Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698139925984.pdf (South Africa)
Wednesday, 30 November 2016] 1 No 156—2016] THIRD SESSION, FIFTH PARLIAMENT PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS WEDNESDAY, 30 NOVEMBER 2016 TABLE OF CONTENTS ANNOUNCEMENTS National Assembly and National Council of Provinces 1.

Bills passed by Houses – to be submitted to President for assent .................................................................................................... 2 National Assembly 1.
Referral of Bill to Committee ............................................................... 2 2.

Bill returned for consideration of President’s reservations ........................................................................................... 2 3.

Membership of Committees ............................................................... 10 TABLINGS National Assembly and National Council of Provinces 1.
Speaker and Chairperson .................................................................... 12 National Assembly 1.

Speaker ............................................................................................... 12 ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 2 [Wednesday, 30 November 2016 COMMITTEE REPORTS National Assembly 1.

Labour ................................................................................................. 14 2.
Appropriations .................................................................................... 16 3.

Appropriations .................................................................................... 75 4.

Public Service and Administration ..................................................... 89 National Council of Provinces 1.

Communications and Public Enterprises ........................................ 94 2.
Communications and Public Enterprises ........................................ 94 ANNOUNCEMENTS National Assembly and National Council of Provinces The Speaker and the Chairperson 1.

Bills passed by Houses – to be submitted to President for assent (1) Bill passed by National Council of Provinces on 30 November 2016: (a) Division of Revenue Amendment Bill [B 15 – 2016] (National Assembly – sec 76).

National Assembly The Speaker 1.


Referral of Bill to Committee (1) The Adjustments Appropriation Bill [B 16 - 2016] (National Assembly – section 77) has been referred to the Standing Committee on Appropriations in accordance with the Money Bills Amendment Procedure and Related Matters Act, 2009 (Act No.

9 of 2009).

2.
Bill returned to Assembly for consideration of President’s reservations (1) A letter dated 28 November 2016 has been received from the President of the Republic, returning the Financial Intelligence Centre Amendment Bill [B 33B - 2015] to the National Assembly for consideration of the President’s reservations about its constitutionality: ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 3 ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 4 [Wednesday, 30 November 2016 ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 5 ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 6 [Wednesday, 30 November 2016 ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 7 ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 8 [Wednesday, 30 November 2016 ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 9 Referred consideration and report in terms of Joint Rule 203. the Standing Committee on Finance for to ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 10 [Wednesday, 30 November 2016 3.
Membership of Committees (1) The following changes to committee membership have been made: Economic Freedom Fighters Ad Hoc Committee on the South African Broadcasting Corporation Board Inquiry Discharged: Appointed: Appointed: Shivambu, Mr NF Ndlozi, Mr MQ Mokoena, Mr LG [Alternate] Portfolio Committee on Rural Development and Land Reform Discharged: Appointed: Matiase, Mr NS Mashabela, Ms NR Portfolio Committee on Arts and Culture Discharged: Appointed: Moteka, Mr PG Mokoena, Mr LG Ad Hoc Joint Committee on Appointment of Board Members to the National Youth Development Agency Discharged: Appointed: Chewane, Dr H Ndlozi, Mr MQ Portfolio Committee on Public Works Discharged: Appointed: Dlamini, Mr MM Mathys, Ms L Portfolio Committee on Energy Appointed: Dlamini, Mr MM Portfolio Committee on Public Enterprises Discharged: Appointed: Mathys, Ms L Dlamini, Mr MM Inkatha Freedom Party Ad Hoc Committee on the South African Broadcasting Corporation Board Inquiry Discharged: Appointed: Van der Merwe, Ms LL Singh, Mr N ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 11 National Freedom Party Ad Hoc Committee on the South African Broadcasting Corporation Board Inquiry Discharged: Appointed: Shaik Emam, Mr AM Khubisa, Prof NM African National Congress Standing Committee on Appropriations Discharged: Discharged: Appointed: Ndongeni, Ms N Senokoanyane, Ms DZ [Alternate] Senokoanyane, Ms DZ Portfolio Committee on Defence and Military Veterans Discharged: Appointed: Nesi, Mr BA Dambuza, Ms NB Portfolio Committee on Home Affairs Discharged: Appointed: Nesi, Mr BA Ndongeni, Mr Portfolio Committee on Human Settlements Appointed: Dambuza, Ms NB [Alternate] Portfolio Committee on Public Service and Administration Discharged: Mabe, Ms BP Portfolio Committee on Rural Development and Land Reform Discharged: Appointed: Appointed: Qikani, Mrs AND Matsimbi, Ms C Qikani, Mrs AND [Alternate] Portfolio Committee on Telecommunications and Postal Services Discharged: Appointed: Appointed: Maseko, Ms LM Mahambehlala, Ms T Kilian, Mrs JD Portfolio Committee on Water and Sanitation Discharged: Appointed: Manana, Ms DP Mnguni, Mr D ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 12 [Wednesday, 30 November 2016 Portfolio Committee on Women in The Presidency Discharged: Appointed: Mthembu, Mrs N Kilian, Mrs JD Portfolio Committee on Science and Technology Appointed: Koornhof, Mr NJJ Portfolio Committee on Small Business Development Discharged: Appointed: Mahambehlala, Ms T Mthembu, Mrs N TABLINGS National Assembly and National Council of Provinces 1.
The Speaker and the Chairperson (a) Report of the Auditor-General on Performance Audit of the management of pharmaceuticals at the departments of Health [RP 313-2016].

(b) Report of the Auditor-General on Performance Audit on water infrastructure at the Department of Water and Sanitation [RP 314-2016].

(c) Education Sector Report for 2015-16 of the Auditor-General South Africa [PR 360-2016].

National Assembly 1.


The Speaker (a) Letter from the Minister of Public Enterprises dated 29 November 2016, to the Speaker of the National Assembly explaining the reasons for the further delay in the tabling of the Annual Report of the South African Express Airways SOC (Limited) for 2015-16.
Dear Honourable Speaker Late Tabling Of South African Express Airways' 2016 Annual Report My letter dated 27 September 2016 enclosed herewith advising that I was not in a position to table the SA Express annual report including the audited financial statements for the ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 13 2015/16 financial year by 30 September 2016 refers.
This was due to the fact that SA Express had not satisfactorily demonstrated its ability to continue operating on a going concern basis for a period of at least 12 months after the signing of the annual financial statements.

This had resulted in a delay in completing the audit to finalise the 2015/16 annual financial statements.

The SA Express executives are still engaging with the Auditor- General to satisfy the solvency and liquidity test required to demonstrate that the airline is going concern.
I therefore wish to inform the Honourable Speaker that, the process is still in progress and the 2016 Annual Report and financial statements will be tabled as soon as the going concern status of the airline has been resolved and the audit has been concluded.

Yours sincerely (Signed) MS LYNNE BROWN, MP MINISTER OF PUBLIC ENTERPRISES ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 14 [Wednesday, 30 November 2016 COMMITTEE REPORTS National Assembly 1.
Interim Report of the Portfolio Committee on Labour on the Labour Laws Amendment Bill [PMB 5 - 2015] (National Assembly – sec75), in terms of National Assembly Rule 286(4)(c), dated 30 November 2016 The Portfolio Committee on Labour (“the Committee”) has considered the subject of the Labour Laws Amendment Bill [PMB 5 - 2015] (National Assembly – sec75) (“the Bill”) referred to it and classified by the Joint Tagging Mechanism (JTM) as a section 75 Bill.
The Bill seeks to amend the Basic Conditions of Employment Act, 1997, so as to correct an obsolete reference to an Act; to provide for parental, adoption and commissioning parental leave to employees; to provide that a collective agreement may not reduce an employee’s entitlement to parental, adoption or commissioning parental leave; to amend the Unemployment Insurance Act, 2001, so as to provide for the right to claim parental and commissioning parental benefits from the Unemployment Insurance Fund; to provide for the application for, and the payment of, parental and commissioning parental benefits from the Unemployment Insurance Fund; to correct an obsolete reference to an Act; to provide that the number of contributors to whom parental and commissioning parental benefits were paid and the amount of such payments be included in the written report from the Director-General of Labour to the Minister of Labour; and to provide for matters connected therewith.
The Bill was introduced and referred to the Committee on 26 November 2015 (ATC No.

161-2015).

The Committee held public hearings and considered proposed amendments to the Bill.

Whilst inquiring into the subject matter of the Bill and during the public hearings the Committee realised it is necessary to amend other provisions of the Unemployment Insurance Act, 2001 (Act No.
63 of 2001) (“principal Act”) which were not ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 15 included in the Bill.

The Committee now seeks to amend other provisions of the principal Act beyond the scope of the Bill.
The envisaged amendments, which are not currently contained in the Labour Laws Amendment Bill [PMB 5 - 2015] will, amongst others, cover: • The inclusion of a new clause to provide that the benefits a contributor to the Unemployment Insurance Fund is entitled to, may not be reduced by the payment of parental, adoption and commissioning parental benefits.
This amendment is necessary in order to align the payment of parental, adoption and commissioning parental benefits with the payment of maternity benefits provided for in the recent Unemployment Insurance Amendment Bill [B25D—2015].
• The inclusion of a new clause that would provide that an application for adoption benefits to the Unemployment Insurance Fund may be made within 12 months after the date of an adoption order, or within 12 months after the date that a child is placed in the care of a prospective adoptive parent by a competent court, pending the finalisation of an adoption order, whichever date occurs first.
The purpose of this amendment is to enable a prospective adoptive parent to apply for adoption benefits from the Unemployment Insurance Fund shortly after a child is placed with the prospective adoptive parent.

The prospective adoptive parent in whose care the child is placed will therefore not have to wait until a final adoption order is granted by the court which is often granted long after the child is placed with the prospective adoptive parent.
This amendment is necessary to enable the prospective adoptive parent to access the adoption leave at a time when it is most needed, ie.

when the child is first placed with the prospective adoptive parent.

The Committee submits this interim report to motivate its request for permission, in terms of National Assembly Rule 286(4)(c), to amend other provisions in the Unemployment Insurance Act, 2001 (Act No.

63 of 2001).

Report to be considered.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 16 [Wednesday, 30 November 2016 2.
REPORT OF THE STANDING COMMITTEE ON APPROPRIATIONS ON THE FOURTH QUARTER EXPENDITURE PATTERNS FOR THE 2015/16 FINANCIAL YEAR AND FIRST QUARTER EXPENDITURE PATTERNS FOR THE 2016/17 FINANCIAL YEAR , DATED 29 NOVEMBER 2016 The Standing Committee on Appropriations, having heard briefings and having considered the fourth quarter expenditure patterns of national departments for the 2015/16 financial year as well as the first quarter expenditure patterns for the 2016/17 financial year, reports as follows: 1.
Introduction The Standing Committee on Appropriations (the Committee) was established in terms of section 4(3) of the Money Bills Amendment Procedure and Related Matters Act, No.9 of 2009.

The Act requires the Committee to consider and report on spending issues, and on actual expenditure published by the National Treasury.

The Committee has adopted a tradition of inviting both National Treasury and the affected departments to account on government spending.
This consultative approach gives the Committee an opportunity to interrogate departments on their spending with a view to identify and strengthen gaps in public spending.

The Committee is established as a strategic centre to flag issues which might impact negatively on service delivery through scrutiny of government spending.

As such, the Committee has taken a decision to move swiftly towards balancing its expenditure monitoring with actual performance.
This report provides a detailed overview of government spending for the period 1 April 2015 to 31 March 2016 and also the period 1 April 2016 to 30 June 2016.

It intends to highlight spending patterns of national departments and to draw the attention of Parliament and the Executive to findings and recommendations made for improved public spending performance.

The section hereunder provides an overview of the expenditure for the period under review.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 2.

Expenditure Overview 17 2.1 Overview of 2015/16 fourth quarter expenditure As per Table 1 below, the National Budget for 2015/16 is R1251.1 trillion.

Of this R544.8 billion is committed for Direct Charges against the National Revenue Fund.

The National Departments’ budget amounts to R706.4 billion.
R464.5 billion of this, or 65.8 per cent, is allocated to be transferred by departments to support households, other spheres of government, organisations, agencies and institutions, and R29.1 billion, or 4.1 per cent, is spent on financial assets.

This leaves R212.9 billion allocated to be spent by national departments on operations.

Table 1.
National Budget 2014/15 and 2015/16 Economic Classification 2014/15 2015/16 Available Percentage Mai n Available Actual Percentage R million Current payments Compensation Of Employees budget¹ spent appropriation budget¹ expenditure 181 419.4 121 318.5 98.2% 98.8% 194 587.5 134 469.1 195 323.4 192 987.5 133 552.1 133 425.0 Spent 98.8% 99.9% Goods and Services 60 051.4 96.7% 60 069.3 61 674.3 59 449.1 96.4% Interest and Rent on Land 49.5 209.3% 49.1 97.0 113.4 116.9% Transfers and Subsidies Payments for Capital Assets Payments for Financial Assets Awaiting classification Sub total 636 618.1 98.3% 679 497.5 706 374.1 699 337.6 99.0% Direct Charges Against the National Revenue Fund Total 504 509.6 100.0% 537 726.2 544 756.0 544 175.6 99.9% 1 141 127.8 99.1% 1 217 223.7 1 251 130.0 1 243 513.3 99.4% Source: National Treasury (2016) ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 18 [Wednesday, 30 November 2016 National departments spent R699.3 billion against the final available budget of R706.4 billion thus showing an underspending of 1 per cent at the end of 2015/16.
Preliminary spending outcomes reflect that the largest amount of underspending is under the departments of Cooperative Governance and National Treasury.

The next largest areas of underspending, although marginal compared to total vote budget, are recorded under the departments of Social Development, Human Settlements, Water and Sanitation and Basic Education.
Operational expenditure has increased when compared to the same period in the previous financial year at a nominal rate of 9.4 per cent, which is equivalent to R18.1 billion.
Substantial expenditure growth within Higher Education and Training was the compensation of employees’ item with over 36 000 staff in the Vocational and Continuing Education and Training programme attributed to a function shift of Technical and Vocational Education and Training (TVET) Colleges and Adult Education and Training (AET) from provincial Education Departments to Higher Education and Training in 2015/16.
It is critical to note that 20.5 per cent of operational expenditure in quarter 4 was within Administration programmes, representing R43.2 billion.

This is an increase from the equivalent period in the previous financial year of R2.5 billion, or 6.1 per cent.

The largest rand value expenditure under Administration occurs in departments with large personnel structures: Police, Correctional Services, Defence and Home Affairs.
The three largest proportions of budget spent on Administration are in the departments of Women, Economic Development and Communications.

Detail is provided in the vote reports presented below.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 19 The following are Departments that showed significant variance in scheduled expenditure versus actual expenditure.
• The Department of Cooperative Governance’s expenditure showed R2.8 billion underspending as at end of 2015/16.

This was primarily due to the withholding of local government equitable share payments from municipalities that did not surrender unspent conditional grants which were not approved for rollovers.

• The Department of Social Development’s expenditure showed R1.4 billion underspending as at end of 2015/16.
This was largely due to savings on social grants as a result of fewer than anticipated beneficiaries and South African Social Services Agency’s improved efficiency in processing the grant applications.

The savings are as follows: Disability grant (R733m), old age grant (R645m) and child support grant (R369m).

• The Department of Basic Education’s expenditure showed R490 million underspending as at end of 2015/16.
Major contributing areas to the under-expenditure were the Accelerated School Infrastructure Delivery Initiative (ASIDI) and Expanded Public Works (EPWP) programmes.

The under-spending in the ASIDI programme was mainly due to the difficulties in replacing underperforming implementing agents and service providers; and delays in finalising the merging and rationalisation of schools in the Eastern Cape Province.
With regards to the EPWP Kha Ri Gude incentive grant, the under- spending was due to delays in finalising the calculation of full time equivalents (which is used to determine the amount due to the department) by the EPWP Unit at the Department of Public Works.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 20 [Wednesday, 30 November 2016 • The Department of Health showed underspending of R215 million as at the end of 2015/16.
The under-spending was mainly due to delays in the procurement process for the manufacturing and production of condoms; and the non- submission of claims by provinces for reimbursement for the Human Papilloma Virus Vaccinations (HPV) campaign.
• Other areas of under-expenditure in the preliminary spending outcomes for 2015/16 include the Department of Energy where there was underspending in the solar water heater project due to procurement delays, the Department of Telecommunications and Postal Service showed underspending on the SA Connect project, National Treasury underspent on the Jobs Fund and transfers to municipalities; Public Works underspent due to vacant positions and EPWP linked to the Independent Development Trust, Department of Justice underspent due to the late submission of invoices for office accommodation and computer services; and the Department of Defence underspent due to delays in finalising the procurement process for the mobility packages utilised during border safeguarding operations.
• Preliminary spending outcomes show that three departments overspent their final available budgets and these are the Department of International Relations and Cooperation which overspent by R133 million due to foreign exchange rate fluctuations on foreign denominated expenditure; Parliament overspent its budget by R50 million mainly on compensation of employees and Correctional Services overspent its budget by R121 000 on goods and services.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 21 2.2 Overview of the 2016/17 first quarter expenditure As per Table 2 below, the National Departments’ budget amounts to R721.1 billion or 55 per cent.

R493.3 billion of this, is allocated to be transferred by departments to support households, other spheres of government, organisations, agencies and institutions.
An amount of R145.2 billion is allocated for compensation of employees and R63.3 billion is allocated for goods and services.

Table 2.
National Budget 2016/17 R million Main Available Actual Expenditure Variance as % of from % variance from appropriation budget expenditure available projected projected budget expenditure expenditure Economic Classification Current payments Compensation of Employees Goods and services Interest and Rent on Land Transfers and subsidies Payments for capital assets Payments for Financial Assets Awaiting classification Total -12.9 1.4% 11.0 12.9 721 148.2 721 148.2 161 217.3 22.4% 5 078.7 3.1% Source: National Treasury (2016) As at the end of 30 June 2016, departments have spent R161.2 billion or 22.4 per cent of the available total budget.
Spending for the first quarter is R5 billion or 3.1 per cent less than projected expenditure for the quarter.

An amount of R109.3 billion, or 22.2 per cent of the available budget was spent on transfers and subsidies.

Expenditure on payments for capital assets was R1 billion or 32 per cent less than the projected expenditure for the first quarter.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 22 [Wednesday, 30 November 2016 With regards to Compensation of Employees (COE), spending for national departments (excluding National Parliament) for the first quarter of 2016/17 represents 24.4 per cent of the respective departmental budgets for compensation.
Growth in COE quarter-on- quarter (first quarter of 2016/17 compared with last quarter of 2015/16) for national departments is 2.3 per cent which is less than expected given the 2016/17 salary adjustments in line with the 2015 wage agreement provisions.

This may be explained by a reduction in personnel headcount in the first quarter of 2016/17.

The following are Departments that showed significant variance in scheduled expenditure versus actual expenditure.
• The Department of Basic Education has spent R7.1 billion or 31.8 per cent of the available budget of R22.2 billion.

This spending is lower compared to its projections to spend R7.9 billion.

This was because expenditure on workbooks will only now take place in Quarter 2 and not Quarter 1 though the delay is not expected to result in the late delivery of workbooks for the 2017 school year.
Furthermore, there was low spending in the School Infrastructure Backlogs grant due to implementation delays due to poor performance by some implementing agents, difficulties in replacing underperformers, and delays in the finalising the merging and rationalisation of schools in the Eastern Cape Province.

• The Department of Health spent 23.2 per cent of its available budget which is 6.5 per cent less than projected expenditure under various programmes.
National Treasury submitted that the Department of Health should consider ways to improve general infrastructure planning and coordination.

For example, there are a large number of smaller projects included in its infrastructure master project and this may negatively impact the Department’s ability to deliver on the larger projects.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 23 • The Department of Telecommunications and Postal Services has spent a total amount of R739.3 million of its available budget.

This is lower than the projected expenditure of R965.5 million for the 1st quarter.
This was due to lower than expected spending in Information Communications Technology (ICT) Infrastructure Support due to funds not being transferred to the Universal Service and Access Agency of South Africa (USAASA) as the Department received insufficient information on the utilisation of previous transfers and the ongoing litigation related to the Set Top Box technology.
• The Department of Public Works has spent a total amount of R1.83 billion of its available budget and this was slightly higher than the projected expenditure of R1.81 billion for the 1st quarter.

The main reason was that spending exceeded projections due to expenditure incurred by the Property Management Trading Entity (PMTE).

However, there was slow spending on the agency and outsourced services in relation to the Expanded Public Works Programme.
• Other areas showing significant variances of expenditure performance for the 1st quarter of 2016/17 included the Department of Higher Education and Training where there were delays in payments for infrastructure and efficiency grants for university infrastructure.
The Department of Labour experienced slow spending due to delays in placing and receiving orders from the State Information Technology Agency (SITA) and delays in receiving invoices from the Department of Public Works (DPW) for office accommodation.

The Department of Arts and Culture experienced delays in the selection process of an appropriate institution to host the Venture Capital Fund, and there was poor spending on Capital Works projects due to delays by DPW in implementing the projects.
The Department of Small Business Development experienced delays due to the ongoing ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 24 [Wednesday, 30 November 2016 capacity building programmes and there were also fewer claims received than anticipated for processing for the Black Business Supplier Development Programme and Cooperatives Incentives scheme.

3.
Spending by departments at the end of the fourth quarter of the 2015/16 financial year and the end of the first quarter of the 2016/17 financial year In light of the above, the Committee invited the following departments for hearings on the Fourth Quarter Expenditure for the 2015/16 financial year and the First Quarter for the 2016/17 financial year: • Department of Basic Education; • Department of Health; • Department of Water and Sanitation; • National Treasury; • Department of Public Works; and • Department of Telecommunications and Postal Services.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 25 3.1 Department of Basic Education (Vote 14) 3.1.1 Expenditure patterns for the Fourth Quarter of the 2015/16 financial year Expenditure per Economic Classification Summary per Economic Classification Adjusted Actual Programme Appropriation Expenditure Variance % Spent R'000 R'000 1.Administration 386 645 386 475 170 99.96% 2.Curriculum Policy, Support and Monitoring 1 837 965 1 797 740 40 225 97.81% 3.Teachers, Education Human Resources Development, and Institutional Development 1 164 017 1 163 548 469 99.96% 4.Planning, Information and Assessment 11 959 764 11 511 905 447 859 96.26% 5.Educational Enrichment Services Total 5 938 035 5 936 456 1 579 21 286 426 20 796 124 490 302 99.97% 97.70% Source: Department of Basic Education (2016) The Department of Basic Education (the Department) was allocated an adjusted budget of R21.286 billion for the 2015/16 financial year.
At the end of the fourth quarter of the 2015/16 financial year, the Department had spent R20.796 billion or 97.70 per cent.

The under-spending on Programme Two was mainly on the EPWP Grant.

The under-spending on the grant was due to delays in finalising the calculation and the late submission of data in the EPWP electronic system.

The major problem was the delay in submitting certified copies of Identity Documents to EPWP.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 26 [Wednesday, 30 November 2016 The under-spending on Programme Four was mainly on the ASIDI programme.

The under expenditure on the Schools Infrastructure Backlog Indirect Grant was due to delays in the rationalisation of schools.
Expenditure performance on Earmarked Allocations and Conditional Grants at the end of the 2015/16 financial year Earmarked Allocation and Conditional Grant Expenditure for 2015/16 Adjusted Actual Service Appropriation Expenditure Variance % Spent R'000 R'000 Earmarked Funds: 1 676 517 1 587 847 88 670 94.71% Kha Ri Gude Literacy Project EPWP: Kha Ri Gude Workbooks NEEDU MST NSNP 437 922 65 096 950 340 22 345 5 075 15 986 437 721 201 99.95% 29 485 35 638 45.25% 948 162 2 178 99.77% 25 580 (3 235) 114.48% 4 272 14 822 803 84.18% 1 164 92.72% Annual National Assessment 179 753 127 832 51 921 71.12% Conditional Grants: Education Infrastructure National School Nutrition Programme HIV and AIDS (Life Skills Education) Occupation Specific Dispensation for Therapists (OSD) MST 15 631 771 15 746 754 (114 983) 100.74% 9 354 443 9 411 677 (57 233) 100.61% 5 685 381 5 712 478 (27 097) 100.48% 208 730 221 758 (12 028) 106.24% 66 275 316 942 82 380 (16 105) 124.30% 318 462 (1 520) 100.48% Source: Department of Basic Education (2016) ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 27 The Department reported that the reason for the under expenditure on the EPWP: Kha Ri Gude programme was due to delays in the finalisation of the calculations and the late submission of data, i.e.
certified copies of Identity Documents in the EPWP electronic system.

The reasons for the under expenditure on the ANA was due to the Annual National Assessment.

The impasse between Teacher Unions and the Department on the writing and administration of ANA had an impact on the spending trend.

However, the Department has established a task team to look at the restructuring of the Annual National Assessment.
The reported over expenditure on the NEEDU was as a result of the higher than projected expenditure on the Compensation of employees.

The Departments cited roll-overs that were approved at provincial level as the reason for the over expenditure on Conditional Grants.

Performance Information per programme as at the end of 2015/16 Programme Number of Not Partially Fully Indicators Achieved Achieved Achieved 1.

Administration 2.

Curriculum Policy, Support and Monitoring 3.


Teachers, Education Human Resources Development, and Institutional Development 4.

Planning, Information and Assessment 5.


Educational Enrichment Services Total Percentage 4 8 7 9 2 30 0 1 2 1 0 4 0 1 1 0 0 2 100% 13% 7% 4 6 4 8 2 24 80% Source: Department of Basic Education (2016) ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 28 [Wednesday, 30 November 2016 The Department reported that the target which was not achieved in Programme 2 related to the Kha Ri Gude programme.
The completion date of the Kha Ri Gude programme fell outside the financial year and further stated that the completed learner assessment portfolios were only submitted in May 2016.

In respect of Programme 3, the set targets for the percentage share of Principals appointed based on a competency assessment process and the number of teachers who were to write the Self-Diagnostic Assessments for English First Additional Language and Mathematics were not achieved.
With regard to the appointment of Principals, the Department reported that eight provinces could not introduce the competency assessments due to delays in the consultation process with teacher unions.

In respect of the Self-Diagnostic Assessments tool it was reported that the target set was too high and that a lack of an appropriate platform as well as required funding prevented the Department and provinces from undertaking the tests.
Progress on the Accelerated Schools Infrastructure Development Initiative (ASIDI) and Education Infrastructure Grant in 2015/16 With regard to the ASIDI programme, the Department reported that 100 schools have been built as at the end of the 2015/16 financial year.

The Department reported that while 8 5540 schools required maintenance, only 3 392 maintenance projects were undertaken in the 2015/16 financial year.

From a total budget of R2.009 billion for the 2015/16 financial year, 85 per cent or R1.
710 billion was spent across the nine provinces in South Africa.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 29 3.1.2 Expenditure patterns for the First Quarter of the 2016/17 financial year Expenditure per Economic Classification Summary per Economic Classification Adjusted Actual Economic Classification Appropriation Expenditure Variance % Spent Compensation of Employees Examiners and Moderators 402 112 21 794 100 543 301 569 25.00% 1 009 20 785 4.63% Transfers to Public Entities 1 162 484 760 198 402 286 65.39% R'000 R'000 Other Transfers Conditional Grants Schools Infrastructure Backlogs Indirect Grant Earmarked Funds Departmental Operations Office Accommodation Projects TOTAL Source: Department of Basic Education (2016) The Department was allocated an adjusted budget of R22.269 billion for the 2016/17 financial year.
At the end of the first quarter of the 2015/16 financial year, the Department had spent R7.064 billion or 31.72 per cent.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 30 [Wednesday, 30 November 2016 Expenditure performance on Earmarked Allocations and Conditional Grants at the end of the 2016/17 financial year Earmarked Allocation and Conditional Grant Expenditure for 2016/17 Adjusted Actual Service Appropriation Expenditure Variance % Spent Earmarked Funds: EPWP: Kha Ri Gude Workbooks NEEDU MST NSNP Matric Second Chance Conditional Grants: R'000 R'000 1 171 605 53 696 1 117 909 68 549 - Education Infrastructure 9 613 692 3 605 135 6 008 557 37.50% National School Nutrition Programme 6 006 012 2 022 775 3 983 237 33.68% HIV and AIDS (Life Skills Education) Maths, Science and Technology 230 849 362 444 23 084 36 244 207 765 10.00% 326 200 10.00% Source: Department of Basic Education (2016) In respect of the EPWP: Kha Ri Gude project, the Department reported that it has not yet signed the Memorandum of Understanding with the Department of Public Works and that classes would resume in October 2016 and thus fall outside the accounting period.
Similarly, the delivery of the workbooks for 2017 would commence in September 2016.

It was further reported that the transfers of Conditional Grants were made as scheduled.

The Department also reported on its non-financial performance and stated that 2 targets were not achieved, 4 were partially achieved, and 5 were fully achieved at the end of the first quarter of the 2016/17 financial year.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 31 In respect of the expenditure performance on the Education Infrastructure Grant at the end of the first quarter of 2016/17, it was reported that 17 per cent or R1.666 billion from a total allocation of R9.723 billion had been spent.

With regard to Maintenance at the end of the period under review, 20 per cent or R345.758 million of an available R1.750 billion had been spent across the nine provinces in South Africa.
3.2 Department of Health (Vote 16) 3.2.1 Expenditure patterns for the Fourth Quarter of the 2015/16 financial year Expenditure per Economic Classification Economic Classification Summary per Economic Classification Adjusted Budget Final Allocation Actual Expenditure Funds Available % Spent R'000 R'000 R'000 R'000 Compensation of Employees 774 278 750 097 750 097 0 100,0% Good and Services Transfers Capital Losses TOTAL Source: Department of Health (2016) The Department of Health (the Department) was allocated an adjusted budget of R36.25 billion for the 2015/16 financial year.
At the end of the fourth quarter of the 2015/16 financial year, the Department had spent R36.04 billion or 99.4 per cent.

In terms of Economic Classification, Compensation of Employees was allocated an adjusted budget of R750.09 million and the entire allocation had been spent by the end of the fourth quarter.
Goods & Services was allocated an adjusted budget of R1.38 billion and reflected an expenditure of R1.18 billion or 85.9 per cent at the end of the period ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 32 [Wednesday, 30 November 2016 under review.
Transfers & Subsidies reflected expenditure of R33.6 billion or 75.8 per cent of an adjusted budget of R33.55 billion, while Payments for Capital Assets reflected an expenditure of R567.82 million or 99.4 per cent of an adjusted budget of R571.22 million.
The reported main reasons for the under expenditure under the Goods and Services economic classification item were as follows: • Human Papilloma Virus Vaccinations (HPV) expenditure was slower than expected; • Contractual difficulties with condom supply; • Demographic Health Survey still in progress; • Late finalisation of service level agreements for the Diagnosis- Related Groups (DRG) and not all claims for GP Contracts had been received before 31 March 2016; and • Progress reports from funded NGOs were received during March 2016 and payments could not be processed before 31 March 2016.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 33 Expenditure on conditional grants Overall Expenditure per Grant Adjusted Budget Expenditure % Spent of Budget Grant Name R'000 R'000 % Schedule 4 and 5 Grants -Direct Grants Health Professionals Training & Development Grant 2 374 722 2 373 729 100,0% National Teartiary Sewrvices Grant 10 417 555 10 371 080 Comprehensive HIV/AIDS Grant 13 709 627 13 692 681 Health Facility Revitalisation Grant 5 699 849 5 493 343 National Health Insurance Grant 70 406 63 491 TOTAL 32 272 159 31 994 324 Schedule 6 Grants -Indirect Grants NHI Component CCMDD Health Practitioner Contracting Health Facility Revitalisation Grant Current Capital Machinery & Equipment Building & Fixed Structures HPV Component TOTAL Source: Department of Health (2016) 99,6% 99,9% 96,4% 90,2% 99,1% 96,3% 88,2% 97,3% 100,0% 100,0% 100,0% 100,0% 100,0% 79,4% 95,3% The total expenditure on the Department’s direct conditional grants was R31.9 billion or 99.1 per cent against a total adjusted budget of R32.27 billion.
The under spending was attributed to the Health Facilities Revitalisation Grant (HFRG) and the National Health Insurance Grant which reflect spending of 96.4 per cent and 90.2 per cent respectively.

The underspending in the HFRG was due to challenges with Implementing Agents and delays in the payment of invoices.

The NHI Grant underspending is largely due to challenges in Supply Chain Management and the late delivery of Ward Based Outreach Teams’ uniforms and other equipment.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 34 [Wednesday, 30 November 2016 The Department’s expenditure on indirect grants is R1.05 billion or 95.3 per cent of the total adjusted budget of R1.10 billion.

The contributors to under spending are the NHI Component which reflects under spending of 3.7 per cent due to the late contracting of pharmacy assistants and the HPV Component which reflects under spending of 20.6 per cent as a result of delays in submission of invoices by provinces.
3.2.2 Expenditure patterns and performance for the First Quarter of the 2015/16 financial year Expenditure per Economic Classification Economic Classification Summary per Economic Classification Original Budget R'000 Actual Expenditure Funds Available % Spent R'000 R'000 Compensation of Employees 873 398 204 952 668 446 Good and Services Transfers Capital Losses TOTAL 1 431 372 287 607 1 143 765 35 637 020 8 323 189 27 313 831 621 527 120 456 501 071 0 51 -51 38 563 317 8 936 255 29 627 062 23,2% 23,5% 20,1% 23,4% 19,4% Source: Department of Health (2016) ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 35 Expenditure on Health Conditional Grants Overall Expenditure per Grant Original Budget Expenditure % Spent of Budget Grant Name R'000 R'000 % Schedule 4 and 5 Grants -Direct Grants Health Professionals Training & Development Grant 2 476 724 582 345 National Teartiary Sewrvices Grant 10 846 778 2 459 468 Comprehensive HIV/AIDS Grant 15 290 603 3 566 192 Health Facility Revitalisation Grant 5 272 680 1 074 271 National Health Insurance Grant 85 227 10 791 TOTAL 33 972 012 7 693 067 Schedule 6 Grants -Indirect Grants NHI Component CCMDD Health Practitioner Contracting Capitation Model Health Facility Revitalisation Grant Current Capital Machinery & Equipment Building & Fixed Structures Ideal Clinic Component HPV Component TOTAL Source: Department of Health (2016) 23,5% 22,7% 23,3% 20,4% 12,7% 22,6% 37,2% 22,4% 41,5% 0,0% 17,3% 7,3% 21,5% 8,4% 23,8% 13,6% 1,4% 18,8% First quarter expenditure on the Department’s direct conditional grants is R7.69 billion or 22.6 per cent against a total budget of R33.97 billion.
The conditional grants reflecting under spending are the National Tertiary Services Grant (NTSG), Health Facilities Revitalisation Grant (HFRG) and the National Health Insurance Grant.

According to the Department, the underspending in the NTSG was due to delays in the recruitment process for specialists posts.

The underspending in the HFRG was due to slow progress by contractors and as a remedial action the Department reported that it will strengthen monitoring and oversight through site visits.
The NHI Grant underspending is due to delays in the implementation of business plans in provinces.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 36 [Wednesday, 30 November 2016 The Department’s expenditure on indirect grants is R237.14 million or 18.8 per cent of the total budget of R1.26 billion.
The contributors to under spending are the NHI Component which reflects under spending of 3.7 per cent due to the late contracting of pharmacy assistants and the HPV Component which reflects under spending of 20.6 per cent as a result of delays in the submission of invoices by provinces.
With regards to progress on the NHI Phase I, the Health System Strengthening pilots have yielded a range of positive results which include the provision of direct specialist support to districts with most districts in the country now having at least one specialised doctor.

Over 3 million learners in Grades R to 7 were reached with the deworming campaign and the 2016 integrated school health programme campaign has been synchronized with the HPV vaccination campaign.
In addition, a total of 644,892 patients have been enrolled on the chronic medicines supply programme.

In efforts to address the challenge of poor uptake of GPs in the NHI pilot districts, the department engaged with GPs in all the NHI pilot districts and addressed concerns which included covering travel costs, orientation workshops on departmental policies and guidelines, providing additional consultation space in clinics and ensuring the availability of medicines and equipment.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 37 3.3 Department of Water and Sanitation (Vote 36 ) 3.3.1 Expenditure patterns for the Fourth Quarter of the 2015/16 financial year Expenditure per programme Spending per Programme Final Actual Under/Over Programme Appropriation Expenditure Spending % Spent Administration 1 519 753 1 517 866 1 887 99,9% R'000 R'000 R'000 Water Planning and Information Management 684 446 668 816 15 630 Water Infrastructure Development 11 856 540 11 748 846 107 694 Water and Sanitation Services 1 414 674 1 359 576 Water Sector Regulation 271 117 261 868 55 098 9 249 97,7% 99,1% 96,1% 96,6% TOTAL 15 746 530 15 556 972 189 558 98,8% Source: Department of Water and Sanitation 2016 The Department’s final allocation for the 2015/16 financial year was R15.75 billion and R15.56 billion or 98.8 per cent was spent as at the end of the fourth quarter.
This translates to under expenditure of R189.56 million.
The reasons for under expenditure are as follows: • Programme 1: Transfers to other organs were not done due to outstanding documents • Programme 2: unfilled funded vacant posts • Programme 3: Due to delays in procurement of services and contractors by Implementing Agents • Programme 4: Due to late receipt of invoices • Programme 5: Due to delays in Water UA invoice finalisation and transfer to Water Research Council due to delays in finalisation of memorandum of agreement ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 38 [Wednesday, 30 November 2016 Expenditure on Conditional Grants Provincial and Municipal Conditional Grants Grant Actual Spent by % Grants and Transfers to Municipalities Allocation Transfer Municipality Spent R'000 R'000 R'000 Municipal Water Infrastructure Grant 1 803 932 1 803 932 850 342 47,1% Water Services Operating Subsidy 452 915 452 915 152 465 33,7% Rural Households Infrastructure Grant 48 182 48 182 25 538 53,0% TOTAL 2 305 029 2 305 029 1 028 345 44,6% Source: Department of Water and Sanitation (2016) As at the end of the fourth quarter of the 2015/16 financial year, the Department had transferred R2.31 billion in conditional grants and only R1.03 billion or 44.6 per cent had been spent by provinces and municipalities.
The Department highlighted that the variance between amounts transferred and expenditure is due to the misalignment of the Department’s financial year (31 March) and the municipal financial year (30 June) and that spending improved by the end of the municipal financial year.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 39 Expenditure of the Water Trading Entity EXPENDITURE FOR AUGMENTATION FUNDED PROJECTS FOR THE MONTH ENDED 31 MARCH 2016 YTD Annual PROJECT NAME Cash Flow Actual % spent Original Budget Revised Budget ORWRDP (Ph 2A) - De Hoop Dam 21 127 19 540 92% 21 053 21 127 ORWRDP-2C ORWRDP-2D ORWRDP-2E ORWRDP-2F - - 8 772 - - - 236 760 - - 1 - - - - - - GLeWAP Phase (Nwamitwa Dam) 25 579 25 579 100% 107 544 25 579 GLeWAP Phase (Tzaneen Dam Raising) 17 250 15 208 218 611 169 989 88% 78% 43 833 17 250 277 007 218 611 Dam Safety Rehab ilitation Programme(DSRP) Water Resources Project: Raising of Clanwilliam Dam Mokolo and Crocodile River (West) Water Augmentation Project 211 632 196 223 93% 406 464 211 632 - - 43 860 - Development of Raising of Hazelmere Dam 187 757 188 198 100% 219 539 187 757 GLeWAP Distrib ution (Mopani DM) 191 753 493 709 257% 140 351 191 753 Mzimvub u Water Projects Nandoni Nsami Pipeline Nootgedacht Water Acid Mine Drainage 75 852 79 457 105% 231 579 75 852 213 400 66 200 31% 100 000 213 400 7 839 7 839 100% - 7 839 - - - - NWRI Support/ Project management 191 680 159 369 Financial Management/Project support 180 472 172 675 83% 96% 232 200 191 680 199 988 180 472 SUBTOTAL VAT TOTAL Source: Department of Water and Sanitation (2016) The Department’s Water Trading Entity reflects an adjusted budget of R1.76 billion and R1.82 billion or 103 per cent was spent by the end of the fourth quarter of the 2015/16 financial year.
Overspending is reflected for the following projects: GLeWAP Distribution and Mzimvubu Water Projects.
Underspending is also reflected for a number of projects and reasons thereof are shown below: • ORWRDP (Phase 2A)- De Hoop Dam: reflects underspending of 8 per cent due to delays in the appointment of professional Service Provider (PSP) to do fencing and sub-surface drainage; ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 40 [Wednesday, 30 November 2016 • GLeWAP Phase (Tzaneen Dam Raising): reflects underspending of 12 per cent due to the delay in the appointment of the Implementing Agent; • Dam Safety Rehabilitation Programme: reflects underspending of 22 per cent due to delays caused by damage to construction equipment, slow delivery of material by supplier and industrial action that lasted for 2 weeks; • Water Resources Project: Raising of Clanwilliam Dam: reflects underspending of 7 per cent due to delays in the appointment of the Environmental Control Officer and appointment of sub- contractors; and • Nandoni Nsami: reflects underspending of 69 per cent.
Work on site was suspended on instruction from National Treasury.
3.3.2 Expenditure patterns and performance for the First Quarter of the 2015/16 financial year Expenditure per programme First Quarter Expenditure of the 2016/17 financial year Programme Administration Water Planning and Information Management Water Infrastructure Development Water and Sanitation Services Water Sector Regulation TOTAL Annual performance Planned Expenditure vs Actual Expenditure Appropriation % Spent Planned Expenditure Actual Expenditure Variance % spent R'000 R'000 R'000 R' -286 260 131,6% 350 443 250 976 99 467 71,6% 57 391 62 714 -5 323 109,3% 15 245 297 13,1% 1 899 791 2 001 769 -101 978 105,4% Source: Department of Water and Sanitation (2016) ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 41 The Department of Water and Sanitation was allocated a budget of R15.25 billion for the 2016/17 financial year of which R2.00 billion or 13.1 per cent had been spent as at the end of the first quarter.
The Department originally planned to spend R1.90 billion for the quarter thus resulting in over spending of R101.98 million.

The overspending is attributed to payments related to employee social benefits which could not be anticipated and previous financial year’s invoices for the Regional Bulk Infrastructure which were paid during the current financial year.
Although the Department reported overspending for this quarter there are areas of underspending due to vacant posts, outstanding performance bonuses, pay progressions and salary increases for senior management across all five programmes.

Expenditure on conditional grants The Department’s budgeted grant allocations are R4.69 billion and no transfers were made during the first quarter of the 2016/17 financial year.
Transfers are scheduled for the 2nd and 3rd quarter as per National Treasury’s payment schedule.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 42 [Wednesday, 30 November 2016 Expenditure of the Water Trading Entity FOR MONTH ENDED 30 JUNE 2016 YTD Annual PROJECT NAME Cash Flow Actual Variance Original Budget Adjustment Revised Budget ORWRDP (Ph 2A) - De Hoop Dam 1 360 5 461 (4 101) 22 000 - 22 000 ORWRDP-2C 43 669 43 669 - - 150 000 150 000 ORWRDP-2D 23 459 23 459 - 56 896 - 56 896 ORWRDP-2E 12 167 12 167 - 64 499 - 64 499 ORWRDP-2F 2 765 2 765 - 64 499 - 64 499 GLeWAP Phase (Nwamitwa Dam) Water Resources Project: Raising of Clanwilliam Dam GLeWAP Phase (Tzaneen Dam Raising) Development of Raising of Hazelmere Dam Mzimvubu Water Project Dam safety rehabilitation program (DSRP) NWRI Support/Project management 13 455 - 13 455 119 544 (21 000) 98 544 33 464 15 198 18 266 281 177 (72 000) 209 177 10 350 6 091 4 259 36 800 - 36 800 63 150 23 784 39 366 242 094 - 242 094 91 095 - 91 095 265 287 (57 000) 208 287 55 579 29 774 25 805 235 965 - 235 965 44 995 40 499 4 496 197 368 - 197 368 Financial Management 54 827 41 405 13 422 185 965 - 185 965 AMD Subtotal VAT TOTAL 255 525 - 255 525 599 811 - 599 811 705 862 244 273 461 590 2 371 905 - 2 371 905 98 821 34 198 64 623 332 067 - 332 067 804 683 278 471 526 212 2 703 972 - 2 703 972 Source: Department of Water and Sanitation (2016) The Department’s Water Trading Entity had an original budget of R2.70 billion of which R278.47 million or 10.3 per cent was spent by the end of the first quarter of the 2016/17 financial year.
The WTE had projected cash flow of R804.

68 million for the first quarter thus resulting in significant underspending of R526.21 million.
The projects reflecting underspending and the reasons thereof are shown below: • GLeWAP Phase (Tzaneen Dam Raising): delayed due to Geotechnical investigations; ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 43 • GLeWAP Phase (Nwamitwa Dam): delayed due to Geotechnical investigations; • Water Resources Project: Raising of Clanwilliam Dam: delays in the appointment of PSP , tender for PSP still to be advertised; • Development of Raising of Hazelmere Dam: Slow progress on site due to challenges with installation of operational anchors; • Mzimvubu Water Projects: Delayed due to Variation Order exceeding R20 million and thus needing approval by National Treasury; and • Dam Safety Rehabilitation Programme: delayed due to poor performance by sub-contractor, delays in Bid Evaluations due to new policy guidelines and delays due to challenges during the design process.
3.4 National Treasury (Vote 7) 3.4.1 Expenditure patterns for the Fourth Quarter of the 2015/16 financial year National Treasury was allocated an adjusted budget of R29.006 billion for the 2015/16 financial year of which R28.690 billion or 98.9 per cent had been spent.

This resulted in a variance of 1.1 per cent or R314.22 million being recorded.

The expenditure per programme will be depicted in the table below.
Summary Expenditure per programme 2015/16 Actual Programme Final Budget Expenditure Variance % Spent R'000 R'000 1.

Administration 386 645 376 303 10 342 97.3% 2.

Economic Policy, Tax, Financial Regulation and Research 132 730 131 272 1 458 98.9% 3.

Public Finance and Budget Management 268 889 262 314 6 575 97.6% ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 44 [Wednesday, 30 November 2016 4.

Asset and Liability Management 3 265 171 3 264 294 877 100.0% 5.
Financial Accounting and SCM Systems 783 753 774 091 6. International Financial Relations 3 547 662 3 546 099 9 662 1 563 98.8% 100.0% 7.

Civil and Military Pensions, Contributions to funds and other benefits 3 967 741 3 967 698 43 100.0% 8.

Technical Support and Development Finance 2 755 969 2 472 245 283 724 89.7% 9.

Revenue Administration 9 334 439 9 334 439 10.


Financial Intelligence and State Security TOTAL - - 100.00% 100.00% 4 562 062 4 562 062 29 005 061 28 690 817 314 244 98.9% Source: National Treasury (2016) The main reasons attributed for the under expenditure in Programme 8 were as a result of Employment Facilitation Creation Fund (Jobs Fund) disbursements which were not made due to Jobs Fund Partners not meeting the disbursement conditions.
Furthermore, transfer payments due to municipalities amounting to R23.4 million were withheld due to non-compliance to the Division of Revenue Act and the Neighbourhood Development Partnership Grant (NDPG) framework.

Under Programme 1, the under expenditure was as a result of delayed delivery of infrastructure systems servers within the Information Communication and Technology unit.
Performance Information per programme as at the end of 2015/16 In terms of non-financial performance at the end of the 2015/16 financial year, the Department reported that from a total of 135 targets, it had achieved 93 or 69 per cent of its targets, partially achieved 34, while 8 were not achieved.

The targets not achieved related to Programmes 3 and 5.
Key highlights for performance for the 2015/16 financial year include ensuring that over 140 000 new jobs are contracted for approved and active projects in the Jobs Fund, ensuring ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 45 that the value of government’s gross annual borrowing remains below R204.5 billion, leveraging over R4 billion in estimated third party investment and overseeing over 60 neighbourhood development partnership grant projects that are under construction per year.
3.4.2 Expenditure patterns for the First Quarter of the 2016/17 financial year Quarter 1 2016/17 - Actual Expenditure Outcomes per programme Year to date Programme Main Expenditure Actual Variance Variance Budget drawing Expenditure for the % target as at as at 30 June year 30 June 2016 2016 R’(000) R’(000) R’(000) 1.

Administration 412 661 2.

Economic Policy, Tax, 146 070 112 765 35 018 91 691 32 208 21 074 18.7% 2 810 8.0% Financial Regulation and Research 3.
Public Finance and 286 955 71 016 68 488 2 528 3.6% Budget Management 4.

Asset and Liability 107 211 21 654 21 642 12 0.1% Management 5.

Financial Accounting 849 854 189 590 361 883 (172 293) -90.9% and SCM Systems 6. International Financial 5 039 068 73 594 154 899 (81 305) -110.5% Relations 7.

Civil and Military 4 173 242 860 015 802 746 57 269 6.7% Pensions, Contributions to funds and other benefits 8.
Technical Support and 2 634 718 214 335 219 466 (5 131) -2.4% Development Finance ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 46 [Wednesday, 30 November 2016 9.

Revenue 10 009 2 502 288 2 502 288 Administration 151 10.
Financial Intelligence 4 812 487 1 035 878 1 035 876 - 2 0.0% 0.0% and State Security 28 471 5 116 153 5 291 187 (175 034) -3.4% TOTAL 417 Source: National Treasury (2016) The under expenditure in Programme 1 related to the delayed procurement of servers and storage infrastructure for disaster recovery, delayed payments due to outstanding invoices, and the savings on Compensation of Employees due to the freezing of vacant posts.
The over expenditure in Programme 5 related to the payment of R461 million for the purchasing of software licenses in respect of the Integrated Financial Management System (IFMS).

In respect of Programme 6, the over expenditure amounting to R81.305 million was due to 2015/16 financial expenditure for the payment for financial assets for shares acquisition of the African Development Bank which could not be made in the previous financial year due to funding constraints.
Performance Information per programme as at the end of Quarter 1 of 2016/17 From a total of 164 indicator targets for the 2016/17 financial year, the Department reported as follows at the end of the first quarter: • Achieved – 82 • Partially Achieved – 32 • Not Achieved – 8 • Not yet due for reporting - 42 ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 47 The Department also reported on its performance highlights for the first quarter of the 2016/17 financial year as follows: • 928 officials trained on the Infrastructure Delivery Management (IDM) toolkit; • 90.4 per cent funded positions filled and a 96.2 per cent staff retention rate; • 13 per cent higher than expected uptake by staff of development programmes; • 100 per cent of government’s liquidity requirements were met; • Interactions to manage and ensure effective relations with credit rating agencies held; • 100 per cent of procurement plans published on the new e-tender portal;’ • 49 transaction advisory projects registered far exceeding the 4 planned; and • 685 officials in national and provincial spheres of government trained in building public financial management competencies significantly above the targeted 75.
Performance on Conditional Grants National Treasury reported on its performance and expenditure on the Financial Management Grant (FMG), Integrated City Development Grant (ICDG), Infrastructure Skills Development Grant (ISDG), and the Neighbourhood Development Partnership Grant (NDPG).
In terms of the ICDG, it was reported that 79.3 per cent of the budget allocation was spent at the end of the 2015/16 financial year and 100 per cent or R124.486 million had been transferred to 16 municipalities under the ISDG.

With regard to the NDPG, it was reported that 96 per cent of the funds have been transferred to municipalities however only 76 per cent of same have been spent by receiving municipalities.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 48 [Wednesday, 30 November 2016 Jobs Fund Performance from inception to 30 June 2016 National Treasury highlighted the following performance areas of the Jobs Fund since its inception to the period under review.

• National Treasury reported that the Jobs Fund has implemented 6 funding rounds and that it has a portfolio of 104 projects, 97 of which were implementation and the balance being at a contracting stage.
Of the 104 projects, 44 are partnerships with the private sector and the balance are with Non-Governmental Organisations (NGOs) and public sector organisations.

• To date, R5.46 billion in grants funds have been allocated towards the fund and another R6.3 billion has been leveraged from project partners for job creation.

An amount of R3.3 billion has been disbursed to date.
• 121 481 permanent jobs have been created since inception, 157 267 persons have benefited from work readiness/technical training, and 19 000 short term jobs/internships were facilitated.

• Of the 121 481 permanent jobs created, 64 per cent went to youth and 58 percent went to women.
• In respect of income, 69 per cent of the jobs created had salaries which ranged between the minimum wage and R3 499; 25 per cent of the salaries ranged between R3 500 and R7 999; and for 6 per cent the salaries were more than R8 000 per month.

• More than 12 000 SMMEs have benefitted trough the Jobs Fund’s support to Enterprise Development projects and R1.7 billion has been disbursed to support same.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 49 3.5 Department of Public Works (Vote 11) 3.5.1 Expenditure patterns for the Fourth Quarter of the 2015/16 financial year Expenditure per Economic Classification Summary per Economic Classification – Quarter 4 of 2015/16 Annual Actual Percentage Economic Classification Appropriation Expenditure Spent Current Payments Compensation of Employees Good and Services R’000 R’000 454 959 372 393 435 858 366 035 % 96% 98% Transfers and Subsidies 5 412 407 5 411 314 100% Payments for Capital Assets Infrastructure Machinery and Equipment/Intangible - - - Assets 28 060 23 537 84% Payments for Financial Assets TOTAL 44 403 44 403 6 312 222 6 281 147 100% 99% Source: Department of Public Works (2016) The Department of Public Works has spent 99 per cent or R6.281 billion out of a total budget of R6.312 billion at the end of the 2015/16 financial year.
This resulted in an overall under expenditure of R31.075 million at the end of the financial year.
The reported under expenditure related to the following areas: • Compensation of Employees – due to vacancies relating to the EPWP which were filled in the latter part of the financial year; ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 50 [Wednesday, 30 November 2016 • Goods and Services - due to late receipt of invoices and therefore reported as accruals; and • Machinery and Equipment – under expenditure was linked to the vacancies.
Performance Information per programme as at the end of 2015/16 The Department reported that at the end of the 2015/16 financial year, it had an overall target achievement rate of 63 per cent.

Programme 1 achieved 87 per cent, 2 obtained 100 per cent, 3, 67 per cent, 4 achieved none of its targets and programme 5 managed to achieved 50 per cent.

The Department reported that it had 38 targets for the Fourth Quarter of 2015/16 from which 21 or 55 per cent were achieved.
Some of the targets not achieved include only 75% compliant invoices settled within 30 working days due to significant downtime of the transversal system during last quarter, only 742 179 work opportunities against a target of 1 127 186 created through the EPWP Phase 3 due to public bodies being unable to report on the work opportunities created timeously and only 46 surplus freehold office type properties against a target of 100 were let out for revenue generation.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 51 3.5.2 Expenditure patterns for the First Quarter of the 2016/17 financial year Expenditure per Economic Classification Summary per Economic Classification – Quarter 1 of 2016/17 Percentage Annual Actual Percentage Economic Classification of Budget Appropriation Expenditure Spent Current Payments Compensation of Employees Good and Services % 7% 7% R’000 R’000 % 470 825 431 297 118 945 67 940 25% 16% Transfers and Subsidies 85% 5 588 134 1 536 480 28% Payments for Capital Assets Machinery and Equipment/Intangible Assets 1% 38 508 6 598 17% TOTAL 100% 6 528 765 1 729 963 26% Source: Department of Public Works (2016) The Department reported that the expenditure patterns as per the above table were in line with drawings and that its budget will be fully spent at the end of the 2016/17 financial year.
Performance Information per programme as at the end of the First Quarter of 2015/16 The Department reported that it had 22 targets in the First Quarter from which 17 or 77 per cent were achieved, 3 were partially achieved, and 2 targets were not achieved.
The targets not achieved related to Programme 1 and were as follows: ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 52 [Wednesday, 30 Novem mber 2016 • 20 per cent red • 2 modules im duction in baseline of irregular expenditure e; and mplemented for the Property Management Trading Entity (Asset Register and Lease).
Expenditure and Performance of the Property Mana agement Trading Entity Expenditure as at the end of the Fourth Quarter of the 2015/16 financial year Source: Depa rtment of Public Works (2016) ANNOUNCEMENTS, TABLING GS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 53 The PMTE reflected a cash deficit of R812 million at the end of the Fourth Quarter of the 2015/16 financial year due to the following: • R340 million of municipal services expenditure incurred was not recovered from the client departments before the end of the financial year; • The day-to-day maintenance budget was over spent by R108 million - cash flow impact of subsequent payment of previous year’s accruals; • Property rates expenditure exceeded the 2015/16 allocation by R203 million resulting from the payment of validated historical municipal invoices identified through the rates verification project; and • Substantial 2014/15 asset related accrued expenses were incurred in 2015/16 against refurbishments resulting in the non- recoverable capital expenditure to exceed budget by R228 million.
In terms of non-financial performance, the PMTE reported that from a total of 54 targets for the Fourth Quarter of the 2015/16 financial year, 26 or 48 percent were achieved.

In terms of the annual targets, the PMTE achieved 70 percent for the 2015/16 financial year.
In terms of targets achieved, there was a 284,4 million reduction in kilowatt-hour (Kwh) usage achieved on energy consumption against a target of 220 million KwH and all of investment decisions (73 of 73) have been approved on proclaimed fishing harbours Infrastructure.

However, the Department only attained 5% (253 of 5553) efficiency (turnaround time) for unscheduled maintenance on freehold property within 5 days against a 65% target.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 54 [Wednesday, 30 November 2016 Expenditure per Economic Classification for the First Quarter of 2016/17 Summary per Economic Classification – Quarter 1 of 2016/17 Percentage Annual Actual Percentage Economic Classification of Budget Appropriation Expenditure Spent Current Payments Compensation of Employees Good and Services Cleaning and Gardening Operating Leases Repairs Maintenance Municipal Services Transfers and Subsidies Property Rates % 75% 12% 6% 2% 35% 7% 10% 2% 10% 10% R’000 R’ % 25% 23% 11% 24% 26% 26% 30% 30% 9% 9% Payments for Capital Assets 15% 1 836 995 372 782 20% Machinery and Equipment/Intangible Assets Refurbishments DPW capital Infrastructure 0.3% 9% 6% 40 414 1 094 172 702 409 18 941 247 018 106 823 47% 23% 15% TOTAL 100% 11 786 524 2 659 393 23% Source: Department of Public Works (2016) The PMTE reported that the expenditure as per the above table is in line with projections for the First Quarter of the 2016/17 financial year and will as such not have any impact on service delivery.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 55 The table below will provide the breakdown of the PMTE’s revenue for the First Quarter of 2016/17.
Revenue – Quarter 1 of 2016/17 Percentage Actual Percentage of Budget Annual Budget Revenue of Revenue % R’000 R’000 % State Owned Accommodation Charges 36% 4 150 315 2 552 317 61% Private Owned Accommodation Charges 33% 3 953 648 508 124 13% Management Fees on Municipal services Augmentation Rental debtors Other Total Source: Department of Public Works (2016) In terms of non-financial performance, the PMTE reported that it had 24 targets for the First Quarter of 2016/17 from which 12 or 50 per cent were achieved.
In terms of the operationalisation of the PMTE, it was reported that the challenges included the condition of some buildings which inhibits user departments from fulfilling their service delivery mandates; infrastructure backlogs, non-compliance with laws and regulations and the inability to deliver projects on time and within budgets; and the tight fiscal space under which the entity operates.

The PMTE reported on the interventions undertaken to mitigate against the aforementioned challenges.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 56 [Wednesday, 30 November 2016 The PMTE also reported on the challenges and mitigating actions with the billing system and invoicing of client departments which is depicted in the table below.
CHALLENGE MITIGATION ACTION TIMEFRAMES Confirmation of occupancy by clients Confirmation of occupancy 31 January 2016 signed off by all client departments Signing of lease contracts based on Signing of lease agreements by 31 March 2016 list of properties and extent user departments based on list of properties and extent used Current payment system not capable Implementation of the asset 31 October 2016 of handling new asset register and register and leasing modules on expected volume of transactions and Archibus/SAGE.
the related billing requirement Current billing of clients not based on Approval of proposed tariffs by 1 April 2016 a fair and systematic manner.

Budget National Treasury.

devolved on outdated client occupancy Clients budgets not re-prioritised with National Treasury to re- 1 April 2016 NT, additional funding might be distribute clients funds to be in necessary through MTEF process line with the proposed tariffs.
Source: Department of Public Works (2016) ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 57 Challenges of the Independent Development Trust (IDT) The IDT reported that it received a qualified audit opinion for the 2013/14 financial year followed by a disclaimed opinion in 2014/15 and another disclaimer in 2015/16.

This was after it received 11 consecutive unqualified audit opinions from the period 2002/03 to 2012/13.
This was due to the following: • Material imbalances of programme spent and programme reserves and liabilities for audit purposes without accurate and complete accounting records; • Inadequate reconciliations performed on the underlying accounts relating to management fees, trade receivables, impairment of trade receivables and provision for doubtful debts; • The impact of take-on balances in the project accounting system emanating from the migration process that took place in 2013/14; • Vulnerable funding model opening the organisation to the threat of solvency; • Prolonged transformation process impacting adversely on staff morale, staff turnover, strategic and operations planning, and organisational performance.
The IDT further reported that it received R50 million in each of the last three financial years from National Treasury to help bridge its transition to self-funding.

The IDT further stated that considering the vulnerable state of its finances, the continuation of the support for a further two years will strengthen the organisation.

In conclusion, it was reported that action has been taken and continues to be taken against responsible officials for transgressions and dereliction of duty.
This included action against the former Chief Financial Officer and Acting Executive responsible for Strategy and Corporate Performance both of whom had had their services terminated.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 58 [Wednesday, 30 November 2016 3.6 Department of Department of Telecommunications and Postal Services (Vote 32) 3.6.1 Expenditure patterns for the Fourth Quarter of the 2015/16 financial year Expenditure per Programme Spending per Programme Programme Final Budget Actual Expenditure Variance % Spent R'000 R'000 R'000 Administration ICT International Affairs Policy Research abd Capacity Dev ICT Enterprise DEV & SOC Oversight Infrastructure Support TOTAL Source: Department of Telecommunications and Postal Service (2016) The Department’s final allocation for the 2015/16 financial year was R1.40 billion and R1.30 billion or 92.5 per cent was spent by the end of the fourth quarter.
This translates to under expenditure of R105.16 million.

The under expenditure is attributed to delays in the filling of vacant positions and delays in the implementation of the South African Connect Broadband project.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 59 3.6.2 Expenditure patterns for the First Quarter of the 2016/17 financial year Programme Spending per Programme Budget Projected Expenditure Actual Expenditure Variance % Spent R'000 R'000 R'000 R'000 Administration ICT International Affairs Policy Research abd Capacity Dev 193 337 44 710 95 618 48 407 5 119 23 660 52 126 -3 719 27,0% 4 071 17 797 1 048 5 863 ICT Enterprise DEV & SOC Oversight 891 801 717 236 658 420 58 816 Infrastructure Support 1 191 946 171 098 6 865 164 233 9,1% 18,6% 73,8% 0,6% TOTAL 2 417 412 965 520 739 279 226 241 30,6% Source: Department of Telecommunications and Postal Service (2016) The Department has an allocated budget of R2.42 billion for the 2016/17 financial year and R739.28 million or 30.6 per cent had been spent by the end of the first quarter.
The projected spending for the first quarter of the 2016/17 financial year was R965.52 million thus resulting in underspending of R226.24 million.

The underspending is attributed to vacant positions, delays in the implementation of projects due to late appointment of service providers, and transfers to departmental entities not done as per the draw down schedule.
In particular, the Broadband Connectivity Implementation Plan was not finalised and connectivity to 675 identified sites not yet project managed due to delays in supply chain management processes.
Resolving challenges in the South African Post Office With regards to resolving challenges of leadership and governance, the Department submitted that the appointment of the Board and Group CEO has assisted in bringing leadership stability and that the filling of other critical senior positions (CFO, COO and Company Secretary) is being fast-tracked.
Other interventions include the maintenance of records of fruitless and wasteful expenditure, irregular expenditure, material losses and a financial misconduct committee has been established and it maintains regular reviews on a monthly basis and reports to the Board through the Audit & Risk Committee.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 60 [Wednesday, 30 November 2016 With regards to funding and operational challenges, R650 million has been allocated for the turnaround project and R3.7 billion long term borrowing has been secured with the commercial banks by SAPO.

The department reported that SAPO is set to finalise its strategy for its parcel and logistics subsidiary.
Moreover, SAPO has now complied with all SARB’s requirements for the application for authorization to establish this bank and it is envisaged that the process of obtaining a banking license should be completed by end of June 2017.

4.
Findings The Standing Committee on Appropriations, having deliberated with the invited departments on the fourth quarter expenditure patterns for the 2015/16 financial year and the first quarter expenditure patterns for the 2016/17 financial year, makes the following findings: 4.1 Overall Spending Performance as at end of Fourth Quarter 2015/16 and First Quarter 2016/17 4.1.1 The Committee notes that preliminary 2015/16 spending outcomes show that National departments have spent and transferred R506.7 billion as at the end of 2015/16, whilst having scheduled drawings of R512 billion leaving an estimated under spending of R5.3 billion at the end of 2015/16.
The largest amounts of underspending were under the departments of Cooperative Governance and National Treasury.

The next largest areas of underspending, although marginal compared to total vote budget, are recorded under the departments of Social Development, Human Settlements, Water and Sanitation and Basic Education.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 61 4.1.2 The Committee notes that preliminary spending outcomes show that three departments overspent their final available budgets and these are the Department of International Relations and Cooperation which overspent by R133 million due to exchange rate fluctuations on foreign currency denominated and non- discretionary expenditure items in missions abroad and an increase in membership fees; Parliament which overspent its budget by R50 million mainly on compensation of employees and Correctional Services which overspent its budget by R121 000 on goods and services.
4.1.3 The Committee notes that 20.5 per cent of operational expenditure in quarter 4 of 2015/16 was within Administration programmes, representing R43.2 billion.

This is an increase from the equivalent period in the previous financial year of R2.5 billion, or 6.1 per cent.

The largest rand value expenditure under Administration occurs in departments with large personnel structures: Police, Correctional Services, Defence and Home Affairs.
The Committee notes with concern that the three largest proportions of budget spent on Administration are in the departments of Women, Economic Development and Communications.

4.1.4 The Committee notes that as at the end of 30 June 2016, departments have spent R161.2 billion or 22.4 per cent of the available total budget.

Spending for the first quarter is R5 billion or 3.1 per cent less than projected expenditure for the quarter.
The Departments that significantly spent less than projected are Cooperative Governance and Traditional Affairs, Sports and Recreation, Telecommunications and Postal Services, Rural Development and Land Reform, and Small Business Development.

The Departments that spent significantly higher than projected are the Presidency and Water and Sanitation.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 62 [Wednesday, 30 November 2016 4.1.5 The Committee finds that in general there is a lack of consequence management in national departments for non- compliance and transgression of the Public Financial Management Act (PFMA) and Treasury regulations.
The Committee is of the view that implementing punitive measures as prescribed by the PFMA will curb trends of non-compliance that result in irregular expenditure, fruitless and wasteful expenditure and the non-payment of suppliers within 30 days.
4.1.6 The Committee finds the following challenges across departments which in many service delivery programmes are responsible for reported under spending and the non- achievement of targets by national departments: • Medium Term Expenditure Framework planning tools and mechanisms are still not sufficiently embedded in the work of Departments and entities; • There remain challenges in procurement planning and general supply chain management with a lack of alignment between the procuring department/entity’s delivery strategy and resource plan with its procurement plan; • Contract management remains an area of concern and needs to improve so as to realise increased savings and good- quality and on-time delivery of services; • There remain vacant posts in many critical positions within national departments; and • There remain challenges in the capacity of departments for the effective implementation of sound financial administration and management.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 63 4.2 Department of Basic Education 4.2.1 The Committee is concerned about the recurring under expenditure by the Department on the Accelerated Schools Infrastructure Development Initiative (ASIDI) programme.

An under expenditure of R423.4 million has been recorded on the ASIDI programme at the end of the 2015/16 financial year.
Whilst the Committee notes that some delays are due to the rationalisation of schools, the Committee is of the view that this cannot be used to excuse any under-expenditure of voted funds and implores the Department to complete the rationalisation process expeditiously.

The Committee emphasises the need for proper planning by the Department especially given that underperformance on the ASIDI programme will negatively affect the attainment of the National Development Plan (NDP) targets.
4.2.2 The Committee is concerned about the Department’s performance in terms of payment of invoices within 30 days and is also concerned about the effectiveness of the Department’s contractual relationship with the Department of Public Works.

The Committee is of the view that challenges in contract management between the Department of Public Works and client departments needs to be addressed expeditiously.
4.2.3 With regard to the Expanded Public Works Programme (EPWP) Kha Ri Gude Literacy Project, the Committee is concerned about the reported R35.6 million or 45.25 per cent under expenditure as at the end of the Fourth Quarter of the 2015/16 financial year.

Of even more concern is the fact that zero percent of the EPWP: Kha Ri Gude budget allocation was spent by the end of the First Quarter of the 2016/17 financial year.
However, the Committee notes the Department’s indication that classes for the said programme will resume in October 2016.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 64 [Wednesday, 30 November 2016 4.2.4 With regard to the maintenance of schools infrastructure, the Committee notes with concern that only 3 392 schools were earmarked for maintenance during the 2015/16 financial year whilst 8 540 required maintenance work.
At the end of June 2016, the Department managed to spend 20 per cent or R345.758 million of a total allocation of R1.750 billion for the 2016/17 financial year.

4.2.5 In respect of the Department’s performance against pre- determined targets as contained in its Annual Performance Plan for the 2015/16 financial year, the Committee expressed concern that some of these were not SMART as there was a material disjuncture between planned targets vis-à-vis actual performance.
4.3 Department of Health 4.3.1 The Committee is concerned about the Department’s trends of underspending in the 2015/16 financial year and notes that that the same patterns of underspending are emerging in the 2016/17 financial year.

The Committee notes with serious concern persistent challenges in its operating environment which are due to a lack of people-centred and effective inter-governmental coordination and challenges in concurrent service delivery areas.
In particular, the Committee notes with serious concern the Department’s reasons for the aforementioned underspending which include procurement challenges in provinces and challenges with the responsiveness of the Department of Public Works as an Implementing Agent for the maintenance and rollout of health infrastructure projects.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 65 4.3.2 The Committee is concerned about the underspending in the indirect portion of the National Health Insurance Grant and is of the view that the inclusion of a large number of smaller projects in the master project list for this grant detracts from the Department’s focus on larger projects and that consideration should therefore be given to whether maintenance projects should be shifted back to provinces 4.3.3 The Committee welcomes the submission by the Department’s Audit Committee that the Department has a risk management strategy in place and that all branches manage risks successfully and are evaluated and tracked by the Audit Committee on a quarterly basis.
The Committee also welcomes the Department’s assertions that all internal controls are in place and working effectively as evidenced by the decrease in repetition of findings raised by both the Internal Auditor and the Auditor-General.
4.3.4 The Committee notes that a significant budget of the Department relates to conditional grants transferred to provinces and is therefore concerned about the Audit Committee’s submission that that there are extensive challenges which emanate from provinces which pose a risk to the Department’s performance.
4.4 Department of Water and Sanitation 4.4.1 The Committee is concerned that the Department’s critical posts for leadership stability such as the Director-General and Chief Financial Officer are still vacant.

The Committee is also concerned with the overall number of vacancies in the Department and the impact thereof on spending performance and service delivery.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 66 [Wednesday, 30 November 2016 4.4.2 The Committee notes reported delays in procurement and challenges with contract management which were cited as the reasons for underspending on the Department’s infrastructure projects.
The Committee is seriously concerned that the same reasons were indicated previously by the Department together with proposed remedial actions and is of the view that there should be visible progress on the implementation of the said remedial actions.

4.4.3 The Committee notes with concern the Department’s indication that its monitoring mechanisms over conditional grants are weak.
The Committee is of the view that the Department as a transferring national officer should develop systems for monitoring conditional grants to ensure that they are spent effectively.

4.5 National Treasury 4.5.1 National Treasury underspent an amount of R225 million for the Employment Creation Facilitation Funds (ECFF) transfer payment which was scheduled for payment in March 2016.

The funds could not be disbursed as the Jobs Fund Partners had not met the disbursement conditions which include job targets.
4.5.2 The Committee notes with concern that National Treasury underspent an amount of R23.4 million due to transfer payments to municipalities being withheld due to municipalities’ non- compliance to the Division of Revenue Act regulations and the NDPG framework.

While the Committee notes the reasons for the withholding of funds, it is of the view that any withholding of funds from municipalities should not in any way adversely affect the delivery of services to the public.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 67 4.5.3 The Committee is concerned about the substantial over expenditure in Programme 6, Financial Accounting and Supply Chain Management Systems, wherein R172.2 million has been over-spent on the Integrated Financial Management System as at the end of the first quarter of the 2016/17 financial year.
The Committee cautions the Department against the possible unauthorised expenditure that may occur at the end of the financial year and emphasises that the Department should strictly adhere to budget management controls and regulations.

4.5.4 The Committee notes with concern that Buffalo City Metro, Nelson Mandela Bay and the City of Tshwane spent less than 50% of their 2015/16 allocation for the Integrated City Development grant programme.
The Committee views integrated cities as critical for enabling quality human settlements especially given that the ICD grant aims to incentivise cities to engage in long-term planning.

4.5.5 The Committee welcomes the submission by the Department’s Audit Committee that the Department has a risk management strategy in place and that all branches have risk management plans and that these are evaluated and tracked by the Audit Committee on a quarterly basis.
4.5.6 The Committee welcomes the positive contribution that National Treasury is making towards the attainment of National development Plan objectives which includes over 140 thousand new jobs contracted for approved and active projects in the Jobs Fund, ensuring that 18 long term urban regeneration programmes are registered per year, ensuring over 80 thousand individuals are trained per year to assist with the implementation of financial management reforms and ensuring the successful leveraging of over R4 billion in estimated third party investment for improved service delivery.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 68 [Wednesday, 30 November 2016 4.6 Department of Public Works 4.6.1 The Committee notes with serious concern the non-attainment of performance targets under Programme 4, Property and Construction Policy and Research, as at the end of the Fourth Quarter of the 2015/16 financial year.

The Committee views the promotion, growth and transformation of the construction and property industries as critical for radical transformation.
4.6.2 The Department created 742 179 work opportunities through Phase 3 of the EPWP programme during the 2015/16 financial year.

Furthermore, 1 294 beneficiaries participated in the Department of Public Works’ Skills Development programme which was above the targeted 1 067 for the 2015/16 financial year.
4.6.3 The Committee notes with concern the current level of performance of the Independent Development Trust (IDT) as evidenced by the disclaimed audit opinions from the Auditor General South Africa in the 2014/15 and 2015/16 financial years.

The Committee however notes the interventions undertaken to remedy the situation including actions taken against responsible officials for transgressions and dereliction of duty.
4.6.4 The Committee notes with concern that the Property Management Trading Entity recorded a cash deficit of R812 million as at the end of the 2015/16 financial year.

Furthermore, the Committee is concerned at the current poor state of a number of buildings within the portfolio of properties managed by the Department of Public Works.

The Committee however notes the interventions undertaken by the Department to improve its performance with regard to the aforementioned.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 69 4.6.5 The Committee notes that a number of interventions are underway including the Efficiency Enhancement programme to improve access to, and the quality of, the State’s immovable assets, the introduction of a monitoring and evaluation process to measure the performance of project managers to expedite the delivery of infrastructure projects; and the development of a financial model with a focus on revenue generation through various interventions.
The Committee will be watching progress on these interventions closely.

4.7 Department of Telecommunications and Postal Services 4.7.1 The Committee notes that although the Department’s report cites vacancies as a reason for underspending, all vacancies have subsequently been filled except for four strategic posts i.e.
the Director General position whereby the filling process is currently under way and three Deputy Director General posts which are currently on hold due to disputes on the dismissals of previous incumbents.

The Committee also notes that the Department’s two strategic vacant positions are no longer funded and that the Department is in negotiations with National Treasury for the funding.
4.7.2 The Committee is concerned about the under spending related to delays in the Digital Migration project and is of the view that the Department should put in place mitigation mechanisms to ensure that the project completion target date of 2020 is attained.

The Committee notes with concern the Department’s indication that there may be resource constraints and challenges around public awareness for the requirements of Set Top Boxes.
The Committee is also concerned about delays in the South Africa Connect Broadband project and the slow responsiveness of the Department in implementing the Cabinet resolution for the appointment of Telkom.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 70 [Wednesday, 30 November 2016 4.7.3 The Committee welcomes the indication by the Audit Committee that all risk management and governance structures and tools in the Department are in place and working effectively.
The Committee also acknowledges the indication that there has been great improvement in the Department’s achievement of performance targets.

4.7.4 The Committee notes with concern the Audit Committee’s indication that under expenditure in the Department is as a result of weaknesses in the Supply Chain Management processes and the lack of monthly Budget Management monitoring for early detection of potential spending challenges and application of remedial action.

5.
Recommendations The Standing Committee on Appropriations having engaged with the invited departments on the fourth quarter expenditure report for the 2015/16 financial year and the first quarter expenditure report for the 2016/17 financial year, recommends as follows: 5.1 That the Minister of Finance should ensure the following: 5.1.1 That National Treasury develop systems and strengthen mechanisms aimed at ensuring that norms are implemented for minimising administration budgets and that frontline service delivery programmes are prioritised in budget programme structures.
5.1.2 That National Treasury strengthen efforts at ensuring the Job Fund projects reach all provinces especially the rural areas and increase emphasis on knowledge intensive and technology intensive sectors as these are critical for a competitive future information economy.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 71 5.1.3 That National Treasury together with the Department of Planning, Monitoring and Evaluation strengthen Medium Term Expenditure Framework planning tools and ensure that these are embedded in budgeting and planning across departments.
5.2 That the Minister of Basic Education should ensure the following: 5.2.1 That the Department of Basic Education together with the Department of Planning, Monitoring and Evaluation and other stakeholders should develop mechanisms for appropriate sanctions to discourage poor performance, especially in ensuring that the attainment of targets in the annual performance plans is aligned to budget planning and spending performance.
5.2.2 That the Department of Basic Education together with the National Treasury and other stakeholders should develop mechanisms aimed at dealing expeditiously with non-performing contractors for the effective provision and maintenance of schools’ infrastructure.

5.2.3 That the Department of Basic Education should finalise the rationalisation of schools process expeditiously.
5.3 That the Minister of Health should ensure the following: 5.3.1 That the Department of Health together with the Department of Planning, Monitoring and Evaluation and other stakeholders should develop mechanisms for appropriate sanctions to discourage poor performance, especially in ensuring that the attainment of targets in the annual performance plans is aligned to budget planning and spending performance.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 72 [Wednesday, 30 November 2016 5.3.2 That the Department of Health strengthen efforts to implement peer review mechanisms and integrate knowledge sharing amongst district offices aimed at improving the functioning and quality of healthcare facilities.
5.3.3 That the Department of Health together with the Department of Planning, Monitoring and Evaluation and other stakeholders urgently develop systems and mechanisms aimed at resolving challenges in the rollout of concurrent functions with emphasis on ensuring the effective delivery of healthcare services.

5.3.4 That the Department of Health in collaboration with National Treasury consider streamlining the master project list of health infrastructure projects by shifting maintenance projects to provinces.
5.4 That the Minister of Water and Sanitation should ensure the following: 5.4.1 That the Department of Water and Sanitation together with the Department of Planning, Monitoring and Evaluation and other stakeholders should develop mechanisms for appropriate sanctions to discourage poor performance, especially in ensuring that the attainment of targets in the annual performance plans is aligned to budget planning and spending performance.
5.4.2 That the Department of Water and Sanitation together with the Office of the Chief Procurement Office develop systems and protocols aimed at ensuring effective procurement planning and contract management for the smooth provision and maintenance of water services infrastructure.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 73 5.4.3 That the Department of Water and Sanitation develops and implement systems for the effective monitoring of the rollout of conditional grants with emphasis placed on ensuring visible service delivery performance.
5.5 That the Minister of Public Works should ensure the following: 5.5.1 That the Department of Public Works together with the Department of Planning, Monitoring and Evaluation and other stakeholders should develop mechanisms for appropriate sanctions to discourage poor performance, especially in ensuring that the attainment of targets in the annual performance plans is aligned to budget planning and spending performance.
5.5.2 That challenges between the Department of Public Works and how it services client departments be addressed expeditiously.
5.6 That the Minister of Telecommunications and Postal Services should ensure the following: 5.6.1 That the Department of Telecommunications and Postal Service together with the Department of Planning, Monitoring and Evaluation and other stakeholders should develop mechanisms for appropriate sanctions to discourage poor performance, especially in ensuring that the attainment of targets in the annual performance plans is aligned to budget planning and spending performance.
5.6.2 That the Department of Telecommunications and Postal Service together with the Office of the Chief Procurement Office develop systems and protocols aimed at ensuring effective procurement planning and contract management for the broadband implementation project and in how it supports the Broadcasting Digital Migration (BDM) project.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 74 [Wednesday, 30 November 2016 5.7 The Minister of International Relations and Cooperation should ensure that the Department of Internal Relations and Cooperation together with National Treasury, the Department of Planning, Monitoring and Evaluation and other stakeholders should develop mechanisms for the alignment of strategic plans, annual performance plans and budgets so as minimise the impact of exchange rate fluctuations.

6.
6.

Conclusion The responses to the recommendations as set out in section 5 above by the relevant Executive Authorities must be sent to Parliament within 60 days of the adoption of this report by the National Assembly.

Report to be considered.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 75 3.
REPORT OF STANDING COMMITTEE ON APPROPRIATIONS ON THE 16TH ASSOCIATION OF PUBLIC ACCOUNTS COMMITTEES (APAC) CONFERENCE 2016: “CONSOLIDATING THE 22 YEARS’ GAINS OF OVERSIGHT: ACCELERATING PUBLIC ACCOUNT-ABILITY”.

BLOEMFONTEIN, FREE STATE, 18 – 22 SEPTEMBER 2016, Date 29 November 2016 The Standing Committee on Appropriations, having attended a Conference in Free State from 18 to 22 September 2016, reports as follows: 1.
Introduction The Standing Committee on Appropriations (the Committee) was established in terms of the Money Bills Amendment Procedure and Related Matters Act, No.

9 of 2009 (the Money Bills Act).
In terms of section 4(3) of the Money Bills Act, each House must establish a Committee on Appropriations whose powers and functions include considering and reporting on the following matters: • Spending issues; • Amendments to the Division of Revenue Bill, the Appropriation Bill, Supplementary Appropriation Bill and the Adjusted Appropriation Bill; • Recommendations of the Financial and Fiscal Commission (FFC), including those referred to in the Intergovernmental Fiscal Relations Act, 1997 (Act No.
97 of 1997); • Reports on actual expenditure published by the National Treasury (section 32 reports); and • Any other related matters.

The Standing Committee on Appropriations attended the 16th APAC Conference which was held at the Performing Arts Centre of Free State at the Free State Province in Bloemfontein on 18-22 September 2016.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 76 2.
Committee Delegation: [Wednesday, 30 November 2016 Based on the above mandate, the Committee was invited by the Association of Public Accounts Conference (APAC) to be part of its 16th Bi-annual Conference from 19 to 22 September 2016 at the Performance Arts Centre of Free State (PACOFS) in Bloemfontein.
The theme for the conference was ‘Consolidating the 22 years gains of oversight: Accelerating Public Accountability.’ The conference was attended by the following Committee Members: Ms YN Phosa (Chairperson), Mr NE Gcwabaza (ANC), Dr. CQ Madlopha (ANC), Ms SCN Shope-Sithole (ANC), Ms DZ Senokoanyane (ANC), Ms MNS Manana (ANC), Dr MJ Figg (DA), Ms N Louw (EFF), and Mr .

AM Shaik-Emam (NFP).


The delegation was accompanied by the following parliamentary officials: Mr Phelelani Dlomo (Committee Researcher), Mr Musa Zamisa (Committee Researcher) and Mr G Mankayi (Committee Assistant).

3.
Themes and Guest Speakers Theme Guest Speaker Organisations Sub-theme 1 - Panel Mr Kenneth Brown National Treasury Discussion: “Dealing with Supply Chain Management (SCM) challenges and consequence management in the public sector" Chief Procurement Officer Office of the Chief Procurement Officer (OCPO) Mr Kimi Makwetu Auditor-General of South Africa Auditor-General (A-GSA) Sub-theme 2- Panel Ms Neila Orlandi Parliamentary Budget Office (PBO) Discussion: "Entrenching the role of oversight in the Deputy Director budgeting process" Mr Sisa Ntlango Deloitte Director ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 77 Sub-theme 3 - Panel Cllr Thabo Manyoni SA Local Government Association Discussion: "Institutionalisation of Municipal Public Accounts Committees) (MPACs)” National Chairperson (SALGA) Hon.
Des Van Rooyen Cooperative Governance & Traditional Affairs (COGTA) Minister of Cooperative Governance & Traditional Affairs Sub-theme 4 – Panel Hon Themba Godi Parliament of the Republic of South Discussion: “Curbing Illicit Financial Flows in Africa” Chairperson of the Standing Committee on Public Accounts Africa (RSA) Adv Mojanku Gumbi African Union/ECA High Level Panel on Illicit Financial Flows from Africa 4.

Main Discussion 4.1.

Main Themes 4.1.1.


Theme 1: Dealing with Supply Chain Management (SCM) Challenges and Consequence Management in the Public Sector.

Mr Kimi Makwetu outlined various legislative frameworks which govern SCM and consequence management in the South African public sector.

Mr Makwetu and Mr Brown identified the Constitution as the key legal instrument.
Other legal instruments ranged from the Public Finance Management Act (PFMA), Municipal Finance Management Act (MFMA), Municipal Systems Act (MSA), Preferential Procurement Policy Framework Act (PPPFA), Prevention and Combatting of Corrupt Activities Act (PRECCA), Disclosure Framework, Preferential Procurement Regulations, Treasury Regulations, Municipal Supply Chain Management Regulations, Public Service Regulations, Performance Regulations and the Disciplinary Regulations.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 78 [Wednesday, 30 November 2016 The speakers pointed out that consequence management remained a challenge, especially in the SCM environment, despite the existence of multiple legislative and institutional frameworks.
Apart from a declining trend in unauthorised expenditure from R1.9 billion in 2013/14 to R947 million in 2015/16, Mr Makwetu cited the following: • An upward trend in the number of auditees that incurred irregular expenditure from 257 (58 percent) in 2013/14 to 272 (59 per cent) in 2015/16, • An increase in irregular expenditure from R28.9 billion in 2013/14 to R31.6 billion in 2015/16, • An increase in fruitless and wasteful expenditure from R1 billion in 2013/14 to R1.1 billion in 2015/16.
Mr Makwetu attributed the challenge of SCM environment to the following factors: • Process: Lack of proactive planning which informs procurement; lack of focus which expands lead times for the procurement process, culture of forcing missed deadlines, and creating service delivery challenges; business processes and organisational alignment which is unfavourable to sound SCM processes; lack of credible information.
• Technology & Systems: Lack of sufficient internal controls and systems; limited systems for record keeping; limited reporting capabilities; lack of systems to support contract management and monitoring.

• People: Lack of customer focus; insufficient buy-in from top management; lack of clear definitions of roles and responsibilities; capability, capacity and calibre; lack of linkage between skills/knowledge and operational and strategic requirements.
Mr Brown, on the other hand, identified the following contributing factors: • The nature of the system in the public sector which was too big and comprises a large number of procuring departments, municipalities and entities, ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 79 • Unseen procurements (i.e.
small contracts) and deviations, particularly because there was no need for another tender process in case of deviations, • The public sector’s failure to use its purchasing power given that government is the biggest consumer of goods and services in the market.
Mr Brown identified the following measures taken by the OCPO to address SCM challenges: • The OCPO has started to work with the South African Revenue Service (SARS) to curb conflict of interest in cases where government employees are getting government contracts, • The OCPO is implementing the e-tender portal which is aimed at enforcing transparency, thus curbing multiple SCM irregularities, • The OCPO has started to use avenues such as the Amazon.com to identify cheapest suppliers and improve efficiency in the procurement process.
Mr Makwetu further discussed the state of consequence management in the public sector.

He cited an increase in the number of senior managers (SMS members) found guilty of financial misconduct from 22 in 2004/05 to 64 in 2012/13.

He also cited an example of the unsatisfactory rate of compliance with the Financial Disclosure Framework by SMS members, which remained below 100 percent despite an increase from 47 per cent in 2009/2010 to 85 per cent in 2013/14.
Mr Makwetu proposed the following solutions: • Enhancing oversight process to drive consequence management, which should include calling the relevant executive authority to account in case of gross negligence of key legislative prescripts, • Establishing and enforcing a stringent mechanism of tracking implementation of SCOPA and MPAC recommendations, • Filling of all critical vacant position with suitable and qualified candidates, • Establishment and strict enforcement of performance management, monitoring and evaluation and reporting mechanisms, ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 80 [Wednesday, 30 November 2016 • Enhancing oversight over key law enforcement agencies in case of delays in processing reported cases.
Resolutions from Commission 1 1.

APAC must strengthen relations with the Speakers’ Forum, Portfolio Committees and MPACs, 2.

Enforce accountability to those who are in the executive (All spheres of government), 3.

Blacklisting of officials and companies which have defrauded the state.

4.1.2.

Theme 2: Entrenching the Role of Oversight in the Budget process.

Mr Ntlango discussed the role of budget oversight structures in relation to Public Account Committees.
He further discussed the importance of linking oversight with the: National Development Plan (NDP), Strategic Plans, Annual Performance Plans (APPs), Integrated Development Plans (IDPs), Budgets and Service Delivery Implementation Plans (SDBIPs).
According to Mr Ntlango, some of the common contributing factors to weaker oversight include: • Excessive focus on numbers and insufficient understanding of programme design and implementation plans; • Link between budgeted figures and cost drivers is undefined; • Excessive focus on the expenditure-side as opposed to the revenue- side of the budget; • Excessive focus on rand value as opposed to value for money; • Impact of unanticipated and unforeseen disruptors; • Poorly identified and unquantified strategic risks; • Undefined link between strategic risk and budget impact; ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 81 Mr Ntlango further outlined the following basic requirements for effective oversight, which should be understood by oversight bodies: • • • • In-depth understanding of legal requirements relating to the budget process; In-depth understanding of the role of oversight structures, particularly Public Accounts Committees; In-depth understanding of budget structures/templates that are approved by National Treasury; In-depth understanding of the link between the National Development Plan (NDP) and budgets.
Mr Ntlango, also highlighted a number of proposals which can be used by oversight structures to entrench a more effective budget oversight and these include supporting institutions such as the Department of Planning, Monitoring and Evaluation (DPME), the Auditor-General of South Africa (A-GSA), the National Treasury (NT) and the Department of Public Service and Administration (DPSA).
He further emphasised the need to understand strategic risks, quantification of risk impact, use of technology and analytics to quantify and monitor strategic risk, setting up early warning signals as well as understanding the link between budgeting process and programme design.
On the other, Ms Neila Orlandi from the Parliamentary budget office (PBO) highlighted the role of Parliament in budget oversight as a means to: • Detect and prevent abuse of state resources; • Prevent illegal and unconstitutional conduct in relation to budget execution on the part of the government; • Protect the rights and liberties of citizens; • Strengthen transparency and trust in government and its operations; • Enhance accountability over the use of public funds ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 82 [Wednesday, 30 November 2016 Commission 2 discussed the role of legislatures in the budget process.
The Commission also discussed the possibility of passing a Money Bills legislation for provincial legislatures to amend budgets, including the establishment of parliamentary/provincial budget offices.

Furthermore, it was mentioned that the Money Bills Act of 2009 provides norms and standards for the provincial legislatures to provide for a procedure to amend money Bills.

It was further discussed that the objective of the procedure is to give effect to the resolution of the legislature on oversight.
The objective of the procedure is to establish principles to be adhered to when amending the budget.

The Commission also alluded to the need for strengthening relations between legislatures and the Executive to ensure effective budget oversight.

Delegates proposed an establishment of a memorandum of understanding (MOU) as a mechanism for reinforcing such relations.
The Commission further discussed the issue of consequence management as one of the challenges which contribute to unsatisfactory performance and poor financial management.

Delegates further discussed the need for parliamentary committees to transit from output-based oversight towards an outcome or impact-based oversight.

Resolutions from Commission 2 1.

APAC must facilitate the establishment of parliamentary/provincial budget offices across the nine provincial legislatures, 2.
APAC must conduct a study on the impact of budget offices on the wage bill, 3.

APAC must facilitate the development of the act which will allow legislatures/councils to amend the budget.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 83 4.1.3.

Theme 3: Institutionalisation of MPACs Hon.

Van Rooyen1 reminded delegates that MPACs resulted from an assessment conducted in 2009, which sought to address lack of accountability.
The Minister further mentioned that the establishment of MPACs was among various measures put in place to curb irregular expenditure, fruitless and wasteful expenditure.

Hon.

Van Royeen emphasised that MPACs are established in terms of section 79 of the Municipal Structures Act to assist the Council and that the role of MPACs is similar to that of SCOPAs.

Cllr.

Thabo Manyoni further stressed that MPACs oversee the executive branch of a municipality (.

i.e.

executive mayor and mayoral committee).


Through the oversight function, MPACs ensure that priorities, plans and projects identified in the Integrated Development Plan (IDP), financed through the budget and specific Service Delivery Implementation Plan are implemented and are on track.

Cllr.

Thabo Manyoni, underscored the significance of MPACs and applauded the speedy manner in which they have been introduced across the nine provinces.
Both speakers noted the contribution of MPACs in the improved performance of municipalities, as reflected in the 2014/15 A-G Report.

This was so particularly in relation to audit outcomes.

The Minister cited an upward trend in the number of unqualified audit opinions from 16 in 2010/11 to 72 municipalities in 2014/15.
The Minister further cited the declining trend in the number of municipalities which received disclaimers and adverse audit opinions from 102 in the 2010/11 financial year to 43 in the 2014/15 financial year.

In this regard, the speakers commended the role played by SALGA, APAC, GOGTA and other relevant role-players.

1 Hon.
1 Hon.

Van Rooyen was not in attendance due to other commitments and the presentation was made on his behalf ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 84 [Wednesday, 30 November 2016 Both speakers acknowledged that MPACs are still characterised by numerous weaknesses which arise from administrative and political challenges: • Unlike national and provincial public accounts committees, MPACs consists of part time councillors.
MPAC chairperson were likely to be declared full-time by the member of the executive council (MEC) for local government in cases where a municipality has more than 40 councillors, • • Inadequate training and lack of capacity among MPACs councillors.
This included insufficient knowledge and skill in municipal finance management, insufficient knowledge and understanding of relevant legislative frameworks and others factors, Inadequate administrative and professional support such as researchers, • Unsatisfactory follow-up on the recommendations of the A-GSA, • Lack of political will to support, cooperate with and protect MPACs.
In response to the above-mentioned weakness, the speakers proposed the following solutions: Administrative and Technical Solutions Political Solutions -Municipal councils should clarify the roles, -Stronger political will for openness, responsibilities and lines of communication for transparency and accountability MAPCs through the adoption of terms of references as required in Section 53 of the Municipal Systems Act.
-The terms of reference, hence the roles and responsibilities of MPACs, should be based on a -Stronger political support for consequence sound diagnosis of the challenges facing the management municipality ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 85 -The terms of reference and delegations for MPACs needs to be tailor made, and a one size fits all approach is not productive.
-Enhance administrative and professional support by secretaries, researchers, audit committees, internal audits and other units.

-Political parties must ensure that councillors deployed to the MPAC have the skills and ability to attend to the work without fear or favour -GOGTA should strengthen the Code of -Institute compulsory training for MPAC Conduct to secure the role of the Chairperson.
-COGTA should institute and enforce sanctions against councils that ignore MPACs’ reports and recommendations councillors to improve capacity and in-depth knowledge of relevant laws, report writing, minutes writing and effective oversight -The MPACs should develop annual work plans and ensure regular reporting to the municipal council (i.e.

at least quarterly).

-MPACs report any challenges (e.g.


administrative challenges) to the Speaker, who together with the MPAC chair should timeously attend to such reports.

-improve partnerships with role players such as APAC, SALGA, A-G, National Treasury, Audit Committee, Provincial Treasuries, COGTA and others.

Discussions in Commission 1 primarily echoed the main points raised by the Speakers.
Lack of capacity dominated the discussions and delegates agreed that more needs to be done to ensure that APACs are sufficiently capacitated in order to effectively execute their functions.

The Commission further agreed that the success of APACs depend on strong political will.

It ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 86 [Wednesday, 30 November 2016 was agreed that APACs often make good recommendations, which are often not implemented due to lack of political will.
The Commission also emphasised the importance of developing systems and guidelines aimed at ensuring that MPACs resolutions are implemented.

The discussion also focused on the need to strengthen consequence management.

Resolutions of Commission 3 1.

Provincial PACs working together with SALGA must assist those Municipalities that have not yet established MPACs to ensure that these are put in place by December 2016, 2.
Implementation of a skills audit of all MPACs in order to determine the capacity needs of all MPACs.

Suh audit should be conducted by the APAC in partnership with SALGA and its must be completed by end January 2017, 3.

APAC in partnership with SALGA should drive the process towards an MPAC Interim Representative Structure which will prepare for the launch of the MPAC Conference.

This Conference must be held before the end of the 2016/17 financial year, 4.
In addition to the current Terms of Reference for MPACs, COGTA must develop a legal framework for institutionalising MPACs as well standardisation of composition and financial assistance to MPACs.

This framework should be finalised by March 2017, 5.

Copies of the Constitution should again be made available to jurisdictions for their input.

These inputs should be collated and submitted by the end of January 2017, 6.
Research should be conducted by APAC on the feasibility of having a single National Public Accounts Commission with provincial chapters.

This research must be completed by end September 2017.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 87 4.1.4.

Theme 4: Curbing Illicit Financial Flows in Africa Hon.

Godi discussed the adverse effects of illicit financial flow (IFFs) on the African continent and across the global community.
The speaker raised concerns around the poor recording and documentation of IFFs and the extent to which this makes it difficult to monitor and device workable solutions.

Hon.

Godi cited a study which estimated that IFFs amounted to between USD 1 trillion and USD 1.6 trillion per year, with about half originating from developing countries.

According to Hon.

Godi, it is estimated that 60-65 per cent of the above-mentioned IFFs results from commercial tax abuse.
The Commission attributed the challenge to factors including weaker tax administration, corruption and poor governance.

Resolutions from Commission 4 1.

A review and streamlining of existing legislation to make Illicit Financial Flows (IFFs) illegal and to ensure that compliance is enforced.

Tax laws must be strengthened and monitoring enforced to incorporate IFF.

Trade mispricing and tax delays must be illegal.


Consequences for non-compliance must carry heavy penalties to deter this practice, even expropriation of assets, 2.

Political will and culture must change and must deal decisively with corruption, nepotism, self-enrichment, favouritism, 3. International, regional and local stakeholders must be actively involved and mobilised to deal with IFFs, 4.

A Review of licencing and ownership of minerals in the country, 5.
Capacitate and strengthen institutions such as central banks and other financial intelligence centres in order to enhance monitoring of IFFs transactions, 6.

Uproot corruption by law enforcement agencies such as customs, 7.

Increase the mandate of the Finance Committee to deal with IFFs, 8.
APAC leadership must engage with the Speaker Forum to take the issue of IFFs forward whether debate it in the House and if there is a need, the President must commission a judicial enquiry, ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 88 [Wednesday, 30 November 2016 9.

Revoke licenses of banks that do not comply with tax laws and allow IFF investments.

IFFs transactions must be traced, 10.

Collaboration and information sharing between different countries.

5.
5.

Observations and Lessons for the Standing Committee on Appropriations The following observations were made by the Committee: 5.1 Consequence management remains a major challenge in the public sector.

5.2 Oversight structures, including parliamentary committees, should shift from output based oversight towards outcome-based oversight.
5.3 Oversight structures, including parliamentary committees, should integrate financial and non-financial information produced by independent oversight bodies such as the AGSA.

5.4 Parliamentary committees should improve oversight on both the expenditure side and revenue side of the budget.

5.5 Legislatures should invest in information technology (IT) systems and various innovative strategies in order to improve and simplify oversight over the Executive.
5.6 Parliamentary committees and other oversight structures should enhance oversight over SCM processes in order to significantly reduce inefficiencies and wastage of public funds.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 89 4.
REPORT OF THE PORTFOLIO COMMITTEE ON PUBLIC SERVICE AND ADMINISTRATION AS WELL PLANNING, MONITORING AND EVALUATION ON THE APPOINTMENT OF THE NATIONAL PUBLIC SERVICE COMMISSION COMMISSIONERS, DATED 30 NOVEMBER 2016 The Portfolio Committee on Public Service and Administration as well as Planning, Monitoring and Evaluation (the Committee) having considered the request by the President of South Africa, requesting the National Assembly to recommend fit and proper persons in accordance with section 196(8)(a) of the Constitution, to fill the vacancies of three commissioners for the Public Service Commission, reports as follow.
1.

BACKGROUND 1.1 The Public Service Commission is an independent institution established in terms of Chapter 10 of the Constitution, 1996.

It derives its mandate from section 196 of the Constitution, which sets out the values and principles governing public administration.

The Constitution stipulates that there is a single PSC for the Republic of South Africa, which consist of 14 commissioners.
Section 196 (7)(a) of the Constitution stipulates that five commissioners are approved by the National Assembly in accordance with subsection (8)(a).

Section 196(10) states that a commissioner is appointed for a term of five years, which is renewable for one additional term only.

2.
2.

INTRODUCTION 2.1 A letter dated 27 May 2016 was received from the President of South Africa, requesting the National Assembly to recommend fit and proper persons in accordance with section 196(8)(a) of the Constitution, to fill the vacancies in the Public Service Commission (see ATC of 1 June 2016).

The Speaker of the National Assembly referred the matter to the Portfolio Committee on Public Service and Administration as well as Planning, Monitoring and Evaluation for consideration and report.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 90 [Wednesday, 30 November 2016 2.2 Prior to designing the advert, the Committee sought a legal opinion from the Constitutional and Legal Services of Parliament pertaining to the advice on the requirement for a commissioner in the Public Service Commission (PSC).
The words “fit and proper person” in respect of the appointment of a PSC commissioner as set out in both the Constitution and the Public Service Commission Act, 1997 (Act No.46 of 1996) must be interpreted.

2.3 In terms of the legal interpretation, it is commonly accepted that in order to be a “fit and proper person” a person must show integrity, reliability and honesty as these are the characteristics which could affect the relationship between such a person and the public.
The Courts have also interpreted the requirement of “fit and proper person” and have held that the “fit and proper person” standard is a value judgement.

Having received a legal opinion, the Committee designed an advert in compliance with Section (10)(b) of the Constitution and the Public Service Commission Act, 1997 requirements.

Advert was approved by the Committee.


2.4 On 14 September 2016, the Portfolio Committee established the Sub- Committee which include the following members: African National Congress: Hon RMM Lesoma (Acting Chairperson), Hon SZ Dlamini-Dubazana, Hon WS Newhoudt-Druchen, Hon MLD Ntombela, Hon MA Dirks; Hon MS Booi (alternate), Democratic Alliance: Hon AP van Der Westhuizen, Economic Freedom Fighters: Hon MO Mokause; National Freedom Party: Hon SC Mncwabe and Inkatha Freedom Party: Hon M Hlengwa.
2.5 On 23rd September 2016, the Committee placed adverts in various newspapers calling on members of the public who are fit and proper persons to apply for the vacancies in the PSC.

The advert closed on 07th October 2016.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 3.

SELECTION PROCESS 91 3.1 The Committee received 132 applicants who responded to the advert to serve as commissioners of the Public Service Commission.
Prior to screening all applicants, the committee reached a consensus on the criteria to be considered for shortlisting.
The following criteria were generally applied: • Principle of fit and proper person • Demonstrate strong work ethics and integrity, • Understanding and/or previous experience with the Public Service Commission, Public Administration and Monitoring and Evaluation • Experience and/or senior management knowledge and skills, institutional memory, and senior public service, • Clear vision on the National Development Plan, • Understanding of government policies and among others must have served in any other Boards.
3.2 The Committee through the assistance of Parliament Support Staff and Legal Services went through a rigorous process of screening all applicants and shortlisted suitable candidates.
The following 14 candidates were shortlisted for the interviews: 1) Ms Lulama Viwe Sizani 2) Ms Clara Phumelele Nzimande 3) Mr Jack Lesiba Matlala 4) Mr Dizline Mfanozelwe Shozi 5) Mr Matome Zacharia Mawasha 6) Mr Vusumuzi Goodman Mavuso 7) Mr Bongani France Mapholoba Khonjwago 8) Mr Lefuno Reginald Ndou 9) Ms Thembekile Makhubela 10) Mr Richard Khaliphile Sizani 11) Ms Mally Hilda Mokoena 12) Mr Michael Homotsang Seloane ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 92 [Wednesday, 30 November 2016 13) Ms Sylvia Phala 14) Mr Tholumuzi Bruno Luthuli 4.
INTERVIEW PROCESS 4.1 As per the advert requirements, applicants were subjected to security clearance.

All candidates’ details were submitted for the security clearance process.

4.2 All candidates were invited to the interview.

One candidate declined an invitation for the interview.

On 15 November 2016, the committee interviewed seven (7) candidates.

Furthermore the committee interviewed six (6) candidates on 16 November 2016.
Candidates were questioned on the same areas relevant to the mandate of the Public Service Commission.

4.3 On 23 November 2016, Security Clearance report was presented in the Committee prior deliberation on the performance of the candidates.

5.
5.

RECOMMENDATIONS 5.1 Having deliberated on the individual performance of the candidates, the Portfolio Committee unanimously resolved to recommend the following candidates to the National Assembly in terms of section 196(8)(a) of the Constitution, for the appointment by the President to serve as commissioners for the Public Service Commission: (1) Mr Richard Khaliphile Sizani, (2) Ms Clara Phumelele Nzimande and (3) Dr Tholumuzi Bruno Luthuli.
5.2 The Committee recommends that in future, great emphasis should be placed on a generational mix, demographics, geographical spread and people living with disabilities during the selection process of commissioners’ position of the Public Service Commission.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 Wednesday, 30 November 2016] 93 6.
CONCLUSION 6.1 The Portfolio Committee is therefore confident that all candidates recommended for appointment have a clear understanding of the mandate and are fit and proper person to be commissioners of the Public Service Commission.

Report to be considered.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016 94 [Wednesday, 30 November 2016 National Council of Provinces 1.
Report of the Select Committee on Communications and Public Enterprises on The World Radio Communications Conference 2015 (WRC-15) Final Acts, dated 30 November 2016 The Select Committee on Communications and Public Enterprises, having considered the request for approval by Parliament of The World Radio Communications Conference 2015 (WRC-15) Final Acts, referred to it and tabled in terms of section 231(2) of the Constitution, 1996, recommends that the Council approves the said international agreement.
Report to be considered.

2.

Report of the Select Committee on Communications and Public Enterprises on the International Telecommunications Regulations 2012, dated 30 November 2016 The Select Committee on Communications and Public Enterprises, having considered the request for approval by Parliament of the International Telecommunications Regulations 2012, referred to it and tabled in terms of section 231(2) of the Constitution, 1996, recommends that the Council approves the said international agreement.
Report to be considered.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 156─2016