Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698137112007.pdf (South Africa)
Thursday, 9 March 2023] No 31—2023] FIFTH SESSION, SIXTH PARLIAMENT PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA _____________________ ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS _____________________ THURSDAY, 9 MARCH 2023 _____________________ TABLE OF CONTENTS ANNOUNCEMENTS National Assembly 1.

2.
Appointment of Leader of Government Business ............................................................ 2 President’s request for more information on names submitted to him for appointment to SABC Board ..................................................................................................................... 4 Communication of appointment of Cabinet members and Deputy Ministers and their assigned powers and functions ......................................................................................... 7 4.
Membership of Committees ............................................................................................10 3.

TABLINGS National Assembly and National Council of Provinces 1.

Minister of Basic Education ............................................................................................10 2.

Minister of Employment and Labour ..............................................................................11 National Assembly 1 1.
Speaker ............................................................................................................................11 COMMITTEE REPORTS National Assembly 1.

2.

3.
2.

3.

Communications and Digital Technologies ................................................................... 12 Employment and Labour ................................................................................................ 30 Public Accounts ............................................................................................................. 53 ANNOUNCEMENTS National Assembly The Speaker 1.
Appointment of Leader of Government Business (1) A letter from the President of the Republic of South Africa, informing the National Assembly of the appointment of Leader of Government Business in the National Assembly, in terms of the Constitution.

2 3 2.
2 3 2.

President’s request for more information on names submitted to him for appointment to SABC Board (1) A letter from the President, requesting more information on the names that the National Assembly submitted to him to consider for appointment to the Board of the South African Broadcasting Corporation.

4 5 6 Referred to the Portfolio Committee on Communications and Digital Technologies for consideration and report.

3.
3.

Communication of appointment of Cabinet members and Deputy Ministers and their assigned powers and functions (1) A letter from the Leader of Government Business, informing the National Assembly of the appointment by the President of Cabinet members and Deputy Ministers.
He further informs the Assembly that the details of the powers and functions formally assigned, or delegated, to each at the time of appointment or subsequently, as required by National Assembly Rule 352 (1) (b), will be submitted when they are finalized with the concerned Ministers and Deputy Ministers.

7 8 9 4.
Membership of Committees (1) The following committee membership changes have been made by the Economic Freedom Fighters: Portfolio Committee on Basic Education Discharged: Thembekwayo, Dr SS [Alternate] Appointed: Makgotho, Mrs S [Alternate] Portfolio Committee on Mineral Resources and Energy Discharged: Langa, Mr TM [Alternate] Appointed: Motsepe, Mrs CCS [Altenate] Portfolio Committee on Cooperative Governance and Traditional Affairs Discharged: Matumba, Mr A [Alternate] Portfolio Committee on Higher Education, Science and Innovation Discharged: Thembekwayo, Dr SS Appointed: Mogale, Mr T Portfolio Committee on Public Works and Infrastructure Discharged: Tshwaku, Mr M [Alternate] Portfolio Committee on Sport, Arts and Culture Discharged: Khawula, Ms MS [Alternate] Standing Committee on Finance Discharged: Ndlozi, Dr MQ [Alternate] Standing Committee on Appropriations Discharged: Hlonyana, Ms N [Alternate] TABLINGS National Assembly and National Council of Provinces 1.
The Minister of Basic Education 10 (a) Annual Performance Plan of the Quality Council for General and Further Education and Training – UMALUSI for 2023/24.

(b) Annual Performance of the South African Council for Educators for 2023/24.

2.

The Minister of Employment and Labour (a) Annual Performance Plan of the Department of Employment and Labour for 2023/24.

(b) Annual Performance Plan of the Commission for Conciliation, Mediation and Arbitration for 2023/24.
(c) Annual Performance Plan of the National Economic Development and Labour Council (NEDLAC) for 2023/24.

(d) Revised Strategic Plan of the National Economic Development and Labour Council (NEDLAC) for 2020/21 to 2024/25.

National Assembly 1.

The Speaker (a) Reply by the Minister of Police to a motion of the National Assembly noting the vicious attacks by pit bulls on ordinary civilians, particularly on children, as agreed to by the House on 22 November 2022.
Referred to the Portfolio Committee on Police.

COMMITTEE REPORTS National Assembly 11 1.
ADDITIONAL REPORTING OF THE PORTFOLIO COMMITTEE ON COMMUNICATIONS AND DIGITAL TECHNOLOGIES TO THE BUDGETARY REVIEW AND RECOMMENDATIONS REPORT (BRRR): POSTBANK ANNUAL REPORTS FOR 2019/20, 2020/21; AND 2021/22 FINANCIAL YEARS AND BROADBAND INFRACO DATED 7 MARCH 2023 The Portfolio Committee on Communications (PCC), having considered the financial and non- financial performance for the years 2019/20, 2020/21 and 2021/22 of the Postbank on 15 November 2022 and of Broadband Infraco (BBI) for the year 2021/22 on 17 February 2023 reports as follows: 1.
Introduction For the period under review, the Committee, in exercising its oversight role, considered for Postbank 2019/20, 2020/21 and 2021/22 Annual Reports and Financial Statements of Postbank.

For BBI, the Committee considered the 2021/22 Annual Report and Financial Statements.

The Auditor-General of South Africa (AGSA) also presented the audit outcomes of the Entities for the above-mentioned Financial Years.
The annual reports of both entities were not available to be processed during the BBBR process in 2022, hence this addition reporting.

2.

Postbank History of Postbank • First Savings bank was established in 1822.

• Became a State-owned savings bank in 1875.

• Banking was first conducted in 100 SAPO branches initially.

• Eventually, the services were available at every Post Office.

• In 1910 Post Office Savings bank amalgamated to form the Post Office Bank of the Union of South Africa.
Product offerings: Union loan certificate, national savings certificate, Saving Books, Banks Cards, Investments 1 12 The Postbank Act was promulgated in 2010 to create Postbank as a stand-alone Entity.

On 1 April 2019, Postbank was created as a separate legal entity and assets and liability split from SAPO.

Postbank is in the process of applying for a full banking license and currently has a Section 13 approval to establish a bank obtained in 2016.
There is a need to establish a Bank Controlling Company once the Postbank amendment bill has been promulgated.

The Section 16 license will be updated and submitted to the SARB once the amendments to the Postbank’s Act have been promulgated and the appointment of the key management staff is finalised.

The entity’s mandate is to drive financial inclusion on a cost-effective basis.
The transition milestones to a State bank are composed of: a) Finalisation of the amendment to the Postbank Act b) Update and submission of the Section 16 license application envisaged for the fourth quarter of FY2023.

c) Finalisation of the modernisation of the Bank's IT platforms to comply with banking legislation and regulatory requirements.

d) Implementation of the channel strategy.

e) Provide expanded services on a cost-effective basis to benefit its customer base.
Performance Summary as at 31 March 2020 2 13 There was a high vacancies and instability in the leadership position which impacted the execution of the strategy.

Operational Highlights: 2019/20 As at the end of March 2020, the Postbank had 19.7 million individual and group savings accounts that were predominantly for the bottom of the pyramid and previously financially excluded customers and further awarded the Department of Environmental Affairs (DEA) Waste Bureau business.
A total of 8.4 million SASSA beneficiaries were paid via Postbank accounts to the amount of R122.5 billion during the 2019/20 financial year.

Despite initial payment IT challenges, Postbank attained improved systems stability in the 2019/20 financial year, significantly improving its adherence to the industry SLA.

Postbank implemented grant payments and biometric systems.
Partnered with the Eastern Cape Department of Public Works and Department of Roads and Transport to provide banking accounts to over 23 000 workers.

The transfer of the operations of the Postbank division, including staff and assets & liabilities, to Postbank was Gazetted with an effective date of 1 April 2019, in line with the provisions of the Postbank Amendment Act 44 of 2013.
Updates to Section 16, banking license application and Section 43 related to establishing a bank controlling company are in progress.

In HR, Postbank Commenced HR capacity building in key areas of IT, Operations, Project Office, and Product development.

3 14 Key Financial Highlights: 2019/20 The profit after tax for the financial year ended 31 March 2020 amounted to R211 million.
Net Cash from Operating Activities amounted to a cash basis figure of R5.3 billion; this is the amount of cash generated by Postbank from the revenue that was generated.

Total assets amount to R14.2 billion in 2020 financial year, which exceeds total liabilities by R3.7 billion.

This means that Postbank has sufficient cash to pay its debts.

Postbank generated total revenue of R2.3 billion during the year ending 31 March 2020.

Return on Assets amounted to 2.05 per cent during the 2019/20 financial year.
This return shows the profitability of Postbank’s assets in generating revenue and earnings.

Investments amounted to R7.065 billion in the 2019/20 financial year despite slow growth in deposits due to customers.

Auditor-General’s Report: 2019/20 The Postbank received an outcome of a Qualified Opinion for the year under review.
Other Reserves and Other Deposits (grants): The AGSA could not obtain sufficient and appropriate audit evidence that the other reserves and other deposits had been adequately accounted for.

This resulted from Postbank's inability to reconcile IGPS records to SAP (reporting 4 15 system).

Other reserves were determined after deducting the liability of the other deposits (grants) transferred to Postbank from SAPO.
The Postbank has developed an Integrated Audit Action Plan: 1) Short-term measures to address the reconciliation - Postbank is appointing a service provider through Supply Chain Management by the 31st of January, 2023.

The Service Provider will perform the reconciliation, present the result to Management and Management correct and report the Annual Financial Statements by the 15th of May 2023.
2) Long-term measures to address the reconciliation – Postbank will develop a Business Case; facilitate the procurement of a solution and implementation of the reconciliation solution/system by the 31st of October 2023.

Management will ensure the reconciliation solution/system is implemented by the 30th of October, 2023 and ensure credible reporting in the Annual Financial Statements going forward.
Performance Summary as at 31 March 2021 Key Challenges: • The 2020/21 financial year was a difficult trading period across the markets due Covid-19 pandemic.

The restrictions and lockdown significantly impacted the bank’s overall performance and revenues.

• High vacancies and instability at the leadership position impacted the execution of the strategy.
5 16 Operational Highlights: 2020/21 The Postbank holds 19.8 million (2019/20: 19.7 million) individual and group savings accounts, with grant accounts making up a significant number.

The SARB designates Postbank as a clearing system participant in terms of Section 6(3)(a) of the NPS Act.

The Banks Act Amendments promulgated enabling Postbank to start the process of finalising the incorporation of a Bank Controlling Company.
The entity awarded the SRD grants business and paid R13.33 billion to 5.2 million SRD grant beneficiaries for the period under review.

Key Financial Highlights: 2020/21 The Postbank presented their financial results on the back of the Covid-19 pandemic, which left a distraction and major onslaught on our economy and, most importantly, our customers.
Besides its negative impacts on economic activities, the Covid-19 pandemic caused harm to the South African economy in various ways, closure of businesses, massive damage to tourism and the hospitality sector and a significant number of job losses.

The financial results as at 31 March 2021 are reflective of the challenging operating environment that Postbank has experienced.

The Bank’s revenue declined from R2.2 billion as at 31 March 2020 to R2.09 billion in the period under review.
This was mainly due to expected credit losses which increased from R521 million to R798 million.

The impairment charge for the period under review was significantly high, primarily due to the increase in credit risk on some of our investments and the adjusted overlay for the Covid-19 pandemic impact.

The Net Interest Income (NII) declined from R555 million in the prior year to R406 million as at 31 March 2021 as a result of the decline in interest rates.
The bank generates its revenue mainly from two income sources: the NII and Non-Interest Revenue (NIR).

During the year ending 31 March 2021, the NIR contributed 80% (70%: 31 March 2020) of total revenue whilst Net Interest Income.

The NII accounted for only 20 per cent (25%: 31 March 2020) of total revenue.

Diversifying the bank’s revenue sources is part of their management focus in the short-to-medium term.
6 17 Auditor-General’s Report: 2020/21 The Postbank received a Disclaimer audit opinion for the reporting year.

Other Reserves and Other Deposits (grants): The AGSA could not obtain sufficient and appropriate audit evidence that the Other reserves and Other deposits had been adequately accounted for.

This resulted from Postbank's inability to reconcile IGPS records to SAP (reporting system).
Other reserves were determined after deducting the liability of the other deposits (grants) transferred to Postbank from SAPO.

The Postbank has developed an Integrated Audit Action Plan: 1) Short-term measures to address the reconciliation - Postbank is appointing a service provider through Supply Chain Management by the 31st of January, 2023.
The Service Provider will perform the reconciliation, present the result to Management and Management correct and report the Annual Financial Statements by the 15th of May 2023.

2) Long-term measures to address the reconciliation – Postbank will develop a Business Case; facilitate the procurement of a solution and implementation of the reconciliation solution/system by the 31st of October 2023.
Management will ensure the reconciliation solution/system is implemented by the 30th of October 2023 and ensure credible reporting in the Annual Financial Statements going forward.

Performance Summary as at 31 March 22 7 18 Key Challenges: • The South African Reserve Bank (“SARB”) variation notice prevented Postbank from issuing new bank cards and launching products that integrate into the National Payment System (NPS) until the bank complies with the conditions outlined in the variation notice.
• Ministerial Moratorium around Postbank entering into long-term procurement contracts and the appointment of executives also impacted the activation of several strategic initiatives during FY2021/22.

Operational Highlights 2021/22 The Postbank holds 21 million (31 March 2021: 19.8 million) individual and group savings accounts, with most of the account holders from previously financially disadvantaged (underbanked) and excluded (unbanked) customers.
The entity partnered with additional retail merchants to disburse SRD grants in the period under review.

At least 7 million (31 March 2021: 5 million) SRD grant recipients were paid via Postbank accounts to the value of R15 billion in the period under review (31 March 2021/2021: R13 billion).

More than 71 financial literacy campaigns were conducted in 2021/2022 compared to the previous Financial Year.
In Financial Year 2020/2021, SARB designated Postbank as a clearing system participant in terms of section 6(3)(a) of the NPS Act.

Key Financial Highlights: 2021/22 The Postbank’s net profit improved significantly to R324 million in the year under review, rising from a loss of R443 million in the prior year.

The improvement from the preceding year is mainly due to lower expected credit losses in the year under review, mainly due to reduced Covid-19 overlay adjustment.
Although the Bank’s profitability has improved, the effects of Covid-19 still negatively impacted the overall performance of the Bank.

This was evident in the flat revenue numbers reported in the year under review.

The Bank reported revenue of R2 billion in the period under review.

The revenue was impacted by a 16 per cent decline in NII from R405 million in the prior year to R335 million during the year ending 31 March 2022.
8 19 The main driver of the decline in the NII was the reduction in the Interest income from R436 million in the prior year to R367 million in the period under review as a result of the low interest rates.

Auditor-General’s Report: 20221/22 The Postbank received a Disclaimer audit opinion for the reporting year.

Other Reserves: AGSA could not obtain sufficient and appropriate audit evidence that the Other reserves had correctly been transferred and accounted for.
Other Deposits: AGSA was unable to obtain sufficient appropriate audit evidence for deposits due to customer due to the limitations imposed by the information systems to manage the related transactions.
Fee and Transactional income: AGSA was unable to obtain sufficient and appropriate audit evidence for Fee and Transactional income due to the inadequate status of accounting records and lack of required reconciliations between supporting information systems not being conducted Intercompany Receivables: The issues resulting from the carving out of Postbank’s Assets and liabilities from SAPO were resolved, and Postbank successfully migrated to a new environment.
However, AGSA qualified this line item because the balance included SASSA-related transactions where we normally settle transactions with SAPO.

Material losses: Material losses could not be verified for completeness due to the significance of internal control deficiencies identified on key systems and cyber security incidents resulting in a loss of R89 million.
Postbank has developed an Integrated Audit Action Plan: 1) Short-term measures to address the reconciliation—Postbank is appointing a service provider through Supply Chain Management by the 31st of January 2023.

The Service Provider will perform the reconciliation, present the result to Management and Management correct and report the Annual Financial Statements by the 15th of May 2023.
2) Long-term measures to address the reconciliation – Postbank will develop a Business Case; facilitate the procurement of a solution and implementation of the reconciliation 9 20 solution/system by the 31st of October 2023.

Management will ensure the reconciliation solution/system is implemented by the 30th of October, 2023 and ensure credible reporting in the Annual Financial Statements going forward.

The service provider, KPMG has been appointed to investigate the root causes of material losses.
The investigation will also assist in quantifying the total value of material losses incurred, which will be reported in the Annual Financial Statements.

3.

Broadband Infraco (BBI) BBI is a Schedule 2 Entity in terms of the Public Finance Management Act No.

1 of 1999 (PFMA) (as amended) and is mandated through the Broadband Infraco Act, No.

33 of 2007 (the Act), amongst other key pieces of legislation.
The Company has two Shareholders - the Department of Communications and Digital Technologies (DCDT), representing the South African Government (owning 74 per cent of the shares), and the Industrial Development Corporation (IDC), which owns 26 per cent of the shares.

The legislative mandate is set out in the Broadband Infraco Act No.

33 of 2007 (the Act).


Its objectives are to expand the availability and affordability of access to electronic communications, including, but not limited to, under-developed and under-serviced areas.

The objects of the Act are aligned with the Electronic Communications Act No.
36 of 2005 and commensurate with international best practices and pricing through the provision of electronic communications network services and electronic communications services, expand the availability and affordability of access to electronic communications, including (but not limited) to underdeveloped and underserviced areas.

Performance Summary as at March 2022 The Company has achieved fourteen (14) out of nineteen (19) targets, which represents 74 per cent of its annual targets.
Fourteen of the nineteen targets were achieved.

Four financial sustainability targets and one socio-economic target were not achieved.

The Company could not commence the process of raising funds in the market due to the delay in the approval of the network investment plan.

BBI also has low cash flow levels and a lack of debt repayment history.

These factors contributed significantly to the non-achievement of the financial 10 21 sustainability targets of the Company.
The revenue is impacted in the main by the dropping of contracted links, price pressure due to fierce competition in the market, long outstanding debts, and self-provisioning by major customers.

Due to some long outstanding debts, the debtors’ collection period has increased to 58 days compared to 28 days in the previous financial year.

Low procurement levels and low spending on training and development due to financial constraints contributed significantly to the regression of the B-BBEE Level.
The Company has survived by using the cash generated from operations since 2012.

This has resulted in very low levels of network investment and has impacted the ability to expand and upgrade the current infrastructure, including being unable to replace the obsolete ADLash fibre.

This and load shedding has increased the network's instability, impacting customer satisfaction during the year under review.
The new normal that was caused by the outbreak of the COVID-19 pandemic altered working from physical locations (offices) to home offices, with meetings held virtually and learning for school pupils conducted digitally.

Many children in rural and underserviced areas were left out of the e- learning process due to the widening digital divide in our country.
Broadband Infraco is poised to expand broadband connectivity to ensure the inclusivity of all citizens in e-government, e-health, e-commerce, digital economy, and e-learning.

11 22 Operational Highlights 2021/22 • A total of five customers were acquired in the year under review.

• Strategic Partnerships – BBI recently signed a partnership agreement with a local Cloud and IT services company which has started to yield results with the one of BBI’s customers who are interested in the hosted cloud service.
This will enable us to extend our offerings to include Cloud Services to exiting backhaul services – adding additional revenue.

• Channel Partner Training – BBI provided training to one of the strategic partners on its products and services.

Additionally, the process training was conducted to ensure a seamless introduction to BBI’s internal processes.

• BBI concluded a letter of agreement with one of the provinces on the Intergovernmental Framework.
This was for the continuation of services following the existing contract's expiration.

The opportunity is to replace a private contract with a government-to- government deal.

• BBI has been selected as one of the preferred Service Providers for IT Infrastructure at Dube Trade Port in KZN.

Dube Trade Port has already sent requests for quotations on 1Gbps IP Transit and 10Gb Layer 2 connectivity from Teraco Durban to Dube Trade Port Offices.
• C4IR – BBI was selected by CSIR to partner with the Centre for the Fourth Industrial Revolution (C4IR) to accelerate the adoption of the implementation of the Internet of Things (IoT) by the SMMEs Project.

BBI’s role will be to provide Backhaul on its NLD Network from the region to Teraco Isando.

• KZN DoE – BBI has successfully deployed 10Mbps Internet to 36 of the 38 Schools in the KZN Region.
We are currently in discussions to set up support processes with the selected contractors to address post-installation support services.

Key Financial Highlights 2021/22 Company revenue decreased by 5.47 per cent from R463 million in the prior year to R 437 million for the year ended 31 March 2022 and against a target of a 36 per cent increase.

Company cash generated from operations decreased from R45 million in the prior year to R7 million for the year ended 31 March 2022.
A total of 136 per cent Debt to Equity was achieved against a target of 107 per cent.

12 23 There was an R27 million positive cash balance maintained against a target of R15 million and a total of R323 million new sales contracts against a target of R400 million.

There was a decline in operating profit by R69 million against a target of R37 million.

Non-current liabilities decreased by 2.3 per cent.

Other costs as a percentage of revenue increased to 26 per cent from 12 per cent in the prior year.
The total capex as a percentage of revenue is 20 per cent at a rand value of R86 million.

Auditor-General’s Report: 20221/22 The statement of profit and loss and other comprehensive income indicates that the Company incurred a net loss of R118.561 during the year ended 31 March 2022 due to lower revenue raised against the cost to revenue and other operating expenses.

The Company’s current liabilities exceeded its current assets by R339.535.
The Company had accumulated losses of R1.556.687, and that the Company’s total assets exceeded its liabilities by R272.843.

This indicates a material uncertainty and casts significant doubt on the ability of the company to continue as a Going Concern.

4.
4.

Observations and recommendations 4.1 Observations for the Postbank In relation to Postbank, the Committee noted: a. and thanked the Postbank for the presentation made; b. that it required clarity from the AGSA on steps to be taken by AGSA when entities ignore the recommendations of the Committee.

AGSA responded that the Public Protector and Hawks could be approached in such cases.
AGSA noted that an element of collusion was identified in this matter, and it was referred to the Hawks for investigation regarding the SASSA grant.

AGSA meets regularly with the Hawks, and a Steering Committee has been set up to deal with these issues.

AGSA had met with the Board to discuss a forensic investigation and would avail their findings to ensure an efficient investigation.

Regular meetings with the Reserve Bank have also been undertaken.
; 13 24 c. its concern that the Postbank has received two disclaimers in a row and that this is the worst possible audit outcome an entity can receive; d. its concern in respect of irregular expenditure of the Postbank; e. its concern that the Board is to be appointed by the Cabinet and not the Committee.
The Deputy Minister responded that the Board was appointed by the Minister in consultation with Cabinet as was required by legislation; f. its concern with respect to record-keeping and Information Technology (IT) capabilities which were inadequate; g. that the failure to maintain internal control issues was identified by AGSA and needed to be addressed; h. its concern in respect of the internal controls and internal audits of the Postbank; i. its concern as to how the Postbank will finance itself with?
the establishment of the State Bank; j. its concern in respect of the IT systems required and whether these updated systems can be afforded; k. concern in respect of the sustainability of the Postbank; l. that it required clarity to determine if the current revenue available could sustain the Postbank; m. that the unfavourable (more likely adverse that unfavourable?)
audit outcome speaks to the lack of proper systems within Postbank; n. that it recognised that the Postbank is in a transition process, which is not expected to be without challenges; o. that the Bank has enough capital and is above Reserve Bank requirements, which is a positive sign; p. that it required clarity in the case the Postbank does not get the licence and what would be the consequence of this.
The AGSA responded that Postbank was allowed to participate in the national payment system, almost like a bank.

In the absence of the Postbank complying 14 25 with the variation order by the Reserve Bank, the Bank would be exposed and not be able to conduct its work; q. its concern that Board members and several Executives are yet to be appointed, which is likely to cause instability in leadership.

AGSA responded that this might have been the cause of unfavourable (adverse?)

audit outcomes.
The situation was exacerbated in that there were governance challenges at both the Executive and Board levels; r. that AGSA noted that it met with the Minister, the Entity’s Executive and the Board frequently to address the audit queries; s. that AGSA noted the importance of established governance structures in supporting the Board; t. that it was evident that the initial spin-off stage from SAPO to Postbank was not managed correctly; u. concern that there were vacancies at the Board and Executive level that impacted the functioning of the Postbank; v. that the Postbank indicated that it was well capitalised and had sufficient reserves to function; w. that Postbank can sustain itself without requesting assistance from the fiscus to function; x. they indicated that the Card Management System was part of the legacy issues and that they will undertake a complete card replacement process in a secure environment; and y. that the current Board appointees were competent and were appointed with the involvement of the Auditor General and Reserve Bank; 4.2 Recommendations for the Postbank In relation to the Postbank, the Committee resolved that the Minister should: a. ensure that processes are in place to address all issues raised by AGSA; b. ensure that the Postbank submits regular reports and updated quarterly reports to update the Committee on its capacity and service providers, amongst others; 15 26 c. ensure that the oversight function of the Department on the Postbank is improved; d. ensure that the Committee receive further information on the sustainability of the Postbank; e. ensure that the issue of the banking licence be finalised; f. ensure that the high risk of cyber security, capacity issues, project management and card management needs, are addressed; g. ensure that all vacancies on Board and Executive levels are filled urgently; h. ensure the Committee arranges a joint committee meeting with Standing Committee on Finance; i. ensure that the AGSA provide pointers that the Committee look at when doing oversight over entities; j. ensure that processes are in place to strengthen internal controls measures; and k. ensure that processes are in place to fill all vital vacancies.
4.3 Observations for BBI In relation to Broadband Infraco (BBI), the Committee noted: a. and thanked the BBI for the presentation made; b. that BBI achieved fourteen (14) out of nineteen (19) targets, which represents a 74 per cent achievement rate; c. that of the five targets not met, four (4) are for financial sustainability, and one (1) for socio-economic transformation; d. that an unqualified audit outcome, with findings, was achieved by the entity; e. that the going concern status of BBI remains an ongoing challenge; f. that access to funding by the entity was a challenge and needed to be addressed; g. that network expansion to create redundancy and capacity in the network was a challenge; h. that BBI would, in the future, deal with the expansion of service offering through partnerships and collaborations; 16 27 i. that BBI would have to fill critical vacancies; j. that it required clarity on the process of conclusion of the merger between BBI and Sentech; k. that it required the need to understand the rationale to have the BBI incorporated with Sentech.
The Department responded that the rationale for the merger was proclaimed in the 2013 Presidential Review on state entities and SOE reforms; l. that it required clarity as to how the merger would improve the entity's results.

The Deputy Minister responded that the issue of SA Connect had a phase 1, a pilot which connected 1000 sites.
The implementation of phase 2 would be more detailed and would include the connectivity of the entire country, including schools, clinics, and traditional authorities, amongst others; m. that the Deputy Minister indicated that the merger between BBI and Sentech would impact legislation the Companies Act and that, therefore, there would be a need to amend legislation governing these entities; n. concern and requested clarity about why the Gauteng and Western Cape provinces did not receive connectivity.
BBI responded that there was a concentration in areas that were not as effectively connected, however in the future, all provinces will be catered for; o. concern and required clarity on the entity’s debt to Telkom.

BBI responded that R150 million was owed to Telkom; p. that it needed clarity as to the challenges experienced in reaching the deadline date for the merger.
Sentech indicated that the process would be concluded at the end of the financial year; q. that it also required clarity on the impact of the merger on the market; r. concern on how load shedding has impacted the infrastructure of BBI and wanted to know if it was mitigating the damage caused; s. concern that the merger may result in job losses.
The Deputy Minister indicated that this merger would not result in job losses, although positions at top management would have to be managed; 17 28 t. that the Deputy Minister noted that the ultimate idea is to have one entity with one functioning role as one digital state company.

The Department indicated that the creation of one company was in the long term, but at the end of this year, Sentech will take over 74% of the government, and BBI will control the rest.
The integration of the two companies would still need to be confirmed by the Companies Act; and u. that the Deputy Minister noted that Sentech and SABC (one of its biggest clients) had taken the matter for rates for signal distribution to the Competition Commission.

The matter was ongoing, but Committee was assured that Sentech was not a going concern as a functioning Entity and therefore not threatened.
4.4 Recommendations for BB1 In relation to the BBI, the Committee resolved that the Minister should: a. ensure that processes are in place to address all issues indicated by the Auditor General; b. that processes are in place to address the going concern challenges of the entity; c. that processes are in place to deal with the challenge of access to funding by the entity; d. that network expansion challenges be addressed; and e. that critical vacancies be filled.

Report to be considered.

18 29 2.
18 29 2.

REPORT OF THE PORTFOLIO COMMITTEE ON EMPLOYMENT AND LABOUR ON THE FIRST QUARTERLY REPORT REGARDING THE PERFORMANCE OF THE DEPARTMENT OF EMPLOYMENT AND LABOUR AND ITS ENTITIES IN MEETING STRATEGIC OBJECTIVES FOR 2022/23, DATED 8 MARCH 2023 The Portfolio Committee on Employment and Labour, having considered the First Quarterly Report on the performance of the Department of Employment and Labour (DEL) and its entities in meeting strategic objectives for 2022/23, reports as follows: 1.
INTRODUCTION The Portfolio Committee on Employment and Labour considered the First Quarterly Report on the performance of the Department of Employment and Labour and its entities in meeting strategic objectives for 2022/23 as presented in meetings held on 1 and 15 February 2023.
This report provides an overview of the presentations made by the Department of Employment and Labour (Department) and its entities, focusing mainly on its achievements, output in respect of the performance indicators and targets set for 2022/23 financial year and financial performance.

The report also provides the Committee’s observations and recommendations relating to the Department’s and entities’ performance.

2.
2.

PERFORMANCE PER PROGRAMME The Department reported on its performance per programme as follows: Table 1: DEL Performance per Programme in Q1 of 2022/23 BRANCH Annual Indicators Achieved Overall Planned with Q1 Achievement Indicators Targets 1.

Administration 2.

3.

Inspections and Enforcement Services Public Employment Services 9 4 6 1 7 4 4 5 3 4 71% 75% 100% 30 4.
Labour Policy and Industrial Relations OVERALL PERFORMANCE 10 29 6 21 3 15 50% 71% Source: Presentation to the Portfolio Committee on Employment and Labour dated 1 February 2023 Table 1 above reflects that the Department had 29 annual planned indicators in the 2022/23 financial year.

Of those indicators, 21 have targets reporting in Q1.

The Department achieved 15 of the 21 targets reporting in Q1.
This translates to an overall performance of 71%, which is a regression from the 81% achieved in Q4 of 2021/22.

Programme 1 (Administration) had seven planned indicators that have targets reporting in Q1.

The programme achieved five of the seven reporting in Q1.

This translates to an overall achievement of 71% in Q1.

This is a decline from the 75% achievement of Q4.

This programme did not achieve the target of maintaining vacant funded posts at 8% or less for every quarter.
Instead, the vacant funded posts were at 9.27% in Q1 of 2022/23.

The reason for non-achievement was reported to be the delay caused by massive amounts of applications especially at lower levels against the current HRM capacity and unavailability of panel members.
As a remedial action, the Department has decided to discontinue email applications because the country is no longer under lockdown and develop a commitment form to be signed by panel members to confirm their availability during recruitment and selection processes.

The programme did not achieve the target of resolving 93% of reported incidents of corruption in the Department.

The programme resolved 6% of cases in Q1 of 2022/23.
The reason for non-achievement of this target was reported to be that Employment Relations (ER) has 90 working days to finalise all misconduct cases.

All cases received within the quarter are still within the required time frame.

Disciplinary action for the remaining 16 cases is in progress.

To remedy the situation, ER will endeavor to finalise the remaining cases within the prescribed time frame.

Programme 2 (Inspection and Enforcement Services) had four indicators with targets reporting in Q1.
Of the four targets, three were achieved in Q1.

This translates to an overall achievement of 75%, which is consistent with Q4 performance.

This programme conducted 71 213 inspections against the target of 74 526.

The under-achievement was attributed to that some offices took longer to fill 2 31 vacancies.

As a corrective measure, the branch recruited a number of new inspectors; some are yet to be fully functional.
The branch has prioritized filling of vacancies, training and development of new inspectors to be complemented with coaching and monitoring.

The total number of compliant employers was 54 340.

Eastern Cape (EC), Free State (FS) and Western Cape (WC) were the only provinces that exceeded their targets.

The EC, FS and WC inspected 8 333, 7 486 and 8 331 against the targets of 7 971, 6 657 and 8 181 respectively.
The total number of non-compliant employers was 16 873 and 16 645 or 99% were served with notice within 14 calendar days.

The Northern Cape (NC) province served 772 of 845 or 91% of non- compliant employers with notices against the 95% target, which is the least number of non-compliant employers served with notices.

The branch referred 86% workplaces for prosecution against a target of 65%.

Only the Northern Cape Province did not meet the target.
It referred 150 of the 237 workplaces received by statutory services, translating to an achievement of 63%.

Programme 3 (Public Employment Services) had four indicators with targets reporting in Q1 of 2022/23 and they were all achieved, translating to an overall achievement of 100%.

A total of 230 276 work-seekers were registered on Employment Services South Africa (ESSA) system against the target of 195 500 resulting to a positive variance of 34 776.
The reason for the variance was reported to be high level of unemployment in the country and companies closing down due to Covid-19.

Of the work-seekers registered on ESSA, 137 113 or 60% are young people aged 15-35 and 93 106 or 40% are adults aged 36 years and above.

Gender split of registered work-seekers is 55% females and 45% males.

A total of 650 or 0.3% of registered work-seekers have disabilities.
Classification of work-seekers in terms of equity groups is as follows: Africans: 189 772 or 82%, Coloureds: 20 360 or 9%, Whites: 6 357 or 3%, Indians: 1 969 or 1% and unspecified: 11 818 or 5%.

A total of 51 936 employment opportunities were registered on ESSA against a target of 26 250 resulting to a positive variance of 25 686.

The reason for over achievement was reported to be an increase in registered employment opportunities.
3 32 Only 13 368 or 26% registered work and learning opportunities are classified by economic sector and 35 568 or 74% are not.

The sectors that registered most opportunities are agriculture (5 164), Public (2 291), safety and security (1 320), and manufacturing (1 026).

The challenge was negative impact of COVID-19 pandemic lockdown on the economy that led to closure of some businesses and reduced registration of opportunities.
Registration of opportunities by opportunity types is as follows: Formal jobs-25 665 or 49%, projects-12 138 or 23%, learnerships-6 331 or 12%, internships-3 997 or 8%, UIF-LAP-2 831 or 5%, apprenticeships-595 or 1% and will-programme-180 or 0%.

Opportunities registered by employment type is as follows: Contract-40 489 or 78%, temporary-5 851 or 11%, permanent-3 254 or 6% and other-2 342 or 5%.
A total of 83 649 registered work-seekers were provided with employment counselling against a target of 57 600 resulting to a positive variance of 26 049.

The reason for deviation was that high levels of unemployment necessitated that more people be provided with employment counselling.

The following provinces provided the majority of counselling: Gauteng (18 397), KwaZulu-Natal (12 072), Limpopo (11 012) and Mpumalanga (10 219).
A total of 475 or 0.5% registered work-seekers who received counselling have disabilities.

Placements: A total of 23 663 registered work and learning opportunities were filled by registered work seekers against a target of 13 750.

The reason for deviation was reported to be improved employer confirmation of placement.

Of the filled work and learning opportunities 13167or 56% are formal jobs, 5 495 or 23% are projects and 1 583 or 7% are learnerships.
Of all the placements, 18 843 or 80% are of contract type, 3 128 or 13% are temporary opportunities, 1 180 or 5% are permanent opportunities and 512 or 2% are classified as other.

Only 6 010 or 25% of filled opportunities are classified by economic sector and 17 653 or 75% are not.

The sectors with majority placements are agriculture (2 562), public (1 550), safety and security (784), education (400) and financial accounting (250).
4 33 A total of 16 535 or 70% of work seekers placed are young people aged 15 – 35 years and 7 127 or 30% are adults aged 36 years and above.

The remaining one percent is not specified by age group.

Placement by gender reflects that 13 633 or 58% females and 10 030 or 42% males registered on ESSA were placed in registered work opportunities.

Placement rate against work seekers registered is 10% (23 663 of 230 276) and placement rate against registered opportunities is 46% (23 663 of 51 936).
Programme 4 (Labour Policy and Industrial Relations) had six indicators with targets reporting in Q1 of 2022/23.

This branch achieved three of the six targets reporting in Q1.

This translates to an overall achievement of 50%, which is a decline from the 88% achieved in Q4 of 2021/22.

The branch did not achieve the target of assessing and verifying 100% of collective agreements where parties are representative within 60 working days of receipt by 30 June 2022.
The branch managed to assess and verify 33.3% collective agreements within 60 working days of receipt by 30 June 2022.

The reason for variance was reported to be delays caused by both external and internal factors.

As a remedial action, the branch reported that government printer system is now working and the order number is secured.

The branch did not achieve the target of submitting one annual implementation report to the Minister for sign-off by 30 April 2022.
Instead, the report was submitted to the Minister for sign-off after 30 April 2022.

The variance was attributed to delay of the report due to commitments in the Chief Directorate in respect of preparations for the V Global Conference on the elimination of Child Labour.

Officials got caught up in the preparations and overlooked the submission date of the report.

It was later submitted on the 6 June 2022.


The branch did not achieve the target of submitting draft report, completing workplace survey and completing data collection instruments (internally conducted research).

Actual achievement was reported as follows: Gender stereotypes and sexism within DEL: Data cleaning, analysis completed.
Developing draft report commenced; Silicosis benchmark: Preparation for fieldwork by engaging companies to participate in the study that is currently ongoing; Ethics in the Department: Proposal, literature review, draft data collection tool and project plan shared for inputs; and Youth employment 5 34 creation interventions: Data collection finalized, data analysis completed and draft report development commenced.
Reasons for variance were reported as: Pressure from other work demand; delays due to lack of buy-in from companies to participate in the study, only three of the 27 companies confirmed participation; and delays in submission and consolidation of inputs to finalise the data collection.
The branch undertook to implement the following as remedial action: Complete drafting report; Silicosis benchmark: Inspection and Enforcement Services intervening by doing physical visits to the sampled companies to get buy-in.

This will be done up to end of July 2022; and workshops to present revised draft and adoption of the data collection tool.

3.

FINANCIAL REPORT OF DEL 3.1.
Expenditure information per Programme in Q1 of 2022/23 The Department reported its expenditure per Programme as follows: Table 2: DEL Expenditure Information per Programme in Q1 of 2022/23 BRANCH Original Q1 Expenditure Available Expenditure Appropriation Budget as at 30/06/22 R’000 R’000 R’000 % Administration Inspection and Enforcement Services Public Employment Services Labour Policy and Industrial Relations Total 3 956 019 1 016 350 2 939 669 26% Source: Presentation to the Portfolio Committee on Employment and Labour dated 1 February 2023 Table 2 above reflects that the Department’s original appropriation amounted to R3.9 billion.
Of this amount, R1.0 billion or 26% was spent in Q1, resulting to a variance of R2.3 billion.

6 35 Labour Policy and Industrial Relations received the largest allocation of R1.3 billion and spent R376 million or 29% in Q1, resulting to a variance of R943 million.

The Administration programme received R1.0 billion, which is the second largest allocation.
This programme spent R204 million or 20% by the end of Q1, resulting to a variance of R839 million Public Employment Services programme received R935 million allocation, which was the third largest budget allocation and spent R310 million or 33% of the allocation resulting to a variance of R624 million.

Inspection and Enforcement Services received the least budget allocation of R657 million and spent R124 million or 19% of the allocation by the end of Q1 resulting to a variance of R532 million.

3.2.
3.2.

Expenditure information by economic classification in Q1 of 2022/23 Table 3 below reflects the expenditure information by economic classification.
Table 3: Expenditure Information by Economic Classification in Q1 of 2022/23 ECONOMIC Original Q1 Available Expenditure as CLASSIFICATION Appropriation Expenditure Budget at 30/6/2022 R’000 R’000 R’000 % Compensation of Employees 1 430 813 319 065 1 111 748 Goods and Services 716 995 165 460 551 535 Transfers and Subsidies 1 736 957 523 539 1 213 418 Payments for Capital Assets 71 254 8 284 62 970 Payment for Financial Assets - - - Total 3 956 019 1 016 350 2 939 669 22% 23% 30% 12% - 26% Source: Presentation to the Portfolio Committee on Employment and Labour dated 1 February 2023 Table 3 above reflects budget allocation by Economic Expenditure.
It shows that Transfers and Subsidies received the largest share of the budget at R1.7 billion and spent R523 million or 30% of the allocation by the end of Q1, resulting to a variance of R1.2 billion.

Compensation of Employees received the second largest allocation at R1.4 billion and spent R319 million or 22% resulting to a variance of R1.1 billion.

Goods and Services received.

The appropriation of R716 million and spent R165 million or 23% by the end of Q1 resulting to a variance of R551 million.
Payment for Capital Assets received 7 36 appropriation of R71 million and spent R8 million or 12% by the end of Q1 resulting to a variance of R62 million.

3.3.
Expenditure per Q1 Budget Allocation Table 4: DEL Expenditure per Q1 Budget Allocation by Programmes Programme Q1 Budget Q1 Expenditure Available Budget Expenditure as at R’000 R’000 R’000 % 246 879 165 010 204 845 124 994 42 034 40 015 83% 76% 30/06/2022 152 796 310 416 -157 619 203% Administration Inspection & Enforcement Services Public Employment Services Labour Policy and 344 767 376 095 -31 328 109% Industrial Relations Total 909 452 1 016 350 -106 898 112% Source: Presentation to the PC on Employment and Labour dated 1 February 2023 Table 4 above reflects that the Department was allocated R909 million in Q1 of 2022/23 and spent R1.0 billion or 112% of the allocation resulting in over spending of R106 million.
Public Employment Services had the highest level of over-spending.

It was allocated R152 million and spent R310 million or 203% of the budget resulting over-spending of the budget by R157 million.

Labour Policy and Industrial Relations was allocated R344 million and spent R376 million or 109% resulting to over-spending of R31 million.

The Administration programme was allocated R246 million and spent R204 million or 83% of the allocation resulting to under-spending by R42 million.
Inspection and Enforcement Services received a budget allocation of R165 million and it spent R124 million or 76% by the end of Q1 resulting to a variance of R40 million.

8 37 Table 5 below reflects Q1 budget allocation and expenditure by Economic Classification.
Table 5: Expenditure per Q1 Budget Allocation by Economic Classification Economic Q1 Budget Q1 Expenditure Available Budget Expenditure as at Classification Compensation of Employees Goods & Services Transfers & Subsidies 30/06/2022 R’000 355 118 163 057 370 633 R’000 319 066 165 460 523 539 R’000 36 052 -2 403 -152 905 % 90% 101% 141% Payment for 20 644 8 284 12 360 40% Capital Assets Payments for Financial Assets 0 2 -2 * Total 909 452 1 016 350 -106 898 112% Source: Presentation to the PC on Employment and Labour dated 1 February 2023 In terms of Economic Classification CoE was allocated R355 million and Spent R319 million or 90% of its allocation by end of Q1 resulting to a variance of R36 million.
Goods & Services received R163 million and spent R165 million or 101% of its budget resulting to a variance of R2 million.

Transfers & Subsidies received the largest budget allocation of R370 million and spent R523 million or 141% by the end of Q1 resulting to over-spending of R152 million.

Payment for Capital Assets received R20 million and spent only R8 million or 40% of its allocation by the end of Q1 resulting to a variance of R12 million.

4.
4.

Q1 PERFORMANCE OF ENTITIES OF THE DEPARTMENT OF EMPLOYMENT AND LABOUR (2022/23) The entities that reported to the Portfolio Committee on Employment and Labour on their QPR 1 are the following: • Commission for Conciliation, Mediation and Arbitration 9 38 • National Economic Development and Labour Council • Productivity South Africa 4.1.
COMMISSION FOR CONCILIATION, MEDIATION AND ARBITRATION (CCMA) CCMA is a statutory body established in terms of section 112 of the Labour Relations Act of 1995 (LRA), as amended.

In terms of section 113 of the LRA, CCMA is independent of the State, any political party, trade union, employer, employers’ organisation, federation of trade unions or federation of employers’ organisations.

4.1.1.
4.1.1.

Constitutional Mandate CCMA’s Constitutional mandate is drawn directly from section 23 of the Constitution of the Republic of South Africa that deals with labour relations.

4.1.2.

Mandatory Functions Mandatory functions of the CCMA are to: • Conciliate and arbitrate workplace disputes.

• Assist with the establishment of workplace forums.

• Compile and publish statistics and information about its activities.

• Administer the Essential Services Committee (ESC).
• Consider applications for accreditation and subsidies of bargaining councils and private agencies.

4.1.3 Discretionary Functions The discretionary functions of CCMA are to: • Supervise ballots for unions and employer organisations.

• Provide training and information relating to primary objective of the LRA.

• Advise a party to a dispute about the procedures to follow.

• Offer to resolve a dispute that has not been referred to the CCMA.

• Publish guidelines on any aspect of the LRA and to make rules.
10 39 • Provide training and advice on establishment of collective bargaining structures, workplace restructuring, consultation processes, termination of employment, employment equity programmes and dispute prevention.

• Conduct and publish research.

• Provide assistance of an administrative nature to an employee earning less than the BCEA threshold.

• Determine fees that CCMA can charge and regulate practice and procedure for conciliation and arbitration hearings.

4.1.4.
4.1.4.

Strategic Pillars The strategic pillars of the CCMA are to: • Optimise the organization.

• Enhance labour market stability • Support strategy implementation and good governance.

4.1.5.

Programmes of the CCMA Programmes of the CCMA are: 1.

Administration 2.

Proactive and relevant labour market intervention 3.

Special interventions and support 4.

Efficient and quality dispute resolution and enforcement services 5.

Effective strategy management and governance 4.1.6.
CCMA 2022/23 Q1 Non-Financial Performance CCMA reported that it had four planned indicators with targets reporting in Q1 and all were achieved translating to an overall achievement of 100%.

The table below provides the details on non-financial performance in Q1.

Table 6: CCMA 2022/23 Q1 Non-Financial Performance Results OUTPUT INDICATOR Annual Quarterly Q1 Target Target Actual 11 40 1.

Percentage of uptime ICT critical systems implemented.

95% 2.
95% 2.

Number of interventions conducted to promote effective 12 dispute resolution in essential services per annum.

3.

Number of stakeholders engaged to make inputs on 4 legislative changes per annum.

4.

Number of entities engaged to ensure that there are 106 minimums to be maintained during industrial action in essential services per annum.

95% 12 1 26 5.
95% 12 1 26 5.

Number of essential services designations, minimum 8 2 services agreements, minimum services determinations and/or maintenance services determination monitored for implementation and observance per annum.

6.

Number of awareness sessions on essential services 14 3 designations conducted per annum.

Output 98.33 30 1 47 2 4 7.


Percentage of conciliable cases heard within 30 days of 98% 98% 99.57% first event (excludes agreed extensions, where certificates were issued, and out of jurisdiction cases/ withdrawn / settled by parties’ cases before the matter being scheduled, no process cases and cases which are not conciliable or where conciliation is not the first process) 8.
Percentage of arbitration awards rendered and sent to 98% 98% 0 parties within 14 days of conclusion of the arbitration proceedings (exclude extensions granted and heads of arguments filed) 9.

Quality of awards index achieved by 31 March 2023.

97% 97% 0 Source: Presentation to the Portfolio Committee on Employment and Labour dated 15 February 2023 The last two targets that were reflected as not achieved when QPR 1 was finalized were converted to achieved after assurance by internal audit.
4.1.7 High Impact Labour Market Contributions in 2022/23, Q1 12 41 During the period under review, a total of 43 129 referrals were received by the CCMA.

This is an increase of 8% (3 299) referrals compared to 39 830 referrals in the first quarter of previous financial year.
Referrals by sector were as follows: • Safety/ Security (private)-17% • Business/ Professional Services-15% • Retail-13% • Building/ Construction-7% • Domestic-5% • Agriculture/ Farming-4% • Transport (private)-4% • Mining-4% Other CCMA achievements in Q1 of 2022/23 • Conciliations heard-99.57% (29115/29242) • Conciliation turnaround time-22 days • Settlement rate-80% • Postponement rate-6% • Certificates issued-514 • Arbitration awards rendered and sent to parties within 14 days-99.98% (4 123/4 124) • Arbitration turnaround time-45 days • TERS application received-5 o Considered by SAC-3 o Finalised-8 o Employees to benefit-67 o Total cost-R3 885 909 • Complaints o Received-84 o Investigated and finalised-55 o Pending-29 • Online referrals-3 879 13 42 • National Minimum Wage referrals-567 • Public interest matters (s 150)-97% (38/39) • Jobs saved-40% (4100/10189) • Disputes of interest resolved-59% (572/964) • Return to work index (RTW)-9% (1 061/11 626) 4.1.8.
CCMA Financial Performance in Q3 of 2021/22 CCMA reported on its financial performance as follows: Table 7: CCMA Expenditure per Programme in Q1 of 2022/23 PROGRAMME Budget Actual Variance Variance Administration Labour Market Intervention Special Interventions and Support Spending R’000 58 551 4 155 4 470 R’000 34 994 2 714 2 745 Dispute Resolution and Enforcement 192 070 188 718 Services Strategy Management and Governance 9 819 7 010 TOTAL 269 066 236 180 R’000 23 557 1 442 1 726 3 353 2 809 32 886 % 40.2% 34.7% 38.6% 1.7% 28.6% 12.2% Source: Presentation to the Portfolio Committee on Employment and Labour dated 15 February 2023 The CCMA spent R236 million of the R269 million allocated for Q1 of 2022/23 resulting to a variance of R32 million or 12% of the allocated budget.
The Dispute Resolution and Enforcement Services programme spent R188 million of the R192 million allocated for Q1 resulting to a variance of R3 million or 1.7% of the budget.

The programme receives the highest programme allocation.

The variance resulted from the part time commissioners’ fees which were more than projected costs.

The other factor was due to the increased expenditure on travelling costs to conduct cases in remote areas by the commissioners.
The Administration programme received the second largest budget allocation.

It spent R34 million of the R58 million allocated for Q1 resulting to the variance of R23 million, which is 40% of the budget allocation.

This variance was reported to have resulted from timing differences in staff recruitment.

The other contributing factors include the outstanding invoices for VOIP, WAN, Vodacom 4G usage 14 43 and once-off payment for Microsoft Teams migration.
The printing costs, organisational design project and employee wellness programme also contributed to the saving.

Furthermore, the savings related to operating costs variance results from amortization of Fenestrae (Fanixation) and Board pack (Support and Maintenance) which was renewed at a lower than the projected costs during the budget planning process.

The factors that contributed to the saving include the delay of the removal of VMWARE project due to the non-responsive bid.
The procurement process has been initiated.

The other factors that contributed to the savings include the travel costs and training interventions, as well as legal fees which were budgeted for but not utilized as anticipated for the activities such as the panel of attorneys for litigation matters, opinions and investigations.

Lastly, the saving is also seen in the expenditure resulting from recruitment services.
It is expected that the saving will be absorbed in subsequent months as the expenditure is incurred.

Strategy Management and Governance programme received the third largest programme allocation.

It spent R7 million of the R9 million of the budget allocated for Q1, resulting to a variance of R2 million or 28% of the Q1 budget.

The variance reportedly resulted from timing differences in staff recruitment.
The other contributing factor is due to the savings resulted from projects such as printing of CCMA coffee table book, corporate events services, editing, proof reading and translation services as well as appointment of service provider to conduct the Imvuselelo Mid-Term Impact Assessment which were budgeted for but not utilized as anticipated.
Lastly, the other factors that contributed to the saving include the insurance premiums not paid as anticipated and saving from committee fees and travel related for special committee meetings.

Special Interventions and Support programme spent R2 million of the R4 million allocated for Q1 of 2022/23 resulting to a variance of R1 million or 38% of the budget.
The variance reportedly resulted from timing difference in staff recruitment and less utilization of part-time commissioners for the ESU and Mediation interventions.

The other contributing factor is saving related to travel costs for the ESC members to conduct its mandate.

The Labour Market Intervention programme spent R2 million of the R4 million budget allocation resulting to a variance of R1 million or 34% of the allocation.
The variance is reported to result from dispute management outreach activities, including travelling costs, venue hire and promotional materials that were budgeted for but not utilized as anticipated as the service is also dependent on the user request.

4.2.

NATIONAL ECONOMIC DEVELOPMENT AND LABOUR COUNCIL (NEDLAC) 15 44 The NEDLAC was established through NEDLAC Act no 35 of 1994.

It operates under the terms of the NEDLAC Constitution.
NEDLAC mandate is derived from the following: NEDLAC Act; Labour Relations Act, NEDLAC Constitution; and NEDLAC Protocols.
NEDLAC objectives in terms of the NEDLAC Act are as follows: • Strive to promote the goals of economic growth, participation in economic decision-making and social equity; • Seek to reach consensus and conclude agreements on matters pertaining to social and economic policy; • Consider all proposed labour legislation relating to labour market policy before they are introduced in Parliament; • Consider all significant changes to social and economic policy before it is implemented or introduced in Parliament; and • Encourage and promote the formulation of coordinated policy on social and economic matters.
4.2.1.

NEDLAC Performance per programme in Q1 of 2022/23 NEDLAC reported its performance per programme as follows: Table 8: NEDLAC Performance per Programme in Q1 of 2022/23 PROGRAMME Planned Indicators Targets Targets Overall Indicators applicable achieved not Achievement to Q1 in Q1 achieved in % 1.

Administration 2.

Core-Operations 3.


Constituency Capacity 8 4 1 Building Overall Performance 13 3 2 0 5 Q1 1 0 2 2 N/A N/A 66% 100% N/A 4 1 80% Source: Presentation to the Portfolio Committee on Employment and Labour dated 15 February 2023 16 45 The above table reflects that NEDLAC has 13 annual planned indicators in 2022/23 and five indicators applicable to Q1.

Of those indicators four were achieved, translating to an overall achievement of 80%.
The Administration programme has eight annual planned indicators and three applicable to Q1.

Of those applicable to Q1, two were achieved translating to an overall achievement of 66%.

NEDLAC resolved 94.23% of IT related complaints against a target of 100%.

The reasons for non- achievement of the target were: • New engineers hired by the IT service provider did not understand the NEDLAC system and this led to problems with applications, which took long to resolve.

• Users struggled to use applications.


As a remedial action, training was done to correct the second reason above.

Core Operations programme has four annual planned indicators and two applicable to Q1.

Both targets applicable to Q1 were achieved translating to an overall achievement of 100%.

Constituency Capacity Building programme has no indicator applicable to Q1.

4.2.2.
NEDLAC Financial Report as at Q1 of 2022/232 NEDLAC reported on its expenditure per programme as follows: Table 11: Expenditure per programme in Q1 Programme Q1 YTD budget Q1 YTD actual Variance R’000 R’000 R’000 Administration Core-Operations Capacity Building Total 11 448 1 625 1 875 14 948 11 433 - 467 11 900 15 1 625 1 408 3 048 Source: Presentation to the PC: Employment and Labour dated 15 February 2023 The total budget of Nedlac for Q1 amounted to R14 million and it spent R11 million by the end of Q1 resulting to the variance of R3 million.
17 46 Administration programme Spent R11.43 million of the allocated R11.44 resulting to a variance of R15000.

Core-Operations programme did not spent its first quarter budget of R1.6 million.

Capacity building programme spent R467 000 of the allocated R1.8 million resulting to a variance of R1.5 million by the end of Q1.

4.3.

PRODUCTIVITY SOUTH AFRICA (PSA) Productivity SA was established in terms of section 31 of the Employment Services Act, No.
4 of 2014, as a schedule 3A Public Entity of the Department of Employment and Labour with the responsibility to fulfill an economic or social mandate of government, which is to promote employment growth and productivity thereby contributing to South Africa’s socio-economic development and competitiveness.
Productivity SA has three regional offices in Johannesburg/ Midrand, which is the Head Office and also servicing Gauteng, North West and Limpopo; eThekwini/ Durban servicing KZN, Eastern Cape and Mpumalanga; and Cape Town servicing Western Cape, Northern Cape and Free State.

Vision The vision of Productivity SA is to lead and inspire a productive and competitive South Africa.
Mission The mission is to improve productivity by diagnosing, advising, implementing, monitoring and evaluating solutions aimed at improving South Africa’s sustainable growth, development and employment through increased competitiveness.

Legislative Mandate Productivity SA contributes to the following mandate of the Department: • Improved economic efficiency and productivity.

• Creation of decent employment.

• Promoting social dialogue and workplace democratization.
Functions of Productivity SA In terms of section 32 of the Employment Services Act, the functions of Productivity SA are to: • Promote a culture of productivity in the workplace; 18 47 • Facilitate and evaluate productivity improvement and competencies in the workplace; • Support initiatives aimed at preventing job losses; • Measure and evaluate productivity and competitiveness in the workplace and overall economy; and • Maintain a database of productivity and competitiveness systems and publicize same; and to undertake productivity-related research.
4.3.1.

Productivity SA Performance per Strategic Objective in Q1 of 2022/23 Productivity SA reported its performance per Strategic Objective as follows: Table 12: Productivity SA Performance per Strategic Objectives in Q1 of 2022/23 STRATEGIC OBJECTIVES Annual Q1 Achieved Overall Planned Planned Achievement Indicators Indicators % 1.

Strengthen the institutional capacity of 3 Productivity SA to deliver on its mandate and be financially sustainable 2.
To support government programmes 2 aimed at sustainable employment and income growth 3.

To support enterprises facing economic 3 distress and initiatives aimed at preventing job losses.

4.

Generation and dissemination of 2 productivity related research and statistics 5.
To promote a culture of productivity 2 and competitiveness in the workplace and community life Overall Performance 12 1 2 3 1 2 9 1 2 2 1 1 7 100% 100% 67% 100% 50% 78% Source: Presentation to the Portfolio Committee on Employment and Labour dated 15 February 2023 19 48 Table 12 above reflects that Productivity SA had 12 annual planned indicators for 2022/23 financial year.

Of these indicators, 9 have targets reporting in Q1.
The entity achieved 7 of the 9 indicators with targets reporting in Q1, translating to an overall performance of 78%.

Strategic objective 3 achieved two of the three indicators with targets reporting in Q1, translating to an overall achievement of 67%.

Strategic objective 5 achieved one of the two objectives reporting in Q1, translating to an overall achievement of 50%.

The entity achieved 100% in other strategic objectives.

4.3.2.
4.3.2.

Productivity SA Performance per Programme in Q1 of 2022/23 Productivity SA reported on its performance per programme as follows: Table 13: Productivity SA Performance per Programme in Q1 of 2022/23 PROGRAMME Annual Q1 Achieved Overall Planned Planned Achievement Indicators Indicators % 1.

Corporate Services (CS) 2.

Human Resource Management (HRM) 3.

Corporate Relations (CR) 4.

Competitiveness Improvement Services (CIS) 5. Business Turnaround and Recovery (BT&R) 6.
Research, Innovation and Statistics (RIS) Overall Performance 2 1 1 3 3 2 12 1 n/a 1 3 3 1 9 1 n/a 1 3 2 1 7 100% n/a 100% 100% 67% 100% 78% Source: Presentation to the Portfolio Committee on Employment and Labour dated 15 February 2023 Table 13 above reflects that there were 12 annual planned indicators.

Of these, 9 indicators have targets reporting in Q1.

The entity achieved seven of the nine targets reporting in Q1, translating to an overall performance per programme of 78%.
20 49 Business Turnaround and Recovery (BT&R) programme had three indicators reporting in Q1 and two was achieved, translating to an overall achievement of 67%.

Corporate Relations programme had one planned indicator for Q1 and did not achieve it translating to an overall performance of 0%.

4.3.3.
Productivity SA Financial Performance in Q1 of 2022/23 Productivity SA reported its financial performance as follows: Table 14: Productivity SA Expenditure per Programme in Q1 of 2022/23 Financial Year PROGRAMMES Budget Actual Variance Expenditure R’000 R’000 R’000 % Q1 2022/23 Administration 13 247 18 097 (4 850) 136.6% Competitiveness Improvement 5 915 5 283 632 89.3% Services Business Turnaround and 20 799 5 339 15 460 25.7% Recovery Research, Innovation and 2 203 1 753 450 79.6% Statistics TOTAL EXPENDITURE 42 164 30 472 11 692 72.3% Source: Presentation to the Portfolio Committee on Employment and Labour dated 15 February 2023 Table 14 above reflects that Productivity SA had a total budget of R42.1 million in Q1 of 2022/23 and it spent R30.5 million or 72.3% by the end of Q1 resulting to a variance of R11.7 million.
The Administration programme has a budget of R13.2 million and spent R18.1 million or 136.6% resulting to an over-expenditure of R4.9 million or 36.6% of the allocated budget.

Competitiveness Improvement Services had a budget of R5.9 million and spent R5.3 million or 89.3% of the budget by the end of Q1 resulting to a variance of R632 000. Business Turnaround and Recovery programme had a budget of R20.8 million and spent R5.3 million or 25.7% resulting to a variance of R15.5 million.
Research, Innovation and Statistics had a budget of R2.2 million and spent R1.8 million or 79.6% by the end of Q1 resulting to a variance of R450 000.

21 50 5.

COMMITTEE OBSERVATIONS After receiving the presentations from the Department and its entities, the Committee made the following observations: 5.1.

The Department of Employment and Labour 5.1.1.

The Department spent 26% of Q1 budget and achieved 71% of the targets.

5.1.2.
5.1.2.

The Northern Cape Inspection and Enforcement Services branch under-achieved in the number of workplaces inspected, number of non-compliant workplaces served with notices and number of workplaces received by statutory services that were referred for prosecution.

5.1.3.

The placement rate by Public Employment Services against work seekers registered was 10%.

5.2.

Commission for Conciliation, Mediation and Arbitration 5.2.1.
CCMA overspent its budget by 9.10% and recorded an overall achievement of 78% in Q1 of 2022/23.

5.2.2.

The entity had 43 129 total case referrals during the period under review.

Of these referrals, 567 were National Minimum Wage.

Some of these NMW referrals are for repeat offenders.

5.3.

NEDLAC 5.3.1.

NEDLAC spent R11.9 million of its R14.9 million Q1 budget, translating to 80% of Q1 budget.

It also recorded an overall achievement of 80% during the period under review.

5.3.2.
5.3.2.

NEDLAC founding documents are still in review process.

5.4.

Productivity SA 5.4.1.

Productivity SA achieved the overall performance of 78% in Q1 of 2022/23.

The entity achieved 67% in Business Turnaround and Recovery (BT&R) programme and achieved 0% in Administration Corporate Relations programme.

5.4.2.

Productivity SA is still receiving funding from multiple sources.

5.5.

Unemployment Insurance Fund (UIF) and Compensation Fund (CF) 5.5.1.
That UIF and CF did not meet the deadline for tabling of their annual reports for 2021/22 financial year.

22 51 6.

COMMITTEE RECOMMENDATIONS In view of the above-mentioned observations, the Committee recommends that the Minister ensures that: 6.1.

The Department of Employment and Labour 6.1.1.

Recruitment and selection process for the vacant post of the Compensation Fund Commissioner is expedited without delay.

6.2.

Commission for Conciliation Mediation and Arbitration 6.2.1.
The statistics of National Minimum Wage Act referrals are disaggregated in terms of sectors they originate from.

6.3.

NEDLAC 6.3.1.

Reviewed founding documents of the entity are presented to the Committee as soon as they are finalized.

6.4 Productivity SA 6.4.1.

The single source funding matter is expedited to ensure that the entity is appropriately resourced.

6.5.

UIF and CF 6.5.1.


Progress on UIF and CF tabling of annual reports for 2021/22 financial year and the plan to ensure that the deadline is not missed in future is provided to the Portfolio Committee.

Report to be considered.

23 52 3.

Report of the Standing Committee on Public Accounts on its study tour to New Delhi in India, from 30 January to 5 February 2023, dated 8 March 2023.

1.
Introduction The Standing Committee on Public Accounts (the Committee), having undertaken a study tour to New Delhi in India, from 30 January to 5 February 2023, reports its findings and recommendations to the House as follows: Delegation Mr M Hlengwa (IFP); Chairperson and Leader of the delegation (ANC) (ANC) (ANC) (ANC) (DA) (DA) (EFF) Mr B Hadebe Mr S Somyo Ms A Beukes Ms B Swarts Mr RA Lees Ms B van Minnen Ms V Mente Apologies Ms N Tolashe Ms B Zibula (ANC) (ANC) Support Staff Ms N Nkabinde (Committee Secretary) Ms N Cenge (Content Advisor) Page 1 of 13 53 Officials from the Special Investigating Unit (SIU) Adv JL Mothibi (Head of Unit) Ms N Gumbi (Senior Manager: Corporate Secretariat & Governance) Officials from the Auditor-General of South Africa (AGSA) Mr S Saki (Senior Manager: Institutional Cooperation) 2.
Background During this current Parliament, the Committee identified consequence management as one of its key focus areas, and continued to work closely with the Auditor-General of South Africa (AGSA), and the Special Investigating Unit (SIU), in order to enhance its oversight capability.

It further monitored the progress made by the SIU in investigating cases of corruption and recovery of monies from implicated officials and companies.
Upon encountering some hurdles in the value chain of accountability and consequence management, the Committee looked outside the country, to the Public Accounts Committee in India in particular, in order to compare notes on how they deal with some of the matters that seem to present challenges.

The Public Accounts Committee in India is one of the oldest committees in that country, having been in existence for 100 years in 2021.

Its role and performance has therefore advanced over the years.

3.
Objectives of the study tour 3.1 To obtain comparative insight into the operations, procedures, and methodology of the Public Accounts Committee in India in the execution of the oversight and monitoring of public finance management in societies with developmental challenges similar to South Africa’s; 3.2 To determine the style, approach and methodology of formal engagements with Page 2 of 13 54 the Executive, and how they prioritise audit reports and performance audits; 3.3 To find out the challenges faced when carrying out their mandate, and how these challenges are overcome; 3.4 To establish strategies used to ensure that their recommendations are implemented by the Executive; 3.5 3.6 3.7 3.8 To compare the corruption, maladministration and malpractice typologies; To determine the style of monitoring of the outcomes of investigations and consequence management; To learn about the legal framework that governs civil recovery; and To determine the framework for the prevention of corruption.
4.

Meeting with the High Commissioner and Deputy High Commissioner of South Africa; 1 February 2023 The delegation had a brief but informative courtesy meeting with the High Commissioner, Mr Sibusiso Ndebele, and his Deputy, Mr Cedrick Crowley.

The High Commissioner welcomed the delegation and gave an overview of India, covering matters pertaining to democracy, the economy and levels of socio-economic development, and the nature of party politics.
He also provided useful insights about how to conduct business in India.

He referred to India as a country of a billion people, yet very democratic.

He also portrayed India as a shining model of democracy and a country of many opportunities with robust party politics.

Another positive element about India is that its citizens are very patriotic, always portraying their country in a positive light.

5.
5.

Meeting with Comptroller and Auditor-General of India (C&AG) and Senior officials, chaired by Mr Girish Chandra Murmu; 1 February 2023 The Comptroller and Auditor-General, as the head of the Indian Audit and Accounts Department, is neither a part of the legislature nor the Executive, but an office created by the Constitution to see to it that diverse authorities, in regard to all financial matters, adhere to the demands of the Constitution and other laws that govern Public Finance Management.
To this end, there are several provisions that are enshrined in the Constitution of India Page 3 of 13 55 whose aim is to safeguard the Comptroller and Auditor-General’s independent functions.

The Comptroller and Auditor-General is appointed by the President of India by warrant under his hand and seal, and his oath of office requires him to uphold the Constitution of India and other laws in his/her area of responsibility.
Once the Comptroller and Auditor- General has been appointed, he cannot take any public office position.

He can be removed from office only on grounds of proven misbehaviour or incapacity after an address by both Houses of Parliament and supported by a vote of a two-thirds majority.
His administrative powers and the conditions of service of persons serving in the Indian Audit and Accounts Department are prescribed by the rules made by the President only after consulting with the Comptroller and Auditor-General.

The expenses of his office are charged upon the Consolidated Fund of India and are not subject to being voted by Parliament.
The Comptroller and Auditor-General examine the yearly accounts of the Government and scrutiny certifies the accounts, subject to such reservations as he chooses to make, and submits his reports to the President who submits to Parliament.

The audit by the Comptroller and Auditor-General is comprehensive and manifold.

It involves, among other things, accountancy audit, regularity audit, appropriation audit, discretionary audit, and efficiency-cum-performance audit.
5.1 The role of the Comptroller and Auditor-General of Public Accounts (C&AG) 5.1.1 To undertake special audits for the parastatals; 5.1.2 To issue to Auditors standardised guidelines on how to look at certain issues during the auditing process of the parastatals; 5.1.3 To conduct supplementary audits on all the parastatals after special Chartered Accountants have done the audits.

5.2 Who oversees the Comptroller and Auditor-General of Public Accounts?
5.2.1 There is no formal body that oversees the functions of the Auditor-General in India; Page 4 of 13 56 5.2.2 The Comptroller and Auditor-General is regarded as the final authority to oversee the Accounts; 5.2.3 The Comptroller and Auditor-General is fully funded by the government of India.
To supplement their income, the Comptroller and Auditor- General recovers some of its monies from agencies, which were audited by the Comptroller and Auditor-General’s office; 5.2.4 There is no connection between the Accounts Office and the Audit Office.

The Comptroller and Auditor-General deals with Separate Accounts and Separate Audits separately.
5.3 Observations regarding the Comptroller and Auditor-General of Public Accounts 5.3.1 Although India is a Federal State, the Constitution provides for a Unitary Audit by the Comptroller and Auditor-General, who conducts audits of the accounts of both the Union and the State Governments; 5.3.2 PAC recommendations are referred to the Comptroller and Auditor- General for vetting before tabling in Parliament; 5.3.3 To ensure uniformity in Government accounting, the Constitution also prescribes that the accounts of the Union and the States should be kept in a form prescribed by the President on the advice of the Comptroller and Auditor-General; 5.3.4 The Comptroller and Auditor-General plays a fiduciary role in federal financial relations.
He ascertains and certifies the net proceeds of taxes levied and collected by the Union but assigned to the States or distributed between the Union and the States; 5.3.5 PAC reports are published online for Departments to access.

6.

Meeting with Central Vigilance Commission of India (CVC) and Senior Officials in New Delhi, Mr PK Srivastava; 2 February 2023 Page 5 of 13 57 The Central Vigilance Commission is an investigative unit similar to the Special Investigative Unit in South Africa.
It was established in February 1964, on the recommendations of the Committee on Prevention of Corruption, to exercise superintendence over the vigilance administration of the organisations in respect of which the executive powers of the Government of India extended.

It was conceptualized as an apex integrity institution, having complete independence and autonomy in its function.
The Central Vigilance Commission has been mandated to advise the authorities concerned in respect of an act of improper conduct or corrupt practices, along with review and modification of procedures and guidelines, which may afford scope for corrupt practices.

In September 1997, the Central Government constituted an Independent Review Committee to suggest measures for strengthening anti-corruption activities.
The Review Committee suggested that statutory status should be given to the Central Vigilance Commission.

Subsequently, the Supreme Court of India gave directions to the Government of India to confer statutory status to the Central Vigilance Commission.
The Central Vigilance Commissioner and the Vigilance Commissioners are appointed by the President on the recommendation of a Committee consisting of the Prime Minister (Chairperson), the Minister of Home Affairs (Member), and the Leader of the Opposition in the Lok Sabha.
A member of the Commission may be removed from his office only by order of the President on the grounds of proven misbehaviour or incapacity after the Supreme Court, on a reference made to it by the President, has, on inquiry, reported that the Central Vigilance Commissioner or any Vigilance Commissioner, as the case may be, ought to be removed.
6.1 Functions and powers of the Central Vigilance Commission under the Central Vigilance Commission Act, 2003 The following key responsibilities were noted: 6.1.1 To give directions to the Delhi Special Police Establishment (DSPE) for superintendence insofar as it relates to the investigation of offences under the Prevention of Corruption Act, 1988; Page 6 of 13 58 6.1.2 To inquire or cause an inquiry or investigation to be made on a reference by the Central Government; 6.1.3 To inquire or cause an inquiry or investigation to be made into any complaint received against any official belonging to such category of officials as specified in sub-section 2 of Section 8 of the Central Vigilance Commission Act, 2003; 6.1.4 To review the progress of Investigations conducted by the Delhi Special Police Establishment into offences alleged to have been committed under the Prevention of Corruption Act, 1988; 6.1.5 To review the progress of the applications pending with the competent authorities for sanction of prosecution under the Prevention of Corruption Act, 1988; 6.1.6 To tender advice to the Central Government and its organisations on such matters as may be referred to it by them; 6.1.7 To exercise superintendence over the vigilance administrations of the various Central Government Ministries, Departments & Organisations of Central Government such as the Central Bureau of Investigations (CBI) and the Enforcement Directorate (ED); 6.1.8 To exercise all the powers of a Civil Court while conducting any inquiry; 6.1.9 To respond to Central Government on mandatory consultation with the Commission before making any rules or regulations governing the vigilance or disciplinary matters relating to the persons appointed to the public services and posts in connection with the affairs of the Union or to members of the All India Services; 6.1.10 Prepare and present the Commission’s Annual Report to the President and to be placed before the Parliament.
6.2 Role and functions of Chief Vigilance Officers (CVOs) 6.2.1 The Chief Vigilance Officers are considerably higher level officers who are appointed in each and every Department / Organisation to assist the Head of the Department / Organisation in all vigilance matters; Page 7 of 13 59 6.2.2 The Chief Vigilance Officers undertake various measures, which include: 6.2.2.1 Examining in detail the existing Rules and procedures of the Organisation with a view to eliminate or minimise the scope for corruption or malpractices; 6.2.2.2 Identifying the sensitive / corruption-prone spots in the Organisation and keep an eye on personnel posted in such areas; 6.2.2.3 Planning and enforcing surprise inspections and regular inspections to detect system failures and the existence of corruption or malpractices; 6.2.2.4 Maintaining proper surveillance of officers of doubtful integrity; and 6.2.2.5 Ensuring prompt observance of Conduct Rules relating to the integrity of the Officers.
6.3 Observations 6.3.1 The Central Vigilance Commission functions on a three-pronged approach to vigilance, namely: 6.3.1.1 Punitive vigilance, which involves investigation of improper conduct: - - advising and reviewing of disciplinary action; advising for prosecution; - powers of civil court when conducting enquiries.
6.3.1.2 Preventative Vigilance, which involves leveraging on technology: - streamlining of processes; - updating public manuals promoting ethics/good governance and recommending amendments; - capacity building such as training inquiry officers to dispose of matters efficiently.
Page 8 of 13 60 6.3.1.3 Participative vigilance, which includes whistleblowing mechanisms (the PIDPI, an online facility), notably anonymous whistle blower reports are not followed up: - Integrity pledges which are taken by all citizens and an online certificate is furnished, organisations, aside from natural persons, can also take the pledge; - Awareness, which is focused from schools to all sectors of society.
6.3.2 All Chief Vigilance Officers and any official occupying a sensitive/senior position must have vigilance clearance certificates before they are appointed.

This is akin to the vetting by the State Security Agency in South Africa.
6.3.3 Raising awareness to inculcate ethical values and reduce society's tolerance towards corruption, through outreach activities and sensitization 6.3.4 Corruption investigations against government officials can proceed only after the government permits order 6.3.5 The Central Vigilance Commission has also been publishing a list/database of corrupt government officials against which it has recommended punitive action.
Officials are not permitted to resign amidst investigation and/or disciplinary action until conclusion.

6.3.6 The Central Vigilance Commission is only an advisory body.

Central Government Departments are free to either accept or reject Central Vigilance Commission 's advice in corruption cases 6.3.7 The Central Vigilance Commission does not have powers to institute criminal cases.

It deals only with vigilance or disciplinary cases.
Similarly, in RSA, the SIU does not investigate criminality but referrals are made to the appropriate authority 6.3.8 The Central Vigilance Commission does not have mandate to investigate members of the executive government or high political figures in government Page 9 of 13 61 6.3.9 There is a cross-referral collaboration between the Central Vigilance Commission and CAG, the Central Vigilance Commission also can investigate corruption matters outlined in the CAG annual report.
6.3.10 The Central Vigilance Commission reports are tabled in Parliament by the President through the Ministry of Personnel & Training.

6.3.11 The Public Accounts Committee (PAC) can follow up on the Central Vigilance Commission reports tabled.

In contrast, the SIU investigation reports are submitted to the President however, they are not tabled at Parliament.
6.3.12 The Committee has played a crucial and instrumental role in introducing the Audit Para Monitoring System (APMS) portal, which is an online real-time system for effective monitoring of submissions of actions taken and replies on the PAC recommendations 7.
Meeting with the Public Accounts Committee (PAC) at the Indian Parliament, Chaired by Mr Adhir Ranjan Chowdhury, Chair of the Public Accounts Committee at the Lok Sabha; 3 February 2023 7.1 Composition The Public Accounts Committee in India had its historical beginning during the pre-independence days of British rule.

The first Public Accounts Committee was set up in 1921 and it consisted of only 12 members.
The Public Accounts Committee is constituted every year, and currently consists of 22 members, 15 of which are from the Lok Sabha (Upper House) and 7 from the Rajya Sabha (Lower House).

The Committee became a Parliamentary Committee accountable to the Speaker and led by a non-official Chairman nominated by the Speaker from among the Lok Sabha Members serving on the Committee.
By its composition, it is Parliament in miniature as the Members of the Committee are elected on the basis of proportional representation of political parties in Parliament.

However, once elected, the members cease to function on party-political lines in the committee.
Page 10 of 13 62 Being a sentinel on public expenditure, it has been the constant endeavour of successive Public Accounts Committees that the money voted by Parliament is disbursed legally for the intended purposes approved by Parliament, and in accordance with the rules and regulations framed by the competent authority.

7.2 Method of work 7.2.1 The Committee examines any money spent on any service throughout a fiscal year in excess of the amount granted by the Lok Sabha for that purpose.
7.2.2 It examines public expenditure not only from a legal and formal point of view but also from an economic point of view to reduce inefficiency and extravagance.

7.2.3 It undertakes a post-mortem analysis of accounting.

7.2.4 When a case of proven negligence is brought to the notice of the committee, the concerned Ministry is called upon to explain what action, disciplinary or otherwise, has been initiated to pinpoint responsibility and prevent a recurrence.
7.2.5 The Committee expresses no opinion on points of general policy, but it is well within its jurisdiction to point out whether there has been any extravagance or waste in carrying out the policy.

7.3 Observations 7.3.1 India as a democracy faces challenges that are almost similar to South Africa, in terms of both socio-economic development and Public Finance Management.

7.3.2 The PAC in India has the privilege of having long-term serving Members of Parliament as members of the committee.
The advantage of this is that this allows for continuity and accumulation of valuable experience.

Page 11 of 13 63 7.3.3 None of the work that is done by the Public Accounts Committee is debated in the House.

7.3.4 The Committee has no power to investigate or subpoena anyone.

7.3.5 It has no authority to intervene in day-to-day administration.

7.3.6 Its suggestions are only advisory and do not bind the ministries.

7.3.7 It does not have the authority to prohibit departmental spending.
7.3.8 It is not an executive body; it cannot issue an order.

Only Parliament has the authority to make final decisions based on its findings.

7.3.9 The Committee is not entirely independent, given that the office of the Comptroller and Auditor General assists it by coming up with recommendations on all the observations highlighted in the Audit Report.

7.3.10 There is no women representation in the Committee.

7.3.11 The activities of the committee are largely apolitical.
Members divorce party politics from their Committee work.

7.3.12 The Committee has played a crucial and instrumental role in introducing the Audit Para Monitoring System (APMS) portal, which is an online real- time system for effective monitoring of actions taken following the PAC recommendations.

8.

Meeting with the Speaker of the Lok Sabha, Mr Om Birla; 3 February 2023 The Committee had an interaction with Speaker of the Lok Sabha.
He stressed on the role of PAC as an effective mechanism of ensuring financial accountability of the Executive.

Issues discussed touched on Parliamentary diplomacy, India's leadership of G-20, Solar Alliance, Global Disaster Management and strengthening parliamentary procedures.

9.
Recommendations 9.1 Considering that disclaimed reports carry a high risk of corruption and maladministration, the Committee should automatically refer all disclaimed audit reports to the SIU for further investigation; Page 12 of 13 64 9.2 The Committee should interact with National Treasury to determine the possibility of setting up an e-procurement portal where public procurement will be done, in order to minimise the risk of unfair pricing by suppliers; 9.3 The Committee should interact with the SIU to determine the possibility of setting up a whistle blower portal to report any incidences of corruption and maladministration.
The committee is of the view that the whistle blower portal will leverage on the independence provided by the SIU.

10.
10.

Conclusion Having interacted with the Speaker of the Indian Parliament, the Speaker, in the spirit of strengthening the relations with the Indian government, suggested that the Speaker of the South African Parliament should support the following initiatives: The International Solar Alliance This is an initiative aimed at galvanising developing countries to forge solidarity and focus on alternative sources of energy to support their economies.
The Global Disaster Management Alliance This is an initiative aimed at creating awareness of global disasters while encouraging countries to take proactive action to avert and manage crises brought by natural and other disasters.
The Committee wishes to express its sincere gratitude to the High Commissioner of South Africa in India, the Speaker of the Lok Sabha, the Comptroller and Auditor-General, the Central Vigilance Commission, Members of the Public Accounts Committee of India, and staff from the office of the High Commissioner, who made the visit such a resounding success.

Report to be considered.

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