Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698931431788.pdf (South Africa)
Wednesday, 11 May 2022] No 68—2022] FOURTH SESSION, SIXTH PARLIAMENT PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA _____________________ ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS _____________________ WEDNESDAY, 11 MAY 2022 _____________________ TABLE OF CONTENTS ANNOUNCEMENTS National Assembly 1.

Referral to Committees of papers tabled .......................................................................... 2 2.
Membership of Committees ............................................................................................. 2 TABLINGS National Assembly and National Council of Provinces 1.

Minister of Finance ........................................................................................................... 3 2.
Minister in The Presidency ............................................................................................... 3 COMMITTEE REPORTS National Assembly and National Council of Provinces 1.

Ethics and Members’ Interests ......................................................................................... 4 1 National Assembly Justice and Correctional Services ..................................................................................... 9 1.

2.
2.

Justice and Correctional Services ................................................................................... 30 3.

Water and Sanitation ...................................................................................................... 44 Communications ............................................................................................................. 69 4.
Communications ............................................................................................................. 90 5.

Social Development ...................................................................................................... 143 6. International Relations and Cooperation ...................................................................... 185 7.

National Council of Provinces 1.


Appropriations .............................................................................................................. 224 ANNOUNCEMENTS National Assembly The Speaker 1.
Referral to Committees of papers tabled (1) The following paper is referred to the Portfolio Committee on Agriculture, Land Reform and Rural Development for consideration: (a) Letter from the Minister of Agriculture, Land Reform and Rural Development to the Speaker of the National Assembly explaining the reasons for the delay in the tabling of the Budget of the Ingonyama Trust Board for 2022-23.

2.
2.

Membership of Committees (1) The following members have been nominated by their parties to serve on the Ad Hoc Joint Committee on Flood Disaster Relief and Recovery.
African National Congress Frolick, Mr CT Lesoma, Ms RMM Direko, Ms DR Mangcu, Mr LN Mbinqo-Gigaba, Ms BP Mashego, MR Malatji, Mr T [Alternate] Masiko, Ms FA [Alternate] 2 Joemat-Petterssen, Ms TM [Alternate] Magaxa, Mr KE [Alternate] Democratic Alliance Macpherson, Mr DW Hoosen, Mr MH Economic Freedom Fighters Mente, Ms V Inkatha Freedom Party Hlengwa, Mr M African Transformation Movement Zungula, Mr V United Democratic Movement Kwankwa, Mr NLS [Alternate] Freedom Front Plus Groenewald, Mr IM [Alternate] TABLINGS National Assembly and National Council of Provinces 1.
The Minister of Finance (a) Draft Conduct Standards on requirements relating to third party cell captive insurance business, including annexures 1, 2 and 3 in terms of the Financial Sector Regulation Act, 2017 (Act No 9 of 2017).

(b) The final draft of the amended Regulation 28 made in accordance with section 36(1)(bB) of the Pension Funds Act, 1956 (Act No 24 of 1956).

2.
2.

The Minister in The Presidency (a) Annual Report of the National Conventional Arms Control Committee (NCACC) for the year ended December 2021, tabled in terms of section 23(1)(c) of the National Conventional Arms Control Act, 2002 (Act No 41 of 2002).

3 COMMITTEE REPORTS National Assembly and National Council of Provinces 1.
REPORT BY THE JOINT COMMITTEE ON ETHICS AND MEMBERS’ INTERESTS ON THE 2021 REGISTER OF MEMBERS’ INTERESTS - LATE DISCLOSURES: CONTRAVENTION OF THE CODE OF ETHICAL CONDUCT AND DISCLOSURE OF MEMBERS’ INTERESTS: 1.
INTRODUCTION 1.1 Item 9.2.1 read with item 9.2.3 of the Code of Ethical Conduct and Disclosure of Members’ Interests (“the Code”) prescribes that Members of Parliament (Members) must disclose their registrable interests annually at a time determined by the Joint Committee on Ethics and Members’ Interests (“the Committee”).

1.2 Item 9.2.2 also states that if a Member has no registrable interests, a “nil” return must be submitted.
1.3 The due date for the 2021 disclosure of Members’ Interests was 30 November 2021.

1.4 Item 10.1.1.1 of the Code of Ethical Conduct and Disclosure of Members’ Interests provides as follows: “A member breaches the Code it the Member contravenes or fails to comply with the requirements of the provisions for disclosing interests.

1.5 Of the 454 Members who are required to submit their disclosures, 4 Members failed and/or neglected to submit their disclosures by the due date.
1.6 The Committee convened on 7 March 2022, 11 April 2022 and 9 May 2022 to discuss the late disclosures.

2.

LATE DISCLOSURES 2.1 HON.

ELPHAS BUTHELEZI,MP 2.1.1 The Member submitted the disclosure of interests form on 02 December 2021.

2.1.2 A letter was addressed to the Member on 18 March 2022, to which the Member replied.

4 2.1.3 The Member indicates that according to his recollection, he submitted his forms on time.

It was then brought to his attention that his form was incomplete.
2.1.4 Once it was brought to his attention that his forms were incomplete he duly completed the forms and submitted it.

2.1.5 The Member apologised and indicated that it was an honest omission from his side.

He asked that the Committee view his late submission as an honest mistake.

2.1.6 On 11 April 2022 the Committee found that the Member breached item 10.1.1.1 of the Code.

2.1.7 The Member was afforded an opportunity to provide written representations on the sanction to be imposed.
2.1.8 The Member expressed that his late disclosure was not meant as disrespect.

He also stated that he was honest in his submission and requests that the Committee consider a reprimand in the House as opposed to a harsher sanction.

2.1.9 The Committee noted the representations.


2.1.10 RECOMMENDATION: The Joint Committee recommends to the House to impose a penalty in terms of item 10.7.7.1 (i) of the Code, which provides as follows: “The Committee must recommend the imposition of one or more of the following penalties where a Member breached clauses 10.1.1.1 … of this Code (i) A reprimand in the House;” 2.2 HON.

MKHULEKO HLENGWA, MP 2.2.1 The Member submitted a disclosure of interests form on 09 December 2021.
2.2.2 A letter was addressed to the Member on 18 March 2022, to which the Member replied.

5 2.2.3 The Member indicates the late disclosure was due to an administrative error by staff who are assigned to attend to his Parliamentary administrative function.

He does state that this does not absolve him from responsibility in ensuring that his disclosure is submitted.

2.2.4 The Member apologises for his late disclosure.
He indicates that he respects the work of the Committee in its administration of the Code and again apologised for the late disclosure.

2.2.5 On 11 April 2022 the Committee found that the Member breached item 10.1.1.1 of the Code.

2.2.6 The Member was afforded an opportunity to provide written representations on the sanction to be imposed.

2.2.7 The Member stated that he accepts responsibility for the late submission.
2.2.8 He requests that the Committee consider a sanction in terms of item 10.7.7.1(iii) of the Code, which provides for a reduction of salary not exceeding 30 days.

2.2.9 The Member apologised sincerely and indicated that the late submission was not deliberate.

2.2.10 The Committee noted the representations.


2.2.11 RECOMMENDATION The Joint Committee recommends to the House to impose a penalty in terms of item 10.7.7.1 (i) of the Code, which provides as follows: “The Committee must recommend the imposition of one or more of the following penalties where a Member breached clauses 10.1.1.1 … of this Code (ii) A reprimand in the House;” 2.3 HON.

PONANI MAKHUBELE, MP 2.3.1 The Member submitted a disclosure of interests form on 07 December 2021.
2.3.2 A letter was addressed to the Member on 18 March 2022, to which the Member replied.

6 2.3.3 The Member indicates that the forms were emailed to an email address which she no longer uses and that the email was directed to a spam folder.

2.3.4 When she discovered the email in her spam folder she asked the office to email it to her closer to the deadline.

2.3.5 When she received the email she completed the forms and emailed it, but there was a delay in the transmission of the email on her side.
2.3.6 The Member acknowledges that she was wrong in submitting her forms late.

She expresses the sentiment that her future disclosures will be given her utmost priority.

2.3.7 On 11 April 2022 the Committee found that the Member breached item 10.1.1 of the Code.

2.3.8 The Member was afforded an opportunity to provide written representations on the sanction to be imposed.

2.3.9 The Member indicated that she accepts the decision of the Committee and would like to tender a heartfelt apology.
2.3.10 She requests that the Committee consider the fact that she is a first time offender.

She confirmed that she has taken steps to ensure that she does not submit her disclosure forms late gain.

2.3.11 The Member requested that the Committee consider a reprimand in the House.

2.3.12 The Committee noted the representations.


2.3.13 RECOMMENDATION The Joint Committee recommends to the House to impose a penalty in terms of item 10.7.7.1 (i) of the Code, which provides as follows: “The Committee must recommend the imposition of one or more of the following penalties where a Member breached clauses 10.1.1.1 … of this Code (iii) A reprimand in the House;” 2.4 HON.

BRENDA MATHEVULA, MP 7 2.4.1 The Member submitted a disclosure of interests form on 01 December 2021 in pdf format.
2.4.2 A letter was addressed to the Member on 18 March 2022, to which the Member replied via email.

2.4.3 The Member indicates that the forms were emailed in pdf format and then she was alerted to the fact to submit in the proper format.

The member then submitted again but the email didn’t go through because of the power failure in the area.

2.4.4 The Office records show that the first email with the PDF document is dated 1 December 2021, i.e.

after the deadline.
after the deadline.

2.4.5 On 11 April 2022 the Committee found that the Member breached item 10.1.1.1 of the Code.

2.4.6 The Member was afforded an opportunity to provide written representations on the sanction to be imposed.

2.4.7 The Member did not provide any representations on the sanction to be imposed.

However, the Committee noted that the Member is on approved leave for the period 22 February 2022 to 22 June 2022 as per the NCOP House resolution of 9 March 2022.
2.4.8 RECOMMENDATION The Joint Committee recommends to the House to impose a penalty in terms of item 10.7.7.1 (i) of the Code, which provides as follows: “The Committee must recommend the imposition of one or more of the following penalties where a Member breached clauses 10.1.1.1 … of this Code (iv) A reprimand in the House;” Report to be considered BEKIZWE SIMON NKOSI MOJI LYDIA MOSHODI CO-CHAIRPERSONS OF THE JOINT COMMITTEEE ON ETHICS AND MEMBERS’ INTERESTS 8 National Assembly 1.
Report of the Portfolio Committee on Justice and Correctional Services on the Annual Performance Plan for 2022/23 of the Office of the Chief Justice and Vote 27: Office of the Chief Justice, dated 11 May 2022 The Portfolio Committee on Justice and Correctional Services, having considered the Annual Performance Plan for 2022/23 of the Office of the Chief Justice and Vote 27: Office of the Chief Justice, reports as follows: 1.

Context 1.1.
Context 1.1.

On 3 May 2022, the Minister of Justice and Correctional Services addressed the Committee on the political priorities relevant to the mandate of the Office of the Chief Justice (OCJ).

The Minister’s speech is available from the Committee Secretariat, as well as on the Department of Justice and Constitutional Development’s website.

1.2.

The OCJ presented its Annual Performance Plan 2022/23 and budget for the 2022 MTEF on 3 May 2022.
The presentation is available from the Committee Secretariat.

1.3.

The meeting took place on the Zoom virtual platform.

2.

Policy overview 2.1.

Fiscal Policy 2.1.1.

Medium‐term fiscal policy remains focused on reducing the budget deficit and stabilising the debt‐to‐GDP ratio.
Although Government has attempted to slow expenditure growth by reducing baseline budgets and 1 9 setting ceilings on compensation spending, the gap between revenue and expenditure has widened, increasing pressure on basic service delivery.

2.1.2.

The 2022 Budget is the second main budget to be tabled since the onset of the Covid-19 pandemic.

Allocations over the MTEF period respond directly to the effects of the pandemic while aiming to grow the economy.

2.1.3.
2.1.3.

The Peace and Security function, of which the OCJ is a part, accounts for approximately 12% of government’s consolidated expenditure.

The function is allocated R220.7 billion in 2022/23, R217.0 billion in 2023/24 and R226.6 billion in 2024/25; and accounts for 12% of consolidated government expenditure.

2.1.4.

Notably spending on Peace and Security has declined on average by - 8.5% between 2012/13 and 2021/22 and will continue to decrease over the 2022 MTEF by -3.1%.
As most departments falling in this function are labour intensive (the OCJ included), spending reductions largely affect personnel.

2.1.5.

The function’s baseline is increased by R15 billion over the MTEF period, from R645.4 to R660.4 billion.

The R15 billion net increase includes R12.4 billion for compensation of employees’ budgets within the function.

2.2.

Overview of the Vote for the 2022 MTEF 2.2.1.


The OCJ is allocated R2.38 billion in 2022/23, compared with R2.33 billion in 2021/22 (adjusted down from R2.45 billion).

The budget is expected to increase over the MTEF to R2.36 billion in 2023/24 and R2.46 billion in 2024/25.

2 10 2.2.2.

The allocation for programmes is R1.27 billion or 52.5% of the total allocation, while the remaining amount of R1.12 billion comprises the direct charge for Judges’ salaries.

2.2.3.
2.2.3.

In terms of economic classification, an amount of R1.77 billion is allocated to compensation of employees, R371.9 million to good and services, R135.8 million to transfers and subsidies and R112 million for purchase of capital assets.
Budget allocation per programme 2022 MTEF Programme Adjusted MTEF Average Appropriation 2022/23 2023/24 2024/25 Expenditure/ 2021/22 R million Administration Superior Court 246.2 937.0 255.7 260.6 958.8 919.4 271.9 961.0 Total % 2021/22- 2024/25 10.8% 39.5% Services Judicial Education and Support Subtotal 58.6 51.4 52.9 55.4 ‐ 2.3% 1 241.8 1 265.8 1 232.9 1 288.3 52.5% Judges’ Salaries Total 1 118.4 2 360.2 1 122.6 1 124.7 1 175.2 47.5% 2 388.4 2 357.6 2 463.5 100.0% Changes to 2021 29.9 39.9 0 - - Budget Estimate Budget allocation per economic classification 2022 MTEF 3 11 Economic Adjusted MTEF Average Classification Appropriation 2022/23 2023/24 2024/25 Expenditure/ 2021/22 R’ million Total % 2021/22- 2024/25 Compensation 1 779.9 1 768.6 1 740.7 1 818.9 74.3% of employees (including Judges’ remuneration) Good and 337.8 371.9 365.2 381.6 15.2% services Transfers and 133.6 135.8 136.5 142.6 5.7% subsidies Payments for 108.9 112.0 115.2 120.4 4.8% capital assets Total 2 360.2 2 388.4 2 357.6 2 463.5 100.0% 2.3.
Strategic and annual planning 2.3.1.

The OCJ’s core function is that of providing administrative support to the judiciary and has adopted the following strategic outcomes: • Effective and efficient administrative support.

• Improved court efficiency.

• Enhanced judicial education and support.

2.3.2.


In this way, the OCJ responds to Chapter 14 of the National Development Plan ‘Promoting accountability and fighting corruption’, particularly contributing to the focal area ‘strengthen judicial governance and the rule of law’ by: • Accelerating reforms to implement a judiciary-led court administration.

• Ensuring an efficient court system.

4 12 • Reducing inefficiencies in the administration of the courts.

• Ensuring access to justice.

2.3.3.


The Medium Term Strategic Framework (MTSF) 2019 – 2024 acknowledges that the challenges of poverty, inequality and unemployment continue to hold back national development.

To address these challenges, the MTSF identifies a number of priority areas, including ‘A capable, ethical and developmental state’ and ‘Social cohesion and safe communities’.
The MTSF also recognizes the lack of access to resources and opportunity for Women, Youth and People with Disabilities as cross-cutting, requiring a variety of interventions.

2.3.4.

Implementation of the MTSF 2019-2024 was disrupted by the outbreak of the Covid-19 pandemic and the declaration of a National State of Disaster on the 15 March 2020.
As a result, the MTSF has been revised to include the following critical interventions: to defeat the coronavirus pandemic; to accelerate economic recovery; to implement economic reforms to create sustainable jobs and drive inclusive growth; and to fight corruption and strengthen the capacity of the state.

These commitments will provide the focus for annual plans.

2.3.5.
2.3.5.

The OCJ plans to contribute to the revised MTSF priorities as follows: • ‘Priority 1: A capable, ethical and developmental State’ by: Ø Promoting an ethical culture.

Ø Integrating ‘Batho Pele’ principles into the Department’s institutional culture.

Ø Adherence to corporate governance principles such as leadership, strategy and performance, and risk and stakeholders’ management.

Ø Improved court systems.

Ø Modernisation of the court processes and systems.
• ‘Priority 2: Economic transformation and job creation’ by implementing equity programmes targeting employment and empowerment of youth, women, and people with disabilities in both its recruitment and procurement processes.

5 13 • ‘Priority 6: ‘Social cohesion and safe communities’, by ensuring access to a safe and secure court environment and improving the integrity of court processes/ outcomes, as well as capacitating/ resourcing the courts in order for them execute their mandate.

2.3.6.
2.3.6.

Specifically, the OCJ’s Annual Performance Plan 2022/23 aims to: • Support the Chief Justice in ensuring judicial accountability.

• Implement initiatives that contribute to broadening and improving access to justice and services of the Superior Courts.

• Ensure an efficient court system and provide judicial support.

• Reduce inefficiencies in court administration through modernised systems, processes and infrastructure.

• Implement measures that are intended to address the impact of COVID- 19.
2.3.7.

In addition, the 2022 APP reflects the following medium term strategic focus areas: • Strengthening capacity for ensuring business continuity management.

• Ensuring that ICT remains a strategic partner to Business.

• Curbing opportunities for fraud and corruption.

• Promoting professional ethics within the organisation.

• • Improving the OCJ’s capacity with more focus on the core business.

Implementing health and wellness programmes.

• Ensuring occupational health and safety.


• Training of Judicial Officers.

2.4.

Aligning planning with expenditure 2.4.1.

Over the MTEF period, the OCJ will focus on improving access to justice and the services of the superior courts, increasing access to judicial education courses, and implementing initiatives to address the impact of Covid-19: 6 14 2.4.2.
In terms of economic classification, compensation of employees is the largest cost driver, accounting for an estimated 74.3% of its total budget over the medium term.

However, the number of personnel is to decline over the medium term from 2 481 in 2021 to 2416 in 2024/25.

In 2022/23, the number of personnel decreases by 56 to 2425.

2.4.3.

At programme level, • Under Administration: Ø The approved ICT Strategy is in place.
ICT infrastructure upgrades are expected to cost R22.4 million over the medium term.

Ø During 2022/23 the OCJ will continue with digitisation of the court system, with a focus on prioritisation of Court Online and the digitisation of court records, as well as the e-Judiciary system.

Ø The fight against fraud and corruption will be intensified and the fraud prevention and anti-corruption policy is in place.
• Under Superior Court Services: To strengthen access to its services, the Department plans to employ 5 researchers and 19 registrars over the period ahead.

This additional capacity will enable it to increase the percentage of default judgments finalised within 14 days and ensure that all warrants of release are delivered within 1 day of being issued.

Funding for these initiatives is with the Superior Court Services programme’s allocation of R2.8 billion over the MTEF period.
• Under Judicial Education and Support: Activities in the South African Judicial Education Institute sub-programme in the Judicial Education and Support programme will continue to centre on providing education and training through virtual platforms, with the number of courses provided set to increase from 105 in 2021/22 to 120 in 2024/25.

As a result of this shift away from physical venues, expenditure in this sub-programme will decrease from R34.7 million in 2021/22 to R30.9 million in 2024/25.
However, related ICT infrastructure upgrades are expected to cost R22.4 million over the same period.

Similarly, with the increasing demand for virtual meetings and other event streaming services, estimated spending in 7 15 the Corporate Services subprogramme in the Administration programme is expected to increase from R151.9 million in 2021/22 to R173.9 million in 2024/25.

2.5.

Risks and mitigation strategies 2.5.1.


The OCJ has updated its key risks and mitigation strategies for 2022/23 as follows: Risks and mitigation strategies 2022/23 RISKS MITIGATION Outcome: Effective and efficient administrative support Possible exposure to fraud and corruption.

• Continuous awareness of policies.


[Possible exposure to fraud and corruption due • Strengthen internal controls to the increasing economic pressures and the relating to financial subversion of the current controls in place management and court order resulting in increased opportunity for fraud and processes.

corruption.

The OCJ might not be able to • Monitor the implementation timeously prevent and detect the complex fraud of fraud prevention and anti- and corruption incidents.]

corruption strategy.


Delays in the implementation of the Court • Reinforce stakeholder Online system due to external dependencies.

relations to ensure commitment to project resourcing.

Possible cyber and information security • Accelerate incidents (breaches and hacking).

implementation of the the Information Security Management programme.

• Conduct network and vulnerability audits.

• Establishment of the Threat and Vulnerability 8 16 RISKS MITIGATION Management programme.
Inability to fully capacitate the OCJ to operate • Reprioritization of resources in the new normal.

to implement the new way of doing business.

[The OCJ does not have adequate resources • Skills capacitation to operate (skills and budget for the tools of trade) to in the new normal.

implement alternative/new business model.

• Implement and monitor Implementation of the budget cuts affect the compliance to the COVID- adequate provisioning of required tools of trade.

19 regulations.
19 regulations.

The OCJ does not have adequate skills sets to • Deep cleaning and operate in the new normal.

Possible COVID-19 infections and spread among employees and/or members of the public which could result in services not been rendered sanitisation of the affected area at the courts and National Office after the confirmed cases were due to limited staff and/or resources.]

reported.
reported.

Outcome: Improved court efficiency Inadequate administrative support to ensure • Prioritise the appointment court efficiency of registrars.

• Continuous training of registrars.

Outcome: Enhanced judicial performance Inadequate resources to conduct judicial • Implementation of the education and provide support virtual and e-learning module for Judicial Education.

3.

Programmes 3.1.

Programme 1: Administration 9 17 3.1.1.


The purpose of this programme is to provide strategic leadership, management and support services to the Department.

The programme consists of the following sub-programmes: • The Management subprogramme, which provides administrative, planning, monitoring, evaluation, performance reporting and risk management functions necessary to ensure effective functioning of the Department.
• The Corporate Services sub-programme, which provides an integrated Human Resources Management (HRM), Information and Communication Technology (ICT) and Security Management Support Services to the Department.

• The Finance Administration subprogramme, which provides overall financial, asset and supply chain management services to the Judiciary and the Department.

• The Internal Audit and Risk Management sub-programme, which provides overall internal audit and forensic audit services to the Department.
• The Office Accommodation sub-programme, which provides for the acquisition of office accommodation.

3.1.2.
Output indicators and targets are as follows: Administration: Output indicators and annual targets Output Indicator Annual Targets Outcome: Effective and efficient administrative support 2021/22 2022/23 2023/24 2024/25 Audit outcome for the OCJ Clean audit Clean audit Clean audit Clean audit outcome outcome outcome outcome Percentage of designated 100% 100% 100% 100% employees who submitted financial disclosures within timeframes 10 18 Output Indicator Annual Targets 2021/22 2022/23 2023/24 2024/25 Percentage of funded vacant 10% or 10% or 10% or 10% or posts on PERSAL per year Percentage of staff in the lower 30% lower 30% lower 30% lower 30% department comprised of youth Percentage of women 50% 50% 50% 50% representation in Senior Management Service (SMS) Percentage of people with 2% 2% 2% 2% disabilities representation in the department Court online system implemented at service centres Number of Employee health and wellness programmes implemented Percentage of fraud cases investigated within 60 working days Number of Fraud Prevention and Anti-Corruption awareness sessions conducted 2 9 - - 5 9 5 9 11 9 75% 75% 75% 25 25 25 Percentage of tenders awarded 80% 80% 80% 80% to suppliers with level 4 and above BBBEE status 3.1.3.
The OCJ has the following COVID-19 related indicators and targets for 2021/22; Administration: COVID-19 related indicators and targets 2022/23 11 19 Output indicator Estimated Target performance 2022/23 2021/22 Number of COVID-19 OHS inspections conducted at OCJ Number of COVID-19 awareness programmes implemented Number of COVID-19 related trainings conducted for safety officers Number of COVID-19 compliance reports produced Number of COVID-19 risk mitigation reports produced 3.1.4.
Planned expenditure: 4 4 4 4 4 4 4 4 4 4 • The Administration programme is allocated R255.7 million in 2022/23 (compared with an adjusted budget of R246.2 million in 2021/22), R260.6 million in 2023/24 and R271.9 million in 2024/25.

• Expenditure in the Corporate Services sub-programme in the Administration programme is expected to increase from R151.9 million in 2021/22 to R173.9 million in 2024/25.
This is to improve data management by implementing an electronic filing system that will allow cases and evidence to be accessed more easily, and cloud- based software that enables evidence to be digitised in court to streamline court proceedings.

Implementing these systems forms part of the broader implementation of the integrated criminal justice strategy led by the Justice Department.
By modernising systems and processes, the OCJ aims to increase its capacity to ensure that court services are more widely available and improve their quality.

• The number of personnel in Programme 1 is expected to decrease from 163 in 2021/22, at a cost of R111.6 million to 151 in 2024/25, at a cost of R105.9 million.

The decrease in personnel is as result of 12 20 financial constraints that will prevent identified posts from being filled as they become vacant.

3.2.
3.2.

Programme 2: Superior Court Services 3.2.1.

This programme provides judicial support and court administration services to the Superior Courts.

The programme consists of the following sub-programmes: • The Administration of Superior Courts subprogramme provides administrative and technical support to the Superior Courts, monitors the overall performance of the Superior Courts, and enhances judicial stakeholder relations.
• The Constitutional Court subprogramme funds the activities and operations of the Constitutional Court.

• The Supreme Court of Appeal subprogramme funds the activities and operations of the Supreme Court of Appeal.

• The High Courts’ subprogramme funds the activities and operations of the various high court divisions.

• The Specialized Courts subprogramme funds the activities and operations of the labour, land, electoral and competition courts.

3.2.2.
3.2.2.

All performance indicators and targets that address court performance were removed, leaving only those that relate to quasi-judicial performance and support to the Superior Courts.
Output indicators and annual targets are as follows: Superior Court Services – Output indicators and annual targets Output Indicator Medium Term Targets 2021/22 2022/23 2023/24 2024/25 Outcome: Improved court efficiency Percentage of default judgments 72% 74% 76% 78% finalised by Registrars within 14 13 21 Output Indicator Medium Term Targets 2021/22 2022/23 2023/24 2024/25 days Percentage of taxation of legal costs 75% 80% 85% 90% finalised within 60 days from date of set down Percentage of warrants of release 100% 100% 100% 100% delivered within one day of release granted No.
of monitoring reports on Court Order integrity produced Number of Judicial Case Flow Management Performance reports produced Number of reports on enhancement of court order integrity produced 3.2.3.

Planned expenditure 4 4 4 4 4 4 4 4 4 4 4 4 • The Superior Courts Services programme is allocated R958.8 million in 2022/23 (compared with an adjusted budget of R937.0 in 2021/22); R919.4 million in 2023/24; and R961.0 million in 2024/25.
• The increase in the expenditure for this programme is mainly due to an increase of the capital allocation to meet the cost requirements of the Judges’ vehicles.

• Due to the labour-intensive nature of the Department’s work, an estimated 67.8% (R 1.9 billion over the MTEF) of the budget in this programme is earmarked for spending on compensation of employees, increasing from R648.2 million in 2022/23 to R651.7 million in 2024/25.
14 22 • The number of personnel in Programme 2 is expected to decrease from 2 010 in 2021/22 at the cost of R653.7 million to 1 682 in 2024/25 at the cost of R651.7 million.

• The roll-out and implementation of the Court Online system, as well as modernisation of court processes will play a key role in ensuring that the decrease in the number of personnel does not impact on the provision of services, as well as increasing access to justice for all.

3.3.

Programme 3: Judicial Education and Support 3.3.1.


Judicial Education and Support provides education programmes to Judicial Officers, including policy development and research services for the optimal administration of justice.

3.3.2.

The programme has the following sub-programmes: • The South African Judicial Education Institute sub-programme funds the activities of the SAJEI to provide training for Judicial Officers.
• The Judicial Policy, Research and Support sub-programme funds the provision of advisory opinions on policy development and regulatory services to the Judiciary and the Department.

• The Judicial Service Commission subprogramme provides secretariat and administrative support services to the Judicial Service Commission to perform its constitutional and legislative mandates effectively.

3.3.3.
3.3.3.

Output indicators and targets are as follows: Judicial Education and Support – Output indicators and annual targets Output Indicator Annual Targets No.

of judicial education courses conducted 105 110 115 120 2021/22 2022/23 2023/24 2024/25 15 23 Output Indicator Annual Targets 2021/22 2022/23 2023/24 2024/25 2 4 3 - 2 5 3 2 2 5 3 2 2 5 3 2 No.

of research monographs for Judicial Education produced per year No.

of litigation reports produced No.


of reports on judicial appointments and judicial complaints produced Number of reports on the status of disclosures for Judges Registrable Interests produced 3.3.4.

Planned expenditure: • The Judicial Education and Support programme is allocated R52.1 million for 2022/23 (compared with an adjusted budget of R58.6 million in 2021/22); R53.2 million in 2023/24; and R55.7 million in 2024/25.
The spending focus for this programme remains on conducting training for judicial officers.

• The number of personnel for Programme 3 is expected to increase from 42 officials, at the cost of R26.9 million, to 51 officials in 2024/25 at the cost of R27 million.

4.

2021 Budgetary Review and Recommendation Report (BRRR) 4.1.

In its 2021 BRRR, the Committee observed the following: • The Committee commended the OCJ on maintaining its clean audit opinion.
The Committee also commended the OCJ on its strong governance, noting sound management of problems when they occur.

• Transfer of functions to the OCJ.

The Committee noted the lack of progress in drafting the legislation and finalising a court administration model that will allow for functions presently 16 24 undertaken by the Department of Justice and Constitutional Development (such as security services at the courts) to the OCJ.

• ICT security.
• ICT security.

The Committee noted inadequacies in ICT security and user access management, as well as ICT operational inefficiencies as areas for concern.

The OCJ assured the Committee that it takes ICT security very seriously and is working hard to strengthen its ICT environment.

• Court modernisation.


The Committee noted that the OCJ reports that it was unable in 2020/21 to roll out the court online system at two service centres as planned because of the pandemic, as well as because of system failures as a result of the security breach in September 2020.

In addition, the project to refresh the ICT infrastructure was delayed as a result of the non-responsiveness of the market at the stage of sourcing/tenders.
However, there has been progress since: user equipment has been overhauled, licences have been procured, there is Wi-Fi at courts for judges and officials, the bandwidth has been increased, etc.

and rollout of the CaseLines solution is in progress.

• Employment of persons with disabilities.

The Committee noted that the OCJ has not been able to achieve its employment targets for persons with disabilities.

5.

Committee’s observations 5.1.


Judicial governance and court administration model and single judiciary.

The Committee welcomes the Minister’s announcement that he intends, at long last, to introduce legislation to replace the Magistrates’ Courts Act, 1944, and the Magistrates Act, 1993, towards the establishment of a single judiciary, as well as take the Executive’s response to the Judiciary’s proposal concerning a judicial governance and court administration model to Cabinet in this financial year.
The Committee urges the Minister to introduce these as a matter of urgency.

Not only is the establishment of a single judiciary a constitutional 17 25 imperative but also the lack of an appropriate policy and legislative framework contributes to the many inefficiencies and other challenges that our judicial system experiences.

.

5.2.

Infrastructure and maintenance.


During its recent oversight visits to several superior and magistrate’s courts, the Committee witnessed first- hand very serious infrastructure and maintenance problems.

As many of our court buildings are very old, the failure to maintain them quickly becomes a refurbishment/renovation project.
Leaking roofs that remain unfixed, ceilings that must be replaced, broken air-conditioning, water shortages and the lack of or inadequate generators are only some of the infrastructure-related difficulties that undermine the efficient running of court matters.

At the Supreme Court of Appeal (SCA), for example, the generator is only able to light the corridors during outages and load shedding.

As the courtrooms do not have windows, it is impossible for matters to be heard when the electricity is off.
This makes mockery of the right of access to justice.

The Committee is aware that, as the infrastructure budget is with the Department of Justice and Constitutional Development, the OCJ has the challenging role of liaison between the Judiciary, the Department of Public Works and Infrastructure and the Justice Department.
The Committee, however, notes that the OCJ’s assurances that the challenges were raised at the SCA are being attended to but is concerned that it would seem that action is finally being taken only after the Judiciary had raised its complaints about court conditions with the Committee.

5.3.

Court modernisation through ICT solutions.


The Committee notes that during 2022/23 the OCJ will continue with ICT related initiatives to modernise the court system, prioritising the further roll out of Court Online in the Superior Courts and the digitisation of court records.

We have repeatedly supported ICT solutions as a way of making our judicial system more effective and, finally, more accessible.
However, given our observation of the deplorable conditions at many courts, we question 18 26 whether investment in technology can have the desired outcome and impact unless necessary attention is also given to ensuring that our courts have access to the basics, such as running water and electricity when there are outages.

5.4.

Tools of trade.

The Committee notes the Judiciary’s complaint that tools of trade, such as laptops, are bought without consulting the affected judges about their needs.
The Committee acknowledges the OCJ’s explanation that the laptops in question were bought because they have the right specifications to allow for working virtually.

Furthermore, the OCJ did not buy the laptops: these were bought through SITA making use of transversal contracts although the OCJ provided the specifications.

Also, the Judiciary has a committee that looks specifically at ICT.
Still, it seems that there is a perception among the judiciary that the executive does not consult and this is causing some unhappiness.

The Committee suggests that the OCJ pay greater attention to improving its communication with the Judiciary at all levels so that those who will be affected are brought on board from a very early stage.

5.5.

Case backlogs.

The Committee remains extremely concerned about the increased number of backlog cases.
There is justifiable concern that the increased case backlogs may eventually overwhelm the legal system, undermining the right of access to justice.

The Committee acknowledges that the OCJ is unable to provide an input on the backlogs, as court performance lies with the Chief Justice and Heads of Court.

5.6.

Capacity.

We have observed repeatedly that our courts need enough capacity to efficiently deliver court services in line with the standards and the court rules.
At present, the OCJ has a staff shortage but there are no funds available to employ additional staff.

Consequently, when vacancies arise, posts that support core business are prioritised.

However, with greater automation of court processes, personnel will be freed up for deployment elsewhere in the organisation.

19 27 5.7.

Storage of court records.

A lack of space makes storing old court files very challenging.
The implementation of the Court Online solution will assist going forward but does not address the challenge of storing older records.

The Committee notes that the OCJ has made a submission to the IJS for funding to assist with the digitisation of old court records and supports this.

6.

Appreciation 6.1.

The Committee wishes to thank the Minister of Justice and Correctional Services, Mr R Lamola, and the Deputy Ministers: Mr J Jeffery and InKosi Patekile Holomisa, for the political overview.

6.2.
6.2.

The Committee also wishes to extend its appreciation to the Secretary- General, Ms M Sejosengwe, and the officials of the OCJ for their assistance in this process.

7.

Recommendations 7.1.

The Committee, having considered the Office of the Chief Justice’s Annual Performance Plan 2022/23, recommends to the House that it be approved.

7.2.

The Committee, having considered the Budget Vote 27: Office of the Chief Justice and Judicial Administration, recommends to the House that it be approved.
20 28 Report to be considered 21 29 2.

REPORT OF THE PORTFOLIO COMMITTEE ON JUSTICE AND CORRECTIONAL SERVICES ON BUDGET VOTE 22: CORRECTIONAL SERVICES, DATED 11 MAY 2022 1.

INTRODUCTION 1.1.

The Committee received a political overview by the Minister of Justice and Correctional Services, Mr Ronald Lamola, on 03 May 2022, who was accompanied by the two Deputy Ministers, Inkosi Phathekile Holomisa (Correctional Services) and Mr. John Jeffery (Justice and Constitutional Development).
This briefing took place by way of a virtual platform.

1.2.

The Department of Correctional Services and the Judicial Inspectorate for Correctional Services presented their Annual Plans and their Budget allocations for 2022/23 financial year on 04 May 2022.

The briefings also took place by way of a virtual platform.

1.3.

The DCS’s mandate is derived from the Correctional Services Act (No.
111 of 1998), as well as the White Paper on Correctional Services (2005) and the White Paper on Remand Detention Management in South Africa (2014).

The legislation and policies inform all the efforts towards achieving the safe and human detention of offenders and remand detainees, rehabilitation and social reintegration into the community.

1.4.
1.4.

The DCS’s planning documents are also informed by the government-wide Medium-Term Strategic Framework (MTSF) 2020-25, which is geared towards the implementation of the National Development Plan’s Vision 2030 (NDP).

2.

POLITICAL OVERVIEW BY THE MINISTER OF JUSTICE AND CORRECTIONAL SERVICES 1 30 2.1.
The Minister indicated that, during the devastating floods in Kwa-Zulu Natal, inmates, through the Department of Correctional Services’ Self Sufficiency and Sustainability Model, contributed towards the social relief efforts.

The Department of Correctional Services donated vegetables, eggs, meat, milk and bread to needy families who were affected by the floods.

2.2.
2.2.

The Minister also reported that the Department of Correctional Services will be implementing a new programme that will extend correctional and rehabilitation programmes to Remand Detainees who spend more than two months in remand facilities.

2.3.

The Department of Correctional Services has been able to take off items such as eggs and pork on their procurement lists in the past financial year and more items will be added to these lists as a result of implementation of Self-Sufficiency.
The Minister also indicated that DCS’ workshops have been capacitated with latest technology to enable them to produce inmate uniform, staff uniform and shoes in large quantities.

2.4.

The Minister has also reported that, the national Treasury has approved 100% retention of revenue generated by the Department of Correctional Services through Self-Sufficiency and these funds will be reinvested towards programmes contributing to Self-Sufficiency.

2.5.
2.5.

With regard to the two PPPs, the Minister indicated that, the department will not be renewing the two contracts when they lapse, instead they will take over the running of the two facilities.

2.6.

The Minister also reported on his meeting with the Minister of Public Works and Infrastructure to look at ways in which, through offender labour, they can respond to minor maintenance at courts like installation of ramps for people living with disabilities, cleaning and minor renovations.

2.7.
2.7.

In dealing with corruption, the Minister indicated that the Department of Correctional Services is intensifying its campaigns and processes to systematically and 2 31 comprehensively prevent corruption and mismanagement, as well as ensure consequence management.

2.7.1.

The Minister committed, in working towards ensuring that all departments and entities under the Ministry of Justice and Correctional Service meet their objectives.

3.

DEPARTMENT OF CORRECTIONAL SERVICES’ STRATEGIC GOALS 3.1.
The DCS’s mission is to contribute to a just, peaceful and safer South Africa through the effective and humane incarceration of inmates, and the rehabilitation and social reintegration of offenders.

The DCS is committed to playing its role to ensure that the MTSF and the NDP’s strategic outcomes are achieved.

The overarching goal is to build a safer South Africa where all people are and feel safe.

3.2.
3.2.

To this end the DCS has identified the following three focus area for 2022/23 financial year: • • • Implementation of the Self-Sufficiency and Strategy Providing adequate security at correctional centres, and Facilitation of Restorative Justice.

4.

OVERVIEW OF THE DCS BUDGET: 2022/23 4.1.

The DCS will receive R26.1 billion in 2022/23.

This is an increase of 0.64% or R165.4 million from 2021/22.

The allocation is projected to increase to R26.7 billion over the medium term (2024/25).
Of the total allocation for 2022/23, 68.5% (or R17.8 billion) goes towards Compensation of Employees.
TABLE 1: SUMMARY OF ALLOCATION FOR 2018/19-2024/25 Programmes 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 R’000 Audited Audited Audited Adjusted Medium Medium Medium outcome outcome outcome appropriation term term term estimates estimates estimates Administration 4, 334.5 4,925,0 4,709.2 4,497.1 4,679,1 4,570,8 4,771.2 Incarceration 14,468.9 15,189.8 14,973.0 15,480.7 15,282.1 14,946.7 15,611,9 3 32 Rehabilitation 1,749,0 1,895.2 1,884,4 2,213,0 2,319,9 2,349,4 2,461.2 Care Social Reintegration Total expenditure 2,286.7 2,187,6 2,481,2 2,463,8 2,620,3 2,625,5 2,748.1 936,7 987,1 979,2 1,288.6 1,207,4 1,101,5 1,150,9 23,775.8 25,775,8 25,027,1 25,943,3 26,108,7 25,593,9 26,743,3 Source: Estimates of National Expenditure 2022 4.2.
The DCS budget is distributed across five programmes: Administration (R4.6 billion), Incarceration (R15.3 billion)), Rehabilitation (R2.3 billion), Care (R2.6 billion), and Social Reintegration (R1.2 billion).

4.3.

A combined 76 percent of the allocation goes towards the Administration and Incarceration programmes.

The Rehabilitation and Social Reintegration programmes together receive only 14 percent of the overall budget for 2022/23, while the Care programme receives 10 percent.

4.4.
4.4.

The Judicial Inspectorate of Correctional Services receives a transfer from the Vote of R78.7 million in 2022/23, R76.5 million in 2023/24 and R79.9 million in 2024/25.

5.

OVERVIEW OF ALLOCATION PER PROGRAMME 5.1.

PROGRAMME 1: ADMINISTRATION 5.1.1.


The Administration programme provides for the functions that underpin the DCS’s service delivery and comprises administrative, management, financial, information communication and technology, research, policy co-ordination and good governance support functions.
The sub-programmes under this programme are: Ministry, Judicial Inspectorate for Correctional Services (JICS), Management, Human Resources, Finance, Internal Audit, Information Technology, Assurance Services and Office Accommodation.

5.1.2.

An amount of R4.6 billion has been allocated to the Administration programme for the 2022/23 financial year.

This amounts to 18 percent of the total Departmental budget.

4 33 This is the second largest programme in the Department in terms of budget allocation.
This programme has been decreased by 4.05 percent or R182 million in nominal terms.

5.1.3.
5.1.3.

The allocation to sub-programmes, as percentage of the allocation to the Administration programme, is as follows: Finance - 26 percent or R1, 130.7 billion; Human Resources - 45 percent or R1,994.4 billion; Management – 19.5 percent or R858.5 million; Information Technology – 8.6 percent or R380.6 million; Assurance Services – 2.6 percent or R117.9 million; Office Accommodation – 2.2 percent or R100.6 million; and the Ministry – 1.8 percent or R21.6 million.
The Judicial Inspectorate for Correctional Services receives 1.8 percent or R78.7 million of the total allocation for the programme.

5.1.4.

In terms of the Annual Performance Plan, the department intends to have an unqualified audit opinion with reduced findings in the 2022/23 financial year.

The target for IIMS has been increased from 12% (in 2021/21) to 16% (in 2022/23).

The department also plans to have 20% of youth employed in the 2022/23 financial year.
Table 4: Programme 1: Administration Programme 1: Administration Sub- programmes Ministry Judicial Inspectorate for Correctional Services Management Human Resources Finance Assurance Services Information Technology Office Accommodation 2021/22 (R’000) 2022/23 (R’000) Nominal % changes Real % change Nominal Rand change Real Rand change 5 302.5 4 392.7 -17.16 -20.73 -909.8 -1 099.0 27.3 21.6 -20.88 -24.29 -5.7 -6.6 72.1 797.8 1 953.7 1 082.4 129.0 334.0 96.9 78.7 854.5 1 994.4 1 0130.7 117.9 380.6 100.6 5 3.42 7.11 2.08 4.48 -1.04 2.49 -2.31 -0.02 2.6 56.7 40.7 48.5 -0.8 19.9 -45.2 -02 -8.60 -12.54 -11.1 -16.2 13.95 -9.05 46.6 30.2 3.82 -0.65 3.7 0.6 34 5.2.
PROGRAMME 2: INCARCERATION 5.2.1.

The Incarceration programme provides for services and physical infrastructure that supports secure conditions of incarceration for inmates.

The Incarceration programme has four (4) sub-programmes.

5.2.2.

Being the largest DSC programme, the Incarceration programme is allocated an amount of R15, 282.1 billion for 2022/23, a decrease by 1.28 percent in nominal terms compared to the previous financial year.
The programme receives 58 percent of the total budget allocation to the Vote.

A total of 71.8 percent (R10, 981.3 billion) of the allocation for this programme goes towards Compensation of Employees.

5.2.3.

The largest allocation under this programme goes to the Security Operations sub- programme which received R8.35 billion, constituting 55 percent of the total allocation for the Incarceration programme.
In contrast, the Remand Detention sub- programme receives only R623.7 million or four percent of the total allocation to the programme and is the smallest sub-programme.

The allocation to the remaining sub- programmes is as follows: Facilities - R4 billion or 27 percent; Offender management - R2.1 billion or 14 percent.

5.2.4.
5.2.4.

For the 2022/23 financial year, the department plans to have less than 0.031% of escapes from their correctional facilities, and less than 4.55% of inmates injured as a result of assaults in correctional facilities.

The percentage of unnatural death is expected to be less than 0.32% in the 2022/23 financial year.
In terms of infrastructure projects, the department plans to complete only 1 infrastructure project in the current financial year and reduce overcrowding to less than 32% in the same period.
Table 5: Programme 2: Incarceration 6 35 2021/22 (R’000) 2022/23 (R’000) Nominal % changes Real % change Nominal Rand Change Real Rand change 15 480.7 15 282.1 -1.2857 -.52 231.7 -371.3 8 558.3 4 016.3 756.9 2 255.4 8 355.2 4 121.6 623.7 2 181.5 -2.37 2.62 -17.60 -3.28 -6.58 -1.80 -21.15 -7.44 -203.1 105.3 -132.2 -73.9 -562.9 -72.2 -160.1 -167.8 Programme 2: Incarceration Sub-programmes Security Operations Facilities Remand Detention Offender Management 5.3.
PROGRAMME 3: REHABILITATION 5.3.1 The Rehabilitation programme provides for needs-based programmes and interventions to facilitate offenders’ rehabilitation and eventual reintegration to society.

It comprises three sub-programmes: Correctional Programmes, Offender Development and Psychological, Social and Spiritual Services.

5.3.2 The Rehabilitation Programme is allocated an amount of R2.3 billion, receiving 9 percent of the overall allocation to the Vote.
A total of 73 percent (R1.7 billion) of the allocation to the programme is for Compensation of Employees.

In nominal terms, the programme receives an increase of 4.83 percent or a real increase of 0.32% in 2022/23.

5.3.3 In terms of the allocations to sub-programmes, the largest allocation is to Offender Development (R1 211.2 billion or 52 percent); Psychological, Social and Spiritual programme (R632 million or 27 percent); and Correctional programme (R476.6 million or 18 percent).
5.3.4 Under rehabilitation programmes, the department intends to have 80% of offenders with Correctional Sentence Plans who have completed correctional programmes in the current financial year.

In addition, 90% of offenders are expected to participate in Long Occupational Skills and 85% of offenders are expected to participate in the General Education and Training in the 2022/23 financial year.
Table 6: Programme 3: Rehabilitation 7 36 Programme 3:Rehabilitation Sub-programmes Correctional Programmes Offender Development Psychological, Social and Spiritual Services 2021/22 (R’000) 2022/23 (R’000) Nominal % Changes Real % change Nominal Rand change Real Rand change 2 213.0 2 319.9 4.83 0.32 106.9 7.0 462.5 1151.3 476.6 1 211.2 3.05 5.20 -1.39 0.67 14.1 59.9 -6.4 7.7 599.1 5632.0 5.49 0.95 32.9 5.7 5.4.

PROGRAMME 4: CARE 5.4.1.


The Care programme provides for needs-based programmes and services aimed at maintaining the personal well-being of offenders.

It comprises two sub-programmes; Nutritional Services and Health and Hygiene Services.

5.4.2.

The Care programme is allocated R2, 620.3 billion for 2022/23, which is an increase by 6.35 percent in nominal terms from 2021/22 allocation.

The real percentage change for this programme is 1.77 percent.
This programme comprise 10 percent of the total allocation to the Department in the 2022/23 financial year.

Compensation of employees takes up 46 percent (R1, 210.1 billion) of the total allocation to the programme.

5.4.3.

The bulk of the budget for the programme is allocated to the Nutritional Services sub- programme (R1, 334.2 billion).

The remaining amount (R1, 286.1 billion) is allocated to Health and Hygiene Services.

5.4.4.
5.4.4.

The target under care programme includes, having 12% of inmates benefitting from therapeutic diets, 90% of inmates screened for diabetes and 100% of identified inmates tested for COVID-19 in the 2022/23 financial year.
Table 7: Programme 4: Care Programme 2021/22 (R’000) 2022/23 (R’000) Nominal % changes Real % change Nominal Rand change Real Rand change Programme 4: Care 8 37 Sub-programmes Nutritional Services Health & Hygienic Services 2 562.4 2 620.3 6.35 1.77 156.5 43.7 1 247.4 1 334.2 6.96 2.35 86.8 29.3 1 216.4 1 286.1 5.73 1.18 69.7 14.3 5.5.

PROGRAMME 5: SOCIAL REINTEGRATION 5.5.1.


The Social Reintegration programme provides for services focussed on offenders’ preparation for release, for the effective supervision of parolees, and for offenders’ reintegration into society upon their release.

It comprises three sub-programmes: Supervision, Community Reintegration, and Office Accommodation (Community Corrections).

5.5.2.
5.5.2.

This programme has been allocated an amount of R1,207.4 billion for the 2022/23 financial year, which is a decrease of 6.30 per cent (or R81.2 million) as compared to the previous financial year.

This programme comprises only 5 percent of the total budget of the Department for this financial year.

An amount of R1,089.6 billion or 90% of programme’s budget is allocated to compensation of employees.

5.5.3.
5.5.3.

In terms of sub-programmes, the bulk of the allocation is directed towards Supervision (90%), followed by Community Reintegration (7%), and Office Accommodation: Community Corrections (3%).

5.5.4.

Under Social Reintegration, the targets include, having 97% of parolees not violating their parole conditions, 97% of probationers not violating their parole conditions, and creating 42 economic opportunities for offenders, parolees and probationers.
Table 8: Programme 5: Social Reintegration 2021/22 (R’000) 2022/23 (R’000) Nominal % Changes Real % change Nominal Rand change Real Rand change 1 288.6 1 207.4 -6.30 -10.34 -81.2 -133.2 Programme 5: Social Reintegration Sub-programmes 9 38 Supervision Community Reintegration Office Accommodation: Community Corrections 1 170.0 75.1 1 073.6 88.6 -8.94 17.98 -12.86 12.90 -105.4 13.5 -151.6 9.7 43.6 45.2 3.67 -0.79 1.6 -0.3 6.

COMMITTEE OBSERVATIONS AND RECOMMENDATIONS 6.1.


Self-sufficiency and Sustainability.

The Committee is pleased to hear that the Department was able to take off items such as eggs and pork on their procurement lists as a result of the implementation of Self-Sufficiency and Sustainability initiatives.

The Committee urges the Department to add more items on the lists in order to address the current budget constraints facing the department.
In addition, the Committee continues to urge the Department not only to limit Self-Sufficiency to revenue generation but to also increase the pool of offenders benefiting from skills development.

6.2.

Offender labour.


The Committee welcomes the report by the Minister on his meeting with the Minister of Public Works and Infrastructure to look at ways in which, through offender labour, they can respond to minor maintenance at courts like installation of ramps for people living with disabilities, cleaning and minor renovations.

The Committee would like to encourage the Minister to have more such initiatives with many other government departments and entities.

6.3.
6.3.

Target on people with disabilities.

The Committee is concerned about the low target of 0.3% set by the Department on employment of people living with disabilities while the national target is 2%.

The Department is encouraged to ensure that their targets are aligned with national targets where possible.

6.4.

Lack of official accommodation.

The Committee is concerned about the lack of official accommodation in the newly built Tzaneen Correctional Centre.
The Committee noted the response by the Department and request that alternative means are devised to address the lack of accommodation in this facility.

6.5.

PPP Correctional Centres.

The Committee welcomes the Department’s position not to renew the contract of the two PPP facilities when their contracts end.
The 10 39 Committee urges the Department of Correctional Services and Department of Public Works and Infrastructure to work closely together and develop maintenance plan for the two facilities to ensure that they remain in good conditions for years to come after the take-over by the Department.

6.6.

Integrated Inmates Management System.


The Committee is very much concerned that the target for IIMS has not been met although spending has been increasing over the years and the target for the current financial year has also increased.

The Committee urges the Department to ensure that there is alignment between sending and performance on IIMS and also ensure that this system is implemented in all centres countrywide.

6.7.

Infrastructure Projects.


The slow pace of infrastructure projects in the Department of Correctional Services has been a source of concern for the Committee for some time.

A number of projects have been delayed for several years including the Tzaneen Correctional Centre which was only officially opened in 2020 after more than 10 years since the project started.
The Committee is equally concerned about security systems that are not operational in a number of facilities including at Tzaneen and Grootvlei Correctional Centre.

The Committee urges the Department to ensure that this budget responds to security needs in correctional facilities to ensure safe and secure incarceration of inmates.

6.8.

Filling of vacancies.

The Committee has noted vacancies of GITO and that of the Regional Commissioner Eastern Cape.
The Committee believes that leadership stability is critical for service delivery in each of the two vacancies and therefore request the Minister and the Department to ensure that the two vacancies are filled within a reasonable period.

6.9.

Budget allocation to programmes.


The Committee continues to be concerned about the skewed allocation of the budget of the Department of Correctional Services in favors of Incarceration and Administration to the disadvantage of more deserving programmes such as Rehabilitation and Social Reintegration.

The Committee would like to emphasize that the White Paper on Corrections states that, rehabilitation should be at the centre of all departmental activities.
It is against this background that, the 11 40 Committee calls upon the Department to ensure that the budget respond to this call by the White Paper on Corrections.

6.10.

Underspending of the budget.

In 2020/21, the Auditor General noted with concern that the Department of Correctional Services has under-spent its budget by R569 million.

The Committee questions the Department on why more funds should be allocated to it when they were unable to spend such a huge amount in the 2020/21 financial year.
The Committee believes that, this is either lack of proper planning or poor management on the side of the Department in spending public funds.

The Committee will continue to monitor spending of the Department through quarterly reports.

6.11.

JICS’ risk register.

The Committee has noted with concern that JICS has not mentioned anything regarding a risk register in their Operational Plans for 2022/23 financial year.
The Committee believes that, in order to plan effectively, risks should be identified and mitigation plans put in place to address those.

The Sub-Committee will have a further engagement with JICS on this as part of their programme.

6.12.

Reports on systematic issues.

The Committee request JICS to submit their reports on systematic issues identified during their inspections in correctional facilities.

6.13.

JICS’ Inspection targets.


The Committee has noted that the target for inspection of Correctional Centres in the 2022/23 financial year is only 56%.

The Committee believes that this target is too low and JICS can do much better than that.

The Committee is also concerned about lack of targets on unannounced visits for the 2022/23 financial year.

The Committee believes that it will be difficult to monitor and hold JICS to account on this indicator if there are no targets in place.

6.14.
6.14.

The Committee is of the view that, JICS always present to the Committee, an honest assessment of the situation and acknowledged where they did not perform well.

The Committee believes that there is always room for improvement and encourages JICS to continue with their good work and pick up the pace.

12 41 7.

Summary of reporting requests Reporting request Action Associated timeframe Lack of official accommodation – regular updates.

Report As per Sub-Committee [See paragraph 6.4].


IIMS- regular updates [See paragraph 6.6].

programme.

Report As per Sub-Committee programme.

Infrastructure projects- regular updates on security Report As per Sub-Committee systems in correctional centres.

programme.

[See paragraph 6.7].

Filling of vacancies- regular updates on filling of the Report As per Sub-Committee two key vacancies.

[See paragraph 6.8].

programme.


JICS risk register- update on risk register Report As per Sub-Committee [See paragraph 6.11] programme.

Systematic issues- regular reports Report As per Sub-Committee [See paragraph 6.12] programme.

8.

Appreciation 8.1.

The Committee wishes to thank the following for their assistance in this process: 13 42 8.1.1.

The Minister of Justice and Correctional Services, Mr Ronald Lamola; the Deputy Minister, InKosi Patekile Holomisa; and officials of the Ministry.

8.1.2.
8.1.2.

The Acting National Commissioner, Mr Makgothi Thobakgale, and the officials of the Department of Correctional Service.

8.1.3.

The Inspecting Judge, Justice Edwin Cameron, and the officials of JICS.

9.

Recommendation 9.1.

Having considered the Annual Performance Plan for 2022/23 of the Department of Correctional Services, the Committee supports it and recommends that the National Assembly approve it.

9.2.
9.2.

Having considered Vote 22: Correctional Services, the Committee supports it and recommends that the National Assembly approve it.

Report to be considered.

14 43 3.
REPORT OF THE PORTFOLIO COMMITTEE ON WATER AND SANITATION ON BUDGET VOTE 41 ANNUAL PERFORMANCE PLAN OF THE DEPARTMENT OF WATER AND SANITATION AND ENTITIES FOR THE 2022/23 FINANCIAL YEAR, DATED 10 MAY 2022 The Portfolio Committee on Water and Sanitation (hereinafter the Portfolio Committee) met with the Department of Water and Sanitation (the Department) and Entities (Water Research Commission, Trans-Caledon Tunnel Authority, Breede-Gouritz and Inkomati-Usuthu Catchment Management Agencies) undertaking work on its behalf on 3 and 4 May 2022, to receive briefings on Budget Vote 41, Strategic Plan and Annual Performance Plans, and reports as follows: 1.
Introduction The importance of water as a catalyst for economic growth, alleviating poverty, creating jobs and addressing inequities to fulfil the developmental agenda for South Africa has found meaning in many initiatives of respective departments and entities.
The work of the Department of Water and Sanitation is underpinned by the prescripts of the Constitution and Bill of Rights1, the transformation agenda directed by the National Development Plan South African Vision 2030: and the Outcomes-based Approach found in the Medium-Term Strategic Framework (MTSF), National Water and Sanitation Master Plan, the African Union’s Vision 2063, as well as the United Nations Sustainable Development Goals – Goal Number 6 (SDG-6) impacting on the delivery of water and sanitation.
As depicted in the National Water and Sanitation Master Plan, the national priorities for the water and sanitation sector focus on two streams of work –water and sanitation management and the other creating an enabling environment.
Water and sanitation management relate to reducing water demand and increasing supply, protecting and restoring ecological infrastructure, improving raw water quality, regulating water and sanitation, redistributing water for transformation, and managing effective water and sanitation services.
Creating an enabling environment relate to creating effective and efficient institutions, enhancing strategic water partnerships, amending legislation, ensuring financial sustainability, building human capacity for action, and managing data and information2.

To ensure that it fulfils its obligations, the Department of Water and Sanitation has, through Budget Vote 41, appropriated funds to attain its purpose and mandate.
Vote 41 ensures the availability of water resources to facilitate equitable and sustainable socio-economic development and provide universal access to water and sanitation services.

Over the MTEF period, the Department has been allocated a 1 Section 24 of the Bill of Rights proclaims that all citizens have a right to an environment that is not harmful.

2 Department of Water and Sanitation, Annual Performance Plan 2022/23 to 2024/25.
1 44 total of R59.6 billion over the medium-term, translating to R18.5 billion in 2022/23, R20.1 billion in 2023/24 and R20.9 billion in 2024/25.

The allocation includes amounts for: • Compensation of Employees: An amount of R5.4 billion over the MTEF, that is, R1.836 billion in 2022/23, R1.741 billion in 2023/24 and R1.819 billion in 2024/25.

• Goods and Services: An amount of R5.5 billion over the MTEF, that is, R1.770 billion in 2022/23, R1.819 billion in 2023/24 and R1.908 billion in 2024/25.
• Transfers and Subsidies: An amount of R34.9 billion over the MTEF, that is, R10.528 billion, R12.002 billion in 2023/24 and R12.393 billion in 2024/25.

• Payments for capital assets: An amount of R13.788 billion, that is, R4.404 billion in 2022/23, R4.593 billion in 2023/24 and R4.792 in 2024/25.

Aligned to its general purpose, the legislative mandate of the Department is set out in the National Water Act, 1998, Water Services Act, 1997 and the Water Research Act, 1971.
The Department delineates its work through three (3) programmes – Administration, Water Resources Management and Water Services Management.

The Annual Performance Plan: 2022/23 to 2024/25 acknowledges the persistent challenges related to water security in South Africa.

These relate to external and internal impacts, which necessitate the formulation of reliable and reasonable indicators, targets and outputs to ensure the delivery of its mandate for the financial year under review and over the medium term.
The external factors highlighted in the Annual Performance Plan relate to increasing water demand and declining supply, deteriorating water ecosystems, unreliable water and sanitation services, inequitable water allocation, and weak water and sanitation sector regulation.

The internal factors relate to organisational alignment, managing data and information, and financial resources.

2.
2.

Strategic priorities over a five-year planning period and for the 2022/23 financial year 2.1 Strategic priorities over a five-year planning period With its focus on future supply and demand, water security is central to the developmental agenda articulated in the National Development Plan and the Industrial Policy Action Plan (IPAP).

The former predicts that before 2030, all South Africans will have affordable, reliable access to sufficient, safe water and hygiene sanitation.
The latter also sets out the intentions of South Africa in terms of expanding the manufacturing sector, which will increase water demand.
The balancing of increased water supply for a growing population and economy has found meaning in several policies developed by the Department, which encompass the following policies, strategies and amendments to the pieces of legislation: the Mine Water Management Policy, Sustainable Hydropower Generation Policy, 2 45 Integrated Water Quality Management Policy, Amendments to the National Water Act and Water Services Act, Review of the Pricing Strategy, the National Water and Sanitation Master Plan and the National Water Resource Strategy, Third Edition.
2.2 Key Departmental Strategic Priorities for the 2022/23 Financial Year The introductory section of the departmental presentation on engaging the Portfolio Committee on Budget and Vote 41 and the 2022/23 Annual Performance Plan, on 2 May 2022, provide the key priorities identified for the year under review.

These are: • Ensuring water security through increased water use efficiency and demand and conservation management, • Implementing major projects to augment national bulk water resource infrastructure.
• Developing other water resources such as groundwater and desalination.

• Finalisation of the National Water Resources Infrastructure Agency Bill.

• Strengthening regulatory interventions to address pollution of the environment and protect communities from wastewater.

• Supporting municipalities, improving water use licence turnaround time.

• Promoting transformation in water use.


• Improving revenue collection across the water value chain, and ensuring consequence management for financial misconduct, are central to the work of the Department in the 2022/23 financial year.

The commentary by the Director-General of the Department at the meeting on 2 May 2022 provided further insights on the rationale for the specific determined priorities for the year under review.
The ripple effect of insufficient revenue collection to adequately operate and maintain water and sanitation infrastructure was highlighted.

Municipalities are in debt with water boards that do not have enough money to use their infrastructure or borrow money to increase infrastructure.

The water boards owe money to the Water Trading Entity, which impedes the Department’s work in infrastructure development.

The root cause is that billing and revenue collection is a significant challenge.
However, the Department is working closely with the Department of Cooperative Governance and the National Treasury to strengthen support in municipalities.

3.

Overview of the 2019/20 and 2020/21 Financial Status of the Department The Portfolio Committee on Water and Sanitation in 2019/20 and 2021/22 raised several issues on the financial status of the Department of Water and Sanitation in terms of accruals and payables, underspending, and fruitless and wasteful expenditure.
The Department acknowledged these challenges in strengthening its financial capabilities.

But maintained, as it does in the Annual Performance Plan, 3 46 that this component of their work has improved since the implementation of the financial recovery plan in 2019 and has since achieved the following – maintained a positive bank balance with the accruals and payables being continuous managed every month to ensure that it does not over-commit available budget.
Explanations for the underspending of 14.7 per cent in the 2020/21 financial year were mainly due to underspending on Compensation of Employees due to funded vacant posts across all programmes.

Underspending on capital payment resulted from the government-enforced Covid-19 lockdown restrictions, which impacted the implementation of the projects and some disputed invoices.

The Department noted that senior management posts had been filled since the 2021/22 financial year on filling key positions.
This includes the post of Director-General and Chief Financial Officer.

The post of Deputy Director-General: Water Services and Regulation: Compliance and Enforcement are awaiting confirmation by Cabinet.

All regional heads positions are filled, while interviews for the filling of the Chief Director: Internal Audit have taken place, and potential candidates are undergoing assessments.
At the Portfolio Committee briefing and in the Annual Performance Plan, the Department committed to continuing implementing the recommendation of the In-Year Monitoring and the financial recovery plan to continue delivering services to the communities.

4.

Overview of the 2022/23 Budget and Medium-Term Estimates The following sections will provide an overview of the 2022/23 budget and medium-term estimates with concomitant outputs, output information and annual targets for the three (3) programmes.
4.1 Expenditure overview – Main Account and Water Trading Entity3 The Department of Water and Sanitation operates two financial accounts: The Main Account and the Water Trading Entity.

The Main Account is funded by the fiscus (Vote 41).

The Water Trading Entity account mainly receives voted amounts from the Main Account toward implementing infrastructure and generating revenue through bulk water sales.
The Department of Water and Sanitation delineates its expenditure into three programmes in the financial year under review - Administration, Water Resources Management and Water Services Management.

3 The information that follows was sourced from the National Treasury Estimates of National Expenditure, Budget Vote 41: Water and Sanitation, 2022/23.
4 47 4.1.1 Main Account Over the Medium-Term Expenditure Framework (MTEF) and depicted in the table below, the Department has allocated R18.540 billion for 2022/23, R20.155 billion for 2023/24 R20.913 billion for 2024/25.

Transfers and subsidies to departmental agencies, public corporations and municipalities comprise the most significant budget share, amounting to R34.9 billion over the MTEF period.
Total expenditure is expected to increase at an average annual rate of 5.6 per cent, from R17.7 billion over the medium term for capital projects involving water resources and regional bulk infrastructure.
Programme Rand (thousand) Administration Water Resource Management Water Services Management Total programmes Economic Classification Rand (thousand) Compensation of employees Goods and services Transfers and subsidies Payments for capital assets Total economic classification 2024/25 2 097 971 4 902 887 13 912 429 20 913 287 2023/24 2 006 729 4 355 030 13 793 478 20 155 237 Medium-Term Expenditure Estimates 2022/23 2 012 509 3 782 924 12 744 236 18 539 669 Medium-Term Expenditure Estimates 2022/23 1 836 433 1 770 868 10 528 115 4 402 253 18 539 669 2023/24 1 741 701 1 818 827 12 002 201 4 592 508 20 155 237 2024/25 1 819 924 1 908 189 12 393 475 4 791 699 20 913 287 Source: Presentation by the Department of Water and Sanitation, 2 May 2022 The economic classification explanation, noted in the 2022/34 to 2023/24 Annual Performance Plan, maintains the following: • Compensation of Employees: The budget for compensation of employees over the medium term is R5.398 billion.
The baseline decreased by R64 000 compared to 2022.

The MTEF baseline of R5 334 billion.

The decrease in baseline allocation is mainly due to the National Treasury implementing budget cuts and natural attrition on the compensation of employees across all Government Departments.4 • Goods and Services: The Department received an allocation baseline of R5 332 billion for goods and services over the MTEF, of which R1 943 is allocated for office accommodation in Programme 1.
The major spending items on goods and services over the MTEF are audit fees of R139 037 million, communication services of R135.158 million, computer services of R596.088 million, and business and advisory services of R506.644 and infrastructure and planning services of R726.813 million.5 • Transfers and Subsidies: The Department will be implementing transfers to the Water Trading Entity for augmentation projects for the design, construction, commissioning and rehabilitation of raw water infrastructure, including dams and bulk distribution systems, operations and 4 Department of Water and Sanitation, Annual Performance Plan, 2022/23 to 2024/25.
5 Department of Water and Sanitation, Annual Performance Plan, 2022/23 to 2024/25.

5 48 maintenance, Komati Basin Water Authority for the repayment of outstanding loans to various financial institutions and operational overheads.

There will be transfers to infrastructure projects – the Regional Bulk Infrastructure Grant of R12.894 billion over the MTEF and the Water Services Infrastructure Grant of R11.603 billion over the MTEF.
The grants are based and dependent on implementation plans, cash flow projection and schedules for conditional grants.6 4.1.2 Water Trading Entity The Water Trading Entity was established in 1983 and was converted into a trading entity in 2008 in terms of the Public Finance Management Act, 1999.

The entity’s primary role is to manage water infrastructure and resources and sell raw water.
Over the medium term, the entity will continue to maintain existing water resource infrastructure and supply bulk water to strategic users, such as large industrial companies, to stimulate and support economic developments.

In supporting the long-term sustainability of water resources, the entity will implement 16 dam safety rehabilitation projects over the MTEF period.

Expenditure is expected to increase at an average annual rate of 4.9 per cent, from R15.6 billion in 2021/22 to R18 billion in 2024/25.
An additional R2.1 billion is allocated over the period ahead to finalise the Olifants-Doorn River water resources project.

The entity expects to generate 82.8 per cent (R50.8 billion) of its revenue through the sale of raw water.

Total revenue is expected to be R60.8 billion over the MTEF period.
4.2 Overview of expenditure trend aligned to performance indicators over the MTEF7 The Department, over the MTEF, intends to ensure the delivery of safe water and the effective management of wastewater through enforcing various regulatory measures and strengthening its oversight functions.

The Blue, Green and No Drop regulatory standards are in place to improve asset management practices in municipalities.
Other initiatives with defined performance indicators over the MTEF relate to: • Supporting 32 district municipalities with developing water and sanitation reliability plans and monitoring the compliance of all water services authorities with regulatory standards.

• Ensuring that 80 per cent of applications to authorise water use are finalised within 90 days.

• Allocating R270.7 million for regulatory compliance in the Water Resources Regulation sub- programme in the Water Resources Management Programme.
• Allocating R220.9 million for oversight in the Water Resources Institutional sub-programme in the Water Resources Management programme.

6 Department of Water and Sanitation, Annual Performance Plan, 2022/23 to 2024/25.

7 The information was sourced from the National Treasury Estimates of National Expenditure, Budget Vote 41: Water and Sanitation 2022/23.
6 49 • For activities related to water services, R323.9 million for regulatory compliance and R71 million were allocated for oversight in the Water Services Regulation sub-programme in the Water Services Management programme.
Further initiatives over the MTEF include the following: • Investing in water resources and implementing projects such as Phase 2D of the Olifants River water resource development project, the Mokolo-Crocodile water augmentation project, the raising of the Tzaneen and Hazelmere dams, and the Umdloti River development project.

• Spending in the Water Resources Management programme is expected to increase at an average annual rate of 10.7 per cent, from R3.6 billion in 2021/22 to R4.9 billion in 2024/25.
This includes spending R2.1 billion to raise the Clanwilliam Dam wall over the medium term.

• Implementation and finalisation of 2 mega, 24 large and 28 small regional bulk infrastructure projects.

These projects and related activities are carried out in the Water Services Management programme; spending is expected to increase at an average annual rate of 4.6 per cent from R12.2 billion in 2021/22 to R13.9 billion in 2024/25.
An additional allocation of R3.6 billion over the medium term for the Olifants-Ebenezer water supply scheme, the lower Umkhomazi bulk water scheme, and the bulk water potable water and remedial works programme in George Local Municipality.

5.

Budget allocation and targeted outcomes for programmes over the 2022/23 financial year 5.1 Programme 1: Administration This programme aims to provide strategic leadership, management, and support services to the Department.
The programme also develops and promotes international relations on water resources management with neighbouring countries.

This Programme, which consumes 11 per cent of the overall departmental budget, is allocated R2 billion in the 2022/23 financial year, up from R1.95 billion in 2021/22.

This reflects a nominal rand increase of R52.5 million and an R34.2 million decrease between 2021/22 and 2022/23.
For the 2022/23 financial year, the Department identified the following outcomes, with associated outputs, output indicators and percentage achievable: • An efficient, effective, and development orientated department: compliance with corporate governance regulatory prescripts, which entails 100% compliance with approved audit plan, 100% compliance with the implementation of risk management plan, 10% vacancy rate for engineers and scientists, 50% of training interventions implemented, 64% safety and security assessment for facilities and installations conducted, and 90% information technology systems available.
7 50 • An efficient, effective and development-oriented department with targeted procurement supporting Small Medium and Micro Enterprises (SMMEs) – 15% of targeted procurement is spent on Qualifying Small Enterprises (QSEs), which constitute 40% on women, 30% on youth and 7% on people with disabilities.

The percentage of targeted procurement spent on Exempt Micro Enterprise is 15%, which constitutes 40% on women, 30% on youth and 7% on people with disabilities.
• Implementation of financial and turnaround plan at 90%, % expenditure on annual budget at 100% and reduction of debtor days at 150 days.

• Annual international relations programme implemented at 75%.

This section has provided detailed information on targeted percentages for each outcome for the year under review (highlighted above).

The Department of Planning, Monitoring and Evaluation in the Presidency regulates outcomes with associated indicators depicted in the Department’s Annual Performance Plan.
The Department and Entities have complied with the regulatory component and requirements in using standardised indicators by the DPME.
In summary, the key outcomes, output indicators and targets related to Programme 1: Administration listed above, and further elaborated on by the Department, speak mainly on ensuring an efficient audit plan with a well-thought-out risk management plan, reducing the vacancy rate for engineers and scientists, implementing training interventions for staff, as some of the percentages in the past for training could not be met as some staff were too busy to attend.
Standardised targets set by the DPME for procurement supporting SMMEs and QSEs were used.

The target set for achieving 100% expenditure spend in the year under review is an ambitious one.

With the implementation of the financial recovery plan, the Department intends to work toward achieving this target, as money returned to National Treasury, as in the past, hampered the work of the Department in the delivery of infrastructure services, where the needs for water and sanitation are so great.
5.2 Programme 2: Water Resources Management This programme aims to ensure that the country’s water resources are protected, used, developed, conserved, managed, and controlled sustainably for the benefit of all people and the environment.

This is done by creating a knowledge base and implementing effective policies, procedures and integrated planning strategies for water resources.
This Programme, which constitutes 20 per cent of the overall departmental budget, is allocated R3.7 billion in the 2022/23 financial year, up from R3.5 billion in 2021/22.

This reflects a nominal rand increase of R166 million, which translates into a real rand increase of R3.4 million between 2021/22 and 2022/23.
8 51 For the 2022/23 financial year, the Department identified the following outcomes, with associated outputs, output indicators and numbers achievable: • Ecological infrastructure protected and restored, which constitutes the number of river systems with resource classes and determined resource quality objectives – 1 – Thukela.
The number of river systems monitored to implement resource-directed measures includes 4 – Inkomathi-Usuthu, Olifants-Doorn, Vaal and Letaba, and the number of rivers in which the river eco-status monitoring programme is implemented is 70.

The catchment strategies and plans developed for mine water and wastewater treatment work – 2 – Upper Olifants and Limpopo.

The number of catchment plans implemented for mine water and wastewater management – 2 in Orange and Mzimvubu- Tsitsikamma.
The final waste discharge charge system (WDCS) will be piloted countrywide.

• On reducing water demand and increasing water supply, there are integrated water resources plans/measures developed, which comprise the annual status on implementing the master plans with nine operating mines and specialist strategy studies to be completed.

Seven water resources monitoring programmes and six information systems will be viewed and maintained, with one gauging station refurbished to improve management decisions.
There will be four bulk raw water projects in preparation for implementation and four bulk raw water projects under construction, with one bulk raw water to be completed.

• On enhanced regulation of the water and sanitation sector, the Department intends to develop the National Water Act Amendment Bill and the National Water Resources Strategy-3.

Other initiatives relate to the output of water resource regulatory prescripts developed and implemented – with the Water Research Commission levy approved.
The number of wastewater systems to be monitored against regulatory requirements is 408.

Draft regulation for water allocation reform will be published for public comment.
• On water distributed for transformation, the performance of water resources institutions to be evaluated against their performance plans are 4, gazetting of one catchment management agency, the Mzimvubu-Tsitsikamma, the National Water Resources Infrastructure Agency Bill to be finalised, with the transformation of 5 irrigation boards into water user associations.

A business case will be compiled to establish a Water Regulator Version 111.
Summary explanatory notes presented by the Department on the above outcomes, outputs and targets in Programme 2: Water Resource Management (highlighted above) in the Annual Performance Plan are further concretised by the following initiatives: Water resources monitoring and reviewing information systems related to water sources are essential, with well-resourced gauging stations to monitor and update information as levels of water sources are the “bedrock” to determine water needs in the country.
An ongoing priority in this programme is to 9 52 implement and plan major resource infrastructure projects.

The centrality of the need to maintain existing water resources infrastructure, including dams, is fundamental to ensure that dams are kept safe and rehabilitated.

The Department is currently working on amendments to the National Water Act to ensure a regulatory environment for national water and water resource management is adequate and implemented.
It has finalised and submitted to Cabinet the National Water Resource Strategy-3.

Water charges are developed and implemented on an annual basis.

The issuing of water use licences for economic growth must not be an obstacle for investments.

The targets for water use applications will also include the monitoring of water users in accordance with water use licences and compliance.

The Department revived systems, such as the Blue, Green and No Drop reports.
In March 2022, the Department published the Green Drop report with a need to undertake an assessment every two years, with the following Green Drop report to be published in 2023/24.

These Blue and Green Drop reports are not just assessments of the state of wastewater or water quality but play an essential role in supporting municipalities to address the challenges with the quality of water supply and issues with water spillages from wastewater treatment works not meeting the quality standards.
The Department will engage all municipalities that don’t meet the Blue and Green Drop standards requirements and workshop them with the assessment results.

This process will include developing plans to address the causes of the problems and implementing recommendations identified in the report.

The Department is currently working on transforming irrigation boards into water user associations.
Not all catchment management agencies will be established as independent agencies, with some being run by the Department with committees set up and participation by community and stakeholder associations to oversee the work of the Department.

The work on the establishment of the National Water Resource Agency is advanced.

Currently, the Department is undertaking detailed research on the feasibility of establishing a water economic regulator.
Several options and recommendations will be presented to the Minister.

On the one hand, the study focuses on the need for a fully independent regulator such as NERSA (for electricity regulation) and ICASA (for telecommunications).

On the other hand, another option is to retain the regulation within the Department as is currently the case but to have a degree of independent oversight by establishing an independent committee to oversee the department's work.
These options will be presented for decisions to be made.

10 53 5.3 Programme 3: Water Services Management This programme aims to develop, rehabilitate, and refurbish the raw water resources and water services infrastructure to meet the socio-economic and environmental needs of South Africa.

This appears to be the priority Programme of the Department, as it receives the highest allocation of the entire departmental budget.
This programme receives R12.7 billion in the 2022/23 financial year, constituting 69 per cent of the overall departmental budget.

This Programme reflects a nominal rand increase of R586 million compared to the 2021/22 financial year, which translates into a real rand increase of R37.2 million between 2021/22 and 2022/23.
For the 2022/23 financial year, the Department identified the following outcomes with associated outputs, output indicators and targets: • On reducing water demand and increasing water supply, four updated draft water conservation and water demand strategies, eight large water supply systems assessed for water losses, and 144 water services authorities to be evaluated for compliance with the No Drop Regulatory programme requirements.
Eight feasibility studies for water and wastewater services projects will be completed, with five implementation readiness studies for water and wastewater projects.

Other initiatives include: I93 regional bulk infrastructure project phases are under construction, 22 regional infrastructure projects to be completed, 294 water services infrastructure projects under construction and 115 water services infrastructure projects to be completed, with two intervention projects under implementation.
Ten thousand seven hundred ninety-eight (10 898) existing bucket sanitation backlog systems (in Free State and Northern Cape) will be replaced in formal settlements.

• To effectively manage water and sanitation services, 10 district municipalities will be assessed for 5-year water and sanitation reliability plans.
• To enhance regulation of the water and sanitation sector, the Water Services Amendment Bill is to be developed and submitted for Cabinet approval, nine provincial action plans aligned to the National Sanitation Integrated Plan and the final national faecal sludge management strategy completed.

• On water redistributed for transformation, the performance of 9 water boards was evaluated against their plans.
In Programme 3: Water Services Management, the objective of the major grants to municipalities is to assist them in developing water and sanitation distribution infrastructure systems.

The grants are not disbursed without any oversight by the Department.

The Department’s regional offices work closely with municipalities to carry out feasibility and implementation readiness studies to ensure the effective use of grant transfers, such as the Regional and Water Services Infrastructure Grants.
The Department provided Annexures in the presentation, which provides a breakdown of projects funded by the grants in different provinces.

Self-assessment plans with the Municipal Services Strategic Services 11 54 Assessment (MuSSA) system are one of the tools assisting municipalities in proving the reliability of their services and targets.
The following will be undertaken to ensure that the water services side is adequately regulated: Minor amendments to the Water Services Act will be submitted to Cabinet this financial year.

Submitting to Cabinet a Norms and Standards for water and sanitation services, including a standard sanitation framework to ensure greater equity in standards in the country.
As with the Green Drop Report, the Blue Drop Report will be renewed under the Water Services Management programme to assess water treatment works and related infrastructure.

A progress report on Blue Drop Assessment has been issued, with the completed Blue Drop Report to be published in this current financial year and thereafter every two years.
One of the priorities to streamline water services institutional arrangements is the dissolution of the Sedibeng Water Board and the rationalisation of water boards and amendments to the geographical boundaries of water boards.

The Department will make an announcement on this matter.

6.
Overview of Infrastructure Allocations for Regional Bulk Infrastructure Grant and Water Services Infrastructure Grant projects, water boards, Water Trading Entity and KOBWA Under Programme 3: Water Services Management, the total Regional Bulk Infrastructure Grant (conditional allocations to local government and allocations in kind to municipalities for the designated special programme) allocations over the Medium-Term Expenditure Framework (MTEF) are R5.9 billion, R6.4 billion and R6.5 billion, respectively.
The total Water Services Infrastructure Grant (conditional and in-kind) allocations over the MTEF are R4.4 billion, R4.6 billion and R4.8 billion, respectively.
Total allocations of R4.4 billion over the Medium-Term to water boards for specific infrastructure projects include the following: Magalies Water for the Pilanesberg bulk water supply scheme, Umgeni Water for the Umshwathi Regional Bulk Water Scheme, Maphumulo Regional Bulk Schemes, Greater Mpofana Phase 1 -3 and uMkhomazi Bulk Water Supply Scheme, Sedibeng Water for the replacement of Namakwa Bulk Water Supply and Lepelle Water for the upgrade of the Olifants and Ebenezer water supply schemes.
The Water Trading Entity receives allocations for the following projects – acid mine drainage and other capital projects, raising the Clanwilliam Dam and Olifants-Doorn River water resource project, operations and maintenance of infrastructure, and establishment of catchment management agencies.

KOBWA, over the medium-term, receives an amount of R768 million.

12 55 7.
12 55 7.

Overview of the plans and budgets of entities supporting the work of the Department As a sector leader, regulator and oversight body of institutions undertaking work on its behalf, the Department has had interactions with Breede-Gouritz Catchment Management Agency, Water Research Commission and Trans-Caledon Tunnel Authority to discuss and understand annual performance plans and will oversee the implementation thereof.
The interactions with the Inkomathi- Usuthu will be undertaken in this financial year.

7.1 Catchment Management Agencies South Africa’s Catchment Management Agencies were established in terms of section 78(1) of the National Water Act, 1998.

One of the main principles of the National Water Act is its focus on decentralisation.

Decentralisation emphasises public participation in water management and related decision-making processes.
Currently, two (2) Catchment Management Agencies have been established, the Breede-Gouritz and the Inkomati-Usutu CMAs.

Currently and apart from the Breede- Gouritz and Inkomati-Usutu CMAs, the remaining seven CMAs are considered the so-called proto- CMAs since they are in the process of being established.

Those proto-CMAs are managed by the respective regional offices of the Department.

Water resource management of the CMAs is aligned to the water management area’s internal strategic perspective.
The functions of CMAs are to cooperate and seek agreement on water-related matters amongst various stakeholders and interested parties.

CMAs are service delivery agencies listed in the Public Finance Management Act, 1999.

The CMAs are also linked to Treasury Regulations to ensure financial viability and good governance.

Catchment Management Agencies are Schedule 3A Public Entities and must comply with the Public Finance Management Act.
A critical mandate of CMAs is the development of a catchment management strategy.

The strategy is a plan to realise the protection, use, development, conservation, management and control of water resources, processing water use applications, recommending to the Department approval or non-approval of respective applications, and setting principles for water allocation in respective water management areas.
These measures must be in line with the National Water Resource Strategy.8 8 Information was sourced from Freshwater Governance in the 21st century, edited by Eiman Karar.

13 56 7.1.1 Breede-Gouritz Catchment Management Agency The Breede-Gouritz Catchment Management Agency, in aligning its mandate to fulfil its obligations as highlighted in the section above, delineated six (6) strategic focus areas in its 2022/23 Annual Performance Plan.
These are to: • Ensure legal water use is maintained by ensuring 90% comments of land use planning and rezoning applications are achieved, finalisation of 85% water registrations, 200 signed and finalised validation and verification confirmation letters, and 100% capturing of water use authorisation audit.
Within this strategic focus area, the agency also commits to an 85% recommendation of licences as per the regulation, 100% of general authorisations to be confirmed, and 80% completion of audit reports for water use compliance.

The agency intends to complete four (4) water quality compliance reports of Municipal Wastewater Treatment Works that discharge effluent to water sources.
• Capacitate 5000 learners and stakeholders on water resource management awareness and attain four (4) intergovernmental cooperation initiatives to facilitate and enhance water resource management.

• The Integrated Water Resource Management and Empowerment of Stakeholders component of its work is projected at 100%, with 40 forums being undertaken to support water resource management.
• Capacitating Historically Disadvantaged Individuals (HDIs) and resource-poor farmers with water supply, the intention is to attain a 100%, with two workshops to capacitate and empower resource- poor farmers and 400 rainwater harvesting tanks to be installed.
• Ensuring water quality and legal water use, the agency will monitor 80 water resource points in its catchment area, three river rehabilitation projects to be funded and technically supported, and investigate 100% of non-compliance cases, to resolve 80% of investigated cases.

• Ensuring compliance with listed financial reporting prescripts, the agency will work toward 100% of reports and submit one proposed tariff report to the Department to comply with the pricing strategy.
For the financial year under review, the agency has a proposed budget of R82 million, which shows an increase of R7 million compared to the prior year.

The funding comprises an augmentation budget from the Department and water use charges.
The main factor for this increase relates to employer relation costs, which increased from R51 million to R55 million, with amounts budgeted for the appointment of a Chief Executive Officer (CEO), and other water-related vacancy positions to capacitate the agency to improve service delivery.

Goods and Services receive an amount of R24 million, repairs and maintenance of R259 million, and capital outlay of R1.2 million with board-related costs of R947.8 thousand.
14 57 Expenditure is expected to increase at an average annual rate of 7.8 per cent from R75.1 million in 2021/22 to R94.2 million in 2024/25.

The agency’s main cost driver is the compensation of employees, which accounts for an estimated 64.1 per cent (R168.9 million) of its total expenditure over the period ahead.
7.1.2 Inkomati-Usuthu Catchment Management Agency The Inkomati-Usuthu Catchment Management Agency's water use activities in Mpumalanga are strategic use to ESKOM and Sasol Secunda Complex, supporting irrigation and forestry sector transboundary international obligations to Mozambique and Swaziland.

Funding is received appropriated funds and water resources charges.
The agency’s water management area is part of the Inco Maputo River Basin, covering Mozambique and Swaziland under the interim Inco Maputo Agreement.

For the financial year under review, and further elaborated in its Annual Performance Plan, the agency identified four outcomes – increased stakeholder satisfaction, enhanced human resources capabilities, maintained financial sustainability, and protected water resources.
The output indicators aligned to targets are: Implementation of a stakeholder engagement plan, inclusive of technical, governance, support and finance issues, at 80%.

Attainment of a ratio in terms of working (80%), current (1.1%), debt collection of historical debt owed to the Department (4%) and current debt collection of 60%.

Monitoring compliance to water resource quality objectives and international obligations at 90% and 90%, respectively.
Processing water use authorisations within the regulated timeframe at 80%, with 90% issuance of water use authorisations registered on WARMS.

Monitoring activities for compliance at 90 per cent and 100% of enforcement action taken against the non-compliant facilities/users.

The agency's current ratio figure of 1.1% is an essential consideration, as it factors the agency’s ability to manage its debt.

However, the agency’s current ratio is lower than a good current ratio of 1.2 to 2.
The lower ratio figure is due to challenges associated with payment of a historical debt which impact the going concern of the agency.

The agency is working toward a change in the outer years to increase revenue from other streams by working on two specific targets.
One is its ability to increase its debt collection ratio by ensuring that a 4% target of retrieval of past debt is achieved and ensuring that current data information capturing of invoices is aligned to the validation and verification programme to increase the percentage around the collection.

The overall budget component allocation to the agency to undertake work in the financial year under review amounts to R147.879.141 million.
Funding sources for the current year are derived from augmentation from the Department through the Main Account and Water Trading Entity for water use charges paid into the Water Trading Entity and interest received.

The economic classification indicates 15 58 that salaries and wages amount to R96.890 million, R26.038.723 for Goods and Services, R21.902.096 for bad debt, and repair and maintenance at R348 000, capital outlay at R200 000 and board related costs at R2.5 million.
The agency proposed an initial budget for the current year, an amount of R174 million but received R147 million.

This translates to a shortfall of R50.7 million, a 23% decrease in the augmentation grant, translating to a 40% reduction in service charges due to historical bad debt inherited from the Department.

The impact of the budget cuts was that the budget was not sufficient to cover all personnel and critical contractual obligations.
Critical earmarked activities which would remain unfunded were valued at R50.7m, which would result in a reduction of the Agency's ability to fully execute its mandate and overall public value, cessation and/or downsizing of key strategic projects, and immediate suspension of any further appointments to critical positions.
In the short term, the proposed action plan was to engage urgently with the Department to revise allocations for 2022/23 to ensure effective delivery of the IUCMA mandates and approved strategic outcomes and the implementation of debt management and cost containment strategy.

In the long term, the plan was to identify other revenue streams to augment already strained sources and to engage the Department to review and redevelop a sustainable funding model.
The challenges the IUCMA faced included the increased international obligations to Mozambique, hence the need for the construction of the Mbombela Dam; the slow pace of transformation; the bulk water allocated to irrigation boards; costly maintenance of integrated decision support systems; and the expansion of the water management area to include the Pongola Catchment.
The agency is continuously engaged with the Department for assistance and advice on addressing the shortfall as it impacts critical contractual obligations.

However, the agency has developed a debt management strategy and engages the Department in revising the current water pricing strategy.

The current water pricing strategy places curbs on some of the tariffs for water use that the agency can charge, particularly for domestic use and the forestry sector.
Expenditure is expected to increase at an average annual rate of 11.8 per cent, from R139.7 million in 2021/22 to R195.4 million in 2024/25.

Transfers from the Department account for an estimated 66.5 per cent (R373.4 million) of the agency’s revenue over the period ahead, with the remainder generated through licence fees for water use.
16 59 7.1.3 Trans-Caledon Tunnel Authority The Trans-Caledon Tunnel Authority (TCTA) is a specialised liability management entity that derives its mandate from the National Water Act, 1998.

It is responsible for financing and implementing bulk raw water infrastructure development and providing treasury management services to the Department.

TCTA’s mandate is set out in terms of the Notice of Establishment and directives issued from time to time by the Executive Authority.
The strategic goals for 2022/23 of the authority are to raise funding for implementation of infrastructure, implement capital projects on time, within budget, to the appropriate standards and in a sustainable socio/environmental manner, manage debt within the approved borrowing limit, effective control of corporate expenditure, ensure organisational positioning for the planned water agency, enhance the internal control environment, risk management and supply chain management system, coordinate and monitor the efficient implementation of the projects within Strategic Integrated Project-199, clear irregular and fruitless and wasteful expenditure and develop a high-performance culture that contributes to the achievement of the organisational goals.
The rollout of infrastructure projects in the preparation phase is the uMkhomazi Water Project – Phase 1, at the implementation phase of the Mokolo Crocodile Water Project and the Berg River Voȅlvlei Augmentation Scheme.

Operations and maintenance will focus on Acid Mine Drainage and the Lesotho Highlands Water Project Phase 1.

Expenditure is expected to increase at an average annual rate of 24.1 per cent, from R7.9 billion to R15.1 billion in 2024/25.
The authority projects a surplus of R5.6 billion over the period, mainly due to delays in the delivery tunnel for the Lesotho Highlands Water Project, while revenue is expected to increase at an annual average rate of 27.3 per cent from R8.4 billion in 2021/22 to R17.4 billion in 2024/25, mainly due to funding for construction received from the Water Trading Entity.
The TCTA presentation highlighted the risks it faces as a public entity due to the following challenges: • Project implementation: Challenges in agreeing on funding models with project beneficiaries and obtaining their commitment to sign offtake agreements contribute to raising funding.

• Raise funding: Reduced funders’ appetite for lending to SOEs and generally tight lending conditions.
9 SIP 19: Ecological Infrastructure for Water Security, which provides an overview of a proposed Strategic Integrated Project (SIP) aimed at improving South Africa's water resources and other environmental goods and services through the conservation, protection, restoration, rehabilitation and/or maintenance of key ecological infrastructure 17 60 • Debt management: Municipalities’ ability to pay water tariffs, ensuring that tariffs are affordable and sustainable to assure the viability of water sector institutions, tighter conditions of regulatory approval for borrowings reduce flexibility to deal with unforeseen liquidity challenges.
7.1.4 Water Research Commission The Water Research Commission was established in terms of the Water Research Act 1971.

It is mandated to research the water sector by determining needs and priorities for research, promoting coordination, cooperation and communication in the area of water research development, stimulating and funding water research, promoting the effective transfer of information and technology, and enhancing knowledge and building capacity in the water sector.
Over the medium term, the commission plans to bridge knowledge gaps in the sector by prioritising research informed by government policies, needs and international trends.

The commission’s research will focus on the desalination of seawater, climate change modelling and water availability.

Expenditure is expected to increase at an average annual rate of 5 per cent, from R337 million in 2021/23 to R390.7 million in 2024/25.
Spending on Research and Development and Innovation and Impact Programmes account for an estimated 5.1 per cent (R557.9 million) of the commission’s total expenditure.

Compensation of employees is the commission’s main cost driver, increasing at an average annual rate of 8.6 per cent, from R113.6 million in 2021/23 to R145.5 million in 2024/25.

The commission expects to derive 80.6 per cent (R889 million) of its revenue over the MTEF period through the water research levy.

8.
8.

Observations and Recommendations 8.1 Department of Water and Sanitation 8.1.1 Eradication of the Bucket Sanitation Systems in Formal Settlements and Pit Latrines in Public Schools Members of the Portfolio Committee noted that the Department of Water and Sanitation intends to eradicate 10 798 existing bucket sanitation systems in formal settlements in the year under review, as highlighted in their 2022/23 Annual Performance Plan.
The argument made by Members of the Portfolio Committee related to the transfer of elimination of the bucket system in the Free State to an Entity (Housing Development Agency) of the Department of Human Settlement in the 2019/20 financial year.

The HDA, as the implementing agent for the Department of Water and Sanitation, was to provide programme management services to seven projects in the Free State to eradicate the bucket 18 61 toilet system.
The scope of work included construction, refurbishment, and upgrading of wastewater infrastructure in identified towns to eliminate bucket toilets.

Issues were raised on whether HDA had undertaken any work in the two years the function was transferred to the agency.

In response, the Department provided statistics on the number of households that received toilets in the last financial year.
Regarding bucket eradication in the Northern Cape and Free State, out of 12 221 houses, only 1 409 had received toilets in the previous fiscal year.

This meant that 10 798 houses in the formal areas were still on the bucket system, mainly in the Free State.
The Portfolio Committee recommended that the Department provide clarity on this programme and indicate how it intends to address budget shortfalls, quarterly briefings and action plans on bucket toilets eradication by the proposed date of March 2023 in the Free State and Northern Cape.

Furthermore, the Department should provide a progress report on its National Sanitation Framework to ensure that the country's bucket system is eliminated in terms of Norms and Standards.
Of further importance is the collaboration between the Department of Water and Sanitation and Basic Education to eradicate pit toilets in public schools, as well as collaboration between the Department of Water and Sanitation and Human Settlements on regulating the ‘mushrooming’ of informal settlements by allocating suitable land and ensuring suitable social amenities, such as water and sanitation.
8.1.2 Shortage of funding for mega infrastructure development Members of the Portfolio Committee noted the shortage for mega infrastructure development as the estimated cost of the mega infrastructure projects is in access of R100 billion.

The available budget is less than one per cent of this estimated cost.

This means that it will take decades to fully achieve the country’s infrastructure needs.
Members requested the Department to consider accessing financial resources, with the assistance of National Treasury, for mega infrastructure projects from unspent funds within departmental and Entities’ programmes.

The Portfolio Committee recommended that the Department provide plans/interventions to address this issue and provide details on whether it is considering Public-Private Partnerships to develop mega infrastructure projects.
8.1.3 Amendments to the National Water Act and the Water Services Act The amendment of both the National Water Act and the Water Services Act is long overdue.

The Annual Performance Plan indicates that the National Water Act will be amended under Programme 2, while the 19 62 Water Services Act will be amended under Programme 3.

However, the speed at which the amendment process is going is concerning, as it may not reach Parliament during the year under review.
The Portfolio Committee recommended that the Department clarify the slow progress and how these delays will affect the long-overdue water allocation transformation.

8.1.4 Deferment of 2021/22 targets to the 2022/23 financial year Some of the 2021/22 targets appear to have been transferred to the 2022/23 financial year.

These include targets such as eradicating the bucket toilet system, establishing an economic regulator, and amendment of legislation.
The Portfolio Committee recommended that the Department provide an overview of the 2021/22 performance concerning achievements of targets and indicate targets that were transferred to 2022/23, with reasons for the postponement.
8.1.5 Department’s partnership with the private sector in developing bulk infrastructure projects Members of the Portfolio Committee requested more information on the Department’s engagement with the Development Bank of Southern Africa (DBSA), with allocations from National Treasury, to develop bulk infrastructure projects.

The Portfolio Committee recommended that a progress report be provided on specific projects and implementation amounts allocated.
8.1.6 Mechanisms in place to mitigate the challenges of trade debtors and non-payment to the Water Trading Entity Members of the Portfolio Committee noted that the Department must devise control measures and plans to address long-standing challenges of trade debtors and non-payment.
The Portfolio Committee recommended that the Department present its action plans and control measures to recover monies owed to the Department and Entities, as well as provide more details on the progress made by the Multidisciplinary Revenue Committee comprising the National Treasury, the South African Local Government Association, Department of Cooperative Governance and Traditional Affairs and municipalities, as part of an intergovernmental relations initiatives to address debt collection.
20 63 8.1.7 Meeting the deadline of less than 90-day processing of water use licencing Members of the Portfolio Committee enquired whether the Department would meet its 90-day processing time for water use licencing, as the Annual Performance Plan talks of an improvement plan to process in a more programmatic way to ensure the subsequent attainment of backlogs.
The Portfolio Committee recommended that the Department provide regular quarterly briefings on achieving the 90-day processing of water use licences.

8.1.8 Joint planning with the Southern African Development Community partners on Climate Change for water security in the region Members of the Portfolio Committee stressed the importance of the Climate Change Strategy and the Regional Strategic Action Plan for the SADC region.
Clear awareness programmes on climate change and environmental risks should form part of the Department of Water and Sanitation and other Departments' work.

The Portfolio Committee recommended that the Department provide a briefing on the Climate Change Strategy (adaptation and mitigation plans), the Regional Strategic Action Plan and the SADC Industrialisation Strategy, which anchors water as a catalyst for industrialisation.
8.1.9 Departmental contribution to job creation Members of the Portfolio Committee maintained that the high unemployment rate in the country necessitated the need for the Department to contribute to creating jobs within the water and sanitation sector.

The Portfolio Committee recommended that the comprehensive outlook framework on job creation within the sector, once finalised, must be presented in a briefing within six (6) months.
8.2 Water Research Commission 8.2.1 Limited use of WRC research products and technology Members of the Portfolio Committee expressed concerns about the limited or non-use of the extensive knowledge base on water and sanitation issues, the technology produced and the amount of funding invested but under-utilisation by government departments.
The Portfolio Committee recommended collaboration with government departments such as the Department of Trade and Industry and Competition, and the Department of Cooperative Governance 21 64 and Traditional Affairs, to ensure the uptake and develop the industry for the mass production of these technologies.
8.2.2 Groundwater use programme Members of the Portfolio Committee required more information on the project that the WRC, in partnership with the Department, is currently working on, reviewing and updating maps to detect groundwater supply.

The significance of the work of the Water Research Commission to utilise technologies and mechanisms to maximise the use of groundwater should be optimally incorporated into the work of the Department.
The Portfolio Committee recommended that the Department and the WRC present their findings on work to detect groundwater supply, with focused action and implementation plans in this quarter.

8.2.3 Use of the Aquatrip technology to detect water leaks e Members of the Portfolio Committee sought more information on the use of the Aquatrip technology fitted to water pipes to monitor water flow over a period of time.

If leaks are detected, the technology switches off and alerts the user of water leaks.
Members queried whether these were produced locally.

The Portfolio Committee recommended visiting the Water Research Commission to receive a briefing and see how the technology is utilised.

8.3 Catchment Management Agencies 8.3.1 Breede-Gourtiz 8.3.1.1 Drilling of boreholes Members of the Portfolio Committee raised a question on whether farmers drilled their boreholes with the necessary general authorisation or a water use licence dependent on the water of abstracted water.
The Portfolio Committee recommended that a briefing be scheduled with the Department and Catchment Management Agency to obtain substantive information on general authorisation and water use licences for abstracted water through the drilling of boreholes.

22 65 8.3.1.2 Rollover of unspent funds Members of the Portfolio Committee raised a question on the rollover of unspent funds due to the late receiving of funds from the Department and committed funds for validation and verification of water users.
The Portfolio Committee recommended that a briefing be scheduled with the Department and Breede-Gouritz on late payment by the Department, which results in rollovers, a progress report from the Agency to confirm registered volumes of water use, as well as programmes such as the removal of alien invasive species and distribution of rainwater harvesting tanks due to the lockdown.
8.3.2 Inkomati-Usuthu 8.3.2.1 Job creation Members of the Portfolio Committee raised concerns about the ability of the agency to create jobs in the agency’s area of operations in the short and long term.

The Portfolio Committee recommended that a written response be provided on job creation opportunities regarding installing water tanks and clearance of invasive alien species and other future agency projects.
8.3.2.2 Role of the agency in the transformation of irrigation boards to water use associations Members of the Portfolio Committee requested more information on the agency’s role in transforming irrigation boards into water use associations within the catchment management area.

The Portfolio Committee recommended a written response on the progress of setting up an internal task team to facilitate and fast-track the transformation of irrigation boards into water user associations.
The intention is to transform the 26 irrigation boards into two water user associations.

8.3.2.3 Allocation to Broad-Based Black Empowerment (BBBEE) entities Members of the Portfolio Committee requested more information on the Board’s commitment to allocate R30 million in the current financial year to support BBBEE entities.

The Portfolio Committee recommended that the agency provide a substantive written response on the R30 million commitment to the BBBEE programme.
23 66 8.3.2.4 Assistance to resource-poor farmers in the catchment management area Members of the Portfolio Committee requested further information on the agency’s assistance to the resource-poor farmers’ programme.

The Portfolio Committee recommended that the agency provide a written response on supporting resource-poor farmers in its catchment management area.
8.3.2.5 Budget shortfall of R50.7 million, which limits the work of the IUCMA for the financial year under review Members of the Portfolio Committee noted that the agency reported a shortfall of R50.7 million, which would negatively impact their programmes in the current financial year.

While the agency has developed a debt management policy and a revenue advancement plan, it was also crucial for the Department of Water and Sanitation to assist the agency.
The Portfolio Committee recommended that the Department fully support the agency in recovering historical debt and further assist in funding solutions for the budget shortfall of R50.7 million.

The Portfolio Committee expects a progress report within six months of publication of this report.

The Portfolio Committee also recommended that the Department revise its pricing strategy on water use charges for domestic and forestry use to allow CMAs to recuperate more revenue to meet their obligations.
8.4 Trans-Caledon Tunnel Authority 8.4.1 Role of the Trans-Caledon Tunnel Authority transformation agenda of the country and risk management strategies in place to control coercion tactics of contractors to procure tenders Members of the Portfolio Committee raised several issues on the involvement of women in the construction industry, as highlighted in a report by the Water Research Commission.
Other matters of concern within the construction industry related to increasing the involvement of black-owned companies and control of the construction industry by coercion tactics of contractors to obtain tenders on construction sites.

The Portfolio Committee recommended that a more detailed briefing be provided by the Department and TCTA on issues related to the transformation agenda within the construction industry.
The Portfolio Committee further recommended that the Department deal decisively with cases of 24 67 criminality and coercion of the set-aside procurement for local communities in the construction industry.

8.4.2 Role of TCTA in the establishment of the National Water Resources Infrastructure Agency Members queried the role of TCTA in the establishment of the National Water Resources Infrastructure Agency.
The Portfolio Committee recommended that the Department provide a detailed response on the modalities, including a roadmap with timeframes to establish the National Water Resources Infrastructure Agency.
8.4.3 TCTA implementation of AGSA resolution on the accounting systems used in the Lesotho Highlands Water Project Treaty The issue of reconciling accounting systems regarding the Lesotho Highlands Water Project, detailed in the Treaty, has been resolved between National Treasury, the Accountant-General and AGSA.

8.4.4 Acid Mine Drainage Members requested more information on TCTA’s short and long-term strategies to mitigate challenges related to acid mine drainage.
The Portfolio Committee recommended a detailed briefing by the TCTA on mitigating challenges related to acid mine drainage.

Report to be considered.

25 68 4.


Report of the Portfolio Committee on Communications on its deliberations on Budget Vote 4: Government Communication and Information System (GCIS), dated 10 May 2022 The Portfolio Committee on Communications (the Committee), having considered Budget Vote 4: Government Communication and Information System (herein referred to as ‘the Department’) and the Annual Performance Plan (APP) for 2022/23, reports as follows: 1.
Introduction Section 55(2) of the Constitution of the Republic of South Africa, Act 108 of 1996, states that the National Assembly (NA) must provide for mechanisms (a) to ensure that all executive organs of state in the national sphere of government are accountable to it; and (b) to maintain oversight of (i) the exercise of national executive authority including the implementation of legislation; and (ii) any organ of state.
In terms of the Public Finance Management Act (PFMA), the Accounting Officers must provide Parliament or the relevant legislature with their respective institution’s Medium-Term Strategic Framework (MTSF) and where applicable with its Annual Performance Plan.

The Money Bills Amendment Procedure and Related Matters Act was promulgated in 2009, and provides Parliament with powers to reject or recommend the approval of departments’ budgets.
The Act also makes provision for the implementation of recommendations emanating from the committee’s oversight reports.

The Committee met with the Department and the Media Development and Diversity Agency (MDDA), herein referred to as “the Agency” on Tuesday, 19 April 2022.

The meeting with the Department and the Agency was held virtually.

69 2.
69 2.

The Department’s APP 2022/23 An APP sets out what the institution intends doing in the upcoming financial year and during the Medium Term Expenditure Framework (MTEF) 2022/23 – 2024/5 to implement its Strategic Plan.

The document sets out performance indicators and targets for budget programmes, and sub-programmes where relevant, to facilitate the institution realising its goals and objectives set out in the Strategic Plan.
2.1 Mandate Section 195(g) of the Constitution of the Republic of South Africa of 1996 forms the basis of the formation of the Department, where it stipulates that in order to foster transparency the public should be provided with information that is timely, accurate and importantly, accessible.
In 1998, the South African Communication Service was dissolved and the Department established by Cabinet, largely based on recommendations contained in the report of the Task Group on Government Communications (COMTASK).

Therefore, the Department is responsible for providing strategic leadership and coordinating a government communication system that ensures that the public is informed, and has access to government information, programmes and policies that benefit them.

3.
3.

The Department’s Situational Analysis 3.1 Problem Statement Following the attainment of freedom in 1994, the democratic dispensation inherited an unequal society where the majority of the people did not have access to information that could empower them to live a better life.

Since South Africa is now part of the global community, transformed information dissemination structures are a key focus area in marketing the country locally and internationally.
As stated above, the Department was established in terms of Section 239 of the Constitution of the Republic of South Africa of 1996 and as a strategic unit in the Presidency in terms 70 of Section 7 of the Public Service Act, 1994 (Act 103 of 1994).

This constitutional and legislative mandate empowers the Department to use its strategic location to coordinate and lead on communication-related projects that straddle across almost all government departments.
The Department is further mandated to ensure transparency in government and that relevant government structures provide information that is timely, accurate and accessible.

Its coordination role cuts across all three spheres; national, provincial and local government.

Although it has a constitutional mandate, it however still relies on the power of persuasion to compel some departments to fulfil their communication obligations.
The Towards a 25 Year Review report on the performance of government highlights a wide range of areas where service delivery has improved.

It also reveals a number of areas that government still need to address, such as in building social cohesion and nation-building, and advancing inclusive economic growth.

Given the economic challenges facing the country, it is imperative to ensure prudent use of state resources by delivering services effectively and efficiently in a cost-effective manner.
The principle of doing more with less should be considered under these dire financial circumstances.

Information dissemination and direct interaction with communities remain key in empowering and rallying society towards a common vision for a better South Africa.

Government has seamlessly adapted to the modern ways in which the public consume or receive information, by embarking on an intensive penetration and sustained presence in the digital media space.
However, South Africa remains an unequal society with some parts of the country still without internet connectivity while others are yet to enjoy the benefits of technology.

The fervent drive to boost economic growth will culminate in attracting more potential investors and visitors to the country, which is a catalyst for the creation of much-needed jobs.
By providing developmental-related information such as available government programmes and services that empower citizens to actively participate in improving their 71 lives, our provincial and district offices – through the District Development Model (DDM) – contribute to progress in communities.
By also consistently communicating the remarkable progress being achieved by government in terms of providing sustained service delivery to communities, the Department helps to spread a positive message of hope to the public.

Also importantly, the use of all our official languages in communicating with the public, especially those in the far-flung rural areas with minimal access to the mainstream media, contributes immensely to nation-building and a sense of belonging.
3.2 External Environment The 2021/22 financial year has been premised on government’s key priorities, as set out in the February 2021 State of the Nation Address (SoNA).

These priorities centred on defeating the Covid-19 pandemic; promoting economic reforms and recovery, building a capable state and combating corruption.

In addition, Gender Based Violence and Femicide (GBVF) and intensifying the fight against corruption remained top priorities.
These priorities informed the Department’s coordination of the government-wide communications programme, as well as the support it provided as a Department, within The Presidency, to the President as the Communicator-in-Chief, the Deputy President and the Minister in The Presidency.

Government’s performance against these priorities assumed diverse forms, all of which presented a combination of communication opportunities and challenges.
The Department was awarded R50 million in the 2021/22 financial year to drive a centralised Covid-19 vaccination roll-out campaign.
Through this allocation, communication activities ranged across the following areas from 1 April 2021 to date: • Educating and reassuring the public around the roll-out of Covid-19 vaccines during the early phases of the vaccination programme; • Combating vaccine hesitancy and disinformation; • Profiling the President’s globally important role as African Union (AU) Covid-19 champion; 72 • Profiling South Africa’s emergence as a Covid-19 vaccine production centre – from the Aspen Pharmacare investment in Gqeberha in the Eastern Cape to the NantSA facility established in Cape Town in January 2022; • Communications support to the Deputy President as Chair of the Inter-Ministerial Committee (IMC) on Vaccines; • Communications support to Vooma Vaccination Weekend activations; • Communications support to the National Coronavirus Command Council (NCCC), Cabinet, the President’s Coordinating Council (PCC) and special sessions of Cabinet devoted to Covid-19; and • The National Communication Partnership (NCP), which brings together government communicators and professional communicators from the private sector and more broadly, civil society.
The Department delivers a wide range of communication services.

In spearheading the government communication agenda, it provides communication planning and coordination; media engagement services domestically and internationally; content development for its own platforms; media monitoring and analysis; streaming services and community mobilisation through its provincial and district operations, and other activities.
Communication is diverse, and messaging and content should always resonate with the targeted audience.

The range of the Departments’ platforms align with the Government Segmentation Model (GSM) developed in 2016.
In terms of the model, South African society is segmented into five tiers, namely Rooted Realists (48 per cent of the South African adult population), City Seekers (25 per cent of the South African adult population), Safely Suburban (10 per cent of the South African adult population), Metro Mobiles (11 per cent of the South African adult population) and Cosmopolitan Capitals (6 per cent of the South African adult population).
The distribution of communication products and platforms should be diverse to appeal to and reach all five segments of society.
The Department goes into the new financial year armed with a wealth of insights from the GSM (which delineates different audiences geographically and psycho-graphically), public opinion research, cyclical reports from 73 Statistics South Africa (SSA), research insights presented to Cabinet, clusters and other platforms of government, as well as studies by global institutions in the State, non-state or multilateral sectors.
3.3 Internal Environment The Department has demonstrated great resilience over the last two years.

Despite the Covid-19 National State of Disaster restrictions and the varying levels of the risk- adjusted response strategies, the staff of the organisation continued to deliver and implement the mandate of the Department derived from the Constitution of the Republic of South Africa of 1996.
The Department managed to reduce the vacancy rate from 8.44 per cent in the 2020/21 financial year to 6.32 per cent by 28 February 2022.

The three new Deputy-Director Generals (DDGs) assumed duty on 1 March 2022.

Overall, the Department experienced a turnover rate of 5.95 per cent between 1 April 2021 and 28 February 2022.
In support of the ambitions of the Presidential Youth Employment Programme, the Department recruited 22 graduate interns during the 2021/22 financial year to alleviate unemployment amongst young graduates and provide opportunities to gain work experience.
Representation of youth in the Department was improved through the employment of 10 graduate interns into permanent vacant positions and this increased the representation of youth by one percentage point from 30.1 per cent in 2020/21 to 31.2 per cent during 2021/22.

To enhance the achievement of Employment Equity (EE) targets, the Department designated a certain number of posts to promote representation.
This was achieved through targeted recruitment and partnership with institutions for persons with disabilities.

Eight employees from designated groups were recruited during the reporting period.

The national target of 2 per cent was achieved at 3.22 per cent, exceeding the national target by 1.22 per cent.

Women representation at Senior Management Service (SMS) level was achieved at 55 per cent.
74 The Department will continue to mitigate the structural challenges through reprioritisation and possible redefining of job profiles in line with organisational needs.
Through implementation of the Recruitment Plan, informed by the MTEF Human Resource Plan, the Department will continue to recruit and retain a suitably qualified, capable and skilled workforce aligned to the EE targets of the Department and maintain the vacancy rate below 10 per cent as prescribed by the Department of Public Service and Administration (DPSA).

A total of 36 graduate interns will be recruited during the 2022/23 financial year for 24 months.
The interns will be exposed to working areas not limited to creative concept development, copy and scriptwriting, radio advert production, graphic design, video production and photographic services, all of which are in great demand and usage in the communications sector.

Efforts continue on transforming the skills and relevance of HR aligned with the Fourth Industrial Revolution (4IR) ambitions of the organisation.
A list of Hard-to-Fill Skills relevant to the Department and broader communications environment was developed in 2021/22.
The WSP of 2022/23 will continue to prioritise training in areas such as Artificial Intelligence; Big Data Analytics; Business Impact Analysis; Business Intelligence; Business Process Mapping; Cloud Computing; Cyber Security; Digital Transformation; Infographics and Animated Gifts; Social Media and Digital Marketing; Smartphones As An Essential Social Media Tool; Graphic Design; Creative Writing; Drone Operation Licence; Information and communication technology (ICT) infrastructure; Internet of Things; Problem-Tree Analysis; Communication; Customer-Centric; Emotional Intelligence, and Fore-sighting and Forecasting.
E-learning programmes will be encouraged to minimise physical contact.

75 4.

Annual Performance Plan 2022/23 – 2024/25 The Department is allocated R719.9 million in 2022/23, R714.9 million in 2023/24 and R746.8 million in 2024/25.

Transfer payments to public entities, Brand South Africa (BSA) and the Agency, are included under Programme 2: Content Processing and Dissemination and amount to R254.9 million in 2022/23, R256.6 million in 2023/24 and R268 million in 2024/25, see table below.
Programmes R thousand Administration Content Processing and Dissemination Intergovernmental Coordination and Stakeholder Management Total Audited outcomes Adjusted Appropriation Medium term expenditure estimate 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 R’000 R’000 R’000 155 341 167 654 177 791 R’000 178 752 R’000 177 251 R’000 R’ Transfer payments to the aforementioned two public entities (36 per cent) and compensation of employees (39 per cent) comprise on average 75 per cent of the budget over the medium term while 75 per cent of the Department’s allocation over the medium term is shared between the Programme: Content Processing and Dissemination and Programme: Intergovernmental Coordination and Stakeholder Management, and 25 per cent in the Programme: Administration.
The Department’s funded establishment is expected to be 467 permanent posts.
Spending on Goods and Services over the medium term is expected to be primarily on operating leases which comprise mostly of the lease of office accommodation, operating payments that relate mainly to the publication and distribution of the fortnightly Vuk’uzenzele newspaper, travel and subsistence which relate mainly to the covering of events of the President and Deputy President, and computer services in respect of transversal systems, data lines software licences and subscriptions.
Over the medium term, the Department will focus on coordinating and professionalising government communication and making it as cost-effective as possible.

76 4.1 Expenditure Overview To expand its reach to more South Africans, the Department aims to harness and coordinate various communication structures across the government communication system over the medium term.
Essential to doing this economically is joint planning, the sharing of resources and the integration of efforts among government departments.

Compensation of the Department’s 541 employees in 2020/21 was the largest expenditure item, comprising an estimated 38.3 per cent (R844.9 million) of the total budget over the MTEF period.

Transfer payments to entities account for an estimated 34.9 per cent (R779.6 million) of total expenditure.
Vuk’uzenzele newspaper, which is distributed digitally and physically countrywide, is the only national publication that is focused on government’s key priorities, with an emphasis on service delivery programmes and the opportunities created by government.
Over the medium term, the Department plans to produce 30.6 million copies of Vuk’uzenzele at an estimated cost of R75 million to R50.4 million per year for printing in the Products and Platforms subprogramme and R24.6 million per year for distribution in the Communication Service Agency subprogramme, both in the Content Processing and Dissemination programme.

The Department also engages with the public through campaigns and outreach programmes.
These include, community radio talk-shows, activations at taxi ranks and mall, information blitzes on commuter trains and social media campaigns.

It plans to hold 1 140 community and stakeholder engagements per year over the medium term in the form of dialogues, meetings, webinars and community radio talk shows with the sector departments, civil society, your formations, faith based organisations and business forums.
In addition to these initiatives, the Department plans to conduct 1 140 development communication projects over the period ahead to enhance service delivery and keep citizens informed and empowered on government’s progress and projects.

Expenditure for these activities is within the Intergovernmental Coordination and 77 Stakeholder Management programme, which has a budget of R392.7 million over the MTEF period.

5.
5.1 Explanation of Planned Performance Per Programme Programme 1: Administration: (R177.2 million) Audited outcomes Adjusted Appropriation Medium term expenditure estimate R thousand Departmental Management Corporate Services Financial Administration Internal Audit Office Accommodation Total 2018/19 R’000 2019/20 R’000 2020/21 R’000 2021/22 R’000 2022/23 R’000 2023/24 R’000 2024/25 R’ The strategic intention of the this programmes is to provide strategic direction to the organisation and integrated business solutions through transformation and innovation initiatives so as to ensure that the Department remains relevant and maintain good corporate governance.
The Office of the Director General (DG) provides support to the Minister in The Presidency in his role as the Executive Authority to oversee the Department and its public entities reporting to it as well as managing the interface between the Ministry, Cabinet, Parliament and the Department.
The Programme: Administration continues to provide support for Strategic Planning, Risk Management, Performance Monitoring and Reporting (SPRMPMR) across the organisation to ensure alignment and compliance to the legislative framework.

The SPRMPMR has further strengthened and expanded the Department’s planning and reporting processes and system.
This includes the review of the Department’s outcomes in 2020/21 and improvement in a range of indicators for the 2022/23 financial year as well as the introduction of mid-term review sessions and operational planning processes at subprogramme level and a Directors’ Forum for better information flow and integration across the organisation.

78 The Human Resources (HR) subprogramme ensures that all transactional and transformational HR support services are rendered.
Effective initiatives are undertaken towards enabling the department to attract, develop and retain the skills needed to deliver on its mandate.

Talent management, albeit within a restricted fiscal environment, will form the basis of career path development, including succession planning, reskilling of employees and multipronged programmes to ensure that critical skills are retained and that the vacancy rate is maintained at below 10 percent.
Given the changing IT environment and vigilance towards cyber-attacks, the Department will invest in technological reforms that will propel us in delivering on the NDP, MTSF and constitutional requirements.

For the 2022/23 financial year, the Department will invest on MS Office 365 migration and also maintain IT security software in light of cyber-security issues.
Among other areas, the focus over the medium term will be placed on: • strengthening governance and accountability with specific focus on further maturing institutional risk management implementation, intensifying anticorruption and ethics management; • strengthening Business Community Management (BCM) with specific focus on further maturing institutional BCM processes, policies and assessment as well as reporting thereof; • developing the Service Delivery Improvement Programme and strengthening integrated performance reporting with more focus on the revised MTSF and Budget Review and Recommendations Reports’ (BRRRs)outcomes; • coordinating the zero-based budgeting process and coordinating resource allocation to meet priorities set by the department; • strengthening and monitoring compliance to the regulatory universe through the Directorate: Legal Services; and • amplifying internal communication messaging (including Covid-19 vaccination) to keep employees more informed and engaged on both internal issues and matters of national interest.
79 Over the medium term, the Budget Office, through Office of the Chief Financial Officer (CFO), will continue providing financial related advice by monitoring revenue and expenditure trends and ensure that the department remains within spending limits approved by Cabinet.

The Budget Committee will achieve this through in-year monitoring of expenditure of the department.
The Financial Administration team continues to ensure that the department closes its accounting records on the Basic Accounting System timely and with sufficient supporting documentation for accountability, compliance and audit purposes.
In order to realise cost savings and improve administrative efficiencies and effectiveness, the Department will participate in relevant transversal contracts within National Treasury or other organs of state provided such awards meet the procurement process legislative frameworks.
5.2 Programme 2: Content Processing and Dissemination: (R 411.7 million) R thousand Programme Management for Content Processing and Dissemination Policy and Research Products and Platforms Communication Service Agency Entity Oversight Media Policy Total Audited outcomes Adjusted Appropriation Medium term expenditure estimate 2018/19 R’000 2019/20 R’000 2020/21 R’000 2021/22 R’000 2022/23 R’000 2023/24 R’000 2024/25 R’ The programme’s purpose is to provide strategic leadership in government communication to ensure coherence, coordination, consistency, quality, impact and responsiveness.
The programme’s functions are organised into five subprogrammes, namely Products and Platforms, Policy and Research, Communication Service Agency (CSA), Entity Oversight and Media Policy The Department aims to strengthen its monitoring of the implementation of policies and fulfilment of mandates by BSA and the Agency.
The Agency aspires to improve its position as a change and innovation agent for the media sector in the future, offering leadership that will ensure community media’s long-term viability in changing times.

As a result, the 80 Agency has examined and expects to strengthen its research, capacity building, training, advocacy and lobbying functions, although its core activity remains grant and seed funding for community media projects.
At the start of the 2022/23 financial year, the Agency will work on research and development of a sustainability model for community and small commercial media.

This will enable community media to master the fundamentals of sustaining their organizations.

The process to review the MDDA Amendment Act to align it to key technological developments and good corporate governance practices is expected to be a legislative programme for the Department during the 2022/23 financial year.
The changes seek to improve the governance of the MDDA Board, including the fiduciary duties of the Board to move towards “best practice” BSA will address concerning levels of unemployment and low growth, South Africa needs to pursue a range of interventions to secure inclusive and sustainable growth.

One of these interventions is to sustain the effort to stimulate investment in the economy by South African enterprises and global investors.
BSA will focus its actions on the continent in the coming year in order to exploit and amplify the African Continental Free Trade Area (AfCFTA) opportunity; it will also work to improve South Africa’s brand image and reputation worldwide.

During the 2022/23 financial year, the Department will appoint a steering committee, which will be responsible for developing a Draft Print and Digital Media Transformation and Diversity Charter.
Once developed and approved by the Minister in The Presidency, the draft charter will be published in a Government Gazette for public inputs.

The Department will work with a broad range of stakeholders to ensure that messaging resonates, and that the information provided unlocks the agency of individuals and interest groups in making their own contribution to growth and development.
With current web design trends moving to mobile-first design, the website team will focus on bringing a more responsive and mobile-friendly website online during the 2022/23 financial year.

81 Lastly, Media Buying will ensure that government campaigns reach South Africans through a combination of commercial and community media in ways that contribute to the development of emerging media, and through this, contribute to economic recovery.
The operational budget baseline allocation in the programmes is directed to conduct research, monitor media coverage of government programmes and develop content for departmental communication products such as the Vuk’uzenzele newspaper, the Public Sector Magazine (PSM), articles for SANews.gov.za, websites, the South Africa Year Book (SAYB) and Official Guide to South Africa, translations as well as social media, and to provide leadership in the development and production of communication services.
The programme is also responsible for entity oversight and the transfer of budget allocations to BSA and the Agency.

The gradual increase over the medium term is mainly due to inflation adjustment.
5.4 Programme 3: Intergovernmental Coordination and Stakeholder Management: (R124.7 million) Audited outcomes 2018/19 R’000 2019/20 R’000 2020/21 R’000 Adjusted Appropriation 2021/22 R’000 Medium term expenditure estimate 2022/23 R’000 2023/24 2024/25 R’000 R’ R thousand Programme Management for Intergovernmental Coordination and Stakeholder Management Provincial and Local Liaison Media Engagement Cluster Supervision (Human Development, Social Protection and Governance and Administration) Cluster Supervision (Economic and Infrastructure, Justice and International) Total 112 651 118 109 117 980 126 903 130 954 127 939 133 815 82 The purpose of the programme is the implementation of development communication, through mediated and unmediated communication and sound stakeholder relations and partnerships.
The communication work of the programme is guided by the Cabinet-approved NCSF, which replaced the former Department-led Government Communication Programme (GCP).

In terms of content for communication, this is in turn guided by the Medium Term Strategic Framework (MTSF) of government and its annual iteration, the NASP as approved by Cabinet.
During his SoNA, President Ramaphosa outlined the core priorities driving this NASP, which comes in the wake of the global Covid-19 pandemic, which wreaked havoc on both lives and livelihoods.

Communication work in Programme 3 over the medium term will therefore seek to drive access to information about opportunities and programmes aimed at assisting communities to improve their lives, especially building back after this global tragedy, which hit South Africans equally hard.
Being at the mid-term of the sixth democratic administration, the platforms and resources of this programme will seek to promote hope and confidence by expanding on the initiatives around employment generation and economic recovery; fighting GBVF; combating crime and corruption, and building a capable and ethical state.
The Department will enhance the Africa media tours and collaborations; invitations of strategic editors and media partners to visit South Africa flagship programmes such as the South Africa Investment Conference and African Investment Forums.

In as far as improving relations with the international media is concerned, the coming medium term will build on the successful footprint, which has been established across the continent by the Directorate: International Media Engagement.
Virtual Technology has again played a leading role in many new media partnerships across the continent and worldwide.

The created official media platforms have made it easier for international media to access government information and updates.

There will be re-introduction and resuscitation of Izimbizo as well as part of the communication strategy to communicate directly with the people within the ambit of the DDM.
83 The provincial and district offices will continue to profile good news stories from even the remotest districts through the weekly My District Today electronic newsletter.

The newsletter is published every Friday and the targets are aligned to the calendar weeks.

This indicator has a minor increase from 45 editions in 2021/22 to 47 planned editions for 2022/23.
The operational budget allocation in the Programme: Intergovernmental Coordination and Stakeholder Management is directed to the interface of national government communication with provincial communication programmes as well as effective liaison between Ministers towards coherent communication strategies for national government as well as promoting and facilitating the media’s understanding of government’s agenda.

The gradual increase over the medium term is mainly due to inflation adjustment.

6.
6.

Entities of the Department The Department has two entities reporting to it: BSA and MDDA.

However, the Committee has oversight function only over the MDDA and the Department of Planning, Monitoring and Evaluation (DPME) oversees the work of BSA.

Therefore, the Committee will only report on the work of the Agency.
6.1 MDDA: (R 32.3 million) 6.1.1 The Mandate The Agency was set up in terms of the MDDA Act (2002) to enable historically disadvantaged communities and individuals to gain access to the media.
Its mandate is to: a. create an enabling environment for media development and diversity that reflects the needs and aspirations of all South Africans; b. redress exclusion and marginalisation of disadvantaged communities and persons from access to the media and the media industry; c. promote media development and diversity by providing support primarily to Community and Small Commercial Media (CSCM) projects; 84 d. encourage ownership and control of, and access to, media by historically disadvantaged communities as well as by historically diminished indigenous language and cultural groups; e. encourage the development of human resources and training, and capacity building, within the media industry, especially among historically disadvantaged groups; encourage the channeling of resources to the community media and small commercial media sectors; and f. raise public awareness regarding media development and diversity issues.
The Agency’s core activity is to provide financial and non‐financial support to community broadcast projects, and community and small commercial media print and digital projects.

Its emphasis is on promoting indigenous languages and contributing to community development and the alleviation of poverty and inequality.
Over the medium term, it plans to intensify its focus on communities – such as people with disabilities – who are underserved by mainstream media, and on issues associated with gender and young people.

6.1.2 Situational Analysis The onset of the Covid-19 pandemic, which continues to sweep across the world since 2020, has had a profound impact on the external environment in the Agency’s operational environment.
The depressed economy was severely aggravated by the lockdown imposed by the South African government in an effort both to limit the spread of the virus and to prepare the medical facilities for dealing with Covid-19 patients.

This has in turn impacted the CSCM which saw their already fragile sustainability further weakened by falling revenue as advertisers, in both the private and public sectors, introduced cost containment measures.
Emergency funding for the sector introduced by the Agency, and other organisations such as Google and Facebook, assisted in alleviating some of the immediate cost pressures but the long-term impact remains a concern.

85 At the same time, the pandemic served to highlight the immense value of the community and small commercial media sector in conveying critical information, in this case, health information.
This is due to the sector’s reach in remote communities generally sidelined by mainstream media, as well as the use of all indigenous languages as the broadcasting and publishing medium.

The diagram below is an overview of the situational analysis.

6.1.3 Budget Information Table above depicts the Agency’s projected budget over the MTEF period.

It must be noted however, that the Agency is still awaiting the final figures regarding the budgets; the budgets contained are the initial allocation budgets.
86 Underscoring the Agency’s commitment to this, an estimated 50 per cent (R152.9 million) of its budget over the period ahead will be directed towards grant funding for 60 community broadcast projects, and 18 community and small commercial media print and digital projects.

Community broadcast grants assist with the initiation of new projects and the strengthening of existing projects, and account for an estimated 33 per cent (R100.9 million) of the agency’s total budget over the MTEF period.
The Agency plans to ensure the sustainability of the community media sector over the medium term by investing in initiatives that support skills development.

A targeted 24 projects will receive training in areas such as governance at a total projected cost of R4.3 million per year over the MTEF period, of which 58 per cent (R2.5 million) is allocated to community media training.
However, overall expenditure on community and small commercial print and digital projects and community broadcast projects is expected to decrease from R5.8 million in 2021/22 to R4.3 million in 2022/23 due to a decrease in funding from mainstream print media.
As part of the agency’s emphasis on research and capacity development innovation, it plans to launch and implement the community media sustainability model and conduct research at a projected cost of R2.6 million over the medium term to ensure the sector becomes more sustainable.
The Agency is set to derive 36.8 per cent (R112.6 million) of its revenue over the medium term through transfers from the Department, and 55.5 per cent (R169.7 million) through the mainstream community broadcast sector as donations deductible from the Universal Service and Access Fund (USAF) levy.

87 7.

Observations 7.1 The Department The Committee noted with concern the inadequate budget was impacting on critical programmes of the Department.
Before the deficit, a lot of work was done to address GBVF challenges at community level through face-to-face interactions.

These dialogues, which were so effective had to be stopped.

Furthermore, the Committee noted that, as a result of the deficit, the Department’s studios and the Imbizo Centre, located within Parliament were no longer utilized as a result of technological infrastructural challenges.
7.2 MDDA The Committee noted with great concern the governance challenges at the Agency, which would have led to the suspension of the Chief Executive Officer.

8.
Recommendations 8.1 The Department The Committee recommends that the Minister in the Presidency should ensure: (i) that whilst the Department was confronted with budgetary challenges, the DDM was utilized in ensuring that information reached all South Africans irrespective of their geographical location; and (ii) that the Department works with National Treasury to find ways to ensure that there is adequate funding to save the existence and use of Studios and Imbizo centres as well as ensuring relevant ICT technologies are deployed in the area of digital media; and (iii) that the Committee supports the Ministry and Department by engaging with the Appropriations Committee on the need to save GCIS from collapse as well as positioning it to be relevant with the needs of society in delivering on its constitutional mandate.
88 8.2 MDDA The Committee recommends that the Minister in the Presidency should ensure that: (i) the Department provides a comprehensive report on the governance challenges at the Agency and that the entity Oversight Branch provides interventions thereof; (ii) that the MDDA Board appears before the Committee to report on all outstanding governance matters.

The Committee recommends that Budget Vote 4: Government Communication and Information System be approved.
The DA reserved its right on the adoption of the Report.

Report to be considered.

89 5.

Report of the Portfolio Committee on Communications on its deliberations of Budget Vote 30: Communications and Digital Technologies, dated 10 May 2021 The Portfolio Committee on Communications (the Committee), having considered Budget Vote 30: Communications and Digital Technologies (herein referred to as “the Department” and the Annual Performance Plans (APPs) for 2022/23, reports a follows: 1.
Introduction Section 55(2) of the Constitution of the Republic of South Africa, Act 108 of 1996, states that the National Assembly must provide for mechanisms (a) to ensure that all executive organs of state in the national sphere of government are accountable to it; and (b) to maintain oversight of (i) the exercise of national executive authority including the implementation of legislation; and (ii) any organ of state.
In terms of the Public Finance Management Act (PFMA), the Accounting Officers must provide Parliament or the relevant legislature with their respective institution’s Medium-Term Strategic Framework (MTSF) and where applicable with its Annual Performance Plan (APP).

The Money Bills Amendment Procedure and Related Matters Act was promulgated in 2009 and provides Parliament with powers to reject or recommend the approval of departments’ budgets.
The Act also makes provision for the implementation of recommendations emanating from the committee’s oversight reports.

The Committee met with the Department, ICASA, FPB, BBI, NEMISA, USAASA/USAF, ZADNA, SITA, SAPO, SABC and Sentech on 3 May 2022.

90 2.

The Department’s APP 2022 – 2023 An APP sets out what the institution intends doing in the upcoming financial year and during the Medium Term Expenditure Framework (MTEF) to implement its Strategic Plan.
The document sets out performance indicators and targets for budget programmes, and sub-programmes where relevant, to facilitate the institution realising its goals and objectives set out in the Strategic Plan.

The overall purpose of Budget Vote 30 is to create an enabling environment for inclusive growth in the ICT sector by developing policies and legislation that promote infrastructure investment and socioeconomic development.
2.1 Mandate The Department of Communications and Digital Technologies is mandated to enable South Africa’s digital transformation to achieve digital inclusion and economic growth by creating an enabling policy and regulatory environment.
This is done through the implementation of the 2016 National Integrated ICT Policy White Paper, which provides for the participation of multiple stakeholders for inclusive digital transformation; interventions to reinforce competition and facilitate innovation across the value chain; measures to address issues raised by ICT and convergence; and the establishment of a new national postal policy framework.
It also provides for policies to address the digital divide and affordable access, supply‐side issues and infrastructure rollout, and demand‐side issues to facilitate inclusivity.

The department derives its mandate from a number of acts and policies.
Key among these are the: • Broadcasting Act (1999), as amended, which establishes broadcasting policy in South Africa; • Electronic Communications Act (2005), as amended, which provides the legal framework for convergence in the broadcasting, broadcasting signal distribution, and telecommunications sectors.
It also allows for the granting of new licences 91 and social obligations; the control of the radio frequency spectrum; and the regulation of electronic communication network services, electronic communication services, and broadcasting services; • Film and Publications Act (1996), as amended, which provides for the classification of certain films and publications, and establishes the Film and Publication Board and Tribunal; • Independent Communications Authority of South Africa Act (2000), which establishes the regulator in the sector; and • Postal Services Act (1998), as amended, which makes provision for the regulation of postal services.
Chapter 4 of the National Development Plan recognises that ICT is a key enabler of inclusive economic growth that is critical to addressing inequality in South Africa.
Taking into consideration the developments in relation to the Fourth Industrial Revolution (4IR) as well as the PC4IR Country Report developed by the Presidential Commission on the 4IR, coupled with direction stemming from the NDP Five-Year Implementation Plan and the MTSF, the DCDT will in the medium-term focus on developing new and revising existing policies, strategies and legislation.
Such initiatives are encapsulated with in the Outcome of Enabling Digital transformation policies and strategies, which also informed the legislative programme over the MTEF period.

3.

Alignment to the 2019-2024 Revised Medium-Term Strategic Framework (MTSF) Digital Migration programme 92 Broadcasting include superior image resolution (detail) for a given bandwidth.

Smaller bandwidth for a given image resolution.

Compatibility with computers and the Internet.


While South Africa is shifting to digital, it will avoid dumping of analogue Televisions in South Africa.

Minister was having consultation with the Department of Trade, Industry and Competition (DTIC), Department of International Relations and Cooperation (DIRCO) and the International Trade Administration Commission (ITAC) to coordinate government’s approach on the non-proliferation of analogue TVs in the South African market.
The after-market support strategy and plan was established and approved.

The objective of the aftermarket support is to ensure that registered households are supported in all languages during and after STB installation process.

The existing Call Centre within Sentech will be transitioned to the After-Market Support Centre within the SABC.

Following the President announcement during the 2021 SONA, Analogue Transmitter switch off is targeted for 31 March 2022 across all provinces.
The department has engaged with all provincial governments to raise awareness campaigns in order to register qualifying indigent households.

Minister went to Cabinet in September 2021 and a new delivery model was approved.

Subsequently, a Steering Committee was established to ensure strategy development, plans and project governance.

This is led by the Minister a Project Manager was appointed.

To date, four of the Provinces, namely, FS, NC, NW and MP have been fully switched off.
Limpopo to be switched off by the 8th of February 2022.

The remaining provinces (KZN, EC, WC and GP will be switched off between February and March 2022.

Funding for phase 2 of SA connect must be finalised SA Connect is the implementation of the national broadband policy that was approved by Cabinet in 2013.
SA Connect seeks to meet the technology goals of the 93 National Development Plan of creating an inclusive information society and position the government to play an enabling role in the provision of broadband to the number of underserved district municipalities thereby bridge broadband connectivity gaps.

This would be achieved by the pooling of public sector demand and procuring of high-capacity and future-proof network capacity at more affordable rates to address public sector broadband requirements.
And in the process stimulating network builds by the network operators by reducing the associated investment risk, by ensuring demand.

Due to the magnitude of the project, the programme was divided into two phases, phase one and phase two.

In terms of phase one, the programme initially aimed at connecting 6135 government facilities, which include all schools, health facilities, post offices, police stations and government offices, in the eight rural district municipalities, to broadband services.
Phase one scope was subsequently reduced to 970 government facilities due to budget constraints.
Government has mandated the State Information Technology Agency (SITA) and Broadband Infraco (BBI) to provide the end-to-end broadband services to the 970 government facilities in the eight identified district municipalities, namely (1) Dr Kenneth Kaunda in North West, (2) Thabo Mofutsanyane in Free State, (3) OR Tambo in Eastern Cape, (4) Vhembe in Limpopo, (5) Gert Sibande in Mpumalanga, (6) Pixley ka Seme in Northern Cape, (7) uMgungundlovu and (8) uMzinyathi in KZN.
The remaining 5165 facilities that were not provided with broadband service due to the limited budget allocation for the programme will be transferred to phase two of the programme.

94 Auctioning of high demand spectrum licensing The Department and the regulator was planning to start the process of auctioning new spectrum at the beginning of March 2022.

Spectrum refers to the radio frequencies on which data and information are transmitted.
The release of more spectrum by ICASA means a better-quality service for consumers, with fewer dropped calls, faster internet download speeds and the promise of lower mobile data costs.

The last time SA released spectrum was 2004/2005.

It is important to accelerate the release of spectrum, as it’s been identified as one of the key pillars of the state’s economic structural reforms.

For the mobile operators, spectrum allocation will help provide faster and more widespread high-speed data services.
It’s expected the freed-up spectrum will reduce the cost of data and increase access to the internet.

An auction of high- demand spectrum will further assist the government to raise funds for the fiscus.

It should be noted that DCDT and ICASA are working hard on the issue of the high demand spectrum, as it is public interest demands that the licensing of high-demand spectrum cannot be delayed any longer.
Internet penetration/connectivity 95 Internet access has been the critical source of technological “leapfrogging” in South Africa.

This explains why, for example, there are places without running water where one can stream a music video or make a mobile payment.

But Africa is not nearly connected enough.

It is still the continent with the lowest internet penetration rate at 39% of the population, compared to a global average of nearly 60%.
What’s more, there are large differences in internet access between rural and urban areas, with smartphone usage in urban areas exceed that of rural areas by almost 200 per cent in some countries.

Covid-19 has shown the importance of connectivity.

It has never been as important to share correct information and combat fake news, while being able to elicit information from citizens (and internet-users) on behavior and movement.

In South Africa, improving connectivity need not be a long-term goal.
Learners in poor schools need internet access and tablets or smartphones in hand if they are to continue their school year.

Even if greater connectivity does not solve all challenges, from access to information and accountability to unemployment and poverty – simply attempting an improvement in South Africa will activate positive dividends.

According to StatsSA, in 2021, 60.73 percent of the South African population were internet users.

This share is projected to grow to 66.06 percent in 2026.
Furthermore, report by the Digital 2020 for South Africa, indicates that more South Africans have access to the net, with the number of internet users increasing by 1.1 million between 2019 and 2020.

Internet penetration in South Africa stood at 62 per cent in January 2020.

Freedom of the Net 2020 reports on a number of interventions that have helped accelerate internet access and speed.

These include: 96 the Internet.


Combined revenues from Internet access and Internet advertising will account for an estimated R71.6bn, accounting for 37.6% of total revenues.

Focus on the Fourth Industrial Revolution The Fourth Industrial Revolution (4IR) represents a new era of innovation in technology, one that is enhancing human-machine relationships, unlocking new market opportunities, and fueling growth across the global economy.
South Africa is promoting the 4IR and taking steps to leverage it, which may take time we can enjoy the fruits of innovation-led prosperity.

First, a sufficient supply of advanced engineering talent needs to be available.

Beyond that, people in regular jobs need to develop the skills to deal with the disruptive effects of new technologies in their work environments.

The future of South Africa’s education system is an important consideration in its journey towards the 4IR.
Digital technologies have the potential to vastly improve education and have become key to mitigating the learning disruption caused by COVID-19.

As we are entering an era of technological empowerment, but in order to benefit from the many solutions 4IR technologies offer, we first need to address the widening professional skills gap.
According to Accenture expects, by 2026, 4IR could unlock around R1.4 trillion of value in South Africa across agriculture, infrastructure, manufacturing, and financial services.

Ensuring that South Africa’s workforce will be ready for the future of work will likely require a combination of effort from various stakeholders.
Mounting enthusiasm for the 4IR from different groups is a positive sign, but translating that energy into strong, cross-sectoral partnerships will be the key to effective digital skills creation.

It’s clear that if South Africa is to become a legitimate participant in the digital revolution, it will need to make some fundamental changes first.

Chief among these will be to combat the low levels of digital literacy in its workforce.
Despite the daunting task ahead, South Africa has already begun to prepare to take this leap into the future with technological transformation rolling out across sectors.

Beyond 97 simple productivity improvements, 4IR technologies have also become a sign of hope in South Africa’s social and developmental challenges.

It offers the opportunity for transformation, growth, and improvement, for both governments, organisations, and professionals.
In more ways than one, the 4IR is a solution and tool to be harnessed, so that the future of work is one that’s inclusive and beneficial for all.

The DCDT programmes of action for 4IR were developed in the PC4IR SIP, which has been concluded submitted for Ministers consideration.

Target for the PC4IR SIP was for submission for cabinet approval in the fourth quarter of 2021/2022 financial year.

The implementation and monitoring of the PC4IR extends to subsequent MTSF plan where monitoring happens.
The PC4IR PMO developed an M&E framework to assist in the monitoring of the PC4IR implementation.

The PC4IR SIP position the DCDT as a lead facilitator and coordinator of 4IR in the country, through the PC4IR all public and public institutions work together to digitally transform south Africa.

Key to the DCDT role an awareness strategy for 4IR was developed as an initiative to be rollout to build strong relationships with stakeholders.
As a background, the purpose of the PC4IR Strategic Implementation Plan is to provide clear directives, and guidelines in line with South Africa’s 4IR implementation strategy on how 4IR can be used to accelerate socio-economic development.
The purpose is further outlined in detail as follows: (i) Guide South Africa in identifying potential investment areas and opportunities towards ensuring that the country adequately responds to the fourth industrial revolution; (ii) Provide a model for alignment that all spheres of government can work with towards 4IR implementation; (iii) To unify all government technological initiatives to drive digital transformation and position South Africa take advantage of the socio- 98 economic opportunities presented by 4IR; (iv) Assist all spheres of the public and private sectors to identify areas of collaboration and cooperation towards a 4IR- enabled South Africa; and (v) Establish South Africa’s monitoring and evaluation framework to facilitate inclusivity that has an impact on society and to assist in the coordination of technological initiatives.
Besides the PC4IR; DCDT has to lead initiative in the country, region and internationally to position South Africa on 4IR technology development.

The DCDT has also to lead initiative in the country, region and internationally to position South Africa on 4IR technology development.

Some of the initiatives include the AI Blueprint for Africa, SADC Bid Data Framework and Africa 4IR Strategy.
Furthermore, South Africa is to establish the AI Institute, which will lead programmes strategic to South Africa development in the field of AI.

The Department will also ensure coordinated Initiatives to develop and support the application of Drones, IOT, Block Chain, Robotics and A/VR in the South African Economy.

Cost of Data According to WEF South Africa is among the countries that are still on the mend to improve their infrastructure development programmes for economic transformation.
Countries that are well prepared include Denmark, Estonia, Finland, and the Netherlands.

South Africa ranked 89 out of 141 countries surveyed by the World Economic Forum (WEF) in terms of the global competitiveness on ICT adoption.

In terms of the current state of affairs in the ICT Mobile Industry, collaborative approaches between the Department and regulators has seen average data prices reduce by 35 per cent per 1GB across major operators.
In addition, the past eight months has seen the introduction of more flexible regimes for data expiry in the prepaid segments.

Below is a detail explanation of changes in prepaid data prices for 100MB, IGB, 10GB and 20GB following the Competition Commission data services market inquiry.
According to another report produced by the International 99 Telecommunications Union (ITU), According to the report, infrastructure is the main factor causing slow progress to improve ICT adoption in Africa, since infrastructure is the main enabler, key for policy objectives and for rankings and competitiveness.
With regards to the price changes of 100MB prepaid data for 30-day validity, South Africa has suitable ICT policy framework, the impact of COVID-19 pandemic in the country and the rest of the world has reshaped the operations of economic systems and disrupted the world economy.

For this reason, economic sectors and the general population depends on internet connectivity hence the implementation of Government programmes to reduce of data costs.
In South Africa the most impoverished communities because of affordability depends on small data bundles for internet connection, hence the importance of depicting small bundle data costs.
Regarding the price changes for 1GB Prepaid Data for 30-day validity, as part of implementing the Market Inquiry recommendations, mobile network operators, Vodacom, MTN and Cell C, have entered into an agreement with the Competition Commission to reduce the prices of data, improve access to data services and increase in price transparency.
The biggest impact of the Market Inquiry happened in the 1GB category of data bundles, which is the bundle most affected by the settlement agreements entered into between the Competition Commission and the respective licensees.

Vodacom’s and MTN 1GB prepaid data prices has decreased by 34% or R50 from R149 to R99.

Cell C amended its standard 30-day prepaid data bundles, reduced its 1GB data bundle price by 1 per cent from R100 to R99, effective 20 September 2020.
As the Department, we will be engaging the stakeholders to further appeal for more reductions and initiatives on further implement zero rate services, and: 100 • Develop initiatives to foster an enabling environment for investment and ensure that citizens receive affordable, reliable, and quality services, • Conduct a study to further to investigate the feasibility of regulatory, policy and strategies that could impact on lowering the cost to communicate, • Provide clear principles for access and price regulation for the leasing of different types of facilities, • Progress of the rapid infrastructure deployment strategy contained in the previous ECA Amendment Bill, and • The development of alternative infrastructure to provide data services in lower areas and smaller secondary cities and towns nationally.
3.3 2020/21 Overview and Priorities The Department has four strategic outcomes over the period and a total 33 APP targets as illustrated next page: 101 For Outcome 1, the following are the priorities: • 3 Country Positions developed and approved to support the National ICT priorities focused BRICS, ITU-PP 22 and WTDC • Audio Visual White Paper submitted to Cabinet for approval • Policy Direction on the discontinuation of analogue TV sets from domestic production and imports developed • Postbank Amendment Bill monitored in Parliamentary process • Draft Regulatory Reform Policy developed • SABC Bill submitted to Cabinet for approval to introduce in Parliament • Disestablishment of USAASA undertaken • Digital Economy Strategy developed • South African Post Office (SAPO) Amendment Bill submitted to Cabinet for approval to introduce in Parliament • Draft National Cloud Computing Policy submitted to Minister for approval • Strategy developed to leverage delivery of services through 5G and Wi-Fi 6 to stimulate the digital economy • Policy to discontinue GMS phones developed and submitted for approval • Electronic Communications Amendment Bill submitted to Cluster and Cabinet for public consultation approval For Outcome 2, the following are the priorities: • Implementation of the revised SA Connect Model coordinated on the funded sites • Rapid deployment of digital infrastructure coordinated • Implementation of strategic national cybersecurity programmes and services monitored • Household Migration and Analogue Switch-off for the Broadcasting Digital Migration coordinated from households registered after 31 October 2021 • Policy Direction for 5G deployment developed 102 • Implementation of social obligations for new spectrum licence holders monitored • Second Draft SA Preliminary Positions for WRC-23 developed For Outcome 3, the following are the priorities: • Implementation of identified international programmes to support the digital economy initiatives coordinated • Study on Cost to Communicate conducted to inform the
 revision on the data costs and recommendations stemming from the study implemented • Implementation of the National e-Government Strategy and Roadmap, with a focus on a Single Portal for prioritised government services coordinated • Implementation of the Digital and Future Skills Programme facilitated and monitored • Green Paper developed on Digital Government Act • Digital and Future Skill training programmes coordinated through local and international Public and Private Partnerships • Establishment of the Artificial Intelligence (AI) coordinated AI Strategy developed • Digital Economy Master Plan approved and implemented For Outcome 4, the following are the priorities: • Digital transformation strategy initiative implemented (Work Flow Management System) • Departmental and SOC’s GDYC Responsive Programmes monitored in line with National targets • Implementation of DCDT integrated action plan in support of the implementation of National Strategic Plan (NSP) on gender-based violence coordinated focusing on Prevention, Reporting and Economic Power Pillars • District Development Model (DDM) plan in the prioritised District/ Metros implemented 103 • Consolidated performance monitoring and reporting for the Portfolio developed • Implementation of recommendations from analysis of Departmental & Public Entities Performance Reports coordinated • Tabling of submitted Annual Performance Plans of Public Entities in line with the MTSF in line with the MTSF facilitated • Monitoring and evaluation of the Performance Management System for ICASA Councillors facilitated.
4.

Expenditure Analysis Over the medium term, the Department will mainly focus on implementing the broadcasting digital migration policy to release high‐demand spectrum, which will aid socioeconomic development and bridge the digital divide; rolling out broadband to government facilities through the South Africa Connect project; and implementing the legislative programme to support the 2016 National Integrated ICT Policy White Paper.
The Department has a budget of R7.7 billion over the medium term, of which 72.2 per cent (R5.4 billion) is allocated for transfers to entities for their operations, and for project‐specific funding.

Expenditure is expected to decrease at an average annual rate of 13.3 per cent, from R3.9 billion in 2021/22 to R2.5 billion in 2024/25 because of a one‐off allocation of R1.1 billion in 2021/22 for the broadcasting digital migration project.
The Department’s second‐largest cost driver is compensation of employees, spending on which increases at an average annual rate of 1 per cent, from R295.8 million in 2021/22 to R304.4 million in 2024/25.

The number of personnel is expected to decrease from 379 in 2021/22 to 376 in 2024/25 in line with the new organisational structure, which is expected to be finalised over the medium term.
This is also expected to enable the Department to remain within its expenditure ceiling for compensation of employees.

104 To fast‐track the broadcasting digital migration project, the department has revised its delivery model.

All analogue transmitters are expected to have been shut down by the end of 2021/22.
The bulk of funding for this project has been transferred to the Universal Service and Access Fund and the South African Post Office in previous financial years and has been retained by the entities with approval from National Treasury where required.

As a result, spending in the Broadcasting Digital Migration subprogramme in the ICT Infrastructure Development and Support programme is expected to decrease from R1.3 billion in 2021/22 to R84.1 million in 2024/25, at an average annual rate of 59.5 per cent.
The Department will continue to provide broadband connectivity to government facilities through the South Africa Connect project, which will be supported by relevant state‐owned entities.

Accordingly, at a projected cost of R744 million over the MTEF period in the Broadband subprogramme in the ICT Infrastructure Development and Support programme, the department will monitor and maintain the provision of broadband services to 970 government buildings that have already been connected.
The Department will continue to provide a supporting and enabling legislative environment through the development of relevant policies, strategies and legislation.
Over the MTEF period, this will include finalising the audio‐visual white paper; providing policy direction on discontinuing the local production of and importing analogue television sets; drafting and finalising the Digital Transformation Bill, the ICT Regulatory Reform Bill, and the State Digital Infrastructure Company Bill; and providing policy direction for the deployment of 5G.
Expenditure for these activities is within an allocation of R155.5 million over the period ahead in the ICT Policy Development and Research programme.

5.
5.

Performance and Allocation per Programme The Department implements its outcomes through six programmes, namely (i) Administration; (ii) ICT International Relations and Affairs; (iii) ICT Policy 105 Development and Research; (iv) ICT Enterprise and Public Entity Oversight; (v) ICT Infrastructure Development and Support; and (vi) ICT Information Society and Capacity Development.
As mentioned in previous section of this report, the total allocation over the MTEF amounts to R7.7 billion and R2.7 billion for the 2022/23 financial years, see table below.

Over the MTEF - 70 percent of the budget allocated to Transfers to Entities amounts to R5.4 billion over the MTEF as illustrated in table below: COE – Allocated ceiling not to be exceeded without approval of Parliament.

There is a decline in the 2023/24 financial year and an increase in the 2024/25 financial year.
Goods & Services - Included is the allocation for the SA Connect as follows: 2022/23 – R203.857 million 2023/24 – R204.063 million 2024/25 – R212.827 million Total = R620.747 million 106 Transfers – paid to Entities in line with the pre-approved schedule by National Treasury, see table on next page: 5.2 Programme 1: Administration (R271 million) Purpose of this programme is to provide strategic leadership, management and support services to the Department.
Administration expenditure trends and estimates by subprogramme and economic classification 107 Explanation of planned performance over the medium-term period The Department of Communications and Digital Technologies under the Administration programme will focus on the Outcome of a “High performing and sustainable portfolio to enable achievement of their respective mandates and policy objectives”.
The focus of Programme 1 will be to implement the Digital transformation strategy initiatives with specific focus on the development of the Workflow management system which is aligned to the mandate of digitising the work processes moving the Department towards becoming a paperless environment.
Furthermore, the Department will also monitor the Departmental and SOCs GDYC Responsiveness programmes in line with National targets and coordinate the implementation of the DCDT integrated plan of action in support of the implementation of National Strategic Plan (NSP) on gender-based violence.

The outputs of Programme 1 are aligned to Priority 6 of the NDP: A capable, ethical and developmental state and Outcome 2: Functional, efficient and integrated government.
The initiatives are aimed at accelerating the implementation of Departmental projects to improve service delivery.

The justification for the choice of the outcome indicators is based on the reason that DCDT is to ensure that the issues of the gender, disability, youth and children are given a necessary attention it deserves and to improve relevant skills and digitise processes and system.
The Department will also develop the Implementation plan inclusive of priority projects across Districts/Metros to coordinate and monitor the District Development Model.

108 5.3 Programme 2: ICT International Relations and Affairs (R63.4 million) The purpose of the programme is to position South Africa as a digital technological infrastructure and innovation hub leading on digital transformation to contribute to the digital economy.
ICT International Relations expenditure trends and estimates by subprogramme and economic classification Over the MTEF travel constitutes the bulk of spending and decreases from R4.6 million in 2022/23 to R4.4 million in 2024/25 The spending focus over the medium term will be transfer of membership fees to international organisations within the communications sector; participating in the global discourse within the United Nations system on telecommunications, postal services, information society and green technology and pursuing bilateral engagement with countries of the South and North.
Explanation of planned performance over the medium-term period The DCDT will over the medium-term focus on developing Country Positions to support the National ICT priorities focusing 3 position papers on BRICS, ITU-PP 22 and WTDC as part of contributing to the Outcome of having in place Enabling Digital Transformation Policies and Strategies.
Furthermore, the Department will contribute to coordinating the implementation of identified international programmes to support the digital economy initiatives towards achieving the outcome of Transformed Digital Society.
The planned outputs contribute to the NDP implementation plan outcome of an Inclusive economy, enabled by advanced digital technologies, which provides equally accessible, 109 intelligent, and competitive products and services through government and industry while also aligning to Priority 7: A better Africa and world.
5.4 Programme 3: ICT Policy Development and Research (R53.7 million) The purpose of the programme is to develop ICT policies and legislation that support the development of an ICT sector that creates favorable conditions for the accelerated and shared growth of the economy.

Develop strategies that create the uptake and usage of ICT by the majority of the South African population, thus bridging the digital divide.
ICT Policy Development and Research expenditure trends and estimates by subprogramme and economic classification The spending focus over the medium term will be on ICT Legislation developing in line with the National Integrated ICT Policy White Paper.

Over the MTEF, goods and services will increase from R15.1 million in 2022/23 to R15.9 million in 2024/25.

The budgeted amount for travel over the MTEF is R15.1 million and for Consultants: Business and advisory services is R 13.6 million.
Explanation of planned performance over the medium-term period The DCDT will over the medium-term focus on implementing a targeted legislative Programme aimed at achieving the Outcome of having in place Enabling Digital 110 Transformation Policies, Strategies and Regulation, which will form the foundation of the digital economy.

Such policies and legislation will be targeted at stabilising and strengthening its State-Owned Entities.
Amongst the Digital Transformation Bill, and SABC Bill will be submitted to Cabinet.

Relevant policy, legislation and plans will also be focused on creating a conducive policy environment for the Digital Economy.

Further, the process of establishing the State Digital Infrastructure Company will commenced during this financial year.

Programme 3 planned outputs are aligned to the NDP Priority 1: Economic transformation and job creation and the Outcome of Improve competitiveness through ICT adoption.
5.5 Programme 4: ICT Enterprise and Public Entity Oversight (R1.9 billion) The purpose of the programme is to oversee and manage government’s shareholding interest in the ICT public entities and State-Owned Companies.
ICT Enterprise and Public Entity Oversight expenditure trends and estimates by subprogramme and economic classification The spending focus over the medium term will be on continuing to strengthen the department’s ability to exercise oversight over the public entities and the establishment of National e-Skills Institute (iNeSI).

The budgeted amount for travel over the MTEF is R14 million and Consultants budget over MTEF amount to R5.8 million.
111 Explanation of planned performance over the medium-term period The ICT Enterprise and Public Entity Oversight programme contribute to the Outcome: High Performing and financially sustainable portfolio to enable achievement of their respective mandates and policy objectives with specific focus on the State-Owned Entities within the portfolio.
The programme will focus on the consolidation of the performance monitoring and reporting for the Portfolio and more importantly to coordinate the implementation of recommendations from analysis of Departmental & SOE Performance Reports.
Furthermore, particular focus will be given to facilitating the monitoring and evaluation of the Performance Management System for ICASA Councilors and the facilitating the tabling of submitted Annual Performance Plans of Department and Public Entities, in line with the MTSF.

The outputs of Programme 4 are aligned to Priority 6 of the NDP: A capable, ethical and developmental state and Outcome 2: Functional, efficient and integrated government.
5.6 Programme 5: ICT Infrastructure Development & Support (R343 million) The purpose of this programme is to facilitate the provision of robust, reliable, secure and affordable ICT Infrastructure that supports universal access to applications and services.
ICT Infrastructure Development and Support expenditure trends and estimates by subprogramme and economic classification 112 A total R629.3 million is available over medium term in respect of the broadband policy project to support the Digital Development as per the South African Connect implementation plan.

Infrastructure Projects Project name Outputs Project Total Current year Completion Est.
Cost Expenditure Date SA Connect (Broadband Revised SA To be R194.5 R66 million Connect confirmed million Connectivity) Model Broadcasting Analogue 31 March R2.2 R1.3 billion Digital Migration Switch off 2022 billion Explanation of planned performance over the medium-term period The ICT Infrastructure Development and Support Programme contributes towards the Outcome: Increased Access to Secure Digital Infrastructure and Services through undertaking two key infrastructure projects in the form of Broadband roll- out and Broadcasting Digital Migration.
Programme 2 will further monitor the implementation of strategic national cybersecurity programs and services through the awareness programmes and also improve the Quality of services of the Cybersecurity Hub over the medium term.

113 Amongst others, the programme will also focus on the development of the Policy Direction for 5G deployment, and the SA preliminary positions in preparation of WRC-23 in the 2022/23.
The planned outputs are aligned to the NDP Priority 1: Economic transformation and job creation and the Outcome of Improve competitiveness through ICT adoption.

5.7 Programme 6: ICT Information Society Development and Capacity Development: (R82.5 million) The purpose of this programme is to facilitate the development and implementation of interventions that increase the adoption and use of digital technologies to promote digital transformation.
ICT Information Society and Capacity Development expenditure trends and estimates by subprogramme and economic classification Over the MTEF, goods and services will decrease from R26.8 million in 2022/23 to R23.8 million in 2024/25.

The budgeted amount for travel over the MTEF is R12.4 million and for Consultants: Business and advisory services is R 36.4 million.
Explanation of planned performance over the medium-term period ICT Information Society Development and Research Programme will focus on the Outcome: Digitally transformed Economy and Society, which concentrates on key building blocks for a digital society and the digital economy.
Therefore, specific 114 focus will be given to modernisation of business processes within the public sector through the coordination of the implementation of National e-Government Strategy and Roadmap, with a focus on a Single Portal for prioritised government services.

Another key issue is addressing the skills gap through the facilitating and monitoring the Digital and Future Skills Programmes through local and international Public and Private Partnerships focused at training as well.
Programme 6 will also contribute to the Outcome: Enabling Digital Transformation Policies, Strategies and Regulation, through the development of the Strategy to leverage delivery of services through 5G and Wi-Fi 6 to stimulate the digital economy and development of the policy to discontinue GMS phones.
The planned outputs are aligned to the NDP Priority 1: Economic transformation and job creation and the Outcome of Improve competitiveness through ICT adoption as well as Priority 6 of the NDP: A capable, ethical and developmental state and Outcome 2: Functional, efficient and integrated government.

6.

Entities Reporting to the Department Transfers 115 Total allocation on transfers to Entities over the MTEF amounts to R5,4 billion as illustrated above.
6.1 ICASA The Independent Communications Authority of South Africa was established by the Independent Communications Authority of South Africa Act (2000) to regulate the South African communications, broadcasting and postal services sectors.

The authority is listed as a schedule 1 public entity in terms of the Public Finance Management Act (1999) and is a chapter 9 institution in terms of the Constitution.
It derives its mandate from the Electronic Communications Act (2005) to license and regulate electronic communications and broadcasting services, and the Postal Services Act (1998) to license and regulate the postal services sector.

The Authority is empowered to monitor licensee compliance with licence terms and conditions, develop regulations for the three sectors, plan and manage the radio frequency spectrum, and protect consumers in relation to these services.
The Authority plans to issue 13 community television licences per year over the medium term and monitor 255 broadcasting licences.

In its efforts to protect consumers against unfair practices by service providers over the period ahead, the authority plans to develop six tariff analysis reports and resolve an average of 85 per cent of consumer complaints.
In addition, to increase competition in the telecommunications and broadcasting sectors, various projects are planned over the period, including finalising regulations on the subscription television broadcasting market and developing regulations on call termination.

To increase access to quality broadband services, the authority plans to implement the radio frequency migration plan and develop a monitoring report on the impact of the deployment of 5G in the ICT sector.
Additional funding of R300 million in 2022/23 is 116 earmarked for strengthening regulatory capacity and licensing spectrum for international mobile telecommunications, specifically wireless broadband services.

Updates on Relevant Court Rulings One of the key strategic risks faced by the Authority in executing its mandate is litigation.

As an administrative body, the Authority is subject to PAJA and its decisions constitute administrative action as defined in terms PAJA.
As such, its decisions and processes are subject to judicial review and legal challenge by any affected parties and or stakeholders.

The reviews and legal challenges have a bearing on the Authority’s ability to execute its mandate and enforce / implement its decisions.

Furthermore, the reviews and challenges have resulted in court rulings providing much needed clarity on the powers of the Authority as well as its status as an independent statutory and constitutional body.
There have been several notable court rulings over the past five years, which are relevant to the Authority which dealt with inter alia the status of the Authority as an independent constitutional body, the scope and extent of its powers as well as the lawfulness of its decisions.
6.1.1 Expenditure Analysis Expenditure is expected to decrease at an average annual rate of 0.7 per cent, from R524.3 million in 2021/22 to R513.5 million in 2024/25, because of one-off funding of R48.2 million in 2021/22 for the licensing of spectrum.

As the authority requires highly specialised personnel to conduct its work, spending on compensation of employees accounts for an estimated 67 per cent (R1.1 billion) of expenditure over the MTEF period.
The moratorium on the filling of vacant posts is expected to be maintained over the period ahead to remain within the expenditure ceiling for compensation of employees.

117 The authority receives all (R1.7 billion) of its revenue over the medium term through transfers from the Department.

Revenue is expected to decrease in line with expenditure.
ICASA Expenditure trends and estimates by programme/objective/activity In terms of section 15 of the ICASA Act, the Authority is financed from funds appropriated by Parliament.

To this end, 96.3 per cent of the Authority’s revenue over the medium term is derived via transfers (grants) from the DCDT and 3.7 per cent is generated from interest earned from short-term investments.
Grant allocation is expected to increase from R769.4 million in 2022/23 to R495.2 million in 2024/25, at an average annual rate of 5.8 per cent, see table on previous page.

6.2 SABC The South African Broadcasting Corporation derives its mandate from the Broadcasting Act (1999) and is listed as a schedule 2 public entity in the Public Finance Management Act (1999).
The Corporation is mandated to provide broadcasting and information services through a wide range of programming that displays South African talent in educational and entertainment programmes; offer diverse views through a variety of news, information and analysis; and advance national and public interests through popular sports, for example.

Over the MTEF period, the Corporation will continue to transform its programming, operations and management.
It will also explore other revenue opportunities through the introduction of its own streaming and satellite services and seek to increase revenue generated from advertising.

The Corporation will work with the Department 118 on legislative and regulatory interventions to assist with its long‐term sustainability and will continue to focus on implementing its turnaround plan to ensure financial sustainability.
The commendable progress achieved by the SABC in terms of implementing the key actions in its Turnaround Plan must be viewed in the context of the SABC’s Turnaround Journey as illustrated below: 6.2.1 Expenditure Analysis Expenditure is expected to increase at an average annual rate of 6.4 per cent, from R7 billion in 2021/22 to R8.5 billion in 2024/25, driven by increased investment in content, audience research and broadcasting costs.
Compensation of the corporation’s estimated 2 699 employees accounts for 33 per cent (R7.7 billion) of its projected spending over the medium term.

As the Corporation is mostly self‐funding, transfers from the Department account for an estimated 2.9 per cent (R663.2 million) of revenue over the medium term, while proceeds from television licence fees account for an estimated 15.9 per cent (R3.8 billion).
The remaining 81.2 per cent (R20.2 billion) is expected to be generated by advertising and other commercial activities.

Total revenue is expected 119 to increase at an average annual rate of 10.9 per cent, from R6.4 billion in 2021/22 to R8.8 billion in 2024/25.
SABC expenditure trends and estimates by programme/objective/activity Advertising revenue is expected to increase by 13 per cent in the Financial Year 2023, this is based on Industry expectations and the slow improvement in the economic climate of the world as the Covid19 Pandemic continues.

Over the MTEF period, revenue is expected to grow by an average of 11 per cent.
Sponsorship revenue is projected to close off at R600 million for the FY2022, which is a 70 per cent improvement from the Financial Year 2021 numbers.

Sponsorship revenue is budgeted to increase by 44 per cent in the Financial Year 2023, owing to enhance strategies to grow this revenue line.

Sponsorship revenues will improve by average of 20 per cent over the MTEF period.

Sponsorship Revenue will increase in Financial Year 2025 from R1.026 billion to R1.195 billion.
The SABC OTT platform is expected to launch in the second quarter of the Financial Year 2022.

Revenue from the OTT platform is expected to amount to R88 million for FY2023.

OTT will total R471 million over the MTEF period, with 59 per cent of that from access fees and 20 per cent from advertising revenue.

120 License fees are expected to improve by 10 per cent in the Financial Year 2023.

This is based on the current collection rate.

License will grow at an average of 5 per cent over the MTEF period.
Other revenue and income includes government grants, Trade exchanges, Content exploitation Revenue, Revenue from websites totaling an expected 48 per cent.

Over the MTEF period permanent employee costs bill increase by R280 million.

Marketing costs are expected to increase by 277 per cent in Financial Year 2023.

The SABC is in a process of trying to reshape itself in terms of marketing and branding in line with competitors.
Three agencies will be appointed in the Financial Year 2023 to the value of R100 million.

Radio is planning to host their annual awards events.

All these marketing initiatives are aimed at drawing audiences back to the SABC and improve revenue generation.

6.3 South African Post Office (SAPO) The South African Post Office is a schedule 2 public entity in terms of the Public Finance Management Act (1999).
It is a government business enterprise established to provide postal and related services to the public and derives its mandate from the Postal Services Act (1998) and the South African Post Office SOC Ltd Act (2011).
The Postal Services Act (1998) makes provision for the regulation of postal services and the operational functions of the post office, including universal service obligations, and grants it an exclusive mandate to conduct postal services in the reserved sector for items such as letters, postcards and parcels less than 1 kilogram.
Over the medium term, the post office will continue to provide universal access to postal and related services, focusing on courier services, postal services, financial services and e‐commerce.

The COVID‐19 pandemic and subsequent lockdown restrictions resulted in a slowing down of the post office’s business activities, which negatively affected revenue in 2020/21 and 2021/22.
Accordingly, over the period 121 ahead, the post office plans to focus on the implementation of its revised turnaround strategy to improve its financial position.

6.3.1 Expenditure Analysis R1.6 billion over the MTEF period is allocated to fund the post office’s public service mandate.

This will enable it to maintain 1 979 points of presence, including post offices and retail postal agencies, and provide postal services in areas that have been historically neglected.
Total expenditure is expected to decrease at an average annual rate of 4.8 per cent, from R7 billion in 2020/21 to R6 billion in 2024/25.

This is mainly due to a decrease in spending on compensation of employees, from R4 billion in 2021/22 to R2.7 billion in 2024/25, due to the staff optimization project, which will see the number of employees decrease from 16 275 in 2021/22 to projected 10 254 in 2024/25.
The post office derives its revenue from providing postal and courier services, and from fees for financial transactions.

Revenue is expected to increase at an average annual rate of 4.7 per cent, from R5.5 billion in 2021/22 to R6.3 billion in 2024/25, due to expected opportunities in the government sector and the unreserved market in which the post office competes with the private sector.
SAPO expenditure trends and estimates by programme/objective/activity The financials has been prepared against a backdrop of increased financial pressures, difficult trading conditions and the COVID-19 pandemic that has resulted in a slowdown in SAPO’s business activities during the 2020/2021 financial year, 122 resulting in a loss of R2.4 billion.
SAPO’s financial difficulties have continued for the nine months ending 31 December 2021 with a loss of R1.6 billion; which has further exacerbated the cash flow position.

SAPO’s cash flow position is dire, as creditors, medical aid contributions, pension fund contributions and SARS obligations remained unpaid and will continue not to be paid unless urgent financial assistance is provided.

Postal services declined by R1.2 billion in 2020/2021 financial year in comparison to the 2019/2020 financial year.
The reduction in postal services volumes has been accelerated by the impact of the COVID-19 pandemic.

The lower volumes have continued in the nine months of the 2021/2022 financial year and it is anticipated that this trend will continue for the remainder of the financial year.
MTEF allocations to fund the public service mandate (excludes VAT): • 2022/2023 FY - R452 million • 2022/2023 FY - R456 million • 2023/2024 FY - R476 million The following revenue initiatives have been included in the budgets for the 2022/2023 financial year to the 2024/2025 financial year: 6.4 State Information Technology Agency 123 The State Information Technology Agency was established through the State Information Technology Agency Act (1998) and is listed as a schedule 3A public entity.
The agency is mandated to provide IT, information systems and related services to and on behalf of government departments and organs of state.

This includes the provision and maintenance of transversal information and data processing systems and their associated services, the maintenance of secure information systems, and the execution of its functions according to approved policies and standards.
Over the period ahead, the agency will focus on its financial sustainability, and has reconfigured its strategic programmes to complement the objectives of the national economic reconstruction and recovery plan.

In line with this focus, it will continue to seek collaborations with the industry and learning institutions to create relevant and useful content and seek to build innovation capital by encouraging initiatives such as hackathons among the public.
The Agency will also collaborate with local research institutions to develop innovative digital solutions for government and focus on information and cybersecurity to ensure that the state and its citizens are able to transact, communicate and interface within a secure and safe environment.

6.4.1 Expenditure Analysis Expenditure is expected to increase at an average annual rate of 3.8 per cent, from R6.2 billion in 2021/22 to R7 billion in 2024/25.
Goods and services accounts for an estimated 61.2 per cent (R12.2 billion) of expenditure over the medium term, mostly for the provision of IT services, whereas compensation of employees accounts for an estimated 33.5 per cent (R6.7 billion).

124 As the implementation of strategic projects – such as South Africa Connect, cloud infrastructure and the Gauteng broadband network – require substantial capital investment, R1.5 billion is allocated for the acquisition of assets over the MTEF period.
The Agency generates revenue by providing ICT infrastructure and services to government departments and organs of state.

Revenue is expected to increase at an average annual rate of 4.3 per cent, from R6.2 billion in 2021/22 to R7.1 billion in 2024/25.

Revenue for the Financial Year 2022/2023 is estimated at R5.917 billion an increase of 4 per cent as compared to the forecast of the Financial Year 2021/22.
SITA expenditure trends and estimates by programme/objective/activity Cost of sales increased by 5.1 per cent when compared to the Financial Year 2021/2022 forecast to R4.175 billion for the 2022/2023 financial year, which is aligned with the concerted, cost cutting measures that have been implemented.

Operating expenses (Opex) are expected to increase by 25 per cent from a forecast of R1.387bn for the Financial Year 2021/22 financial year to an estimated R1.728 billion in the Financial Year 2022/23.
The total capital expenditure requirement for the Financial Year 2022/23 is budgeted at R750 million.

However, the actual total Capex requirement far exceeds this amount.

SITA may have to consider borrowing funds as well as applying for conditional grants in order to meet its capital expenditure requirements.
As per currently available information the allocation of capital expenditure per programme is reflected below: 125 6.5 Sentech Sentech was established in terms of the Sentech Act (1996) and is listed as a schedule 3B public entity in the Public Finance Management Act (1999).

It is responsible for providing broadcasting signal distribution services to licensed television and radio broadcasters.
In 2002, following the deregulation of the telecommunications sector, Sentech was granted two additional licences, allowing the entity to provide international voice‐based telecommunications and multimedia services.
Over the MTEF period, the entity will continue to develop new and innovative digital solutions in response to shifts in consumer behavior and preferences; expand its radio network; improve its existing infrastructure; and conclude the process of shutting down analogue transmitters in the migration to digital, which is expected to be completed by 31 March 2022.
Accordingly, the Entity will ensure that it provides digital television coverage to 85 per cent of households each year over the medium term, and that digital terrestrial television is available for 99 per cent of households.

6.5.1 Expenditure Analysis Sentech plans to spend R1.1 billion on the acquisition of property, plant and equipment over the MTEF period.
Goods and services account for an estimated 37.6 126 per cent (R1.5 billion) of expenditure over the period ahead, mostly for service expenses such as satellite costs.

Compensation of employees accounts for an estimated 25.9 per cent (R1 billion) of the Entity’s budget, spending on which is expected to decrease at an average annual rate of 1.1 per cent, from R1.5 billion in 2021/22 to R1.4 billion in 2024/25.

This is due to a moratorium on the filling of vacant posts arising from resignations.
The Entity expects to derive 93.8 per cent (R4.1 billion) of its revenue over the MTEF period through television, radio and streaming services rendered to customers, and the remainder through other sources such as rental income.

Revenue is expected to decrease at an average annual rate of 1.3 per cent, from R1.5 billion in 2021/22 to R1.4 billion in 2024/25, because of the analogue signal network being switched off, resulting in television revenue decreasing slightly before recovering again.
Sentech expenditure trends and estimates by programme/objective/activity Sentech is forecasting a cash balance of approximately R1.9 billion by end of March 2023.

For the 2022/23 financial year, Sentech is projecting revenues of R1.501 billion and operating expenditure of R1,301 billion from continuing operations, resulting in an operating profit of R200 million.
The Company is employing strategic initiatives which will result in continuing revenue increasing by 19 per cent (R243m) on 2021/22 financial year forecasted R1.259 million.

There is a sizable increase in cash generated from operations in financial year 2023 compared to financial year 2022.
Management is positioning the Company for 127 future growth and there will be cash outflows for these strategic initiatives amounting to R250 million per year in financial year 2023, financial year 2024, and R100 million in financial year 2025.

6.6 Broadband Infraco Broadband Infraco’s legislative mandate, as set out in the Broadband Infraco Act (2007), is to provide ICT infrastructure and broadband capacity in South Africa.
Its main objectives are to expand the availability and affordability of access to electronic communications, including in underdeveloped and underserviced areas; ensure that the bandwidth requirements for specific projects of national interests are met; and enable the state to provide affordable access to electronic communications networks and services.

Over the medium term, the Entity will focus on becoming financially and operationally sustainable.
This will involve obtaining access to additional infrastructure, investment and funding, which will assist its growth and enable it to offer customers better network and connectivity.

Structural changes such as working from home and delivering education online have resulted in greater cost efficiencies.

The Entity will harness these insights to optimise its business model; review its operating model; and implement improved processes, systems, structures and governance.
Over the MTEF period, the entity plans to facilitate the connection of 713 government sites to broadband and maintain the time taken to restore faults on the core network at 7.5 hours.

6.6.1 Expenditure Analysis Expenditure is expected to increase at an average annual rate of 3.7 per cent, from R734.8 million in 2021/22 to R820 million in 2024/25.
This is mainly due to increased spending on goods and services, which accounts for an estimated 53.9 per cent (R1.3 billion) of the company’s total expenditure over the MTEF period.

128 Revenue is derived mainly from rendering connectivity services and is expected to increase at an average annual rate of 0.5 per cent, from R914.2 million in 2021/22 to R929.1 million in 2024/25.
BBI expenditure trends and estimates by programme/objective/activity Total funds to be raised in 2023 is R622 million and R334 million to fund specific capacity upgrades will be sourced from Project Finance.R28 million will be used to supplement funding generated from operations required for customer and refurbishment projects.

R178 million will be used to fund the upgrade SDH to IP network and OSS/BSS.

Total revenue expected is R168 million (29%) existing.
Low Probability Revenue (<80%) R1.4 million (0.3%).

SA Connect contracted sales of R141 million (24.4%) and USAASA sites of R25 million (4.4%) included.

Network Investment Strategy revenue of R58 million (10.0%) included and renewal revenue of R5 million (1%).

The growth of existing and new customers is expected at R109 million (18.9%).
6.7 The FPB The Film and Publication Board was established in terms of the Films and Publications Act (1996), as amended, and is listed as a schedule 3A public entity in terms of the Public Finance Management Act (1999).
Its mandate is to regulate the creation, production, possession and distribution of certain publications and films by classifying them; imposing age restrictions on content; and rendering the 129 exploitative use of children in pornographic publications, films or online material punishable.
Over the medium term, the board plans to improve its productivity by automating registration processes to allow distributors to register online; review its classification guidelines to align them with societal norms and standards; and deploy compliance monitors to conduct 21 000 inspections at all identified distributors of content to ensure their compliance with relevant legislation.
6.7.1 Expenditure Analysis To carry out its medium term activities, expenditure for FPB is expected to increase at an average annual rate of 5.7 per cent, from R116.8 million in 2021/22 to R138 million in 2024/25.

Compensation of employees is the board’s main cost driver, accounting for an estimated 53.1 per cent (R207 million) of its expenditure over the MTEF period.
The board expects to derive 81.4 per cent (R315.3 million) of its revenue over the period ahead through transfers from the department and the remainder through fees for classification and registration.

Revenue is expected to be in line with expenditure over the medium term.

FPB expenditure trends and estimates by programme/objective/activity 130 Total revenue is projected to grow from R111.8m (to be audited) Financial Year 2022 to R125.0m in Financial Year 2023.
Taking note that all strategic deliverables of the entity may not be funded by the Government Grant and Subsidies, the entity is seeking to increase the percentage of Self Generated Revenue as a percentage of Total Revenue as well as the reprioritization of existing funds.

The FPB has embarked on a Revenue Enhancement Strategy to enhance revenue streams outside of the Government Grant and Subsidies.
In Financial Year 2021, Self Generated Revenue consisted of 6 per cent of the Total Annual Revenue and it has grown to 10 per cent of Total Annual Revenue in Financial Year 2022.

It is expected to grow to 21 per cent of total revenue in Financial Year 2025/26.

The goal in Financial Year 2023 is to increase Self Generated Revenue to 18 per cent of Total Annual Revenue.
6.8 National Electronic Media Institute of South Africa The National Electronic Media Institute of South Africa was established as a non‐profit institution for education in terms of the Companies Act (1973) and is listed as a schedule 3A public entity in terms of the Public Finance Management Act (1999).
Its programmes were initially structured to enhance the market readiness of students in broadcasting, but its mandate has been expanded to include the development of e‐skills capacity in South Africa and the implementation of e‐skills programmes in collaboration with its partners.

Over the medium term, the institute will continue to implement its operating model and digital skills agenda in collaboration with government, businesses, civil society and the education sector.
Identified e‐skills priority areas include government e‐enablement, creative new media industries, e‐inclusion and social innovation.

Accordingly, over the medium term, the institute aims to provide specialist technology skills to 9 400 citizens and train 370 000 learners in e‐literacy.

131 6.8.1 Expenditure Analysis Expenditure is expected to increase at an average annual rate of 4.1 per cent, from R98.5 million in 2021/22 to R111.2 million in 2024/25.
Goods and services, mainly rental costs for office space and in‐house training, account for an estimated 38.4 per cent (R121.6 million) of expenditure over the medium term.

NEMISA expenditure trends and estimates by programme/objective/activity Transfers and subsidies to higher education institutions to fund e‐skills projects account for an estimated 27.3 per cent (R85.9 million).

The institute derives all its revenue through transfers from the Department.
Revenue is expected to increase in line with expenditure over the period ahead.

6.9 Universal Service and Access Agency of South Africa & Universal Service and Access Agency Fund (USAASA/USAF) The Universal Service and Access Agency of South Africa (the Agency) was established in terms of section 80 of the Electronic Communications Act (2005) and is listed as a schedule 3A public entity in terms of the Public Finance Management Act (1999).
Its sole mandate is to promote universal service and access to electronic communications and broadcasting services.

The Universal Service and Access Fund was established in terms of section 89(1) of the Electronic Communications Act (2005) and is listed as a schedule 3A public 132 entity in the Public Finance Management Act (1999).

The fund’s sole mandate is to subsidise ICT equipment and services, and electronic communications and broadcasting networks for needy people in underserviced areas.
The USAF is managed by the Agency.

Over the medium term, the fund will focus on concluding the broadcasting digital migration project, which will ensure the release of much‐needed spectrum.

In line with the President’s 2021 State of the Nation Address, analogue transmission is set to be shut down and switched to digital on 31 March 2022.
As such, the fund will focus on providing aftermarket support for the installation of set‐top boxes, supporting the objectives of the revised analogue switch‐off plan adopted by Cabinet in September 2021, and funding the operational costs and the maintenance of the national call centre established to support broadcasting digital migration.

The Universal Service and Access Fund will also provide 850 sites in underserviced areas with internet connectivity and maintain these connections over the period ahead.
6.9.1 Expenditure Analysis The Agency is allocated a total budget of R263.7 million over the MTEF period, which is derived through transfers from the department.

These funds will mostly be used to manage the implementation of the broadcasting digital migration project.
USAASA expenditure trends and estimates by programme/objective/activity 133 Total expenditure is expected to decrease at an average annual rate of 20 per cent, from R177.1 million in 2021/22 to R90.8 million in 2024/25, because of additional funding for the broadcasting digital migration project, which was earmarked for the South African Post Office to cover distribution costs, coming to an end in 2021/22.
The USAF is allocated R386.7 million over the medium term, mostly for implementing activities related to broadcasting digital migration.

These funds will be supplemented with transfers that have been made to the fund in previous financial years and retained with the approval of National Treasury in terms of section 53(3) of the Public Finance Management Act (1999).
USAF expenditure trends and estimates by programme/objective/activity Total expenditure is expected to decrease at an average annual rate of 10.2 per cent, from R183.5 million in 2021/22 to R133.1 million in 2024/25, as the one‐off allocations for broadcasting digital migration conclude in 2021/22.

The USAF derives all its revenue through transfers from the Department and has no personnel.
6.10 .ZA Domain Name Authority (.ZADNA) .ZADNA is a statutory, not-for-profit entity established in terms of Chapter X of the Electronic Communications and Transactions (ECT) Act 25 of 2002 to administer, manage and regulate the .ZA namespace.

134 Its mandate is to regulate the za domain namespace and ensure that the namespace is used and managed efficiently.
This in order to ascertain that the za country code Top Level Domain (ccTLD) is always visible on the internet, as za is the South African identifier online.

Furthermore, to ensure that the za namespace is robust and resilient at all times.
For 2022/23, ZADNA will focus on the following to deliver on its statutory mandate and reposition itself for the future: (a) We will continue to improve our stakeholder engagement and management; (b) Focused .ZA awareness; (c) Better co-ordination of Internet Governance dialogue with stakeholders; (d) Registrar Reseller Training which focuses on Women, Youth and People living with disabilities; (e) Better support of the non-commercial Second Level Domain community; (f) Implementation of the promulgated regulation and compliance checks; and (g) Enhancement of our internal capabilities and process with the intent to improve our delivery on the mandate.
6.10.1 Approved Budgeted Income & Expenditure for 2022/2023 7.
Committee Observations 7.1 The Department 135 Having considered the Strategic Plan and APP of the Department, the Committee noted: (i) that Entities that have previously been lagging to deliver on their set targets, strive to improve service delivery; (ii) that some entities are struggling to maintain clean audits; and (iii) that there is focus on compliance, meeting targets and responding to the Auditor-General with no measurements on the impact of such performances and the impact on the lives of ordinary citizens.
7.2 ICASA Having considered the APP of ICASA, the Committee noted: (i) and welcomed the conclusion of the spectrum auction; (ii) and welcomed the reduction of litigation costs; and (iii) with concern the high staff turnover.
7.3 SABC Having considered the APP of the SABC, the Committee noted: (i) the plans to mitigate risks were inadequate; (ii) with concern that the SABC is unable to achieve annual target revenues; (iii) with concern that the PFMA supply chain restrictions led to inadequate procurement of compelling content; (iv) with appreciation of the 12-month exemption from the PFMA, restrictions by National Treasury thereby facilitating speedy procurement of compelling content which makes the SABC competitive; (v) with further concern that the SABC is unable to recruit and retain a competent workforce; (vi) with greater concern about the improper governance practices; (vii) with concern that there is inadequate reporting to the Committee on update on addressing of findings by various State organs; 136 (viii) that the Corporation has yet to resolve all Auditor-General’s findings despite seriousness of the findings; (ix) that the increases in marketing spend are geared at increasing revenue as a result of non-investment over a number of past years by the Corporation; (x) welcome the feedback on the resolve between the Executive and the Board; and (xi) that there are unresolved governance matters that may still cripple the Corporation in its quest to remain competitive.
7.4 USAASA/USAF Having considered the APP of USAASA/USAF, the Committee noted: (i) with concern that financial presentations are not adequately presented 7.5 SITA Having considered the APP of SITA, the Committee did not have any input to make.

The presentation was noted and agreed to.


7.6 SAPO Having considered the APP of SAPO, the Committee noted: (i) with concern that SAPO is struggling to provide services especially to rural communities; (ii) with serious concern that the Entity has R4.2 billion in debt; and (iii) that there is not clear plan by SAPO to integrate the District Development Model of municipalities.

7.7 Sentech Having considered the APP of Sentech, the Committee noted: 137 (i) that Sentech is struggling to attract new customers.
7.8 .

ZADNA Having considered the APP of.

ZADNA, the Committee did not have any input to make.

The presentation was noted and agreed to.


7.9 BBI Having considered the APP of BBI, the Committee noted: (i) with concern that plans to mitigate risks are not adequately described; (ii) with further concern that the report is not clear on the mitigations plans for the situations; (iii) with further concern that there is low employee morale at BBI; (iv) with serious concern about the customer defections; and (v) with concern that BBI is unable to adapt to rapid changes in the market and technology.
7.10 NEMISA Having considered the APP of NEMISA, the Committee did not have any input to make.

The presentation was noted and agreed to.

7.11 FPB Having considered the APP of FPB, the Committee noted: (i) that customer satisfaction initiatives of the Board are inadequate; and (ii) that inadequate capacity of the Entity may impact negatively on its ability to implement the amendments of the Act.

138 8.
Committee Recommendations 8.1 The Department The Committee recommends that the Minister should ensure that the Department: (i) guarantees that entities strive to deliver on their set targets in order to improve service delivery; (ii) and its entities use the billions of public funds are handled with the highest level of accountability—should present a plan to the Committee next Term on plans to mitigate non-performance; (iii) and all its portfolio maintains clean audits; and (iv) guarantees compliance of its portfolio is equal to service delivery and translates to tangible results in changing the lives of ordinary citizens.
8.2 ICASA The Committee recommends that the Minister should ensure that ICASA: (i) develops strategies to circumvent the high staff turnover and present to the Committee during next Term; and (ii) appears before the Committee after the adoption of the report to present a progress report on the spectrum auction and related process.
8.3 SABC The Committee recommends that the Minister should ensure that (i) the Corporation develops plans to mitigate risks; (ii) the Corporation provides plans to expedite addressing of findings by various State organs; (iii) the Corporation endeavours to resolve all Auditor General’s findings because they are serious in nature; (iv) the Corporation maximises its allocated marketing spend in order to increase revenue and appear before the Committee before Board term end to present a marketing plan; 139 (v) the Corporation strives to maximise on annual target revenues; (vi) presents a plan to the Committee no later than April 2023 on how it plans to procure compelling content; (vii) develops a plan to recruit and retain a competent workforce; (viii) improves on governance practices and the current Board should provide a governance sustainability plan no later than their end of term; and (ix) appears before the Committee during next term and provide a report on the causes and resolutions of differences between the Board and the Executive relating to the BDM Policy.
8.4 SAPO The Committee recommends that the Minister must ensure that: (i) rural communities receive services provided by SAPO at all times; should appear before the Committee to present on the operations of SAPO outlets across the country; and (ii) SAPO integrates its Strategy with the District Development Model of municipalities.

8.5 USAASA/USAF The Committee recommends that the Minister must ensure that USAASA/USAF: (i) financial models are adequately outlined in future plans.
8.6 SITA The Committee did not have any further recommendations for the Entity having noted and agreed to the presentation.

8.7 Sentech The Committee recommends that the Minister should ensure that Sentech: 140 (i) develops strategies to attract new customers.

8.8 .

ZADNA The Committee did not have any further recommendations for the Entity having noted and agreed to the presentation.
8.9 BBI The Committee recommends that the Minister should ensure that BBI: (i) develops plans to mitigate risks especially the low staff morale and present a report before the Committee no later than April 2023; (ii) provides a clear strategy on how to circumvent customer defections; (iii) improves on its reporting to the Committee; and (iv) improves on its inability to adapt to rapid changes in the market and technology.
8.10 NEMISA The Committee did not have any further recommendations for the Entity having noted and agreed to the presentation.

8.11 FPB The Committee recommends that the Minister should ensure that FPB: (i) develop plans to improve customer satisfaction initiatives of the Board and present to the Committee in the coming term of Parliament; (ii) builds adequate capacity to enable the implementation of responsibilities imposed by the Amendments of the Act.
Lastly, the Committee will continue to support SAPO by engaging National Treasury to speed up funding.

141 The Committee recommends that the House approve Budget Vote 30: Communications and Digital Technologies.

The DA and the EFF reserved their right on the adoption of the Report.

Report to be considered.

142 6.
REPORT OF THE PORTFOLIO COMMITTEE ON SOCIAL DEVELOPMENT ON THE BUDGET VOTE 19, THE ANNUAL PERFORMANCE PLANS OF THE DEPARTMENT OF SOCIAL DEVELOPMENT AND ITS ENTITIES FOR 2022/23 DATED 11 May 2022 The Portfolio Committee on Social Development having considered and deliberated on the Budget Vote, the Annual Performance Plans of the Department of Social Development (DSD), the South African Social Security Agency (SASSA) and the National Development Agency (NDA) on 20 April 2022, wishes to report as follows: 1.
Introduction The Committee’s mandate as prescribed by the Constitution of South Africa and the Rules of Parliament is to build an oversight process that ensures a quality process of scrutinising and overseeing government’s action that is driven by the ideal of realising a better quality of life for all people of South Africa.

As part of conducting its oversight the Committee has a constitutional mandate to scrutinise and thereafter approve the budget of the department and its entities.
It also considers the Annual Performance Plans of these institutions.

It thereafter, draft a report (the current report) in which it reports of the APPs of the department and its entities as they were presented to it.

It then raises its observations and formulate recommendations.

As part of scrutinising the budget allocation and APPs the Committee makes use of the budget information contained in the National Treasury’s Estimates of National Expenditure (ENE).
This report forms basis from which the Committee debates the budget and APPs of the departments and its entities.

This process culminates to the approval of the department’s budget.

1 143 2.

Auditor-General review findings Prior to the committee receiving presentations of the APPs and SPs from the department and its entities, it received a briefing from the office of the AG.

The briefing was on the review it conducted on the APPs of the department, SASSA and the NDA.
The review focused on whether targets and indicators in the APPs are specific, measurable and time bound.

It also focused on the Status of Control in the department and SASSA.

No review on Status of Records was conducted for the NDA.

Reviews were conducted on the APPs on DSD’s Programme 4: Welfare Services Policy Development and Implementation Support; SASSA’s Programme 2: Benefits Administration and Support; and NDA’s Programme 1: Governance and Administration and Programme 2: CSO Development.
The errors that were found were communicated with the management and were all corrected.

On the review on the Status of Records, the AGSA made the identified the findings areas of concern: • Department of Social Development o Financial Management: Applicants receiving additional R350 unemployment social relief of distress (SRD) grant could be ineligible, leading to overpayments, which could result in increase in debtor’s balance.

Some payments for SRD grants (food parcels, vouchers, uniforms, etc.)
were not done in terms of policies and procedures, resulting in ineligible beneficiaries receiving grant.

Valuation of grants debtors and debtors’ impairment remains a risk as amounts not recoverable are not properly written off or impaired.

The asset register that was provided by management does not agree to the interim financial statements for the period ended 30 September 2021.
This may indicate that the asset register is not updated on a regular basis and the necessary reconciliations are not being done timely.

o Procurement and Contract Management: Forty-four (44) bids, which were planned to be awarded in the period ending 31 December 2021, were not awarded as per the procurement plan.

However, the evaluation of the bids was still in progress.

This may indicate that the department's progress in executing its mandate may be slower than expected.
this may be as a result in failure to contract timeously and may result in deviations, incurrence of irregular expenditure, and failure to achieve set targets.

2 144 o Compliance Management: The inability to finalise investigations in a timely manner has resulted in a failure to implement consequence management against those who were responsible for incurring irregular expenditure and fruitless and wasteful expenditure.
o Human Resources: There are vacancies in key posts, including that of the director- general.

o IT Management: IT security and user management findings were reported in the 2020/21audit.

The findings included a number of key weaknesses in the firewall that was recently implemented and has not yet been fully tested to ascertain its effectiveness.

Given the current environment, in which online communication is used, weakness in security management may leave the department vulnerable to cybercrime.
o Financial Health: Department showed a net asset position mainly due to the high grant debtors outstanding.

As all these funds are not recoverable and if majority is written off or impaired it will result in the department being in a net liability position.

The department should monitor the systems and policies of grants payments as administered by SASSA to minimize grant debtors balance.
• South African Social Security Agency o Financial Management: The preventative controls over recognition and classification of assets are not effective.

The AGSA noted that some assets were incorrectly recognised as work in progress.

It also noted deficiencies in the asset management system that do not take into account the exact period the asset was placed/ brought in use in allocating the depreciation of the capital assets.
There are long outstanding debtors for a period of 2-3 years, which is an indication that debtor accounts are not followed-up regularly in line with the debt management and collection policy of the Agency.

o Performance Management: AGSA reviewed Quarter 1 and Quarter 2 performance reports and noted that at end of Quarter 2, the entity had not achieved desired quarterly performance for two consecutive quarters.

Annual performance targets may thus not be achieved, which could impact service delivery.
In addition, inconsistencies between the 2021-22 Annual Performance Plan and the first and second quarter performance reports for the number of social grant applications approved indicator 3 145 may result in misstatements to the performance reported in the annual performance report.

o Compliance Management: There is slow progress in finalising cases under investigation, which impacts on consequence management.
Some of these cases date back to 2011 irregular expenditure and 2013 fruitless and wasteful expenditure cases.

The inability to finalise investigations has resulted in a failure to implement consequence management against those who were responsible for incurring irregular expenditure and fruitless and wasteful expenditure.
o Procurement and Contract Management: As per the status of the implementation of the procurement/demand management plan, only 25% of the 136 planned bids were awarded as at 31/12/2021 while 68% was still in progress and 4% not yet started.

• 83 contracts had expired as at 30/09/2021 with no replacements contracts through the normal procurement process or deviation process.
This may result in undue deviations from normal procurement process and to the incurrence of irregular expenditure if extensions are not obtained from National Treasury timeously or if the conditions attached to the National Treasury approval of deviations are not complied with.

o Humana Resources: Vacancies in senior management positions, including Chief Operations Officer, General Managers, Senior Managers and District Managers.
As per the Labour Relations report for the period April 2021 to November 2021, two suspensions of Senior Managers were noted which put a strain in human resources which may compromise segregation of duties and lead to poor worker morale.

Appointment of officials without valid qualifications may result to material irregularities, which may be reported in the audit report.

o IT Management: IT security, IT service continuity and user management findings were reported in the 2020/21audit.
The findings included the internal control weaknesses relating to the Disaster Recovery Plan (DRP) which did not include the SRD 350 grant management system and failure of SOCPEN to validate if grant applicants have any source of income as well as the amount of income being earned by the applicants to ensure that beneficiaries do not receive grants that are higher than what they qualify for.

o Oversight and Monitoring: Only 49% of the planned initiatives have been implemented as at 30 October 2021.
This creates a risk that those findings may reoccur in the current financial year if the necessary preventative controls are not implemented.

4 146 With regard to the NDA, the AGSA identified as a concern that a new Board has not been appointed.

The term of office of the previous Board ended on 30 June 2021.

The current acting CEO has been appointed to be the interim accounting authority.
This structure is not in compliance with the requirements of section 5 of the National Development Agency Act as the act requires the board to consist of 11 members.

The also identified the material irregularities (MI) at SASSA: • Payment of social assistance fees to a service provider for services that were not rendered.

The service provider was not entitled to the fees since SASSA had directly made the related grant payments to the beneficiaries’ bank accounts on its own.
The payment for services not rendered to SASSA resulted in non-compliance with section 50(1)(a) and (b) of the PFMA as the accounting authority did not act in the best interests of SASSA.

The non-compliance also resulted in a material financial loss of R74 million for SASSA.

This amount is still disclosed as part of the closing balance of fruitless and wasteful expenditure as indicated in note 30 to the 2020-21 annual financial statements of SASSA.
The accounting officer has taken adequate steps to address the MI.

An investigation is being conducted to determine if any current and former staff can be held liable.

The recovery process can only be completed once the liquidation process of the entity that received the payment is finalised.
• Payments were made to ineligible individuals due to inadequate internal controls to perform validations and prevent payments being made to persons that were not entitled to the Social Relief of Distress (SRD) R350 grant.

This resulted in non- compliance with section 51(1)(a)(i) of the PFMA as the entity did not maintain effective, efficient and transparent systems of financial and risk management and related internal controls.
The non-compliance is likely to result in a material financial loss for SASSA.

MI is still in progress, further work is being done by the AGSA on the R350 grants based on disagreement from the accounting authority in their submission to the AGSA in response to the MI.

5 147 • Payment of R316 million in 2014 to a service provider that was appointed to administer grant payments at the time.

The payment was made as part of a variation to the service level agreement with the service provider.
However, this variation was concluded contrary to SASSA’s supply chain management policy in that no prior approval from the bid adjudication committee had been sought or given.

The variation was not necessary since the additional services were covered by the existing service level agreement with the service provider.

This meant that the service provider was not entitled to the additional payment from SASSA.
The payment for services not rendered resulted in non-compliance with section 51(1)(c) of the PFMA and a financial loss of R316 million to SASSA.

Adequate steps are being taken by the accounting authority to address the MI.

An investigation is being conducted to determine if any current and former staff can be held liable.

The recovery process can only be completed once the liquidation process of the entity that received the payment is finalised.
Recommendations to the Portfolio Committee: The AGSA made the following recommendations to the Committee: • The Portfolio committee must follow up on the progress on resolving the MI and action taken is ensuring losses do not continue.

• It should hold the department and its entities to account in respect of how the taxpayers’ money is used.

It detects waste within the machinery of government and public agencies.

Thus it can improve efficiency, economy and effectiveness of government operations.
• It should determine what action or consequence have been taken against those responsible for the MI.

• It should also conduct oversight over the filling of vacancies to ensure stability of leadership.

• It should also conduct oversight over the implementation of action plans to address the audit findings.

6 148 • It should also enforce a culture of consequence management in the social development portfolio.
• It should monitor and follow up on the progress of receiving databases on a regular basis to do the monthly validations against other databases to reduce the risks of payment to ineligible applicants.

• It should make a follow up on appointment of the NDA board in terms of the NDA Act.

2.1 COMMITTEE DELIBERATIONS • The Committee reiterated its concerns over the lack of consequence management and that officials are not complying to the necessary policies and regulations.
Lack of consequence management is demonstrated by the fact that some of those implicated are no longer working for the NDA.

• It also noted with concern the AGSA’s findings on vacancies in critical positions and the serious implications it has on the functioning of the institutions.

• It also noted with concern the AGSA’s finding that at SASSA some officials were appointed who did not have qualifications.
• It also noted the concern raised by the AGSA regarding weaknesses in the IT security management of the Department which may leave it vulnerable to cybercrime.

• It sought clarity on the AGSA’s view on the status on the preventative controls at DSD and its entities.

Are there any that are still outstanding?

Are the preventative controls contained in the Acting DG’s performance agreement as well as of the senior employees?
Does the AGSA keep a dashboard on the recommendations it has made and findings on preventative controls?

The AGSA explained that the preventative controls that were previously reported on related to COVID 19 measures and many of them have not been fully implemented.

• The Committee also noted with concern the findings the AGSA made on MI, particularly relating the payment of the R350 Social Relief of Distress (SRD) grant to ineligible beneficiaries.
It wanted to know the extent of the material losses incurred?

And to what extent this was due to inadequate controls?

7 149 AGSA explained that SASSA management is of the view that adequate controls have been put in place, but based on audit controls, this is not the case.

SASSA is operating in a paperless environment and that makes the administration and payment of the SRD grant even more challenging.

SASSA used older databases which led to overpayments in some cases.
Databases are not always accurate and complete.

Also, SASSA only receives databases for a particular month two months after it has made a payment.

It is important therefore for SASSA to still conduct its verification.

It should also use as many databases as it can, to try and identify ineligible beneficiaries.

For example, it can also verify using banks databases.

A means test is another important method that can be used and it must be done by the banks.
It can also use National Student Financial Aid Scheme (NSFAS) and Unemployment Insurance Fund (UIF) databases.

In 2021, over R200 million was lost on the payment of SRD grant to ineligible beneficiaries.

It still needs to be established what the potential amount was lost between August 2021 and March 2022 as well as who the ineligible applicants are.

• The Committee also wanted to know what is the AGSA’s view on the development of outcome indicators by the social development portfolio?
The AGSA reported that the 2022/23 performance information shows that there are technical indicators and targets that should be linked to the mandate of the department and the entities.

During the audit process it reviews whether that there is alignment between the audit process and what is contained in the Annual Performance Plan and the legal mandate.

It advised the Committee to be also involved in the planning process.
The Committee should ensure that the set performance information is within the ambit of the issues it considers to be critical.

8 150 3.
8 150 3.

THE DEPARTMENT OF SOCIAL DEVELOPMENT ANNUAL PERFORMANCE PLAN (2022/2023) 3.1 The mandate, vision and the mission of the department The mandate of the Department of Social Development is to provide social protection services and leads government efforts to forge partnerships through which vulnerable individuals, groups and communities become capable and self-reliant participants in their own department.
The department therefore derives its mandate from several pieces of legislation and policies that are aligned to the Constitution.

These include the White Paper for Social Welfare (1997) and the Population Policy (1998), which set out the principles, guidelines, policies and programmes for developmental social welfare in South Africa.

The White Paper for Social Welfare has provided the foundation for social welfare in the post-1994 era.
The White Paper on Social Welfare is being reviewed to expand to make it more inclusive of a wide variety of social welfare services.

The vision of the department is a to promote “caring and self-reliant society”.

The department’s mission is to “transform our society by building conscious and capable citizens through the provision of comprehensive, integrated and sustainable social development services”.
3.3 Policy Priorities for 2022/23 financial year The mandate of the Department of Social Development is to provide social protection services and leads government efforts to forge partnerships through which vulnerable individuals, groups, and communities become capable and self-reliant participants in their own development.
This is to be achieved while giving effect to the right of everyone to have access to: (a) health care services, including reproductive health care; (b) sufficient food and water; and (c) social security, including if they are unable to support themselves and their dependents, appropriate social assistance, as stated in section 27 (1)(2) of the Constitution of the Republic of South Africa (the, Constitution), 1996.
This mandate places the 9 151 Department at the centre of government's initiatives to improve the quality of life for all persons in the country.

The policy priorities of the Department should be in line with the aspirations of the NDP, MTSF, SDGs, AU Agenda 2063, and 2022 SONA policy imperatives.

As mentioned earlier, the 2022/23 APP of the Department is premised of governments priorities as espoused in the MTSF, and build towards the attainment of the NDP aspirations.
Thus, the MTSF has identified seven (7) priorities to be undertaken during 2019 - 2024 electoral cycle in order to put South Africa on a positive trajectory towards the achievement of the 2030 vision.

Although four (4) of the seven (7) priorities relate to the work of the Department, Priority 4 (consolidating the social wage through reliable and quality basic services) has a direct bearing on its work.
The four (4) priorities are highlighted in Figure 1: Figure 1: selected MTSF 2019-24 priorities related to Social Development sector Therefore, the Department has a direct responsibility of ensuring that priority 4 is delivered in a manner that will benefit the communities in South Africa, as outlined in the 2022/23 policy priorities, through: • Implementing the National Strategic Plan to eradicate Gender-Based Violence and Femicide (GBVF).

• Improving the optimisation of social welfare services.
• Optimising the social security legislative framework and develop appropriate norms and standards for service delivery.

10 152 • Optimising the non-profit organisations legislative framework to promote good governance and accountability.

• Promoting vibrant and sustainable communities.

• Improved household food security.

4.


BUDGET ANALYSIS FOR 2022/23 The Social Development Sector provides social protection services and leads government efforts to forge partnerships through which vulnerable individuals, groups and communities become capable and self-reliant participants.
This mandate is realised through the following five (5) budgeted programmes: Administration; Social Assistance; Social Security Policy and Administration; Welfare Services Policy Development and Implementation Support; and Social Policy and Integrated Service Delivery.

The total budget allocation of the Department is R257.0 billion for the 2022/23 financial year, which is a nominal increase of R23.27 billion (or 10 per cent) compared to the R233.7 billion adjusted budget for 2021/22.
Table 1: The Overall budget allocation to the Department and its programmes for the 2022/23 financial year Programme Budget Nominal ↑ or Real ↑ or Nominal Real R million 2021/22 2022/23 ↓ in 2022/23 ↓ in Percent Percent 2022/23 change in change in 2022/23 2022/23 Programme 1 417,9 423,6 5,7 - 12,5 1,36% -3,00% Programme 2 224 542,2 248 294,6 23 752,4 13 060,3 10,58% 5,82% Programme 3 8 077,5 7 614,5 - 463,0 - 790,9 -5,73% -9,79% Programme 4 304,0 Programme 5 385,9 309,1 359,6 5,1 - 26,3 - 8,2 1,68% -2,70% - 41,8 -6,82% -10,83% TOTAL 233 727,5 257 001,4 23 273,9 12 206,9 10,0% 5,22% 11 153 Figure 2 below illustrates how the Department’s budget allocation is affected by the inflation rate of 4.5% for 2022/23 financial year.
Figure 2: DSD budget over the medium term in nominal and real (inflation rate: 4.5%) Figure 3 below compares the Department's budget allocation on specific line budget line items according to economic classifications.

As shown in the Figure, a large proportion of the Departmental budget goes to transfers and subsidies to the value of R232.79 billion (which is 99.6 per cent of the total departmental budget).
For 2022/2023 and 2023/24 financial years, the baseline budget of the Department has been adjusted to include special budget allocations for the following items: • Extended Social Relief of Distress Grant (SRD) – R44.0 billion in 2022/23, • Inflationary increases to social grants – R5.5 billion in 2023/24 and R7.6 billion in 2024/25, • Child Support Grant (CSG) Top-Up for double orphans in the care of relatives – R687.0 million in 2023/24 and R871.0 million in 2024/25, and 12 154 Current payments accounted for the next highest budget allocation to the value of R922.3 million (0.36 per cent of the total departmental budget) and payment of capital assets to the value of R12.5 million (0.01 per cent).
Figure 3: The proportion of the total DSD budget spent on specific line-items according to economic classification The current payments budget shows a real increase half a million rand between 2021/22 and 2022/23 financial years.

The current payments totals R922.3 million, of which: • CoE receives R507.3 million, compared to R516.7 million previously • Goods and Services receives R415.5 million in 2022/23 compared R405.6 million previously.
CoE declines with -1.8% from the previous year, whilst Goods and Services increase in real terms with 2.4%.

The payment of capital assets budget shows a nominal increase of R700 thousand (5.60%).

It increases from R12.5 million in 2021/22 to R13.2 million 2022/23 financial year.

Of this amount, R12.5 million (96.2% of the total budget of this line item) is allocated to machinery and equipment, with the remaining allocated to software and other intangible assets.
13 155 There is a notable increase in both nominal and in real rand value for transfers and subsidies line item.

It increases from R232.79 billion in 2021/22 to R256 billion in 2022/23 year.

The budget increases in this line item are driven by the following: • Households: there is a notable real budget increase from an adjusted R224.54 billion in 2021/22, to R248.3 billion in 2022/23.
• Non‐profit institutions: payments to this line item show a real increase from an adjusted R29.7 million in 2021/22, to R44 million in 2022/23.

5.

BUDGET AND ANNUAL PERFORMANCE TARGETS PER PROGRAMME 5.1 Budget allocations per programme Figure 4 compares the proportional allocations per main programme between the 2021/22 adjusted budget and 2022/23 voted funds.

This excludes programme 2: Social Assistance which is managed by SASSA in paying out social grants.
Figure 4: Comparison of budget allocation between the Departmental programmes Programme 1: Administration receives a budget allocation of R423.5 million for 2022/23, which shows nominal increase of R5.7 million compared to the adjusted budget of R417.9 million in 2021/22 financial year.

However, when the inflation is considered, the programme’s budget shows a real decline of R12.5 million (or -3.00 real percent change).

This programme only consumes 0.2 per cent of the total budget of the Department.
Over the medium term, the programme’s budget shows an average growth rate of 1.6 per cent.

14 156 Programme 2: Social Assistance, the only programme that achieved a positive budget in both nominal and in real rand terns.

The total budget allocation for the programme is R248.2 billion for 2022/23 financial year, up from an adjusted budget of R224.5 billion in 2021/22 financial year.

This programme shows a nominal increase of R23.75billion (10.58%) or a real increase of R13.0 billion (5.82%).
This programme consumes about 96.2 per cent of the total departmental budget.

Over the medium term, the programme’s budget shows an average growth rate of -0.1 per cent.

Programme 3: Social Security Policy and Administration is the second largest budget of the Department and receives an allocation of R7.6 billion for 2022/23 financial year.

This is a decline compared to the adjusted budget allocation of R8.0 billion in 2021/22 financial year.
The programme’s budget shows a nominal decrease of R463 million and a real decrease of R790.9 million.

The programme consumes about 3.3 per cent of the total departmental budget.

Over the medium term, the programme’s budget shows an average growth rate of 3.3 per cent.

Programme 5: Social Policy and Integrated Service Delivery experiences significant budget cuts compared to other programmes of the Department, i.e., its budget decreases from R385.9 million, to R359.6 million.
Therefore, the programme’s budget shows a nominal decrease of R26.3 million (-6.82 per cent) and a real decrease of R41.8 million (-10.83 per cent).

The notable decrease in this programme is the transfer to the National Development Agency (NDA) from R246.0 million in 2021/22, to R 219.3 million in 2022/23 financial year.

Over the medium term, the programme’s budget shows an average growth rate of -1.0 per cent.
Programme 4: Welfare Service Policy Development and Implementation Support budget increases from R304 million in 2021/22 to R309.1 million in 2022/23 financial year.

This shows a nominal increase of R5.1 million (1.68 per cent) and a real decrease of R8.2 million (-2.70 per cent) between 2021/22 and 2022/23 financial years.

However, over the medium term, the programme’s budget shows an average growth rate of 2.0 per cent.
15 157 5.2 Performance targets per programme 5.2.1 Programme 1: Administration The purpose of this programme is to provide leadership, management and support to the department and the social sector.
The programme budget is allocated across 6 sub- programmes as listed below: Table 2: Budget allocation for the sub-programmes Sub-programmes 2021/22 Ministry R42.6 million Department Management R71.7 million 2022/23 R43.7 million R73.5 million Corporate Management R164.1 million R168.2 million Finance Internal Audit R73.5 million R16.5 million Office Accommodation R44.9 million R75.4 million R16.6 million R46.6 million TOTAL CoE R413.2 million R423.5 million R210.8 million (51.0%) R210.7 million (49.9%) Goods and Services R196.8 million (47.6%) R206.9 million (48.7%) The Department reports that it will utilise its budget to pilot the Electronic Monitoring and Evaluation (M&E) System for Social Development in three (3) provinces, and obtain an unqualified audit opinion.
It will also implement the National Integrated Social Protection Information System (NISPIS).

Furthermore, the Department is planning to submit a government wide strategy on the employment of social services professionals to the Cabinet during this financial year.

This programme is a strategic partner to the core business of the Department and is regulated by a myriad of legislation.
It is responsible for ensuring effective and efficient governance 16 158 systems are in place to create an enabling environment to deliver on its mandate.

Thus, during 2022/23 financial year, the Department is planning to: • Submit the Draft SASSA Amendment Bill.

• Draft Regulations on Children’s Amendment Bill submitted to the Minister for approval.

• Refine and validate the Draft Social Development Bill.

• Draft Regulations on Older Persons Amendment Bill.
• Submit the Victim Support Services Bill to Cabinet for approval.

• Table NPO Amendment Bill to Cabinet/Parliament.

• Produce a Draft Amendment NDA Bill.

The realisation of the targets set in this programme will contribute to the achievement of government priorities, particularly, priorities 3 and 6.
5.2.2 Programme 2: Social Assistance The purpose of this programme is to ensure the provision of social assistance to eligible beneficiaries in terms of the Social Assistance Act (No.13 of 2004) and its regulations.

The programme consists of payments made to beneficiaries for the provision of social grants as administered and paid by SASSA on behalf of the Department: Table 3: Payments for provision of social grants Sub-programmes 2021/22 Old Age War Veterans Disability Foster Care R86.
487 billion R1.197 million R23.
579 billion R4.338 billion Care Dependency R3.658 billion Child Support Grant-in-Aid R73.318 billion R1.6 billion Social Relief of Distress R31.561 billion 2022/23 R92 .146 billion R962 thousand R24.704 billion R4.057 billion R3.875 billion R77.224 billion R1.901 billion R44.386 billion TOTAL R195.516 billion R204.295 billion Households (transfers) R195.516 billion (100%) R204.295 billion (100%) 17 159 Over the medium-term, the Department will continue to transfer funds to beneficiaries for the provision of social grants for the provision of social grants to the elderly, children, war veterans and persons with disabilities.
Social grants account for an estimated 94.3 per cent (R175.3 billion per year on average) of the Department’s total budget over the MTEF period.

SASSA is mandated to pay social grants to 19.1 million beneficiaries in 2022/2023, up from 18.6 million in 2021/2022 (in line with the National Treasury's final projection).

Spending on grants is expected to increase at an average annual rate of 7.5 per cent over the medium term.
This is mostly due to inflationary adjustments to the value of the grants and growth in the number of beneficiaries.

The elderly population, is growing by 3% per year.

As the elderly population grows, the number of beneficiaries who receive the old age grant is expected to increase.

Likewise, as the child population grows, the number of beneficiaries who receive the child support grant is expected to increase.
The high levels of unemployment and poverty in the country, combined with high wage inequality and low labour market participation, contribute to the growth of social grants to children.

Therefore, the social assistance programme will continue to be an important lever in government’s arsenal to tackle poverty and inequality.
5.2.3 Programme 3: Social Security Policy and Administration The purpose of this programme is to provide for social security policy development, administrative justice, the administration of social grants, and the reduction of incorrect benefit payments.
The programme budget is allocated across 5 sub-programmes as listed below: 18 160 Table 4: Budget allocation for 5 sub-programmes Sub-programmes Budget 2021/22 Budget 2022/23 Social Security Policy R66.0 million R68.8 million Development Appeals Adjudication R40.5 million R40.7 million Social Grants Administration R7.393 billion R7.427 billion Social Grants Fraud Investigations R70.8 million Programme Management R5.4 million R72 million R5.5 million TOTAL R7.576 billion R7.615 billion Current payments R104.4 million (1.3%) R109.6 million (1.4%) Transfers and subsidies R7.469 billion (98.5%) R7.502 billion (98.5%) Payments for capital assets R2.8 million (0.03%) R2.9 million (0.03%) The programme aims to amend the Social Assistance Act, SASSA Act and the Fund-Raising Act to address existing gaps and inconsistencies in the legislation.
It also plans to develop critical policy documents – 1) draft policy for integrating children’s grants beneficiaries with government services; 2) draft policy on maternal support for vulnerable pregnant women and children; 3) draft policy for income support to 18–59-year-old; and 4) draft policy on voluntary cover for retirement and risk benefits for atypical and informal sector workers.
5.2.4 Programme 4: Welfare Services Policy Development and Implementation Support The purpose of this programme is to create an enabling environment for the delivery of equitable developmental welfare services through the formulation of policies, norms and standards and best practices and support to implementing agencies.
The programme budget is allocated across 9 sub-programmes as listed below: 19 161 Table 1: Budget allocation for sub-programmes Sub-programmes Budget 2021/22 Budget 2022/23 Service Standards Substance Abuse Older Persons R31.7 million R21.9 million R20.2 million People with Disabilities R13.7 million Children Families R85.4 million R10.8 million Social Crime Prevention R73.4 million and Victim Empower HIV and AIDS Youth R13.6 million R25.5 million R30.9 million R20.7 million R19.1 million R13.6 million R82.9 million R10.5 million R75.4 million R12.6 million R42.4 million Social Worker Scholarships R3.4 million - Programme Management R4.5 million TOTAL CoE R304.6 million R142.0 million Goods and Services R121.8 million R4.7 million R313.1 million R142.8 million R115.6 million Only three of the 11 sub-programmes under this programme show positive budget increases in nominal terms, i.e.
Social Crime Prevention and Victim Empowerment, Youth and Programme Management.
Importantly, this programme aims to do the following: • Train 270 social workers on Adoption Policy Framework and Strategy; • Present the revised White Paper on Families to the Technical Working Group; • Monitor the implementation of the Guidelines for Community Based Prevention and Early Intervention Services to vulnerable children; • Monitor the implementation of the Intersectoral Protocol on Management of Violence Against Children, Child Abuse and exploitation; • Monitor the implementation of the programme of action on foster care in provinces; • Capacitate 7 public treatment centres on the implementation of the UTC; • Capacitate (15) GBVF hotspot districts on the provision of psychosocial services policy and Intersectoral Policy on Sheltering Services in implementing the NSP; and 20 162 • Capacitate 4 provinces on the Guidelines on Respite Care Services for Families of Children and Persons with Disabilities 5.2.5 Programme 5: Social Policy and Integrated Service Delivery The purpose of this programme is to support community development and promote evidence-based policymaking in the department and the social development sector.
The programme budget is allocated across 8 sub-programmes as listed below: Table 2: Budget allocation for sub-programmes Sub-programmes Budget 2021/22 Budget 2022/23 Social Policy Research and Development R6.5 million R6.5 million Special Projects and Innovation R12.2 million R12.8 million Population Policy Promotion R38.4 million R38.7 million Registration and Monitoring of Non- R41.5 million R41.9 million Profit Organisations Substance Abuse Advisory Services and Oversight Community Development R6.9 million R7.0 million R30.5 million R29.8 million National Development Agency R246.0 million R219.2 million Programme Management R3.8 million R3.8 million TOTAL Current payments R385.9 million R359.6 million R136.8 million R137.4 million Transfers and Subsidies R248.2 million R221.2 million Payments for capital assets R1.0 million R1.0 million Of the eight (8) sub-programmes in this programme, only two (2) have experienced budget cuts, namely; Community Development and the National Development Agency.
The notable budget cut is that of the transfer to the NDA to the value of R26.8 million.
Importantly, under this Programme, the Department plans to do the following: • Create 176 474 EPWP work opportunities through Social Sector EPWP Programmes; 21 163 • Capacitate stakeholders to implement NPO Mentorship Model; • Build capacity of provinces on the implementation of the DSD Sector Funding Policy; • Implement NPO sector payment system in all provinces; • Develop an annual report on the implementation of the National Food and Nutrition Security Plan; • Link 20 000 social protection beneficiaries to sustainable livelihood opportunities; and • Train 92 municipalities on the Integrating Migration issues into the IDP.
6.

COMMITTEE DELIBERATIONS • The Committee reiterated its concern over the continuing vacancy in the position of the Director-General and wanted to know when will it be filled.

It was equally concerned about other vacancies in critical positions, particularly at senior management level.

What are the budget implications of these vacancies?

The Committee had raised the same concerns over the past two years and these posts remain unfilled.
With the Department not filling vacancies in critical position the concern is how is it going to meet the NDP’s target of employing 3 000 social workers?

The Department explained that with the budget cuts, especially on Compensation on Employees (COEs), it had to embark on re-prioritising of posts.

The Department had a budget cut of R295 million and that has resulted in it not being able to fill all the vacant posts.
• The Committee yet again expressed its concern about the continuing shortage of social workers and yet there are many social work graduates who are unemployed.

This was clearly demonstrated by social work graduates who protested in KwaZulu- Natal over their unemployment.

The Committee wanted to know how many social workers will be employed in the 2022/23 financial year.

The Committee is currently finalizing the Children’s Amendment Bill [B18 -2020], which will need social workers to be implemented.
22 164 The Department reported that it was engaging with a number of relevant government departments on the employment of social workers.

The plan is to develop a joint bid to engage the departments, which will be finalised in July 2022.

There is currently no budget for the employment of social workers, however provinces have been engaged to extend employment contracts of the social workers who were employed on contractual basis.
The Department is also conducting an audit from provinces on how much capacity they need.

There has been a refrain from National Treasury from funding employment of social workers.

It has instead advised that the Department to re-look and reprioritise in its Compensation of Employees budget allocation.

• The Committee sought clarity on the 270 social workers will be trained on the adoption policy, will they be the newly appointed social workers or already employed social workers?
The Department explained that only social workers who have three (3) years and above work experience will be trained on the adoption policy.

• The Committee also sought clarity on how the Social Relief of Distress (SRD) grant will be implemented as part of the Social Assistance Act when it is not legislated in the Act.

The Department reported that it had drafted regulations on the payment of the grant.

It was waiting for concurrence from National Treasury.
The new regulations will be implemented in May 2022.

• The Committee reiterated its concern regarding delays in finalization of investigations on irregular, fruitless and wasteful expenditure, particularly at SASSA and at the NDA.

It wanted to know the reasons for the delays and whether the implicated employees are still working for the Department?

If so, what risks does this pose on the Department’s payroll?
It also wanted to know what is the Department doing in real time to address the delays in investigations on irregular, fruitless and wasteful expenditure?

What progress has 23 165 been made on outstanding cases?

Are there any key performance indicators for senior management regarding finalization of these investigations?

The Department explained that in all the performance agreements of senior managers there are aspects on how issues raised by AG will be responded to.
With regard to challenges at SASSA, the department holds regular entity oversight meetings.

Importantly, it is in the process of finalising amendment to SASSA Act which will include provision for the establishment of the Board.

• The Committee further wanted to know what are the nine (9) districts the anti- gangsterism strategy is planned to be implemented.
The Department responded that the 9 districts are Western Cape Metro North, Sedibeng in Gauteng, eThekwini South in KwaZulu-Natal, Francis Baart and Gariep in the Free State, Gert Sibande in Mpumalanga and Vembe in Limpopo.

• With regard to the Department’s plan to train 92 municipalities on how to integrate migration issues into the Integrated Development Plans (IDPs), the Committee wanted to know if the Department has a clear plan it will train municipalities on.
Migration has presented municipalities with a lot of challenges - sprawling informal settlements, the need for basic services and government social assistance programme.

• In reference to the AGSA’s concern regarding weaknesses in the Department’s IT security management which may leave the Department vulnerable to cybercrime, the Committee wanted to know what mitigating systems the Department has put in place and at what cost.
• The Committee expressed a serious concern over the weaknesses identified on page 22 of the APP, as they are a serious risk to the operations of the Department including effective and efficient service delivery.

24 166 7.
24 166 7.

THE SOUTH AFRICAN SOCIAL SECURITY AGENCY (SASSA) ANNUAL PERFORMANCE PLAN 2022/2023 The mandate for South African Social Security Agency (SASSA) is to ensure the provision of comprehensive social security services against vulnerability and poverty within the constitutional and legislative framework.

SASSA’s work for the Medium Term Expenditure Framework (MTEF) period will be streamlined towards achieving the four outcomes as identified and detailed in its strategic plan 2020 – 2025.
These outcomes include: • Reduced poverty levels.

• Economic transformation - empowered individuals and sustainable communities.

• • Improved customer experience.
Improved organisational efficiencies In line with the aforementioned, for the 2022/23 financial year, SASSA has set to achieve the following interventions: • Business Process Reengineering, • Digitization and automation of business processes to position SASSA within the developing technological topography, • Strengthening the management of SASSA’s payment partnerships in order to ensure that social grants beneficiaries receive their grants at the right time and place, • Building management capacity for efficient and effective organizational environment and improve organizational efficiency and governance.
25 167 7.1.

BUDGET ANALYSIS FOR 2022/23 FINANCIAL YEAR Table 6 below presents the overall budget allocation of SASSA for 2022/23 financial year in comparison with the previous financial year.
Table 6: SASSA budget allocation for 2022/23 financial year Programme R million 2021/22 2022/23 Budget Nominal Increase / Decrease in 2022/23 Real Increase / Decrease in 2022/23 Nominal Percent change in 2022/23 Real Percent change in 2022/23 Programme 1:Administration Programme 2:Benefits Administration Support 3 295,2 5 243,6 2 929,6 4 575,0 - 365,6 - 668,6 - 491,8 -11,09 per cent - 865,6 -12,75 per cent -14,92 per cent -16,51 per cent TOTAL 8 538,8 7 504,6 - 1 034,2 - 1 357,4 -12,1 per cent -15,90 per cent SASSA has a budget allocation of R7.504 billion for 2022/23 financial year.
This shows a nominal decrease of R1.034 billion (or -12.1 nominal per cent) compared to the adjusted budget allocation of R8.538 billion in 2021/22 financial year.

When the inflation rate of 4.5 per cent is factored in, the budget of the Agency is further reduced by R1.357 billion (or - 15.90 real per cent) between 2021/22 and 2022/23 financial years.
When comparing the two programmes of the Agency, the bulk of the total budget is allocated to Programme 2: Benefits Administration Support to the value of R4.575 billion in 2022/23 financial year.

The budget for this programme shows a nominal decrease of R668.6 million (- 12.75 per cent), from R5.243 billion in 2021/22 financial year.
26 168 7.2 BUDGET AND ANNUAL PERFORMANCE TARGETS PER PROGRAMME The Agency functions through two main programmes, namely, Programme 1: Administration and Programme 2: Benefits Administration and Support.

Table 7: Number of performance targets for 2022/23 financial year Programme No.

of targets in the final 2022/2023 APP Programme 1 Programme 2 Total 17 17 34 7.2.1 Programme 1: Administration The purpose of the administration program is to provide leadership, management and support services to SASSA.
This program aims to realize the three SASSA outcomes which are economic transformation, improved customer experience and improved organizational efficiency.

In the year under review, some essential interventions for the program will include: • Linking social grant beneficiaries to developmental opportunities through existing relationship between the DSD and NSFAS.

• Modernisation of business processes to position SASSA within the developing technological topography.
• Utilise SASSA database as a strategic asset to improve decision making and effective integration with other government institutions.

• Consider various options towards migration from legacy system to modern solutions.

• • Improve organisational efficiency and governance.

Intensify the fight against fraud and corruption.

The Administration programme plays a crucial role in ensuring that SASSA is capable to deliver efficiently on its mandate of administering, managing and payment of social grants.
Essential to the identified priorities within the programme are the organizational 27 169 transformation interventions which deal with capacity of the Agency to deliver on its mandate.

This includes a skills audit which is aimed at proper placement of staff for optimal utilization.

The modernization of business processes also remains a priority for SASSA in the MTEF period.

The programmes compensation of employees is R1, 114 995 billion in 2022/23.
The increase in compensation of employees to R1,182,686 is expected to accommodate the outcomes of the planned initiatives, for example, the Business Process Reengineering Programme.

To improve the quality of SASSA’s financial reporting, the Agency will invest in a business intelligence solution which will verify that all payments to grant recipient banks accounts were successful and match the claims from the SAPO.
This solution will allow data to be profiled comprehensively and effectively to support transactional, operational and analytical workloads regardless of it source, volume or latency.

7.2.2 Programme 2: Benefits Administration and Administration and Support The purpose of the Administration and Support Programme is to provide a grant administration service which will ensure that operations within SASSA are integrated.
This programme manages the entire function of grant administration from application to approval and beneficiary maintenance.

The programme also provides income support to South Africans that are unable to provide for themselves and their dependents.

This programme is responsible for the core business of SASSA and it provides an efficient and effective grant administration service for the implementation of the social assistance program across the country.
It also monitors and evaluates improvements, innovations, and service delivery networks.

Strategic guidance and support is also provided to ensure that an effective and efficient social security customer service is provided to beneficiaries in a dignified manner.

Some of the interventions for 2022/23 financial year include: • Increasing the number of grants in payment including grant-in-aid to an estimated 18.8 million at the end of March 2023.
• Implement the extended Child Support Grant (CSG), that is CSG Top-Up for orphans).

A total of 191 200 applications in payment.

28 170 • Process 100% applications for the Covid 19 special grant (or SRD grant).

• Develop the Service Delivery Improvement Plan (SDIP).

• Implement the System Interface with government institutions where Memorandum of Agreements (MOUs) were completed to improve validation of beneficiaries.
• Reduce the turnaround time for processing social grant applications from 10 days to 5 days and gradually to 1 day at the end of the MTSF period.

• Improve time spent in resolving customers’ enquiries and disputes.

• Roll out the queue management system to 18 local offices – 2 offices per region.

• Strengthen the management of SASSA’s payment partnerships in order to ensure that social grants beneficiaries receive their correct grants at the right time and place.
• Explore the possible value that can be added to the SASSA beneficiaries using the economies of scale and the improvements in the payment landscape.

On its resource allocations, the core business of SASSA is placed within the Benefits and Administration Programme.

While the business processes of SASSA have been automated, it can be noted that some of the activities are still manual and labour intensive.
The scanning of beneficiary records takes place at a central place in each region which means that records are physically transported from local offices to the central regional registry on a regular basis.

The planned improvements including the finalisation of the automation process for the grant applications may yield some positive rewards translating into fewer resources propelled into human resources and equipment (vehicles).
The compensation of employees for this programme was R2, 431,509 billion in 2022/23.

The rollout and upgrade of the beneficiaries’ biometric solution that is aimed at reducing fraud by strengthening beneficiary verification mechanisms and authentication is prioritised in the MTEF period.
The planned upgrades will include facial recognition as an additional biometric identifier, and high performance search and matching capabilities to efficiently scan an estimated 220 million beneficiary fingerprints in the database to identify potential duplicates.

29 171 8.

COMMITTEE DELIBERATIONS • The Committee wanted to know how quick was SASSA’s response to the natural disaster (floods) in KwaZulu-Natal?
SASSA responded that a disaster relief team had been deployed a few days after the floods and had distributed vouchers to 1500 people who qualified for the relief.

There was no additional budget allocated as this was part of normal social relief allocation.
• With the consistent high levels of fraud and corruption in the grant payment system, which also involves SASSA and SAPO (South African Post Office) officials, the Committee wanted to know if SASSA ever considered doing an overall vetting of its officials.

This can be one avenue to eliminate fraud and corruption.

SASSA reported that it holds regular meetings with SAPO and receives cases for reimbursement.
SASSA has also been working with Fusion Centres and that has made a difference in the fight against fraud.

Because SASSA is not a bank, it is not in charge on the issuing of payment cards but with the new appointment of Postbank CEO is it hoped that this challenge will be addressed.

• With regard to the Relocation of Records Management Centre, the Committee wanted to know who the new service provider is and the reasons the previous one could not continue with the work?
• With the challenge of many new mothers not being able to register their new-born babies for children’s grants and long queues at SASSA offices, the Committee wanted to know if SASSA could consider implementing pre-registration at health facilities as a way of taking government services to the people.
SASSA explained that the challenge has been that mothers often do not have the required documents whilst they are still health facilities, even though it provides information pamphlets to the health facilities to distribute to the mothers.

There is also a challenge of misunderstanding of the means test for the child support grant where people think they do not qualify for CSG because they earn some income.
This can particularly be observed in more urban areas where people are employed on a part-time basis or casually.

30 172 There is a need for more information dissemination.

• The Committee wanted to know what progress has been made on the SRD grant appeals as there is still a lot of people waiting for the outcome of their appeals.

SASSA explained that it has not been able to attend to appeals registered in August 2021 and the numbers are fluctuating.
The delay is partly due to delays in finalising contracts with the banks for 2023 financial year.

SASSA has amended the application process for the grant as with the end of the disaster management period, the grant will be paid as part of the Social Assistance Act.

Also, appeals will be dealt by the Appeals Tribunal.

Regulations for the new processing of the grant were finalised and submitted to National Treasury.
There are people (around 300 000 form the first cycle) who have not collected their grants.

SASSA has sent short message service (smses) reminding them to collect their money.

As a result, there has been an increase of people collecting their grants.

• The Committee also wanted to know if SASSA can determine in its system the ages of the teenage mothers and place them in the Sinovuyo programme.

• It expressed a concern on the possible impact of closure of SAPO branches on the payment of social grants.
It wanted to know if SASSA has any contingency plan.

SASSA reported that there is a substantial budget amounting to 19% of its budget allocation to key items within goods and services that goes to SAPO.

There is a continuous monitoring on the adherence of its Service Level Agreement with SAPO (SLA).

When there is non- compliance to the SLA a penalty fee is charged.

For instance, R17 million was deducted in 2021/22 budget allocation.
SASSA has a contingency plan should SAPO not be able to deliver but it is important to note that a minimal amount of clients (500 00) use SAPO as payment option.

Therefore, the numbers that are likely be impacted upon are minimal.

• The Committee sought clarity on the target to reduce pay points and what impact it will have on beneficiaries.
31 173 SASSA explained that the reduction will be done in a number of ways, such as relocating the pay point to a better resourced pay point or re-channel beneficiaries to other payment channels.

• The Committee also wanted to know what progress has been made on the implementation of the organizational change the Acting-Director General reported on in 2021/22 financial year.

What has been its tangible outcome?

SASSA explained that the process is planned to be rolled out for 24 months.
Officials were trained on it and evaluation was conducted and reports were received on the culture and mind set change.

A detailed operational report can be forwarded to the Committee.

• The Committee expressed a concern that even though at the beginning of the current administration a commitment was made by DSD that there will be “new” social development sector.

Thus far, there has not been a tangible outcome or impact as demonstrated by persistent long queues at SASSA offices.
• The Committee also expressed a concern over the challenges of overcrowding at the Gugulethu SASSA office.

SASSA explained that there have been around 4 or 5 informal settlements that have emerged around the area.

This happened when some service offices in the area had to be closed due to various dangerous social ills.

The challenge has also been non-compliance to health and safety standards in some offices such Mitchell’s Plain, Khayelitsha and Bellville.
These challenges have resulted in overcrowding in neighbouring service offices.

SASSA has engaged with the Department of Public Works and Infrastructure to open two (2) additional offices.

The issue of Gugulethu office is a matter of priority.

• The Committee also raised a concern that in George there were no doctors to assess applicants for the disability grant.

SASSA explained that there was a lack of sites for assessment doctors but requested to be forwarded with more details.
32 174 • The Committee expressed concern about the 60% labour relations cases that were not finalised?

8.

NATIONAL DEVELOPMENT AGENCY (NDA) ANNUAL PERFORMANCE PLAN 2022/2023 The National Development Agency (henceforth, NDA or the Agency) is an agency of government that reports to Parliament through the Department of Social Development (DSD).

The NDA is classified as a public entity under Schedule 3A of the Public Finance Management Act (Act No.

1 of 1999).
1 of 1999).

The NDA was established in November 1998 as government’s response to the challenge of poverty and its causes in South Africa.

The NDA has a two-fold legislative mandate consisting of a primary mandate and a secondary mandate.
Its primary mandate is to contribute towards the eradication of poverty and its causes by granting funds to civil society organisations (CSOs) for carrying out projects or programmes aimed at meeting development needs of poor communities and strengthening the institutional capacity of CSOs involved in direct service provision to poor communities.
The secondary mandate is to promote consultation, dialogue and sharing of development experience between civil society organisations and relevant organs of state; debate on development policy; and undertake research and publications aimed at providing the basis for development.
In line with the NDP and the MTSF, for the year under review, the NDA has set to achieve the following priorities: • Increase funding to CSOs programmes that are creating job opportunities, skills development and sustainable livelihood.

• Create 3 000 job opportunities.

• Provide capacity building interventions to CSOs supported by the NDA on organizational management and technical training to improve quality of service and sustainability.

33 175 8.2.
33 175 8.2.

BUDGET ANALYSIS FOR 2022/23 FINANCIAL YEAR Table 8: NDA budget allocation for 2022/23 financial year The NDA received a budget allocation of R221.3 million for 2022/23 financial year, down from R247.9 million in 2021/22.

This illustrated a nominal decrease of 10.7 per cent and a real decrease of 14.6 per cent (when inflation is considered).

The real decrease is R36.1 million.

8.3 BUDGET AND ANNUAL PERFORMANCE TARGETS PER PROGRAMME 8.3.
1 Programme 1: Administration The focus of this programme is on promoting and maintaining organisational excellence and sustainability through effective and efficient administration that includes performance, employee wellbeing, cost containment as well as brand enhancement and recognition.

These will be achieved within a sound governance and administration environment.
This programme has an allocation of R107.4 million for 2022/23, up from a revised budget allocation of R105.3 million for 2021/22 financial year.
For the 2022/23 financial year, the NDA is planning to achieve the following four (4) performance targets it set for itself: 34 176 Table 9: Indicators and annual performance targets for Programme 1 Output indicator Annual target Percentage (%) reduction of non- Reduce by 80% the cumulative balance of IFW compliance resulting in irregular, expenditure reported in prior year annual fruitless and wasteful expenditure financial statements.
(IFW) expenditure reported ICT strategy and architecture Approve and implement the ICT strategy and aligned to NDA business model architecture to be aligned to NDA business approved and implemented model.

New organisational structure Approval and implementation of new aligned to NDA business model organisational structure aligned to NDA approved and implemented business model.
NDA Strategic Partnership Model NDA will be approving the NDA Strategic aligned to NDA business model Partnership Model to be aligned to NDA approved business model .

8.3.2 Programme 2: Civil Society Organisation Development The purpose of this programme is to focus on elevating the NDA to become the lead coordinator of development initiatives.
The programme will also focus on creating effective poverty eradication impact through the utilisation of key mechanisms and channels of poverty eradication, including, but not limited to the support of CSOs.

The budget allocation for this programme declines from R132.1 million in 2021/22 to R103.4 million in 2022/23 financial year.

This represents a 21.7 per cent nominal and 25.1 per cent real decrease in the budget for this programme compared to the previous year.
This programme has a total of five (5) performance targets for 2022/23 as opposed to the four (4) targets for the 2021/22 financial year.

SONA 2022, indicated that the Social Employment Fund will create a further 50,000 work opportunities using the capability of organisations beyond government, in areas such as early childhood development, and tackling gender- 35 177 based violence among others.
In addition to expanding public employment, Government is providing support to young people to prepare them for work and link them to opportunities.

The NDA is planning to align itself with this target by creating jobs because of CSO development interventions.
Table 10: Indicators and annual performance targets for Programme 2 Output indicator Annual target Rand value of resources raised During the year under review, the NDA plans to from NDA partnerships to fund raise R35 million to fund CSOs CSO development interventions Number of work opportunities NDA intends to create 3000 work opportunities created as a result of CSO as a result of CSOs development interventions.
development interventions Number of CSOs capacitated to NDA also plans to capacitate 2000 CSOs during strengthen their institutional the year under review.

capacity 8.3.3 Programme 3: Research This programme will focus on development policy research and NDA programmes evaluative studies to be used to inform programme planning and policy development and debates in the social, economic and development sectors of the economy.
The outcome is to inform national development policy debates and engagements on issues relating to development and poverty alleviation in general.

It will also produce publications and standards for effective best practice in the development sector to promote sharing of lessons and good practice.

This programme has a total number of three (3) targets for 2022/23, the same as targets set for the previous financial year.
36 178 Table 11: Indicators and annual performance targets for Programme 3 Output indicator Annual target Number of research publications The Agency is planning to release three research produced to provide a basis for publications and three evaluation reports for the development policy.

year under review.

Number of dialogues held with It is also planning to have five (5) external external stakeholders to inform dialogues to engage on the NDA research development policy.
outputs during this period under review.

Number of evaluations conducted to NDA will conduct 3 evaluations for the year inform programme design and under review.

implementation 9.

COMMITTEE DELIBERATIONS • The Committee reiterated its serious concern about the lack of visibility and impact of the NDA.

For instance, it can play an important role in reducing the 47% of people relying on social grants through its programmes.

Thereby, fulfilling its mandate.


The NDA explained that its impact and visibility has been negligent due to the previous service delivery model that did not yield any impact.

• The Committee was equally concerned that 67% (R128 million) of its budget goes to compensation of employees (COE) when there is a serious lack of its impact on the ground.

This is also despite the R7 million budget for travel and subsistence.
It seems as if the NDA is just a channel or conduit of funding to NPOs and not fulfilling its mandatory role.

The NDA explained that its budget structure may look abnormal but according to Section 3(2) of the NDA Act the budget allocation to the NDA should be for operational costs.

Section 3(1) of the Act provides that the NDA should raise funds for CSOs funding from the donors.

The NDA has not made a strategic move on how to implement Section 3(1).
However, the turnaround strategy seeks to address this.

Furthermore, a resource mobilisation 37 179 unit has been established to mobilise funds for CSO funding.

Currently, the NDA is only allocating R14 million per year for CSO funding and that is not enough.

Furthermore, the budget cuts have had a catastrophic impact on the NDA’s budget as demonstrated by the skewed 67% budget allocation for COE.

This has made it difficult to implement the core mandate.
The reason given by National Treasury for not increasing budget allocation of the NDA has always been that DSD has to re-prioritise and do a function shift to the NDA so as to allow more funding of NDA to implement its core mandate.

This has not been done by the department.

This is one of the reasons that the Agency decided to formulate a turnaround strategy so as to attract funders.
It has also decided to freeze some of the vacant posts otherwise had it not done it would have been rendered “useless” as it was going to have a very high COE budget with much less budget for core mandate.

• The Committee also reiterated its concern regarding lack of consequence management for those implicated in the irregular and fruitless expenditure (IFW).

It wanted to know what measures has the NDA put in place to recover monies involved?
The NDA explained that the R1 million irregular and fruitless expenditure dates back from previous financial years and unfortunately it had never applied for condonation.

For it to obtain a condonation there should be some requirements that have to be met, such as a determination of financial loss.

Some of the cases involved procurement of office space without following SCM and so there were no substantial financial loss.
The Agency is currently investigating a R15 million IFW and depending on the outcome of the investigation, it may need to recover it.

• The Committee wanted to know when will the vacancy of the CEO going to filled?

The NDA explained that the recruitment process for the filling of the CEO and Board vacancies has been completed and submitted to the Minister for approval and forward it to Cabinet.

By the end of April 2022 there should be an appointed Board.
This is date that the NDA had agreed with the Minister.

The appointment of the CEO will be processed by the new Board and that is envisaged to happen 3 months after the appointment of the Board.

38 180 • The Committee also wanted to know the deadline of the implementation of the turnaround strategy and the costs associated with it as an external service provider was used.

The NDA reported that the deadline for the implementation of the turnaround strategy is end of April 2022.
The service provider was appointed for a period of 12 months - from May 2021 – April 2022 at a cost of R4.5 million.

• The Committee sought clarity on how the 3 000 work opportunities for youth will be implemented and how much stipend will they receive?

The NDA responded that the work opportunities will be implemented from various programmes such as the Volunteer programme (2 000), UIF and Grant Funding programme.

The Agency works with CSOs to create work opportunities.
With the UIF, it went through a competitive bidding.

With Volunteer Programme, it issued request for proposals.

With Grant Funding, it issued request for proposals and proposal formulation where NDA employees supported communities to develop proposals.

• The Committee also wanted to know to what extent the funding of CSOs will be affected with the medium term budget cuts.

Also, how the NDA is supporting CSOs to fund raise?
The NDA explained that it supports CSOs through its mandate of capacity building.

• The Committee also wanted to know how the NDA plans to support food generation projects, particularly in the context of the increasing food prices.

The NDA explained that it supports and funds soup kitchens, now knows as Community Nutrition Development Centres (CNDCs) and also by assisting them to start vegetable gardens and poultry.
• The Committee also wanted to know what progress has been made regarding the allegations of corruption that were made against the previous CEO.

The NDA reported that National Treasury only approved the interim accounting officer at the end of November 2021 and the office immediately appointed investigation officers.

They 39 181 were given 60 days to complete the investigation.

The report will then be provided to the whistle-blower.
If there was mismanagement of the monies, the case will be referred to the South African Police Service (SAPS).

10.

RECOMMENDATIONS Having considered the strategic plans and the annual performance plans of the department and its entities the Committee makes the following recommendations: 10.1 Department of Social Development • The Minister should ensure that the Department within the 2022/23 financial year fills the vacancies in critical positions, particularly that of the Director-General.
• The Minister should ensure that the Department within the 2022/23 financial year puts in place systems to secure its IT management (firewall) so as to protect it from cybercrime which has proved to be a serious threat globally.

Also, with the advent of Covid 19 pandemic, the Department and its entities had to implement most of their services digitally.
• The Minister should also ensure that the social development portfolio within the 2022/23 financial year addresses all the findings and recommendations made by the Auditor-General and report to Parliament (PC on Social Development) on progress made on quarterly basis.

• The Minister should ensure that the Department within the 2022/23 financial year tables in Parliament (PC on Social Development) on a plan of action to absorb social workers.
• The Minister should ensure that the Department within the 2022/23 financial year tables a plan of action to Parliament (PC on Social Development) addressing all the weaknesses listed on page 22 of the Annual Performance Plan.

10.2 South African Social Security Agency (SASSA) • The Minister should ensure that SASSA within the 2022/23 financial year addresses the Auditor-General’s findings on inefficiencies in the verification process of SRD grant beneficiaries.
SASSA should make sure that it uses updated databases prior to making social grants payments.

40 182 • The Minister should also ensure that SASSA within the current financial year (2022/23) investigates and take action on the Auditor-General’s findings that some of its officials were appointed without qualifications.
• The Minister should also ensure that SASSA implements or strengthens its human resource policies on vetting and academic clearance of its employees as one of the measures to prevent fraud and corruption.

The Minister should also engage with the Minister of Communication and Digital Technologies on the same matter for those employees who work within the social grants payment system.
• The Minister should also ensure that SASSA expands its information dissemination on the pre-registration of birth services at health care facilities for children’s social grants applications.

The information should be disseminated through other channels such as media inclusive of social media and mainstream media.
• The Minister should also ensure that SASSA within the 2022/23 financial year finalises all the appeals on the Social Relief of Distress (SRD) grant, including those dating back to August 2021.

10.3 National Development Agency (NDA) • The Minister should ensure that the NDA within the 2022/23 financial year fills the position of the CEO.

The Minister should also ensure that within the current financial year that the NDA board is appointed.
• The Minister should ensure that the NDA board within the 2022/23 financial year conducts and finalises the investigation on the allegations of fraud and corruption against the previous CEO.

10.
10.

COMMITTEE OVERSIGHT FOCUS AREAS Based on the APPs and AGSA report presented to the Committee and Committee deliberations, the following are the key focus areas of oversight for the Committee for 2022/23 financial year: • Implementation of the AGSA recommendations to the Committee, reported on, on this report (page 6).

• Development and implementation of the joint bid by DSD to engage other government departments on the employment of Social Workers, which is to be finalized in July 2022.
41 183 • The working relationship between SASSA and SAPO, with regard to the implementation of the SLA, particularly the possible risk of SAPO financial challenges and closures of its branches on the payment of social grants.

The Committee may need to be briefed on the contingency plan SASSA reported it has to use in case SAPO fails to deliver.

This is an important oversight area for the Committee as SAPO accounts for 19% budget allocation under goods and services.
• • Implementation, outcome and impact of the organizational change at SASSA.

Implementation, outcome and impact of the turnaround strategy at the NDA.

• The budget allocation structure at the NDA, as per the provisions of the National Development Agency Act.

How will the new service delivery model and turnaround strategy address this challenge.

This is another critical focus area as it significantly affects the funding of CSOs and ultimately the implementation of the NDA’s core mandate.
In relation to the aforementioned, make a follow up on the advice by National Treasury of a function shift from DSD to the NDA that will allow more funding of the NDA to implement its core mandate.

• Progress on the investigation on allegations of fraud against the previous NDA CEO.

_________________________________________________________________ Report to be considered.

42 184 7.
Report of the Portfolio Committee on International Relations and Cooperation on Budget Vote 6: International Relations and Cooperation, dated 11 May 2022 The Portfolio Committee on International Relations and Cooperation (hereinafter referred to as the Committee) having considered the directive of the National Assembly to consider and report on the Strategic Plans, Annual Performance Plans and Budget allocations of the Department of International Relations and Cooperation (hereinafter referred to as the Department) and the African Renaissance Fund (hereinafter referred to as the ARF), tabled by the Minister of International Relations and Cooperation, in terms of the Public Finance Management Act (Act No 32 of 2003), reports as follows: 1.
Background Parliament plays an important role in overseeing planning and performance of government departments and public entities as well as Chapter 9 and 10 institutions.

The Public Finance Management Act, section 27 stipulates that the Minister must table the annual budget for a financial year in the National Assembly before the start of the financial year.

Subsequent to that, the Money Bills Amendment Procedures and Related Matters Act, No.
9 of 2009, section 10 (1) (c) clearly stipulates that the relevant members of Cabinet must table updated strategic plan and annual performance plan for each department, public entity or institution, which must be referred to the relevant Committee for consideration and reporting.
In considering the strategic and annual performance plans, the Committee ensured that the Department of International Relations and Cooperation and the African Renaissance Fund plans and budget allocations are in line with Medium Term Strategic Plan 2019/24.

The Budget allocation serves as a key instrument for government to promote socio-economic development.
It plays a critical role as an economic instrument of the government to reflect on the country’s socio-economic policy priorities, by translating priorities and political commitments into expenditures.

Furthermore, the Budget serves as a vital tool to operationalise government activities towards the achievement of its intended priorities.

It also gets to highlight the constraints and trade-offs in policy choices.

185 2.
185 2.

Introduction The Committee met on 4 May 2022 to consider presentations on the Department’s Annual Performance Plan (APP) 2022/23 and the related budget allocations.

The Committee further considered the Annual Performance Plan 2022/23 of the African Renaissance and International Cooperation Fund (ARF) and its budget allocation.

This report summarises the said presentations of the Department and the ARF, their budget allocations as well as allocations over the MTEF.
2.1 Opening remarks by the Chairperson of the Portfolio Committee of International Relations and Cooperation, Honourable Mr Supra Obakeng Ramoeletsi Mahumapelo MP In his opening remarks, Honourable Mahumapelo welcomed both the Members and those representing the Department, led by Deputy Minister Alvin Botes.
He further acknowledged the presence of the newly appointed Director General, Mr Zane Dangor, whom the Chair expressed hope that he would hit the ground running, as he has been with the Department as the Special Adviser to the Minister.

The Chairperson observed that the Committee was to consider the Budget Vote of the Department, which comprised the Annual Performance Plans of both the Department and its entity, the African Renaissance Fund (ARF).
He reminded the Committee that the budget vote process is very important to Parliament, as it is an oversight tool that indicates where the budget allocation would be spent on in line with predetermined objectives.

The Chair pointed out that the budget vote shapes the oversight strategy, as to what priorities for the year would be, and allows the Committee to scrutinise areas where the Department has set its targets, and would ensure that there would be implementation of the set objectives.
In conclusion, Mr Mahumapelo thanked the Committee delegation that had conducted oversight on the state of state-owned properties in Namibia.

2.2 Overview of the Annual Performance Plan 2022/23 by the Deputy Minister of International Relations and Cooperation, Mr Alvin Botes Page | 2 186 The Deputy Minister thanked the Chairperson for his opening remarks which would help guide the work of the Department.
In his overview, the Deputy Minister hastened to acknowledge that the COVID-19 pandemic has brought about challenges in carrying out international work.

The Deputy Minister highlighted that Africa remained the centrepiece of South Africa’s Foreign Policy.

South Africa would continue to contribute towards a united and cohesive Africa.

As a result, the Department would continue with its mandate as espoused in its Strategic Plan 2020-2025.
In doing so, the Department would continue to focus on economic diplomacy.

This would be in response to the call by President Cyril Ramaphosa in his State of the Nation Address of February 2022, to grow the economy, and to support the Economic Reconstruction and Recovery Plan.

Deputy Minister highlighted that the Department wold continue to enhance regional integration, and increase the balance of trade in the region and further beyond in the continent.
This would be achieved through increasing regional and intra-Africa trade, and utilising opportunities created by the operationalisation of the African Continental Free Trade Area (AfCFTA).

He went further to point out that South Africa would continue to commit resources towards conflict resolution in the continent.
This would be achieved through supporting efforts to address political conflicts in the SADC region and through being involved in African Union (AU) and United Nations (UN) conflict resolution mechanisms, such as participation in the SADC Military Intervention fighting insurgency in Cabo Delgado, Mozambique, and also South Africa’s presence in the UN Mission in the Democratic Republic of Congo (DRC).
The Department would also focus on how it would harness its membership in multilateral forums to achieve inclusiveness and multilateralism.

In striving to achieve this goal, South Africa would work through the SADC collective.

3.

Presentation by the Department on Budget Vote 6: International Relations and Cooperation 2022/23 and Medium Term Expenditure Framework (MTEF) expenditure focus The Department presented on its work towards the realization of South Africa’s Foreign Policy objectives.
This was reported done through: • coordinating and aligning South Africa’s international relations, Page | 3 187 • monitoring developments in the international environment, • communicating government’s policy positions, • developing and advising government on policy options, and creating mechanisms and avenues for achieving objectives, • protecting South Africa’s sovereignty and territorial integrity, • contributing to the creation of an enabling international environment for South African businesses, • sourcing developmental assistance; and assisting South African citizens abroad1.
3.1 Strategic linkages to the National Development Plan (NDP) 2030 It has been highlighted that South Africa’s Foreign Policy finds its inspiration on the country’s domestic agenda.

It endeavours to address the triple challenges of poverty, inequality and unemployment through the implementation of an independent foreign policy, within a highly volatile, uncertain, complex, ambiguous (VUCA) and dynamic international environment.
According to the Annual Performance Plan (APP), the conduct of South Africa’s foreign policy would be driven by the quest to realise the aspirations of the NDP Vision 2030 and its development trajectory.

This would be done with full recognition of the challenges posed by international environment the Department operates in.
With regard to international relations and cooperation Chapter 7, the NDP focuses on the need to enhance South Africa’s position in the region and the world, and to increase trade and investment.

The plan further states that the country’s foreign policy should be shaped by the interplay between diplomatic, political, security, environmental, economic and regional dynamics that define international relations.
The plan envisions the country positioning itself as one of Africa’s 1Annual Performance Plan 2022/23, Department of International Relations and Cooperation Page | 4 188 powerhouses, leading development and growth on the continent; and deepening integration with the Brazil-Russia-India-China-South Africa (BRICS) group of countries.

There has been a clear and deliberate move to ensure there is a link between the activities of the Department and the implementation of Chapter 7 of the NDP Vision 2030.
The NDP underscores the importance of building a nation that contributes to the prosperity of the southern Africa region, the African continent and the betterment of the lives of the marginalised throughout the world.

The NDP further requires that South Africa build a resilient economy which would contribute towards creating a working nation, in order to narrow and eventually eliminate the gap between the rich and poor.
The Department recognises that the national priorities as contained in the NDP are inextricably-linked to the aspirations of the African continent.

Hence, economic diplomacy would be used to promote the country as a trade and investment destination, thereby attracting foreign investment and also boosting its tourism sector2.
The aspirations of the NDP have also found expression in the Southern Africa Development Community (SADC)’s development mechanism, the Revised Regional Indicative Strategic Development Plan (RISDP).

These aspirations are also found in the continental programme as encapsulated in the African Union’s (AU) Agenda 2063 Vision, and in the UN 2030 Agenda on Sustainable Development Goals.

The economic development integration of SADC remains a key focus area3.
3.2 State of the Nation (SoNA) February 2022 In his SoNA of February 2022, President Cyril Ramaphosa set the strategic course for the country for 2022/23.
He emphasised the need to grow the economy4, in light of the present situation of deep 2 National Development Plan 2030, Chapter 7 thereof 3 Annual Performance Plan 2022/23 of the Department of International Relations and Cooperation 4 CM Ramaphosa, SoNA 2022, the Presidency, February 2022 Page | 5 189 poverty, unemployment and inequality in the country, aggravated by the COVID-19 pandemic.
Following this directive given by the President, the Department would continue with its focus on economic diplomacy in support of the President’s initiatives.

This work would build on the foundation of the Economic Reconstruction and Recovery Plan (ERRP), which remains the common programme to rebuild the economy.

In this regard, he indicated that the African Union had resolved that trade could resume under the African Continental Free Trade Area (AfCFTA).
In this regard, South African companies are poised to play a key role in taking up the opportunities this presents for preferential access to other African markets5.

President Ramaphosa emphasised that the AfCFTA is about Africa taking charge of its destiny and growing its economies faster6.

The President further emphasised that South Africa would increase its efforts to develop Africa’s ability to manufacture vaccines7.
In this regard, the Department is looking forward to the support of its Missions, especially in Africa, to make this a reality8.

4.

Planned policy initiatives The Department intends to enhance its operational capacity in the following key area in the medium term9: 1.

The revival of the Partnership Fund for Development Bill.

The Partnership Fund for Development Bill aimed at repealing the African Renaissance and International Cooperation Fund Act 51 of 2000.
5 CM Ramaphosa, SoNA 2022, the Presidency, February 2022 6 Ibid 7 Ibid 8 Annual Performance Plan 2022/23, Department of International Relations and Cooperation 9 Annual Performance Plan 2022/23 of the Department of International Relations and Cooperation Page | 6 190 5.
Legislative mandates of the Department According to the Strategic Plan 2020-2025, the Department is further responsible for regulation and implementation under the following Acts10: • The African Renaissance and International Cooperation Fund (ARF) Act, 2001 (Act 51 0f 2001): The Act establishes the Fund to enhance cooperation between the South Africa and other countries, in particular, African countries.
This is achieved through the promotion of democracy, good governance, the prevention and resolution of conflict, socio-economic development and integration, humanitarian assistance and human resource development.

• The Foreign States Immunities Act, 1981 (Act 87 of 1981): This Act regulates the extent of the immunity of foreign states from the jurisdiction of courts of the Republic and provides for matters connected therewith.
• The Diplomatic Immunities and Privileges Act, 2001 (Act 37 of 2001): This Act provides for the immunities and privileges of diplomatic missions and consular posts and their members, heads of state, special envoys and certain representatives of the United Nations and its specialized agencies, and other international organizations and of certain other people.

Provision is also made for immunities and privileges pertaining to international conferences and meetings held in South Africa.
• The Measures and Guidelines for Enhanced Coordination of South Africa’s International Engagements and its annexures, approved by Cabinet in 2009, establish more effective measures and mechanisms to coordinate the conduct of international relations and the implementation of South Africa’s foreign policy.

• The White Paper on Foreign Policy, approved by Cabinet in 2011, assesses South Africa’s foreign policy against the rising expectations of the critical role of foreign policy to meet domestic priorities.
• Foreign Service Dispensation (FSD) is implemented in terms of the provisions of Section 3(3) (c) of the Public Service Act, 1994 (Act 103 of 1994), as amended, and is applicable to designated 10 Strategic Plan 2020-2025, Department of International Relations and Cooperation Page | 7 191 employees who serve in a foreign country at a South African mission abroad and fall within the scope of the Public Service Coordinating Bargaining Council.
The Department is also a custodian of international agreements (bilateral and multilateral) concluded by the Republic in terms of relevant constitutional provisions (sections 231(2) and 231(3) of the Constitution.

6.

Strategic outlook in the Strategic Plan 2020-2025 International responsibility is to build the country’s role as an influential continental and global actor and partner.
Key deliverables would be around the participation of South Africa in the Southern Africa Development Community (SADC) Organ on Politics Defence and Security Cooperation (Troika), as the Chairperson of the SADC Organ.

7.
7.

Performance delivery environment At the outset, it was highlighted that the Department’s work would be impacted by various challenges that exist in the international environment, such as the long-term impact of COVID-19 on the welfare and financial well-being of the world, an increasing trend towards unilateralism, protectionism, nationalism, populism and an inward-looking focus on countries’ domestic priorities.
Strong tendencies to pursue national interests and the fragmentation of global decision-making were said to be emerging.

This has demonstrated that South Africa needs to review certain relationships and alliances in a pragmatic way to better realise its foreign policy objectives11.

It is reported that this would require a re-evaluation of all previous assumptions, in the realisation that there are and would be fundamental shifts in the global political and economic environment i.e.
the global trend away from 11 Annual Performance Plan 2022/23, Department of International Relations and Cooperation Page | 8 192 multilateralism to unilateral-centred international relations and being able to adapt to fluidity in the global environment12.
As a result, the Department would be required to engage strategically in this uncertain international environment and use its strong bilateral footprint and respected multilateral presence to continue to advance the interests and values of South Africa, Africa and the Global South.

Multilateralism remains a focal point of South Africa's foreign policy.
South Africa’s foreign policy implementation is guided and shaped by its national interest, South Africa would continue to utilise high-level multilateral and bilateral meetings to advance the national interest.

It was pointed out that despite the above, the Annual Performance Plan for 2022/23 was delivered in an environment that was still characterised by fiscal constraints, recurring qualified audit outcomes and an outdated information and communications technology (ICT) infrastructure.
However, the Department confirmed that the ageing ICT infrastructure is currently in the process of being upgraded following the approval of the Digital Strategy.

The Department has acknowledged that the COVID-19 pandemic has fundamentally altered the way it interacts with the world.

The challenges of the pandemic in the international environment include a severe impact on most socio-economic activities globally13.
There has been a reduction in global trade, including manufacturing and transportation, an increase in unemployment, devastation of the tourism, hospitality, entertainment and sporting industries, and education on all levels has been widely disrupted.

This outlook is underscored by the global economic and financial community.
In its “Global Economic Prospects January 2022”, the World Bank highlighted the fact that, despite rebounding to an estimated 5.5% in 202114, it is expected that global growth will decrease to 4.1% in 202215 inter 12 Ibid 13 Annual Performance Plan 2022/23, Department of International Relations and Cooperation 14 Ibid 15 Ibid Page | 9 193 alia due to continued COVID-19 waves.

Global growth is projected to decline further to 3.2% in 202316.
Although the economic outlook for advanced economies for 2023 is considered positive, it is expected that emerging market and developing economies would struggle to return to pre- pandemic levels, due to lower vaccination rates, tighter fiscal and monetary policies, and more persistent scarring from the pandemic17.

The APP provided that South Africa's economic growth was already under pressure prior to COVID- 19.
This is said to have been due to, inter alia, ailing state-owned enterprises (SOEs), public debt, high unemployment and the weakened international economic situation, which impacted on the country’s prospects for sustained growth18.

This situation has been exacerbated by the pandemic.

It is argued that the pandemic has clearly resulted in diminished global growth.

It has been estimated that the pandemic has pushed back the attainment of the 2030 SDGs for less developed economies by a decade 19.
It is further argued that poverty and inequality have been further exacerbated, especially by a diminution of opportunities because of travel and educational restrictions.

It has been evident that oil prices have been volatile and that global supply chains have become more complex and complicated due to COVID-1920.

7.1.
7.1.

Strategic focus areas The Department is committed to continue to focus and deliver on the following strategic areas in the 2022/23 financial year, in line with the MTSF 2019-2024: 7.1.1 Building a better Africa 16 Ibid 17 Ibid 18 Ibid 19 Ibid 20 Annual Performance Plan 2022/23, Department of International Relations and Cooperation Page | 10 194 The Department has put emphasis on the centrality of Africa as the centrepiece of South Africa’s Foreign Policy.
At the core of this focus, is South Africa’s Pan-Africanist vision of unity, solidarity and a common African destiny.

Africa remains at the centre of South Africa’s foreign policy trajectory.

Cognisant of the intrinsic link between South Africa’s national interest and Africa’s stability, unity and prosperity, the country has placed the advancement of the African Agenda at the centre of its foreign policy and has had considerable success in promoting the interests of Africa in different fora21.
South Africa remains a relevant and significant player in issues relating to the regional agenda.

This role is played both through bilateral and multilateral platforms.

The ability to contribute to humanitarian relief efforts and peace and mediation initiatives, places the country in a strategic position of influence22.

With regard to the AU, Morocco has been observed as active since re-joining the organisation23.
The issue of Morocco has been of concern to the Committee in terms of its non-action in facilitating self- determination for the people of Western Sahara, since its return to the AU.

As far as the situation in the Saharawi Arab Republic is concerned, it has been observed that the AU support for the cause appears to be weakening24.

During 2021, South Africa objected to the granting of observer status to Israel, a decision taken by the Chair of the AUC.
The Committee has also impressed upon the Department that the African Agenda should continue to be prioritised, even when rationalising missions, as far as possible, those in African countries should be assisted to remain relevant.

The APP provides that South Africa remains a relevant and significant player in issues relating to the regional agenda.

This role is played both through bilateral and multilateral platforms25.
It has been argued that the ability to contribute to humanitarian relief efforts, peace and mediation initiatives, positions the country in a strategic pole position of influence26.

The economic outlook 21 Annual Performance Plan 2022/23, Department of International Relations and Cooperation 22 Ibid 23 Ibid 24 Ibid 25 Annual Performance Plan 2022/23, Department of International Relations and Cooperation 26 Ibid Page | 11 195 for sub-Saharan Africa is, therefore, “clouded”.
COVID-19 has had severe negative economic implications and impacted on the attainment of the SDGs.

In terms of threats to security and safety, it has been reported that the continent has seen an increase in terrorism in all regions with involvement by outside players, including in the SADC region.

The situation in Cabo Delgado, in Northern Mozambique, remains a source of concern, as is that in eSwatini and Lesotho27.
The start of trading under the African Continental Free Trade Area (AfCFTA) Agreement, on 1 January 2021, marked the dawn of a new era in Africa’s development journey.

It is expected that over time, the AfCFTA would eliminate import tariffs on some of goods traded on the continent, as well as address non-tariff barriers28.

Regarding the African economic situation, economies have been struggling due to volatile oil prices.

The South African economy is not growing sufficiently.
Furthermore, COVID-19 has limited international trade and economic interactions with Africa.

According to the African Development Bank (AfDB), in its “African Economic Outlook” supplement29, published on 12 March 2021, although all economies in Africa have been affected by the pandemic, tourism-dependent economies, oil-exporting economies and other-resource intensive economies were the most significantly hit by the pandemic.
According to the AfDB, African policymakers must turn the COVID–19 crises into opportunities by focussing sharply on food and nutritional security30.
It is expected that Africa to consider re-thinking healthcare and social protection systems; nurturing the private sector, especially small and medium- 27 Estimates of National Expenditure 2022, National Treasury 28 Tralac.org.za 29 www.afdb.org 30 www.afdb.org Page | 12 196 sized enterprises and women-led firms; harnessing and better managing the natural resources revenue streams; by operationalising the AfCFTA; and by paying greater attention to climate change and resilience31.
Africa is the world's youngest continent with around 60% of the population currently under the age of 2532.

Within the next two generations, it is expected that this youthful population will increase more than 180%, compared to that of Europe and Asia, which will shrink by more than 21% and by almost 28% respectively33.
Towards the end of the century, it is estimated that Africa's youth population would reach 1.3 billion34, double the expected total population of Europe, and would represent almost half of the world’s youth35.

By 2034, the region is expected to have a larger workforce than either China or India36.

The youth bulge in Africa is seen as a huge advantage, provided they are engaged in productive economic activities.

The SADC’s integration agenda is anchored in political, security and economic integration.
To facilitate the process of integration, SADC has developed economic and strategic blueprints, in particular the SADC Industrialisation Strategy and Roadmap as approved by the summit in April 2015.

The strategy has been aligned to the AU Agenda 2063.

Critical to regional economic integration is the rapid implementation of the Tripartite Free Trade Area (TFTA), as well as the AfCFTA, to boost industrial and infrastructure development and enhance intra-regional trade.
The Department would closely monitor South Africa’s progress on the implementation of the Regional Indicative Strategic Development Plan (RISDP) projects37.
31 Ibid 32 Annual Performance Plan 2022/23, Department of International Relations and Cooperation 33 Ibid 34 Ibid 1.1.1 36 Ibid 35 Mo Ibrahim Foundation: Mo Ibrahim on youth innovation and leadership in Africa, November 2021 37 Annual Performance Plan 2022/23, Department of International Relations and Cooperation Page | 13 197 With regard to the Southern African Customs Union (SACU), the customs union has to be transformed into a vehicle for regional integration, capable of promoting equitable development, sustainable infrastructure development and industrialisation.
7.1.2 Building a better world: Reform of the United Nations Security Council (UNSC) South Africa’s engagement in the UN is based on its commitment to promote an equitable rules- based multilateral system.

It is informed by the recognition that the UN does not reflect current global political and economic realities.
South Africa would continue to advocate for the reform of global governance institutions, as well as promote participation in selected multilateral fora outside the UN system as a force multiplier for the overall strengthening of multilateralism38.

South Africa’s engagement in the UN is based on its commitment to promote an equitable rules-based multilateral system.

It is informed by the recognition that the UN does not reflect current global political and economic realities.
South Africa’s engagement is to advance the reform of the existing global governance architecture with a view to improve the voice and representation of Africa and the developing world39.

It also intends to draw attention to the responsiveness of the UN system to the needs and challenges faced by Africa and developing states.

In line with South Africa’s foreign policy, the Department would continue to advocate for the reform of global governance institutions40.
With regard to the UN, UNSC reform and the granting of an African permanent seat(s) have not been achieved41.

7.1.3 Promotion of cooperation between the AU and the UN 38 Estimates of National Expenditure 2022, National Treasury 39 Annual Performance Plan 2022/23, Department of International Relations and Cooperation 40 Ibid 41 Ibid Page | 14 198 The APP provided that South Africa’s third two-year term on the UN Security Council (SC) ended in December 2021.
During its term, South Africa endeavoured to promote its views and values.

These were, among others, the importance of women in peace and security; championing the cause of children in armed conflict situations; the rule of law at national and international levels; post- conflict reconstruction and development; and the peaceful resolution of conflict while fighting impunity.

Although South Africa has handed over the Chairship of the AU, it still supports closer cooperation between the AU and UN.
President Cyril Ramaphosa was appointed as AU Champion for COVID-1942.

7.1.4 Disarmament According to the APP, the Department’s assessment of international developments, the risk of a major conflict involving nuclear weapons and the radical consequences thereof couldn’t be discounted43.

The Treaty on the Prohibition of Nuclear Weapons entered into force on 22 January 2021.
Globally, there are an estimated 13 080 nuclear warheads at the start of 2021 of which 3 825 were active, deployed with operational forces44.

7.1.5 Climate change Despite the international community's ongoing fight against climate change, which kicked off during June 1992 in Rio de Janeiro, Brazil, global warming is continuing to escalate.

The APP provides that South Africa advocates for a global response that is equitable and that provides development space for developing countries45.
The expectation is that the developed countries should take the lead in emission reductions, closing the ambition gap, including those carried over from the pre-2020 to the 42 Ibid 43 Ibid 44 www.un.org 45 Annual Performance Plan 2022/23, Department of International Relations and Cooperation Page | 15 199 post-2020 period and providing adequate means of implementation that would enable a response to the challenge.

In this context, South Africa's position on climate change has been defined.
Its national objectives are premised on a science- and rules-based international system with multilateralism at its core.

It is said the changes brought about by climate change would, in the medium to long term, include periodic to continual flooding, protracted droughts and heat waves causing forest and bush fires, reduced precipitation and reduction of glaciers in source catchment areas46.

It is expected that there would be a rise in conflicts over resources, particularly water, e.g.
over the Grand Ethiopian Renaissance Dam in Ethiopia, contested by Sudan and Egypt.

There would eventually be a need for more sustainable lifestyles in order to adapt to changing conditions47.

7.1.6 Gender According to the APP, South Africa’s commitment to gender equality is firmly established in the Constitution (1996).
Chapter 2 of the Constitution, also known as the Bill of Rights, guarantees full and equal enjoyment of all rights by all genders and the protection of people against any form of discrimination, including discrimination on the basis of race, sex, gender, religion, etc.

South Africa has ratified many international instruments aligned to its constitution relating to gender equality48.
It also ratified the Beijing Platform for Action, an agenda towards empowerment of women and girls, and made a firm commitment to mainstream gender within the Government by creating the National Gender Machinery led by the Department of Women, Youth and Persons with 46 Ibid 47 Ibid 48 Annual Performance Plan 2022/23, Department of International Relations and Cooperation Page | 16 200 Disabilities 49 .
In 2021, South Africa ratified the International Labour Organisation (ILO) Convention 190 aimed at ending violence and harassment in the world of work.

7.1.7 South-South cooperation South Africa pursues mutually beneficial cooperation among countries and groupings of the South to develop common positions on political, economic, social and human rights issues as an effective response in addressing the historic marginalisation of these countries50.
Groupings of the South share the need to restructure the global political, economic and financial architecture to be more balanced, representative, inclusive and equitable, as well as to ensure that the international system rests on the important pillars of multilateralism and international law.
Groupings of the South include BRICS (Brazil, Russia, India, China and South Africa); IBSA (India, Brazil and South Africa); lORA (Indian Ocean Rim Association); the Group of 77 (G77) and China; and the Non-Aligned Movement (NAM).

The Committee encourages South Africa to continue to leverage strategic regional groupings such as BRICS, IBSA and IORA to improve trade flows and build consensus in multilateral groupings.
7.1.8 Cooperation with the countries of the North It has been reported that Europe has traditionally been the largest source of development cooperation with South Africa.

These engagements are focussed on addressing poverty; job creation and inequality.

The focus of the Department would continue with the consolidation of relations with these regional partners and to promote partnerships in support of South Africa's domestic priorities.
South Africa also engages with key global economic processes of the North, to promote African Agenda 2063 in particular, and the broader development interests of developing countries in general.

49 Ibid 50 Ibid Page | 17 201 FDI from Europe is estimated at over R1 trillion with more than 2 000 companies operating in South Africa, employing South Africans, enhancing their skills and investing in the economy51.
7.1.9 Relations with regions of the world The inexorable change in the economic geography of the world economy, requires a more purposeful effort to diversify South Africa's trade and investment relations, to benefit from the rapid and dynamic economic growth in the Global South52.

In line with the focus on economic growth and sustainable socio-economic development, the Department would negotiate and navigate international trends beyond its immediate region and the continent.
According to the APP, the Department’s international network of missions is seen as a strategic asset that is being leveraged to realise maximum return on the investment it represents for the people of South Africa.

Constrained FDI and investment flows, protectionism and the impact of US sanctions on (secondary) Iran and Huawei, have impacted on the South African domestic economy, for example the telecommunication sector.
South Africa would avoid taking sides on the growing tensions between China and the USA, to avoid compromising trade and investment with either country53.

The rivalry between China and the Russia in Central Asia could possibly impact negatively on the cohesion in BRICS54.

South Africa would remain committed to a stable and peaceful Middle East and supports sustainable and just solutions to the various conflicts in the region.
The region is an important component of South Africa's global trade and is a critical energy partner to South Africa.

The strong focus on investment would be continued in the objectives pursued in 2020 to 2025, through South Africa's 51 Annual Performance Plan 2022/23, Department of International Relations and Cooperation 52 Ibid 53 Annual Performance Plan 2022/23, Department of International Relations and Cooperation 54 Ibid Page | 18 202 diplomatic engagement with the region.
South Africa would remain committed to supporting the Two-State solution and the people of Palestine55.

South Africa remained committed to a stable and peaceful Middle East, and supports sustainable and just solutions to the various conflicts in the region.

South Africa enjoys strong political, economic and technical relations with the countries in the East Asia and Oceania region.

Bilateral relations with countries in the region are pursued in line with priorities highlighted in the NDP and 2022 SoNA.
South Africa's trade and investment relations with the region are strong and growing, but there is substantial room for expansion.

Tourism from the region, in particular, has huge potential to contribute to South Africa's GDP.

China is South Africa’s major trade partner, but there is a deficit in the trade balance.

China does not view South Africa as its only African partner.

Furthermore, China can be seen as an economic competitor for South Africa companies in Africa, especially in Eastern Africa.
7.1.10 Multilateralism Multilateralism remains a focal point of South Africa's foreign policy56.

South Africa's multilateral engagements are premised on the need to advance its national interest and safeguard its national positions.

It is in these forums that South Africa would advance the development priorities of developing countries and promote an equitable rules-based multilateral system, as identified in Priority Seven of the MTSF.
The Department would continue to communicate South Africa’s role and position in international relations in both the domestic and international arenas.

The Department would also continue to provide the requisite protocol and consular services.

55 Ibid 56 Ibid Page | 19 203 During the financial year, the Department would continue with the closure of identified Missions, in an attempt to deal with the reduced budget at its disposal.
The drafting of regulations, codes and directives to operationalise the Foreign Service Act would also be finalised and approved.

8.
Budget allocation for programmes of the Department Table 1 Budget Allocation-Vote 6: International Relations and Cooperation 2022/23 Programme (R million) 2021/22 2022/23 1: Administration 1 690 805 1 732 100 2: International Relations 3 295 334 3 297 955 3: International Cooperation 485 194 517 155 4: Public Diplomacy & Protocol 297 439 289 943 5: International Transfers 749,100 763 355 Total 6 517 872 6 600 508 Source: 2022/23 Annual Performance Plan of the Department of International Relations and Cooperation Over the medium term, the Department would continue to focus on advancing the African Agenda, including curbing the impact of the COVID-19 pandemic on the continent; participating actively in the United Nations; and enhancing the management of its infrastructure portfolio in foreign Page | 20 204 missions57.
For 2022/23, the Department has an increased budget allocation from R6 517 872 billion in 2021/22 to R6 600 508 billion in 2022/2358.

Total expenditure is expected to increase from R6.5 billion in 2021/22 to R6.9 billion in 2024/25, at an average rate of 2 per cent59.

The Department’s work is mainly realised through the 116 diplomatic missions in 102 countries in which South Africa has representation60.
As such, compensation of employees is the Department’s main cost driver, accounting for an estimated 43.2 per cent (R8.7 billion) of expenditure over the medium term61.

8.1 Managing infrastructure projects and properties The Department’s international property portfolio comprises of 127 state-owned properties and more than 1000 rented properties.
Over the MTEF period, it plans to reduce its rental portfolio and the associated operational costs by developing one property in Luanda, Angola, and one property in Gaborone, Botswana on state owned vacant land.

It also plans to assess the condition of the state- owned properties within its portfolio over the medium term, beginning with those in Africa, to determine the need for maintenance, repairs and renovations to extend their lifespans.
To carry out these activities, R838.3 million over the medium term is earmarked in the Foreign Fixed Asset Management subprogramme in the Administration programme, of which R51 million is allocated specifically for assessing the condition of state-owned properties abroad.
8.2 Budget allocations per programme 8.2.1 Program 1: Administration 57 Estimates of National Expenditure 2022, National Treasury 58 Ibid 59 Ibid 60 Ibid 61 Ibid Page | 21 205 The Diplomatic Academy would be a centre of excellence in foreign service training and the plan is to conduct a gap analysis on delivering training in AU/UN languages.
The current realities call for organisational renewal, innovation as well as the Department’s transition towards a digitisation system currently in progress in order to assist the organisation to achieve more and to deliver on its mandate and the five year strategic objectives.

It also requires the Department to streamline its processes with a specific emphasis on improving its digital environment through its Digital Strategy.
The allocated budget for Administration amounts to 26.2% of the total Departmental budget for the 2022/23 financial year62.
Over the MTEF, the budget allocation for this programme would increase from R1.691 billion in the 2021/22 financial year to R1.732 billion in the 2022/23 financial year63 and the increase is mainly for capital infrastructure for the construction, refurbishment and renovations of state-owned properties abroad as well as the Information and Communication Technology (ICT) budget for the implementation of the ICT strategy64.
8.2.2 Programme 2: International Relations The Department would continue to pursue increased and improved access of South African products and services to foreign markets, which would contribute to the aim of increasing manufacturing and thereby contribute to an export-orientated economy.

The Department intends to become a catalyst and operate as a networking agent for “South Africa Incorporated”65.
The missions, in particular, are poised as key frontline role players in the pursuit of economic diplomacy and its component pillars such as FDI pledges, as well as the contribution towards inbound tourism promotion66.
62 Estimates of National Expenditure 2022 63 Ibid 64 Estimates of National Expenditure 2022 65 Annual Performance Plan 2022/23, Department of International Relations and Cooperation 66 Ibid Page | 22 206 The budget allocation for Programme 2 would increase over the MTEF from R3 295 334 billion (2021/22) to R3 297 955 billion in 2022/2367 and includes allocations for 116 missions in the Africa, Americas, Europe, Asia and Middle East regions.
The increase in the budget allocation for this programme is mainly on goods and services.

This is reported due to the escalations on contractual obligations for the leases of offices and residential accommodation abroad68.

8.2.3 Programme 3: International Cooperation The primary objective of this programme is to participate in initiatives of international organisations and institutions in line with South Africa’s national values and foreign policy objectives.
Multilateralism remains a focal point of South Africa's foreign policy69.

South Africa's multilateral engagements are premised on the need to advance its national interest and safeguard its national positions.

It is in these forums that South Africa would advance the development priorities of developing countries and promote an equitable rules-based multilateral system, as identified in Priority Seven of the MTSF.
This is achieved through South Africa’s engagements within the Global system of governance; continental cooperation; South- South cooperation; North-South cooperation to advance and support national priorities, the African Agenda and the developmental agenda of the South.

In line with South Africa’s foreign policy, the Department would continue to advocate for the reform of global governance institutions70.
67 Estimates of National Expenditure 2022, National Treasury 68 Ibid 69 Ibid 70 Estimates of National Expenditure 2022, National Treasury Page | 23 207 The allocated budget amounts to 7.8% of the total departmental budget for the 2022/23 financial year71.

The allocation was R485 194 million in (2021/22), it has increased to R517 155 million in (2022/23)72.
8.2.4 Programme 4: Public Diplomacy and State Protocol According to the APP, the Department aims to implement and monitor the effectiveness of the Public Diplomacy strategy.

Through this programme, the Department would ensure rapid and timeous support to missions on domestic and global developments.

Key messages would be distributed to missions on domestic and global developments.
Several platforms would be utilised to inform and promote South Africa’s foreign policy to domestic and international audiences, thus making an effort to ensure that foreign policy decision-making process reach the grass roots.

The budget allocation for Programme 4: Public Diplomacy and Protocol Services has experienced a decrease in allocation; from R 297 439 million in 2021/22, to R 289 943 million in 2022/23.
8.2.5 Programme 5: International Transfers The Department would continue to transfer payments, which arise from obligations undertaken by South Africa at international, regional and subregional multilateral levels, and to its entity, the African Renaissance Fund73.

The MTSF (2019 – 2024) requires that South Africa contributes to a better South Africa and better region and to secure the advancement of South Africa’s national interest.
This could only be realised through the payment of South African contributions to international organisations in full and on time.

71 Ibid 72 Ibid 73 Estimates of National Expenditure 2022, National Treasury Page | 24 208 Therefore, under its Outcome, “Agenda 2030 and Agenda 2063”, it is required that South Africa honours its obligations towards the UN, SADC and the AU, including the institutions hosted in South Africa (i.e.
Pan-African Parliament, New Partnership for Africa’s Development, African Peer Review Mechanism, African Commission on Nuclear Energy and Pan-African University on Space Science (PAUSS) and trans-frontier conservation areas.

This would require the settlement of all assessed contributions as required by the respective international organisations.
The budget allocation for Programme 5: International Transfers for the 2022 MTEF, consists of the Departmental Agencies’ allocation to the African Renaissance and international Cooperation Fund, which is R51 199 million in 2022/23 74 , as well as international membership contributions to organisations such as, among others, the AU, SADC, UN, India-Brazil-South Africa Trust Fund, and the Commonwealth of Nations.
The allocated budget amounts to 11.6% of the total departmental budget for the 2022/23 financial year75.

The budget allocation for this programme is determined based on the assessment letters from each organisation South Africa is a member of.

The budget allocation for Programme 5: International Transfers experiences an increase from R749,100 million in 2021/22 to R763 355 million in 2022/23.

9.
9.

The African Renaissance and International Cooperation Fund (ARF) The Department has one entity, the African Renaissance and International Cooperation Fund (ARF).

After 1994, the democratic government took a deliberate decision to establish a Fund, to promote development assistance and consolidate peace and reconstruction in Africa.
The African Renaissance and International Cooperation Fund was thus established in 2000 pursuant to an Act of Parliament, the African Renaissance and International Cooperation Fund Act (Act 51 of 2000).

The fund’s mandate is to enhance cooperation between South Africa and other countries, particularly African countries76.

74 Ibid 75 Ibid 76 Strategic Plan 2020-2025, African Renaissance Fund Page | 25 209 The ARF continues to be an invaluable instrument in pursuit of the priorities identified in the MTSF.
As foreign policy is an extension of national priorities, the ARF would contribute to the seventh priority of “A Better Africa and World” through “enhancing cooperation between the Republic and other countries, in particular African countries, through the promotion of democracy, good governance, the prevention and resolution of conflict, socio-economic development and integration, humanitarian assistance and human resource development”.
9.1 Annual Performance Plan 2022/23 of the African Renaissance Fund The APP provides that the ARF operates through an Advisory Committee77 which is comprised of: The Director General (DG) or delegate; 3 officials of the Department appointed by the Minister; 2 officials from National Treasury appointed by Minister of Finance.

The Advisory Committee makes recommendations to the two Ministers on the disbursements of funds through loans or other financial assistance.
The DG is the accounting officer of the Fund in terms of the PFMA 1999.

The DG has created a secretariat consisting of officials to assist with disbursement of funds.

Officials assist with monitoring and administration of projects relating to the fund.

The ARF has received successive unqualified audit opinion without findings for the past three financial years in succession.

The APP of the ARF provides that the transferred budget allocation to the ARF for 2022/23 is at R51 199 million.
The ARF would implement its mandate in a constraint fiscal environment with significant reductions in annual allocations.

However, the ARF would be able to achieve its mandate through the Department’s 116 missions in 102 countries abroad.

Due to fiscal constraints, the APP provides that there would be fewer projects for the 2022/23 financial year 78 .
However, the Department would ensure that with limited resources available, it maximises the impact of its contribution to a better African continent and the world at large.
In terms of policy initiative, the current Strategic Plan and APP of the ARF, provide that the African Renaissance and International Cooperation Act 2000, should be amended to provide for a name 77 Ibid 78 Annual Performance Plan 2022/23, African Renaissance Fund Page | 26 210 change of the ARF to the South African Development Partnership Fund; and for the designation of a Head, as an Accounting Authority, who would be responsible, together with the Secretariat, for the administration of the fund.
The fund would remain an entity listed in terms of the Public Finance Management Act, 1999 (Act 1 of 1999).

10.

Findings by the Committee 10.1 The processes for the implementation of the Digital Strategy are slow.

The Department has acquired the necessary tools of trade like, laptops, tablets, desktops, for the officials at headquarters, it is yet to transfer such tools to the South African Missions abroad.
It has undertaken to provide quarterly progress reports on the implementation of the Digital strategy.

With lessons learnt from restrictions on movement because of COVID-19, the Committee saw digital technology as key for the Department to turn the corner on the ICT infrastructure limitations.

10.2 The Committee noted that the implementation of the 2009 Cabinet decision for the establishment of the South African Development Partnership Agency is still outstanding.
Furthermore, it is provided that the African Renaissance and International Cooperation Act 2000, should be amended to provide for a name change of the ARF to the South African Development Partnership Fund; and for the designation of a Head, as an Accounting Authority, who would be responsible, together with the Secretariat, for the administration of the fund.

The fund would remain an entity listed in terms of the Public Finance Management Act, 1999 (Act 1 of 1999).
More information was needed as to why a name change would be an option.

10.3 It was observed that, in some aspects, the APP of the African Renaissance Fund was not the same as the power point presentation.

The APP had omitted the targets of South Africa participating in the SADC Election Observer missions (SEOM) despite four elections due in 2022 within the SADC region.

The other target not included is on South Africa’s support for the projects aimed at operationalising the AfCFTA.
Page | 27 211 10.4 The draft regulations for the Foreign Service Act 2019 were in the process of being finalised.

They would in turn be published for public scrutiny, and the Committee would have an opportunity to be part of the stakeholders’ consultations on the draft regulations.

The concern was on the length of time it has taken the Department to conclude the process.

10.5 The Committee noted that COVID-19 would slow down implementation of the United Nations Sustainable Development Goals (SDGs).
More information was sought whether there were any other factors impacting on the achievement of SDGs.

10.6 It was observed that the Department was planning to undertake infrastructure projects without a ‘milestone report’.

Such a report would be necessary to clearly outline how it would detach itself from the professional assistance in the built environment which was provided by the Department of Public Works (DPW).
The milestone report would also serve as a handing over document from the DPW detailing the state of affairs in the property portfolio which they had been managing.

It should also inform the Department how many properties there are, monies spend on maintenance and rentals, cleaning and all other related matters.

In essence, the Department would not be able to take over with custodianship of state owned properties abroad without some form of a handing over report.
10.7 The Committee has noted that under Programme 1: ‘Provide leadership, management and support services to the Department’, there would be quarterly progress reports on the implementation of the predetermined objectives under this progamme.
These reports would include progress on the implementation of the digital strategy; service delivery relating to training on UN/AU languages; outreach initiatives to advance gender equality and women’s empowerment through gender mainstreaming; youth development and empowerment; and mainstreaming rights of persons with disabilities.

The Committee would like to regularly receive these reports for oversight scrutiny and accountability.
10.8 Under Programmes 2 and 3, there would also be quarterly reports covering the Foreign policy activities of the Department and Missions abroad.

The Committee’s view was that these reports should also show how these bilateral and multilateral activities, translate into economic reciprocation Page | 28 212 for South Africa.

Furthermore, the Committee would utilise these reports to assess the impact of South Africa’s participation on the outcomes of these bilateral and multilateral engagements.
10.9 The Department reported it has finalised the review of its organisational structure, to align it with its Strategic Plan and the priorities of the MTSF 2014-2019.

The Committee’s view is that the structure should be aligned to the Foreign Service Act 2019.

Specifically, progress was sought on the recruitment of a chartered accountant as a CFO.
The Committee further cautioned against empire- building tendencies at work in the Department, where previously individuals would broaden their scope of influence and power through bullying others into submission.

It was observed that the practice had let to low morale amongst the officials.

10.10 Remaining within the stipulated compensation of employees ceiling remains a challenge.

The budget is therefore lower than the number of current employees in the Department.
It has been difficult for the Department to fill vacant posts; these vacancies have been aggravated by an aging workforce resulting in natural attrition.

Upskilling of personnel was regarded as an ad-hoc solution, which would not address the real root cause of challenges with maintaining the cost within a determined ceiling.

It was asked whether the Department conducts regular head count interventions to ensure that there were no ghost-workers.
It was also noticed that there were additional staff to the organisational structure.

10.11 The Department’s international property portfolio comprises 127 state-owned properties and more than 1000 rented properties, resulting in high rental costs with annual escalations.
The Committee observed that in order to reduce its rental portfolio and the associated operational costs, the Department should consider a model which would allow for acquiring instead of leasing residential and office accommodation for Missions abroad.

10.12 There were some challenges facing the Department in the conduct of South Africa’s Foreign Policy.
It has demonstrated that South Africa needs to review certain relationships and alliances in a pragmatic way to better realise its foreign policy objectives.

It is reported that this would require a re-evaluation of all previous assumptions, in the realisation that there are and would be fundamental shifts in the global political and economic environment i.e.
the global trend away from multilateralism Page | 29 213 to unilateral-centred international relations and being able to adapt to fluidity in the global environment.

The Committee expressed a need to have a detailed discussion on the risk factors, to also factor them in when developing its oversight strategic plan for its work henceforth.

10.13 It was observed that some of the output indicators had not been refined adequately.

The emphasis was still on numbers as targets.


10.14 The Committee noted that the process of the reduction of mission is continuing.

Presently there are 116 South African missions abroad, in an effort to contain the expenditure on the compensation of employees within the determined ceiling.

The reduction should not disadvantage the African continent.

10.15 Regarding climate change, South Africa advocates for a global response that is equitable and that provides development space for developing countries.
The expectation is that the developed countries should take the lead in emission reductions, closing the ambition gap, including those carried over from the pre-2020 to the post-2020 period and providing adequate means of implementation that would enable a response to the challenge.

Clarity was sought as to whether the Department had mitigating plans for the challenges relating to Brexit, tensions within BRICS, and adverse effects of climate change.
10.16 South Africa’s engagement in the United Nations is to advance the reform of the existing global governance architecture with a view to improve the voice and representation of Africa and the developing world.

It also intends to draw attention to the responsiveness of the UN system to the needs and challenges faced by Africa and developing states.

The Committee reiterated their political view, that the reform agenda should remain on the agenda of South Africa’s multilateral engagements.
10.17 In terms of South Africa’s foreign policy, clarity was sought on lessons learned from having had to adjust from a pre COVID pandemic period to a post pandemic conditions affecting conduct of international relations.

Page | 30 214 10.18 The SADC’s integration agenda is anchored in political, security and economic integration.
The Committee emphasised that critical to regional economic integration, is the rapid implementation of the Tripartite Free Trade Area (TFTA), as well as the AfCFTA, to boost industrial and infrastructure development and enhance intra-regional trade.

10.19 In terms of threats to security and safety, the continent has seen an increase in terrorism in all regions with involvement by outside players, including in the SADC region.
The situation in Cabo Delgado, in Northern Mozambique, remains a source of concern, as is that in eSwatini and Lesotho.

The Committee expressed a need for SADC acceleration of efforts to bring about political solutions to the conflicts.

10.20 It was noted that the funds on subsistence allowances, have been reduced due to COVID restrictions.

Clarity was sought if it was possible to reallocate the savings to other costs centers such as compensation of employees.
10.21 The Department was asked to provide to the Committee a report on existing tenders and service providers doing business with the Department.

10.22 The Department was reminded that it was yet to submit a report on the criteria used for transferring officials, especially the Corporate Services Managers, who are charged with property and financial management in the missions abroad.
The Department reported previously that such officials are posted with no specific skill on these traits, and on return from the missions, they are often placed in the Finance branch.

10.23 A concern was raised regarding individuals that appear to be additional to the Department’s establishment.

11.

Responses by the Department Page | 31 215 11.1 On compensation of employees, the Department noted that it is human capital centred.
It was said that diplomacy work, both at headquarters and in the missions, does require suitable warm bodies who understand the mission of the Department to safeguard national interest, and promote both the African Agenda and the agenda of the Global South.

11.2 The compensation of employees’ budget has not increased in tandem with the growing mandate of the Department.

Consultations with National Treasury on the matter are continuing.
11.3 With regards to the reduction of South African missions, the associated risk is that in the diplomatic world, such an exercise is interpreted as signalling that South Africa is reducing its ambitions in the international community.

For example, when considering a permanent seat in the Security Council, diplomatic footprint is an important issue.
11.4 The Department would do an objective assessment and look at economic rationale behind the diplomatic footprint, while also looking at how to make missions, more efficient so that we can do more with less.

This process would be carried out in a way that would not harm South Africa’s global diplomatic ambitions by reducing its diplomatic footprint too much.
11.5 The Department has not been able to fill vacancies, nor to recruit young people into the fold, due to the challenges with the ceiling on compensation of employees.

This has resulted in very competent young people being in junior positions for a very long time, thus giving rise to demoralised employees.

Talent management would be developed within Human Resources branch to look into this area, in terms of creating space for young people to move up in the ranks within the Department.
11.6 On the matter around the R50 million donation to Cuba, it was noted that this was not linked to compensation of employees.

The Department jointly with National Treasury are in the process of appealing the ruling of the Pretoria High Court on the donation to Cuba.

Page | 32 216 11.7 The Department has reported that it has recruited an official to for managing of properties.

It has a massive portfolio of 127 state owned properties and 1000 rented properties abroad.
11.8 The advent of COVID-19 had a massive impact in terms of a slowdown in the global economy supply chains.

This also impacted on the implementation of SDGs and the Agenda 2063, and disrupted the global economy supply chains.

Indeed, the global economy was already moving in a downward trend before the pandemic.

11.9 The draft regulations to the Foreign Services Act were ready to be circulated for public comment.
The thinking has been that since the impact of these regulations is largely internal, the Department is considering to reduce time for public comment to a period of 14 days.

The Department further noted that it would be working with the Presidency, and also grant Parliament space to consider the regulations.

11.10 Negotiation are ahead between the Minister and that of Finance in terms of the future of the ARF.
The outcome therefrom would determine the shape and form of the entity that would replace the ARF.

11.11 The individuals that appear to be additional to the establishment were individuals that were on unpaid leave, as most were spouses accompanying those on posting.

The other group comprise heads of mission designates appointed by the President; and in the last group were officials who were seconded to the Department from other sister departments.
11.12 On the issue of ghost workers, the Department on a regular basis requests its employees to physically collect their payslips and sign for them.

Should an employee not sign for them, the Department would withhold the salary.

Acting positions largely arose because no new positions could be filled.

The Department committed to work faster in filling critical vacant positions.

Page | 33 217 11.13 The reduction of Subsistence Allowance is as a result of some engagements being held virtually.
11.14 With regards to tools of trade for officials, as of the end of March 2022, the Department had already distributed the laptops and desktops to officials.

Having placed the order in June 2021, the delay was attributed to the global demand pressure and shortage of electronic equipment.

The Department has migrated all users to the Microsoft Office 365 which is running the latest tools, and it has managed to synchronise email boxes from the old.
The laptops and desktops that have been distributed are secured and even when officials lose their laptops, the Department would able to wipe out the information.

11.15 The Department embarked on a data modernisation Centre project which has commenced in January at the headquarters, with a plan to roll out to hubs in London and Washington.

The configurations and setup of these hardware devices are currently being tested, and once finalised, would be shipping them to the two hubs in Washington in London.
Once these processes have been completed, data migration would be rolled out to allow the Department to run a high availability environment where the challenges would also be addressed.

11.16 National Treasury has been approached for funds to enable the Department to conduct an impact assessment on the work of the African Renaissance Fund.

12.

Conclusions After discussions during the briefing, the Committee concluded as follows: The Department has received an increased budget for financial year 2022/23.
The budget would still be further affected by the imminent foreign exchange currency fluctuations and unavoidable mandates and responsibilities in its diplomatic intercourse and conduct of international relations.

Its main operations abroad have previously been affected by currency fluctuations.

Page | 34 218 The situation with COVID-19 has meant that, like other departments, this Department would have to work within a tight budget and reprioritised targets.
The mandate of the Department is largely abroad, most of the activities it had planned would be severely impacted upon as there would be no travel due to the travel restrictions and lockdowns in many countries.

However, the Committee was encouraged by the Department’s commitment and resolve to achieve its strategic objectives albeit with budgetary constraints.
Graduation from the qualified audit opinion baseline to a clean audit should be the Department’s goal for the medium term; and it should implement the audit action plan and adhere to the cost containment measures it has agreed to with the National Treasury.

The Department has to carry out its mandate within unpredictable, at times turbulent, external environment to advance South Africa’s national interest.
It is becoming evident that there are shifts within the international environment, which in turn impact on the traditional alliances that South Africa had.

The Department would have to re-evaluate some of its assumptions and adapt to the shifting international political landscape in order to remain relevant and pursue national interest with like-minded partners.
The National Development Plan prescribed that the Department should position itself to assume greater leadership role in Africa, leading development and growth in the continent.

The interplay between foreign policy and national interest continue to be the baseline for the Department’s success in the conduct South Africa’s foreign policy.
Following from the above conclusions, it has, therefore, become important for the Department to have continued with clear and focus driven plans which remain aligned to the budget allocated, and the continued vigour to respond to the domestic challenges as per the aspirations of the NDP.

The Committee has observed that very important targets under the African Renaissance Fund were not planned for this financial year.

However, a presentation had populated such targets.
Participation in SADC election observer missions and supporting the projects that would operationalise the AfCFTA, directly speak to South Africa’s Foreign Policy aspirations on regional and continental agendas.

Page | 35 219 The Committee has continued its trend of a robust approach to oversight over the activities of the Department, South Africa’s Missions abroad and the entity, and the African Renaissance Fund, despite challenges posed by the Oversight Model of Parliament.
More of oversight visits to the ARF project area would follow.

The Committee would also engage in various issues aimed at enhancing the conduct of South Africa’s foreign policy.

The Committee would continue to make a number of recommendations to the Department, as part of its oversight, and in an effort to enhance the way South Africa relates and engages in international relations.

The Department has responded positively in some aspects, and benefitting from guidance from the Committee.
There is room for improvement, as the Committee is encouraged by the responsiveness of the Department to the oversight interventions.

13.
13.

Recommendations Having considered the Strategic Plan 2020-2025 and the Budget Vote 6 of the Department 2022/23 and its entity, the Committee recommends that the Minister should consider the following and report on progress within three months of adoption by the National Assembly of this report: 13.1Conduct a full assessment of the effect of COVID-19 and its impact on the budget allocation of the Department, predetermined objectives, and service delivery.
13.2Finalise the implementation plan and relevant processes and publish for stakeholders’ consultations, the draft regulations, as a precursor for the promulgation of the Foreign Service Act 2019 to come into force.

Page | 36 220 13.3Oversee the implementation of effective financial management through the application of sound financial management systems, including management and financial accounting, as well as supply chain management.
13.4Improve the internal control environment in line with the requirements of the Public Finance Management Act, 1999.

13.5Obtain a milestone report from the Department of Public Works as a handing over brief on state owned land and properties abroad.

13.6Ensure that a property management strategy is developed as a guiding framework for the custodianship of the property portfolio, in line with the Foreign Service Act.
13.7Develop an implementation plan with timeframes, in order to determine the course of action needed for all state owned land parcels and properties abroad.

13.8Streamline processes with a specific emphasis on improving digital environment through the implementation of the Digital Strategy with set timeframes.
13.9Consider a model which would allow for acquiring instead of leasing residential and office accommodation for Missions abroad, to minimise costs due to the escalations on contractual obligations for the leases of offices and residential accommodation.

13.10 Consider mainstreaming youth development in the work of the Department to effect positive outcomes among young people at local, provincial and national levels in South Africa.
Page | 37 221 13.11 Revise the strategy for South Africa’s participation in BRICS, and garner support to tackle possible threats on cohesion within the geopolitical forum, and ensure its continued relevance in advancing South Africa’s national interest and the African Agenda 2063.
13.12 Re-evaluate all previous relationships, alliances, in a pragmatic way to better realise South Africa’s foreign policy objectives, recognising that there are and would be fundamental shifts in the global political and economic environment.

13.13 Monitor and coordinate South Africa’s progress on the implementation of the Regional Indicative Strategic Development Plan (RISDP) projects, to facilitate regional integration.
13.14 Devise short and long term plans to address the issue of compensation of employees, in consultation with National Treasury, to optimise the current staff establishment to maximise delivery on its ever-increasing mandate.

13.15 Conduct an assessment whether the cost-reduction initiatives through closure of some South African Missions abroad, bear the intended impact on the challenges brought about by the ceiling on compensation of employees.
The reduction should not disadvantage the African continent.

13.16 Expedite review of the organisational structure to, among others, separate the Finance branch from property management and all other non-financial units.

13.17 The Committee notes the court judgement on the appeal of the Department regarding its humanitarian contribution to Cuba.
It is the expectation of the Committee that, in taking the matter further, the Department should do so in full compliance, recognition and observance of the Constitution of the Republic of South Africa, the Foreign Policy principles and prescripts, historical relations with Cuba, and indeed any other related policies.

The Committee further expects the Department to continue with its accountability on this matter to Parliament through the Portfolio Committee.
Page | 38 222 13.18 Conduct an impact assessment on the work of the African Renaissance Fund, with details of how the disbursement of funds from the ARF contributes to South Africa’s development cooperation agenda.
To the National Assembly 13.19 The Parliamentary Oversight Model must be reviewed to allow the Portfolio Committee on International Relations and Cooperation to have more regular oversight visits to South African Missions abroad, in order to have a holistic approach on the performance abroad of the Department of International Relations and Cooperation.
Being mindful that cost considerations may not allow oversight visits to all the South African Missions abroad, the Portfolio Committee has adapted to the new normal, and has conducted a novel oversight visit, virtually.

It is the hope of the Committee that Parliament will embrace this innovation into Oversight and Accountability Model.
13.20 The Parliamentary Oversight Model should allow the Portfolio Committee on International Relations and Cooperation to have more regular oversight visits to project areas of the African Renaissance and International Cooperation Fund (ARF), in order to have a holistic approach on the performance abroad of the entity of the Department of International Relations and Cooperation.
13.21 The Portfolio Committee should be allowed to conduct oversight visits to international organisations that the Republic of South Africa is a state-party.

This would enable the Committee to assess the impact of the Department’s participation on the overall outcomes at such forums.

13.22 The Committee recommends that Budget Vote 6: International Relations and Cooperation 2022/23 be passed.

Report to be considered.

Page | 39 223 National Council of Provinces 1.


REPORT OF THE SELECT COMMITTEE ON APPROPRIATIONS ON THE DIVISION OF REVENUE BILL [B6-2022], DATED 11 MAY 2022 The Select Committee on Appropriations, having considered the Division of Revenue Bill [B6 – 2022] (National Assembly-Section 76(1)), referred to it and classified by the JTM as a Section 76(1) Bill, reports as follows: 1.
Introduction and background Section 214(1) of the Constitution of the Republic of South Africa requires that every year a Division of Revenue Act should determine the equitable division of nationally raised revenue between national, provincial and local government.

In line with Section 7(1)(3) of the Money Bills and Related Matters Act No.

9 of 2009, as amended by Act No.

13 of 2018 (the Money Bills Act); Section 27(1) of the Public Finance Management Act No.
1 of 1999, as amended by Act 29 of 1999 (the PFMA), and Section 10(1) of the Intergovernmental Fiscal Relations Act No.

97 of 1997, the Minister of Finance, Mr E Godongwana, tabled the 2022 annual national Budget, including the Division of Revenue Bill [B6 – 2022] (the Bill) in the National Assembly on 23 February 2022.
The purpose of the Bill is to provide for – (a) the share of each sphere of government of the revenue raised nationally for the relevant financial year; (b) each province’s share of the provincial share of that revenue; and any other allocations to the provinces, local government or municipalities from the national government’s share of that revenue, and any conditions on which those allocations are or must be made.

2.
2.

Legislative framework guiding processing of the Bill, consultations and public participation According to the above-mentioned legislative frameworks, the Bill must be processed following the procedure established by Section 76(1) of the Constitution.

On 24 March 2022, the Bill was passed by the National Assembly and referred to the National Council of Provinces 1 224 (NCOP) and the Committee for consideration and report as required by Section 9(2) of the Money Bills Act.
As per the practise, the Committee invited all provincial portfolio committees on Finance and/or Treasury to be part of the briefing by National Treasury, on 09 March 2022.
The same approach was followed on 16 March 2022, when the Committee, in compliance with Section 15 of the Money Bills Act, was briefed by the Parliamentary Budget Office (PBO) and, in compliance with Section 214(2) of the Constitution and Section 10(4) of the Intergovernmental Fiscal Relations Act No.97 of 1997, consulted with the Financial and Fiscal Commission (FFC).
Furthermore, during a virtual meeting on 23 March 2022, in compliance with Section 214(2) of the Constitution, the Committee consulted with the South African Local Government Association (Salga).

As per Section 72 (1)(2) of the Constitution and 9(5)(b) of the Money Bills Act, the Committee facilitated public participation while processing the Bill.
To this end, advertisements calling for public submissions were published both in the national and regional print media in all eleven official languages from 04 to 11 March 2022, with 18 March 2022 as the closing date.

The Committee also invited, via email, all stakeholders who had made submissions in the past.
Despite these efforts the Committee received only five written submissions, from the Congress of South African Trade Unions (COSATU), Section27, Rural Health Advocacy Project, Healthy Living Alliance and Budget Justice Coalition.

All these stakeholders made oral presentations during the meeting of 23 March 2022.

The NCOP, through its Permanent Delegates – Committee Members - briefed provinces between 19 and 22 April 2022.
The Committee received and considered the submitted provincial negotiating mandates on 04 May 2022 and final mandates on 11 May 2022.

This served as an indication that provinces had fully participated in the processing of the Bill, as envisaged in Section 214(2) of the Constitution.

3.
Overview of 2021 Medium Term Expenditure Framework (MTEF) The central fiscal objectives over the 2022 Medium Term Expenditure Framework (MTEF) period are to - • Reduce the budget deficit and stabilise the debt-to-GDP ratio, primarily by controlling non-interest expenditure growth; 2 225 • Use a portion of higher-than-anticipated tax revenue to narrow the deficit while increasing non-interest expenditure to support economic growth, job creation and social protection; • Realise a primary surplus by 2023/24, a year earlier than projected in the 2021 Medium Term Budget Policy Statement; and • Support economic growth through a range of reforms, including the infrastructure build programme, financed through innovative funding mechanisms and supported by improved technical capabilities.
The 2022 MTEF fiscal outlook is subject to significant risks.

These include weakening of global or domestic economic growth, rising global borrowing costs, the possibility of higher public-service wage bill, and the poor financial condition of several major state-owned companies.

4.

The 2022 Division of Revenue allocations Table 1 below indicates the overall allocations to national, provincial and local spheres of government for the medium term.
Table 1: Equitable division of revenue raised nationally Column A Column B Spheres of Government Forward Estimates 2022/23 R’000 2023/24 R’000 2024/25 R’000 National allocations1,2 1 327 188 238 1 354 771 376 1 433 054 261 Provincial allocations 560 756 789 543 149 099 562 018 365 Local government 87 311 493 94 086 549 101 486 470 allocations Total allocations 1 975 256 520 1 992 007 024 2 096 559 096 - National share includes conditional allocations to provincial and local spheres, general fuel levy sharing with metropolitan municipalities, debt-service costs, the contingency reserve and provisional allocation - The direct charges for the provincial equitable share are netted out 3 226 The above table shows that the provincial share of nationally raised revenue grows by an annual average of 1.4 percent over the medium term, including growth in equitable share transfers of 1 percent and conditional grants of 3.3 percent.
However, the municipal share grows by an annual average of 7.9 percent, including equitable share growth of 10.3 percent and conditional grants growth of 5.3 percent.

In contrast, the national share contracts by an annual average of 1 percent.

Over the 2022 MTEF period, after budgeting for debt service costs, the contingency reserve and provisional allocations, 48.8 percent of nationally raised funds are allocated to national government, 41.4 percent to provinces and 9.8 percent to local government.
Excluding the debt service costs and the contingency reserve, allocated expenditure shared across government amounts to R1.66 trillion in 2022/23, R1.60 trillion in 2023/24 and R1.67 trillion in 2024/25.

The 2022 Budget increased allocations for both provincial and local government to assist with urgent spending pressures.

Relative to the 2021 Budget, direct provincial allocations increased by R74.1 billion over the medium term.
The majority of this amount consists of R53 billion added to the provincial equitable share (PES) and R5.4 billion added to direct conditional grants following the 2021 MTBPS.

Local government allocations increased by a total of R30.7 billion; of which R28.9 billion was for the local government equitable share (LGES) and R1.8 billion for direct conditional grants, over the same period.
4.1 Provincial equitable share allocation The PES is made up of six components: education, health, basic, institutional, poverty and economic activity.

From nationally raised revenue, provincial governments receive two forms of allocations: the equitable share and conditional grants.
Having taken revisions to the provincial fiscal framework into account, national government transfers to provinces grew from R661 billion in 2021/22 to R682.5 billion in 2022/23, increasing at an annual average of 1.4 percent over the MTEF to R690.2 billion in 2024/25.

A total of R560.8 billion is allocated to the PES and R121.8 billion to conditional grants, which includes an unallocated amount of R471 million for the Provincial Disaster Response Grant and the Provincial Emergency Housing Grant.
Due to their limited revenue raising abilities, provinces receive 41.4 percent of nationally raised revenue over the medium term.

In addition, 4 227 provinces receive conditional grants to help them fulfil their mandates, and transfers to provinces account for over 95 percent of their provincial revenue.
Table 2: Provincial equitable share and conditional grant allocations Column A Column B Equitable Conditional Forward Estimates Provinces share Grants 2022/23 2022/23 2023/24 2024/25 R’000 R’000 R’000 R’000 Eastern Cape 72 230 960 13 850 000 69 779 414 71 841 946 Free State 31 107 440 8 737 000 30 108 911 31 108 873 Gauteng 120 041 881 26 503 000 116 263 997 120 759 712 KwaZulu- 114 509 371 25 041 000 110 785 551 114 372 560 Natal Limpopo Mpumalanga Northern Cape North West Western Cape Unallocated Total 560 756 789 121 782 000 543 149 099 562 018 365 Table 2 shows that total transfers to provinces in 2022/23 amount to R682.5 billion, of which R560.7 billion is the equitable share and R121.7 billion is conditional grants.
Included in the 5 228 conditional grant funding is an unallocated amount of R417 million.

Table 2 also shows the forward estimated allocations which are R543.1 billion in 2023/24 and R562 billion in 2024/25.
4.2 Provincial conditional grants Major changes to the provincial conditional grant framework are as follows: 4.2.1 Additions to grant allocations • R3.3 billion will be added to the Human Resources and Training Grant to address funding of the shortfall for medical interns and community service doctors.

• R1 billion will be added in 2022/23 to the COVID-19 component of the District Health Programme Grant to fund the continuation of the COVID-19 vaccine rollout by provinces.
• R2.1 billion will be added over the next two years for repairing of infrastructure damaged by storms and floods in KwaZulu-Natal in 2019 and 2020.

This disaster funding will be divided between three grants, as follows: - Human Settlements Development Grant: R398 million in 2022/23 and R475 million in 2023/24; - Education Infrastructure Grant: R145 million in 2022/23 and R326 million in 2023/24; and - Provincial Roads Maintenance Grant: R490 million in 2022/23 and R294 million in 2023/24.
4.2.2 Reprioritisation and reductions of grant allocations • To address funding shortfalls for medical internship and community service posts in provinces over the 2022 MTEF period, R745 million is reprioritised to the Human Resources and Training Grant.

This funding will be made available through reprioritising R345 million from the Health Facility Revitalisation Grant and R400 million from the National Health Insurance Indirect Grant over the 2022 MTEF period.
• R1.7 billion will be reduced from the Provincial Roads Maintenance Grant in 2022/23.

These funds were set aside in the Grant baseline in the 2021 MTEF as an incentive portion allocated to provinces based on their performance.

For the 2022/23 financial year, the incentive portion will not be allocated as the process of developing clear and objective criteria is being finalised by the sector.
6 229 4.2.3 Correction to the District Health Programme Grant Framework The overarching framework for the District Health Programme Grant wrongly indicates the target for the human papillomavirus vaccination programme as Grade 7 school girls.

However, the Grant funds are targeted at Grade 5 girls in public and special schools.
While the grant framework for the District Health component shows the correct target and the error does not affect allocations per province; it creates confusion and National Treasury requested the Standing Committee on Appropriations to recommend that the conditional grant framework be corrected as part of the gazette that will be issued in terms of section 15 of the Act, once the Bill is enacted.
4.2.4 Changes and renaming of grants • The HIV, TB, Malaria and Community Outreach Grant is renamed the District Health Programme Grant.

Though it will still be used for the same purpose, the number of components within the grant will be reduced to two.

The mental health services component and the oncology services component of the previous grant are shifted to the National Health Insurance Grant.
• The Early Childhood Development (ECD) Programme will be officially transferred from the Department of Social Development to the Department of Basic Education from April 2022.

As a result, the ECD Grant will also follow the function accordingly.
• The name of the Provincial Disaster Relief Grant is changed to the Provincial Disaster Response Grant, to align the existing processes and actions that are followed by the National Disaster Management Centre in responding to disasters, including the provision of relief where it is needed.

4.3 Local government equitable share allocation Over the 2022 MTEF period, R481.3 billion will be transferred directly to local government, this is 9.8 percent of national government’s non-interest expenditure.
Allocations to local government will increase by R31.5 billion, relative to the indicative allocations in the 2021 Budget.

The LGES, including the Regional Service Council/Joint Service Board (RSC/JSB) Levies Replacement Grant and Special Support for Councillor Remuneration and Ward Committees Grant, will amount to R282.9 billion (R87.3 billion in 2022/23, R94.1 billion in 2023/24 and R101.5 billion in 2024/25).
7 230 4.4 Local government conditional grants National government allocates funds to local government through a variety of conditional grants.

These grants fall into two main categories: infrastructure and capacity building.

The total value of conditional grants directly transferred to local government will increase from R48 billion in 2022/23 to R51 billion in 2023/24 and R52.5 billion in 2024/25; with growth just above inflation, at an average annual rate of 5.3 percent.
4.4.1 Changes to conditional grants Over the 2022 MTEF, the Department of Cooperative Governance (DCoG) will introduce an indirect component to the Municipal Infrastructure Grant.

It is envisaged that this will improve efficiency in Grant expenditure to develop more and better quality infrastructure.

A portion of the Municipal Systems Improvement Grant will be utilised to continue to support the institutionalisation of the District Development Model (DDM).
The name of the Municipal Disaster Relief Grant will change to the Municipal Disaster Response Grant.

Other changes include - • A reduction of R754 million in 2022/23 and R105 million in 2023/24; and an increase of R621 million in 2024/25 in the Public Transport Network Grant to align to the revised implementation plan and cash flow projections for the City of Cape Town’s MyCiti public transport network.
• R1 billion added through the Budget Facility for Infrastructure to the Regional Bulk Infrastructure Grant to continue with the implementation of the Potable Water Security and Remedial Works Project in George Local Municipality.

4.4.2 Reprioritisations, technical shifts and additional allocations • R50 million will be reprioritised from the Integrated National Electrification Programme (Eskom) Grant to finance the operational requirements of the Independent Power Producer Office in 2022/23.
• R8 million in 2022/23 and 2023/24, respectively, will be reprioritised from the Energy Efficiency and Demand Side Management Grant to finance operational requirements within the vote of the Department of Mineral Resources and Energy.

• R10 million will be shifted from the sport component of the Municipal Infrastructure Grant (MIG) to fund a sport project in Polokwane Local Municipality.
8 231 • Over the MTEF period, R347 million will be added to the Municipal Disaster Recovery Grant to fund infrastructure recovery in KwaZulu-Natal municipalities.

• Over the MTEF period, R1.7 billion will be added to the Neighbourhood Development Partnership Grant to fund the continuation of city-led public employment programmes as part of the Presidential Employment Initiative.
4.4.3 Amendment to the Local Government Financial Management Grant (FMG) framework From 2022/23, the FMG will make provision for the preparation of asset registers.

The Municipal Infrastructure Grant, administered by DCoG, has a similar, but broader, provision: funding the development of Asset Management Plans.

The submission of audited asset registers is a prerequisite for eligibility for this provision.

Where the asset registers need updating, DCoG can provide support.
National Treasury added a requirement in the responsibilities of the administrators of the FMG, to ensure that there is no duplication of effort and funding for municipalities targeted for this support.

The phrasing of this requirement in the framework has to be amended to highlight the need for alignment between the provisions in both grants.

This will be done through improved collaboration between the two administering departments when support is provided in the preparation of asset registers.

5.
5.

Consultation process in terms of Section 214 of the Constitution 5.1 Financial and Fiscal Commission (FFC) The Financial and Fiscal Commission (FFC) submitted that the 2022 Budget proposed a total allocation of R682 billion over the 2022 MTEF to the provincial fiscal framework which represented a slight improvement to the 2021 MTBPS estimate of R658 billion.

However, the FFC submitted that notwithstanding the upward adjustment, the 2022 MTEF allocations remained below pre-COVID-19 projections.
The FFC recommended that provinces identify selected service delivery indicators and provide assessments of service levels using the 2020 financial year as a point of reference to determine the impact of stagnant allocations on service delivery.

These assessments must also incorporate provincial conditional grant delivery targets set out in the 2020 Division of Revenue Act in comparison to the year of assessment.
With regard to the R24.6 billion allocated over the 2022 MTEF for provincial education departments to address the shortage of teachers, the FFC cautioned that government should consider the carry-through cost of these teachers going forward.
9 232 Regarding local government, the FFC submitted that 2022 would be a challenging year for municipalities as the political landscape had changed drastically after the municipal elections with governance and fiscal challenges which had the potential to impact the delivery of basic services.
Furthermore, these changes were taking place against the backdrop of COVID-19, which amplified challenges related to access to basic services, such as water, electricity, and sanitation, with wider fiscal gaps and municipalities (68 percent of 278) in financial distress.
The FFC made the following comments with regard to local government: • The FFC welcomed government's efforts to keep the LGES growth rate above inflation as this would go a long way in offsetting the ever-increasing costs of basic services and enable the delivery of basic services to poor households.
• The FFC welcomed the review of capacity-building systems and infrastructure grants, indicating that such initiatives would enhance municipal performance, move the local government sector forward, and quicken the recovery process.

• The FFC further underscored that the aforementioned review initiatives should be synchronised with the district development model, which seeks to address critical issues of municipal finances and service delivery failures.
• Lastly, the FFC emphasised that municipalities must improve the efficiency of spending with cooperative support from the national and provincial spheres of government through monitoring, reporting and evaluation to fulfil their constitutional mandates.
5.2 South African Local Government Association (Salga) The South African Local Government Association (Salga) noted and supported the fiscal consolidation course plotted by government to narrow the budget deficit and submitted that this promised to bear results, notwithstanding the risk factors cited.
Salga welcomed the increased adjustment to the local government fiscal framework since this accorded with what the organisation had been lobbying and advocating for at the Budget Forum, Parliament and various other intergovernmental relations fora.

Salga submitted that the proposed increase in the allocation to local government over the MTEF cycle would gradually realise the promise contained in the White Paper on Local Government of an equitable share of nationally raised revenue.
10 233 With regard to the importance of effective municipal capacity building, given the high number of municipalities currently in financial distress, Salga submitted that it had introduced the following: • The development of a Good Practice Guide on Municipal Financial Management, with a view to improve the capacity of municipal officials and political leadership.
Furthermore, it is in the process of rolling out capacity building initiatives via the Municipal Finance Integrated Councillor Induction Programme (ICIP) as well as capacity building workshops targeting municipal officials.
• In line with the coordination of capacity building initiatives targeted at municipalities, the ICIP is offered in collaboration with National Treasury and provincial treasuries; DCoG, the South African Revenue Service (SARS), and the Local Government Sector Education and Training Authority.
• The development of the accredited Project Preparation and Financing capacity building initiative for major capital projects included piloted municipalities to ensure that the learning outcomes address the deficiencies agreed with municipalities.
In terms of municipal revenue, Salga submitted that the National Conference resolved amongst others to encourage municipalities to strictly implement their credit control policies in an effort to manage escalating debt-owing to municipalities, particularly in collecting debt from customers who are able to pay but not willing as opposed to indigent customers.
Salga made reference to the updated Municipal Borrowing Policy Framework, and stated that it is collaborating with the Development Bank of Southern Africa’s Infrastructure Fund in an effort to facilitate the uptake of long-term borrowing instruments for major capital projects.
Salga welcomed the allocations of R800 million in 2022/23 and R856 million in 2023/24 in respect of the Neighbourhood Development Partnership Grant to continue with city-led employment programmes forming part of the presidential employment initiative.

However, it submitted that these allocations must be aligned to the local government functions of the grant.

Salga acknowledged the temporary nature of the initiative as a response to the impact of the COVID-19 pandemic on the economy.
Furthermore, Salga noted the risk of placing 11 234 expectations on municipalities to provide this form of employment in the medium to long-term after the funds were no longer available.

Regarding the Municipal Disaster Recovery Grant, Salga highlighted the need to factor in rapid disbursements of the grant allocations to municipalities in cases of disaster.
Salga emphasised that the responsiveness in the disbursement of the funds determined whether the grant would have the requisite impact in the event of disasters and it was therefore important to draw from lessons learnt during the COVID-19 hard lock-down.

Salga further noted the changes to the Public Transport Network Grant and Integrated Urban Development Grant.
In conclusion, Salga submitted that it supported the Bill and recommended that the upward trajectory in local government allocations from nationally raised revenue be maintained in order to realise the aspirations contained in the White Paper on Local Government of 1998 in respect of subsidising the provision of basic services.

6.
6.

Consultation process in terms of Section 9 (5)(b) of the Money Bills Act 6.1 Parliamentary Budget Office (PBO) The Parliamentary Budget Office (PBO) gave an overview of the Bill and provided a situational analysis at national, provincial and local government level.

The PBO submitted that, while the 2022 Budget increased the local government equitable share by an average annual rate of 10.3 percent, this did not guarantee that the needs of indigent households would be sufficiently met.
The PBO stated that national transfers accounted for a relatively small proportion of the local government fiscal framework, with the majority of local government revenues being raised by municipalities.

However, poor rural municipalities received most of their revenue from transfers, while urban municipalities raised the majority of their own revenues.
The PBO made reference to the research work undertaken by the Public Affairs Research Institute which found the following: • The challenges faced by local government were systemic and were the direct result of the unrealistic assumptions made when designing the funding model in the 1998 White Paper on Local Government.
12 235 • The White Paper assumed that local governments could raise over 70 percent of their financing requirements through service charges and also made them responsible for providing affordable services to households.

The PBO made reference to the capital and operating revenue trends at local government, and underscored that poor revenue management and an inability to efficiently raise own revenue was some of the biggest causes of financial distress in municipalities.
Furthermore, a number of municipalities failed to deliver services effectively due to poor governance, financial mismanagement and insufficient capacity.

The PBO also stated that the key issues in municipal budgets included growing grant dependence, inadequate maintenance expenditure, outstanding customer debt, and under-pricing of services.
The PBO recommended that national departments must monitor information on financial and non-financial performance of programmes partially or fully funded by an allocation made in the Division of Revenue Act.

The mandates of the different spheres of government are addressed by the division of revenue considering the demographic, social and economic needs of the environment.
The PBO emphasised that relevant up-to-date official statistical data was, however, not always available to inform policy and funding decisions.

7.

Submissions by stakeholders As indicated under section 2 above, only five public submissions on the Bill were received despite the Committee’s efforts to facilitate wider public participation.
7.1 Congress of South African Trade Unions (COSATU) COSATU welcomed the extension of the R350 Social Relief of Distress (SRD) Grant, indicating that it needed to be extended and linked to skills training programmes, to help its recipients find jobs.

COSATU added that the SRD Grant laid the foundation for a Basic Income Grant, but expressed disappointment that it had not been adjusted for inflation or to match the food poverty level.
COSATU supported the R76 billion allocation to the Presidential Employment Stimulus, even though the 2022 allocation had been reduced by R6 billion and the jobs target reduced to 510 000, as it had helped 840 000 people to find work and gain experience and skills thus far.

COSATU further expressed the hope that the R35 billion funding 13 236 for small, medium and micro enterprises would not be suffocated by banks’ lending criteria.
COSATU also indicated that there was a need to fast-track pension relief legislation to help financially distressed and indebted workers.

On the public wage bill, COSATU welcomed the Minister’s move towards collective bargaining, indicating that it was critical to settle the 2022 public service negotiations soon and honour the 2020 wage agreement.
COSATU emphasised that there was a need for a single wage regime and a collective bargaining process for national, provincial and local government, state-owned entities (SOEs) and all public entities.

In addition, the remuneration packages of politicians and managers should be reduced and, in order to eliminate ghost posts and workers, there must be a physical headcount.
With respect to infrastructure, COSATU welcomed the R812 billion 50-year plan, in particular the - • R126 billion to Transnet; • R62 billion to PRASA; • R26 billion to upgrade 900 informal settlements; and • R471 million infrastructure fund for 30 new schools, 40 schools to receive water and 450 to receive sanitation.
With respect to provincial government allocations, COSATU noted the R8 billion National Health Insurance (NHI) funding over the MTEF, the R3 billion for employing health workers, and the R15.6 billion to fight COVID-19; but expressed concern that 0.2 percent growth over the MTEF would weaken an already overstretched healthcare system.

COSATU further welcomed the R24.6 billion to address teacher and learning material shortages and the R12.7 billion to hire over 310 000 teaching assistants.
On local government, COSATU was concerned that 175 out of 259 municipalities were financially distressed, compared to the 86 in 2013.

According to COSATU, many of these municipalities failed to provide water, sanitation, electricity and roads or indigent rebates and subsidies; but there were no concrete measures in the 2022 Budget to address this crisis.

COSATU also highlighted that there was no road map to move from unsustainable municipalities to the District Development Model.
14 237 COSATU concluded by commenting that this Bill, and the 2022 Budget, would not take South Africa out of its current quagmire, but would only worsen the situation.
7.2 Healthy Living Alliance (HEALA) The Healthy Living Alliance (HEALA) proposed that revenue collected through the Health Promotion Levy (HPL) be earmarked specifically for support for the Department of Health’s health promotion programme and other high impact interventions that could contribute to decreasing the burden of hunger, obesity and diet-related non-communicable diseases; stating that its proposals were in line with the holistic intent of the HPL and the furtherance of its goals.
HEALA believed that the health and nutrition of women and children needed to be prioritised and therefore suggested the following three areas where the HPL revenue could be utilised: 7.2.1 Increasing support for School Nutrition Programme (SNP) The SNP reportedly benefited over 9 million learners aged four and above every day and was an effective poverty alleviation intervention, reaching some of the most vulnerable children in South Africa.
It allowed learners to realise their constitutional rights to basic nutrition and basic education.

However, studies had identified numerous shortcomings in the implementation of the programme.

While schools argued that they could not meet the SNP's nutrition requirements without sufficient funding, most provincial education departments underspent on their budgets for the SNP implementation.
In order to be a more effective programme and meet the nutritional needs of many vulnerable children, HEALA proposed that the SNP be expanded to include breakfast.

Evidence showed that breakfast had positive benefits for children’s academic performance and attention in school; and using the funds from the HPL to strengthen and expand this programme could be an effective way to address child hunger.
7.2.2 Supporting nutrition of children in the critical first 1000 days: Maternity Grant HEALA indicated that intervening in a child’s nutrition in the first 1000 days could have lifelong positive results, as stunting arose from chronic malnutrition in pregnancy and the early years of life and impaired the physical and cognitive development of young children.
Improving the wellbeing and nutritional status of pregnant women during this critical period, when the growth of the developing foetus was dependent on the nutritional status of the mother, was vital to combat stunting.

Extending the Child Support Grant into pregnancy in the form of 15 238 a maternity support grant would provide poor and vulnerable pregnant women with access to income support, enable healthy nutrition and improve mental health.
7.2.3 Improving nutrition in households: Basic Income Support HEALA reported that cash grants reduced hunger and malnutrition and improved food sufficiency; evidenced by the fact that the R350 Social Relief of Distress (SRD) Grant introduced during the pandemic, had been used primarily to buy food.
HEALA believed that the implementation of a Basic Income Support (BIS) in South Africa was feasible and affordable, and would contribute to economic growth and job creation, ensuring many households had improved food security, health and educational outcomes, having a long-term impact on poverty reduction.

Although the extension of the SRD Grant was welcomed, HEALA proposed that it be increased to at least the monthly food poverty line of R624, until social assistance for the unemployed was made permanent.
7.3 Rural Health Advocacy Project (RHAP) The Rural Health Advocacy Project (RHAP) submitted that, while there were huge inequalities and inefficiencies in current health spending and resources were constrained, the recovery efforts in the wake of the COVID-19 pandemic presented a vital opportunity to rebuild differently.
Rethinking how an adequate healthcare workforce, relevant health information systems and responsive budgeting mechanisms could be coordinated under good governance and values offered the possibility of building resilient health systems, reducing vulnerability to shocks and deepening South Africans’ health and wellbeing.
RHAP indicated that realising the right to healthcare access should be understood through achieving universal health coverage (UHC), defined by access, quality and affordability of healthcare for all; and that deepening quality of healthcare for the few could not be prioritised over increasing access to healthcare for the majority.

This meant better investment in primary healthcare (PHC) services, and focus on rural areas, which suffered historical and ongoing low service coverage.
It was government’s responsibility to ensure the optimisation of health spending to secure a more equitable access to primary healthcare (PHC), towards universal health coverage (UHC).

This required a human rights budgeting framework which more intentionally aligned economic policy with socioeconomic rights.

RHAP argued that building resilient rural health systems was inseparable from this aim.
Rural-proofing current policies challenged core features of persistent inequalities, while improving access to health for the majority of the under-served or excluded.

16 239 After outlining the historic under-funding of the sector as well as the unequal distribution of resources, RHAP commented on the 2022 Budget, as follows: • In real terms, consolidated healthcare expenditure decreased by 4.3 percent over the medium term, with per person expenditure dropping by 15 percent.
• Changes to the provincial equitable share (PES) formula for more rural-sensitive budgeting is welcomed, but the impact remains dependent on efficiency of spending.

• The lack of new funding specifically for PHC is worrying in light of COVID-19 regressions; and clear plans are required from provinces here.

• The freeze on filling critical and vacant posts is set to continue.
While the allocation to fund medical interns and community service doctors is welcomed, the impact on the current unequal distribution is dependent on placement.

• Cuts to infrastructure spending continue, but funding remains for much needed and delayed projects.

However, greater oversight is needed to ensure value for money and that provinces’ project lists improve service delivery coverage.
• The reduction over the medium term to the District Health Programme Grant potentially endangers progress with HIV/Aids, but may present an opportunity to review and strengthen implementation.

• It was important to provide clarity on how mental health and oncology services (and funding for this) would be protected under the NHI Direct Grant.
• The NHI Indirect Grant represented key opportunities for strengthening PHC networks, producing impactful NHI demonstration projects, and improving the capacity, relevance and responsiveness of current Health Information Systems.

• Despite some progress, the 2022 Health budget arguably fails to provide an expansive recovery budget or strong strategic clarity on how this recovery can be achieved.
Noting National Treasury’s statement that provinces and municipalities would need to improve efficiency and spend more effectively, RHAP suggested the following to support improved efficiency in provincial spending: • A one-size-fits-all model cannot be imposed on provinces, given contextual factors.

• Inefficiencies are not necessarily resolved at provincial level without support.
Provincial allocations often become based on historical expenditure trends as opposed to clear links to plans, targets, or changes in programme performance.

17 240 • Improving efficiency is a long-term task, yet immediate steps are required in the context of imperative recovery and preventing regression.

• While existing provincial autonomy should be upheld, there is room for the potential review and enhancement of provincial annual performance plans beyond existing accountability mechanisms.
In conclusion, RHAP recommended that a joint committee be set up temporarily to review and interrogate provincial departments’ budgetary decisions for 2022/23, in accordance with the most optimally aligning allocation of available resources to meeting existing needs.

This committee should be jointly comprised of the Department of Health, the Portfolio Committee on Health, the National Council of Provinces, and civil society actors in the health sector.
Appropriate representatives from provincial departments should engage with this committee to present on and explain how their allocations, given by their annual performance plan, were intentionally prioritising efficient coverage for the most vulnerable.
7.4 Section27 Section27 submitted that significant real term reductions in the provincial equitable share (PES) and certain conditional grants would impact both the availability and the quality of public health and education and that the government had failed to justify these measures or take adequate steps to mitigate their impact on human rights.
It asked Parliament to consider whether this Bill would strengthen the fiscal capacity and efficiency of provinces and municipalities, enabling them to provide basic services and perform the functions allocated to them.
Section27 further insisted that cuts to social spending must be based on transparent and participatory human rights impact assessments that demonstrated that the reductions would not increase inequality and undermine people's right of access to quality basic education and healthcare services.
7.4.1 Gender-responsive budgeting Section27 submitted that conditional grants were not allocated in a gender-responsive manner, despite an FFC recommendation that the budget should address gender inequality through gender budgeting in the public sector.

In addition, funding for the Department of Women, Children and People with Disabilities had been reduced by an annual average of 11.9 percent over the MTEF.
Section27 requested that the NCOP monitor whether this would impact on provinces, and further made the following recommendations: 18 241 • Parliament should request a copy of the government’s plans for the medium term that reflects steps in advancing gender-responsive budgeting.

• There should be engagement between government, Parliament and the public on what gender-responsive budgeting should look like in the South African context.
• Parliament must insist on adequate resource allocation to gender empowerment programmes and for provinces in particular to implement the National Strategic Plan on Gender-Based Violence and Femicide to address the scourge of gender-based violence.
7.4.2 Basic Education conditional grants While welcoming the increase of 4.5 percent over the MTEF to the Education Infrastructure Grant (EIG), Section27 was concerned over nominal cuts in the current year to provinces with a pre-existing infrastructure crisis, namely the Eastern Cape, North West and Limpopo.
It was further concerned over the below-inflation increase of 0.3 percent in the School Infrastructure Backlogs Grant (SIBG) in the current year, followed by a 13.5 percent reduction the following year.

The nominal cut to the EIG in the outer year of the MTEF was not supplemented by SIBG allocations.

Section27 requested clarity on these reductions in light of the exiting backlogs.
Section27 further expressed concern over the 1.7 percent growth in the Early Childhood Development (ECD) Grant which, when considering inflation, was expected to decrease by 2.8 percent in real terms until 2024/2025.

Furthermore, the increase in the National School Nutrition Programme (NSNP) Grant did not take into account the rising cost of nutritious meals, as food price inflation remained higher than ordinary inflation.
Section27 proposed that the NSNP Grant be aligned with the food price inflation rate.
7.4.3 Health conditional grants Section27 was concerned that the allocation to the District Health Programmes Grant (DHPG) was expected to fall by about 4.2 percent on average in real terms each year for the next three years; while provinces faced disrupted access to prevention, care and testing for HIV/AIDS during the pandemic, resulting in a spike in infections, while National Treasury had acknowledged that the target of 5.7 million people living with HIV remaining on treatment by the end of 2022 was unlikely to be achieved.
Noting the target to vaccinate 70 percent of the population against COVID-19 by March 2023 and the R10.1 billion allocated to the vaccine roll-out and R2.3 billion earmarked for purchasing additional vaccines in future, Section27 recommended that vaccine sites be made more accessible through extended opening hours and 19 242 increased mobile units; a financial incentive be considered to offset travel costs and make the process of vaccination easier; and public awareness and branding campaigns about the location of vaccine sites be undertaken.
Section27 was further concerned over cuts in the Health Facility Revitalisation Grant to all the provinces in 2022/2023, except the Northern Cape and the Western Cape; while increases to these two provinces were not aligned with inflation, resulting in real cuts over the medium term; noting that budget allocations may not meet the infrastructure backlogs in the provinces, which predated the COVID-19 pandemic.

7.5.
7.5.

Budget Justice Coalition The Budget Justice Coalition (BJC) argued that severe real term funding cuts to non-interest expenditure, and specifically to the provincial equitable share and conditional grants, were not justified, and disproportionately impacted on the most marginalised and poor, thereby increasing inequality.

7.5.1 Education The BJC submitted that the budget did not reflect the crisis in the basic education sector, with a lack of consistent inflation-related growth.
While the consolidated expenditure in basic education for 2022 increased by almost R20 billion from what had been projected in the 2021 Medium Term Budget Policy Statement and the spending cuts made during the COVID-19 pandemic were not continued, the annual average funding increase of only 2.0 percent was less than half of what was required to keep up with CPI inflation of 4.5 percent.
The Education Infrastructure Grant (EIG) and the School Infrastructure Backlogs Grant (SIGB) was reduced by R1.7 billion, with an additional R4.4 billion being reprioritised within infrastructure budgets for COVID-19 related measures.

This had a deep impact on the provision of school infrastructure and the BJC was pleased that these cuts were not continued in 2022/2023 and over the medium term, as allocations to the EIG and SIBG totaled about R47.4 billion over the MTEF.
While more than R26 billion had been allocated to the National School Nutrition Programme (NSNP) Grant over the next three years, the allocation was just keeping up with inflation and had not been increased to accommodate escalating food needs following the pandemic.

7.5.2 Health The BJC submission and recommendation on Health corresponded with that of the Rural Health Advocacy Project as captured under 7.3 above.
20 243 7.5.3 Social Development While noting the extension of the Social Relief of Distress (SRD) Grant to March 2023, the BJC urged that funds should be allocated for the Grant to be increased to the food poverty line of R624 and for the Department of Social Development to address the administrative challenges of the Grant.

In addition, a permanent Basic Income Support Programme should be implemented for those aged 18 to 59 years with little to no income, before the SRD Grant was terminated.
The BJC submitted that the online platform to access the SRD Grant was exclusionary and would further entrench economic and racial inequality; as there were beneficiaries and recipients who did not have access to digital technology including devices, connectivity or data.

According to the BJC, it was crucial that the budget be provided to facilitate a hybrid application system.
The BJC was further concerned that only R9.2 billion per year for the next two years had been allocated to the Presidential Employment Stimulus Programme, representing a decline from the R12.9 billion allocated for the first phase.
The BJC was concerned over the below-inflation increase in the Child Support Grant (CSG), from R460 to R480 per month, indicating that the fact that the CSG was already substantially below the food poverty line of R624 per month, meant that child malnutrition and stunting would persist and even rise, with long term consequences for society and the economy.
7.5.4 Local government The BJC submitted that local government received a relatively low 9 percent of nationally raised revenue, of which 58 percent was in respect of the equitable share (LGES).

The biggest component of the LGES was the funding of the package of free basic services (FBS), with an amount of R63.9 billion being allocated to fund FBS for 10.9 million households.
This critical part of the overall social wage was intended to ensure that all households could access a minimum amount of basic services, and amounted to R488.42 per month per household.

However, over the past five years the number of households that actually received the package of FBS had declined, while funding in the national budget had increased.
Currently, fewer than 3 million households received the full package of FBS from their local municipality; representing less than 30 percent of what was funded in the Budget.

The BJC reported that approximately 4.3 million South African households lived below the food poverty line; with at least 1.3 million of those not receiving the FBS, despite the funds being made available.
The result was that households must divert expenditure from food to pay for electricity and water; impacting negatively on household food security in general, and child nutritional status in 21 244 particular.

Another 5 million households that lived below the upper-bound poverty line were reportedly not receiving the FBS from their local municipality.

The result was that the social support component of the budget was actually much lower than the figures suggested.
Despite the requirement in the Bill that municipalities who chose to provide fewer households with FBS than they were funded for through the LGES, should clearly set out in their budget documentation why they had made this choice and how they had consulted with the community during the budget process, no municipality had to date provided this information.

The BJC argued that Parliament had an oversight responsibility to ensure that the package of FBS was actually implemented.

8.
8.

Provincial mandates The Committee met on 04 and 11 May 2022, respectively, to consider negotiating and final mandates from provinces.

8.1.

Negotiating mandates 8.1.1.

Eastern Cape supported the Bill and made comments.

8.1.2.

Free State supported the Bill and raised issues for consideration.

8.1.3.

Gauteng supported the Bill and made recommendations.

8.1.4.

KwaZulu-Natal supported the Bill.

8.1.5.

Limpopo supported the Bill.

8.1.6.

Mpumalanga supported the Bill and made recommendations.
8.1.7.

Northern Cape supported the Bill and raised issues for consideration.

8.1.8.

North West supported the Bill and made recommendations.

8.1.9.

Western Cape did not support the Bill.

8.2.

Final mandates 8.2.1.

Eastern Cape supported the Bill.

8.2.2.

Free State supported the Bill.

22 245 8.2.3.

Gauteng submitted a document that did not comply with the Mandating Procedures of Provinces Act (No 52 of 2008), and could therefore not be considered.

8.2.4.

KwaZulu-Natal supported the Bill.

8.2.5.


Limpopo supported the Bill.

8.2.6.

Mpumalanga supported the Bill.

8.2.7.

Northern Cape supported the Bill.

8.2.8.

North West supported the Bill.

8.2.9.

Western Cape did not support the Bill.

9.

Observations and findings 9.1 The Committee welcomes the Bill, which allocates 49.7 percent to the national sphere, 41.2 percent to provinces, and 9.1 percent to local government.
Although the Committee notes some increases to rural provinces and municipalities, it remains concerned that the overall allocation to the local government sphere is still inadequate, given that the input costs for providing basic services continue to rise.

This is further worsened by municipal revenue constraints caused by COVID-19, the increasing number of municipalities facing financial distress (68 percent of 278 municipalities), and the adoption of unfunded mandates.
9.2 The Committee notes the proposed spending plans, which include an allocation of R3.33 trillion, or 59.4 percent of total non-interest spending, for the social wage.

It further notes that the main budget non-interest spending has a net increase of R282.3 billion over the 2022 MTEF period compared to the 2021 Budget, which is supported by higher than anticipated revenue collections.
9.3 The Committee notes the engagements taking place between Salga and the Executive to resolve the issues of municipal debt to Eskom and government departments’ debt owed to municipalities.

The Committee is concerned with the slow progress in resolving these matters, as their negative impact on Eskom and municipal finances is bound to affect service delivery.
23 246 9.4 The Committee notes Salga’s continuous efforts to empower municipalities through skills development workshops and other capacity building initiatives to ensure that funds are spent effectively and to address spending challenges on infrastructure grants in some municipalities and non-compliance with certain conditional grant frameworks, such as 100 percent expenditure being reported without approved operational plans being in place.
9.5 The Committee notes Salga’s relationship with traditional leadership structures and the fact that chairpersons of traditional houses form part of Salga’s Provincial Executive Committees (PECs) and sit in municipal councils of several municipalities, particularly in the district municipalities, with full participation.
The Committee further notes that Salga is not involved in the budgetary process of traditional councils, but does assist with fundraising for traditional activities and other in-kind initiatives.
9.6 The Committee believes that the user pays principle is a critical mechanism to assist municipalities and other public entities to generate revenues to be self-sufficient and therefore, it remains concerned about the fact that the local government equitable share (LGES), which is meant to fund free basic services for the poor (indigent), is in fact subsidising the delivery of services across the board, including to those who can afford to pay.
This further defeats the objectives of the cross- subsidisation principle, which aims to assist the most vulnerable and needy communities.
9.7 Whilst the Committee notes Salga’s undertaking to continue implementing its National Executive Council (NEC) resolution relating to accountability and consequence management for wrongdoing at municipalities, it remains concerned that Salga does not have legislative powers to sanction individual councillors to fast-track such interventions, since its mandate only includes lobbying; advocacy; and capacity building for its members.
9.8 The Committee remains concerned about the increasing trend where direct conditional grants are converted into indirect grants for both the provincial and local 24 247 government spheres, so that their allocations seem to have increased, while the funds remain with the national departments.
The Committee is of the view that national departments should only intervene where absolutely necessary, notwithstanding the fact that some departments might also have their own capacity challenges, which may continue to impact on indirect grant spending.
9.9 The Committee shares the Financial and Fiscal Commission’s (FFC’s) concern over the fact that infrastructure grant allocations, specifically for local government, decline over the medium term period; especially in light of the need for an infrastructure-led economic recovery.
9.10 The Committee shares COSATU’s concerns regarding the reduction over the medium term in the allocation for the Land Reform Programme; the below-inflation increase in the Foster Care Grant; and the fact that some funds are lost due to corruption and wasteful and fruitless expenditure.
9.11 Whilst the Committee notes the proposal by the Rural Health Advocacy Project (RHAP) that a joint committee be established to review and interrogate provincial health departments’ budgetary decisions, it remains concerned about the legal standing and terms of references for such a committee as well as the possible duplication of roles and responsibilities already performed by parliamentary oversight committees in the health sector, both in the national and provincial legislatures.
9.12 Whilst the Committee welcomes the R21.1 billion earmarked largely to support the ongoing response to the COVID-19 pandemic as well as the appointment of medical interns and community service doctors, it remains concerned about some departments, particularly the Department of Health, which will be surrendering back to the National Revenue Fund (NRF) allocations it received for the Presidential Employment Initiative, when South Africa reportedly reached record unemployment levels in the third quarter of 2021.
25 248 9.13 The Committee welcomes the R32.6 billion earmarked over the medium term for the Department of Higher Education and Training to fund any shortfall in funding for student bursaries.

Noting the levels of reported under-expenditure in some conditional grants, including the School Infrastructure Backlogs Grant, the Committee is concerned about the incorporation of this Grant into the Education Infrastructure Grant.
The Committee is of the view that this could potentially remove the focus from school infrastructure backlogs, including the eradication of pit latrines and inappropriate structures.

9.14 The Committee welcomes the fact that social expenditure is maintained in the 2022 Budget, as well as the extension of the Social Relief of Distress (SRD) Grant until March 2023; and further noted that a process of reviewing the entire social grant system is underway.
9.15 The Committee notes the R3.7 billion baseline allocated to provinces for the Early Childhood Development (ECD) Programme including the function shift from Social Development to Basic Education as a step in the right direction.

The Committee is of the view that, for government to improve the quality of education, more investment is required at the level of ECD as this will yield numerous positive spill- overs such as increased success in the later schooling years.
9.16 Whilst the Committee welcomes the additional R7.4 billion earmarked to hire additional personnel in security cluster departments to intensify the fight against crime and corruption, it remains concerned about the fact that the increasing debt servicing cost is crowding out many other spending functions, including the South African National Defence Force (SANDF) budget.

At the same time, there has been increasing reliance on the SANDF, due to international, regional and domestic conflicts.
Insufficient funding for the cluster continues to undermine the maintenance of important assets including vehicles and buildings.

9.17 Whilst the Committee notes the R20.5 billion earmarked for cost implications of the 2021 public service wage agreement, with no further provision made over the medium term for increased compensation above this level, it remains concerned 26 249 about the higher public sector wage bill as a percentage of spending and Gross Domestic Product (GDP).
The Committee further notes that the National Treasury was still in the process of engaging with the labour unions at the end of March 2022 to identify challenges and come up with solutions with regards to this matter.
9.18 The Committee remains concerned about the lack of interventions or action taken against government officials or departments who continue to undermine financial management regulations by not paying service providers within 30 days, as required by Section 38 of the Public Finance Management Act of 1999.

The Committee is of the view that not paying service providers on time does not assist government to implement its economic recovery plan, as announced by the President, successfully.
9.19 Whilst acknowledging the challenges relating to the Public Procurement Bill, the Committee remains concerned about the slow pace of resolving matters related to this important piece of legislation to ensure it is tabled in Parliament soonest.

The Committee is of the view that the Bill could help to further streamline public procurement processes and achieve much needed economic empowerment for previously disadvantaged groups, including women, youth and people with disabilities.
9.20 The Committee agrees with Section27 that conditional grants are not allocated in a gender-responsive manner, despite an FFC recommendation that budgets should address gender inequality through gender budgeting in the public sector.

It also notes the observation that funding for the Department of Women, Children and People with Disabilities has been reduced by an annual average of 11.9 percent over the MTEF.
9.21 The Committee notes the recommendation by the Budget Justice Coalition (BJC) that the Social Relief of Distress (SRD) Grant be increased to the food poverty line of R624 and that the Department of Social Development address the administrative challenges of the Grant.
27 250 9.22 While welcoming the R15 billion allocation for loan guarantees for small businesses to bounce back, the Committee remains concerned over the accessibility of these funds, in light of the serious challenges previously experienced by businesses who needed loans; and over whether government has taken enough strides to ensure that better criteria are used to improve take-up of the scheme.
The Committee further welcomes the involvement of development finance institutions (DFIs) in the implementation, given that the scheme is still experimental in nature.

9.23 The Committee notes, from the issues raised by provinces in the negotiating mandates, that information does not seem to be flowing from Members of the Executive, who engage with National Treasury at the Budget Council and Budget Forum meetings, to the oversight committees of provincial legislatures.

10.
10.

Recommendations 10.1 The National Treasury, together with the Department of Cooperative Governance and Traditional Affairs and provincial treasuries and cooperative governance departments, should ensure that any increased allocation to the provincial and local government spheres, as well as some national departments, is accompanied by the requisite capacity and support to ensure proper planning as well as effective implementation of grant funded projects.
Furthermore, they need to ensure that all pillars of accountability, monitoring and oversight are strengthened and consequence management is implemented immediately where necessary.

10.2 The South African Local Government Association (Salga) should expedite its engagement with the Executive to resolve the issues of municipalities owing Eskom and some provincial and national departments owing municipalities.
The Committee believes that these issues are long overdue and concrete steps ought to be taken to resolve it as a matter of urgency.

The Committee believes that this will partly address some revenue challenges for both Eskom and municipalities.

A progress report should be tabled in Parliament in the next budget cycle.
28 251 10.3 Salga should intensify its programmes to empower municipalities through skills development workshops and other capacity building interventions to ensure that allocated funds are spent efficiently and effectively to address the lack of spending on infrastructure grants at municipal level, including the non-compliance with grant frameworks.

Parliament will continue to monitor progress in this regard.
10.4 Salga should ensure that it interacts with all recognised traditional leadership from rural villages the same way as those leaders of local government located in urban areas, to address the large backlog of under-development and infrastructure challenges in such areas.
10.5 The Committee is of the view that national and provincial government should intervene in municipalities only in instances where local government is not capable of performing and that this should always happen in consultation with that particular municipality or province.

Moreover, the Committee believes that it is important to improve and strengthen capacity and to support municipalities and provinces with customised interventions instead of using a one-size-fits-all approach.
However, where the national or provincial government finds it necessary, such intervention should be decisive in order to ensure effective and prompt rectification; and consequence management should be implemented where necessary.
10.6 The Committee believes that, in order for Salga to succeed in implementing its NEC resolutions focusing on extracting accountability and ensuring consequence management in municipalities, it should work with various law enforcement agencies whose mandates are legislated to enforce accountability, given that its role only includes lobbying, advocacy and skills development.
10.7 The National Treasury and provincial treasuries should ensure that funds lost due to corruption, maladministration and wasteful expenditure are recovered and paid back to the State to improve service delivery.
The Committee is of the view that provincial departments as well as municipalities need to ensure that Audit Improvement Plans, which are part of their approved annual plans, are 29 252 implemented to address wastage of resources and many other issues raised by the Auditor-General of South Africa and other bodies.

10.8 The Minister of Health should ensure that conditional grants are utilised to strengthen service delivery and hospital infrastructure.
Moreover, there is an urgent need to address the current situation where government is unable to employ doctors and nurses due to a lack of funds.

The Committee is of the view that the post-COVID-19 recovery programme should include the strengthening of primary health care through utilising community health care workers.

The Committee believes that the state of health infrastructure maintenance in some provinces is worrisome and requires urgent attention.
10.9 The review of the provincial equitable share (PES) formula should be expedited, the Committee is of the view that certain provinces such as Northern Cape, Gauteng and KwaZulu-Natal, should continue to be considered for a bigger share to address the challenges posed by their rurality, vastness and population growth as a result of people moving for jobs and educational opportunities.

The Committee believes that the formula should reflect such factors.
10.10 The National Treasury should expedite the process towards tabling the Public Procurement Bill in Parliament.

The Committee believes that the Bill should assist government to promote local procurement initiatives and stimulate domestic manufacturing to boost the economy as well as ensure the participation of previously disadvantaged groups such as women, youth and people with disabilities.
This Bill should further assist government to fast-track the implementation of the economic recovery plan as announced by the President.

10.11 With regards to the public sector wage bill as the largest cost driver in the current payments budget category, the Committee recommends that National Treasury and the Department of Public Service and Administration expedite the process of engaging with labour unions to amicably address this matter.
The Committee believes that the review process of departmental organograms and vacant posts is a critical exercise that might also assist.

The National Treasury should report on this matter in the next budget cycle.
30 253 10.12 The National Treasury and the Department of Health should ensure that the R21.1 billion earmarked largely to support the ongoing response to the COVID-19 pandemic as well as the appointment of medical interns and community service doctors, is utilised according to approved performance plans.
The Department of Health needs to ensure that appropriate and effective internal control systems are put in place to make sure that funds earmarked for the Presidential Employment Initiative are not returned to the fiscus given the levels of unemployment in South Africa.
10.13 The Department of Higher Education and Training should ensure that the R32.6 billion earmarked to fund the shortfall in student bursaries is transferred to the National Student Financial Aid Scheme (NSFAS) on time to assist the needy beneficiaries.
10.14 The Committee is of the view that, before the School Infrastructure Backlogs Grant (SIBG) is incorporated into the Education Infrastructure Grant; the Department of Basic Education should table a status report in Parliament on school infrastructure backlogs and pit latrines around the country, particularly in the Eastern Cape where the backlog of inappropriate structures amounted to more than 500 in 2009.
The Department should also table a clear plan in Parliament on how it intends incorporating the SIBG without compromising its fundamental principles and objectives.

10.15 The Department of Basic Education, National Treasury and provincial treasuries should ensure that provincial education departments put proper systems in place to ensure effective administration of the R3.7 billion for the Early Childhood Development (ECD) Programme, including a smooth function shift.
The Committee is of the view that, for government to improve the quality of education, still more investment is needed at the level of ECD.

10.16 Whilst welcoming the extension of the Social Relief of Distress Grant, the Committee is of the view that there is an urgent need for the Department of Social Development to further address the administrative challenges affecting the 31 254 distribution of the Grant to the correct beneficiaries.
These include unnecessary delays in processing beneficiary documents, long queues and corrupt elements taking advantage of the vulnerable and poor.

10.17 The Committee believes that budget is a critical instrument for government to achieve both transformation and inclusive economic growth.
Therefore, the Committee reiterates its previous recommendation around gender budgeting that the Minister of Finance, together with the Minister of Women in the Presidency need to ensure that adequate resources are allocated for women, youth and people with disabilities.
Furthermore, they need to ensure that enough resources are earmarked and transferred to provinces for the implementation of the National Strategic Plan on Gender-Based Violence and Femicide; to help address the scourge of gender-based violence and to ensure proper mainstreaming of gender issues including those of the LGBTQIA+ community.
10.18 In line with the proposed amendment to the Local Government Financial Management Grant (FMG), the Committee recommends that National Treasury correct as part of the gazette, the Grant’s framework that will be issued in terms of Section 15 of the Division of Revenue Act, once this Bill has been enacted.
10.19 The Committee believes that there is a need to strengthen and enhance the intergovernmental cooperation with regard to information flow between the executive authority and national and provincial legislatures and their portfolio committees to avoid the information gap regarding policy decisions.

Engagements between the executive and legislatures and their portfolio committees regarding policy decisions would foster transparency and accountability between the two arms of State.
10.20 The Committee believes that, in order to avoid an undue share of conditional grant funds being consumed in salaries instead of service delivery, National Treasury should give serious consideration to ring-fencing the amount that can be used for salaries and to capturing this information in a separate column in the Bill.

The Committee will engage further with National Treasury on the desirability and feasibility of this.

32 255 11.
32 255 11.

Committee decision The Select Committee on Appropriations, having considered the Division of Revenue Bill [B6 – 2022] (National Assembly-Section 76(1)) referred to it and classified by the Joint Tagging Mechanism as a Section 76 Bill, reports that it has agreed to the Bill without any proposed amendments.

Report to be considered.

33 256