REPORT BY THE INTERIM REPORT BY THE INTERIM MANAGEMENT TEAM TO THE MANAGEMENT TEAM TO THE

PORTFOLIO COMMITTEE: PORTFOLIO COMMITTEE: PUBLIC SERVICE AND PUBLIC SERVICE AND

ADMINISTRATIONADMINISTRATION

CAPE TOWN

14 AUGUST 2003

Structure of the report

Background and Introduction

Problem Analysis

Turn around strategy

Lessons from the EC

Challenges and risks

Turnaround Strategy

Mandate of the IMT

Overall goal of the IMT is to ensure that any service delivery backlogs are addressed and to establish sound management and leadership in the Education, Health, Roads and Public Works and Social Development departments

The IMT is specifically mandated to-

– establish turn around plans for the four target departments, including the elimination of service delivery backlogs

– address cross cutting issues such as disciplinary matters, procurement reform and human resource management

– establish appropriate management structures and back office support

– monitor the implementation of the turn around plans and other interventions as well as the use of conditional grants

On the basis of its presentations to the Provincial EXCO and Cainet, the IMT received additional mandates related to specific challenges

Structure of the IMT

Interim Management TeamDG:DPSA, DG:OPSC,DG:ECape and HoD of Provincial Treasury[In partnership with National Prosecuting Authority and other law enforcement agencies]

Specialist TeamsIssues based ad hoc teams, e.g. Disciplinary

cases

OPSCDPSA

National Depts& EC senior Managers

Joint Management TeamsSpecialists and consultants from

IMT Roadmap

3. Proposals & Way foward

•Develop proposals for all identified problems•Agree on priorities with Executive Council•Cost priorities and develop detailed implementation plans•Develop a comprehensive program management system

4. Implementation

•Implement, implement, implement •Visibility of delivery and celebration of success•Create a culture of “delivery”•April, ongoing

5. Evaluation and exit•Develop strategies for sustaining implementation drive•Evaluation and exit report•Through to March 2004

1. Preparation for IMT work•Set up infrastructure and establish teams•Asses legal options and accountability•November 2002 –January 2003

2. Problem analysis•Structure partnership arrangements with key stakeholders such as JACTT and AG

•Assess impact of previous initiatives•Conduct thorough problem analysis•Identify quick wins and opportunities for immediate success

•January –February 2003

Modus operandi of JMTs

JMT co-leaders work collaboratively, and the HOD remains accounting officer

The tasks of each JMT were to-

– develop plans and strategies to address service delivery backlogs

– Identify actions in the areas of Leadership and Management, Finance and Administration, Human Resource Management, Service Delivery and Ethics and Cultural issues

– to implement the turn around plan of the department

The roles of the JMTs of each department are now being assessed to improve their effectivness

Relationship with other stakeholders

The IMT functions in close co-operation with, and receives support from various partners and stakeholders. These are-

– the Joint Anti-corruption Task Team (JACTT) led by the National Director of Public Prosecutions, that attends to criminal matters emanating from the IMT’s work

– Intelligence and law enforcement agencies

– the Special Investigating Unit

– The Office of the Auditor-General

– a range of national and (other) provincial departments who provide portfolio specific or cross cutting support (eg. national Health department, SAMDI, provincial treasury of the Western Cape)

– the Center for Public Service Innovation and the State Information Technology Agency

The IMT’s operations are emerging as a model for integrated governance with a cross-departmental and cross-institutional sharing of skills and other resources

Socio-economic profile

Uneven development – an extremely bi-modal economy composed of:

– Two relatively developed port cities

– Impoverished rural periphery

Peripheral to minerals-energy complex

Home to migrant workers in the Bantustans

Urban/seaports: small import substituting manufacturing sector (mainly auto)

Rural/hinterland: Livestock economy

BASIC CHARACTERISTICS(note that figures may have changed)

Eastern Cape

South Africa EC % of RSA

Population (million) 6,79 44,05 15,4

GDP / GGP 2000 (R million)

56,888 887,795 6.4

GDP / GGP Growth rate (%)

1,5 2

Unemployment (% of labour force)

Total

Urban

Rural

48

37

63

34

29

44

Poverty

EC poorest province in SA – GGP per capita is half national average

64% of population live in poverty (household income less than R800/month)

43% of households earn less than R500/month

Poverty rate rises as high as 80% in former Transkei where households survive mainly on grants and remittances

(need to reconfirm figures as these may have changed, though

trends remain the same)

PROVINCIAL GROWTH & DEVELOPMENT STRATEGY FRAMEWORK

Industrial Development Support

Program

Rapid Impact Program Social Development Public Sector Transformation

Support to IDZs

Industrial Sector Studies

–Automotive

–Plastics

–Wood

–Food

Industrial Research Capacity

Strategic Infrastructure

Roads

Agro-Forestry & Beneficiation

Agriculture & Food processing

Social Infrastructure

Institutional renewal

Health Care

Education

Accelerated Delivery of Child Support Grant

Restructuring Provincial Forestry Program

Alignment of IDPs

Building Developmental Local Government

Provincial Planning Centre

Re-orientate Fiscus to Provincial Priorities

Medium term expenditure framework

Increase in equitable share for 2003/4 (6%) and stabilizing through MTEF:R26-R33b

Conditional grants to double during MTEF period

Gradual decline in own revenue over last three years but above budget expectations

Effect of overspending has been negative on the ability of the province to maintain a healthy surplus

Donor support projects in excess of R500m

About R3.4 billion targeted for infrastructure projects in current financial year

Spending capacity

Improved spending levels in nominal terms

Delays in payments of social grants arrears

Problem analysis: General observation

Quality of leadership and management at departmental level?

Quality of human resource management practices?

Financial management and general administrative capacity?

Ability to uphold ethics and reduce corruption?

Reliability and dependability of public service to deliver on government priorities?

Overall effectiveness and efficiency of public service ?

X

Positive Negative

X

X

X

X

Current Stakeholder Perceptions

X

Service delivery challenges - 1

Service delivery issues

– The Eastern region has suffered from a history of neglect, therefore bearing the brunt of geographic disparities from a service delivery point of view

– There is an over-supply of planning activity not matched by implementation capacity

– Study of budgets do not indicate an immediate funding problem although a case can be made for historical backlogs

Service delivery challenges - 2

In the Eastern Cape, like other under-developed regions, there is a high dependency on Government for socio-economic development. Government cannot fail this need. In the absence of widely-available alternatives for socio-economic development, Government remains the major provider of-

– infrastructure development

– services

– social security, and

– opportunities that stimulate job creation

Service delivery challenges - 3

Job creation and increased social security are just not happening visibly fast enough

There are plans and resources for fast-tracking service delivery in under-serviced areas (such as the Eastern region), however implementation of these plans remain frustratingly slow

Inadequate focus on results and too much time spent on process

Analysis of previous interventions aimed at improving

service delivery and capacity

Number of projects/interventions interventions being implemented as at Dec 2002

Education : 28 different interventions

Social Development : 20 different interventions

Public Works : 13 different interventions

Health : 32 different interventions

See annexure for detailed report

Trends in Findings from previous interventions

Shortage of professional/managerial staff

Many managers in acting positions

HR management is weak

Financial management capacity is inadequate

Poor communication

Huge gaps between macro plans and operational plans

Culture of “shifting the blame”

Intervention areas mostly focused on

Human resources (performance management, human resource records, training, recruitment, payment of backlogs, salary payments)

Service delivery (various specific areas e.g. payment of grants)

Financial resource management (payment of creditors, Clearing of suspense accounts, budget reviews)

Analysis of interventions

Similar type of activities being implemented by the different interventions but supported by different stakeholders e.g. different donors supporting similar type of activities

Repetitive nature of implementing activities which were addressed by previous interventions of sustainability may be attributed to consultants’ contracts that are not performance based

Our primary concerns - 1

Our assessment is that a change in behavioral patterns is lacking and this change is critical for turn-around of the departments

This assessment established that:-

– Managers are, continuously, not taking responsibility and they are not displaying a strong sense of accountability - according to managers the problem always is ‘out there” and blame for inertia, under-servicing, poor leadership and management are deferred to systems, inadequacies, interference by unions and stakeholders and historic challenges

– In spite of the fact that departments continuously receive audit disclaimers, no action is taken against any manager and the problems are not rectified

– Personal responsibility is consistently fudged

Our primary concerns - 2

Unions continue to have undue influence over managers and their decisions, especially in Education, but we have to recognize that a fear factor is prevalent in some of these decisions, although evidence is limited to an incident in Health

Very high levels of corruption are reported, but with limited follow through action

The culture of ill-discipline and acceptance of the poor work ethic, manifests in such behavior as absenteeism and demanding overtime for work that should be done in office hours, accentuated by lack of vigorous management responses

Our primary concerns - 3

A culture of entitlement prevails as epitomized by claims to overtime, performance awards and backlog HR payments

Managers have a significant reliance on outsiders for work that is normal businesses - donors and consultants are seen as only solutions

The authority and power of the Tender Board far outweighs its level of accountability

APPROACH

Comprehensive, integrated

– Addresses both actual delivery and the conditions that make delivery possible

Mixture of department specific and province wide

– There are transversal challenges that have to be addressed to make departmental delivery successful, for example financial management arrangements in the Province

Mix of short and long term

– Some solutions are immediately implementable, but will only realise benefits in coming financial years

– Some solutions are immediately implementable and will realise immediate benefits

CONCEPT

PROBLEM ANALYSIS

OUTCOMES

Back Office Support

HR Management

Leadership &

management

Ethics & anti-corrpuption

Internal Contrls

Service delivery

Education

Health

Social Dev.

Roads & PW

TURNAROUND PLANS AND TRANSVERSAL PROJECTS

Turnaround Strategy

Strengthen leadership

and management

Improve HR

Management

Improve Internal controls

and accountability

Strengthen Back

Office Support

Program

Management

Departmental

Turnaround

Strategies

Rapid and visible

Service delivery

Ethics and anti-

Corruption

Strategy

Turnaround Strategy

Decentralize financial delegations back to departments as from May 1;

Delegate procurement powers up to R5m

Source in back office support for two years based on output based contract

In sourcing will focus on financial management,systems, closing of books and expenditure management

Will include human resource management and cleaning of PERSAL database

Separate process for document management

Strengthen back office support

Strengthen leadership

and management

Improve HR

Management

Improve Internal controls

and accountability

Program

Management

Departmental

Turnaround

Strategies

Rapid and visible

Service delivery

Ethics and anti-

Corruption

Strategy

Strengthen Back

Office Support

BACK OFFICE SUPPORT: PROGRESS

Planned Achieved

Decentralize financial delegations back to departments as from May 1;

Financial delegations have been provided to departments in line with decentralisation decision of EXCO

The assessment of the IT infrastructure has been finalised and the draft report is being discussed by the IMT.

Delegate procurement powers up to R5m

Procurement delegations have been provided to the IMT and departments with effect from 1 May 2003 and are being used for IMT work

Source in back office support for two years based on output based contract. In sourcing will focus on financial management, systems, closing of books and expenditure management and will human resource management and cleaning of PERSAL database

Tenders awarded for Phase 1 which will result in the development of a detailed service level agreement for Phase 2.

Separate process for document management

The tender process for the development of the EDMS for the Department of Educations is been concluded through SITA processes.

SITA is now pursuing the feasibility of rolling-out the tender processes of the EDMS to other IMT departments.

IT Assessment The assessment has been finalised and a draft was presented and discussed on 13 August 2003.

Planned Achieved

BACK OFFICE SUPPORT: PROGRESS

Turnaround Strategy

Decentralize Internal Audit function;

Departments to have own Audit Committees;

Internal Audit capacity will be outsourced for first year whilst capacity being developed;

Common audit plan and strategy for rolling out internal audit developed;

Improve internal controls and accountability

Strengthen leadership

and management

Improve HR

Management

Strengthen Back

Office Support

Program

Management

Departmental

Turnaround

Strategies

Ethics and anti-

Corruption

Strategy

Improve internal

Controls

Rapid and visible

Service delivery

INTERNAL CONTROLS: PROGRESS

Planned Achieved

Decentralize Internal Audit function.

Internal Audit capacity will be outsourced for first year whilst capacity being developed.

Decentralisation to be piloted in four JMT departments. Tender awarded and work has begun.

Departments to have own Audit Committees.

Guidelines developed and departments busy establishing audit committees.

Common audit plan and strategy for rolling out internal audit developed.

Work in progress.

Turnaround Strategy

Implementation of resolution 7 proposals Filling of vacancies

Strategy for attracting scarce skills Support services companies Incentives for professionals in rural areas Internships and strategy for training

people in scarce skills

Improve human resource management

Strengthen leadership

and management

Strengthen Back

Office Support

Program

Management

Departmental

Turnaround

Strategies

Ethics and anti-

Corruption

Strategy

Rapid and visible

Service delivery

Improve HR

Management

Improve Internal Controls

IMPROVE HR MANAGEMENT: PROGRESS

Planned Achieved

Implementation of resolution 7 proposals

Consultation on plans finalised. Matching and placement to be finalised by 15 August. Affected staff to be informed by 22 August.

Filling of vacancies Process aims to be concluded by end September.

Strategy for attracting scarce skills, incentives for professionals in rural areas, internships and strategy for training people in scarce skills.

Multi-disciplinary task team formed, workshop held and report being compiled.

Support services companies Report completed, proposal presented to IMT on 13 August, whereafter will be tabled with EXCO.

Turnaround Strategy

Increase management to at least 1% of social departments

Competency profiling of all senior managers

Performance agreements for senior managers

Initiate disciplinary processes for managers based on existing forensic and Auditor General reports

Workplace based management development program

Strengthen leadership and management

Improve HR

Management

Strengthen Back

Office Support

Program

Management

Departmental

Turnaround

Strategies

Ethics and anti-

Corruption

Strategy

Rapid and visible

Service delivery

Strengthen leadership

and management

Improve Internal Controls

LEADERSHIP AND MANAGEMENT: PROGRESS

Planned Achieved

Increase management to at least 1% of social departments.

Appointment process ongoing.

Competency profiling of all senior managers.

Competency profile complete. Final report being prepared.

Performance agreements for senior managers.

Ongoing.

Initiate disciplinary processes for managers based on existing forensic and Auditor General reports.

Forensic reports ongoing. In instances disciplinary proceedings have commenced.

Workplace based management development program.

Will be developed once final competency report complete.

Turnaround Strategy

Advisory Panel for disciplinary cases

Prosecutions for old and emerging cases

Special Commercial Crimes Court

Education and Awareness programs

Hotline

Forensic audits into problem areas

Ethics and anti-corruption strategy

Improve HR

Management

Strengthen Back

Office Support

Program

Management

Departmental

Turnaround

Strategies

Strengthen Management

And leadership

Rapid and visible

Service delivery

Ethics and anti-

Corruption Strategy

Improve Internal Controls

ETHICS AND ANTI-CORRUPTION: PROGRESS

Planned Achieved

Advisory Panel for disciplinary cases

Panel set up and team dealing with cases.

Prosecutions for old and emerging cases

Ongoing with significant progress being achieved. Two teams involved: Disciplinary Cases Task Team (discipline) and Joint Anti-corruption Task Team (criminal)

Education and Awareness programs

Three programmes aimed at senior managers, front line staff and other employees have been developed and aligned with Batho Pele components.

Hotline Operational with many cases being received. Cases referred to DCTT or JACTT as required.

Forensic audits Ongoing with good progress.

Turnaround Strategy

Service level agreement with Coega.

Priority projects for six departments.

Framework for monitoring projects.

Rapid and visible service delivery

Improve HR

Management

Strengthen Back

Office Support

Program

Management

Departmental

Turnaround

Strategies

Strengthen Management

And leadership

Ethics and anti-

Corruption Strategy

Rapid and visible

Service delivery Improve Internal Controls

RAPID SERVICE DELIVERY: PROGRESS

Planned Achieved

Service level agreement with Coega

Draft prepared, in the process of being finalised.

Priority infrastructure and maintenance projects for six departments

Departments have identified 10 projects each for rapid implementation. Detailed implementation plans are being developed.

Framework for monitoring all projects

Being developed to allow for monitoring of all projects in the province.

Turnaround Strategy

Departmental turn-

around strategies

Improve HR

Management

Strengthen Back

Office Support

Program

Management

Rapid and Visible

Service Delivery

Strengthen Management

And leadership

Ethics and anti-

Corruption Strategy

Departmental

Turnaround Strategies

Improve Internal Controls

TURN AROUND: EDUCATION Based on 12 projects

– Human resourcing and personnel expenditure

– district development

– performance management

– management (their performance) and leadership

– financial services

– human resource services

– procurement and logistical services

– discipline

– physical facilities

– learning support material

– matriculation readiness

– school nutrition programme

Was necessary to change the management structure by establishing a project management structure and the infusion of managers deployed from national departments, as well as the appointment of an interim head of department

TURN AROUND: HEALTH

Three key focus areas

Improve the management of health services

Improve targeted front line health services in Eastern Region

Improve back office support to health institutions

TURN AROUND DRPW

Roads and BuildingsArea wide buildings and maintenance contracts

Strategy Priority projects (Roads and Buildings)

PropertyStrategic Asset Management Partner

Human ResourcesCorporate Support ProcurementEthics

CBWP

Review current leadership and management cadre

Rid the Department of corrupt officials

Implement initiatives to remove service delivery bottlenecks, particularly to speed up CGS registration and the disbursement of welfare grants.

Celebrate short-term achievements with aggressive targeted communications

PROPOSED TURN AROUND: SOCIAL DEVELOPMENT

The long-term transformation will take place on three levels:

– A reconfiguration of how the Department interacts with the public, which we call the front office. New partnership model with Home Affairs and Department of Labour to provide a one stop shop solutions

– Helping the Department to make the shift from a welfare to a developmental paradigm

– A redesign of the Department’s back office. Key would be setting a processing center in the department and establishing a contract management center outside the department but managed by the department

 

PROPOSED TURN AROUND: LONG TERM

PROGRESS AGAINST DEPARTMENTAL TURNAROUND PLANS

Implementation has begun and progress in certain areas is being achieved.

Issues of budget, however, are constraining progress and initiatives are underway to resolve this problem.

Some concerns are also emerging with regard to the buy-in of certain departments in implementing the turnaround plans.

CHALLENGES/RISKS

Budget:

– Required budgeted to implement is approximately R 240 million.

– Departmental and transversal interventions will be funded from savings/underspending.

– Departments are busy finalising these allocations, but are experiencing difficulty to balance with ongoing work and commitments.

Buy-in of departments

– Success requires ongoing support and buy in from those in leadership.

Revised management structures

– Revised management structures are required for the successful implementation of turnaround plans.

Challenges related to the concept

– Co-operative nature of the model requires effective lines of accountability, good communication and funding.

EXIT OF THE IMT

Concurrently developing critical structure through-

- Monitoring and Evaluation mechanisms;

- Effective Management structures; and

- Dedicated function located in the OTP to drive and monitor after March 2004.

EMERGING LESSONS/THEMES

Turnaround is not a quick fix, some solutions only realise its full impact over time

Getting basics right is essential for smooth functioning of higher level activities. A breakdown of basic administrative practices (such as recording leave) in many instances sabotage an output (such as paying out a pension, which cannot be done without a complete leave record)

Setting a foundation for future delivery

– A lot of effort is being put into support systems that make actual delivery of services possible. Stable but flexible support systems can accommodate policy changes, but if the foundations are weak, departments battle to deliver and accommodate policy shifts.

Exposing both national and provincial departments to various new ways of delivery (e.g. partnerships, alternative service delivery, benefits of using IT)

– The IMT is providing a rich experience in public administration and innovation, drawing on examples of other departments and provinces and tailoring solutions. These experiences can also enrich processes in other departments and provinces

EMERGING LESSONS/THEMES

To complete the delivery chain local government needs to be included in turn around strategies, but currently the legislative framework hampers this integration.

The cooperative model currently applied in the Eastern Cape has limitations, and alternative models need to be available for similar interventions. This requires that the Constitutional-type interventions be made possible in flexible legislation.