face of perceived

future economic uncertainties– Savings and reprioritization of budgets and baselines 3Briefing to the Portfolio Committees on WCPD

BACKGROUND TO DWCPDBACKGROUND TO DWCPD• Previously under the Presidency in the Office of Special Projects• DWCPD established in May 2009, although only started functioning

as a sovereign dept in Nov. 2010 due to lack of capacity• Purpose is to “Advance, develop and protect the rights of women, children and

people with disabilities through mainstreaming, lobbying, advocacy, awareness raising, empowerment & monitoring compliance in government and all relevant sectors”

• Four main programmes: Administration, Women Empowerment, Children, people who are Disabled

• Core functions are: Advocacy and Awareness raising, Institutional Development & Capacity Building and Monitoring and Evaluation on empowerment of women, children & people who are disabled

• DWCPD contributes to Outcomes 1,2,3,5,6,7,8 & 12 as stated in its BS 4Briefing to the Portfolio Committees on DWCPD

KEY MTEF PRIORITIESKEY MTEF PRIORITIES• Advocating the protection of rights• Monitoring and evaluating gender• Ensuring targets for disability and children integrated

into macro-compendium of indicators• Mainstreaming gender, disability & children’s rights

happens at key fora (e.g. Cabinet, DG forum etc.)• Strengthening institutional capacity to delivery quality

services• Strengthening initiatives in bilateral and multi-lateral

initiatives5Briefing to the Portfolio Committees on WCPD

HOW WELL DID THE DEPARTMENT DO IN HOW WELL DID THE DEPARTMENT DO IN 2011/’12?2011/’12?


• The DWCPD achieved 54% of all its targets in 2011/’12

• By program, Admin achieved 63% of its targets, Women empowerment 37% , Children’s Rights 57% and People with Disabilities 50%

• Major reasons cited for outputs not achieved were: lack of staff capacity, some consultations or approval still to take place, financial reasons etc.

• In many cases, narrative provided lacked clarity

QUALITY OF NON-FINANCIAL QUALITY OF NON-FINANCIAL INFORMATION FOR OVERSIGHT INFORMATION FOR OVERSIGHT

PURPOSESPURPOSES• Indicators in AR read as objectives /goals (E.g. safe and

secure working environment)• Some indicators not measurable

– AG reported a total of 50% of indicators for P2 not measurable• Indicators have more than one target• Area of performance not properly defined (E.g. ENE finalized

& submitted to Treasury)– AG reported 27% of targets of P2 don’t define nature of

performance• AG reported 42% of reported targets not consistent with

indicators & targets as per approved APP• Priority indicators hidden among 120 departmental indicators


WHAT DOES THE ORG. STRUCTURE WHAT DOES THE ORG. STRUCTURE TELL US ABOUT THE PERF. OF THE TELL US ABOUT THE PERF. OF THE

DEPT?DEPT?


• All three programmes have the same three sub-areas.

• Performance information reveal some outputs are duplicated across the three main programme areas (E.g. development of M&E tool)

• Could the dept. have improved its performance, achieved economies of scale and reduced costs if some outputs were delivered jointly by programmes (e.g. M&E function)?

PROGRESSION OF PROGRAMME PROGRESSION OF PROGRAMME SPENDING AND MTEF BUDGETSPENDING AND MTEF BUDGET


• Departmental spending increased by 23.5% in real terms in 2011/’12, mainly due to the migration from the Presidency to a stand-alone dept

• Dept budget over MTEF expands on avge by 9.9% p.a in real terms (i.e. taking infl. into account), increasing from R143 m in 2011/’12 to R214m in 2014/’15

• The above avge increase (compared to other national depts) over MTEF is largely to fund the deputy minister’s office (R39.7m), recruit new staff and sustain dept’s annual programmes

PRIORITIZATION OF SPENDING & PRIORITIZATION OF SPENDING & MTEF BUDGETMTEF BUDGET


• Women’s empowerment program largest share of total budget, but decreases significantly over MTEF to 43% in 2014/15. Positively skewed in relation to other sectors, mainly from transfer payment to the Gender Commission which comprises around 70% of the program budget.

• Admin. expands from 30% in 2011/’12 to 39% in 2014/’15 mainly as a result of increasing capacity & financing deputy minister’s office

• Share of the Children’s programme remains fairly constant over the period, with Disabilities increasing substantially after coming off from a low base of 3% in 2010/’11

PROGRESSION OF LINE ITEM PROGRESSION OF LINE ITEM SPENDING & MTEF ESTIMATESSPENDING & MTEF ESTIMATES

11Briefing to the Portfolio Committees on Economic Development

• CoE increased by 56% in 2011/’12 and will increase by 29% p.a in real terms over the MTEF to fund vacant posts. Staff complement expected to more than double between 2011/’12 – 2014/’15

• Goods & services decreases from 25% growth in 2011/’11 to 8% p.a real growth. Major cost drivers are property payments, travel & subsistence and venues.

• Transfer exp. to the Gender Commission did not grow in real terms in 2011/’12 and only a 1.2% forecasted real growth predicted p.a. over MTEF. Suggests future budgetary tension betw. Gender Commission & funding dept. programs. Performance and spending not reported on in the AR. The Dept states exercising accountability of the Commission falls outside its mandate given that the Commission is a Ch 9 institution

LINE ITEM SHARE OF TOTAL LINE ITEM SHARE OF TOTAL EXPENDITURE & MTEF BUDGETEXPENDITURE & MTEF BUDGET


• The doubling of the staff complement over the period drives up the share of CoE from 21% in 2010/’11 to 37% in 2014/’15 while the share of transfers & subsidies slides dramatically by 17%

• Transfers still a significant share of dept. budget although no detailed breakdown provided in BS or AR

• Goods & Services decreases marginally over time, with savings in some line items offset by dramatic increase in travel & subsistence from R9m in 2011/’12 to R24.8m in 2012/’13. No reason cited in the BS.

SPENDING PERFORMANCE SPENDING PERFORMANCE (FISCAL DISCIPLINE) (1)(FISCAL DISCIPLINE) (1)


• DWCPD only spent 54% of its total budget in 2010/’11 compared to 117% in 2011/’12

• Overspending by Admin program increased from 31% in 2010/’11 to 57% in 2011/’12. The reasons cited for overspending in the 2011/’12 annual report not very clear.

• Disabilities programme only spent 3% of its budget in 2010/’11 and 87% in 2011/’12 due to posts not being filled, hence projects not being implemented.

SPENDING PERFORMANCE SPENDING PERFORMANCE (FISCAL DISCIPLINE) (2)(FISCAL DISCIPLINE) (2)


• Overspending on CoE increased from 17% in 2010/’11 to 31% in 2011/’12. Reasons cited were critical posts being filled and Senior Managers being appointed. AG mentioned increases not approved by NT as per Treasury Regulations.

– Employees received above 30% of monthly salary for overtime in contravention of PSR

– Salary range posts increased based on incorrect grading in contravention of PSR

• Spending on G&S increased from 123% in 2010/’11 to 128% in 2011/’12 due to relocation costs not budgeted for and delayed payments

• Not clear the reason for under-spending on capital budget in both years

IN-YEAR SPENDING PROFILEIN-YEAR SPENDING PROFILE


• Dept. spending only commenced in the last quarter of 2010/’11 because of migration issues

• Negative amt. noted in Sept of 2011/’12. Not clear why?

• The spike of R50m in Oct 2011 could be the transfer amt coming off the Dept. budget

• Second quarter (July – Sept) spending in 2011/’12 lower than the other quarters

• No significant spike observed in last quarter

UNAUTHORIZED UNAUTHORIZED EXPENDITUREEXPENDITURE

• An amount of R3.7 m unauthorized exp. in 2010/’11 result of overspending on the vote. Amt. not condoned in 2011/’12

• An amount of R25 m unauthorized exp incurred in 2011/’12. No reason cited for unauthorized expenditure.


YR Opening Balance Amounts for the year Amounts condonedAmounts written off/not condoned

Awaiting Condonement

2010 0 3 729 0 0 3 7292011 3 729 25 153 0 0 28 882

IRREGULAR EXPENDITUREIRREGULAR EXPENDITURE

• An amount of R6.6 m irregular exp. recorded in 2010/’11 as a result of savings on capital budget used to defray current expenditure. Amount condoned in 2011/’12

• Dept incurred R35m irregular exp in 2011/’12 due to overtime (R973k) & overspending on compensation (R11.3m).

• Currently investigation under way regarding R21 m irregular exp. In 2011/’12 but reason cited in AR not very clear.


YR Opening balance Amounts for the year Amounts condonedAmounts written off/not condoned

Awaiting Condonement

2010 0 6 629 0 0 6 6292011 6 629 35 120 6 629 0 35 120

SUMMARY OF FINANCIAL SUMMARY OF FINANCIAL ASSESSMENTASSESSMENT

• Department is facing a challenge in balancing its mandate with available resources. Problem will continue in subsequent years unless addressed in some meaningful way. Some suggestions would be for the Department to: – Re-look at existing projects and activities and assess if some are non-

value adding/non-core & can be done away with or reduced (E.g. overseas travel)

– Re-look its implementation strategy to find cost-effective means to implement projects and programs (E.g. Similar outputs betw. programs could be implemented jointly, leveraging IT technology such as teleconferencing facilities to reduce travel expenses etc.)

– Address issues related to HR raised by the AG

• Budget planning, implementation and monitoring currently weak – AG reported AO did not take appropriate steps to prevent overspending18Briefing to the Portfolio Committees on WCPD

AUDITOR GENERAL’S REPORTAUDITOR GENERAL’S REPORT 2011/’12 2011/’12

• Unqualified audit report in both 2010/’11 & 2011/’12• AG refers to the following matters for attention:

– Audit committee did not review effectiveness of internal control systems & institution’s compliance with legal & regulatory provisions

– No internal audit function– SCM procedures and regulations flouted (E.g. not applying preference

points system)– HR plan did not do budget analysis to ensure sufficient funds available– No effective steps to prevent unauthorized and irregular expenditure– In-year monitoring inadequate & not compliant with laws– Investigation launched into approval of overtime, recruitment and

irregular appointments made• found employees were negligent & recommended disciplinary action should be

taken 19Briefing to the Portfolio Committees on WCPD

SUGGESTED FISCAL OVERSIGHT SUGGESTED FISCAL OVERSIGHT QUESTIONS (1)QUESTIONS (1)

• Transversal1. Have Committee recommendations in Oversight Reports

on the previous Annual Report been implemented and/or reported on?

2. Can the DWCPD publish the full APP report on it’s website?

3. How will the department address the issues raised in the 2011/’12 AG report?

4. How has the DWCPD responded to the recommendations made in the report on the investigation of overtime, recruitment and irregular appointments?



• Non-Financial1. When and how will Performance Information

(SOs, PIs and targets) be streamlined in terms of:• best practice criteria?• better reflecting performance dimension?• measuring efficiencies?

2. How can Department prioritize key outputs in future AR in order to facilitate better oversight?



• Financial– Has an internal control committee been

established?– What steps is the department taking to avoid over-

expenditure in 2012/’13?– Has the HR plan of the department been costed?


23

PARLIAMENT CAN DICTATE THE FORMAT PARLIAMENT CAN DICTATE THE FORMAT OF THE ANNUAL REPORTOF THE ANNUAL REPORT

• National Treasury Regulation 18.3 (2005) “Contents of annual reports” - In preparing the annual report of an institution, the accounting officer must, e.a:– include any additional information required by Parliament or the

provincial legislature.

• FFC therefore suggests that the Committee requires the Department to:– publish their responses to previous Committee oversight report;

and– publish their progress on priority outputs as defined by the

Committee, on first pages of Annual Report

FFC RECOMMENDATIONSFFC RECOMMENDATIONS

Briefing to the Portfolio Committees on WCPD

FFC RECOMMENDATION 2013/14 FFC RECOMMENDATION 2013/14 ANNUAL SUBMISSION ON DORANNUAL SUBMISSION ON DOR

• FFC presented all previous recommendations relevant to the Committee that it had made last year

• For 2013/14 Annual Submission, FFC has made recommendations related to:– Financing e-Education and Achieving Policy Goals

in Public Ordinary Schools – Assessing Gender Responsive Budgeting in the

Local Government Sphere in South Africa

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RECOMMENDATIONS: FINANCING E-RECOMMENDATIONS: FINANCING E-EDUCATIONEDUCATION

• Necessary to understand why the e-education challenge is not being met– Some reasons include the need for concerted cultural and

technological adaptation, education is a concurrent function between national and provincial government, requirement for explicit budget allocations for e-education, supporting strategies and funding, building public accountability for policy implementation

• National and provincial education sector requires firm and expert guidance on designing e-education– e-Education Commission

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RECOMMENDATIONS: RECOMMENDATIONS: FINANCINGFINANCING E- E-EDUCATIONEDUCATION

• Limited data available on e-education expenditure and specifically on e-learning expenditure– Should be remedied through making explicit budget

allocations in the annual budgeting process and through explicit reporting on expenditure on e-learning and e-education

• A well-structured IG financing mechanism should be established with explicit guidelines to provincial departments of education regarding the budget line items that require prioritization

27

RECOMMENDATIONS: ASSESSING RECOMMENDATIONS: ASSESSING GENDER RESPONSIVE BUDGETING IN GENDER RESPONSIVE BUDGETING IN

THE LOCAL GOVERNMENT SPHERE IN SATHE LOCAL GOVERNMENT SPHERE IN SA• National and Provincial Governments should:

– Run a pilot on gender budgeting in a few municipalities– Ensure that gender planning is institutionalised in municipal IDPs by sector– Provide gender budgeting good practice guides and toolkits– Provide guidelines for collecting sex disaggregated data

• Local Government should:– Institutionalise gender responsive budgeting process linked to IDPs– Build capacity for gender mainstreaming and gender responsive budgeting

at the local level– Ensure gender-responsive appropriations and budget allocations – Ensure gender-sensitive public participation and consultations at local level

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ONGOING WORK ON CHILD WELFARE ONGOING WORK ON CHILD WELFARE SERVICES IMPACTING ON DWCPDSERVICES IMPACTING ON DWCPD

Briefing to the Portfolio Committees on WCPD

ONGOING WORK ON CHILD ONGOING WORK ON CHILD WELFARE SERVICESWELFARE SERVICES

• Finalised a draft report on the provision and funding of Child Welfare Services in South Africa

• The objectives of the report:– To provide an overview of government policy in the

provision and funding of child welfare services in South Africa.

– To provide an analysis of child welfare services budgets in South Africa.

– To identify key issues to be addressed to improve the provision and funding of child welfare services in South Africa.

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MAIN FINDINGS OF THE MAIN FINDINGS OF THE LEGISLATIVE AND POLICY LEGISLATIVE AND POLICY

FRAMEWORKFRAMEWORK• Lack of human resource capacity in child welfare service

provision, both at NPOs and in terms of the capabilities of Provincial Departments of Social Development to administer and monitor the current grant system.

• Costing exercises point to a lack of adequate funding of NPOs by Provincial Departments of Social Development through existing subsidies and programme funding in order to delivery on requirements of the Children’s Act.

• Court cases involving child welfare services affirmed the responsibilities of Provincial Departments of Social Development to implement policies based on adequate funding of NPOs.

31

MAIN FINDINGS OF THE MAIN FINDINGS OF THE LEGISLATIVE AND POLICY LEGISLATIVE AND POLICY

FRAMEWORKFRAMEWORK• A deterioration of Auditor-General audit opinions for

Provincial Departments of Social Development since the 2007/08 financial year raise serious questions about the capabilities of these Departments to facilitate child welfare services through their management of social grants and transfer payments to implementing NPOs

• The main cost drivers for child welfare services include the growth of vulnerable child populations, growth of poor households, and growth of parental deaths due to HIV/Aids.

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MAIN FINDINGS OF THE ANALYSIS MAIN FINDINGS OF THE ANALYSIS OF CHILD WELFARE SERVICE OF CHILD WELFARE SERVICE

BUDGETSBUDGETS• Fiscal space: With government expenditure growth slowing down

and impacting on the flow of funds to DSD, the fiscal space for child services is limited at a macro level, with little manoeuvrability, unless the state reallocates between the sectors.

• Funding trends: Funding of child services more than doubled in almost all provincial SD departments (except Northern Cape) between 2007/’08 – 2014/’15

• Internal prioritization: The results from the internal prioritization exercise reveal that some provincial departments are not giving sufficient consideration to child services (e.g. Kwazulu- Natal, Eastern Cape and North West), especially when interpreted in the context of demographic data and per capita child expenditure for these regions.

33


BUDGETSBUDGETS• Per capita spending: A distinct two-tiered system of delivering child

services in South Africa is apparent. Social development departments classified in tier one (i.e. Western Cape, Gauteng, Northern Cape and Free State) spent between R264 – R336 per capita on child services in 2010/’11 compared to R60 – 124 per capita for tier two SD departments (i.e. Eastern Cape, Limpopo, Mpumalanga, Kwazulu-Natal and North West).

• Unspent funds: Total unspent funds by SD departments over the four year period (i.e. 2007/’08 – 2010/’11) amounted to R1.2 billion, with unspent funds in 2010/’11 accounting for more than half this amount (R690 million).

• NGOs and transfers: While 8 provincial departments allocated more than 50% of their child care budget to transfers in 2010/’11, no instances were recorded for crime prevention.

34


BUDGETSBUDGETS• Unspent Transfers: Total unspent transfer funds for child care over

the two years amounted to R69.5 million compared to crime prevention, which ran up a deficit on its transfer budget of R4.4 million

35

NGO’S IN A CRISISNGO’S IN A CRISIS• Certain provinces reduce transfer payments to fund CoE & ICS pressures &

absorption of social work graduates• DSD policy does not accommodate ‘full funding’ of social welfare NGO’s• Subsidy model/partial funding – NGO’s expected to ‘raise own revenue’• Certain services are statutory (foster care, children’s homes) but still not fully

funded by government• Free State NOWONGO court case has forced DSD to relook at its approach to

funding NGO’s– Court rulings were not prescriptive but advised on a fair and transparent process

• Looking at a process of ‘prioritising’ services according to legislative requirements• Fund according to how services are prioritised• Norms & Stds for welfare services poorly designed, not costed and implication of

emerging NGOs meeting these stds and qualifying for funding not properly thought through


NGO’S CLOSING DOWNNGO’S CLOSING DOWN


Province Nr Eastern Cape 9 Free State 2 Gauteng 23 Kwa-Zulu Natal 23 Limpopo 4 Mpumalanga 3 Northern Cape 2 North West 9 Western Cape 12 National Organisations 12 Total: 99

• Not a full picture• Range of services affected – substance abuse, foster care, ECD,

services to older persons, OVC’s etc• Services slowed down, organisation closed, staff retrenched• Donors no longer/reduced funding• Government not adequately funding – some provinces concentrating

on delivering services internally which is more expensive because of OSD and full funding

RISING TO THE CHALLENGERISING TO THE CHALLENGE

• NGO’s provide bulk of social welfare services

• Crisis situation – especially for well being of children

• Focus on ‘transforming NGO’s’ – whilst positive, the impact on well established

NGO’s are negative. Well established NGO’s have a strong presence and

foothold and the clients they service are the same as emerging NGO’s.

• Provincial DSD’s should play a much bigger role in supporting NGO’s in terms

of reporting, governance, administration and financial management – these are

often the reasons for non transfer of funds.

• Transfers to NGO’s should be protected in provincial budgets


THANK YOU.THANK YOU.

Financial and Fiscal CommissionMontrose Place (2nd Floor), Bekker Street,Waterfall Park, Vorna Valley, Midrand,Private Bag X69, Halfway House 1685

www.ffc.co.zaTel: +27 11 207 2300Fax: +27 86 589 1038

Documents

Briefing to the Portfolio Committee on WOMEN, CHILDREN AND PEOPLE WITH DISABILITIES