Status of Administrative and Management Systems of all provincial departments put under administration

by Cabinet

6 June 2012

Portfolio Committee on Public Service and Administration

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Presentation Outline

Purpose Background and Introduction Current Scope of Interventions Methodology for the Intervention Stabilization phase Institutional arrangements Progress Emerging Issues Recommendations Way Forward

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Purpose of the Presentation

The presentation seeks to provide an update on interventions in the:- Eastern Cape Department of Education Limpopo Departments of Education, Health, Public Works,

Roads and Transport, as well as Treasury Free State Departments of Treasury Gauteng Departments of Health and Treasury

The role played by the DPSA in each of the departments and provides the context for these emerging roles

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Introduction and Background

On 5th November 2011, Cabinet took a decision to invoke section 100 (1) (b) of the Constitution on the Limpopo Province due to its failure to implement its financial management responsibilities in terms of the Public Finance Management Act (PFMA). The affected provincial departments are Provincial Treasury, Education, Health, Public Works, and Roads and Transport.

In addition the above, Cabinet took a decision to invoke Section 100 (1) (a) of the Constitution to remedy the service delivery challenges in Free State Departments of Treasury, and of Police, Roads and Transport, and Gauteng Departments of Health and Treasury

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Introduction and Background

On 18 April 2012, Cabinet reaffirmed that the intervention in the Eastern Cape Education Dept must be implemented in terms of section 100(1)(b) of the Constitution of the Republic

Cabinet approved the Monitoring, Oversight and Evaluation Report and its recommendations; and further reaffirmed that the Minister of Basic Education, assisted by the task team of Deputy Ministers, is mandated to oversee the full implementation of the section 100(1)(b) intervention in the ECED.

The DPSA has been requested to play a meaningful role as part of the intervention team in assisting the Province to upgrade its systems and capabilities to a “new normal” in full compliance with all the legislative framework.

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Introduction and Background

That the DPSA must form part of the 5 departmental task teams supporting the Deputy Ministers in implementing section 100(1)(b) intervention in the ECED.

The DPSA is actively involved in the Eastern Cape and Limpopo Provinces.

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Scope of Intervention

In the case of Section 100 (1 (b) the practical effect is that the relevant departments are put under administration by national government, with key departments such as the relevant national policy departments, DPSA and National Treasury playing a key role to intervene in the affected departments to turn it around.

In the case of Section 100 (1 (a) the practical effect is that the relevant departments require assistance which can be provided by national departments such as the DPSA and National Treasury and/or the relevant Office or the Premier

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Methodology of the Intervention

PHASES ACTIVITIES

Phase 1 Preparations; Setting Up.

Phase 2 Diagnosis of the situation and recommendations

Phase 3 Recovery Plans.

Phase 4 Implementation, Ongoing Monitoring and

Reporting.

Phase 5 Evaluation and Exiting Strategy.8

Stabilisation Phase

In the case of the section 100 (1) (b) interventions in Limpopo and the Eastern Cape a fairly generic approach was followed pertaining to problem diagnosis.

The initial focus was to stabilize financial management. Initial diagnosis revealed problems around the following:1. Cash and budget management (overruns, corruption)

2. Leadership capacity and management (ineffective oversight, direction, leadership operational instead of strategic)

3. Organisational arrangements (organizational structures not aligned to budget programme structures, service delivery models)

4. Functioning of key processes (poor contract management, project management)

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Stabilisation Phase

5. State of data integrity (Databases such as PERSAL out of date, data integrity shows little relationship with real situation)

However, assistance is lead by National Treasury and relevant Offices of the Premier with the DPSA providing advice on request – no formal requests to date have been received from Free State and Gauteng.

DPSA will also quality assure compliance with PSA and PSR on issues relating to OD as part of normal oversight activities.

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Institutional Arrangements

Institutional arrangements in Limpopo and Eastern Cape not the same

In the case of the Eastern Cape Department of Education: 5 Deputy Ministers of DPSA, Higher Education, Justice,

Basic Education and Finance have been assigned to politically lead the EC Intervention

Administrator has been appointed to oversee Six (6) Task Teams responsible for the EC Education turnaround

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Institutional Arrangements

In the case of Limpopo 5 departments: Political Leadership is provided by the Minister of

Finance, supported by the Ministers of Health, of Education, of Transport, of Public Works, the MPSA and the Minister of Justice and Constitutional Development

Administrators have been appointed for each of the 5 Affected Departments.

Administrative support teams from relevant departments, with DPSA, National Treasury playing leadership roles have been appointed in both Limpopo and Eastern Cape

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General Progress

Stabilization phase well advanced – financial stability achieved through – Reduction of the Compensation of Employee Budget (CoE) by 2%. Improved supply chain management oversight and management

processes Improved control measures regarding payments

Recovery phase initiated in all departments; A “back to basics” approach to diagnose causal factors and to design

solutions to the problems identified (simple, rule-based, operationally viable and technologically feasible)

The approach focuses on both systemic and related governance issues

The DPSA Organisational Functional Assessment Tool (OFA) was introduced to aid recovery plan diagnostics.

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AG Findings (AG 2010/11): HRM & Administrative Systems in Limpopo

Focus Area Summary of Key Findings

HR Planning and Organisation

-HR Plan did not adequately determine gap between existing and required HR and actions necessary to address the gap (57%)-Organisational Structure not aligned to Strategic Plan (14%)

Management of Vacancies; Positions vacant for more than 12 months (86%)

Appointment Processes -Appointments made in posts that had not been advertised (14%)14%)- Verification checks not performed (29%)

Performance Management Performance bonuses incorrectly calculated (57%57%)

Acting Positions Employees acted in positions for more than 12 months (71%71%)

Management of Leave, overtime and suspensions

Processes/procedures not in place to monitor sick leave and overtime (57%)57%)

Capacity of Key Personnel Appointment of staff without necessary required qualifications (43%) 43%)

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Situational Analysis on Quality of Data

• The Quality of information on various data fields as extracted from the PERSAL system was not maintained

• These data fields reflected inaccuracies in the capturing of crucial information impacting on planning & decision making ;

• High vacancy rate compromising the control environment, resulting in lack of segregation of duties and delegations;

• Unfunded vacancies captured on PERSAL;

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Situational Analysis on Quality of Data

• Consistent over expenditure on Compensation of Employees over the MTEF period;

• Large amount of vacancies which had existed for over 12 months or more

• Management and Administrative Controls not implemented to ensure that identified weaknesses are corrected through implementation of actions plans, which should be monitored on a regular basis by leadership of the departments;

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Province : Limpopo Oct 2011 Dec 2011 Mar 2012

Lp:vote 03: Department of Education 36.77 37.58 38.18

Lp:vote 07: Department of Health 29.55 29.89 30.93

Lp:vote 08: roads & transport 21.28 21.46 17.74

Lp: vote 09: public works 4.00 4.50 6.00

Lp:vote 05: provincial treasury 15.90 16.83 11.00

Average Period in Months Post have been Vacant in Oct 2011, Dec 2011 and March 2012

Public works is doing well in terms of managing period in takes to fill a vacant position, falling within the national norm when compared to departments of Education and Health.

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Progress: Limpopo

• PERSAL Clean-up fast tracked in all 5 departments and showing good progress – results show many unfunded vacancies in all departments

• Organizational review processes initiated in all 5 Departments and showing good progress, contents informed by OFA processes.

• Review of appointments to determine whether they are in line with Public Service Act & Regulations initiated in all 5 departments – progress vary from complete to well advanced

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Progress: Limpopo

• Review the application of Performance management policy and system for SMS in all 5 departments – completed. Varying results in 5 departments. Generally poor alignment between departmental objectives and SMS KPAs. Many unsigned or incomplete PAs. Corrected as discovered.

• Review assessment of submission rate of financial disclosure – completed.

• Varying results in 5 departments. Many cases of interest in private companies. Accuracy of disclosures being subjected to forensic analysis in cases where financial mismanagement is investigated.

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Progress: Limpopo

• Management of disciplinary cases – varying rate of progress. Conclusion of such cases dependent on detailed forensic investigation and successful criminal prosecution. Can be very time consuming.

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PHASE1

Detection of IrregularitiesInvestigation /Prosecution Forward to the NPA

PHASE2

Administrative Disciplinary ProsecutionForward to the DPSA

PHASE3

Scrutiny of cases to establish prima facia caseAppointment of Presiding OfficersObtain consent from the EmployeeFacilitation of the logistical arrangement in terms of the hearing Facilitation and co-ordination of AppealsFacilitation of the Implementation of the sanction

Management of Disciplinary Cases

CASE LIST

DEPARTMENT TOTAL NO OF CASES

NO OF CASES REQUIRING INVESTIGATION

NO OF CASES REQUIRING HEARING

NO OF CASES FINALISED

EDUCATION 27 9 5 13

ROADS AND TRANSPORT

13 0 2 11

HEALTH 30 30 30 0

SERVICE PROVIDERS (Health)

51 51 - 0

TREAUSURY (Grievances)

12 12 - 0

TREAUSRY (Disputes)

8 8 8 0

LIMPOPO BACKLOG FILES RECIEVED

Approach to fast-track Service Delivery

Establishment of an HR Task Team with clear Terms of Reference to deal with amongst others: Plan to reduce Compensation of Employees by 2% (Limpopo); An action Plan to address the critical vacant positions in the 5 departments in Limpopo as well as Education Department in EC; Continuous monitoring of progress through project plans from departmental teams as part of PERSAL Clean-Up Strategy;

Training, in collaboration with PALAMA on PERSAL HR Information and use of such information to Senior HR Managers in Limpopo & Eastern Cape;

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Approach to fast-track Service Delivery (Limpopo)• Provision of Monitoring tools and Early warning

indicators to assist departments in tracking progress in costing structures against COE’s;

• Application of the Organisational Functionality Assessment Tool (OFA) on all departments in the intervention

• Communication from DPSA to DG’s/HOD through circulars on need to abolish unfunded vacancies on PERSAL ;

• Participation in provincial steering Committee meetings, Forums, etc, to give feedback

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PROGRESS: EASTERN CAPE EDUCATION

Implementation Plans have been developed and submitted to the principals.

Verification of plans well advanced within the department.

Awaiting principals’ meeting on a permanent work arrangement and logistics.

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Department Department Jan 2012Jan 2012 Feb 2012Feb 2012 March 2012March 2012

Filled Vacant Total VR Filled Vacant Total VR Filled Vacant Total VR

Limpopo Education 62,717

11,584

74,301 15.6%

62,903

11,951

74,854 16.0%

63,809

14,548

78,357 18.6%

Limpopo Health 37,944

28,106

66,050 42.6%

37,565

27,838

65,403 42.6%

38,084

27,134

65,218 41.6%

Limpopo Public Works

3,337 3,926

7,263 54.1%

3,322

3,942

7,264 54.3%

3,305

3,955

7,260 54.5%

Limpopo Roads & Transport

4,359 3,362

7,721 43.5%

4,343

3,384

7,727 43.8%

4,315

236

4,551 5.2%

Provincial Treasury 465 234

699 33.5%

464

237

701 33.8%

461 4

465 0.9%

Eastern Cape

Education 87,240 9,711 96,951 10.0% 81,656 14,842 96,498 15.4% 74,440 20,562 95,002 21.6%

Vacancy Rate for the Period January 2012 to March 2012

The table above indicate that of the five departments in Limpopo, Roads & Transport as well as Provincial Treasury have drastically reduced their vacancy rate in March 2012. to 5.2% and 0.9% respectively. Most of the four departments have not done much as this can be attributable to capturing unfunded vacancies on Persal. EC Education has picked up vacancy rate by 6% and this can also be attributable to re-employment of the 3000 teachers in February & March 2012.

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Approach to fast-track Service Delivery (EC Education)• Phase 1 on the proposed work plan is PERSAL

clean-up, this is the area where DPSA’s full participation is expected;

• This includes verifying the department information with the relevant personnel who are familiar with the organizational design structures and PERSAL information.

• Head count verification, etc, and the DPSA plays a critical role in terms of the analysis and verification of numbers as captured on PERSAL vis a vis departmental numbers – to ensure consistencies

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Emerging Issues

• Leadership & Governance• Management governance structures and processes to be reviewed• Financial and Administrative delegations to be reviewed

• HRM& D and Organizational Development

• PERSAL to be cleaned up – unfunded posts abolished• Service delivery model to be assessed and re-designed• Organisational structure to be re-designed to be in line with the new

service delivery model• Information Technology and Knowledge Management

• Assessment of ICT infrastructure in support of departmental operations

• Assessment of ICT security and governance

• Assessment of control mechanisms to guide the procurement, usage

and disposal of ICT assets29

Emerging Issues

• Service Delivery Improvement• Assess and review, map and improve key service delivery

processes (e.g. SCM and payments)• Assess & review the service delivery improvement plans and

charters (including service standards) of the department.

• Ethics and Anti-Corruption• Assessment and review of Anti-corruption policy implementation• Assessment and review of Anti-corruption and Risk management

plan• Assessment and review of processes to investigate, discipline and

prosecute staff members implicated in alleged corrupt activities

• Change Management

• Assessment to determine level of change readiness of department (against the background of the intervention activities).

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Emerging Issues

• Project Capacity:

• Multidisciplinary capacity needed in all section 100 (1) (b) departments, DPSA capacity thin

• Integrated teams to incorporating provincial officials as part of the work streams is very slow and create major challenges towards sustainability beyond the intervention

• Leadership & Management

• Leadership changes (Administrator level) especially in Limpopo Education results in project roll-out delays

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Thank YouThank You

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