Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698926550895.pdf (South Africa)
Friday, 5 May 2023] No 58—2023] FIFTH SESSION, SIXTH PARLIAMENT PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA _____________________ ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS _____________________ FRIDAY, 5 MAY 2023 _____________________ TABLE OF CONTENTS ANNOUNCEMENTS National Assembly 1.

Introduction of Bills ........................................................................................................ 2 COMMITTEE REPORTS National Assembly 1.

2.

3.
2.

3.

Health ............................................................................................................................... 3 Sport, Arts and Culture .................................................................................................. 56 Forestry, Fisheries and the Environment ....................................................................... 85 ANNOUNCEMENTS National Assembly 1 The Speaker 1.
Introduction of Bills (1) The Minister for the Public Service and Administration (a) Public Administration Management Amendment Bill [B10-2023] (National Assembly – proposed sec 76) [Explanatory summary of Bill and prior notice of its introduction published in Government Gazette No 48449 of 21 April 2023.]
Introduction and referral to the Portfolio Committee on Public Service and Administration of the National Assembly, as well as referral to the Joint Tagging Mechanism (JTM) for classification in terms of Joint Rule 160.

In terms of Joint Rule 154 written views on the classification of the Bill may be submitted to the JTM.

The Bill may only be classified after the expiry of at least three parliamentary working days since introduction.

COMMITTEE REPORTS National Assembly 2 1.


The Budget Vote Report of the Portfolio Committee on Health, dated 03 May 2023 Table of Contents 1.

INTRODUCTION ............................................................................................................ 2 1.1.

Purpose of the report .................................................................................................. 2 1.2.
Process ........................................................................................................................ 2 1.3.

Report of the Financial and Fiscal Commission ........................................................ 2 1.4.

Report of the Auditor-General of South Africa ........................................................... 4 2.
CONSIDERATION OF THE ANNUAL PERFORMANCE AND BUDGET OF THE DEPARTMENT OF HEALTH (2023/24) .................................................................... 4 2.1.

2.2.

Introduction ................................................................................................................. 4 Policy Priorities for 2023/24 and alignment with development agendas ................... 5 2.2.1.

2.2.2.

2.2.3.

2.2.4.


State of the Nation Address (SONA) .................................................................. 5 The National Development Plan (NDP) .............................................................. 6 Department of Health Five-Year Strategic Goals (2020/21 – 2024/25) .............. 6 Department of Health Planned Policy Initiatives ................................................ 7 2.3.
Annual Performance Plan (APP) Key Indicators ........................................................ 8 2.4.

Budget Analysis (2023/24) ....................................................................................... 10 2.4.1.

2.4.2.

Consolidated Health Budget 2023/24 ................................................................ 10 National Department of Health (NDoH) Budget (2023/24) .............................. 11 2.4.3.
Budget allocation per programme ......................................................................... 14 2.5.

Committee Observations on the Department ............................................................ 17 3.

CONSIDERATION OF THE APPs AND BUDGETS OF ENTITIES (2023/24) .

19 3.1.

Compensation Commissioner for Occupational Diseases (CCOD) ......................... 19 3.2.

Office of Health Standards Compliance (OHSC) ..................................................... 23 3.3.
National Health Laboratory Services (NHLS) .......................................................... 28 3.4.

Council for Medical Schemes (CMS) ....................................................................... 33 3.5.

3.6.

South African Health Products Regulatory Authority (SAHPRA) ........................... 39 South African Medical Research Council (SAMRC) ............................................... 43 3.7.
Committee Observations on Entities ........................................................................ 47 4.

COMMITTEE RECOMMENDATIONS ................................................................. 50 4.1.

Department of Health ................................................................................................ 51 4.2.

Entities ...................................................................................................................... 52 5.
CONCLUSION ........................................................................................................... 53 3 Report of the Portfolio Committee on Health on Budget Vote 18: Health, Annual Performance Plan of the Department of Health and its entities, Dated, 03 May 2023 The Portfolio Committee on Health (the Committee), having considered Budget Vote 18: Health, together with the 2023/24 Annual Performance Plans (APPs) of the Department of Health (the Department) and its entities, the Compensation Commissioner for Occupational Diseases (CCOD), Office of Health Standards Compliance (OHSC), National Health Laboratory Services (NHLS), Council for Medical Schemes (CMS), South African Health Products Regulatory Authority (SAHPRA) and the South African Medical Research Council (SAMRC), reports as follows: 1.
INTRODUCTION Section 5(2) of the Constitution of South Africa and section 27(4) of the Public Finance Management Act (No.1 of 1999) sets out the role of Parliamentary committees in overseeing the performance of government departments and entities.

Furthermore, the Money Bills Amendment Procedure and Related Matters Act (Act No.
9 of 2009), provides for the National Assembly, through its committees to assess the budget votes of departments and entities with their respective strategic and annual performance plans.

1.1.

Purpose of the report This report summarises the presentations received from the Department of Health and its entities focusing on the 2023/24 Annual Performance Plans and, as well as allocations over the medium-term expenditure framework (MTEF) period.
The Committee received reports from the Auditor-General South Africa (AGSA) on its review of the 2023/24 health sector APPs and an update on material irregularities in the health sector.

The Committee also received a report from the Financial and Fiscal Commission (FFC) on its analysis of the health sector’s APPs and budgets for 2023/24 financial year This report details the deliberations, observations and recommendations made by the Committee relating to Vote 18.

1.2.
1.2.

Process On the 18th April to 21st April 2023, the Portfolio Committee on Health engaged the Department and its entities on their Annual Performance Plans and budgets for 2023/24.

1.3.

Report of the Financial and Fiscal Commission 2 4 The FFC highlighted the current health issues which include the high burden of both communicable and non-communicable diseases which require a dedicated targeted preventative and preventative programs.
The FFC further noted that Stats SA in 2021 estimated HIV prevalence rate to be approximately 13.7% of the South African population which is about 8.2 million.

It was indicated that inequality in healthcare resources requires an acceleration and speedy implementation of health reforms such as the implementation of the National Health Insurance.
The FFC informed the Committee that the private sector which has more resources provides health services to only about 15-16% of the population while the public sector with less resources is responsible for the remainder of the population.

The FFC highlighted the shortage of doctors and specialists in South Africa and that compared to other countries, South Africa has the lowest number of doctors per 1000 patients and the highest patients per doctor.
It was indicated that the situation is worsening in the country as it had 0.79 doctor per patient in 2019.

The FFC indicated that the Department of Health’s budget for the 2023/24 financial year is R60.1 billion down from R64.6 billion for the 2022/23 adjusted appropriation and that the total expenditure is projected to increase at an annual average rate of 0.4%.
On the entities, it was highlighted that the CCOD’s expenditure is expected to total R1.5 billion over the MTEF, increasing at an annual average rate of 6.5%.

The Council for Medical Scheme’s total expenditure is expected to increase at an average annual rate of 4.7% from R193.4 million in 2022/23 to R221.9 million in 2025/26.
The Council is further expected to generate 95.2% (R616.4 million) of its revenue over the medium term through the collection of levies from medical schemes and 3.2% through transfers from the department.
Relating to the National Health Laboratory Services (NHLS), laboratory tests dominate the service budget after accounting for over 77.8% of the service’s total budget between 2019/20 and 2022/23 and that the dominance of this programme continues over the MTEF period, accounting for 73.8% or (R320 billion) of the service’s total budget.
Its spending will increase at 11.1% annually, on average from R8.3 billion in 2022/23 to R11.4 billion in 2025/26 due to the projected increase in test volume other than Covid-19 tests as services normalise.

On the Office of the Health Standards Compliance, it was noted that the office is fully funded through transfers amounting to R516 million over the MTEF an increase in line with expenditure.
The South African Medical Research Council’s budget over the MTEF is projected to increase at an average annual rate of 0.7% from R1.4 billion in 2022/23 to R1.5 billion over the MTEF period.

The South African Health Products Regulatory Authority’s total revenue expenditure is expected to increase at an annual average rate of 7% to total of R1.2 billion over the MTEF and that a deficit of R13.9 million is projected for 2023/24 after which the budget remains balanced.

3 5 1.4.
3 5 1.4.

Report of the Auditor-General of South Africa AGSA provided an update on material irregularities in the health sector and presented feedback on the outcome of its proactive reviews of the annual performance plans of the sector.
On material irregularities, it was highlighted that the overall aim of the AGSA’s expanded mandate is to instil a culture of accountability, improve the protection of resources, enhance public sector performance and encourage an ethical culture and strengthen public sector institutions to better serve the people.

On the proactive reviews of the annual performance plans in the health sector, it was indicated that the reviews were part of the early warning system that the AGSA implements.
The main purpose is to understand the preparation and revision process of updated five-year plans and final draft of annual performance plans.

The AGSA reported that Mpumalanga Provincial Department of Health had not submitted its APP at the time of review.

There seem to be improvement overall.

The National Department of Health, Eastern Cape, Free State, Limpopo and Mpumalanga had findings of measurability.
Findings on completeness were identified for the National Department of Health and the North West Provincial Department of Health.

2.

CONSIDERATION OF THE ANNUAL PERFORMANCE AND BUDGET OF THE DEPARTMENT OF HEALTH (2023/24) 2.1.

Introduction The public health sector, has for some time been under pressure and the arrival of COVID-19 intensified the pressure on the constrained system.
It is thus concerning that, at a time when investment and expenditure in public health resources should ideally increase, the Health Budget declines by 6.9 percent in the 2023/24 financial year, and is expected to grow by only 0.4 percent over the Medium Term Expenditure Framework (MTEF), compared to average growth rate of 8.3% between 2019/20 – 2022/23.

This is due to baseline reductions in the 2021 Budget which included the HIV and AIDS and Tertiary Services Conditional Grants.
The COVID -19 vaccine programme which was a prominent part of the Health Budget previously is now integrated into the Department’s routine services.
Over the 2023 MTEF, the Department’s focus will be on: ● Preventing and treating communicable and non‐communicable diseases (NCDs); ● Overseeing primary health care services and the shift of port health from the Primary Health Care Programme to the newly established Department of Home Affairs entity – the Border Management Authority; ● Strengthening the health system and preparing for National Health Insurance; ● Supporting tertiary health care services; 4 6 ● Investing in health infrastructure; ● Supporting tertiary health care services in provinces; and ● Developing the health workforce.
2.2.

Policy Priorities for 2023/24 and alignment with development agendas 2.2.1.

State of the Nation Address (SONA) In the February 2023 State of the Nation Address (SONA), the President addressed the following health-related issues: ● The impact of climate change on the health of people.

Extreme weather events such as floods, drought and wild fires, attributed to climate change, have a negative impact on the health and well-being of people.
To this end, government will continue its just transition to a low carbon economy, mitigating the impact of climate change, but in a manner and at a pace that the country can afford.

● A state of disaster was declared in response to the electricity crisis.

Importantly, from a health perspective, critical infrastructure such as hospitals and water treatment plants will be exempted from loadshedding.
● The President made mention of South Africa’s world class manufacturing capabilities, including in the Health Sector.

He gave the examples of an anaesthetic made in a world class manufacturing facility in the Eastern Cape, as well as; the fact that a South African firm has received a licence in the United Kingdom to produce an oral vaccine for cholera for the first time.
● The Hemp and Cannabis sector will be supported to unlock economic opportunities in the rural parts of the country, especially in the Eastern Cape, KwaZulu-Natal and Mpumalanga.

To this end, the Department of Agriculture Land Reform and Rural Development and the Department of Health will address existing conditions for the cultivation of hemp and cannabis to allow for outdoor cultivation and collection of harvests from traditional farmers.
Furthermore, work is being finalised by the Government to create an enabling regulatory framework for a whole plant, all legitimate purposes approach for complimentary medicines, food, cosmetics, and industrial products, aligned to international conventions and best practices.

This includes the reprioritisation of departmental budgets for sector development and support for traditional, black farmers, and the alignment of South African Police Services enforcement with regulatory reforms.

5 7 2.2.2.
5 7 2.2.2.

The National Development Plan (NDP) The National Development Plan (NDP) identifies demographics, burden of disease, health systems and the social and environmental determinants of health as the key areas for intervention required to improve the health system in the country.

Nine goals for health have been identified in the NDP, viz.
: ● Average male and female life expectancy at birth increased to 70 years; ● Tuberculosis (TB) prevention and cure progressively improved; ● Maternal, infant and child mortality reduced; ● Significantly reduced prevalence of non-communicable chronic diseases; ● Injury, accidents and violence reduced by 50% from 2010 levels; ● Health system reforms completed; ● Primary Health Care teams deployed to provide care to families and communities; ● Universal health coverage achieved; and ● Health posts filled with skilled, committed and competent individuals.
The planned National Health Commission is aimed at preventing and reducing the burden of communicable diseases.

The Department envisages a number of health system reforms, including improved health facility planning, an improved Health Management Information System, and improved quality of care.

The Office of Health Standards Compliance (OHSC) was established as a public entity in the 2014/15 financial year.
Its aim is, amongst others, to ultimately improve the quality of health services in the country and deal with complaints.

2.2.3.

Department of Health Five-Year Strategic Goals (2020/21 – 2024/25) In addition to the NDP, the health sector is also guided by the health sector Ten Point Plan and the United Nations (UN) Sustainable Development Goals 2030 (SDGs).
The Department’s five-year strategic goals are as follows: Table 1: Department of Health Five Year Strategic Goals MTSF Priority 3: Education, Skills and Health Impact Statements A.

Life expectancy of South Africans improved to 66.6 years by 2024, and 70 years by 2030.

Outcomes 1.

Maternal, Child, Infant and neonatal mortalities reduced.

2.

HIV incidence among youth reduced.

3.

90:90:90 targets for HIV AIDS achieved by 2020 and 95:95:95 targets by 2024/25.

4.
4.

Significant progress made towards ending TB by 2035 through improving treatment/cure.

5.

Premature mortality from non-communicable diseases reduced by 10%.

6.

An equitable budgeting system progressively implemented and fragmentation reduced.

B.

Universal Health Coverage for all South 6 8 Africans progressively achieved and all citizens protected from the catastrophic financial impact of seeking health care by 2030.

7.
7.

Resources are available to managers and frontline providers, with flexibility to manage it according to their local needs.

8.

Financial management strengthened in the health sector.

9.

Management of medico-legal cases in the health system strengthened.

10.

Package of services available to the population is expanded on the basis of cost-effectiveness and equity.

11.

Integrated services delivered according to the referral policy, at the most appropriate level, to ensure continuity of care.

12.
12.

Quality and safety of care improved.

13.

Staff equitably distributed and have right skills and attitudes.

14.

Community participation promoted to ensure health system responsiveness and effective management of their health needs.

15.

Environmental Health strengthened by contributing to improved quality of water, sanitation, waste management and food services.

16. Financing and Delivery of infrastructure projects improved.

17.
17.

Adaptive learning and decision making is improved through use of strategic information and evidence.

18.

Information systems are responsive to local needs to enhance data use and improve quality of care.

The Department’s Strategic Plan consists of two impact statements derived from the Medium Term Strategic Framework (MTSF) 2019-2024, linked to 18 outcomes.

Five outcomes relate to the quadruple burden of disease; and 13 outcomes to health system strengthening and the NHI.
An extra intervention, with three indicators, has since been added due to the pandemic: Rollout of the National COVID-19 Vaccination Programme across the country to reduce morbidity and mortality.

2.2.4.

Department of Health Planned Policy Initiatives The key policy priorities of the Department include the following: ● National Strategic Plan (NSP) for HIV, TB and STIs (2023 – 2028): The fifth generation of the NSP was launched in 2023.

This NSP will ramp up efforts to reach the 95-95-95 goal.
This includes all provinces scaling up paediatric HIV treatment that is more effective and easier for care-givers to administer.

TB remains the leading cause of death in the country.

More focused measures will be implemented to tackle both TB and HIV in order to transition to the 95-95-95 targets set for both TB and HIV.
● Reduce Non-Communicable Diseases (NCDs): The National Strategic Plan for the Prevention and Control of Non-Communicable Diseases 2022 – 2027 will be implemented to reduce the rapid growth in NCDs including, amongst others, cancer, diabetes, and mental health.

Changing behaviour, raising awareness of status regarding hypertension, diabetes and cholesterol, as well as preventing complications that result 7 9 in disabilities, are key priorities.
The Department is also prioritising a multi sectoral approach to the communities’ reproductive needs.

In particular, the Department aims to address the issue of an increasing number of younger women delivering babies in facilities.

This, the Minister says, “will require a change in in societal morals, beliefs and practises.” ● Facilitate the implementation of the National Health Insurance (NHI) service.

The Department will continue to prepare for the implementation of the proposed NHI.
The Department is still in the process of developing and implementing the Electronic Health Record (EHR) which will collate all the patient’s health data and information into one digital record, providing complete and up-to-date information at the point of care.

● Community participation will be fostered by “Imbizos.” Youth Zones will be expanded in Primary Health Care (PHC) facilities to address HIV amongst youth.
● Improvement of health system infrastructure: The Department will continue to includes the 10-year National Health Infrastructure Plan, which implement maintenance and refurbishment of health facilities.

2.3.

Annual Performance Plan (APP) Key Indicators Some of the key indicators in the Department of Health’s 2023/24 APP include: Programme 1: Administration ● The Department aims for an unqualified audit opinion.

● New indicator: Payment of suppliers within 30 days of receiving valid invoices.
● Legislation to manage medico-legal claims will be developed.

● A medico-legal claim case management system will be used in at least 4 participating provinces.

● 100 health promotion messages will be placed on social media in order to reduce premature mortality due to non-communicable diseases to 26% (10 % reduction).

● New indicator: Community participation promoted through Health Imbizos and unannounced site visits.
● Meet equity targets regarding percentage of women in SMS (Senior Management Service), percentage of youth appointed, and percentage of people with disabilities appointed.

Programme 2: National Health Insurance ● New indicator: Model for PHC contracting developed and documented, identified concepts (from the model) tested in 9 Contracting Units for Primary Health Care (CUPs).

● New indicator: Five (5) million parcels delivered to Pick up Points (PUPs).
8 10 Programme 3: Communicable and Non-Communicable Diseases ● 340 facilities offering HIV self-screening (HIVSS).

● 2100 PHC facilities with youth zones.

● Ninety (90) percent of drug susceptible (DS) –TB treatment success rate.

● Find and treat 223 654 people for TB.

● New indicator: Four (4) Districts introduce HPV screening for cervical cancer.
● Schistosomiasis (also referred to as Bilharzia) prevention – 5 Schistosomiasis endemic districts administering Praziquantel for school attending children (SAC).

● New indicator: 128 clinicians trained and certified competent in any of the 14 Sexual and Reproductive Health (SRH) modules.

● 200 new State patients admitted into designated psychiatric hospitals.

● Additional 100 Hospitals obtain 75% or more on the food service policy assessments.
● New indicator: A draft national implementation plan to strengthen the public health system’s capacity to cater for the mental health needs of children and adolescents developed.

● Updated Strategy for the prevention and control of obesity in SA developed and published.

● New indicator: Four (4) National NCD Campaigns conducted.

● New indicator: Position paper on restricting advertising of unhealthy food during children TV times and on other children’s platform developed.
Programme 4: Primary Health Care ● District Health System Policy framework and Strategy for 2024 -2029 developed.

● Revised District Health Management Offices (DHMOs) guidelines developed and approved.

● 20.5 million Community Outreach Services to household first and follow-up visits.

● 505 of PHC facilities with a Clinic Committee.

● 30 Ports of entry compliant with international health regulations (IHR).
● 26 Metropolitan and district municipalities assessed for adherence to environmental norms and standards.

● Nine (9) Provinces assessed for compliance with Regulations relating to Standards for Emergency Medical Services.

Programme 5: Hospital Systems ● Please note there are only 4 outputs for the programme which receives one of the largest shares of the budget.

● Hospital Strategy concept document is finalised for NHC approval.

● 45 PHC facilities constructed or revitalised.


● 30 hospitals are to be constructed or revitalised.

● 300 public health facilities to be maintained, repaired and/or refurbished.
9 11 Programme 6: Health Systems Governance and Human Resources ● Three (3) Boards appointment recommendations made prior to the expiry of the term of office (South African Pharmaceutical Council (SAPC), South African Nursing Council (SANC) and the Council for Medical Schemes (CMS)) ● Statutory Health Professionals Councils and Public Entities governance report produced bi-annually.

● Nine (9) Nursing Colleges supported to develop curricula for prioritised Nurse and Midwife Specialist training programmes.
● 200 PHC facilities and 160 hospitals implementing the National Health Quality Improvement Programme.

● 2 600 PHC facilities qualify as Ideal Clinics.

● New indicator: Review comments on Food Labelling Regulations.

● recommendations of the Reviewed Community Service Policy finalised.

● Roll-out of the Human Resource Information System (HRIS) for HRH planning in 30 Health Districts.

2.4.

Budget Analysis (2023/24) 2.4.1.


Consolidated Health Budget 2023/24 The Public Health Budget spans across the national department, its entities and the provincial Departments of Health.

The consolidated budget for 2023/24 totals R259.2 billion, down from R259.4 billion in the previous financial year.

Table 2, below, provides a breakdown of the 2023/24 budget, by functional and economical classification.
Table 2: Consolidated Spending by Functional and Economic Classification, 2023/24 Compensation of Employees Goods and Services Capital spending and transfers Current transfers and subsidies Interest Payments Total R billion Consolidated Health SA Total Expenditure Amount 163.6 % 63.1 Amount 76.1 % 29.4 Amount 13.3 % 5.1 Amount 6.2 % 2.4 Amount 0.0 % 0.0 259.2 701.2 31.3 305.2 13.6 192.8 8.6 685.0 30.5 349.5 14.4 2 242.6 ● A significant segment of the consolidated health expenditure, 63.1%, is dedicated to Compensation of Employees (COE), which totals R163.6 billion, up from R159.6 billion.
● Consolidated health expenditure on Goods and Services totals R76.1 billion, down from R78.9 billion, which constitutes 29.4% of overall health expenditure.

10 12 ● Consolidated health expenditure also makes provision for R13.3 billion (5.1%) allocated to Capital spending and transfers, and R 6.2 billion (down from R6.4 billion in the previous year) for Current transfers and subsidies (2.4%).

● There is no allocation for Interest Payments.


However, given that Provinces are known to run high levels of accruals, this is likely not accurate, suppliers are probably charging interest for late payment.

Figure 1: Consolidated Health Budget Expenditure As can be seen in Figure 1 above, District Health Services receives R113.1 billion (43.6%), the largest proportion of the consolidated health budget.
This is followed by Central Hospital Services, which receives R48.6 billion (18.7%), Other Health Services R46.1 billion (17.8%) and Provincial Hospital Services receives R40.2 billion (15.5%).

Facilities Management and Maintenance Receives R11.3 billion (4.4%).

2.4.2.

National Department of Health (NDoH) Budget (2023/24) Table 3: NDoH Budget Summary 11 13 2.4.2.1.

Programme overview The Department receives R60.1 billion, down from R64.6 billion in 2022/23.
This represents a decrease of 6.9% in nominal terms (11.2% in real terms).

This reduction is the result of the once‐off allocations for the COVID‐19 response in 2021/22 and baseline reductions effected over the 2021 MTEF period.

The two largest programmes, namely Programme 3: Communicable and Non-Communicable Diseases (R24.6 billion) and Programme 5: Hospital Systems (R22.6 billion), jointly constitute 78.6% of the total budget allocation.
Programme 4: Primary Health Care Services, declines 41.6% from R5.2 billion to R3.0 billion.

The smallest budget item (constituting only 1.3% of the total budget) is Programme 1: Administration which increases by 1.9% from R786.1 million to R800.9 million.

2.4.2.2.

Economic classification In terms of economic classification, the bulk of the NDoH budget (R56.3 billion or 93.4 per cent) consists of transfers and subsidies.
This figure includes R54.2 billion to Provinces and municipalities, R189.8 million to Non-Profit Organisations (NPOs), and R1.9 billion to departmental agencies and accounts.

● Current payments constitute a total value of R2.6 billion, which represents 4.3% of the total budget allocation.

● Compensation of employees declines from R812.1 million, to R682.1 million.

This 16% decrease is of concern.


● Most of the current expenditure (R1.9 billion) is allocated to Goods and Services, constituting approximately 73.1% of the total current payments.

● The largest share of expenditure goes to Contractors at R601.2 million.

● Expenditure items that also receive a large share of the Goods and Services budget are Inventory: Medical supplies R115.7 million, and Consultants: Business and advisory services R303.2 million.
● Operating leases amount to R105.5 million and Travel and subsistence at R139.2 million.

● Capital assets is allocated R1.3 billion.

Buildings and other fixed structures are allocated R1.2 billion, and Machinery and Equipment is allocated R112.4 million.

2.4.2.3.
2.4.2.3.

Spending priorities for 2023 MTEF Over the medium term, the Department will continue to focus on the prevention and treatment of communicable and non-communicable diseases, overseeing primary health care services, phased implementation of the NHI, supporting tertiary health care services, investing in Public Health Infrastructure and developing the health workforce.

12 14 ● Phased implementation of the NHI continues.
Over the MTEF, R8.8 billion is allocated for NHI activities - the National Health Insurance Indirect Grant is allocated R6.5 billion.

R2.1 billion is allocated to Provincial Health Departments through the Direct National Health Insurance Grant.

This will be used for contracting primary health care doctors, and mental health and oncology service providers.

R174.2 million is earmarked for capacitating the Department’s National Health Insurance Unit and building its health technology assessment.
● The District Health Programmes Grant (previously known as the HIV, TB, malaria and community outreach grant) is allocated R25.0 billion per year over the medium term to fund the prevention and treatment of HIV and TB.

The target is for 7 million people per year to receive ARV treatment by 2025/26.

o R10 million per year in 2023/24 and 2024/25 are allocated to the Communicable Diseases sub-programme in order to provide for the COVID- 19 no - fault compensation scheme.
● Overseeing Primary Health Care services.

Port Health Services’ function will be shifted from the NDOH to the newly established Department of Home Affairs (DHA) entity the Border Management Authority (BMA).

R162 million will be shifted in 2023/24, R171.1 million in 2024/25 and R178.9 million in 2025/26.

Approximately 295 employees will be shifted to the BMA.

The NDOH will continue to provide policy guidance to the BMA on port health services.
The reasons and mechanism for the shift of the Port Health function needs to be examined by the Committee.

● Investing in health infrastructure.

R22.2 billion will be transferred to Provinces through the Health Facility Revitalisation Grant.

R4.7 billion is managed by the Department on behalf of Provinces through the health facility revitalisation component of the National Health Insurance Indirect Grant.
These Grants are aimed at accelerating the construction, maintenance, upgrading and rehabilitation of new and existing health system infrastructure, as well as providing medical equipment required to render health services.

This will include the on-going construction of the Limpopo Central Hospital, which will be the first central hospital in the province.
● The National Tertiary Services Grant is allocated R14 billion in 2023/4, and R14.7 billion in 2024/25 and R15.3 billion in 2025/26 in Programme 5: Hospital Systems.

The Grant compensates Provinces for providing tertiary services to patients from elsewhere.

The Grant has a developmental component earmarked to establish tertiary services in provinces with limited access to them.

In this regard, oncology services will be rolled out in Mpumalanga and Limpopo to reduce referrals to Gauteng hospitals.
● Developing Human Resources for Health.

Under Programme 6: Health System Governance and Human Resources additional allocations are made to the statutory human resources component of the Human Resources and Training Grant to ensure 13 15 students can complete their medical internships and community service.

This Grant now totals R7.8 billion over the MTEF.

For further development and training of existing health workers, the training component of the grant is allocated R8.5 billion over the same period.
2.4.2.4.

Conditional Grants In terms of direct grants, the Department administers R54.2 billion in 2023/24.

The largest grant is the District Health Programmes Grant, which receives R26.9 billion, followed by the National Tertiary Services Grant (NTSG) with R14.1 billion, and the Health Facility Revitalisation Grant with R7.1 billion.

With regard to the indirect grants, the National Health Insurance Indirect Grant is allocated R2.5 billion.

2.4.3.

Budget allocation per programme 2.4.3.1.


Programme 1: Administration Programme 1’s budget increases by 1.9% in nominal terms (and decreases by 2.9% in real terms) from R786.1 million in 2022/23 to R800.9 million in 2023/24.

The largest sub- programme is Corporate Services, of which its allocation increases by 9.4% in nominal terms and by 4.3% in real terms.
Sub-programme 5 (Financial Management) decreases, from R176.9 million to R151.6 million, representing a 14.3% decrease in nominal terms and 18.3% decrease in real terms.

Table 4: Programme 1: Administration In terms of economic classification, 98.5% of the budget is allocated to Current payments.

Compensation of employees amounts to R249.4 million, down from R250.1 million in the previous financial year.

R539.3 million is allocated to Goods and services.


This includes R126.6 million for Operating leases, R56.2 for Property payments and R51.0 million for Travel and Subsistence.

14 16 2.4.3.2.

Programme 2: National Health Insurance The Programme’s budget increases by 0.6% in nominal terms (decreases by 4.1% in real terms).

Table 5: Programme 2: National Health Insurance A total of R793.1 million is allocated for Current payments, of which R700.1 million is for Goods and Services.
R554.3 million or 70.0% of the Goods and services budget is spent on Contractors.

In terms of Transfers and Subsidies, R694.7 million is transferred to Provinces and Municipalities.

R54.8 million is allocated to payments for Capital Assets.

2.4.3.3.
2.4.3.3.

Programme 3: Communicable and Non-Communicable Diseases This programme budget decreases from R26.9 billion to R24.6 billion, ostensibly due to the R2.1 billion reductions in the Communicable Diseases sub-programme after the COVID-19 interventions in the previous years.

Table 6: Programme 3: Communicable and Non-Communicable Diseases The bulk of Programme 3’s budget, i.e., 98.9%, is allocated to the HIV, AIDS and STIs sub- programme, amounting to R24.4 billion in 2023/24.
This represents a nominal decrease of 0.8% (a decline of 5.4% in real terms).

The Communicable Diseases sub-programme allocation decreases by 97.2% (97.3% in real terms).

The remaining six sub-programmes combined receive approximately 1.1% of the 15 17 programme’s budget.

This includes the Tuberculosis Management; Women’s Maternal and Reproductive Health; Child, Youth and School Health; Non- communicable Diseases (NCDs); and the Health Promotion and Nutrition sub-programmes.

2.4.3.4.
2.4.3.4.

Programme 4: Primary Health Care This Programme’s budget declines by 41.6% in nominal terms from R5.2 billion to R3.1 billion.

The District Health Services sub-programme decreases from R4.9 billion in the previous year, to R3.0 billion in 2023/24, a reduction of 39.9% nominally, and 42.7% in real terms.

Table 7: Programme 4: Primary Health Care Environmental and Port Health Services declines by 82.1% (i.e.

R187.6 million) from R228.4 million to R40.8 million in 2023/24.
R162 million is shifted from this programme as the Port Health function is moved to the Border Management Authority, a newly created entity in the Department of Home Affairs.

2.4.3.5.

Programme 5: Hospital Systems The total budget for Programme 5 remains stagnant, declining 0.3% in nominal terms and by 4.9% in real terms.
Table 8: Programme 5: Hospital Systems The 2023/24 allocation to the Health Facilities Infrastructure Management sub-programme increases by 2.7% in nominal terms from R8.3 billion in 2022/23 to R8.5 billion in 2023/24, which is a decline of 2.1% in real terms.

16 18 The Hospital Systems sub-programme decreases by R281.5 million from R14.3 billion in 2022/23 to R14.0 billion in 2023/24, representing nominal decrease of 2.0% and a 6.5% decline in real terms.
A total of 97.5% of programme funding is transferred to Provinces via the NTSG and HFRG.

2.4.3.6.

Programme 6: Health Systems Governance and Human Resources Programme 6 remains stagnant increasing by only 0.2% in nominal terms and decreasing by 4.5% in real terms in 2023/24.

Table 9: Programme 6: Health Systems Governance and Human Resources Two sub-programmes dominate expenditure under Programme 6.
The Human Resources for Health sub-programme which receives R5.5 billion, which is an increase of 0.6% in nominal terms from the previous financial year’s total, a real decrease of 4.1%.

The Public Entities Management sub-programme, receives R1.94 billion, decreasing by 0.9% in nominal terms (i.e.

5.5% decrease in real terms) from the previous year’s allocation of R1.95 billion.
The Nursing Services sub-programme decreases by 1.9% in nominal terms from R10.3 million to R10.1 million in 2023/24, a decline of 6.5% in real terms.

2.5.

Committee Observations on the Department ● The Committee noted with concern the report of the FFC highlighting the severe shortages of health care workers and enquired about the current vacancy rate for nurses, doctors and specialists and wanted to know how the Department was going to address this.
● The Committee noted with concern the delays in the placement of interns and community service doctors and wanted to know how the department is addressing this matter.

● The Committee sought progress on the training and upskilling of nursing staff and the reopening of nursing colleges.

17 19 ● The Committee noted with concern the decreased budget of the Department, which would have a negative impact on the delivery of health services.
● The increase on the burden of communicable and non-communicable diseases remains a concern to the Committee.

● The Committee noted with concern the increase in cancer rates and the shortage of oncology facilities in the country, which is said to be contributing to cancer deaths.

● On non-communicable diseases, the Committee enquired on whether the Department could provide a report on the success of its NCD programmes funded through the sugar tax.
● The Committee sought an update regarding the implementation of the Commission for Gender Equality’s recommendations on the report of forced sterilisation of women living with HIV/AIDS in South Africa.

● The Committee wanted to know the status of surgery backlogs and what plans are put in place to overcome this challenge.

● The Committee enquired about the impact of the recent labour unrest on the public health sector.
● The Committee expressed concern about the backlogs at the forensic chemistry laboratories and asked for the timeline for the analysis of all the outstanding samples.

● The Committee enquired about the steps the Department has undertaken to mitigate the impact of the fire at Charlotte Maxeke Hospital and the restoration of oncology services.
● The Committee wanted to know whether the Department was monitoring the implementation of the recommendations of the Health Ombud in relation to the Rahima Moosa Mother and Child Hospital.

● The transfer of level two patients from Mpumalanga Province to Mamelodi Hospital is a concern to the Committee and wanted to know how this would be resolved.
● The Committee wanted to know what the Department was doing to address the shortage of equipment and infrastructure challenges, including the maintenance of existing infrastructure.

● The Committee wanted to know how many health facilities are exempted from loadshedding and how much has been budgeted to mitigate the impact of power outages in health facilities that are not exempted.
● The Committee enquired about the cost for the planned upgrades of 45 primary health care facilities and 30 hospitals and whether the Department would have adequate project management in place.

● The Committee was pleased that the Department is increasing its efforts to strengthen the management of medico legal claims and sought further details on the draft Bill on medico legal claims.
● The Committee noted with concern that the costing model for the NHI is still outstanding, yet R1.5 billion has been allocated to the Department for NHI, considering that the National Treasury has not engaged the Committee about the costing model of the NHI.

● The Committee enquired about the key stakeholders in the district health system framework and how it will enable the platform for the implementation of the NHI.
18 20 ● The Committee expressed major concern about the lack of access to emergency medical services in rural areas, such as the Northern Cape Province.

● The Committee is concerned that patients over 60 years are being refused kidney treatment, particularly in Gauteng health facilities and wanted to know the rationale for this.
● The Committee noted that there are new performance indicators under programmes one, two, three and six; and wanted to know the reason behind the removal and replacement of indicators.

● The Committee wanted to know the kind of challenges the Department is experiencing in the roll out of the CCMDD programme.

● The Committee wanted to know the strategies put in place by the Department to ensure that 50% of women are in senior positions.
● The Committee noted with concern that almost all entities were understaffed.

● The Committee flagged the need for an engagement between the Council for Medical Schemes and the Department to discuss the need to limit levy increases incurred by members of medical schemes, considering that there is R98 billion surplus with medicals aids.

● The Committee requested an update on the status of the report submitted to the Minister by the CMS on the roll out of the low cost-benefit options.
● The Committee enquired about the allegations of tender-rigging for the Department’s new head office and asked what legal process has been undertaken to address the matter and whether investigations were currently underway.

● The Committee wanted to know what the Department was doing to protect whistle- blowers and closing the gaps for corruption practices in the health sector.
● The Committee expressed that the dumping of medical waste needs to be looked into, in particular the irregularities in the contracts and the storage of medical waste.

3.

CONSIDERATION OF THE APPs AND BUDGETS OF ENTITIES (2023/24) 3.1.
Compensation Commissioner for Occupational Diseases (CCOD) The Compensation Commissioner for Occupational Diseases (the CCOD) in Mines and Works administers the Mines and Works Compensation Fund (the MWCF), which is established by the Occupational Diseases in Mines and Works Act 1973, (No.

78 of 1973) (ODMWA).

The CCOD operates under the provisions of the framework of the ODMWA.
In addition, the ODWMA provides for the establishment of the Medical Bureau for Occupational Diseases (MBOD), which oversees the provision of Benefit Medical Examinations and certifications of claims.

Of all the entities of the National Department of Health (NDOH), the CCOD is peculiar because it operates as a sub-programme of the NDOH and has no Board, hence its administration costs, 19 21 i.e.

personnel, operational and infrastructure operations are controlled by the NDOH.
The vision and mission provide the essence of what is required from the entity as follows: 3.1.1.
CCOD’S milestones By the end of March 2022, CCOD reported the following achievements: ● Received funding for the digitisation of the physical files of the MBOD/CCOD from Rand Mutual Assurance; ● Compiled a comprehensive database with access to the different class action and social protection funds; ● Attained an unqualified audit with no material findings from the Auditor-General of South Africa; ● Ensured innovations in service delivery to the current and ex-workers in mines and works; ● Paid an estimated 466 claimants per month totalling R104,5 million for the 9 months; ● Worked closely with provinces and neighbouring country governments to trace claimants; ● Successfully adjudicated 790 certifications through MBOD Certification Committee; and ● Inspected 95 controlled mines and works by 31 December 2022.
3.1.2.

CCOD’s priorities for the 2023/24 fiscal year For the period of 2023/24 financial year, the CCOD’s Annual Performance Plan (APP) indicates the intention for the entity to accomplish the following performance targets as key priorities.
● Reforming ODMWA to include the new Governance structure (the Mines and Works Compensation Authority); ● Submitting 2022/23 annual report of the MWCF for the audit to the Auditor-General of South Africa; ● Maintenance of the database of controlled mines and works; ● Expansion of the electronic claims management system; and ● Maintenance of the claims management system.

3.1.3.
3.1.3.

Situational Analysis In executing its mandate, the CCOD has been using its only one national office to cover South Africa and the neighbouring countries, which has been inadequate given the incremental demand.

In its situational analysis, the entity puts the following challenges as a major concern i.e.

i. Pensioners 20 22 In accordance with the Pneumoconiosis Compensation Act, (No.
64 of 1962), CCOD pays former workers or spouses who are now pensioners a monthly pension pay-out, but the same Act makes no provision for additional pensioners.

ii.

One Sum Benefits The MBOD/CCOD Certification Committee plays an integral role in determining the ex-miner that qualify for compensation.

No former or current mine worker gets any compensation without the Certification Committee having made its assessment.

In addition, compensation is given to those who have worked at controlled mines.
This exclusion suggests that the former mine workers who may unknowingly worked for years at the uncontrolled mines do not get any compensation.

In 2022/23, CCOD reported on its impediments on APP and these appear to have been omitted in the 2023/24 APP.

Because these are critical, they are worth underlining for the Committee to seek clarity from the entity.
These include the following challenges: ● Has an in-optimally functioning Risk Committee for identification of mines and works; ● Relies on Minerals Council South Africa for support on specialised personnel; ● There is a shortfall on medical, finance and information technology personnel; and ● There are no specialised personnel within its structure.

3.1.4.
3.1.4.

Performance Indicators and Targets for 2022/23 Financial Year The CCOD uses four programmes to implement its mandate, namely: Administration, Compensation of Pensioners, Compensation of Ex-miners, and Compensation of Tuberculosis.

Table 10 below presents performance information stating the Outcome, Output Indicator and Estimated Performance/ Targets.
Table 10: Performance indicators and targets 2023/24 Outcome Output Indicator Estimated Performance/ Targets of Submission amendments to ODMWA to the Director-General of the National Department of Health Report on the submission of amendments to the Director- General the National Department of Health of None Report on updates of the database of claims at the CCOD in terms of claims, payments, certifications and data exchange updates and/or additions Master database updated for payments made, new claims and new certifications for the month before the 7th of the next month.
External data exchange updates and/or additions the master database once a quarter to 21 23 Ensure the effective and efficient management of the CCOD the number of Report on certifications finalised on the Mineworkers Compensation System per year.

Report on the number of benefit payments made by the CCOD (other than pension payments).

Report on the number of claims finalised by the CCOD (other than pensioners).
14 100 8 100 9 035 Report on the submission of annual reports of the CCOD to the Auditor General of South Africa Percentage of controlled mines and works liable for payment of levies per the financial system paying levies to the CCOD Submission of the 2022/23 annual report to the Auditor-General of South Africa 80% of controlled mines and works paying levies to the CCOD The CCOD’s greater impact could be more experienced by the beneficiaries, when its performance targets are accordingly increased.
The table above, shows that some of the entity’s performance targets are static over time.

In this contexts, the Committee may consider a full update on the formulation of performance targets.

In addition, the Committee could seek to know of the stakeholders in the determination of performance targets for greater health outcomes.

3.1.5.

Proposed Budget for 2023/24 Financial Year Table 11 below discusses the proposed budget through its four programmes for 2023/24 financial year.
Table 11: Proposed budget for 2023/24 financial year per programme Programme Budget R million 2022/23 2023/24 Nominal % change in 2023/24 Real % change in 2023/24 Nominal Increase / Decrease in 2023/24 Real Increase / Decrease in 2023/24 0 -88 Administration Compensation of Pensioners Compensation of ex- miners Compensation of Tuberculosis 0 379 0 305 0 -74 0 -19,53% 0 -23,28% 449 439 471 638 22 199 168 4,94% 0.04% 0 0 0 0 0 0 22 24 TOTAL 449 818 471 943 22 125 80 4.9% 0.02% The proposed budget in table 11 shows a marginal increased from R449.8 million in 2022/23 to R471.9 million in 2023/24 financial year, which equates to a real nomination increase of R22.1 million.
Of the four programmes – table 11 shows programme 2 i.e.

Compensation of Pensioners with a significant decrease in allocation.

For example, the real decrease for this programme amounts to R-88,2 million.
While the administration of the CCOD together with the provision of Benefit Medical Examinations and activities of Certification Committee are carried out by the voted funds in the NDOH, the proposed budget falls short of the key fundamentals at CCOD such as: ● Substantial resources estimated at R150 million per annum are required to expand and scale up the services of the CCOD, recruit specialised staff in the legal, information technology, occupational hygiene, medical and financial management disciplines and provide for the medical assessments, certifications, payment and infrastructural backlogs in buildings, medical facilities and information technology; and ● Business reform processes at the CCOD, which are currently supported by human, technical and financial resources from the Minerals Council South Africa.
3.2.

Office of Health Standards Compliance (OHSC) The Office of the Health Standard Compliance (OHSC) is established in terms of the National Health Amendment Act (NHA), No.

12 of 2013 and is listed as a Schedule 3A Public Entity in terms of the Public Finance Management Act (PFMA).
The object of the OHSC in section 78 of the NHA is to protect and promote the health and safety of users of health services by: ● Monitoring and enforcing compliance by health establishments with norms and standards prescribed by the Minister concerning to the national health system; and ● Ensuring that complaints about non-compliance with prescribed norms and standards are considered, investigated and disposed of in a procedurally fair, economical and expeditious manner.

3.2.1.
3.2.1.

Situational Analysis The OHSC notes its importance to the roll out of the National Health Insurance as a model for achieving the objectives of Universal Health Coverage in South Africa.
The OHSC acknowledges that its organisational realities pertaining to the current funding model, the centralised operations and limited resources capacity, compared to the projected and estimated number of health establishments to be inspected for certification, means that the entity is likely to fully meet the expectations of certifying all health establishments in South Africa at least once in four years.
In this regard, the OHSC requires expansion and coverage in all provinces both in the public and private sectors.

In recognition of the prevailing challenges, the OHSC has developed the “OHSC Business Case” which details the framework to increase its capacity to carry out inspections.
The 23 25 Business Case provides an overview of the current scenarios, the organisational design of the OHSC, a decentralised model of operations, an accompanying Human Resource model as well as a financial model outlining a forecast of cost and expenditure over four years.

The OHSC has a conducted a reflective analysis to identify external factors that could affect an organisation’s decisions, helping it to maximise opportunities and minimise threats.
The three assessment methods used, include; the Political, Economic, Social, Technological, Legal/Ethics, Environment (PESTLE) analysis; SWOT analysis; and Stakeholder analysis.

The outcome of these exercises were that there are successes (unqualified audits), strengths (its autonomy and political support) and challenges (financial and human resources challenges) for the entity.

The following are some of the concerns coming out of the entity’s annual performance plan (APP).
● Weak economic growth; ● COVID-19, violent unrests and environmental disasters; ● The OHSC lacks adequate funding to carry out its mandate; ● The centralised delivery model hampers the wider reach and geo-specialisation in the delivery of services; ● Insufficient human resource capacity; ● Delays in the resolution of complaints; ● Negative public perception and sentiment toward healthcare facility inspections; and ● The possibility of other bodies and institutions encroaching on the OHSC mandate.

3.2.2.
3.2.2.

Performance Indicators and Targets for 2022/23 Financial Year The OHSC has five (5) programmes, namely, Administration; Compliance Inspectorate; Complaints Management and Ombud; Health Standards Design, Analysis and Support; and Certification and Enforcement.

Table 12 below discusses a set of selected indicators and targets in comparison to their performance in the previous financial year (2022/23).
Table 12: Performance indicators and targets 2023/24 Outcome Programme Output Indicator Administration Percentage of vacancies filled within four month of the vacancy Percentage vacancy rate per year Percentage of certified inspectors after completion of training Estimated Performance Targets for 2022/23 90% 2023/24 91% 7% 95% 6% 95% 24 26 Programme Outcome Output Indicator A fully functional OHSC Percentage of ICT availability for core OHSC services Percentage of ICT availability for support OHSC services of Number community stakeholder engagements to raise public awareness on the role and powers of the OHSC and Health Ombud Number of private sector engagements raise awareness on the role and powers of the OHSC and Health Ombud to Estimated Performance 2022/23 Targets for 2023/24 Projected to remain the same over the MTEF period 95% 95% Projected to remain the same over the MTEF period 95% 95% Projected to remain the same over the MTEF period 12 12 Projected remain the same over the MTEF period 08 08 remain Projected the same over the MTEF period Unqualified Audit Opinion achieved Unqualified audit Unqualified audit Compliance Inspectorate Percentage of public health establishments inspected for compliance with the norms and standards Percentage of private health establishments inspected for compliance with the norms and standards Compliance with norms and standards is effectively monitored 21% (788 of 3 741) 18.4% (689 of 3 741) Projected remain the same over the MTEF period 12% (52 of 431) 19% (100 of 431)
 100% Percentage of additional inspection conducted in public and private and private health establishments to Projected increase to 21% (110 of 526) over the MTEF period 100% Projected to remain the same over the MTEF period 25 27 Programme Outcome Output Indicator Estimated Performance Targets for 2022/23 2 2023/24 2 Complaints Management and Ombud Improved quality of health care services rendered to the users in the HEs Number of reports of inspections conducted with the names and location of the health
 establishment every six months published Number of annual reports that set out the compliance status of all health establishments Percentage of low-risk complaints resolved within 25 working days of lodgement in the call centre of Percentage user complaints resolved through 30 assessment working days within Percentage of complaints resolved within 6 months through investigation Percentage of complaints resolved within 24 months through investigation Percentage of backlog complaints older than 24 months resolved through investigation Projected to remain the same over the MTEF period 01 01 80% 85% to to 90% the MTEF Projected increase over period 65% 70% to to 75% the MTEF Projected increase over period 15% 20% to to 40% the MTEF Projected increase over period 0 5% This indicator was not achieved in 2022/23 and is projected to increase to 8% in 2024/25 0 2% This indicator was not achieved in 2022/23 and is projected to remain at 2% over the MTEF 03 26 Health Standards Design, analysis and Support Number recommendations improvement in of for the 03 28 Programme Outcome Output Indicator Facilitate achievement of compliance with the norms and standards regulations for different categories of health establishments Compliance with norms and standards increased Certification and Enforcement Estimated Performance Targets for 2022/23 2023/24 Projected to remain the same over 24 the MTEF period 24 Projected to remain the same over the MTEF period healthcare sector made to relevant authorities Number of guidance workshops conducted to facilitate implementation of the norms and standards regulations of health Percentage establishments issued with a certificate of compliance within 15 days from the date of the final inspection report and recommendations 100% 100% Projected to remain the same over the MTEF period of Percentage health establishments against which enforcement action has been initiated within 10 days from final the date of inspection and recommendations Number of
 bi-annual reports developed for publication on the OHSC website the report 100% 100% Projected to remain the same over the MTEF period 02 02 Projected to remain the same over the MTEF period In an effort to improve the outlook and the quality of healthcare services, the OHSC is expected to increase the number of health establishments it inspects and certifies for compliance with norms and standards.
The percentage of private health facilities inspected is expected to increase from 12% in 2022/23 to 21% in 2025/26.

3.2.3.

Proposed Budget for 2023/24 Financial Year As indicated in table 13, the overall proposed allocation for the entity is R162.7 million for 2023/24 and is expected to increase to R181.7 million in 2025/26.
The bulk of the funding is allocated to Programme 2: Compliance Inspectorate, which carries out most of the entity’s work and constitutes an estimated 35.7% of its total projected expenditure over the MTEF period.

For the 2023/24 financial year, programme 2 sees a nominal decrease of about 1.27%.

27 29 However, funding for this programme is expected to increase at an average annual rate of 2.8%, from R58.4 million in 2022/23 to R63.4million in 2025/26.
Table 13: Budget for 2023/24 as per programme Programme Budget Nominal Rand change Nominal % change Real % change R’000 million 2022/23 2023/24 2024/25 2025/26 2022/23 – 2025/26 Administration 64 680 69 276 73 372 79 602 4 596 7.10% 2.47% Compliance Inspectorate Complaints Management and Ombud Health Standards Design, Analysis and Support Certification and Enforcement TOTAL 58 469 20 890 10 972 2 498 157 509 57 726 60 883 63 451 -743 -1.27% -3.36% 21 404 22 378 22 957 514 2.46% -2.17% 11 519 12 037 12 383 547 4.99% 0.36% 2 800 2 929 3 356 302 12.09% 7.46% 162 725 171 599 181 749 5 216 3.31% -1.32% 3.3.
National Health Laboratory Services (NHLS) The National Health Laboratory Service (NHLS) is governed by the Board and the Chief Executive Officer (CEO).

The National Health Laboratory Act (Act No.37 of 2000) establishes NHLS as a Schedule 3A Public entity in line with the Public Finance Management Act (Act No.1 of 1999).
The NHLS is mandated to provide quality, affordable and sustainable health laboratory and related public health services to all public healthcare providers, other government institutions, and any private healthcare provider in need of service.

Moreover, the entity is required to support health research and provide training for health science education including advisory services to the National Department of Health (NDOH) and other stakeholders.

3.3.1.
3.3.1.

Situational Analysis In its situational analysis, the NHLS discusses external and internal environmental factors that affect its mandate and operations.

Importantly, the situational analysis provides challenges that require close attention to support the NHLS fulfil its and ensuring that pathological services are easily accessible by the health users.
The list below shows the extent of challenges for the entity: 28 30 ● Expensing debt impairment of R1.2 billion due to failure by provincial Health Departments to meet their obligations; ● A slight increase in HIV-related mortality since 2020 due to the COVID-19 pandemic and associated restrictions; ● Unfunded mandate for NHLS to financially support NICD, NIOH, Forensic Chemistry Laboratory (FCL), and National Cancer Registry (NCR) due to a significant decrease in a conditional grant from the NDOH; ● Compromised health facilities’ infrastructure that affects the NHLS from effectively providing ongoing quality service to its clients as per mandate; ● Outstanding non-payment of R5.89 billion to NHLS by the provincial Health Departments of which 70,8%, i.e.
R4.17 billion was owed over 90 days; ● Limitation of the NHLS by the Protection of Personal Information Act (Act No 4 of 2013) to conduct surveillance in a public health emergency and conducted research; ● Ongoing attrition, particularly of pathologists at higher levels, including Heads of Department due to recruitment from the private sector and international migration; and ● Digitisation challenges for NHLS, which include aging Information Technology (IT) infrastructure, IT skills shortage, the non-availability of electricity, and the Supply Chain Management processes that inhibit the replacement of critical systems and tools on time.
These challenges have a significant impact on both the entity and its clients i.e.

health-users.

● Loadshedding impact on quality and turnaround times on laboratory tests 3.3.2.

SWOT Analysis The NHLS conducts a SWOT analysis prior commencement of the financial year to ascertain its strengths, weaknesses, opportunities, and threats (SWOT).

In the past two financial years i.e.


2021/22 and 2022/23 including the current fiscal year (2023/24), NHLS cites the following weaknesses lack of succession planning and development across various levels, inequitable distribution of critical and scarce skills, and inadequate ICT infrastructure capacity.
With regards to threats, NHLS identifies private-sector competition, especially in Anatomical Pathology, inadequate resources to cover the needs, insufficient throughput from the training platforms, and operational costs exceeding tariff increases.

The challenges listed in the situational analysis and the accentuation of weaknesses and threats suggest that the entity is facing an insurmountable mandate.

The Committee needs to engage thoroughly with the NHLS to resolve most of the mentioned challenges.
● Forensic Chemistry Laboratory On 1 April 2022, the Forensic Chemistry Laboratory (FCL) was fully integrated into the NHLS in line with the applicable legislation.

As the integration happens, the NHLS has identified the following challenges facing FCL: • Staff shortages and staff rotation due to COVID-19; 29 31 • Delays in procurement and sub-standard buildings; • Laboratories operating at half capacity; and • Old equipment.
In the 2022/23 fiscal year, the NHLS indicated that the integration posed a series of challenges - chief among them was the increased operational costs on its limited resources.

● Delayed Publication of NAPHISA Regulations Pursuant to the extensive legislative process on the National Public Health Institute of South Africa Bill (NAPHISA), which resulted in it being passed by the National Assembly and assented to by the President on 5 August 2020.
Strangely, since August 2020, the Regulations that operationalise the Act have not been completed nor gazetted - hence an enormous strain on NHLS.

Once the Regulations are proclaimed, the following divisions will migrate i.e.

the Occupational Health, Cancer surveillance, Environmental health, Communicable diseases, Non-communicable diseases, and Injury and violence prevention.

3.3.3.

Performance Indicators and Targets for 2022/23 Financial Year The NHLS has six programmes i.e.
Laboratory Service; Academic Affairs, Research and Quality Assurance (AARQA); Surveillance of Communicable Diseases; Occupational and Environmental Health and Safety; National Institute for Occupational Health (NIOH) and Administration.

NHLS uses these programmes to implement its APP.
Table 14 provides an identified outcome, output indicator and estimated performance target for 2023/24 financial year: Table 14: Performance indicators and targets 2023/24 Output Indicator Estimated Outcome Observation Performance 2023/24 (Targets) for Clinical Effectiveness and efficiency Percentage of TB GeneXpert tests performed within 40 hours Percentage of HIV viral tests load performed within 96 hours 94% 94% The marginal increase from 93% in 2022/23 fiscal year.
It is projected to be 95% in 2024/25 financial year.

A 12% increase from 82% in 2022/23 financial year.

Over the MTEF, it is projected to a slight increase of 95%.

30 32 Clinical and efficiency effectiveness and Develop implement a POCT (Point-of-care testing) plan.
10% implementation of the POCT plan based on the pilot Implement pathology digital Implement the pilot High-quality services Percentage compliance achieved by laboratories during annual quality compliance audits Clinical and efficiency effectiveness Number of pathology admitted registrars the and NHLS trained in intern Number of medical scientists admitted and trained in the NHLS Number of articles published in peer- reviewed journals High-quality services Clinical and efficiency effectiveness Percentage of blood tests alcohol completed within a normative period of 90 days Percentage reduction of backlogged toxicology cases 94% 40 50 170 75% 40% By 2026/27 about 50% of point of care (POCT) will be implemented based on the pilot.
By 2026/27 about 20% of the identified laboratories based on the pilot will be roll- out.

This target is decreased from 100% in 2020/21 financial year.

It is projected to increase to 95% in 2024/25 This target is projected to remain 40 until 2024/25.

This target was decreased from 55 in 2020/21 and is projected to remain 50 until 2024/25.

This target was decreased from 200 in 2020/21 and projected to increase to 180 in 2024/25.
This new target is increased from 60% in 2022/23 and is projected to increase to 80% in 2024/25.

This is another new target.

It is increased from 20% in 2022/23 and is projected to increase to 60% in 2024/25.

The targets are marginally increased while others remain the same over the MTEF period, which translates to a similar outcome to the previous financial year.
For making a greater impact on the health system and the country’s economy, performance targets ought to be significantly increased given the remit the entity was established for.

3.3.4.

Proposed Budget for 2023/24 Financial Year 31 33 Table 15 provides the National Treasury’s proposed budget for NHLS to be appropriated by Parliament and transferred to the entity through the NDOH.
Table 15: Proposed budget to NHLS for 2023/24 fiscal year Programme Budget R million 2022/23 2023/24 Laboratory Service 8 322 261 9 978 062 355 022 377 871 Nomina l Increas e / Decreas e in 2023/24 Real Increas e / Decreas e in 2023/24 1 655 801 22 849 1 189 714 5 198 Nomin al Percen t change in 2023/2 4 19.90 % 6.44% Real Percen t change in 2023/2 4 14.30 % 1.46% Academic Affairs, Research, and Quality Assurance Surveillance of Communicable Diseases Occupational and Environmental Health and Safety Forensic Chemistry Laboratory Service Administration TOTAL 459 886 483 761 23 875 1 278 5.19% 0.28% 166 009 174 738 8 729 566 5.26% 0.34 % 490 500 530 925 40 425 15 624 8.24% 3.19 % 1 805 381 1 897 787 11 599 059 13 443 144 92 406 1 844 085 3 758 1 216 140 5.12% 15.9% 0.21% 10.48 % Table 15 depicts a total of 10.48% of real increase, which equates to R1.2 billion real increase for 2023/24.
Compared to 2022/23, a significant deficit in Programme 1: Laboratory Service amounted to a real decrease of R-531.1 million which caused a significant shortfall in meeting its targets.

For 2023/24 fiscal year, all programmes reflect a positive allocation.

In addition, the statement of financial performance expresses the following amounts for the current financial year: ● Total revenue ● Total expenses ● Surplus : R13.5 billion; : R13.4 billion; : R60.159 million.
Despite the proposed budget showing positivity across all programmes, there is a serious concern with the decrease in conditional grants and non-movement in respect to NAPHISA Regulations.

As such, for 2023/24 financial year, the total deficit amounting to R368.5 million is been identified for the following division with NHLS.
● National Institute of Communicable Diseases (NICD) ● National Institute of Occupational Health (NIOH) : R219.1 million : R48.6 million 32 34 ● Teaching, Training and Research (TTR) : R100.7 million 3.4.

Council for Medical Schemes (CMS) The Council for Medical Schemes (CMS) is the national medical schemes regulatory authority.
It is the public entity responsible for regulating the medical schemes industry to protect the interests of beneficiaries, “controlling and co-ordinating the functioning of medical schemes, collecting and disseminating information about private health care, and advising the Minister of Health on any matter concerning medical schemes” CMS Annual Performance Plan indicates that as at 31 March 2022, the Council regulates: ● 72 (down from 74) medical schemes; ● 27 (up from 19) administrators (including self-administered schemes); ● 44 managed care organisations; ● 2 156 broker organisations; and ● 7 530 individual brokers.
CMS regulates these entities utilising the Medical Schemes Act (No.

131 of 1998) and Regulations to ensure that all the 8.95 million scheme beneficiaries’ interests are protected.

This means that the CMS should ensure that all the regulated entities are at all times compliant with the Act and its provisions.
In the previous financial years, the Health Sector has seen the release of the Medical Schemes Amendment and National Health Insurance Bills, the Health Market Inquiry Final Report and the Review of the Financial Sector Regulation Act and the Conduct of Financial Institutions (COFI) Bill.

The process of finalising and implementing these three policy initiatives will provide a basis for all the key initiatives that the Council will focus on within the next five years.
The strategic objectives for the CMS for the next three years are to ensure effective regulation of the medical schemes industry and playing a significant role in the implementation of Universal Health Coverage, known in South Africa as the National Health Insurance.
The CMS aims to make significant contributions in the following key areas: ● Policy development and research; ● Reduction of costs and quality improvement ● Reduction of fraud, waste and abuse; ● Support establishment of a coding authority; ● Harmonise the medical schemes regulatory frameworks in the SADC; ● Consolidation of options and medical schemes; ● Primary Health Care package as part of the Prescribed Minimum Benefits (PMBs); and 33 35 ● Presidential Health Compact.
This paper provides an overview of the 2023/24 Council for Medical Schemes’ Annual Performance Plan (APP) and Budget, as submitted to Parliament.

Key issues for consideration by Parliament are also highlighted.

3.4.1.

Situational Analysis The CMS identified a number of threats, weaknesses, opportunities and strengths in its APP.

It will be important for the Committee to have a more in-depth discussion on what the CMS is reporting for each of these factors.
Table 16: SWOT Analysis STRENGTHS • Unique expertise.

• Hybrid working mode.

• Experienced skilled personnel, Sole mandate.

• Track record of success in legal challenges.

• Unqualified audits.

• >80% overall performance against set objectives.

WEAKNESSES • Insufficient resources for current operations.

• Sustainable funding model challenges.

• Lack of a cohesive communication strategy.

• Capacity constraints in communication/ No Spokesperson.

• Unfilled key posts and High Staff Turnover.


OPPORTUNITIES THREATS • Partnership with other Regulators.

• Support for the NDOH in the implementation of the NHI.

• Fast-tracking the development and implementation of new Regulations.

• FSRA and COFI Bill, • Attack by Conglomerates.

• Increased Litigation • Prolonged SIU and Section 59 Investigations.

• Cybersecurity and Act • POPIA Act • Undesirable Business Practices.

• Single source of information for Industry performance.
• Functional Governance Body.

• CMS Branding and Image.

• Revamped CMS website.

• Partnerships and collaboration with other • Prioritization of the Medical Schemes Amendment Bill Processing.

• Alternative Funding Model for the CMS.

• Ageing ICT Infrastructure.

• Inability to comprehensively respond to energy, network and other ICT challenges.

• Succession Planning and Continuity.

• Reactive Regulatory than proactive approach.


• Lack of a comprehensive • Unregistered product doing business of the medical scheme.

• Increasing and shifting burden of disease and its impact on scheme risk profiles.

• Performance Incentive Moratorium.

• Potential of FWA.

• Scheme reserves and surplus generated during 34 36 OPPORTUNITIES THREATS the pandemic.

WEAKNESSES Stakeholder Management Strategy: o NDoH o National Treasury o Regulated entities and others.
• Lack of succession planning and retention strategy.

• Delayed appeals process.

STRENGTHS regulators and industry bodies through MoU’s.

• MoU’s with institutions of higher learning i.e., Stellenbosch University, Sefako Makgatho, Wits.

• Join Learning Network partnering with NDoH, NT and the World Bank.

• Published research in peer reviewed journals.

As it did in previous years’ APP, the CMS reports that despite a high turnover rate that the CMS work environment remains stable.
Employees were placed in the new structure during the second quarter of 2022/23.

3.4.2.

Performance Indicators and Targets for 2022/23 Financial Year The table below highlights some of the annual and quarterly performance indicators for the CMS.

Table 17: Strategic Objectives and Performance Plan Indicators for 2023/24 STRATEGIC OBJECTIVE PROGRAMME PLANNED TARGET 2023/24 1.
ADMINISTRATIO N Ensure that reported performance information is in accordance with the Framework for Strategic and Annual Performance Plans.

Ensure that the review and development of a Strategic Plan and Annual Performance Plan is done for Council’s consideration by the 31st January each year.

35 37 PROGRAMME STRATEGIC OBJECTIVE PLANNED TARGET 2023/24 Ensure that overall performance of the entity is maintained above 80%.
Produce an Annual Performance Information Report that is reliable, accurate and complete by 31 July each year.

Ensure effective financial management and alignment of budget allocation with strategic priorities.

An established ICT Infrastructure that ensures information is available, accessible and protected.

Provide software applications that serve both internal as well as external stakeholders, and that improve business operations and performance.
Effectively provide information management services and organise the management of organisational knowledge with a view to enhance knowledge sharing.

Build competencies and retain skilled employees.

Maximise performance to improve organisational efficiency and maintain high performance culture.

Legal advisory and support service for effective regulation of the industry and operations of the office.

Obtain an unqualified opinion issued by the Auditor General of South Africa.
Produce a Budget that is approved by Council by 31 January each year.

Achieve 99% in network uptime.

Ensure 5% of IT security incidents (breaches).

Achieve 95% in uptime of business critical application systems.

Ensure that 95% of physical requests for information are responded to within 30 days.

Minimise staff turnover to less than 15% per annum.

Average turnaround time of 120 working days to fill a vacancy.

Achievement of employment equity targets (BBBEE).


Develop and maintain talent management Policy Framework by implementing a career path and succession plan.

95% of employee performance agreements are signed no later than 31 May each year.

95% of employee performance assessments are concluded bi- annually.

95% written and verbal legal opinions provided to internal 36 38 PROGRAMME STRATEGIC OBJECTIVE PLANNED TARGET 2023/24 2.

STRATEGY PERFORMANCE AND RISK 3.


REGULATION Defending decisions of the Council and the Registrar.

Corporate governance, Secretariat & Board administration Support and Legal Services for effective governance by the Accounting Authority.

Ensure that strategic projects are scoped and project plans are in place.
Accredit regulated entities based on their compliance with the requirements for accreditation in order to provide accredited services and monitor legal compliance throughout the period of accreditation.

Inspect regulated entities for routine monitoring of compliance with the prescribed legislation.

Strengthen and monitor governance systems medical schemes and other regulated entities.

Ensure that rules of the schemes are simplified, standardised, fair and compliant with the Medical Schemes Act (1998).
Monitor and promote financial soundness of medical schemes.

Strengthen and monitor governance systems medical schemes and other regulated entities.

and external stakeholders, attended to within 14 days.

100% of court and tribunal appearance in legal matters received and action initiated by the Unit within 14 days.

Number of training sessions held for Council and /or Committees.

90% of signed annual declaration of financial interest by Council Members.
Development and maintain a Strategic Projects Register.

80% Scope and Develop plans for strategic projects.

80% of broker and broker organisation applications accredited within 30 working days on receipt of complete information.

100% of managed care organisation applications analysis completed within three months of receipt of complete information.

100% of administrators and self-administered schemes’ applications analysis completed within three months of receipt of complete information.
10 Routine inspections undertaken, if applicable.

70% of Governance interventions implemented.

80% Interim rule amendments are processed within 14 days of receipt of all information.

100% of business plans processed in respect of Regulation 29.

70% of governance interventions implemented during the period.

37 39 PROGRAMME STRATEGIC OBJECTIVE PLANNED TARGET 2023/24 4.

POLICY, RESEARCH AND MONITORING 5.


MEMBER PROTECTION Ensure that rules of the schemes are simplified, standardised, fair and compliant with the Medical Schemes Act (1998).

Monitor and promote financial soundness of medical schemes.

Conduct research to inform appropriate national health policy interventions.

Monitoring trends to improve regulatory policy and practice.
To enhance knowledge and skills among stakeholders in order to create an in-depth understanding of governance and compliance with the Medical Schemes Act through education and training interventions.

Resolve complaints with the aim of protecting beneficiaries of medical schemes.

80% of interim rule amendments processed within 14 working days of receipt of all information.

90% of annual rule amendments processed before 31 December of each year.

1 Financial section prepared for the Annual Report.
17 Research projects finalised, per year.

1 Non-financial Report submitted for inclusion in the Annual Report.

55 Stakeholder education and training sessions.

80% of complaints older than 120 calendar days adjudicated during the reporting period in accordance with complaints standard operating procedures.

100% of Rulings published on the CMS website within 14 days of issuing the ruling.

3.4.3.
3.4.3.

Proposed Budget for 2023/24 Financial Year CMS receives a Government Grant of only R6.5 million from the National Department of Health and the bulk of its budget is from the principal medical scheme members to the value of R193.4 million.

CMS is set to spend R208.4 million in 2023/24, up by 7.7% percent in nominal terms and 2.7% in real terms from the adjusted budget of R193.4 million of 2022/23.
38 40 Table 18: CMS Budget 2023/24 In terms of allocation per programme, programme 1: Administration receives the biggest allocation of R120.4 million in 2023/24 or 57.8% of the budget.

This is an 8.1% nominal increase, and 3.0% real increase from the previous year.

This programme is divided into 5 sub- programmes, namely: Office of the CEO and Registrar; Office of the CFO; Information Systems and Knowledge Management; Corporate Services; and Council Secretariat.
Corporate Services receives the largest share of the Administration budget at R51.7 million.

Information Systems and Knowledge Management is the second biggest budget item receiving R32.6 million; while the Council Secretariat receives the smallest amount with R9.7 million.

Programme 5: Member Protection receives an increase of 12.4% in nominal terms increasing from R25.7 million in 2022/23 to R28.9 million in 2023/24.
Programme 3: Regulation receives a 6.2% nominal increase from R40.9 million in 2022/23 to R43.4 million in 2023/24.

The key cost drivers per economic classification are as follows: 65.5% (R136.5 million) of CMS operating budget (R208.4 million) is allocated for Compensation of employees (COE) and 34.5% (R71.9 million) is allocated for Goods and services.

3.5.
3.5.

South African Health Products Regulatory Authority (SAHPRA) The South African Health Products Regulatory Authority (hereafter, SAHPRA) was established in terms of the Medicines and Related Substance Act (Act No.

101 of 1965) (as amended by Act No.

72 of 2008, together with Act No.

14 of 2015).


This was in order to regulate and control registration, licensing, manufacturing, import and all other aspects pertaining to active pharmaceutical ingredients, medical devices, and for conducting clinical trials in a manner compatible with the national medicines policy.

3.5.1.

Situational Analysis In terms of the internal environment analysis, SAHPRA has moved its business processes from paper-based to digital.
On health products authorisation, since the implementation of the priority review requests process, there has been an influx of relevant applications, resulting in delays in the review of routine applications.

39 41 SAHPRA has commenced with physical inspections, both locally and internationally, due to the easing of travel restrictions.

The demand for inspections remains high and is driven by the new licence and product registration application as well as routine and unannounced inspections.
The Inspectorate unit is capacitating itself in terms of skills and number of inspectors.

On medicinal cannabis, SAHPRA continues to inspect and licence cultivators of cannabis for the purposes of producing scheduled substances.

SAHPRA’s activities in the medicinal sector form part of an important aspect of the broader Cannabis Master Plan, which is led by the Department of Agriculture, Land Reform and Rural Development.
The increase in the number of clinical trial applications for both therapeutics and vaccines continue, although the focus has shifted back to therapeutic areas that became of secondary importance during the pandemic.

Existing expertise in SAHPRA is being increased to deal with new clinical trial designs highlighted during the pandemic.
Veterinary and complementary medicines have seen a decline in Section 21 application and this is said to be attributable to more veterinary registrations taking place and Covid-19, resulting in fewer people obtaining Section 21 for complementary medicines.

The medical device industry is relatively new in terms of regulations, which includes the establishment and product registration.
Attaining relevant skills in this field is a challenge, hence the reliance on external reviewers to assist with the review of applications.

3.5.2.

Performance Indicators and Targets for 2022/23 Financial Year SAHPRA executes its mandate through five (5) programme areas, namely, Leadership and Support; Health Products Authorisation; Inspectorate and Regulatory Compliance; Clinical and Pharmaceutical Evaluation Medicines; and Medical Devices and Radiation Control.
The ensuing sub-section provides a synopsis of SAHPRA’s performance plans/targets, per programme, for the 2023/24 financial year.

3.5.2.1.

Programme 1: Leadership and Support This programme is responsible for providing leadership and administrative support necessary for SAHPRA to deliver on its mandate and comply with all relevant legislative requirements.

For the 2023/24 financial year, this programme has set itself eight (8) performance targets, same as in the previous financial year.
The eight (8) performance targets in this programme for the year under review are as follows: ● Attaining and maintaining an unqualified audit for the 2022/23 financial year.

● Current ratio of 1≥1 maintained.

40 42 ● Progress report on the implementation plan from the 2023/24 stakeholder perception survey submitted to the Executive Committee.

● Progress report on the implementation plan from the 2023/24 staff satisfaction survey submitted to the Executive Committee.
● Seventy percent (70%) employees trained.

● Ninety-five percent (95%) budgeted positions filled.

● Staff turnover rate less than 10%.

● Enterprise Architecture Phase 1 implemented in full.

3.5.2.2.

Programme 2: Health Products Authorisation This programme, previously known as Authorisation Management, aims to coordinate the process of registration and/or licensing or amendment of applications for medicines.
It aims to provide specialised administration support necessary for core functional programmes to enable the entity to deliver on its roles in specific reference to processing licences and permits.

The programme has a total number of four (4) targets, down from six (6) in the previous financial year.

The targets for the programme are as follows: ● Eighty percent (80%) of New Chemical Entities finalised within 490 working days.
● Seventy-five percent (75%) of generic medicines finalised within 250 working days.

● International Organisation for Standardisation 9001: 2015 certified.

● WHO maturity level 4 self-assessment conducted.

3.5.2.3.

Programme 3: Inspectorate and Regulatory Compliance Programme 3 is responsible for ensuring public access to safe and quality health products through conducting inspections and regulatory compliance.
The focus of this programme includes assessment of site compliance, with good regulatory and vigilance practices, including facilitating Good Manufacturing Practice (GMP), Good Warehousing Practice (GWP), Good Distribution Practice (GDP), Good Clinical Practice (GCP), Good Vigilance Practice and Good Laboratory Practice (GLP) compliance.

The programme, as in the previous financial year, there are three (3) targets for 2023/24 financial year.
The key targets for the programme include: ● Seventy percent (70%) of new Good Manufacturing Practice and Good Warehousing Practice related licences finalised within 125 working days.

● Eighty percent (80%) of permits finalised within 20 working days.

● Eighty percent (80%) of health product quality complaints reports produced within 30 working days.

3.5.2.4.
3.5.2.4.

Programme 4: Clinical and Pharmaceutical Evaluation Medicines 41 43 This programme is responsible for conducting evaluation of safety, quality and therapeutic efficacy of medicines and register them for use as per delegated authority in terms of relevant legislation.

This programme has only five targets that it plans to achieve during the year under review.
The five targets are as follows: ● Ninety percent (90%) of applications for the sale of unregistered Category A (human) medicines finalised within three (3) working hours.

● Eighty percent (80%) of human clinical trial applications finalised within 80 working days (down from 90 working days).

● Seventy percent (70%) reports on health product safety signals issued within 40 working days after receipt.

● Six (6) safety awareness campaigns held.


● 95% of lot release requests finalised within 50 working days (up from 30 working days).

3.5.2.5.

Programme 5: Medical Devices and Radiation Control This programme is responsible for developing and maintaining regulations and guidelines relating to the regulatory oversight of medical devices, and listed electronic devices.
The programme has five targets for 2023/24, the Authority plans to achieve: ● Seventy percent (70%) of medical device establishment licence applications finalised within 90 working days.

● Call-up notice of pilot Class D (high risk) medical device products published.

● Sixty percent (60%) of application licenses for radionuclide authorities issued within 30 working days.

● Ninety percent (90%) licence applications for listed-electronic products finalised within 30 working days.
● Three (3) approved guidelines for the management of medical device vigilance.

3.5.3.

Proposed Budget for 2023/24 Financial Year Table 19 below shows that the overall proposed allocation for the entity is R394.8 million for 2023/24 and is expected to increase to R428.4 million in 2025/26.

Table 19: SAHPRA Budget 2023/24 Programme Budget Nominal Rand change Nominal % change Real % change R’000 million 2022/23 2023/24 2024/25 2025/26 1.
Leadership and 127 736 135 444 140 562 145 706 7 708 6.0% 1.4% Support 42 44 2.

Health Products Authorisation 3.

Inspectorate and Regulatory Compliance 4.

Clinical and Pharmaceutical Evaluation 5.
Medical Devices and Radiation Control 51 615 36 268 38 078 39 978 -15 347 -29.7% - TOTAL 349 356 394 796 412 614 428 409 45 440 13.0% 8.4% Leadership and Support (Programme 1) remains the largest programme in terms of allocation and increases from R127.7 million in 2022/23 to R135.4 million in 2023/24, an increase of R7.7 million or 6 percent in nominal terms.
The largest reduction in budget allocation in terms of percentage and amount is in Programme 2: Health Products Authorisation which declines from R51.6 million in 2022/23, to R36.3 million in 2022/23, a 29.7 percent reduction.

Programme 3: Inspectorate and Regulatory Compliance receives a sizeable increase of R25.2 million, from R37.3 million in 2022/23 to R52.8 million in 2023/24.
The second largest programme is Programme 4: Clinical and Pharmaceutical Evaluation, its budget increases from R100.3 million in 2022/23 to R125.5 million in 2023/24.

This represents a nominal increase of 25% percent.

Programme 5: Medical Devices and Radiation Control receives a R12.4 million increase from R32.4 million in 2022/23 to R44.8 million in 2023/24.

3.6.
3.6.

South African Medical Research Council (SAMRC) The South African Medical Research Council Act (No.58 of 1991) (“the Act”) establishes and mandates the South African Medical Research Council (SAMRC) as a Schedule 3A Public Entity that operates according to the provisions of the Public Finance Management Act (No.1 of 1999).
For the 2023/24 financial year, the SAMRC through its 2023/24 Annual Performance Plan (APP), commits to continuous efforts of decreasing the disease burden in South Africa through cutting edge innovations, development of novel treatment regimens, including vaccines.

It also aims to improve diagnostic tools, while localising the production of new drugs and devices to advance the health and lives of South Africans.

3.6.1.
3.6.1.

Situational Analysis 43 45 Over three decades, South Africa has and continues to be confronted by unique and major challenges that threaten the health status of its citizens.

Chief among them is the quadruple burden of disease i.e.

communicable epidemics of Human Immunodeficiency Virus (HIV) and Tuberculosis (TB), non-communicable diseases such as cancers, chronic respiratory diseases, obesity, diabetes and cardiovascular diseases, as well as hypertension.
Other threats include an epidemic of violence and injuries, as well as maternal and infant mortality.
To respond to these daunting challenges, the SAMRC commits to, among others, achieving the following: ● Prioritise research that addresses the top 10 causes of mortality in South Africa; ● Invest in efforts to reduce morbidity and improve health outcomes; ● Ensure that capacity development in health research continues; ● Renew its focus on research translation for health impact; and ● Fund and actively drive innovation.

3.6.2.
3.6.2.

SWOT Analysis Annually, SAMRC conducts a swot analysis to determine the inward and outside challenges to approach the financial year in a prepared mode.

In the previous financial years (2019/20, 2020/21, 2021/22 and 2022/23), the swot analyses have repeated the following threats: diminishing funding for research, research classified as low priority on the political agenda and lack of research translation.

With regard to weaknesses, the following have been identified again i.e.
lack of research translation, poor diversity in management, bureaucratic environment, as well as lack of knowledge sharing.

Notwithstanding the strengths and opportunities, the repetition of the aforementioned suggests that there is a serious concern with the threats and weaknesses, which warrants a plan by the entity to overcome them.

3.6.3.

SAMRC’s Priorities over the MTSF The 2023/24 APP draws its genesis from the 5-year Strategic Plan and MTSF to ensure greater impact.
Over the MTSF period, the SAMRC prioritises the following health priorities ● HIV, Acquired Immune Deficiency Syndrome (AIDS), TB, and other communicable diseases; ● Health promotion and disease prevention; ● Maternal, child and women’s health; ● Health systems strengthening; ● Public health innovation; and ● Biomedical research.

On human resource management, the SAMRC has increased its human capital from 624 in 2021 to 681 in 2022.

The staff is composed of all the country’s demographics.
Figure 1 depicts the absolute numbers of staff compliment as at 31 March 2022.

44 46 Figure 2: Staff demographics in absolute numbers at SAMRC 400 300 200 100 0 Staff demographics in absolute numbers at SAMRC 355 153 27 59 87 Foreign Nationals Whites Indians Coulureds Africans Of the 681 staff compliment, the composition of the executive management committee is comprised of 3 racial groups i.e.

3 from Whites, 3 from Africans and 2 from Coloureds.
Noticeably, the lion share of the human capital at SAMRC is female at 467 and male at 214.

However, the issue of diversity and transformation at senior management remains elusive as introduced in 2016/17 financial year.

3.6.4.

Performance Indicators and Targets for 2022/23 Financial Year SAMRC has five (5) programmes, namely Administration, Core Research, Innovation and Technology, Capacity Development and Research Translation.

The entity, uses these programmes to implement its mandate.
Below is a snap-shot of performance indicators and the estimated performance (targets) for the 2023/24 financial year.

Table 20: Performance indicators and targets 2023/24 Outcome Output Indicator Estimated Performance 2023/24 (Targets) Observation for A clean audit opinion on the SAMRC from the Auditor-General.

To good ensure governance, effective and administration compliance with government regulations.

Clean audit Over the years, the SAMRC has excelled in achieving this target.
of the Percentage total budget SAMRC spent on administration.

the promote To organisation’s administrative efficiency to maximise the funds available for research.

20% This target is projected to remain 20% throughout the MTEF period.

It was increased from 16% in 2020/21.

45 47 produce and To scientific promote excellence the and reputation of South African health research.

Number of accepted and published journal articles, book chapters and books by SAMRC affiliated and funded authors.
Number of accepted and published journal articles by SAMRC with grant-holders of acknowledgement the SAMRC.

To provide funding for the conduct of health research.

research Number of grants awarded by the SAMRC.

projects Innovation and platforms funded by the SAMRC.

of new Number and innovation technology projects funded by the SAMRC aimed at developing, testing and/or implementing new or health improved solutions.
To enhance the long- term sustainability of in health South by providing funding for the next generation of health researchers.

research Africa awards Number of (scholarships, fellowships and grants) by for the SAMRC MSc, PhD, Postdocs and Career Scientists.

Early the facilitate To translation of SAMRC research findings into public understanding, policy and practice.

Number of national or international bodies/committees SAMRC serve on.

employees 700 This target decreased from 750 in 2021/22.
It is projected to further decrease to 600 in 2024/25.

180 This target decreased from 319 in 2019/20.

160 4 150 50 An increase from 150 target in 2022/23.

This target decreased significantly from 29 in 2020/21.

It is projected to remain 4 throughout the MTEF period.

This target increased slightly from 140 in 2022/23.

It is projected to decrease again to 130 in 2024/25.

This target decreased from 96 in 2021/22.

It is projected to remain 50 throughout the MTEF period.
Similar to 2020/21 and 2022/23, the observation is that performance targets have been decreased with no clear reason and are further projected for decrease or remain stagnant till 2024/25.

The Committee ought to consider a detailed discussion with the entity on the crafting of targets and the impact thereof when targets are decreased.

3.6.5.
3.6.5.

Proposed Budget for 2023/24 Financial Year 46 48 Table 21 shows the total estimates that the National Treasury proposes for appropriation by Parliament for SAMRC through the National Department of Health.

As such, the amounts are presented per programme as follows.
Table 21: Budget for 2023/24 financial year Budget Programme R million 2022/23 2023/24 Nominal Increase / Decrease in 2023/24 224 931 721 045 306 192 231 760 707 904 315 076 6 829 -13 141 8 884 Real Increase / Decrease in 2023/24 -3 996 -46 208 -5 833 Nominal Percent change in 2023/24 Real Percent change in 2023/24 3.04% -1.82% 2.90% -1,78% -6,41% -1,91% 88 146 91 586 3 440 - 838 3.90% -0,95% 3 246 4 332 1 086 883 33.46% 27,22% 1 343 560 1 350 658 7 098 - 55 992 0.5% -4.17% Administration Core Research Innovation and Technology Capacity Development Research Translation TOTAL With reference to table 21, the real decrease for the proposed budget is R-55.9 million.
The lion-share of the real decrease amounts to (R-46.2 million) for programme 2: Core Research and (R-5.8 million) for programme 3: Innovation and Technology.

The total real decrease of R-55.9 million for 2023/24 financial year is far less than R-219.4 million shortfall observed in 2022/23 financial year.

Of the five programmes, the less prominent real decrease in comparison with the earlier mentioned is programme 4: Capacity Development, where the deficit is R-4 million.
Given the real decrease arising from the inflation, the SAMRC has opted for reprioritisation of key areas to mitigate the impact on its mandate and operations.

As of 2022/23, SAMRC supplemented the allocation with R10 million per annum over the MTEF for COVID-19 mRNA vaccine development and another R13 million for COVID-19 research.

For 2023/24 and 2024/25, the same amount of R13 million is to be provided to cover the shortfall from the national Treasury allocation.
In addition, the SAMRC has committed to making available R13.5 million annually to support projects that will generate leverage funding of at least the equivalent from collaboration partners and funders.

3.7.

Committee Observations on Entities 3.7.1.

CCOD 47 49 ● The Committee observed that the CCOD has done well with its annual financial statements and auditing.

Further commended that it has received an unqualified audit for 2021/22 financial year.
● The Committee commended the CCOD for the electronic system of claims and payments that has been put in place.

● The Committee enquired about the CCOD’s plans in filling current vacancies.

● The Committee enquired on the strategies and efforts being put in place to address revenue collection and completeness of registers of mines and works.

They further wanted to know which mines were still not paying levies.
● The Committee wanted to know what measures has the CCOD put in place to ensure that the office is more accessible.

● The Committee was concerned that only 71% of the budget was spent on goods and services and 34 % spent on capital expenditure.

● The Committee noted with concern that there were still outstanding claims and wanted to know when will these be addressed.

The Committee further wanted to know how the value of a claim was determined.
● The Committee wanted to know if there are any claimants who have been scammed.

● The Committee sought an update regarding the submission of amendments to the Occupational Disease in Mines and Works Act (ODMWA).

3.7.2.

OHSC ● The Committee commended the OHSC on its audit outcome and welcomed the new Board members.

● The Committee was concerned about the targets the entity has set itself and wanted to know why have they decreased.
● The Committee wanted to know whether the OHSC has assessed the impact of the labour unrest on healthcare facilities.

● The Committee wanted to know the percentage of health facilities inspected in the previous financial year and the number of private facilities that were non-compliant.

● The Committee questioned how the National Health Insurance will be implemented when the public health facilities and the OHSC are under-resourced.
● The Committee enquired about the decrease in inspection of public health facilities and the increase in private health facilities.

● The Committee sought details on the training of inspectors and wanted to know if the training will lead to career advancement for the inspectors.

3.7.3.

NHLS ● The Committee welcomed the NHLS’ plans to request to be exempted from loadshedding.

48 50 ● The Committee was concerned about the media reports that there is a shortage of snake anti-venom.
● The Committee wanted to know how the entity was dealing with the ageing ICT infrastructure and ICT skills shortage.

● The Committee noted with concern the outstanding payments of R5.89 billion by provincial Health Departments and wanted to know what the entity was doing to address this.

● The Committee sought clarity on the impact of the delay in the publication of the NAPHISA Regulations on the NHLS ● The Committee expressed concern about the lower turnaround time (82%) for HIV viral load tests.
● The Committee questioned the approval of sprinter buses without a proper plan to resource them.

● The Committee enquired about the number of facilities that were affected by the appointment of a new service provider, Zamalangeni Holdings.

● The Committee expressed major concern about reported racism and sexism within the entity and asked whether it has implemented consequence management.
● The Committee wanted to know which forensic laboratories were taken over by the NHLS and sought clarity on the difference between forensic and chemistry laboratories.

3.7.4.

CMS ● The Committee wanted to know the reasons behind the high staff turnover at the entity.

● The Committee enquired about the progress on the organisational restructuring process.

● The Committee further wanted to know plans for the entity to reduce legal fees.
● The Committee wanted to know the progress made in relation to the introduction of standardised low-cost medical aid packages.

● The Committee sought an update on the review of prescribed minimum benefits and its finalisation thereof.

● The noted with concern the cost of living that was increasing and wanted to know if this has an impact on medical aid membership.

● The Committee sought on an update regarding the finalisation of the Section 59 investigation report.
● The Committee expressed concern over the proposed levy increases (needed to increase revenue generation), currently being collected from medical scheme members which is concerning in light of the high cost of living and questioned the reasons why it is not carried off by medical schemes.

3.7.5.

SAHPRA ● The Committee commended SAHPRA on the significant increase in fee income generation, increasing from R51 million (2018/19) to R181 million (2021/22).
49 51 ● The Committee noted with concern that SAHPRA has 96 vacancies of highly skilled roles in pharmaceuticals and medical devices product assessment.

Further noting with concern the high turnover rate.

● The Committee sought clarity on legislative reforms, that is the proposed SAHPRA Bill and its objectives.

● The Committee noted with concern the sharp decline in license applications being finalised and asked whether the new Business model has been communicated to applicants and how it affect appeals.
● The Committee sought an update on progress made on the review of the framework for cannabis regulation.

● The Committee conveyed its support for the ratification of the AMA Treaty.

3.7.6.

SAMRC ● The Committee wanted to know if there was any regional work the entity is involved in that might be affected by the war in Sudan.
● The Committee drew attention to the SAMRC’s report which states that unsafe sex and high alcohol consumption are risk factors for disease and death in South Africa and wanted to know whether any research has been conducted to gain a deeper understanding of the cause of this social behaviour and the intervention strategies to respond to these issues.

● The Committee sought an update on non-funded black researchers as reported in 2021 and questioned whether this has been addressed.
● The Committee enquired on the reasons for the entity to use private laboratories when conducting studies instead of using the NHLS.

● The Committee enquired on whether the entity has conducted any research on adverse effects of Covid-19 vaccines.

● The Committee noted with concern that among the non-communicable diseases, cancers are increasing and what interventions is the SAMRC implementing in this regard.
● The Committee questioned the reasons for the decrease in targets under programme two and four.

● The Committee sought clarity on the decrease in the budget allocation to care programmes such as HIV and TB and how the deficit would be mitigated.

● The Committee welcomes the 60% women representation in the organisational structure and appreciated the leading role of women in the organisation.

4.
4.

COMMITTEE RECOMMENDATIONS The Portfolio Committee recommends that the Minister of Health should consider the following: 50 52 4.1.

Department of Health ● Human Resources for Health: - The Department should provide the Committee with a set plan to address staff shortages, in all categories.

- The Department should provide a report on the placement of interns and community service doctors.
- The Department should provide the Committee with a detailed report on the training and upskilling of nurses and the reopening of nursing colleges.

- Provide the Committee with a progress report on the implementation of the Community Health Workers Policy.

Increase specialist training through more registrar posts - ● Improve the quality of health care: - The Department should address the shortage of equipment and inadequate infrastructure and report to the Committee quarterly.
- The Department should furnish the Committee with an action plan aimed at addressing infrastructure backlogs and existing gaps.

- The Department should collaborate with provincial departments in prioritising the procurement of essential health technology for cancer management and a successful retention strategy for specialists.

- Furnish the Committee with a report on the success of its NCD programmes funded through the sugar tax.
● Improve access to health care services: - The Department should improve on access to emergency medical services, particularly in rural areas and provide the Committee with a quarterly progress report.

- Furnish the Committee with an updated report on surgery backlogs as well as the backlogs at the forensic chemistry laboratories.

- Furnish the Committee with a progress report on the implementation of the recommendations of the Health Ombud in relation to the Rahima Moosa Mother and Child Hospital.
- Furnish the Committee with a progress report on Charlotte Maxeke Hospital following the fire and the restoration of oncology services.

● Medico-legal claims: - The Department should provide the Committee with a detailed report on its efforts to strengthen the management of medico-legal claims and how it is assisting provincial departments in this regard.
51 53 ● Entities: - The Department should engage the National Treasury in order to address the budget constraints within entities to ensure that they are properly funded to deliver on their mandates.

● Infrastructure challenges: - The Department should provide infrastructure technical support to provincial departments in order to develop their capacity to plan and manage health infrastructure delivery.
- Furnish the committee with a detailed report, including the cost thereof, of all planned infrastructure projects.

- The Department should ensure the implementation and investment on strategies aimed to mitigate the impact of load shedding on the delivery of health services and report to the Committee quarterly.

4.2.

Entities ● All entities should ensure that they have proper systems in place to root out corruption, fraud and maladministration.

4.2.1.
4.2.1.

CCOD ● Ensure that all vacant posts are filled timeously.

● Improve on the timelines in the payment of ex-mineworkers.

● Provide the Committee with a progress report on strategies and efforts being put in place to address revenue collection and completeness of registers of mines and works.

4.2.2.

OHSC ● Submit to the Committee the recent inspection report, in particular the inspection of private health facilities.
● Should continue to strengthen its outreach programmes and communication strategy.

● Ensure that vacant posts are filled, particularly posts for inspectors.

4.2.3.

NHLS ● Present to the Committee a detailed update on the process relating to the transfer of the Forensic Chemistry Laboratories to the NHLS.

52 54 ● To engage the Department on the impact of loadshedding on its operations, in an effort to get shielded from loadshedding.

4.2.4.
4.2.4.

CMS ● Provide the Committee with an update on the review of PMBs in line with the Health Market Inquiry recommendations.
● The Committee to convene an engagement with the Council for Medical Schemes on the following matters: (i) To discuss the medical schemes surplus of R98 billion to limit annual premiums to members of medical aids; (ii) To be appraised on the Section 59 Investigation Report; (iii) To get a progress report on the low cost-benefit options; (iv) Share with the Committee the documents signed by key stakeholders on the collaboration to address fraud, waste and abuse; and (v) Inform the Committee when the recommendations on the PMB's are finalised, including the set of recommendations made to the Minister on the Primary Health Care elements of disease prevention and promotion.
4.2.5.

SAHPRA ● Provide the Committee with a progress report on the filling of the vacancies of highly skills positions.

● Furnish the Committee with a progress report on the review of the framework for cannabis regulation.

4.2.6.

SAMRC ● Furnish the Committee with a detailed report on the prevalence of non-communicable diseases in the country.

● Provide the Committee with a report on cancer research conducted by the SAMRC.

5.
5.

CONCLUSION Unless otherwise indicated, the Department of Health and its entities should respond to the Committee recommendations within three months from the day the report is adopted by the House.

Report to be considered.

53 55 2.


Report of the Portfolio Committee on Sport, Arts and Culture on Budget Vote 37: Department of Sport, Arts and Culture, dated 05 May 2023 The Portfolio Committee on Sport, Arts and Culture (hereinafter referred to as the “Committee”), having considered the 2020 – 2025 Strategic Plan, the 2023/24 Annual Performance Plan (APP), and the budget of the Department of Sport, Arts and Culture, Vote 37, reports as follows: 1.
INTRODUCTION Section 42(3) of the Constitution of the Republic of South Africa, 1996 bestows the oversight function over the national executive to the National Assembly (NA).

The Committee considered the 2022/23 budget of the Department of Sport, Arts and Culture (DSAC) as part of its oversight function over the Department as mandated by Public Finance Management Act (No.

1 of 1999) and Money Bills Amendment Procedure and Related Matters Act (No.

9 of 2009).
9 of 2009).

The Department briefed the Committee on its 2023/24 budget and APP on 02 May 2023.

The purpose of this document, therefore, is to table the Committee report after scrutiny of the budget allocated to Vote 37: Sport, Arts and Culture in the 2023 Estimates of National Expenditure (ENE).

This Budget Report thus provides a comprehensive analysis of the Department’s allocated budget.

1.1.
Mandate of the DSAC The Department is mandated to provide leadership to the sport, arts and culture sector to accelerate its transformation; oversee the development and management of sport, arts and culture in South Africa; legislate on sports participation, sports infrastructure and safety improve South Africa’s international ranking in selected sports through a partnership with the South African Sports Confederation and Olympic Committee (SASCOC); preserve, develop, protect and promote the cultural, heritage, linguistic diversity and legacy of South Africa lead nation-building and social cohesion through social transformation; enhance archives and records management structures and systems; and promote access to information.
1.2.

Purpose of the Budget Vote 37 The purpose of the Vote is to provide an enabling environment for the sport, arts and culture sector by developing, transforming, preserving, protecting and promoting sport, arts and culture at all levels of participation to foster an active, winning, creative and socially cohesive nation.

1 56 2.
1 56 2.

METHOD The Committee considered the 2020 – 25 Strategic Plans and 2023/24 APPs and budgets of the Department, and Karate South Africa (KSA); Boxing South Africa (BSA); the South African Institute for Drug-Free Sports (SAIDS); and the Market Theatre Foundation (MTF).
These were considered against the background of key Government policy documents, including, amongst others, the National Development Plan (NDP), the 2019 – 2024 Medium Term Strategic Framework (MTSF), and the 2023 State of the Nation Address (SONA).

The Committee also engaged the Office of Auditor-General of South Africa (AGSA) who provided a briefing on the status of records of review, material irregularities and a review of the DSAC APP.
Committee meetings continue to be hosted virtually because of the impact of the 2022 fire.

3.

STRATEGIC OVERVIEW OF THE DEPARTMENT OF SPORT, ARTS AND CULTURE The DSAC APP outlines how the Department’s strategic outcomes align with the policy priorities of the National Development Plan: Vision 2030 (NDP), the Economic Reconstruction and Recovery Plan (ERRP) and the State of the Nation Address (SONA) over the Medium Term Strategic Framework (MTSF).
For the 2023/2024 financial year, the Department has committed to focus on core projects which align with Government priorities.

In its effort to translate the broad policy statements into implementable programmes, the Department’s outcomes will be realised through the implementation of various projects and interventions.
These projects focus on the economic contribution of the sector; the DSAC’s lead role in building a diverse, socially cohesive society; transforming the sector through capacity building; providing integrated and accessible Sport, Arts and Culture (SAC) infrastructure and information; and the ongoing strive for compliant and responsive governance.

3.1.
3.1.

DSAC Outcomes • DSAC Outcome: Increased Market Share of and Job Opportunities Created in Sport, Cultural and Creative Industries The prioritisation of the Cultural and Creative Industries (CCIs) sector as one of the seven focus areas in the country’s revised industrial policy is encouraging as the creative economy 2 57 accounts for 6% of all employment in South Africa (an estimated 1 million jobs).
The Mzansi Golden Economy (MGE) strategy seeks to create economic and job opportunities in the arts, culture, and heritage sector by supporting programmes designed to develop audiences, stimulate demand, increase market access, and develop skills.

In 2023/24, the Department aims to create 12 000 job opportunities across the workstreams and cultural development programmes of the MGE strategy and 40 000 job opportunities through the presidential employment initiative.
• DSAC Outcome: A Diverse, Socially Cohesive Society with a Common National Identity The Department with its various partners and stakeholders are reviewing the Social Cohesion Strategy to refocus efforts and improve the response to what the NDP calls for.

To this end, is worthy to note that the Department is fiercely advocating for all relevant parties to sign the Social Cohesion and Nation Building Compact.
While all sectors have been mobilised, the compact has as yet not been signed and requires serious intervention at a national government level.

• DSAC Outcome: Transformed, Capable and Professional Sport, Arts and Culture Sector In 2023/24, the Department will continue with its efforts to transform the sector through capacity building.
This is done through, among other interventions, the provision of bursaries in heritage and language practice; support to national sporting federations; incubators and other capacity building initiatives.

It is encouraging to note that the face of the creative economy is changing with younger workers being more representative of the demographics of the country.
Given the Creative Industry’s changing skills requirements as the sector pivots to digital platforms in the Fourth Industrial Revolution (4IR), education and skills development must remain a priority.

• DSAC Outcome: Integrated and Accessible SAC Infrastructure and Information Infrastructure development is critical to attaining South Africa’s long-term economic and social goals.
The construction of infrastructure generates employment and broad-based black economic empowerment opportunities, further contributing to the goals of the National Development Plan (NDP).

The ERRP highlights infrastructure investment as one of the key initiatives that are intended to ensure employment opportunities, skills transfer and development, and much-needed economic growth.
With the ongoing challenges in the 3 58 implementation of certain infrastructure projects, DSAC has identified, as a priority, the resuscitation of the internal Infrastructure Committee to monitor projects and finalise implementation of the norms and standards framework.

This is however dependent on the availability of funding.
• DSAC Outcome: Compliant and Responsive Governance Towards achieving compliant and responsive governance the Department capacitates human resources through the internship programme, whilst service delivery is enhanced by timeously paying invoices; by modernising manual Information Technology (IT) services and by holding at least nine (9) focused engagements (izimbizo) with small groups of people on an annual basis.
The Department has devised a range of high impact projects to respond to the outcomes and focus areas.

These include, among others, the amalgamation of entities; the provision of Government support to anti-doping agencies; support high-performance athletes to achieve success at international events; and support to practitioners through the SAC academies, centres of excellence and incubators.

3.2.
3.2.

Legislative and Policy Environment 2023/24 Over the MTSF, the Department’s policy and legislative programme is be guided by two White Papers.

The White Paper for Arts and Culture needs to be implemented so that it can contribute to the transformation of the sector.

The White Paper for Sport and Recreation will co-exist with that of Arts and Culture.

The 2023/24 APP notes that the Department is in the process of developing and/or reviewing legislation, policies and framework documents.
The following, amongst others, will be focused on in the 2023/24 financial year: 3.2.1.

Legislation The Department will focus on tabling three bills, namely: the National Sport and Recreation Amendment Bill, 2021; the South African Geographical Names Council Amendment Bill, 2021 and the Heraldry Bill, 2023.

3.2.2.

Plans and Policies • The Department will review the National Sport and Recreation Plan that was approved by Cabinet in 2012.
4 59 • The Athlete Support Policy, developed in 2016 and updated in 2022/23 will be implemented in 2023/24 to assist, through direct funding, emerging athletes who can compete for senior provincial and national sports teams.

• The review of the South African Sport Academies Strategic Framework and Policy Guideline will be completed.

• The Safeguarding in Sport Policy will be completed.
• The Prioritisation of Sport and Recreation Bodies Policy was drafted and circulated to National Federations for comment and inputs and will be completed by March 2024.

• Recognition of Excellence Policy which seeks to define and guide categories, processes, procedures, and incentives for the recognition and honouring of sport persons planned for completion in early 2023 for the implementation in the current financial year.
The mandate of the Department is wide and inclusive of interventions that are central to the holistic advancement of the nation.

However, the budget allocation remains virtually unchanged as the following section of the report shows.

4.

SUMMARY OF BUDGET EXPENDITURE (2023/24) The total budget allocation for the 2023/24 financial year is R6.29 billion.
The Department organises its expenditure under four programmes, these are: • Programme 1: Administration (R453.2 million); • Programme 2: Recreation Development and Sport Promotion (R1.46 billion); • Programme 3: Arts and Culture Promotion and Development (R1.75 billion); and • Programme 4: Heritage Promotion and Preservation (R2.63 billion).

The table below reflects the budget allocation for 2023/24 and over the medium term.
Table 1: Overall Budget Allocation 2022/23 – 2025/26 R million MTEF allocation 1: Administration Provide Purpose: leadership, management support to Department.
services strategic and the 2022/23 2023/24 2024/25 2025/26 Total Total Total Total 457,9 454,7 427,0 490,3 5 60 2: Recreation Development and Sport Promotion 3: Arts and Culture Promotion and Development 4: Heritage Promotion and Preservation the Purpose: Support the provision of mass participation opportunities, the development of elite athletes, and and regulation maintenance of facilities.

Purpose: Promote and develop arts, culture and languages, and implement the national social cohesion strategy.
Purpose: Preserve and promote South African heritage, including archival and heraldic heritage.

Oversee and transfer funds to libraries.


Total expenditure estimates Source: National Treasury ENE (2023) The following points are for noting when considering the budget over the medium term: • Total expenditure is expected to increase at an average annual rate of 0.7%, from R6.30 billion in 2022/23 to R6.43 billion in 2025/26.
Transfers and subsidies account for an estimated 80.4% (R15.22 billion) of the Department’s spending over the medium term.

• The Department’s total budget over the medium term is R18.95 billion which includes a baseline increase of R26.40 million for salary adjustments.

Annual budget allocations fluctuate across the MTEF with the allocation projected to decrease to R6.12 billion in 2024/25 and increase thereafter to R6.44 billion in 2025/26.
When the projected inflation rates are (2023/24: 4.9%; 2024/25: 4.8%; and 2025/26: 4.7%) taken into consideration, the cumulative growth rate between 2022/23 and 2025/26 is -3.9%.

For the 2023/24 financial year: • The total budget allocation is R6.35 billion.

• The total national appropriation by vote is R1.08 trillion, and thus the Department’s allocation is approximately 0.8% of this total.
• Transfers and Subsidies decreases by R19.8 million, from R5.09 billion in 2022/23 to R5.07 billion, and represents 79.8%, of the budget allocation.

• Payments for Capital Assets increases by R127.3 million from R158.7 million in 2022/23 to R286.0 million (or 4.5%) of the total budget allocation.

• Current Payments, comprised of Compensation of Employees and Good and Services, decreases by R55.3 million, from R1.05 billion in 2022/23 to R999.0 million (or 15.7%) of the budget allocation.
6 61 o Compensation of Employees remains almost unchanged and decreases slightly from R385.8 million in 2022/23 to R385.3 million.

o Good and Services decreases by R54.8 million, from R668.5 million in 2022/23 to R613.7 million.
The line items for the economic classification Goods and Services are tabled below: Table 2: Good and Services: sub-categories Economic Classification R million Goods and Services, of which: Advertising Consultants: Business and advisory services Contractors Operating leases Property payments Travel and subsistence Budget 2022/23 2023/24 668,5 28,6 67,8 109,4 110,0 37,5 80,0 613,7 28,5 41,7 170,9 110,5 34,8 79,2 Nominal Rand change Real Rand change Nominal per cent change Real per cent change 2022/23 – 2023/24 2022/23 – 2023/24 -54,8 -0,1 -26,1 61,5 0,5 -2,7 -0,8 -83,5 -1,4 -28,0 53,5 -4,7 -4,3 -4,5 -8,2% -0,35% -38,5% 56,2% 0,4% -7,2% -1,0% -12,5% -5,0% -41,4% 48,9% -4,2% -11,5% -12,5% Source: National Treasury (2023), own calculations Taking the total budget allocation into consideration, Programme 4: Heritage Promotion and Preservation receives the largest allocation at R2.66 billion, followed by Programme 3: Arts and Culture Promotion and Development with R1.79 billion.
The lowest allocation is directed towards Programme 1: Administration, which receives R454.7 million in the 2023/24 financial year.

Allocations for Programmes 1 and 4 are slightly lower compared to 2022/23, while for Programmes 2 and 3 allocations are slightly higher.

When the projected inflation rate is applied, budget allocations across all programmes are lower than the 2022/23 allocations.

The report now considers budgetary allocations per programme.

7 62 4.1.
7 62 4.1.

Budgetary allocations per programme Programme 1: Administration Purpose: Provide strategic leadership, management and support services to the Department.

This programme plays an important role in giving effect to first priority of the NDP, that is, to build a capable, ethical and developmental state.

This priority is also expressed in the MTSF for the five-year term 2019-2024, as a crucial mode that is required to achieve Vision 2030.
The outputs delivered in Programme 1 contribute predominately to DSAC Outcome 3: Transformed, capable and professional sport, arts and culture sector and Outcome 5: Compliant and responsive governance.

Table 3: Programme 1 Budget Allocation 2022/23 – 2023/24.
Budget 2022/23 2023/24 4.7 69.7 4.6 73.0 Sub-programme R million 1: Ministry 2: Management 3: Strategic Management and Planning 4: Corporate Services 5: Office of Financial Officer 6: Office Accommodation TOTAL the Chief 69.1 125.4 457.9 Source: National Treasury ENE (2023).
22.1 163.7 20.1 169.5 64.5 126.1 454.7 Nominal Rand change Real Rand change Nominal per cent change Real per cent change 2022/23 – 2023/24 2022/23 – 2023/24 0.1 -3.3 -2.0 5.8 -4.6 0.7 -3.2 -0.1 -6.6 -2.9 -2.1 -7.6 -5.2 -24.4 2.2% -4.5% -9.1% 3.5% -6.7% 0.6% -0.7% -2.6% -9.0% -13.3% -1.3% -11.0% -4.1% -5.3% For the 2023/24 financial year, the budget allocation for this programme is R454.7 million.

Compared to the previous financial year, this represents a nominal decrease of R3.2 million, or 0.7%.
When considering the projected inflation rate of 4.9%, the allocation has decreased by R24.4 million, or 5.3%.

The budget allocated to Programme 1 shows a cumulative growth rate of 2.3% over the MTEF, but decreases by 2.4% when the allocations are adjusted for the projected inflation rates over the medium term.

Should inflation rates remain unchanged, this indicates that the Department will have less buying power over the medium term.
Programme 2: Recreation Development and Sport Promotion 8 63 Purpose: Support the provision of mass participation opportunities, the development of elite athletes, and the regulation and maintenance of facilities.
The outputs delivered in Programme 2 contribute predominately to DSAC Outcome 2: A diverse, socially cohesive society with a common national identity; Outcome 3: Transformed, capable and professional sport, arts and culture sector; and Outcome 4: Integrated and accessible SAC infrastructure and information.
Some the objectives of this programme will ensure: • financial and non-financial support is provided to 60 sport and recreation bodies to improve service delivery over the medium term; • transformation within the sport and recreation sector by helping sport federations reach their transformation targets by March 2024; • assistance is provided to 50 municipalities over the medium term to comply with facility norms and standards by providing technical and/or management support during the construction phase of sport and recreation facilities; • school sport is supported at district and national level; • increased opportunities for mass participation in sport and recreation in all provinces by providing management and financial support on an ongoing basis; and • the construction, development, maintenance, and upgrading of sport, heritage and library infrastructure.
Selected performance indicators for the 2023/24 financial year includes: • 295 000 people actively participating in organised sport and active recreation events; • 2 500 schools, hubs and clubs provided with equipment and/or attire as per established norms and standards; • 3 700 athletes supported by sports academies; and • 80 athletes supported through the scientific support programme.

Table 4: Programme 2 Budget Allocation 2022/23 – 2023/24.
Real Nominal Rand Rand change change 2022/23 – 2023/24 2022/23 2023/24 Budget Sub-programme R million 1: Wining Nation Nominal per cent change 2022/23 – 2023/24 Real per cent change 279.2 261.5 -17.7 -29.9 -6.3% -10.7% 9 64 2: Active Nation 3: Infrastructure Support TOTAL 728.2 419.5 1 427.0 Source: National Treasury ENE (2023) 731.4 456.0 1 448.9 3.2 36.5 21.9 -31.0 15.2 -45.8 0.4% 8.7% 1.5% -4.2% 3.6% -3.2% When compared to the 2022/23 financial year, this programme’s budget allocation has increased by R21.9 million or 1.5% in nominal terms.
Over the medium term, the estimated cumulative growth rate for Programme 2 is 3.6% in nominal terms, but in fact decreases by 1.1% when considering the impact of inflation.

Sub-programme 2: Active Nation receives the highest portion of the budget, i.e.

R731.4 million (or 50.5%), with sub-programme 1: Winning Nation receiving the smallest allocation of R261.5 million (or 18.0%).
The highest increase in allocation is seen in sub-programme 3: Infrastructure Support, with an increase from R419.5 million in 2022/23 to R456.0 million in 2023/24.

This represents a nominal increase of R36.5 million (or 8.7%) and a real increase R15.2 million (or 3.6%).

Sub-programme 1: Winning Nation sees a nominal budget allocation reduction of R17.7 million (or 6.3%), with a real decrease of R29.9 million (or -10.7%).
About R9.0 million of the allocation to the mass participation and sport development grant in 2023/24 in the Active Nation sub-programme is earmarked for supporting South Africa’s hosting of the 2023 Netball World Cup and to mobilise more than 6 000 people to participate in public viewing programmes to support the South African team.

The Department invested R136.3 million between 2018/19 and 2023/24 to enable the hosting of the tournament.
Programme 3: Arts and Culture Promotion and Development Purpose: Promote and develop arts culture and languages and implement the national social cohesion strategy.

The outputs delivered in Programme 3 contribute to all five departmental outcomes.
These outputs will ensure: • the promotion and development of official languages, and the support to efforts to increase qualified language practitioners through language bursaries; 10 65 • the development of the Cultural and Creative Industries (CCIs) through supporting practitioners and their enterprises in various cultural and creative sectors to gain access to both local and international markets; • capacity-building projects are financially supported to enhance the ability of practitioners and enterprises to participate effectively in various stages of the value chain of their sector; • provincial community arts development programmes have implemented that position and organise, community arts development to align with the overarching Government objectives of access and participation in the arts by South Africans; and • the coordination of international engagements on the continent and globally and through its international relations work, the Programme further contributes to the Government priority on ‘Better Africa and World’; • the promotion and support of programmes and partnership that foster nation-building and social cohesion, including Gender-Based Violence (GBV) and anti-femicide programmes; • the increase in support to the creative industry, including placement of artists in schools to promote and support arts education through the MGE Strategy and the implementation of the PESP.
Selected performance indicators for the 2023/24 financial year include: • the implementation of 20 community conversations or dialogues to foster social interaction; • place 340 artists in schools; • award 250 bursaries for the development of qualified language practitioners; and • support 90 projects in the creative industry through the MGE programme.

Table 5: Programme 3 Budget Allocation 2022/23 – 2023/24.
Language Sub-programme R million 1: National Services 2: Pan South African Language Board 3: Cultural and Creative Industries Development 4: Cooperation International Budget 2022/23 2023/24 55.7 61.8 123.1 122.9 Nominal Rand change Real Rand change Nominal per cent change Real per cent change 2022/23 – 2023/24 2022/23 – 2023/24 6.1 -0.2 3.2 10.9% 5.8% -5.9 -0.2% -4.8% 160.9 130.0 -30.9 -37.0 -19.2% -23.0% 43.0 41.6 -1.4 -3.3 -3.3% -7.8% 11 66 68.4 744.8 69.5 694.3 5: Social Cohesion and Nation Building 6: Mzansi Golden Economy 7: Arts Performing Institutions 8: National Film and Video Foundation 9: National Arts Council TOTAL Source: National Treasury ENE (2023).
155.9 131.0 1 752.1 318.6 156.8 131.9 1 791.2 332.9 -1.1 50.5 14.3 0.9 0.9 39.1 -4.3 15.7 -1.3 -6.4 -5.3 -44.6 -1.6% 7.3% 4.5% 0.6% 0.7% 2.2% -6.2% 2.3% -0.4% -4.1% -4.0% -2.5% The budget allocation for this Programme is R1.79 billion for the 2023/24 financial year, which is a nominal increase of R39.1 million from 2022/23.

Over the medium term, the estimated allocation will decrease by 6.0%, but when considering the projected inflation rates, the real decrease is 10.3%.
The highest allocation within Programme 3 is to sub-programme 6: Mzansi Golden Economy (MGE) which receives R744.8 million (or 41.6%) of the total budget for the programme.

This is a nominal increase of R50.5 million from the R694.3 million allocated in the last financial year.

This sub-programme also shows the highest percentage change in allocation, i.e.

1.9%.
1.9%.

The lowest allocation in the programme is directed towards sub-programme 4: International Cooperation which receives R41.6 million (or 2.3%) of the programme budget.

The PESP was launched in October 2020 to mitigate the economic impact of the COVID‐19 pandemic across all sectors.

The initiative’s reach into the creative industry is realised through the creative industries stimulus, which is allocated R462 million in 2023/24 to create a targeted 40 000 jobs.
Programme 4: Heritage Promotion and Preservation Purpose: Preserve and promote South African heritage, including archival and heraldic heritage.

Oversee and transfer funds to libraries.

The outputs delivered in Programme 4 contribute predominately to DSAC Outcome 2: A diverse, socially cohesive society with a common national identity; Outcome 3: Transformed, capable and professional sport, arts and culture sector; and Outcome 4: Integrated and accessible SAC infrastructure and information.
12 67 Through its sub-programmes, this Programme will: • support and implement a range of projects including awarding heritage bursaries; books documenting Living Human Treasures; development of heritage policies, as well as the promotion of national identity utilising the flag at national days, major cultural and sporting events in schools, the Monument Flag Project and “I am the Flag” Campaign; • operationalises heritage legacy projects; conceptualises and installs statues, monuments and memorials and develops the Resistance and Liberation Heritage Route as well as the implementation of alternative forms of memorialisation such as repatriation of human remains and objects; • • financially support newly built and/or modular libraries; and transform and standardise of geographical names.
Selected performance indicators for the 2023/24 financial year include: • financially support 32 libraries; and • award 45 students with heritage bursaries.

Table 6: Programme 4 Budget Allocation 2022/23 – 2023/24.
66.1 80.6 632.2 146.6 1 601.4 Budget 2022/23 2023/24 54.1 64.4 649.8 153.6 1 599.5 Sub-programme R million 1: Heritage Promotion 2: National Archive Services 3: Heritage Institutions 4: National Library Services 5: Public Library Services 6: South African Heritage Resources Agency 7: South Geographical Council 8: National Heritage Council TOTAL Source: National Treasury ENE (2023).
5.3 74.0 2 662.9 5.3 73.6 2 668.6 African Names 62.8 62.2 Nominal Rand change Real Rand change Nominal per cent change Real per cent change 2022/23 – 2023/24 2022/23 – 2023/24 -12.0 -16.2 17.6 7.0 -1.9 -0.6 0.0 0.4 -5.7 -14.5 -19.2 -12.8 -0.2 -76.6 -18.1% -20.1% 2.8% 4.8% -0.1% -22.0% -23.8% -2.0% -0.1% -4.8% -3.5 -1.0% -5.6% -0.2 -3.1 -130.1 0.0% 0.5% -0.2% -4.7% -4.1% -4.9% For the 2023/24 financial year, Programme 4 receives the bulk of the departmental budget, R2.66 billion or 41.9%.
The total programme budget remains virtually unchanged, with a slight nominal 13 68 decrease of R5.7 million, or 0.2%, compared to the previous financial year.

Adjusted for inflation, the programme sees a real decrease of R130.1 million or 4.9%.

The highest increase in allocation is seen in sub-programme 3: Heritage Institutions.

This sub- programme sees a nominal increase from R632.2 million in 2022/23 to R649.8 million in 2023/24, representing a nominal increase of R17.6 million, or 2.8%.
Sub-programme 2: National Archives Services sees the biggest decrease in budget allocation in the programme.

The allocation for this sub-programme decreases from R80.6 million in 2022/23 to R64.4 million in 2023/24.

This is a nominal decrease of R16.2 million, or 20.1%.

Adjusting this to the projected inflation rate results in a real decrease of R19.2 million, or 23.8%.

A similar downward adjustment of budget allocation is seen in sub-programme 1: Heritage Promotion.
The allocation for this sub-programme decreases from R66.1 million in 2022/23 to R54.1 million in 2023/24, representing a nominal decrease of R12.0 million, or 18.1%.

In real terms, the decrease from the last financial year is R14.5 million, or 22.0%.
It should be noted that the Department has reprioritised an additional R44.8 million over the medium term to seven museums, including Ditsong Museums of South Africa, to address operational funding shortfalls arising from the devolution of municipal charges; and R8 million in 2023/24 to Freedom Park for the operationalisation of the Liliesleaf Farm Museum.

These funds are reprioritised from the devolution of the municipal services function from the department to entities.
Of the 2023/24 allocation for this programme, R2.55 billion, or 95.7%, is classified as Transfers and Subsidies.

Through this programme, the Department funds a significant number of entities including, but not limited to, national museums, the National Heritage Council (NHC), SAHRA, and public library services.
The latter (sub-programme 5 in the budget structure), transfers funds to Provincial Departments for conditional allocations towards community library services for constructing and upgrading libraries, hiring personnel and purchasing library materials, i.e.

the Community Library Service Grant (CLSG).

The budget allocation to this sub-programme is R1.599 billion, or 60.1% of the total programme budget.
The main aim of the CLSG is to transform urban and rural library infrastructure and services through targeting previously disadvantaged communities.

In respect of the CLSG, this grant is 14 69 allocated to the relevant provincial department and administered by that department or through a service-level agreement with municipalities.

In collaboration with provincial Departments of Basic Education (DBE), the grant also funds libraries that serve both schools and the general public.
Funds from this grant may also be used to enable the shift of the libraries function between provinces and municipalities.

This Grant primarily contributes to Government Priority 6: Social cohesion and safe communities.

The grant is allocated R4.9 billion over the next three years.

The Department plans to finance 32 newly built and/or modular libraries by the end of the 2023/24 financial year.
A budget of R1.33 billion (current) and R239.7 million (capital) is being directed towards provincial revenue funds for the implementation of this project.
The outputs, as outlined in the Division of Revenue Bill [B2 – 2023] for the CLSG for the 2023/24 financial year includes, among others: • 27 new library structures completed; • five new dual-purpose library structures completed; • 310 000 library materials purchased; • 11 upgraded library structures completed; • 2 500 existing contract library staff maintained in all provinces; and • 33 new staff appointed at public libraries to support the shifting of the function to provinces.

5.
5.

ENGAGEMENTS WITH ENTITIES AND/OR FEDERATIONS The Committee engaged the following on their 2023/24 APPs: • The Market Theatre Foundation (MTF), a performing arts institution and a schedule 3A public entity established in terms of the Cultural Institutions Act (No.
119 of 1998); • Karate South Africa (KSA), a national sporting federation which receives an annual grant from the Department to enable them to contribute towards implementing the mandate of the Department as an extension of its service delivery network.

• Boxing South Africa (Boxing SA), an entity established in terms of the South African Boxing Act (No.

11 of 2001).
11 of 2001).

• The South African Institute for Drug-Free Sport (SAIDS), an entity established in terms of the South African Institute for Drug‐Free Sport Act (No.

14 of 1997).

An overview of these engagements is presented below.

15 70 5.1.

The Market Theatre Foundation The Market Theatre Foundation (MTF, or “the Foundation”), located in Newton, Johannesburg, is a schedule 3A public entity established in terms of the Cultural Institutions Act (No.

119 of 1998, as amended).


It is an amalgamation of two previously distinct public entities, namely the Windybrow Centre and the Market Theatre Foundation.

The MTF, along with all other performing arts institutions within the purview of the Department, are mandated to advance, promote and preserve the performing arts in South Africa; enhance the contribution of arts and culture to the economy; create job opportunities; and create initiatives that enhance nation building.
The MTF receives an annual transfer from the Department.

5.1.1.

The Market Theatre Foundation: An Overview of the 2023/24 Financial Year The MTF has been allocated a current transfer of R52.8 million for the 2023/24 financial year.

Compared to the 2022/23 financial year, this represents a nominal increase of R200 000, or 0.4%.

Adjusted for inflation, the allocation is in fact R2.3 million, or 4.3%, less than in 2022/23.
Additional to the current transfer, the Department will also transfer R4.7 million for capital works projects.

The total projected budget, inclusive of donations and other revenues sources is R68.5 million and will be utilised to fulfil its mandate and achieve its strategic goals.
Budgetary information is presented below: Table 7: MTF: Expenses and Revenue over the medium term 1: 22,204 43,040 4: Business Budget 2023/24 Expenses R thousand Programme Administration Programme 2 and 3: Public Engagement Programme Development Total expense budget Income R thousand Interest received Rental received Other income DSAC grant Donations received Transfer from unutilised capital works grants – depreciation on donated assets Total income budget 4,158 68,546 Source: Market Theatre Foundation (2023) % of Total Budget 2024/25 Budget 2025/26 31,0% 63,0% 6,0% 100,0% Budget 2023/24 516 643 4,188 52,763 7,271 3,165 68,546 22,653 45,204 4,382 72,239 23,277 46,489 4,432 74,148 Budget 2024/25 Budget 2025/26 544 678 4,413 55,133 8,135 3,335 72,238 247 828 5,273 57,603 8,215 3,154 75,320 16 71 The entity highlighted the following challenges that have a direct bearing on its operations: • A sub-inflation increase on the Government grant; • Challenging fundraising climate; • No tax incentives for funders; • Limited resources to meet the needs of artists; • A lack of skilled staff; and • A weak economic climate resulting in limited disposable income.
5.2.

Karate South Africa The Karate South Africa (KSA) is the governing body of sport karate in South Africa and is a member of the South African Sports Confederation and Olympic Committee (SASCOC).

The sporting body is also a member of Union of African Karate Federations (UFAK), Region South; UFAK (which includes all African countries); member of the World Karate Federation (WKF); and part of the Commonwealth Karate Nations of the World.
KSA aims to promote, advance, administer, co-ordinate and generally encourage the development of the sport of Karate in South Africa in accordance with the principles as laid down in the Statutes of KSA and World Karate Federation (WKF).

5.2.1.

Karate South Africa: A financial overview The financial support to KSA for the 2021/2022 financial year was R1.4 million.
The support was earmarked for the following priority areas; capacity development programmes, Women’s Karate and the development of the youth coaches, referees and technical officials.

Financial support for the 2022/23 financial year amounted to R3 million of which R480 000 was allocated for administration and the remaining R2.52 million for the implementation of the following projects; coaching development, referees’ development, administrative skills development, development tournament and women’s karate.
KSA have attained several goals including hosting and/or attending national, regional and international events; developing athletes, coaches, referees and table and administration officials; as well as promoting karate amongst women, youth, elderly and in non-urban areas.

KSA has devised a three-year plan to increase the karate footprint in schools.
The plan envisages the integration of schools karate into KSA in public and independent schools in all nine provinces 17 72 with the aim of reaching over 13 million learners in nearly 25 000 schools.

The projected cost for this plan is estimated to be R64.4 million with the possibility to create employment for instructors/coaches.
KSA noted the following challenges: • Funding: All officials, the nine-member executive committee, and the President’s council all work as volunteers; all funding received from the Department is used to administrate and develop the sport.

• Logistics: The vast area of the country presents challenges to taking karate to the people and hosting events across South Africa, particularly non-urban areas.
KSA also noted insufficient equipment and apparel as a concern which was partly addressed by financial support received in the last financial year.

One of the main challenges in relation to logistics is safe and proper venues for teaching and events.

An example was made of a collapsing roof at a venue in KwaZulu-Natal.

• Mainstream versus schools: Karate not included in extra curricula activities: It is not a priority sport in schools.

Classes are conducted after hours at schools.


There is inadequate DSAC / Department of Basic Education (DBE) correlation, however KSA has made strides in approaching the DBE to consider the potential of karate in schools.

5.3.

Boxing South Africa Boxing SA is an entity reporting to the Department.
The Boxing South Africa Act (“Boxing Act”) mandates Boxing SA to administer professional boxing; recognise amateur boxing; create and ensure synergy between professional and amateur boxing; and promote engagement and interaction between associations of boxers, managers, promoters and trainers.
Boxing SA’s objective is to align to its core mandate as prescribed in the Boxing Act and to achieve its objectives during the MTEF period 2020-2025, Boxing SA would need to strengthen its human capital, policies and implement robust systems as support structure.
During this period Boxing SA prioritised the following: • Developing internal systems for the enhanced operations, • Aligning the organisational structure and competencies with the strategic plan and to maximise efficiencies, 18 73 • Reviewing and amending the Boxing Regulations to be in line with the international trends in relation to tournament sanctioning and management, • Reviewing and developing policies and procedures to respond to the demands of a dynamic and fast-changing environment, • Building the capacity of the organisation to regulate the boxing sector, • Fostering stakeholder relations management and partnerships with provincial sport departments, • Supporting the establishment of associations to ensure the equitable boxing environment exists for all stakeholders, and • Reviewing the funding model for Boxing SA 5.3.1.
Boxing South Africa: An overview of the 2023/24 financial year Over the medium term, expenditure is expected to increase at an average annual rate of 3.6%, from R22.4 million in 2022/23 to R24.9 million in 2025/26.

Spending on Goods and Services accounts for a projected 58.2% (R41.5 million) of the entity’s total expenditure over the period ahead.
It is set to derive 87.5 per cent (R62.4 million) of its revenue through transfers from the Department and the remainder through fees for the sanctioning of boxing tournaments.

For the 2023/24 financial year, the Government transfer to Boxing SA amounts to R19.9 million.

A total projected income of R2.9 million will come from internally generated revenue sources which includes licensing, sanctioning fees, penalties and interest from the investment revenue, bring the total budget to R22.8 million.
The entity’s budget is implemented through three programmes, as detailed below: Table 8: Boxing SA: Budget information 2022/23 – 2023/24 Programme 2022/23 (to be audited) R thousand Budget 2023/24 Budget 1: Governance and Administration 16 195 16 316 Purpose: To ensure compliant corporate governance and reporting, prudent financial management and procurement of goods & services in line with relevant regulatory frameworks.
It is also to ensure that the governance structures perform its strategic oversight and leadership functions, monitoring performance and to manage and mitigate entity risks and drive compliance assurance.

2: Boxing and Development 3 569 3 730 19 74 Purpose: To ensure that there are capacity development programmes developed and implemented in the sector for the benefit and development of licensees across all categories, ensuring that they meet and fulfil compliance requirements.
The programme also seeks to ensure that there is compliance in all spheres of boxing administration particularly in sanctioning of tournaments, rating of boxers in various weight divisions, and always promoting health and safety.
3: Boxing Promotion 2 610 2 727 Purpose: To raise the public profile of Boxing SA and boxing and to increase its brand value to such an extent that the public and sponsors will compete for a space in boxing programmes and enlist their support and resources for its development further.

TOTAL Source: Boxing South Africa (2023).

22 374 22 773 The Department reported that Boxing SA is still engaged in a protracted litigation by the erstwhile CEO.

The matter was at the Constitutional Court.


Boxing SA however is also engaging with the legal representatives of the litigant for an out of court settlement.

Some of the inherent challenges facing Boxing in South Africa as indicated by the entity are as follows: • lack of boxing broadcasting; • absence of sponsorship; and • few promoters were able to fund own tournaments without reliance from Government.
Professional boxing in South Africa is noticeably inconspicuous and remains largely unseen by its fans, the nation at large and importantly, possible sponsors.

5.4.

The South African Institute for Drug-Free Sport The South African Institute for Drug-Free Sport (SAIDS) is a public entity established by the SAIDS Act.
Its mandate is to promote the participation in sport free from the use of prohibited substances or methods intended to artificially enhance performance, thereby rendering impermissible doping practices, which are contrary to the principles of fair play and medical ethics, in the interest of the health and wellbeing of sportspersons; and to provide for matters connected therewith.
SAIDS also provide technical obligations for the country to: • • • the United Nations Educational, Scientific and Cultural Organization (UNESCO); the World Anti-Doping Agency (WADA); and the African Union.

20 75 Over the medium term, SAIDS will focus on ensuring compliance in global sport on matters of anti‐doping, anti‐corruption, governance reforms, institutional independence, child safeguarding and data protection.
This includes implementing projects to ensure compliance with the world anti‐ doping code and the UNESCO International Convention against Doping in Sport.

Accordingly, the institute plans to conduct 4 800 drug and 750 blood tests on athletes to meet national sports federations’ demands for testing services.

5.4.1.
5.4.1.

SAIDS: An overview of the 2023/24 financial year Expenditure is set to increase at an average annual rate of 2.3%, from R32.8 million in 2022/23 to R35.2 million in 2025/26, with Goods and Services accounting for an estimated 67.4% (R67.6 million) of this spending over the period ahead.

The Institute expects to receive 92.3% (R93.4 million) of its revenue through transfers from the Department and the balance through services rendered.

Revenue increases in line with spending.


Table 9: SAIDS: Statement of Financial Performance R million Revenue Non-tax revenue Sales of goods and services other than capital assets Other non‐tax revenue Transfers received Total revenue Expenses Current expenses Compensation of employees Goods and services Depreciation Interest, dividends and rent on land Transfers and subsidies Total expenses Source: National Treasury (2023).
Revised estimate Medium term expenditure estimate 2022/23 2023/24 2024/25 2025/ For the 2023/24 financial year, the Department will transfer R29.8 million to SAIDS, with the remaining revenue derived, in part, from doping control sales.
The Institute’s work is implemented over four budget programmes, the allocations for each is outlined in the table below.
21 76 Table 10: SAIDS: Budget information 2022/23 – 2023/24 Budget Nominal Rand change Real Rand change Nominal per cent change Real per cent change 2022/23 2023/24 2022/23 – 2023/24 2022/23 – 2023/24 16,6 16,2 -0,4 -1,2 -2,4% -7,0% 12,2 3,5 0,4 12,0 3,5 0,4 32,2 -0,2 0,0 0,0 -0,6 -0,8 -0,2 0,0 -2,1 -1,6% 0,0% 0,0% -1,8 -6,2% -4,7% -4,7% -6,4% Programme R million 1: Administration 2: Doping control, investigations and results management 3: Education 4: International liaison TOTAL Source: National Treasury (2023).
32,8 The majority of budget expenditure (R16.2 million or 50.3%) is seen Programme 1: Administration.

This is followed by Programme 2: Doping control, investigations and results management, which is a core programme and mandate of SAIDS in which expenditure is estimated at R12.0 million, or 37.3% of the total budget allocation.

Programme 4: International liaison is allocated the smallest portion.

This amounts to R400 000, or 1.2% of the total budget.
A critical challenge highlighted by the entity is that it operates in a complex compliance environment where significant expenditure must be earmarked to ensure ISO 9001 quality assurance, PFMA compliance and World Anti-Doping Code compliance.

This is mandatory.

However, full compliance certifications contribute to the integrity of the operational systems so that athletes and sport have confidence in the policies of SAIDS.
More recent global compliance standards have been adopted around governance to further strengthen operational independence and oversight.

These standards required amending 10 administrative structures and processes that resulted in increased expenditure costs that were not previously envisaged.
Increased scientific advancements in testing, mandates that SAIDS testing program conforms with these advancements, resulting in further cost increases in the spectrum of tests that need to be conducted on doping control samples.

Continued and improved service delivery requires investment in capital expenditure and capacity building of staff.

6.
6.

COMMITTEE OBSERVATIONS Having considered and examined the Departmental 2020 – 2025 Strategic Plan and 2023/24 Annual Performance Plan with associated budgets, the Committee made the following observations: 22 77 6.1.

Observations in relation to the Department of Sport, Arts and Culture 6.1.1.

Main Appropriation: The Committee is concerned that the Department’s total budget allocation is insufficient to meet the demands placed on it to fulfil its broad and wide-reaching mandate.

6.1.2.
6.1.2.

Social Cohesion and Nation Building Compact: The Committee observed that delays in the signing of the Social Cohesion and Nation Building Compact may have far-reaching negative consequences for the Department’s role in leading this NDP goal.

6.1.3.

Implementation of Infrastructure Projects: The Committee notes with concern the ongoing challenges with the implementation of key heritage legacy infrastructure projects.

6.1.4.
6.1.4.

Audit Outcomes: In its engagement with the AGSA, the Committee noted that this Office made some key recommendations to the Department’s Accounting Officer.
These recommendations include all that the key audit issues reported in the status of records review under the key focus areas are timeously addressed; implement, without delay, all the actions required to address the material irregularity; and provide oversight over entities within the portfolio with focus on proper and timely investigations into all instances of irregular fruitless and wasteful expenditure and implementation of consequence management.

6.1.5.
6.1.5.

Sector tax incentives: The Committee observation made in its engagement with the MTF applies across the SAC sector and the lull in the progress on this matter stifles revenue generation and ultimately hinders the potential of the sector to contribute to economic development, and social cohesion and nation building.

6.1.6.
6.1.6.

Implementation of PESP4: The Committee is pleased that the Cultural and Creative Industries have been prioritised as a sector which contributes to the national imperatives to fast-track economic recovery and as such, the Department has been allocated funds to ensure job opportunities are created across the Department’s programmes.
The Committee further notes that the Department will establish Project Management Unit in the 2023/23 financial year specifically to address some of the challenges experienced during the management of the previous PESP allocations.

23 78 6.1.7.

Mzansi Golden Economy Strategy: The Committee acknowledges the continued efforts of the Department to contribute to the national economy by creating job opportunities through the projects implemented with funding provided by the MGE Strategy.

6.1.8.
6.1.8.

Funding of national sporting federations: The Committee noted that the national federations are grossly underfunded despite having the full responsibility to ensure transformation in sport.

6.2.

Observations made in relation to the Market Theatre Foundation 6.2.1.

Sector tax incentives: The Committee noted that the MTF, like many other entities, still face the challenge of reaching their full revenue generation potential as a result of the inability of donors to benefit from tax incentives.
This places a higher than necessary reliance on the Government transfer to retain staff and ultimately fulfil their mandate.

6.2.2.

Budget allocation: Members are concerned about the DSAC allocation to the MTF that is not aligned to the projected inflation rate of 4.9%.

This adds increased pressure on the budgeting process with requests for additional funding being declined.

6.2.3.
6.2.3.

Governance and legal matters: The MTF’s Legal Governance and Ethics Committee has had to deal with a range of legal matters, some of which are historical in nature.

However, the entity has demonstrated that it is on track with financial, legal and governance issues.

6.2.4.

Irregular expenditure: The MTF was awarded an unqualified audit opinion for the 2021/22 financial year, with one of the findings being on irregular expenditure.
The entity has developed an audit implementation plan which is monitored by the Council and Audit Committee, this is to ensure to address the findings relating mainly to irregular expenditure in particular procurement.

6.2.5.

Audience development: The Committee is concerned that audience numbers are decreasing due to factors beyond the control of the entity.

The entity location an inner city precinct that is perceived to be on the decline because of safety concerns.

6.3.
6.3.

Observations made in relation to Karate South Africa 24 79 6.3.1.

Impact of the sport: The Committee noted that the potential of the sport to empower women and girls, particularly in the context of the national drive to fight the scourge of GBVF.

6.3.2.

Transformation: The Committee is encouraged to note that the KSA is working to ensure transformation of the sport, including greater gender representivity at all levels of participation.
KSA is making progress in this regard despite the sport not being a priority code and also not included in the assessment undertaken by the Eminent Persons’ Group (EPG).

6.3.3.

Logistical challenges: The Committee notes with concern the number of logistical challenges raised by the KSA which includes inadequate funding and lack of appropriate venues.

6.3.4.
6.3.4.

Karate in schools: The Committee acknowledges the work the KSA has put into the development of a plan to roll out karate to public and independent schools across the country.

6.3.5.

Fragmentation in the sport: The Members note with concern that the sport is fragmented with the federation not enjoying the support of all styles despite its efforts to address the divide.

25 80 6.4.

Observations made in relation to Boxing South Africa 6.4.1.
Audit outcomes and irregular expenditure: The Committee acknowledges the role the Department plays in assisting BSA with the implementation of its audit improvement plan.

6.4.2.

Council and gender representivity: The Committee notes with concern the gender imbalance within the council.

6.4.3.

Women in boxing: The Committee is encouraged that BSA together with the Department is working to raise the level of women’s boxing in South Africa.

6.4.4.
6.4.4.

Economy of boxing: The Committee notes the Ministers remarks on the potential of the economy of boxing and the need to secure sponsors and commercial partners.

6.5.

Observations made in relation to South African Institute of Drug-Free Sport 6.5.1.

Audit outcomes: The Members acknowledge and welcome the continued attainment of clean audits.

6.5.2.
6.5.2.

Emerging risks: The Members note with concern the emerging risks highlighted by SAIDS which includes obsolete legislation which is not in alignment with the WADA codes; minimal increase in budget allocation despite the role SAIDS plays in fair competition; non-compliance.

6.5.3.
6.5.3.

Imported services: The Committee notes that SAIDS was required to pay Value Added Tax (VAT) on imported services as the Institute was compelled to use international laboratories because of South African laboratories that have lost WASA accreditation.

7.

RECOMMENDATIONS It is requested that the Minister of Sport, Arts and Culture considers the following recommendations and reports back to the Committee by no later than the end of the 2023/24 financial year, i.e.

30 September 2023.

26 81 7.1.


Recommendations in relation to the Department of Sport, Arts and Culture 7.1.1.

Social Cohesion and Nation Building Compact: The Department together with National Economic Development and Labour Council (NEDLAC) should ensure that this Compact is urgently signed to prevent the stalling of efforts to build a socially cohesive nation.

7.1.2.
7.1.2.

Implementation of Infrastructure Projects: The Department should, before the beginning of the next financial year, devise a plan to establish an internal Infrastructure Project Management Unit to ensure the successful implementation of infrastructure projects as these projects not only transform the sporting and heritage landscape, but also contribute to the economy through job creation as envisaged by the ERRP.

7.1.3.
7.1.3.

Audit Outcomes: The Department should heed the recommendations of the AGSA to improve audit outcomes across the portfolio.

7.1.4.

Sector tax incentives: The Department should revisit its earlier engagements with the Davis Tax Committee for the inclusion of the arts into section 18(A) of the Income Tax Act (No.

58 of 1962) to encourage donations to the sector.

7.1.5.
7.1.5.

Implementation of PESP4: The Department should provide the Committee with updates on the implementation of this round of PESP funding for the CCIs.

7.1.6.

Mzansi Golden Economy Strategy: The Department should ensure that applicants and beneficiaries are provided with adequate support.

7.2.

Recommendations in relation to the Market Theatre Foundation 7.2.1.
Governance and legal matters: The entity should keep the Department and the Committee abreast of the implementation of the recommendations outlined by the forensic report.

7.2.2.

Irregular expenditure: The entity should continue to monitor and evaluate the effectiveness of the Audit Implementation Plan and Standard Operating Procedure developed to ensure issues of weakness in internal controls are addressed and will not adversely impact the next audit outcome.

7.2.3.
7.2.3.

Audience development: The Committee is encouraged to note that the entity is considering taking productions to the people as a way to mitigate the impact of deterioration of the inner city.

However, the entity should work with the 27 82 Department and other spheres of Government, to ensure measures are put in place to rectify the situation.

7.3.

Recommendations in relation to Karate South Africa 7.3.1.
Impact of the sport: The Committee recommends that the KSA continue with its awareness raising initiatives to encourage more women and girls to acquire the empowering skills that karate offers.

7.3.2.

Logistical challenges: The Committee recommends that KSA engages the Department, through its business plan, to address the challenges highlighted.

7.3.3.
7.3.3.

Karate in schools: The Committee acknowledges the important role school sport plays in society and in the national transformation objectives and thus recommends the federation continues to engage the DBE as it has already made some headway in this regard.

7.4.

Recommendations in relation to Boxing South Africa 7.4.1.

Audit outcomes and irregular expenditure: The Department and BSA should continue working together to expedite the implementation of the audit implementation plan.

7.4.2.
7.4.2.

Council and gender representivity: Considering the increase in the popularity of women’s boxing, there is an opportunity for the imbalance in gender representivity to be addressed with the appointment of the next council and the Department should endeavor to address this issue as a matter of urgency.

7.4.3.

Women in boxing: The Committee welcomes the ring-fenced funding in the conditional grant.
BSA and the Department should continue ensure that these funds are used for its intended purpose and that the level of women’s boxing is raised nationally.

7.4.4.

Economy of boxing: The Department and BSA should work together on securing sponsors and partners.

Further, the planning for a Boxing Academy should be prioritised.

7.5.

Recommendations in relation to South African Institute of Drug-Free Sport 7.5.1.
Emerging risks: The Department’s Task Team which was established to work with SAIDS on the matter of the obsolete legislation should ensure that the 28 83 Institute is provided with adequate support to stave off the potentially negative impacts of the malalignments with the WADA codes.

7.5.2.
7.5.2.

Imported services: The matter of the laboratories that have lost WADA accreditation needs to be addressed urgently to prevent SAIDS from incurring unnecessary expenditure relating to the importation of services that could potentially be provided domestically.

8.
8.

CONCLUSION Having satisfied itself in its engagement with the Department of Sport, Arts, and Culture, and its entities on their Annual Performance Plans and the Budget, the Portfolio Committee on Sport, Arts and Culture recommends that the House approves Budget Vote 37.

Report to be considered 29 84 3.
REPORT OF THE PORTFOLIO COMMITTEE ON FORESTRY, FISHERIES AND THE ENVIRONMENT ON THE STRATEGIC PLAN 2019/20—2023/24, ANNUAL PERFORMANCE PLANS 2023/24 AND THE BUDGET VOTE 32 OF THE DEPARTMENT OF FORESTRY, FISHERIES AND THE ENVIRONMENT (DFFE), DATED 2 MAY 2023 1 BACKGROUND The Portfolio Committee on Forestry, Fisheries and the Environment (hereinafter referred to as the Portfolio Committee) scrutinised the 2022/23 Vote 32: Forestry, Fisheries and the Environment and budget projections for the Medium Term Expenditure Framework (MTEF) period ending in the 2024/25 financial year.
The process entailed the examination of the 2023/34 Annual Performance Plans (APPs) and Budgets of the Department of Forestry, Fisheries and Environment (hereinafter referred to as the Department or DFFE), and the five national public entities reporting to it during briefings held in April 2023.
Therefore, the Portfolio Committee reports as follows: 2 INTRODUCTION This report accounts for the process embarked upon by the Portfolio Committee to consider Vote 32: Forestry, Fisheries and the Environment as tabled by the Minister of Finance, and the Five-Year Strategic Plan and Annual Performance Plans of the Department, and the five public entities that report to the Minister of Forestry, Fisheries and the Environment.
The Portfolio Committee process followed the tabling of Strategic Plans, APPs and budget allocations by the Department and its national public entities in Parliament as required in terms of the Public Finance Management Act (PFMA), 1999 (Act No.

1 of 1999).

The APPs outline the annual plans in line with Strategic Plans and the allocated budget as per the Estimates of National Expenditure (ENE) tabled by the Minister of Finance.
These planning documents were tabled in March 2023 and presented at briefing sessions on 18 and 19 April 2023.
2.1 Overview of the Department of Forestry, Fisheries and Environment and Entities The mandate of the Department of Forestry, Fisheries and Environment (DFFE) is to ensure the protection of the environment and conservation of natural resources, balanced with sustainable development and the equitable distribution of the benefits derived from natural resources for current 1 85 and future generations.
This is to be achieved while giving effect to the right of the nation to an environment that is not harmful to their health and well-being as stated in section 24(b) of the Constitution of the Republic of South Africa, which stipulates specifically that “all South Africans have the right to an environment that is not harmful to their health or wellbeing, and to have the environment protected for the benefit of the present and future generations” through the relevant legislation.
2.2 Legislative mandate The core business of the Department is underpinned by the Constitution of the Republic of South Africa and all other relevant pieces of legislation that are derived from it.

The constitutional directive “to have the environment protected, for the benefit of present and future generations, through reasonable legislative and other measures” gave rise to the formulation and adoption of notably the National Environmental Management Act (NEMA) No.

107 of 1998.
107 of 1998.

NEMA has undergone several amendments and has provided the bedrock for enacting the following “specific environmental management acts” (SEMAs), or issue-specific legislation on biodiversity and natural heritage resources; oceans and coasts; climate change and air quality management; and waste and chemicals management.

Those applicable SEMAs comprise National Environmental Management: Biodiversity Act No.
10 of 2004; National Environmental Management: Protected Areas Act No 57 of 2003; National Environmental Management: Air Quality Act No.

39 of 2004; Sea Fishery Act No.

12 of 1988; National Environmental Management: Waste Act No 59 of 2008; National Environmental Management: Integrated Coastal Management Act No.

24 of 2008; Marine Living Resources Act No.

18 of 1998; National Veld and Forest Fire Act No.

101 of 1998; and National Forests Act No.

84 of 1998, inter alia.


The Department fulfils its mandate by formulating, coordinating and monitoring the implementation of national environmental policies, programmes and legislation with additional support from its entities, such as the iSimangaliso Wetland Park Authority (iSimangaliso), Marine Living Resources Fund (MLRF), the South African National Biodiversity Institute (SANBI), South African National Parks (SANParks), and the South African Weather Service (SAWS).
The Department is structured into nine programmes to ensure the effective achievement of its constitutional mandate.

The nine different programmes and their purposes are reflective of the different focus areas and subsectors of environmental management (Table 1).

The objective of the current programme structure is to ensure that specific attention is given to each focus area of the Department’s constitutional mandate while acknowledging the interrelationship and ensuring an integrated approach.
2 86 Table 1: The structure and purpose of each departmental programme Programmes Purpose 1: Administration Provides strategic leadership, management and support services to the department.

2: Regulatory Compliance Promotes the development of an enabling legal regime and and Sector Monitoring licensing authorisation system that will promote enforcement and compliance and ensure coordination of sector performance.
3: Oceans and Coasts Promotes, manages and provides strategic leadership on oceans and coastal conservation.

4: Climate Change, Air Leads, promotes, facilitates, informs, monitors and reviews the Quality and Sustainable mainstreaming of environmental sustainability, low carbon Development emissions, climate resilience and air quality in South Africa’s transition to sustainable development.
5: Biodiversity and Ensures the regulation and management of all biodiversity, natural Conservation heritage and conservation matters in a manner that facilitates sustainable economic growth and development.

6: Environmental Implements the expanded public works programme and green Programmes economy projects in the environmental sector.
7: Chemicals and Waste Manages and ensures that chemicals and waste management Management policies and legislation are implemented and enforced in compliance with chemicals and waste management authorisations, directives and agreements.

8: Forestry Management Develops and facilitates the implementation of policies and targeted programmes to ensure the sustainable use and management of forests.
9: Fisheries Management Ensures the sustainable utilisation and orderly access to marine living resources through improved management and regulation.

3 LINKAGES BETWEEN THE DEPARTMENTAL PRIORITIES AND THE NATIONAL DEVELOPMENT PLAN VISION 2030 The National Development Plan (NDP) Vision is that by 2030, South Africa’s transition to an environmentally sustainable, climate-change resilient, low-carbon economy and just society will be well underway.
Achieving this requires, first and foremost, attaining the NDP outcomes relating to 3 87 the transformation of society and an economy, which is internationally competitive, equitable, job- creating and sustainable (resilient, green and low-carbon), inter alia.
Thus, the National Development Plan sets out a vision for promoting environmental sustainability in South Africa by making an equitable transition to a low-carbon economy and transforming human settlements for improved local governance and spatial integration.

The National Development Plan envisions environmental sustainability and transformation within the context of an integrated and inclusive economy that is supported by a capable and developmental state.
This vision is given expression by the following priorities of the government’s 2019/20−2023/24 medium-term strategic framework (MTSF), with which the work of the Department of Forestry, Fisheries and Environment is closely aligned: Priority 1: Economic transformation and job creation Priority 2: Education, skills and health Priority 3: Consolidating the social wage through reliable and quality basic services Priority 4: Spatial integration, human settlements and local government Priority 5: Social cohesion and safe communities Priority 6: A capable, ethical and developmental state Priority 7: A better Africa and world The Department’s 2019/20–2023/24 Strategic Plan and 2023/24 Annual Performance Plan are aligned with the priorities outlined in the MTSF.
However, during the 2022/23 financial year, the Department undertook a process of revising its contribution to the MTSF and their associated targets.

In consultation with the Department of Performance, Monitoring and Evaluation (DPME) and the Auditor General of South Africa (AGSA) to ensure proper alignment of plans and application SMART principles.

Priority 1 “A capable, ethical and developmental state”, the Department undertakes initiatives that improve capacities to comply with legislation.
However, the Department is still struggling to ensure good governance, compliance with laws as indicated by an unqualified audit opinion and transforming the demographic composition of the workforce.

The implementation of projects under Operation Phakisa and Expanded Public Works Programme (EPWP) has an immense contribution to Priority 2 “Economic transformation and job creation”.
While jobs and work opportunities are created, the state of the environment points to inefficiencies and regression in ecosystem rehabilitation and restoration.

For Priority 3 “Education, Skills and Health” the Department has consistently awarded bursaries, offered internships and conducted awareness, albeit insufficient, on 4 88 waste management.
The poor air quality in the Highveld Priority Area (HPA) and other parts of the country are a testament that human health is compromised due to non-compliance or poor enforcement of ambient air quality standards.

Similarly, Priority 5 (Spatial integration, human settlements and local government) entails training government officials and councillors at the district municipality level.
The Department supports municipalities in incorporating environmental priorities in their IDPs, manages hazardous waste streams, and implements air quality management interventions to reduce atmospheric emissions.
Priority 7 (A Better Africa and World) focuses on one of the Department’s key functions of leading and influencing an environmental management global agenda, which includes negotiations on Climate Change, Sustainable Development, Chemicals and Waste Management, Oceans and Coastal Management, Biodiversity and Conservation.

The Department pursues targeted and strategic global and regional engagements to enhance South Africa and Africa’s socio-economic development priorities.
In summary, the Department’s 2023/24 APP aims to continue with the implementation of the Department’s approved Strategic Plan, which is aligned to Environment Sector priorities as outlined in the Government’s 2019/20 – 23/24 MTSF Plan and seven priorities of the 6th administration.
However, the 2023/24 APP is the last attempt at addressing persistent environmental challenges (e.g., poaching, environmental degradation and pollution, climate change) as well as the need to catch up with goals that were derailed by the COVID-19 pandemic.
3.1 Medium Term Strategic Plans and Annual Performance Plans (APPs) of the Department and its Entities for 2023/24 The Department serves as the national collaborator with provinces in shared or concurrent responsibilities and takes the lead in guiding the environmental, forestry, and fisheries sectors by establishing the necessary policies, laws, and benchmarks for safeguarding the environment and promoting sustainable development in the country.
This is evidenced by the Department's significant contribution to the formulation, handling, and management of a multitude of policy and legislative measures.

The Portfolio Committee received a briefing via the online platform Zoom, regarding the Department's strategic plans for the period of 2019/20 to 2023/24, as well as its annual performance plans and budgets for the 2023/24 fiscal year, recognising the Department's crucial role as described above.
The primary objective of this meeting with the Department and its entities was to assess the appropriateness of the allocated budget in support of achieving the Department's and entities' 5 89 strategic objectives and annual performance plans, as well as to ensure that the budget was consistent with the government's strategic priorities, as defined by the NDP.
In addition to this, the Committee was also eager to learn about how the 2023/24 annual performance plan was designed to address the current environmental challenges confronting South Africa.

This report presents the Portfolio Committee's main findings, observations, and recommendations following its interactions with the Department and its entities, focusing on their strategic plans, annual performance plans, and budget.
3.2 Reconfiguration of the Department of Forestry, Fisheries and the Environment The Department of Environmental Affairs was renamed the Department of Environment, Forestry and Fisheries (DEFF) in June 2019, incorporating the forestry and fisheries functions from the previous Department of Agriculture, Forestry and Fisheries.
The Department further realised a name change to the Department of Forestry, Fisheries and Environment (DFFE) at the time of presenting its APP and budget to the Committee in the 2021/22 financial year.

There were ongoing alignments and transfer of functions among departmental programmes to streamline operations and improve the effectiveness and efficient use of available resources.
During the 2022/23 financial year, there were notable changes in functions and where they are transferred or merged within the Department.

Notwithstanding these alignment processes, the mandate of the Department has not changed.

Accordingly, DFFE is mandated to give effect to the right of citizens to an environment that is not harmful to their health or well-being and to have the environment protected for the benefit of present and future generations.
To achieve this, the Department provides leadership in environmental management, conservation and protection toward sustainable development for the benefit of South Africans and the global community.
3.3 Departmental Strategic Objectives The Department’s strategic objectives over the medium term are to: ● Provide leadership, strategic, centralised administration, executive support, and corporate services, and facilitate effective cooperative governance, international relations, and environmental education and awareness; ● Promote the development and implementation of an enabling legal regime and licensing/authorisation system to ensure enforcement and compliance with environmental law; 6 90 ● Promote, manage and provide strategic leadership on oceans and coastal conservation; ● Improve air and atmospheric quality, lead and support, inform, monitor and report efficient and effective international, national and significant provincial and local responses to climate change; ● Ensure the regulation and management of all biodiversity, heritage and conservation matters in a manner that facilitates sustainable economic growth and development; ● Implement expanded public works and green economy projects in the environmental sector; ● Manage and ensure that chemicals and waste management policies and legislation are implemented and enforced in compliance with chemicals and waste management authorisations, directives and agreements; ● Develop and facilitate the implementation of policies and targeted programmes to ensure the sustainable management of forests; and ● Ensure the sustainability, utilisation, and orderly access to marine living resources through improved management and regulation.
4 BUDGET ALLOCATION TO THE DEPARTMENT AND ITS ENTITIES The 2023/24 Government budget is framed within the context of the four policy objectives set out in the 2023 State of the Nation Address (SONA): Addressing load shedding, growing the economy and jobs, building better lives, making communities safer, fighting corruption, and making Government work, promoting economic recovery, sustainable public finances, structural reforms, and faster economic growth.
The Government will continue to provide support for the response to the pandemic, job creation and social protection, partly through the special COVID‐19 social relief of distress grant.

The contribution from the Department will be to facilitate a fair and equitable shift towards a low-carbon economy and a society that can withstand the effects of climate change.
Additionally, the Department has plans to generate job opportunities through an Expanded Public Works Programme while simultaneously promoting a favourable atmosphere for South Africa's transition to a circular economy.

Since financial resources are tight and limited, Parliament must be more effective and efficient in its oversight and accountability functions, particularly on the finances, service delivery against the mentioned priorities and value for money.
The Department's allocation over the MTEF period is R14.3 billion, with 49.2% earmarked for spending on goods and services.

The budget translates to an average annual increase of 2.8% in DFFE’s expenditure, rising from R9 billion in 2022/23 to R9.8 billion by 2025/26.

The Expanded Public Works Programme (EPWP) will receive funding for projects aimed at creating job 7 91 opportunities.
Transfers and subsidies to the Department's entities account for 24% of expenditure over the period, totalling R7.1 billion.

During the medium term, the responsibility for enforcement at ports of entry will shift to the Border Management Authority.

Consequently, the Department of Home Affairs will receive R14 million in 2023/24, R14.7 million in 2024/25, and R15 million in 2025/26.

The allocation is shifted to the Department of Home Affairs as a result of this change.
The budget allocation to the Department constitutes 0.40% of the overall Government expenditure of R2.242 trillion.

According to inflation data from the South African Reserve Bank, the funding level for the Department has remained steady since 2016/17, fluctuating only slightly between 0.40% and 0.45% of national spending.
Factors such as global politics, anticipated Rand depreciation for the current year, rising national debt, persistently high stages of load-shedding and competing needs present challenges for the Government to increase departmental budget allocations.

While the gross domestic product (GDP) is expected to reach 2.5%, it will not have any significant impact on the departmental allocation.
Consequently, The budget allocation of the Department is R9.87 billion for the 2023/24 financial year, which is a nominal decrease of 9.8% (R878.7 million) from the 2022/23 allocation (Table 1).

All departmental programmes were affected by the 2023 budget allocations when compared to the 2022 allocations.
In nominal terms, five programmes received an increased allocation (Climate Change and Air Quality, Biodiversity and Conservation, Environmental Programmes, Chemicals and Waste Management and Fisheries Management) and a reduction of funds affected four programmes (Administration; Regulatory Compliance and Sector Monitoring (RCSM); Oceans and Coasts; and Forestry Management).
8 92 Table 1: The Overall budget allocation to the Department and its programmes for the 2023/24 financial year and changes between the 2022/23 and 2023/24 financial years.
Programme Budget Nominal Real Nominal% Real% R million 2022/23 2023/24 Rand Rand change change change change Administration 1 285.1 1 210.6 - 74.4 - 131.0 -5.8% -10.2% Regulatory Compliance 314.2 308.6 - 5.6 - 20.0 -1.8% -6.4% and Sector Monitoring Oceans and Coasts 502.5 496.8 - 5.7 - 28.9 -1.1% -5.8% Climate Change and Air 571.1 673.0 101.9 70.4 17.8% 12.3% Quality Biodiversity and 1 237.9 2 081.0 843.1 745.8 68.1% 60.2% Conservation Environmental Programmes 3 245.0 3 257.6 12.6 - 139.6 0.4% -4.3% Chemicals and Waste 620.4 634.2 13.8 - 15.9 2.2% -2.6% Management Forestry Management 664.0 586.7 - 77.2 - 104.6 -11.6% -15.8% Fisheries Management 554.7 625.2 70.5 41.3 12.7% TOTAL 8 994.8 9 873.6 878.7 417.5 9.8% 7.4% 4.6% Source: Adapted from National Treasury (2023) The departmental budget allocation has resulted in changes to departmental transfers to the entities.
For example, the transfers to entities have increased from R1.313 billion in the 2022/23 financial year to R1.609 billion in the 2023/24 financial year.
Four entities experienced increases in their transferred allocations (the South African Weather Service, South African National Biodiversity Institute, National Regulator for Compulsory Specifications, and Marine Living Resources Fund), while the transfer to two entities decreased (iSimangaliso Wetland Park Authority, and South African National Parks), as shown in Figure 1.
The Department is injecting capital amounting to R1.945 billion (up from R582.40 million in 2021) into the SAWS (R163m), iSimangaliso (R189.6m), SANParks (R1.268b) and SANBI (R323m) towards maintenance, development and infrastructure projects of the entities.

9 93 Figure 1.

The budget transfers to entities from Vote 32 for the 2023/24 financial year amounted to R1.609 billion.

(Adapted from the National Treasury, 2023).


5 DISCUSSIONS ON DEPARTMENTAL STRATEGIC PLAN, APP & BUDGET As guided by Hon B Creecy, the Minister of Forestry, Fisheries and the Environment, Hon Maggie Sotyu, the Deputy Minister of Forestry, Fisheries, and Environment, introduced the departmental delegation and noted that eight out of nine Deputy Director Generals are women.
Thereafter, the departmental presentation on the strategic plan (2019/20−2023/24), annual performance plan and the budget for 2023/24 was led by the Director-General of the Department, Ms Nomfundo Tshabalala, supported by the respective Deputy Director-Generals.

The Committee made pertinent observations captured under the Department and also under specific departmental programmes/branches and entities.
5.1 Programme 1: Administration The Administration Programme is responsible for providing strategic leadership, management and support services to the Department.

The Programme reorganised some sub-programmes that resulted in their increase from four to six.

The Branch had a 5.8% (R74.4 million) nominal 10 94 reduction in its allocation, mainly from Corporate Management Services and Financial Management Services.

When factoring in inflation, the real decrease is 10.2%, amounting to R131 million.
This programme consumes 12.3% of the total departmental budget, which is a 2.0% decrease from the 2022 allocation.

Consequently, members raised several issues under this Administration Programme, comprising the following: 5.1.1 The Committee was concerned about the 487 frozen posts as well as 291 vacant positions and wanted to know whether this did not pose any challenge to the work of the Department.
The Committee further asked whether those positions were previously filled, or if there were timeframes to fill them.

Departmental responses 5.1.2 Regarding the issue of frozen and unfilled posts, the Department responded that these were not confined to one programme, but were spread across the Department and undertook to prioritise key positions, particularly at the senior management level when filling these vacancies.
5.2 Programme 2: Regulatory Compliance and Sector Monitoring (RCSM) The purpose of the Regulatory Compliance and Sector Monitoring (RCSM) Programme is to promote the development and implementation of an enabling legal regime and licensing/authorisation system to ensure enforcement and compliance with environmental law.

The Programme reorganised some sub-programmes that resulted in their increase from six to eight.
The overall budget decrease is R5.6 million, mainly contributed by the R33.1 million decrease in the allocation from the Integrated Environmental Authorisations and Enforcement sub-programmes.

The Programme consumes a 3.1% share of the entire departmental allocation – slightly reduced from 3.5% in the 2022 allocation.
It is in this regard, among others, that members of the Committee raised the following matter: 5.2.1 The Committee wanted to know the number of cases before the National Prosecuting Authority (NPA) relating to non-compliance with environmental legislation that had not been finalised.

11 95 Departmental response 5.2.2 The Department acknowledged that there was a backlog in processing cases related to compliance by the NPA and to address this the Department had drafted a Compliance and Enforcement Strategy.
In addition, the Department was working towards getting the eThekwini Metropolitan Municipality to comply with water quality regulations as part of the compliance and enforcement initiative.

The Department had been running the Water Quality Programme for the past three years, including testing and monitoring the quality of water flowing into estuaries.
There has been notable progress made thus far; 5.3 Programme 3: Oceans and Coasts The purpose of the Oceans and Coasts Programme is to promote, manage and provide strategic leadership on oceans and coastal conservation.

The Branch has to manage the 1.5 million square kilometres of the exclusive economic zone (EEZ) that is a priority for job creation and economic development under Oceans Economy.

The allocation to this Programme makes up 5.0% of the departmental budget (down from 5.6% in 2022).
The 2023 allocation is R5.7 million less in nominal terms when compared to the allocation of 2022 and shrunk by 5.8% when factoring in inflation.

This overall reduction raises questions about how the Department would deal with existing and additional responsibilities in the oceans space such as the proclamation and management of the new Marine Protected Areas (MPAs) as well as the Oceans Economy, inter alia.
As a result, the Committee posed the following clarity-seeking question: 5.3.1 The Committee welcomed the Ocean Economy Master Plan and noted that it required a multi-stakeholder approach to ensure its success and wanted to know if the Department had consulted other departments to achieve the targets set in the Master Plan.

Departmental response 5.3.2 The question on the consultations with other departments to achieve the targets set out in the Master Plan was not responded to.
5.4 Programme 4: Climate Change, Air Quality and Sustainable Development 12 96 The purpose of this Programme is to lead the mainstreaming of environmental sustainability, low carbon and climate resilience and air quality in South Africa’s transition to sustainable development.

The Programme reorganised some sub-programmes that resulted in their decrease from ten to seven.

The overall budget amounts to 6.8% (up from 6.3% in 2022) of the departmental budget.
The budget was increased by R101.9 million (17.8%) in nominal terms and when factoring in inflation, the increase amounts to R70.4 million (12.3%).

Significant changes were increased transfers towards the South African Weather Service sub-programme.
The Committee inquired about international donor funding and emission sanctions as follows: 5.4.1 The Committee asked whether any of the climate change programmes of the Department were supported by international donor funding; 5.4.2 The Committee wanted to know if the Department had a detailed breakdown for the US$80 million donor funding earmarked for environmental or sustainable development programmes; and 5.4.3 The Committee also wanted to know how the Kendal Power Station was reporting on its emissions and whether the Department had issued any notices to polluting industries in particular, in the Highveld Priority Area.
Departmental responses 5.4.4 On the donor-funding budget, the Department stated that the US$80 million was obtained through several bilateral agreements with Germany, Flanders and multilateral finance agreements.

The Department would ensure that there were continuous engagements with the donor entities and monitors the use of the funds by accredited entities; and 5.4.5 In addition, the foreign funding was located in the Office of the President.
However, after the agreement was signed the Just Energy Transition Investment Plan was handed over to the Climate Change Commission to facilitate public consultation.

5.5 Programme 5: Biodiversity and Conservation The purpose of this Programme is to ensure the regulation and management of all biodiversity, heritage and conservation matters in a manner that facilitates sustainable economic growth and development.
The South African National Parks, iSimangaliso Wetland Park Authority and South African National Biodiversity Institute contribute to this Programme.

The budget allocation to this Branch constitutes 21.1% (up from 13.8% in 2022) of the departmental budget.

The drastic increase 13 97 in the budget allocation of the Branch is largely due to increased transfers to the South African National Parks and South African National Biodiversity Institute.
The matter raised in the Biodiversity and Conservation Programme was: 5.5.1 The Committee commended the Department on the envisaged biodiversity programmes and wanted to know whether they would benefit the previously advantaged communities.

Departmental responses 5.5.4 The Department also mentioned that it envisaged the Biodiversity Programme to benefit around 400 previously disadvantaged individuals.
5.6 Programme 6: Environmental Programmes The purpose of this Programme is to ensure the implementation of the Expanded Public Works Programme (EPWP) which has important implications for the environment and to conceptualise and implement green economy projects in the environmental sector.
Thus, the aim of the EPWP (via the Environmental Programmes) is to provide unemployed mainly disadvantaged people with income support through work opportunities, while building and protecting South Africa's natural resources using labour-intensive methods.

It is seemingly this income-provisioning, pro-poor appeal of the Environmental Programmes that it received an increased budget allocation by 0.4% (R12.6 million).
The changes in sub-programme allocations are from dividing the budget nearly equally among the regions.

The budget of this branch constitutes 33% of the departmental budget (36.1% in 2022) – thus consuming the largest part of the departmental budget.

The Programme reorganised some sub-programmes that resulted in the removal of the Green Fund and the creation of three regions.

The number of sub-programmes is still five.


5.7 Programme 7: Chemicals and Waste Management The purpose of the Chemicals and Waste Management Programme is to manage and ensure that chemicals and waste management policies and legislation are implemented and enforced in compliance with the chemicals and waste management authorisations, directives and agreements.
The Programme reorganised some sub-programmes that resulted in the creation of the Chemicals and Waste Economy Programme Coordination which resulted in the increase of the sub- programmes from six to seven.

This Programme’s allocation is 6.4% of the departmental budget 14 98 (6.9% in 2022).

The overall nominal budget allocation to the Programme has increased by 2.2% (R13.8 million) and seems to align with the strategic priority on the waste economy of the Department.
The budget allocation seems to indicate a shift primarily from the funding of the Waste Bureau and Integrated Waste Management sub-programmes to the Chemicals and Waste Management Policy and Specialist Monitoring Services.
The following issues were discussed under the Chemicals and Waste Management Programme: 5.7.1 The Committee noted that the Department provided training on waste management for 300 officials and wanted details on what the training entailed, the criteria used to identify the trainees, whether all municipalities would be trained and who was paid for the training; 5.7.2 The Committee was concerned about the fact that the Department did not present any initiatives to deal with disposable diapers, which is one of the biggest challenges in South Africa.
Departmental responses 5.7.3 The Department responded that the waste management training was conducted in collaboration with the South African Local Government through their local government forums and covered a wide range of topics, such as Integrated Waste Management, among others; 5.7.4 Furthermore, the Department’s Local Government Support Strategy and Training are provided in several areas that fall within their area of responsibility as well as climate change and biodiversity conservation.
Local Government support officers are available and are supported by youth to ensure they execute their mandates; 5.7.5 Regarding the dumping of disposable nappies, the Department had initiated several projects to address this challenge, for example, the promotion of re-usable towel nappies.

5.8 Programme 8: Forestry Management The Forestry Management Branch exists to develop and facilitate the implementation of policies and targeted programmes to ensure proper management of forests and State plantations.
The Programme reorganised some sub-programmes that resulted in the creation of two new sub- programmes, the Forest Land Management and Post Settlement Support; and Forestry Policy Management, thus increasing the number of sub-programmes to four.

The allocation to the Forestry Branch makes up 7.7% of the departmental budget (7.9% in 2021) and was nominally reduced by 15 99 R26.2 million (3.7%).
The bulk of the budget (57%) goes to the Forest Land Management and Post Settlement Support sub-programme where the bulk of the Programme’s workforce is located.

The following was the clarity-seeking question raised by the Committee under the Forestry Branch or Programme: 5.8.1 The Committee wanted to know whether forestry programmes were designed with climate change mitigation and other aspects in mind.
Departmental response 5.8.2 The Department also reported that Forestry Management and the Climate Change branches worked very closely to ensure that projects were aligned.

5.9 Programme 9: Fisheries Management The Fisheries Management Programme serves to ensure sustainable utilisation and orderly access to marine living resources through improved management and regulation.

The Programme extended the scope of the Aquaculture Development sub-programme to include Fresh Water Fisheries.
The funds allocated to the Fisheries Branch make up 6.3% of the total departmental allocation (6.2% in 2022).

The overall budget was increased by R70.5 million (12.7%) when compared to the 2022 budget allocation.

The sub-programme affected by reduction is Aquaculture Development and Fresh Water Fisheries despite the newly expanded responsibility.

The costs of vessel maintenance and operation are expected to be higher when factoring in the state of the currency and higher fuel prices.
6 ENTITIES REPORTING TO THE DEPARTMENT 6.1 South African National Parks SANParks was established in terms of the National Environmental Management: Protected Areas Act (Act No 57 of 2003), with the mandate to develop, expand, manage and promote a system of sustainable national parks that represents the country’s biodiversity and heritage assets through innovation and best practice for the just and equitable benefit of current and future generations.
It is in this regard that the Committee raised the following matters with SANParks while interacting 16 100 with the entity’s Strategic Plan (2019/20 – 2023/24) and Annual Performance Plan and budget for the 2023/24 financial year: 6.1.1 The Committee inquired about the 11% increase in visitors; 6.1.2 Proposed that the Department specify a security line item in the Kruger National Park budget; 6.1.3 The Committee sought information on the funding needed to hire 82 rangers and the budget allotted for rangers who live outside of the park; 6.1.4 The Committee proposed that the target for poached rhinos should be zero, despite it being insurmountable; 6.1.5 Clarity was sought on the climate change impact on wildlife populations, available options to increase the rhino population, and measures to curb elephant poaching; and 6.1.6 The Committee proposed a joint meeting with other Committees that are affected by the content of Mr Rademeyer’s report on rhino poaching and other related crimes.
South African National Parks Responses 6.1.7 SANParks clarified that the number of visitors has exceeded the pre-Covid levels; 6.1.8 SANParks undertook to discuss and consider the inclusion of a security line item on the budget; 6.1.9 SANParks admitted that the working and living conditions within the Park were not good but the Park was limited by available resources towards filling vacant posts or upgrading living quarters; and 6.1.10 SANParks also stated that they have a comprehensive report on the impact of climate change on the park and adjacent communities.
6.2 iSimangaliso Wetland Park Authority The iSimangaliso Wetland Park Authority in KwaZulu-Natal was established in 2002 in terms of the World Heritage Convention Act (Act No 49 of 1999), with the mandate to ensure that effective and active measures are implemented in the Park for the protection and conservation of World Heritage Convention values; promote empowerment of historically disadvantaged communities living adjacent to the Park; promote, manage, oversee, market and facilitate optimal tourism and related development in the Park; and encourage, sustain, invest and contribute to job creation.
The 17 101 issues raised by the Committee with the iSimangaliso Wetland Park Authority comprised the following: 6.2.1 The Committee wanted an update on the farms in the St Lucia area after the flooding, land encroachment by neighbouring communities, and mining in the buffer zone; 6.2.2 The Committee wanted the details on budget changes between years and the board strategy session; and 6.2.3 The Committee also wanted to know whether non-conservation initiatives were being undertaken by the Park in collaboration with other authorities in the district to address unemployment and poverty.
iSimangaliso Wetland Park Authority responses 6.2.4 On the questions relating to land invasion or encroachment, and engagements with farmers, the Committee will be provided with a written response; and 6.2.5 The board strategy session had been about the five-year strategy and crafting the annual performance plan.

6.3 South African National Biodiversity Institute SANBI was established in September 2004, in terms of the National Environmental Management: Biodiversity Act (Act No 10 of 2004).
The mandate of the Institute is to monitor and report regularly on the status of South Africa’s biodiversity, all listed threatened or protected species, ecosystems and invasive species; and the impact of any genetically modified organism that has been released into the environment.
The Institute is also mandated to act as an advisory and consultative body on matters relating to organs of State and other biodiversity stakeholders; coordinate and promote the taxonomy of South Africa’s biodiversity; manage, control and maintain all national botanical gardens, herbaria and collections of dead animals that may exist; and advise the Minister of Forestry, Fisheries and Environment on any matter regulated in terms of the Act, and any international agreements affecting biodiversity that are binding on South Africa.
To this end, SANBI presented its strategic plan (2019/20 – 2023/24), annual performance plan and budget for the 2023/24 financial year via a virtual platform (Zoom).
Members of the Committee raised several issues on the entity’s strategic plan, annual performance plan and budget, which are captured below: 18 102 6.3.1 The Committee sought clarity regarding the White Paper on Conservation and Sustainable Use of South Africa’s Biodiversity, and how it relates to the High-Level Panel (HLP) recommendations, which called for the phasing out of the captive lion industry; 6.3.2 The Committee noted that there were requests from the captive lion owners who would like to exit the industry and wanted to know whether the Department had a plan to handle those who did not want to exit the industry voluntarily; 6.3.3 The Committee was concerned about the challenges posed by the alien invasive species, which resulted in water loss in terrestrial water bodies and rivers, and further wanted to know who was responsible for clearing invasive species, whether this had been budgeted for and what the long-term strategy for the clearing was; 6.3.4 The Committee raised a concern about the cancellation of lifetime membership of the Botanical Society (BotSoc) members who had been getting free entry into South African botanical gardens, particularly the Kirstenbosch.
Lifetime members had invested thousands to have access to the gardens.

The question therefore was what would happen to the members who joined, hoping they had signed up with the expectation that they would get free lifetime access instead all they would receive now is a 10% discount off entrance fees.
Secondly, there were people with lifetime memberships who were very confused as to the way forward; 6.3.5 The Committee noted that the Entity had exceeded its revenue target of R1.2 million visitors, and its latest figure was R1.3 million visitors and wanted to know the reasons for the cancellation of the lifetime membership; 6.3.6 There was a question regarding the establishment of the Scientific Authority, whether it was a permanent structure or was appointed by the Minister during her tenure, and what the key scientific studies that the body was seized with at the time; 6.3.7 The Committee wanted to know whether SANBI through the Groen Sebenza internship programme monitored the progress of young black interns who published papers, as part of this programme and methods used to ensure their growth into full-time scientists; and 6.3.8 The Committee sought clarity on the 12 cheetahs that were exported to India.
6.3.1 SANBI responses 6.3.9 Concerning the White Paper on Sustainable Use, SANBI supported by the Scientific Authority, had developed management plans, focusing on some species, such as lions, 19 103 elephants and leopards to determine whether the survival of species in the wild was compromised by any activity; and hence the reference to “non-detrimental findings”; 6.3.10 The Scientific Authority Committee was appointed by the Minister and comprised of representatives from each of the provinces, and a representative from the South African National Parks (SANParks).
SANBI’s role was to provide administrative and logistical support and secretarial support for the Authority.

The mandate of the Authority is to conduct research and provide the necessary evidence to support the Minister in carrying out her duties.

Additionally, the Scientific Authority was to support the monitoring of illegal trade.

Many of the studies conducted were focused on particular areas where species were threatened due to illegal trade.
A key example that SANBI was focusing on, was the illegal trade in succulents; 6.3.11 On the invasive alien species, SANBI acknowledged that these species were among the key drivers of biodiversity loss, and investment was vital to ensure that a long-term solution was achieved.
SANBI had produced the Status of the Biological Invasives Report; 6.3.12 Regarding the Groen Sebenza Programme, SANBI implemented a tracking system, and a monitoring programme to monitor the progress of young scientists’ growth over time; 6.3.13 With regards to the BotSoc membership, SANBI introduced a new system that worked on a 90/10 framework in terms of the ratio, which meant a 10% discount on entrance fees.
A new arrangement was agreed on between SANBI and the BotSoc, about the 450-plus lifetime members.
SANBI would honour that arrangement; 6.3.14 In addition, the agreement or relationship between the BotSoc and its members was between the BotSoc and its members, and if there were any claims for refunds, SANBI was not liable; 6.3.15 On the banning of animals in captivity, the Department presented a comprehensive report to the Committee on the linkages and relationship between the White Paper, the Game Meat Strategy as well as work on lions.
The White Paper was adopted by Cabinet two weeks ago, which focused primarily on the four goals related to conservation and sustainable use, access and benefit-sharing, and transformation.
The White Paper was a broad policy direction, and provided a strategic thrust to the rest of the work of the Department and the sector, as far, as issues related to biodiversity conservation and sustainable use went; and 6.3.16 On the exportation of 12 cheetahs, it was mentioned that the Minister had responded to a parliamentary question, in this regard.
6.4 South African Weather Service (SAWS) 20 104 The South African Weather Service (SAWS) is a section 3a entity established in terms of the South African Weather Service Act (Act No 8 of 2001) as amended, Public Finance Management Act (PFMA) and associated treasury regulations.

SAWS mandate is to provide two distinct services, i.e., the public good service, which is funded by the Government of South Africa and commercial services where the user-pays principle applies.
SAWS’ strategic plan (2019/20 – 2023/24), annual performance plan and budget for the 2023/24 financial year, which were presented to the Committee via a virtual platform (Zoom), were reflective of this dual function.
The details of the interactions between the Committee and SAWS are captured below: 6.4.1 The Committee commended SAWS for better presentation compared to the previous years and the fact that laws and policies were implemented, as well as the introduction of the code of conduct within the Entity and hoped that it would also be implemented going forward; 6.4.2 There was concern around SCM and Training for Bid Committee members; 6.4.3 There was a question on the use of aerodrome warnings target of 98 per cent and whether they were used in all provinces or every municipality; 6.4.4 The Committee noted the challenge of poor air quality management across the country and wanted to know the criteria used for air quality monitoring, especially in the Highveld Priority Area and why the heavily polluted areas were not on the South African Air Quality Information System (SAAQIS) and why SAWS was not monitoring those as well; 6.4.5 The Committee wanted to know whether SAWS worked with MeerKAT Telescope in the Northern Cape on meteorological programmes and if not the Committee encouraged them to do so; 6.4.6 There was a concern around SCM and training provided for Bid Committees; 6.4.7 The Committee wanted a long-term solution to deal with load shedding for air quality monitoring stations, especially for aviation purposes; 6.4.8 On air quality monitoring stations that reported on the SAAQIS website, the Committee asked whether those were raw data represented on the site, or it was processed information, where specific pollutants were reflected on the website.
For example, the EThekwini Metro data on the SAAQIS website on two evenings reflected poor air quality; 6.4.9 The Committee raised concern that most of the weather stations were in the urban areas and wanted to know if there was a plan to spread the stations to rural areas as well; and 6.4.10 The Committee also noted challenges related to weather prediction and whether there were risk management plans to address that.
6.4.1 South African Weather Service Responses 21 105 6.4.11 SAWS welcomed the compliment regarding the presentation and told the Committee that the code of conduct had been implemented and employees were workshopped on it; 6.4.12 Concerning the aerodrome warnings, it was responded that all airports in the country were covered; 6.4.13 SAWS also highlighted that it had been affected by load shedding and some of the equipment did not automatically start up, even if the power came back.
A report on weather station availability was submitted to the Board.
It was not looking good for the past quarter; 6.4.14 Concerning SAAQIS, it was responded that SAWS did the air quality monitoring in conjunction with the Department, and areas with poor air quality were prioritised such as the Vaal area because of steel manufacturing as well as the Highveld area, whilst the Bojanala area was identified as a potential area where there would be more air quality issues; 6.4.15 On the MeerKAT matter, SAWS mentioned that they would look into it, however, they were currently working with the South African National Space Agency (SANSA) as well as collaborated with the Agricultural Research Council (ARC), and the Council for Scientific and Industrial Research (CSIR); 6.4.16 On the SCM matter, SAWS reported that it had resolved most of the governance challenges in the past few years, which had led to some improved audit outcomes; 6.4.17 Regarding the air quality monitoring stations, SAWS assured the Committee that it had prioritised all critical weather stations, especially those related to aviation for safety purposes and the set targets were in line with international standards.
Furthermore, SAWS had attended to non-functional airport stations when required as a matter of urgency as it could impact the lives of people flying in or out of a particular airport; and 6.4.18 Regarding the SAAQIS, the Committee was assured that the data put on the App had been processed and that it came from various service providers for municipalities.

There was a penalty if the data were manipulated.


6.5 Marine Living Resources Fund The management of marine fisheries resources lies within the Fisheries Management Branch (the Branch) of the Department of Environment, Forestry and Fisheries (the Department) as primarily guided by the Marine Living Resources Act (MLRA), No.

18 of 1998.

The Marine Living Resources Fund (MLRF or the Fund), a schedule 3A Public Entity under the PFMA, was established in terms of section 10 of the MLRA.
The MLRF is the main source of funding for the operational activities of the Branch.

The MLRF receives transfers from the Branch and generates its 22 106 other income from levies on fish products, licence fees and permits, fines and confiscations, and harbour fees.

In terms of section 10(3) of the MLRA, the Director-General administers the MLRF in consultation with the Minister.
The functions of the MLRF are executed by the staff of the Branch, in partnership with other stakeholders in the fisheries-related industry.

The mandate and core business of the MLRF is to manage the development and sustainable use of South Africa’s marine resources and protect the integrity and quality of the marine ecosystem.

The MLRF tabled its 2023 APP which was presented together with that of the Fisheries Management Branch.
7 RECOMMENDATIONS After reviewing the Department and entities' inputs, the Committee acknowledged their plans to fulfil their mandates and assume additional responsibilities, all of which are influenced by various factors and modifiers in the natural environment.

The Committee expressed appreciation for these efforts.
The Committee is conscious of its responsibility which is to ensure that the Department and the respective entities do exactly, as they have proposed for themselves without any deviation except to exceed agreed targets.

The Minister has already made it abundantly clear that achieving 80 per cent is the minimum acceptable performance.
It is therefore in this regard that the Committee makes the following recommendations: ● The Department should submit in writing a report on the emissions from the Kendal Power Station and notices issued to polluting industries or companies in the Highveld Priority Area; ● The Department should provide detailed information on the waste management training provided, including the criteria used to identify trainees, whether all municipalities will be trained, and who was paid for the training; ● The Department should provide a plan to ensure that the envisaged biodiversity programmes benefit previously disadvantaged communities; ● The Department should provide a detailed breakdown of the US$80 million donor funding, where the projects are located, and implementation timelines; ● The Department should provide the Committee with plans to source funds and upscale initiatives to deal with disposable diapers, which is one of the biggest challenges in South Africa; ● The Department should provide the Committee with a plan for handling captive lion breeders who will not exit the industry voluntarily; 23 107 ● The Department should provide the Committee with a breakdown in terms of municipalities where the 120 000 trees will be planted and the applied criteria for prioritised to be supplied with the trees; ● SAWS should provide a copy of the report on weather stations that was submitted to the Board; ● SAWS should provide a report on the status and location of air quality monitoring stations; • The iSimangaliso Wetland Park Authority should submit a written response to the questions on the flooding of the St Lucia Estuary area and progress on the engagements with the affected farmers; • iSimingaliso should provide details on the mining applications and land encroachment after receiving a court ruling in favour of the park.
• SANParks should provide a breakdown of security expenses to track budget allocations and successes in the parks and a breakdown of the funding towards security at Kruger National Park; • SANParks should provide a comprehensive response to the report that was presented by Mr Rademeyer; • SANParks must submit a comprehensive report on the impact of climate change on the park and adjacent communities, including resilience, adaptation and mitigation plans; and • SANBI must submit a written response on the cancellation of the membership agreement with BotSoc.
The Minister should submit detailed responses to the Committee on behalf of the Department and all its entities made in this report within 60 days after the adoption of this report by the National Assembly.
Having considered the budget and annual performance plan of the Department of Forestry, Fisheries and the Environment, the Portfolio Committee recommends to the House to adopt the Budget Vote 32 allocation for the 2023/24 financial year, with the allocation of R9.873 billion, as tabled on 22 February 2023.

Report to be considered.

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