scof briefing report on limpopo section 100...

SCOF Briefing Report on Limpopo Section 100

(1)(b)

By Chief Administrator – Mr. M. Tom

Section 100 (1)(b) Intervention Team | National Treasury | 15 October 2013

2

Presentation Outline

1. Preamble

2. Brief Diagnostic

3. Recovery

1. Financial Status and Position

2. Accumulated Unauthorized Expenditure

3. Impact on audit outcomes

4. Service Delivery Issues (Enablers and Performance)

4. Governance (refer to presentation on DC and Criminal Cases)

5. Sustainability of Recovery / Exit

6. Conclusion

3

Preamble

On the 10 January 2012, the purpose of the intervention was agreed to,

namely:

1. To assist the province to upgrade its systems and capabilities to a new

normality

2. To ensure compliance with legislation and regulations framework of

government.

3. To enhance the quality of service delivery

To serve this purpose, the intervention focused on three (3) inseparable

measures which are:

1. Recovery – stop the bleeding in a number of areas, by doing things differently.

2. Governance – enforce compliance, accountability with consequences

3. Sustainability – focus on 80/20 principle, whereby major problems can be

addressed through building capabilities in 20 per cent of 5 critical areas.

4

Diagnostic (Diagnostic Report Précis)

Diagnostic Report

• Following a financial collapse, Cabinet resolved to intervene in Limpopo

Province using the ultimate drastic legal tool available, i.e. Section 100 (1)(b)

• The diagnostic report was completed in early in April 2012/13 financial year

(March 2012) and weaknesses are well documented therein.

These included:

a)Lack of leadership and laxity of officials;

b)Poor systems, processes, skills and capacity resulting in:

i. Poor budgeting and financial management skills;

ii. Poor safeguarding of movable and immovable assets; and

iii. Numerous management shortcomings in respect of supply chain management.

Collusive behaviour within the public services which is exacerbated by the private

sector (business) influence so as to get a particular procurement outcome.

c)Non reliability of the IT infrastructure and or enabling systems and software.

5

Recovery (Cash Position and Financing of Accumulated Unauthorised

Expenditure)

INDICATOR Prior to intervention (or previous year end)

Status as at 31 March (Pre-audited) 2013

Spending as at 31 August 2013

Unauthorised expenditure/accumulated debts

Accumulated unauthorised expenditure of R2.7 billion

Accumulated unauthorised of R500 million still remains unapproved. The remaining has been approved by provincial SCOPA to be cleared by the Provincial Revenue Fund

R640 allocated for unauthorised and balance over the MTEF

Cash position Overdraft of R1.7 billion Cash Surplus of R2.4 billion

Cash Surplus of R4.2 billion

Provincial expenditure Projected overspending of R594.6 million

Under spending of R2.2 billion

Projected overspending of R833 million (inclusive of R634 accruals)

Education budget Projected overspending of R354.5 million

Under spending of R959 million

Projected over spending of R277.9 million

Health budget Projected overspending of R250.2 million

Overspending of R21 million

Projected over spending of R604.8 million

Provincial COE Projected overspending of R661 million

Under spending of R330 million

Projected over spending of R437 million

6

Recovery (Financing of the Accumulated Unauthorized Expenditure)

7

Recovery (Administrative Support and core services delivery)

Provincial Treasury

• The aforementioned financial recovery and the creation of greater fiscal space has enabled

better resourcing of service delivery in the province.

• In addition, the challenges identified are to be addressed either as part of recovery (short term)

and or through sustainability / endurance (medium term) as follows:

a) Leadership

i. A Head of Provincial Treasury and 3 Key senior management positions have been filled,

and other 3 have been re-advertised.

b) Poor systems, processes, skills and capacity are being addressed through the following

projects/initiatives

i. The prior years’ legacy of auditor general queries that are due to systemic nature, i.e tribal

levies account, provincial rev fund, console of annual financial statement.

ii. SCM improvements: For example, the implementation of transversal contracts.

iii. A skills audit is currently underway in the offices of the Chief Financial Officers to identify

the level of weakness and address critical skills gaps for financial management

improvement.

iv. Project based learning (PBL), including the CFO Support program, to strengthen

CFO offices

8

Recovery (Finance Position as at end of 31 August 2013)

Table 5 : Limpopo budgets and expenditure as at 31 August 2013

Education 23 475 305 – 23 475 305 23 475 305 23 703 238 9 249 981 39.4% -227 933 – -1.0%

Health 13 076 949 – 13 076 949 13 076 949 13 681 835 5 235 988 40.0% -604 886 – -4.6%

Social Development 1 377 843 – 1 377 843 1 377 843 1 377 843 445 306 32.3% – – 0.0%

Public Works 877 061 – 877 061 877 061 891 061 304 886 34.8% -14 000 – -1.6%

Agriculture 1 525 716 – 1 525 716 1 525 716 1 525 716 555 237 36.4% – – 0.0%

Roads And Transport 3 521 882 – 3 521 882 3 521 882 3 521 882 796 045 22.6% – – 0.0%

Co-Operative Governance Human Settlements And Traditional Affairs2 231 625 – 2 231 625 2 231 625 2 231 625 490 367 22.0% – – 0.0%

Sport, Art And Culture 266 191 – 266 191 266 191 241 347 76 182 28.6% – 24 844 9.3%

Safety, Security And Liaison 74 749 – 74 749 74 749 72 892 27 747 37.1% – 1 857 2.5%

Office Of The Premier 322 857 – 322 857 322 857 322 857 118 227 36.6% – – 0.0%

Legislature 225 987 – 225 987 225 987 239 854 107 292 47.5% -13 867 – -6.1%

Treasury 384 708 – 384 708 384 708 384 708 134 543 35.0% – – 0.0%

Economic Development Environment And Tourism 1 073 947 – 1 073 947 1 073 947 1 073 947 421 804 39.3% – – 0.0%

Total 48 434 820 – 48 434 820 48 434 820 49 268 805 17 963 605 37.1% -860 686 26 701 -1.7%

Economic classification Net -833 985

Current payments 41 545 152 – 41 545 152 41 545 152 42 363 410 16 164 150 38.9% -818 258 – -2.0%

Compensation of employees 33 880 127 – 33 880 127 33 880 127 34 317 173 14 026 230 41.4% -437 046 – -1.3%

Goods and services 7 664 623 – 7 664 623 7 664 623 8 045 835 2 137 920 27.9% -381 212 – -5.0%

Interest and rent on land 402 – 402 402 402 – 0.0% – – 0.0%

Transfers and subsidies 4 991 637 – 4 991 637 4 991 637 5 016 591 1 408 486 28.2% -24 954 – -0.5%

Payments for capital assets 1 898 031 – 1 898 031 1 898 031 1 888 804 390 969 20.6% – 9 227 0.5%

Payments for financial assets – – – – – – – – – –

of which: NPNC 12 656 662 – 12 656 662 12 656 662 13 062 828 3 546 406 28.0% -406 166 – -3.2%

Total 48 434 820 – 48 434 820 48 434 820 49 268 805 17 963 605 37.1% -843 212 9 227 -1.7%

* Available funds refers to adjusted budget including any post adjustment (Virements and shifts) Net -833 985

% (Over)/

under of

M ain

budget

Actual

spending as

at 31 Aug

2013

Projected

outcome

Actual

spending as

% of M ain

budget

UnderMain

AppropriationAdjustments

Available

funds*

R thousand

Adjusted

Appropriation(Over)

9

Recovery (Impact of 2012/13 audit outcomes)

Provincial Department 2011/2012 2012/2013 Additional Notes

Education Disclaimer Disclaimer

Irregular expenditure of R162M reduced to Nil

The overstatement of immovable assets of R102M (2012) was

reduced to R36M

Commitments of R299M (2012) was reduced to R205M

Health Disclaimer Disclaimer


Unallocated receipts of R 50M (2012) was reduced to R21M

(2013)

Scope limitation reduced from R739M (2012) to R 438M (2013)

Provincial Treasury Unqualified Unqualified Except for the non-submission of the Provincial Revenue Fund

and Departmental and Public Entities financial statements, this

department would have received a clean audit

Public Works Disclaimer Disclaimer


Although the department was disclaimed for understatement of

receivables (rent from employees staying in state owned

property), these were recorded in the financial statements of

Health and Social Development

Roads and

Transport Qualification Unqualified

The department moved from receiving a qualification on

movable assets in 2012 to an unqualified opinion in 2013

10

Treasury

Ensuing is a detailed presentation on recovery

progress by the HOD of Provincial Treasury

11

Treasury

RECOVERY PROJECT PROGRESS

Capacity of the Treasury and skilled workforce in right

places

ACTIVITY PROGRESS

Review Provincial

Treasury functional

structure

• The Provincial Treasury organizational structure reviewed

by the s100(1)(b) Intervention Team and DPSA and aligned

to the National Treasury generic structure for provincial

treasuries.

• The Provincial Treasury and the Administrator are currently

reducing the planned 583 posts in the Limpopo Treasury to

between 350 and 380 posts.

Filling of critical

management positions

• The vacant Head of Department post has been filled with

effect from mid December 2012.

• 5 vacant Senior General Manager (SGM) posts were

advertised.

SGM Sustainable Resources has been filled.

Chief Audit Executive appointed and will assume duty on

1 December 2013.

SGM Financial Governance and Chief Operating Officer

posts have been re-advertised as no suitable candidates

was found.

SGM Assets and Liabilities will be re-advertised. 12


places

ACTIVITY PROGRESS

Filling of critical

management

positions

• 3 vacant General Manager posts advertised

General Manager MFMA support – Approval obtained to

appoint, but offer not accepted.

General Manager Budget Management – Appointed and will

assume duty on 1 Nov 2013.

General Manager Assets Management – Appointment under

consideration

• Key infrastructure positions (1 Senior Manager and 2

Managers) linked to Infrastructure Delivery Management

System have been filled.

• GM Infrastructure – Vacated Oct 2013, to be advertised

Improve financial

management, skills

development and

capacity building

Treasury.

• A skills audit in the office of the Chief Financial Officers has

been identified as one of the initiatives that must be done in all

provincial departments and the outcome of this process will be

used to identify critical gaps to be addressed.

• The service provider has assessed Provincial Treasury and

final report is in process.

• Will be assessing Health and Education next and will later be

extended to other departments. 13


places

ACTIVITY PROGRESS

Project based learning • LPT has also embarked on a capacity building programme

which will see officials in financial management,

governance, data analysis and supply chain management

being given skills and knowledge through a work-based

programme. Mentorship and coaching is also integral to

this programme to ensure that the turnaround is

sustainable.

• National Treasury is already assisting in enhancing the

capacity of the offices of the Chief Risk Officers in the

province.

• CFO support will also be deployed in a number of

departments under administration to strengthen financial

management.

• Approval obtained to appoint high level CFO support team

on a two year contract. Advert to be placed.

14

Enhance economic, effective and efficient use of resources

ACTIVITY PROGRESS

Improve the

management of

transversal contracts

• Transversal contracts are being put in place primarily to

leverage economies of scale and to limit space for possible

corruption.

• The labour saving devices contracts and banking contract

are in place.

• Other areas being earmarked for this initiative are travel

and accommodation.

Improve SCM Standard

operating Procedures

• The Provincial SCM Policy has been reviewed.

• Provincial SCM standard operating procedures (SOPs) and

checklists are been developed by Provincial Treasury –

project should be complete by end Oct2013.

• SOPs training and implementation will be provided to all

provincial departments.

15

Improve financial systems

ACTIVITY PROGRESS

FINEST replacement

and electronic

accounting system

• Provincial Treasury is in the process of replacing the

FINEST system which does not interface with BAS and this

make it difficult to track expenditure and compromises the

requirement for proper accountability.

• This lack of an integrated accounting system in Limpopo

has been identified as a major risk which leads to improper

reporting on commitments, accruals, inventory and assets.

• The province has identified the need to implement an

alternative national system the Logical Information System

(LOGIS).

• LOGIS will assist the province to be able to record all

procurement transactions in a single system which also

integrates into the assets and inventory modules in LOGIS

and interfaces seamlessly into BAS.

16


ACTIVITY PROGRESS

FINEST replacement

and electronic

accounting system

• Province has started with the LOGIS implementation in

Provincial Treasury after which it will be implemented in

Education and Health and the other provincial departments.

• Provincial Treasury has identified that additional resources

will be required to implement LOGIS in the province and

has held discussion with the provincial SITA office.

• It has also been noted that there will be a need to arrest the

current asset registers of all departments prior to

incorporation into LOGIS.

• Discussions have started to implement a database system

which will be secure, have an audit trail for any changes to

the asset registers and scanning facilities to perform asset

verification process.

17


ACTIVITY PROGRESS

Centralised supplier

database

• The province has also applied to National Treasury to

implement a centralized supplier database system to

manage all suppliers for all departments in the province.

18

Table a surplus budget, implement the overdraft / finance

strategy

ACTIVITY PROGRESS

Table a surplus budget • The province tabled the 2012/13 budget with a surplus of R907

million. An amount of R748 million was set aside to finance the

overdraft and the balance thereof has been utilised to fund

recovery projects and provincial specific priorities.

• Due to the issuance of Instruction Note 1 of 2012 on austerity

measures, the province has realized a savings of R199.2 million

which was re-allocated during the Adjustments Estimate in

November 2012 to fund priorities.

• The province tabled the 2013/14 budget with a surplus of R735

million of which R640 million has been set aside to finance the

unauthorised expenditure.

19

Table a surplus budget, implement the overdraft / finance

strategy

ACTIVITY PROGRESS

Reduce the R2.7 billion

accumulated over

expenditure in 2012/13

and over the MTEF

• The province had accumulated unauthorized expenditure which

dates back to 2001, of R2.7 billion in 2011.

• Since then the province has reduced the unauthorized

expenditure by R931 million of which R821 million has been

funded from the Provincial Revenue Fund in 2012/13 and the

balance funded through the various departmental budgets.

• The outstanding unauthorized expenditure is R1,4 billion of

which the province intends to finance R640 million in 2013/14

and the balance over the MTEF. (See table below)

• The "OLD" outstanding unauthorized expenditure is R1,7

billion of which the PRF is liable for R1.4 billion and

departments R0.3 billion.

20

Reduction of the R2.7 billion accumulated over expenditure

21

Act 03 of 2010

Approved without

funding (Adopted

by the House on 05

May 2010)

2011/12 2012/13

Department

Without Funding -

(Not Yet funded &

Cleared by

Department)

APPROVED

WITHOUT

FUNDING

APPROVED

WITH FUNDING

NOT

APPROVED

APPROVED

WITHOUT

FUNDING

APPROVED WITH

FUNDING

Not yet

Considered

Not yet

Considered

TOTAL APPROVED

WITHOUT FUNDING

TOTAL APPROVED

WITH FUNDING

Not yet

Considered

TOTAL

UNAUTHORISED

Premier - - - - 32,038 - - -

Legislature 630 1,127 - - 22,924 - -

Education 161,127 5,568 449,400 - 181,140 1,395,844 175,212 99,667 347,835 1,395,844 274,879 2,018,558

Agriculture - - - - - - - - -

Provincial Treasury - 6,803 - - - - - -

Economic Developmet 2,319 2,203 - - - - -

Health 65,384 256,261 - - 18,544 222,381 222,381 222,381

Roads & Transport 19,376 25,034 6,200 - - - -

Public Works - - - - - - - - -

Satety, Security & Liaison - 663 - 3,280 - 228 3,280 228 3,508

Local Government & Housing 2,294 - - - - - - - -

Social Dev 1,421 - 7,001 - - - - -

Sport, Arts & Culture 10,571 - - 7,141 - 7,141 - - 7,141

Total 164,842 103,848 748,492 6,200 191,561 1,469,350 175,212 322,276 358,256 1,395,844 497,488 2,251,588

R 2,684,293

Compensation 157,826 2,319 570,825 8,670 1,396,483 47,255 120,898 166,496 1,357,390 168,153 1,692,039

Goods & Services 2,294 19,979 162,504 108,008 24,879 194,406 110,308 194,406 304,714

Capital 65,384 74,883 -1,064 74,883 74,883

Transfers 4,722 16,166 15,163 6,200 49,052 127,957 6,972 6,569 38,454 134,929 179,952

TOTAL 164,842 103,848 748,492 6,200 191,561 1,469,350 175,212 322,276 358,256 1,395,844 497,488 2,251,588

TOTAL UNAUTHORISED EXPENDITURE NOT YET CLEARED BY DEPARTMENTSLimpopo Unauthorised Act - 2012Limpopo Unauthorised Act -

2012(2)

R 2,251,588

OUTSTANDING UNAUTHORISED EXPENDITURE NOT YET CLEARED BY DEPARTMENTS UNAUTHORISED EXPENDITURE RESOLVE BY LEGISLATURE Not yet Considered

R 497,488R 852,340 R 1,660,911

Reduction of the R2.7 billion accumulated over expenditure

ACTIVITY PROGRESS

Reduce the R2.7 billion

accumulated over

expenditure in 2012/13

and over the MTEF

• SCOPA has not yet taken resolutions on the R175 million and

R322 million incurred in 2012/13

(It is important to note that only Health department overspent

their voted budget allocation for 2012/13 by R21 million and

that the unauthorized is mainly due to over spending of the

main divisions within the votes.)

22

Cost containment measures

ACTIVITY PROGRESS

Reduce and manage

cost on compensation of

employees

• The Department of Health and Education together account for

85 per cent of the total COE in the province. The preliminary

expenditure outcomes for 2012/13 show that Compensation of

Employees (COE) will account for the 69 per cent of the

provincial expenditure.

• Through the efforts of managing the compensation of the

department of Education, it is pleasing to note that

compensation of employee’s budget of the department of

Education has been stabilized and the Provincial Treasury is

putting all efforts to stabilize the Health personnel and goods

and services budget which is posing a big challenge to the

province.

23

Cost containment measures

ACTIVITY PROGRESS

Reduce and manage

cost on compensation of

employees

• The province has also established the Human Resource Task

Team (HRTT) whose primary role is consider the merits for filling

posts in a particular department and ensures that a budget was

available to fund such posts.

• The HRTT process has been relocated to Office of the Premier

in 201314 and the process will be streamlined to prevent delays

experienced in 2013/14 as a result of continuous ad hoc

requests submitted to the HRTT.

• Moreover, the Treasury has undertaken to further monitor and

reduce the percentage of the provincial budget spent on

Compensation of Employees. A COE task team has also been

established to analyse the COE cost drivers in the provincial

administration during 201314.

24

Audit Assistance

ACTIVITY PROGRESS

To provide technical

support to departments

in order to address AG

findings

• The Audit Outcomes in the Province have unfortunately not

shown a positive trend expected in order to achieve the

objective of Clean Audit 2014.

• We have reported a regression in the audit outcomes in

provincial departments, public entities and municipalities.

• PwC team has been deployed in the province to provide

technical support to the intervention department and other 2

departments (i.e. Social Development and Sport Arts and

Culture) to improve the audit outcomes and thereby contribute

towards the 2014 clean audit drive.

• In 2012/13 we recorded a regression in two departments, going

from unqualified to qualified opinions. We did however record

one improvement from qualified to unqualified. (7 Unqualified, 3

Qualified and 3 Disclaimed)

• For the public entities, in the same financial year, we recorded

one regressions, unqualified to disclaimed while the others

showed no improvement in the opinions.

25

Audit Assistance

ACTIVITY PROGRESS




findings

• The main contributing factors to the disclaimed and qualified

audit opinions are the inability to provide a credible asset

register that is complete and accurate and the inability of

institutions to provide all documents required by the AG to verify

amounts disclosed in the AFS.

• The status of our municipality audit outcomes is of major

concern. For the 2011/12 financial year we still have fourteen

municipalities with disclaimed, twelve with qualified and one with

adverse audit opinions.

• Provincial Treasury has noted this trend and as a result

restructured the MFMA support team in the Treasury, in order to

provide better support to the municipalities. Dedicated MFMA

support teams have now been established to support a

particular district and its locals, thereby getting a better

understanding of the issues in the allocated municipalities.

26

Audit Assistance

ACTIVITY PROGRESS




finding

• We have also noted the better cooperation between the two

support departments, namely CoGHSTA and Provincial

Treasury, MFMA teams. Provincial Treasury is also in the

process of appointing a General Manager to support the

Treasury MFMA teams and improve liaisons with National

Treasury.

• Despite the interventions, the 2011/12 audit outcomes by AGSA

still show that ten of the municipalities in the province

regressed.

• Through the S100 (1)(b) intervention team a firm of auditors

has been appointed to assist seven provincial departments to

improve the 2012/13 audit findings and develop sustainable

interventions in these departments. The Department of

CoGHSTA has also appoint audit firms to each municipality to

assist the municipalities to clear their 201112 audit outcomes.

• The proper accounting for the assets of the municipalities and

the accounting for water transactions remain the key issues that

are hampering our progress towards clean audit.

27

Cash Management

ACTIVITY PROGRESS

Introduce cash

management reforms,

including cash allocation

letters to departments

• We as the Provincial Treasury, working together with COGSTA

are already putting in place interventions to address these

challenges.

• One of the major reasons for the s100 (1) (b) intervention was

the negative cash position of the province in November 2011.

• In order to strengthen the cash flow management controls in the

province, Provincial Treasury issue cash allocation letters to

each department indicating their cash allocation for each

payment run date as well as the processes to be followed by

departments to enable Provincial Treasury to release payment

tapes. Schedule of payments runs dates were also sent to

departments to enable them to inform service providers of the

dates on which payments will be effected.

• Currently, Provincial Treasury stringently monitors each

department’s cash flows and daily bank balances and also all

payment-runs are now certified and approved by the Accounting

Officer and Chief Financial Officer of each department before

they are released from the BAS system by Provincial Treasury.

28

Cash Management

ACTIVITY PROGRESS

Introduce cash

management reforms,

including cash allocation

letters to departments

• The objective is to enhance cash management and assist the

province to maintain smaller cash balances in commercial bank

accounts where lower interest is earned and to optimize interest

returns in the CPD (Provincial account in South African Reserve

Bank) account.

• Persal pay runs are now processed 4 times a month, i.e the

15th for normal salaries, 22nd for Educators’ salaries, last

Wednesday of the month for Supplementary payments (claims)

and month-end for probation and contract employees and Third

Party deductions.

• BAS pay runs (payments of suppliers) are effected twice per

month, i.e. on the 15th and month-end.

• This process has produced good results and as a province we

ended the year with a cash positive situation.

29

30

Education

ENABLERS TO SERVICE DELIVERY

• More than 2 000 permanent teacher appointments were made, and the number of

temporary teachers/educators was reduced from 2 544 to 55 as at end of August

2013.

• Rural allowances are being paid to 7 000 teachers (including the backlogs).

• Headcount verification (of educators and learners) - The enumeration has been

completed. Data processing is underway and the report is to be finalized by end of

July, 2013.

• This process will ensure improved planning and performance in respect of (Budgeting

for personnel, norms and standards funding for schools, accurate procurement of LTSM, school

furniture and other items, root out fraud in respect of teacher and learner numbers)

SERVICE DELIVERY IMPROVEMENTS

• For the 2013 academic year, text-books were ordered on time, adequate funding

was made available and surplus stock was procured.

• Norms and standards funding for schools has improved from 66% of the national

norms in 2012/13 to 76.2% in the 2013/14. It is expected to continue to improve

and be fully funded in two to three years time.

31

Health


• An acting CFO has been appointed through national DOH, and recruitment is being done for the

vacant posts in the CFO’s office.

• 33 hospital CEOs have been appointed, with the remaining 7 are currently being recruited

• Headcount verification (of health professionals in facilities) - The enumeration is commencing in

August 2013. This is intended to address the challenge of ghost workers.

• An increase of over 20% in the provincial budget for medicines (through internal reprioritisation)

is the largest budget increase in the country for medicines.


• The province has experienced difficulty in attracting and retaining doctors and nurses due to the

absence of accommodation. A building complex has been acquired to provide the

accommodation needs of about 300 professional staff members.

• 38 boilers in 19 hospitals are currently being repaired, autoclaves installed in hospitals. Two

contracts ( for the boilers and autoclaves) were put in place by national health to eliminate the

quotation practice from service providers who had no capacity to service both the boilers and

install the autoclaves. This was in response to the dysfunctional hospital services such as

theaters, kitchens and hot water, which are dependent on steam from the boilers."

32

Health (Cont…)

• At the depot, the medicine stock levels have improved, and in addition, there is now a direct

delivery system that has improved the rate of delivery and hospital stock levels. However, there

is a shortage of surgical medical supplies due to the expiry of the national transversal contracts.

33

Public Works


• Nine (9) appointed professional includes three (3) chief construction project managers

who are highly qualified and with experience in excess of 20 years; one (1) chief

Architect and five (5) quantity surveyors.

• Out of a total of R632m infrastructure projects budgeted for the current year, R412m of

these projects will be delivered by the IDT under a strict monitoring programme.

• 10 officials in the CFO’s office are receiving training under the Public Sector Advanced

Certificate offered by AAT. 12 senior officials are receiving training under Project Based

Learning (PBL). A high paced executive management course.


• While the audit remained an adverse opinion, there was an improvement in the number of

AG findings from 167 to 132 in the management when comparing the 11/12 to the 12/13

audit finding

• Lease review project due for completion on the 30 October 2013 expected to result in

substantial savings from the current R200m per annum office space rental cost

34

Roads and Transport

ENABLERS OF SERVICE DELIVERY

• Various irregular tenders were investigated and cancelled (On-Point);

• Most of the activity in this department has involved dealing with corruption:

– 30 cases of corruption were handed over to the SIU for investigation

• A study will shortly be conducted on the feasibility of continued existence of

RAL and GAAL


• A new model for the delivery of roads infrastructure and maintenance will

be developed to ensure that the department is able to properly manage its

infrastructure programme, this will require resolution on the role of RAL and

the department

• 36 maintenance projects are being implemented (all currently at design

stage)

35

Governance

1.Internal disciplinary matters are instituted by the

Department of Public Service and Administration.

2.Investigations and criminal cases are carried out by

law enforcement organisations

36

Sustainability of Recovery / Exit

• FOR SUSTAINABILITY OF RECOVERY, CAPABILITIES IN 5

CRITICAL AREAS ARE NECESSARY TO BE BUILTY AROUND

THE:

– SKILLS SET,

– KEY PROCESSES AND

– SYSTEMS DESIGN / TECHNOLOGY.

37

Sustainability of Recovery / Exit

Systemic challenges Systems & Technology Process and implementation

Owners of process or People and skills

Infrastructure

Efficient use of the system of management and implementation Project Management Units (PMUs)

Consider centralised management PMU for a group of departments

Target basic functionality, for example,

Toilets in Education Appearance of hospitals

Centralise recruitment of staff and appointment of only built environment

Competitive procurement

Value for money assessment Target item procurement end to end

Security Laundry Patient Food Medical Waste

Common supplier database Project based learning

Review of contracts (top 20 only) in all 5 departments

Roll out standard operating procedure manuals

Enforce compliance capability & consequences

CFO Offices Secure participation in PBL and other relevant training

Support for the clearing of AG queries of FY 12 and FY13

LPT created CFO support programme at senior level from CD and DDG levels

District management at Health

Patient health information system rollout in hospitals only

Replace LAN infrastructure for communication purposes

Project based learning

Appointment of 33 hospital CEOs

Asset management Interim rollout of BAUD system to support LOGIS rollout

Simplify and standardize transfer of assets from departments to LDPW

Data and records management (Limitation of

Scope)

Introduce electronic records management such as microfilming or scanning technology

Archiving support – to work with Sports, Arts and Culture

Compliance, Interpretation and Enforcement (limitation of

scope by deliberate removal of documents)

Roll out standard operating procedure manuals

Enforce compliance capability & consequences

38

Conclusion

• It is critical that:

– Close working relationship with and support by

the OTP is critical to the success of this

sustainability

– Earmarking of resources by Treasury for the

sustainability programs and working closely with

affected departments.

– The strengthening of the capability in the

Treasury should accelerated as well as the office

of the CFO`s in departments.

Thank You

scof briefing report on limpopo section 100...

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