Report of the Sessional Committee on the Accounts of the Kwazulu government for the financial year 1983/84

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STANFORD LIBRARIES

SO

E

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NY

OB

A

MU

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KWAZULU

LEGISLATIVE ASSEMBLY

REPORT OF THE SESSIONAL COMMITTEE ON THE ACCOUNTS OF THE KWAZULU GOVERNMENT FOR THE FINANCIAL YEAR 1983/84

J 711

T365 1985

1983/84

HOOVER

STANFORD LIBRARIES

ION

INSTITUT

Kwazulu

(South Africa)

SA6523PG

9

Legislative Assembly .

MINUTES

OF THE MEETING OF THE

SESSIONAL COMMITTEE ON PUBLIC ACCOUNTS

OF THE

KWAZULU LEGISLATIVE ASSEMBLY

HELD ON

16 · 18 APRIL , 1985

AT

ULUNDI

This Report is also available in Zulu and in Afrikaans .

་

1

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KWAZULU SESSIONAL COMMITTEE ON PUBLIC ACCOUNTS

CONTENTS

Page Rule 24 ( 2 ) of the Rules of Procedure of the KwaZulu Legislative Assembly

1

Announcement

1

Matters referred to the Committee

2

Sessional Committee on Public Accounts 1985 - First Report

3

Second Report of the Sessional Committee on Public Accounts , 1985

4

Sessional Committee on Public Accounts - 1985 Programme : 16 - 18 April , 1985

5

Proceedings of the Sessional Committee on Public 1985 Accounts 11 April , 1985

8

Proceedings of the Sessional Committee on Public Accounts - 1985 16 - 18 April , 1985 ....

9

Verbatim Report 16 April , 1985 The Chairman The Treasury Vote 9 - Department of Finance and Economic Affairs Vote 5 - Agriculture and Forestry Vote 9 - Finance and Economic Affairs

11 12 16 21 43

17 April , 1985 Vote Vote Vote ture Vote Vote Vote

2 Department of the Interior 3 - Department of Works · 4 Department of Education and Cul-

85 101

6 - Department of Justice 7 Department of Health and Welfare 8 - Department of Police

108 117 123 145

Vote 1 - Department of the Chief Minister

157

18 April , 1985

{

1

1

1 PROCEEDINGS OF THE SESSIONAL COMMITTEE ON KWAZULU GOVERNMENT ACCOUNTS

RULE 24 ( 2 ) OF THE RULES OF PROCEDURE OF THE KWAZULU LEGISLATIVE ASSEMBLY

As soon as possible after the beginning of each Session the Legislative Assembly shall appoint the following Sessional Committees , each consisting of five members , including the Chairman thereof :

(2)

Committee on Public Accounts whose terms of reference shall be to examine the accounts showing the appropriation of the sums granted by the Legislative Assembly to meet public expenditure . When the Report of the Auditor- General is received by the Minister of Finance it shall stand referred to this Sessional Committee .

ANNOUNCEMENT

2.

APPOINTMENT OF COMMITTEE :

26 MARCH , 1985 : In terms of Rule 24 ( 2 ) the following hon . members have been appointed as members of the Sessional Committee on Public Accounts :

Mr. McD . September

(Mahlabathini ) - Chairman

Chief B. Zulu

( Inkanyezi ) (Madadeni )

Mr. P.0 . Sikakana Mr. T.P. Dube

(Enseleni )

Mr. M.A. Mkhwanazi

( Umlazi )

- 2

2.

MATTERS REFERRED TO THE COMMITTEE :

27 MARCH , 1985 : Report of the Auditor - General on the Accounts of the KwaZulu Government and of the Lower Authorities in the Area for the financial year , 1983/84 , Tabled .

--3-SESSIONAL COMMITTEE ON PUBLIC ACCOUNTS 1985 FIRST REPORT

The Sessional Committee on Public Accounts , 1985 , has the honour to submit its FIRST REPORT concerning the unauthorized expenditure of R1 460 396,39 as reported in paragraph 4 , page 1 of the Report of the Auditor -General on the Accounts of the KwaZulu Government for 1983/84. The Committee recommends the specific appropriation by the Legislative Assembly of the sum detailed in the report which is submitted herewith for Tabling .

( Signed ) M.McD . September CHAIRMAN SESSIONAL COMMITTEE ON PUBLIC ACCOUNTS , 1985 16 APRIL , 1985 .

- 4 SECOND REPORT OF THE SESSIONAL COMMITTEE ON PUBLIC ACCOUNTS , 1985

Your Committee , having considered and examined the matters mentioned in the Report of the Auditor - General on the Accounts of the KwaZulu Government for the financial year 1983/84 referred to it , and having heard and considered evidence , begs to report as follows :

RESOLUTION NO . 1 : Your Committee is gravely perturbed that up to now, while it annually makes Resolutions covering a wide field of financial , accounting and administrative functions , including the implementation of internal checking and control measures in connection with thefts and irregularities , losses , transport , heavy equipment , purchase of stores and equipment , training of staff , lack of control over suspense accounts , outstanding cheque lists and directives to the Treasure to take followup control action , it finds to its dismay that generally Accounting Officers give your Committee assurances that everything possible will be done to improve matters in their Departments , but little evidence could be found that real effect was given to previous Resolutions . Your Committee accordingly recommends that all Accounting Officers be advised , through the Treasury of the serious view taken of the failure to implement the measures to improve control over State funds , as indicated in previous Resolutions , and further recommends that Treasury , as the central financial authority in the Public Service , be required to take positive follow- up action to ensure that adequate steps are taken by the Departments concerned to comply with all existing Resolutions of this Committee .

( Signed ) M. McD . September CHAIRMAN

ULUNDI

18 APRIL , 1985.

· 5 SESSIONAL COMMITTEE ON PUBLIC ACCOUNT S - 1985 PROGRAMME :

16 - 18 APRIL , 1985

1.

Welcome by Chairman .

2.

General Discussion .

3.

Resolutions of the Sessional Committee , 1984 .

3.1

Reply of the Treasury in respect of Resolutions 1,3 and 4.

3.2

4.

Accounting Officer , Vote 1 Department of the Chief Minister - Reply in respect of Resolution No. 2 .

Investigation of the Report of the Auditor - General on the Accounts of the KwaZulu Government and of the Lower Authorities in the Area for the financial year 1983/84 .

4.1

Accounting Officer , Vote 9 - Department of Finance and Economic Affairs - Unauthorized Expenditure .

4.2

Committee deliberates on Unauthorized Expenditure .

4.3

Preparation of First Report , 1985.

5.

Remainder of the Auditor - General's Report .

6.

Accounting Officer , Vote 5 - Department of Agriculture and Forestry .

6.1

Paragraph 2 ( 3 ) Page 1. checking and control .

6.2

Paragraph 24 ( 1 ) Page 12. Thefts and irregularities .

6.3

Paragraph 24 ( 3 ) Page 12. Manufacturing , producing and

Audit queries , internal

trading operations .

6.4

Appropriation Account Page 12. Explanations of the causes of variation between expenditure and amount voted - Main Divisions B , F and G.

6.5

7.

Appropriation Account , Page 12. Advantageous utilization of funds .

Accounting Officer , Vote 9 nomic Affairs .

Department of Finance and Eco-

7.1

Paragraph 28 ( 1 ) ( c ) Page 16.

7.2

Paragraph 28 ( 2 ) Page 16. Thefts and irregularities .

7.3

Paragraph 28 ( 4 ) Page 16. Outstanding cheque lists .

Motor accidents .

- 6 -

7.4

Paragraph 28 ( 5 ) Page 16 . General's Account .

Overdraft on Paymaster-

7.5

Paragraph 28 ( 6 ) Page 16 . chequer Account .

Over-issues from the Ex-

7.6

Paragraph 28 ( 7 ) Page 16 .

Ex gratia payments .

7.7

1983 and 1984 Sessional Committees on Public Accounts Suspense Accounts .

7.8

Paragraph 28 ( 8 ) Page 16. Accounts .

7.9

Statement 4 Page 27.

Suspense and Disallowance

Service :

Subsidized Motor

Transport .

8.

Secretary of the Public Service Commission .

8.1

Statement 4

Page 27

Services :

Subsidized Motor

Transport . 9.

Accounting Officer , Vote 2

9.1

Paragraph 2 (3)

Department of the Interior .

Page 1

Audit queries , internal

checking and control . 9.2

10 .

Paragraph 21 ( 1 )

Page 9

Townships

Mondlo Township .

9.3

Paragraph 21 ( 1 )

Page 9

Townships · Items ( h ) and ( i ) .

9.4

Paragraph 21 ( 1 )

Page 9

Townships - Item (g) .

9.5

Paragraph 21 ( 2 )

Page 9

Thefts and irregularities .

Accounting Officer , Vote 3 - Department of Works . 10.1

Paragraph 2 ( 3) Page 1 ing and control .

10.2

Appropriation Account

Audit queries , internal check-

Page 10

Explanations of the

causes of variation between expenditure and amounts voted - Main Divisions B , G and L.

11 .

Accounting Officer , Vote 4 - Department of Education and Culture .

11.1

Paragraph 2 ( 3)

Page 1

Audit queries , internal check-

ing and control . 11.2

Paragraph 23 ( 2 )

Page 11 Thefts and irregularities .

11.3

Paragraph 23 ( 4)

Page 11 Fruitless expenditure .

- 7--

12 .

Accounting Officer , Vote 6 - Department of Justice .

12.1

Paragraph 2 ( 3)

Page 1

Audit queries , internal

checking and control .

13.

12.2

Paragraph 25 ( 1 )

Page 13 Thefts and irregularities .

12.3

Paragraph 25 ( 2 )

Page 13 Ex gratia payment .

Accounting Officer , Vote 7 -

Department of Health and Welfare .

Audit queries , internal check-

13.1

Page 1 Paragraph 2 ( 3 ) ing and control .

13.2

Paragraph 26 ( 3 )

Page 14 Thefts and irregularities .

13.3

Paragraph 26 ( 6 )

Page 14 Compensation payment

(Committee will also require information regarding type of heaters installed in hospitals ) .

13.4

Appropriation Account

Explanation in respect

Page 14

of saving under Main Division 0 . 13.5

Appropriation Account

Page 14

Amount in Suspense .

Section 14 ( 3) ( d ) of Act 66 of 1975 . 14.

Accounting Officer , Vote 8 - Department of Police . 14.1

Paragraph 9

14.2

Paragraph 27

14.3

Appropriation Account

Page 2 Page 15

Stores and equipment - stocktaking . Compensation payments .

Page 15

Explanation of the

causes of variation between expenditure and amounts voted - Main Divisions B and F.

15.

Accounting Officer , Vote 1 - Department of the Chief Minister .

15.1

Resolutions

Reply in respect of Resolution No. 2 of

1984. 15.2

Paragraph 20 ( 1 )

Page 8

15.3

Appropriation Account

Bursaries . Page 8

Explanation of the cause

of variation between expenditure and amounts voted . Main Division E.

- 8 PROCEEDINGS OF THE SESSIONAL COMMITTEE ON PUBLIC ACCOUNTS - 1985

11 APRIL , 1985 VENUE :

LECTURE ROOM - DEPARTMENT OF THE CHIEF MINISTER , ULUNDI . 09h30 .

PRESENT :

Mr. M.McD . September

-

Chairman

Mr. A. Mkhwanazi

-

Member

Chief B. Zulu

-

Mr. P.0 . Sikakana

-

Member Member

ABSENT : Member

Mr. T.P. Dube OFFICIALS IN ATTENDANCE :

Messrs .

W.B. Makhathini

·

L.J. Parker

Committee Clerk Officer of the Auditor -General

S. Spies T.G.J. Basson

-

Officer of the Auditor-General

C.J. Lengana

-

Officer of the Auditor - General

Officer of the Auditor -General

1.

The Chairman took the Chair and welcomed the members .

2.

The Committee Clerk read Rule 24 ( 2 ) of the Rules of Procedure of the KwaZulu Legislative Assembly and also the announcement of appointment of Committee members .

3.

Discussions on the proposed programme took place .

4.

Meeting adjourned at 14h40 until Tuesday , 16th , at 10h00 .

·9 PROCEEDINGS OF THE SESSIONAL COMMITTEE ON PUBLIC ACCOUNTS

1985

16 - 18 APRIL , 1985

VENUE :

LECTURE ROOM - DEPARTMENT OF THE CHIEF MINISTER - ULUNDI . 10h00 .

PRESENT : Messrs M.McD . September T.P. Dube

Chief

Chairman -

Member

P.0 . Sikakana

-

Member

B. Zulu

·

Member

APOLOGY :

Mr. M.A. Mkhwanazi

Member ( 16/4/1985 only )

OFFICIALS IN ATTENDANCE : Messrs . L.J. Parker S. Spies T.G.J. Basson J. van Tonder G.T. Liversage B.P. Kunene

-

Officer of the Auditor-General

·

Officer of the Auditor - General

-

Officer of the Auditor - General Secretary to the Treasury Chief Accountant

·

Committee Clerk

1.

The Chairman opened the meeting and welcomed all present .

2.

The following officials were examined and evidence was taken : 2.1

Messrs . A.P. van der Watt - Acting Accounting Officer Department of Finance and Economic Affairs

2.2

3.

J. van Tonder

- Secretary to the Treasury

The Committee adjourned and deliberated on Unauthorized Expenditure .

The First Report of the Sessional Committee

was compiled for Tabling in the Legislative Assembly . 4.

Mr. H.M.S. Ferreira - Accounting Officer Department of Agriculture and Forestry , was examined on Vote 5 .

5.

The Committee continued taking evidence and Mr. A.P. van der Watt was questioned on Vote 9 .

10

6.

The meeting adjourned at 16h14 until 09h30 on 17 April , 1985 .

7.

The following were examined and evidence was taken :

7.1

Mr. W.F.N. Wiggil · Accounting Officer : Department of the Interior .

7.2

Mr. H.B. Isherwood - Accounting Officer : Department of Works .

7.3

Mr. D.Y. Zimu - Accounting Officer : Department of Education and Culture .

7.4

Mr. E.F. Oltmann

7.5

Dr. D. Hackland - Accounting Officer : Department of Health and Welfare .

7.6

Col. S.M. Mathe · Acting Accounting Officer : Department of Police .

7.7

Mr. G.T. Liversage - Chief Accountant .

7.8

Mr. J. van Tonder - Secretary to the Treasury .

- Department of Justice .

8.

The Meeting adjourned at 15h40 until 09h30 on 18 April , 1985.

9.

The following officers were examined and evidence taken :

9.1

Mr. S.E. Armstrong - Acting Accounting Officer : Department of the Chief Minister .

9.2

Mr. J.B. Cele - Secretary for the Public Service Commission .

10 .

Secretary to the Treasury .

9.3

Mr. J. van Tonder

9.4

Mr. G.T. Liversage - Chief Accountant .

The Second Report of the Sessional Committee was compiled and accepted for Tabling in the Legislative Assembly .

Meeting prorogued at 10h50 .

- 11 · VERBATIM REPORT 16 APRIL, 1985

10h00 .

THE CHAIRMAN :

First of all I wish to welcome you all . Thank you very much for the arrangements made and thank you , Mrs. Spies ,

for your assistance .

Mr. Van Tonder , we thank you for spending some time with us my colleagues , and Mr. Parker and your team.

A hearty welcome to all .

I do not know how the Votes are going to go today , but I hope that it is going to be good for us all . I have only one request to make and that is directed to the Chief Accountant , Mr. Liversage . It has been very much disturbing for me , when I look back at what we have been doing in the records , that it would appear that you are part of the Accounting Officers , which is not correct . I mean , you are only assisting them . Therefore I think it would be good for us all and tidier for our reporting - I am not against your assisting them , but it should not be recorded here .

It is something you can do outside and

they can ask for leave to get information and so on . Do you accept that? MR . LIVER SAGE :

I do , Mr. Chairman .

THE CHAIRMAN :

Thank you , very much . I think we can then start .

DISCUSSION BETWEEN MR . LIVER SAGE AND THE CHAIRMAN . THE CHAIRMAN :

MR . PARKER :

Do you agree with that , Mr. Parker ? Yes , Mr. Chairman , Mr. Liversage is the Chief Accountant and he does assist the Accounting Officers and I think you put it quite neatly

- 12 when you said ,

if they want to consult him , if

they cannot answer a question , then it would be advisable , with your permission , to be excused and to consult and then to come back with a revised or a prepared answer to your question . Thank you , Mr. Chairman . MR . LIVER SAGE :

Thank you , Mr. Chairman .

The point is taken .

THE TREASURY : THE CHAIRMAN :

We come to you , Mr. Van Tonder .

We would

like some explanation here and I will ask my colleague to put a question to you , according to my script here .

MR . DUBE :

This is the question , Mr. Chairman . Mr. Van Tonder , would you kindly inform this Committee of the action taken by Treasury in an endeavour to ensure that its Resolutions Nos . 1 , 3 and 4 of 1985 , as accepted by the Legislative Assembly , were implemented? In your reply also indicate the approximate dates of the action taken and furnish this Committee with any further relevant information in regard to the implementation or otherwise by Accounting Officers .

MR . VAN TONDER :

Mr. Chairman , yes , on 27 April , 1984 , the Treasury sent out a circular with the Resolutions taken by this Committee in 1983 as well as 1984 , and we asked them to comment on these Resolutions , what was done in their Departments to carry out the Resolutions of the Committee . Unfortunately I did not get any reaction from the Departments . I had to send out a reminder , which was done in April , 1984. I still did not get any replies or comments from the Departments , so I sent out a new circular to all Accounting Officers in December ,

1984 , and then I

started getting results from the Departments . I did get comments and replies from all

- 13 Departments , in which they reacted by saying that the Resolutions have been taken note of and that they will be carried out and are being carried out in their Departments . Now, I have no reason to believe that it was not the case and that it has not been carried out in the Departments , Mr. Chairman . To date I have not had any reply after that , after the last replies that I received from the Departments , but I have asked , through the secretaries ' meetings , that should there be any more action taken in the Departments , Treasury should be informed thereof . But that was done very recently , so at this stage I can report that the Resolutions were taken up with the Departments and they are being carried out in the Departments . THE CHAIRMAN :

I hope you have a copy of these Resolutions before you there .

MR . VAN TONDER : THE CHAIRMAN :

Yes , I have , Mr. Chairman . Take Resolution No.

3 , Mr. Van Tonder , the

sentence there , three lines from the bottom was this Resolution communicated by Treasury to the KwaZulu Government for its decision as far as the value of the heavy machinery is concerned ? I am referring particularly to heavy machinery . MR . VAN TONDER :

It was conveyed to the Department of Agriculture as well as the Department of Works , Mr. Chairman , and the replies that I got from those two Departments stated clearly that it will be done and it will be carried out in the Departments .

THE CHAIRMAN : MR . VAN TONDER :

When was that , Mr. Van Tonder? This was done in December , 1984. time it was done in April ,

1984.

The first

The first circu-

lar was sent out in April , 1984 , to which I did not get a reply , but then I did get a reply to

14

the circular I sent out in December , 1984 , saying that it will be carried out . I have it in front of me here . The Accounting Officer reported , just after he had received the circular , saying :

" It was not possible to compile a record of heavy machinery and equipment before April , 1984 , as a physical inspection had to be done in each region and district of the Department . At the end of December , 1984 , the Department will be in a position , as was agreed with the Auditor -General , to compile a record of operative , inoperative and machines to be written off. The value of the heavy machinery could then be assessed and percentage depreciation will be agreed with the AuditorGeneral . # That was his reply to that Resolution . THE CHAIRMAN :

MR . VAN TONDER :

And as you said earlier , you have no doubt that this will be followed? Well , I have at this stage no reason to believe that it will not be done , as the Accounting Officer promised here that he will take the matter up with the Auditor - General .

MR . DUBE :

Mr. Chairman , which Department was this reply from?

MR . VAN TONDER :

This was from the Department of Agriculture , Mr. Chairman .

THE CHAIRMAN :

Mr. Van Tonder , how is the value agreed upon? Has it been agreed?

MR . VAN TONDER :

Mr. Chairman , the Accounting Officer has not yet come back to me about this , because he states

- 15 here that it will be agreed upon with the AuditorGeneral . Now, he did not come back to me about that and I must say , at this stage I have not taken this up with him yet . THE CHAIRMAN :

Mr. Van Tonder , I think you must realize yourself , being a newcomer and this being a new attempt on our part to correct the records , that we would like to have this really followed up strictly and especially the Treasury should have this information , because you have got to help them . There must be teamwork in assessing the value of the machinery . Is that not true?

MR . VAN TONDER :

Mr. Chairman , I will give him all the assistance that he needs , but you know , as the Accounting Officer says here , this matter will be taken up with the Auditor - General , and it is not yet the end of the financial year at this stage , or it was a very short while ago , so I accept that he will at one stage or another come back to me in Treasury to have this matter put right . If he does not do so , then I will go back to him and see that he does .

THE CHAIRMAN :

I would like to hear your comments , Mr. Parker , please .

MR . PARKER :

Thank you , Mr. Chairman . According to the Resolution , the Accounting Officers of the Departments of Agriculture and Forestry and Works were to agree upon a value of the heavy machinery with the Secretary of the Treasury and the Auditor - General . So , if they write to the Secretary of the Treasury and say , they have contacted the AuditorGeneral ,

it is not in the spirit of your Resolu-

tion , they must make contact with the Secretary of the Treasury and the Auditor - General , not just with one of the members . Thank you , Mr. Chairman .

16 THE CHAIRMAN : MR . VAN TONDER :

I think , Mr. Van Tonder , we agree with that ?

I will go I agree with that , Mr. Chairman . position is . the what back to him and ask him Thank you .

THE CHAIRMAN :

Then we will proceed . Gentlemen , I am sorry I delayed to say this , but those of you who would like to remove their jackets are free to do so .

VOTE 9

DEPARTMENT OF FINANCE AND ECONOMIC AFFAIRS :

THE CHAIRMAN :

I would like to welcome you , Mr. Van der Watt . I will ask my colleague to put the question to you , Mr. Van der Watt .

MR . DUBE :

Mr. Chairman , this is the question I am putting to Mr. Van der Watt . According to the Auditor - General's report the explanation was that the excess could be attributed to the manner in which the amounts in the schedule to the KwaZulu Additional Appropriation Act , 1984 , had been framed .

Could you kindly inform this Committee more explicitly what is meant by this explanation and how it was possible for it to give rise to unauthorized expenditure ? I assume that with the control measures in force in your Department you should have , some time before the close of the financial year , been aware that your Vote would be overspent and accordingly you could have taken steps to reduce expenditure within it , so as not to incur unauthorized expenditure . MR . VAN DER WATT :

Mr. Chairman , the Second Revised Estimates for the Department of Finance : R28 619 400 , as approved by Treasury for 1983/84 was the actual

-- 17 amount required to defray anticipated expenditure on Vote 9 , that is , the additional amount of R2 509 700 , plus the additional appropriation of R26 109 700 , gives us a total of R28 619 400 . At this point in time there was no possibility that the Vote could be overspent . However , on receipt of the Printed Estimates of the additional expenditure in April , 1984 , it was observed that a saving of R3 933 140 , which was in fact a saving on Vote 3 - Works , appeared against Vote 9 . As it was too late at that stage to change matters , it was thought best to wait and see what the actual closing of the books and the final appropriation account would reflect . In the normal course of matters this unfortunate miscalculation should not have occurred , but apart from the fact that since 30 April of last year until 7 April , 1984 , there were so many interruptions as a result of the wash- away of the bridge , that the normal functioning of the Department , and also of Treasury , was largely disrupted . We did divide the work .

I took charge of the

general administration and two Bills , the Harmonization of Income Tax Act and the Withdrawal of Moneys Amendment Act . Whilst the then Secretary for Finance was largely involved with the flood disaster , it was very seldom that we got together . At home , yes , at Melmoth , we did get together , but there was no time really for anybody to peruse these figures . Everybody acted in good faith and to the best of their ability and unfortunately I am not in a position to indicate exactly what happened that these savings were reflected incorrectly in the schedule to the Additional Appropriation Act .

Thank you . THE CHAIRMAN :

Thank you , Mr. Van der Watt .

18 Before I move on to ask Mr. Van Tonder a question , I would like to put one question to you , which will perhaps put me more clearly in the picture . You have mentioned a miscalculation that was partly the reason .

Thereafter , of course , you

mentioned these discrepancies , which we all know and we appreciate the fact that it could have had an influence on the whole disruption . But what bothered me very much is this miscalculation you have mentioned . Can you repeat that? MR . VAN DER WATT :

Mr. Chairman , if we turn to page 1 of the abstract of the estimated additional expenditure from the Revenue Fund of the KwaZulu Government during the year ending 31 March , 1984 , the saving in the third column against Vote 9 : Finance R3 933 140 , was in fact a saving under Vote 3 · Works .

The function in regard to transport ser-

vices was transferred to Finance in March , 1983 , and this saving is reflected incorrectly there .

THE CHAIRMAN :

Yes , but that is the point , Mr. Van der Watt , because this is a discrepancy within the Department .

MR . VAN DER WATT :

The global amount of the That is correct . Fiprovision was not exceeded , but on Vote 9 : nance , there is now an apparent discrepancy .

THE CHAIRMAN :

Mr. Van Tonder , could you also comment on

this? MR . VAN TONDER :

Mr. Chairman , yes , it is actually very easy to explain the whole problem . I must admit that the mistake actually occurred in Treasury , and it was when we compiled the Additional Estimates that we made a mistake . This is actually a clerical mistake that crept in . It was very unfortunate that during the financial year we transferred a certain section from the Department of Works to the Department of

- 19 .· Finance , and when the Additional Estimates were compiled , instead of showing the saving against the Department of Works , we showed that saving against the Department of Finance .

Unfortunately

you do not have a copy of this , but the original estimate of the Department of Finance was R2,5 million and we showed that there was a saving under that Department of R3,9 million .

Now, it is

totally impossible for something like this to happen .

What actually happened was that instead of putting the R3,9 million under Works , we put it under Finance , and I would like to put this right . There is in fact no discrepancy , it is just a question of putting one figure against the wrong Department , and when we started balancing the summary , instead of allowing the Department of Finance an additional amount of R26 million , we allowed them an additional amount of R22,1 million , because of this R3,9 million saving that was put in the wrong column .

The Department of Finance was advised by Treasury that the full amount of R28,6 million was approved . So I would like to put it this way , that the Department of Finance did not go wrong anywhere , it was actually the Treasury that slipped up here , and the blame must be laid at Treasury's door for this mistake that was made . The Department could not have known about this before the end of the financial year , because the Additional Estimates and the Bill were only Tabled in the Legislative Assembly after the end of the financial year . That is the explanation of the whole problem .

We have taken steps in Treasury to ensure that this does not happen again . We will check and recheck in future to see that this does not happen again .

20 . Thank you , Mr. Chairman .

THE CHAIRMAN :

Thank you , Mr. Van Tonder .

It is very in-

teresting for me to see how this ball has been kicked from one side to the other . I do not know whether my colleagues here would perhaps like to comment , but I find it very strange , when such a big transaction is undertaken , transferring a big chunk to a certain Department , that the finances accompanying that is not taken care of. How such a mistake could be made , I do not know, because after that there were developments , payments and so on were made in that particular Department , so how this could have been overlooked I cannot see . MR . VAN TONDER :

Mr. Chairman , the problem was that the Department of Finance was informed that the amount that they requested was actually approved .

So it was

just a question that when the document was compiled , the amounts were entered wrongly in the document itself. In total there was nothing wrong with the document , it is just that the detail of the document is wrong , inside the document . THE CHAIRMAN :

Well , Mr. Van Tonder , I think it all amounts to the same thing . Whether it is inside or outside , it should not have been possible to do that , if there was proper accounting and taking care of the work , because it is not only done in one day when you enter a figure , but this was a development . I think when you closed your books , you did not only close the books of that certain section that remained and then transferred the funds to the other Department with the money that accompanied it . Anyway , it is neither here nor there , but what I am saying is that this is not as simple as that when you think of the slackness of the accounting section in the Treasury , if this is as you say . Anyway , thank you very much for this explanation and we leave it to the Committee to look

21

into this . MR . VAN DER WATT :

ter .

Mr. Chairman , this is rather a serious matIt is unfortunate that We do admit this .

Exactly how and why it happened , nobody can really tell at this point in time , but the point I would like to make is that it was not it happened .

possible for the Department of Finance or for the Secretary for Finance to rectify anything in time because when we received the printed Additional Appropriation Bill with the schedule , it was observed that there was a miscalculation somewhere , but it was too late . THE CHAIRMAN :

Thank you , Mr. Van der Watt .

VOTE 5 - AGRICULTURE AND FORESTRY : THE CHAIRMAN :

We are on Vote 5 and we wish to welcome Mr. Ferreira . Mr. Ferreira , I will ask my colleague here to put the questions to you .

MR . T.P. DUBE :

This is Vote 5 · Agriculture and Forestry , paragraph 2 ( 3 ) , page 1 , Audit Queries . Mr. Ferreira , in his report the AuditorGeneral stated that the failure to collect outstanding amounts was mainly attributed to the non-compliance with instructions regarding internal checking and control . Can you please elaborate on this in regard to your Department ?

MR . FERREIRA :

Mr. Chairman , the only outstanding amount in my Department was forest revenue , where we have contractors who remove wood from the forests , and there was an oversight on the part of our district forest officer in one of our regions who did not check on this regularly , and then one of the contractors had an account that was not paid . But

- 22 since then we have put pressure on this district forest officer , he is now checking his accounts regularly , checking the books monthly , and the money that was outstanding was collected from that contractor . THE CHAIRMAN :

Mr. Ferreira , I think it would be fair to say that quite a lot of items in your Vote have been unspent . Is that not true?

MR . FERREIRA :

THE CHAIRMAN :

It is quite correct , Mr. Chairman . This bothers me , because you have such a vast It is a pity responsibility of using the money . that these moneys are not spent on the projects they are intended for and it would give one the suspicion that you overestimate or you just estimate in order to avoid any discrepancy as far as unauthorized expenditure or something like that is concerned . I do not know , I may be wrong .

MR . FERREIRA :

Mr. Chairman , may I explain , disregarding these printed questions , taking it from ( a ) downwards , the underexpenditure of those Votes?

THE CHAIRMAN :

Let us just conclude this one .

As far as your explanation is concerned with regard to the contractor , was this the first time that you had this arrangement with that contractor? MR . FERREIRA :

No , Mr. Chairman .

Our contract that we enter

into with a contractor is more or less the same contract that we enter into with all contractors . It is one that we drew up ourselves and sent through to the Department of Justice and which was afterwards finally authorized by the Tender Board .

So that every time we enter into contracts

with people , your checking , your surveying , the rest , is more or less similar for all contracts we enter into . Unfortunately in this one area we just ran into these problems , due to a slackness on the

-· 23 -part of the district forest officer in not doing his checking properly .

Thank you , Mr. Ferreira .

THE CHAIRMAN :

Can we pass on then , Mr. Ferreira , to your Vote . MR . T.P. DUBE :

Thefts and irregularities , paragraph 24 ( 1 ) , page 12 . Mr. Ferreira , could you please give the Committee more details in this regard as well as details of steps taken by you to tighten control ?

MR . FERREIRA :

Mr. Chairman , as far as I could go through my records , we had three cases during that year . The one was misappropriation of Government funds at the Bartlow Combine Scheme , which was the biggest of them all , where this person misappropriaThis money ted cash funds amounting to R429,50 . has all been paid back by the official . We have also transferred this official away to the college , where he is under stricter control . The other two smaller cases - the one we had to go to Treasury to ask for a write - off , it was a case of housebreaking into the house of one of our officers , where stoves were stolen out of the house and although it was reported to the police , It was an we never could find these stoves again . unsolved case by the police and we had to get Treasury authority for the write - off of that . Another case was where receipt books had actually been lost and the person responsible also paid in the amount of R14,00 , being the cost of printing the receipt books . We are doing our best , Mr. Chairman , with control , with checking , with rules to try and limit the theft and misappropriation and misuse of Government property as much as possible , but whether we will be able to stop it completely , I do not know. People always seem to be inclined to

24 think that it is easy to get away with Government money or Government property , so I cannot say it would not happen again . I suppose it will happen again , it has happened again , but we are doing our best , with control , to try and limit it as far as we possibly can . MR . P.0 . SIKAKANA :

Mr. Chairman , I would like to ask a question with regard to receipt books . I take it that receipt books are used all the time while money is being paid . In cases where they are lost , what happens during that time ?

Are new receipt books

issued , or what happens? MR . FERREIRA :

New receipt books are drawn from the magistrate , because these people collect money on behalf of the magistrate , who is the Receiver of Revenue of the district . They are appointed by Finance as subreceivers of revenue for that district and they then help the Receiver of Revenue in the collection of the money , and if a book is lost and if he has to collect money , he gets a new book , so as to enable him to collect the money .

THE CHAIRMAN :

Mr. Ferreira , you referred to that officer who was transferred because of that discrepancy . Is he still handling money where he has been transferred to ?

MR . FERREIRA :

Mr. Chairman ,

you have got me in a corner .

Unfortunately the position at the college is that the officer in charge of our funds went to university on a course and the other man who was there , handling and looking after the moneys in the safe , He just left the college , was very incompetent . he disappeared , and after he had been away for 28 days during February , he simply came back to collect his cheque , and the only person that was left there in charge of the administration unfortunately was this person , and now he has disappeared with the safe keys , Mr. Chairman , to our detriment we sit with a bigger problem by transferring him .

- 25 We had nobody else . We only had the three administrative officers and he was the last one , and now he has disappeared with the safe keys . THE CHAIRMAN :

The same chap?

MR . FERREIRA :

The + same chap , Mr. Chairman .

MR . T.P. DUBE :

Mr. Chairman ,

so it means that this chap

took all the money that might have been in the safe and threw away the keys so that nobody could find out in good time how much was lost ? MR . FERREIRA :

Mr. Chairman , we are trying to get hold of this man to find out where the keys are , whether he is still in possession of the keys .

If this

is not the case , we will have to go to a firm and ask them to come and open the safe for us , and only then will we be able to establish what money was in the safe , is gone . THE CHAIRMAN :

MR . FERREIRA :

if it is still there , or how much

Mr. Ferreira , how long has this man been in your service ? Mr. Chairman , I cannot reply to that because unfortunately I have not checked that , but it is quite a few years , it may be three or four years . I cannot reply to that .

THE CHAIRMAN :

Because this also goes to show how serious I mean , you are as far as controls are concerned . these things should be ... ( INAUDIBLE ) ... this chap has been here for so many years and you had that faith in him . What faith did you have in this man when you can hardly tell me now how long you have had him in your service ,

for him to have

done these things which nobody can account for now? If it was a man who had been there for years and you had all the trust and confidence in him , then one could say , well , this is most unfortunate , but it could have been nine months , three months , one year ...

- 26 -MR . FERREIRA :

Mr. Chairman , when he was transferred he was There were two not supposed to handle money . senior officers in that office and he was supposed to be the junior in the office , but it just so happened , because of the way things happened at the college over there . With the one perwon away at university and the other one just dropping his job ,

somebody had to take charge of the office and

try and run the office , and unfortunately the principal of the college trusted this bloke right there under his eyes . He did not expect this bloke , knowing that this man had been transferred because of his previous misdoings , to do it again . I mean , it is just natural to me , I do not know whether everybody else does it , to give a man a second chance , and this second chance unfortunately just did not come off . When a man has been punished and you have spoken to him , telling him to mend his ways , you have got to give him a second chance some time . THE CHAIRMAN :

Yes , Mr. Ferreira , but I do not think you can take chances with public money . You say , give the man a second chance if you wanted to give him a second chance , this man should have been here under your eyes , then that is a second chance , but to transfer him to another area where the supervision will not be all that good in helping him to overcome this failing on his part . Anyway , I am more or less stressing the point : what do you do now? What is happening at that place and where is the money being stored now that the safe is locked and the key has been chucked away?

MR . FERREIRA :

We are trying to get the safe opened as soon as possible , Mr. Chairman , and we are making arrangements to transfer another person there to go and assist the principal , as soon as we can .

THE CHAIRMAN :

Was the principal informed of this previous fault of this man when he was sent there?

- 27 He was told that the man is transferred

MR . FERREIRA :

there on punishment , because we took one of the principal's staff away to replace the man up at Bartlow. One small question , Mr. Chairman .

MR . T.P. DUBE :

How long

has this man been away with the keys? MR . FERREIRA : man .

I think this is the second week , Mr. ChairUnfortunately I have not got the latest

information , whether they have found the keys or that he is back . THE CHAIRMAN : MR . T.P. DUBE :

Can we move on?

We are still on Vote 5 .

Paragraph 24( 3) :

Manufacturing , producing

and trading operations . Mr. Ferreira , have you now furnished the statements showing the results of manufacturing , producing and trading operations in respect of projects under your control ? MR . FERREIRA :

Mr. Chairman , no , no such statements have been forwarded for 1983/84 .

My staff are busy collect-

ing or they have kept information for the 1984/85 financial year . We are having problems because we do not know exactly what is expected of us .

Pro-

per trading accounts involve more than only an income and expenditure account , which is more or less all that we can keep at our forest stations .

As I say , we are collecting this information for the 1984/85 year . We hope to keep a better record of all income and expenditure for 1985/86 , which should then be a more complete report , although there is still some controversy somewhere , whether that is really a trading project or not . In any case , that will have to be sorted out during this coming year . THE CHAIRMAN :

Mr. Ferreira , when did you embark on this project ?

Only last year?

- 28 MR . FERREIRA :

The selling of the wood? No , Mr. Chairman . Ever since KwaZulu took over in 1972 these projects were going and never ever were any of those accounts submitted to Audit .

THE CHAIRMAN : MR . FERREIRA :

How was this treated , as what ?

It was not treated as trading . It was never treated as a trading project . There was one school of thought , especially among the people in charge at that time , that this was not a trading project , because when we took over from the Trust , the Trust just never submitted any of these trading reports to the Audit on those projects . Mr. Ferreira , when did you take over?

MR . P.0 . SIKAKANA :

Was

it after 1984? MR . FERREIRA :

I took over on 1 March , 1979 .

MR . P.0 . SIKAKANA :

Well , what is the reason then that there are no records for 1983/84?

MR . FERREIRA :

No , Mr. Chairman , it is not that there are no record . The record of all our expenditure is there , all the receipts and the income are there and the income is reflected in the accounts of the KwaZulu Government , and those figures are There is nochecked and audited the whole time . thing wrong with that . It is just the drawing up of this report to Audit as a trading account that is not being done .

THE CHAIRMAN :

Mr. Ferreira , were there no instructions from Treasury that some accounting had to be done? Did you never have any instruction from the Treasury about this ?

As I say , the accounting has been done .

MR . FERREIRA :

The

instruction from Treasury was there , Mr. Chairman , that a report had to be submitted , but unfortunately the staff I had could not submit such a reThere was also some controversy as to whe-

port .

ther such a report is really required or not , whether it is really a proper trading business .

29 -

In any case , this was a matter of an oversight on my part , I am guilty , I can say nothing about it , that I did not really press on this when it was omitted and after the time went by , it was just thought , well - as we at that time explained to Treasury , that we could not submit this , and although Treasury had then given us a date , we still could not , and there was always talk about it between ourselves , Treasury and Finance . It was just assumed , although it was my fault , I admit I am in the wrong - although there was lot of talk about it , we could not submit these and we could not get these accounts completed . I never went back to go and check on it that Treasury had actually stipulated a date when something had to be done . This was an oversight on my part .

THE CHAIRMAN :

I think that sums up everything , Mr. Ferreira , because as far as Treasury was concerned the instructions were given to you ,

as you said , but

you did not carry them out . MR . T.P. DUBE :

I just have another question to put to Mr. Ferreira . Why did you not obtain the prescribed Treasury authority for exemption from the submission of these statements?

MR . FERREIRA :

Mr. Chairman ,

as I explained just now , as

this has been an on- going argument between ourselves , Finance , Audit and Treasury about these accounts and we never had anything in writing ,

I

did not realize that I had to annually ask for such exemption . That is all there is to it . I mean , to claim ignorance of the law is no excuse , I I realize that , but I must tell you the truth . did not realize that I had to ask annually for this exemption .

THE CHAIRMAN :

Thank you , Mr. Ferreira .

· 30 MR . T.P. DUBE :

Mr. Van Tonder , what are the views of the Treasury in this regard , bearing in mind the directive of February , 1981 , to the Secretary for Agriculture and Forestry to work out a proper cost and accounting system in respect of manufacturing , producing and trading operations under his control for implementation on 1 April , 1981 , particularly as it is now April , 1985?

MR . VAN TONDER :

Mr. Chairman , yes , I think I would agree with the Accounting Officer that the point in question at the moment is whether the operations in the Department of Agriculture and Forestry are actually trading operations or manufacturing operations . I can tell you that in February ,

1981 , the

then Auditor - in-Chief , Mr. Clark , the Chief Accountant , myself and a senior official from the Department of Agriculture did go out and visit every point that was raised by the Auditor at the time to be treated as trading operation points , and we agreed at the time that all these projects were actually training projects . Looking at the little money that came in from the projects , you could not actually call that trading . The main point was training . I mean , if you must take all the expenditure against these projects that we had a look at , if you had to take all the expenditure against those projects , you would find in the end that they are worked at a terrible loss , and I mean , the idea is not to work this at a profit . I think the idea is that your forestry projects should actually be training and development projects . I must admit , however , that in 1981 a ruling was given by Treasury , that this matter must be investigated again through the Chief Accountant or through the Accounts Branch , with a view to drawing up procedures , should it become necessary for these statements to be submitted to Audit . Whether there are actually manufacturing

31 projects or trading projects in the Department of Agriculture , I still question . If I take the revenue from the Department of Forestry , I can still not see that there is any trading going on there . If it is the case , then of course it is a matter that could be investigated , but then the Department must come back to Treasury for this . All I can say is that there was a

ruling in

1981 that it should be investigated , and when this matter is put before Treasury , we will look at it again .

THE CHAIRMAN :

Mr. Van Tonder ,

I think most important is

that your impression does not seem to sink in my mind , that after the instructions were given , you left it , because as far as

you are concerned you

regard it in the light you have just mentioned . So you waited until this came to this Committee for us to ... We are not here to work out the mechanics of this , but we are trying to follow instructions , whether they were carried out or not , and in this case they were not carried out . MR . VAN TONDER :

Mr. Chairman , please , I do not know .

As far

as I see it , when Treasury gives an instruction or when Treasury gives a ruling , it is for the Department to come back to Treasury on that ruling . I do not know whether it is the function of Treasury to go back and ask them , come on , please put something before me to approve . A ruling was made by Treasury at the time and it was for the Department to follow up that ruling and come back to Treasury . I mean , the ruling was that the Department should come back to Treasury . Now , whether they did so - I can tell you I was

that I took over in Treasury last year .

involved in this in 1981 while I was still an accountant allocated to the Department of Agriculture .

32 The fact that the Department did not come back to Treasury - I still maintain that they

must come back .

If they feel that there is tra-

ding going on in the Department of Agriculture , then they must take it up with the Chief Accountant , or with the Department of Finance , let me put it that way , and the procedures submitted to the Treasury for approval . THE CHAIRMAN :

Mr. Van Tonder as far as you are concerned at this point in time , in whose court is the ball ?

MR . VAN TONDER :

THE CHAIRMAN :

It is in the court of the Department, Mr. Chairman .

Thank you . Could we pass on?

MR . T.P. DUBE :

Appropriation Account - Page 12 :

Explanations

of the causes of variation between expenditure and amounts voted . Mr. Ferreira , your explanation in regard to the saving of more than RO , 25 million under your Subsistence and transport , was : Main Division B : " Saving due to shortage of transport " . I would be grateful if you could elaborate on this statement . MR . FERREIRA :

Mr. Chairman , when we put in our estimates for funds , we estimated for vehicles for all our staff to be able to have a vehicle - some of them we realized would be for six months of the year only , where we had no vehicles - but we never got enough new vehicles or replacement vehicles , and then you still had accidents occurring during the year , to be able to have all the staff mobile , to be able to do the work . So that actually we could not use all the kilometres that we were allowed due to the shortage of vehicles at that stage . I might just mention that we kicked up such a noise about the shortage of vehicles , that the

- 33 previous Secretary for Finance at a meeting , when he was asked : but why do you have such a terrific increase in your funds for the supply of vehicles , said inter alia : that is to shut Ferreira's big trap ,

shouting for vehicles , be-

cause we kicked up so much noise , since the shortage of vehicles resulted in our staff not being able to do the work . It has gone so far that we actually reported to the Cabinet that we are not in a position to do our work , due to the shortage of transport in the Department . THE CHAIRMAN :

So you have been shut up ... ( INAUDIBLE )

MR . FERREIRA :

I hope so in the future , Mr. Chairman .

THE CHAIRMAN :

It is a good way of making you shut up , ... ( LAUGHTER ) but a very expensive way for the KwaZulu Government . Before you shut up , I think we have to carry

on . MR . T.P. DUBE :

Mr. Ferreira , as regards Main Division F , your explanation in respect of the saving of approximately RO , 35 million was : " Saving due to major equipment not purchased" . I also understand that you indicated that the major equipment was not bought on request from the Department of Finance .

This Committee would be pleased to hear your comments in this matter . MR . FERREIRA :

Mr. Chairman , it will be remembered that 1983 was the very bad drought year we had . Things were looking very bleak and very black and at a stage round about April /May of that year , I cannot remember which month it was , the then Secretary for Finance actually requested the Department not to purchase all the machinery we had asked tenders for , because they might need that money to be viremented to another Department , so that they could help to create jobs . At that

- 34 stage also there was a big back - log on pensions that they might have to find money in order to be able to pay those pensions . We were then requested verbally by the Secretary for Finance not to buy all the equipment . The actual tenders

that were cancelled

amounted to R853 000 , but later on in the year , when we got drought relief money from the Central Government and other projects were going , and we realized that they were not going to ask this money from our Department , we managed to spend another half a million on equipment . That left this R350 000 in abeyance , that we could not spend . THE CHAIRMAN :

Mr. Ferreira , you say you were involved in negotiations with the then Secretary for Finance ?

MR . FERREIRA :

THE CHAIRMAN :

Correct , Mr. Chairman . How did you conduct these negotiations ? Verbally and where?

MR . FERREIRA :

This was actually at a Secretaries ' Meeting .

THE CHAIRMAN :

I see .

There are no records?

Do you keep

minutes of such meetings? MR . FERREIRA :

THE CHAIRMAN :

Yes , we do , but I do not know whether this I cannot say . was recorded . I am asking this and the reason why I am trying to stress this is because we have to be clear here as to how such big decisions are made about finances , because ... ( INAUDIBLE ) ... one would expect that money cannot be easily transferred from one project to the other , but in this case you are telling us that you were told to hold your horses because we may need this money for other operations . It would be very interesting for me to see this in black on white , if such a procedure is happening in our establishment here , because when we talk about savings and overspending and there

35 are these negotiations going on , it looks very I mean ,

untidy to be involved in such a thing .

I would not like to sit here not knowing the full implications and how the moneys are handled . We do not want to accuse you , but seeing savings such as this disturbs one , because you needed to use the money and then you were told to hold your horses . It is a bit sad to hear such com-

ments .

Let us carry on . MR . T.P. DUBE :

Mr. Ferreira , your explanation for the saving in excess of R1 million under Main Division C was " less dipping material purchased because of drought conditions " . !

Can you please give this Committee more details ? MR . FERREIRA :

Mr. Chairman , yes . At the beginning of 1983 , due to an existing curtailment of dipping operations during the 1982/83 year as a result of the water shortage , animals too lean to be dipped and the rest of it , we had quite an amount of dipping material on hand as at 1 April , 1983 . Then during the 1983/84 financial year , we only restarted dipping during December of that year , after it had rained . At one stage in KwaZulu we were running 220 tankers to supply drinking water to human beings . We could not even supLots of ply and cart water for cattle to drink . these tankers were tankers that were used to cart water to dipping tanks , to dip .

so we could not cart water

On the other hand , also , when the cattle became so thin it was just killing more cattle , driving them regularly to the dip .

So we just stop-

ped all control over old cattle ,

so that people

could go with their cattle where they could find water , where they could find grazing for them .

- 36 So from April right into December we never dipped cattle in KwaZulu and all the money that would have been expended on dipping material for that 8-month period was not used , and because we also had some dipping material on hand from the previous year . Even when it then rained , we had dipping material on hand which we could carry on with , so that it was not necessary to spend this money on dipping material . MR . T.P. DUBE :

Mr. Ferreira , in the light of the overall saving in excess of 10% on your Vote , can you please advise this Committee how you went about ensuring the most advantageous utilization of the moneys allocated to you as Accounting Officer of the Department of Agriculture and Forestry?

MR . FERREIRA :

Mr. Chairman , I have already explained regarding three of the Main Divisions that caused big savings there . The only one that is left is Main Division A which is staff. In the past when we did our Second Revised Estimates , we have asked Treasury to transfer from Main Division A to others . We were told that it was allowed once only and never again , that it could not be allowed . There were two reasons for the big saving that occurred on staff . In October , 1983 , we had a strike at the college , when all students were fired , barring two Zulus , the others were students from other countries . We then took a limited number of students back , but for almost six months of the year we had a very low budget for payment of our new students at the college .

The second reason - this is when a person tries to be clever and gets caught . I know that we have always this Committee has already pointed out to us that we are over- budgeting on staff and we have cut on our staff . We have had to reply to questions like that in the House already .

- 37 · The problem is that when you budget by programme , as we do now, it is very difficult to find out just where you have to cut , because your bookkeeping is not done by project , it is just according to big items as we know the budget . And when we were budgeting , ready to draw up our report , we sat with RO , 5 million that we still had to cut and we did not know where to cut . We then decided , that is when we were budgeting by programme , that we would remove the Mooi River Irrigation Scheme , which was about RO , 5 million - we would just remove that programme completely , but when we rewrite our budget in January to be printed , that RO , 5 million must be taken out of the A section and put back under Engineering I think it was then the L or M section

for use

there . But when the budget was rewritten , the people who rewrote the budget completely forgot about this , I also forgot about it when I checked ,

so

that there was an extra RO , 5 million in the A section that should not have been there . That is part and parcel of it , to tell the truth . The question is : What do we do , Mr. Chairman? It is another sad story , that in my Department and this refers to all our work on finance , stores , thefts , the lot - I sit with one big vacuum at present .

The establishment as it was approved on 1

April is one supervising officer and three inspectors . There is nobody there , and we have worked this into our new budget , the main reason being , we have not got housing for any staff at Ulundi . The people over here are already overcrowded in the houses , we cannot place any more people over here . We have now managed to get a house for the supervising officer , and as soon as we got this house we asked the PSC to advertise the post . The post has been advertised and as far as we know, we know of one applicant at least , and it has been

38 .closed .

We wrote a letter last week to the PSC ,

asking what has happened about the application from this person . So that if we get him , at least we have got a house for him .

Then he can start

on the controls of the budget , on controls of all the financial expenditure in my Department , when we hope things will be better . And then with the three inspectors , with this new development that is going on at Ulundi , as soon as we can find housing we will bring in people at head office to be able to do the inspection of these financial tasks over here . Of course , we have annual meetings with all our senior staff, when the control budgeting and all of this is brought very clearly to the notice of all our regional and district staff for the control of the money , ney .

for the expenditure of the mo-

Very often when we come to budgets , we ask

them , can you spend this money or can you not spend this money? And they are told very clearly that if they do not spend the money ,

it will be a very ne-

gative motivation for them and the next year they will not get any money , because if money is asked for and remains unspent every year , they will not get it in future . So we even try that to make sure that they do use the money they ask for . THE CHAIRMAN :

But you still come out ... ( INAUDIBLE )

MR . FERREIRA :

I still come out on the wrong side of the fence , Mr. Chairman .

MR . T.P. DUBE :

Mr. Van Tonder , has the Treasury any comment to make in regard to my final question and the information furnished in reply thereto by the Accounting Officer?

MR . VAN TONDER :

Mr. Chairman , if it concerns the under spending and all the big savings , it is a big worry to the Treasury that a Department asks for money but it is not used . I can tell you that it is a worry

- 39 -to the Treasury and we are going to take it up in the next financial year when the budgeting is done , that Departments will have to give better and more motivation for the requests that they make for money . There is actually very little that Treasury can do , if a Department requests funds and it motivates its case and the money is then given to the Department , for the Treasury to see that the money is spent . That is actually a function of the Department itself , to see that the money is spent , and all that Treasury can do , when the Additional Estimates are put before Treasury in the latter part of the year , is to have a look and see whether the money that was asked for was actually used . But this is a problem in KwaZulu at the moment , that there are such big savings in Departments , and we in Treasury will in the future have to look more seriously at this problem .

THE CHAIRMAN :

But , Mr. Van Tonder , I also mentioned this last time , that it is most unfortunate , because of this red tape in the Government's operations , that I do not think there is teamwork in our KwaZulu establishment , because we have such a back - log in respect of projects and such great savings , and noThis worries us , body cares about it .

MR . VAN TONDER :

THE CHAIRMAN :

Mr. Chairman , yes , that is why I say ...

... because you say there is nothing that Treasury can do . Well , I quite realize that , as long as you keep to your own compartment , not caring less about the others . This is not the first time I have spoken about overspending . So Treasury could be helpful in motivating these people and directing their attention to these things , making it less evident that nobody takes care .

40 MR . VAN TONDER :

Mr. Chairman , that is actually done three times a year to Departments .

When the budget cir-

cular is sent out , the attention of Departments is drawn to the fact that requests must be made only for those projects and moneys that they are actually sure can be spent . When the circular goes out for the first revised estimates the same request is made again to the Departments , that should there be any problem financial - wise in a Department , it must be brought to the attention of the Treasury . And when the second revised estimates circular , or the letter to the Departments , goes out in October for December , we again ask Departments to show exactly what goes on in their Departments . The Treasury unfortunately does not have the All we can

machinery to go to every Department .

do is to ask by way of circulars and then the DeAnd they partments must give us that information . do give it to us by way of a first revised estimate and a second revised estimate during the year , and it is only by examining those revised estimates that we can actually see what goes on . But the problem is that every time a Department submits a revised estimate , they ask for more money and then they normally motivate it , and they motivate it in such a way that the Treasury has no option ,

if the funds are available , but to grant

it to the Department . But it is a problem thereafter , once the money is granted to a Department , for Treasury to see that the money is spent .

This position is

pointed out every time the letter goes out in connection with the budget or the estimates , but unfortunately that is as far as it goes .

THE CHAIRMAN :

Is it very difficult or is there no machinery to see towards the end of the financial year that all these Departments do not have savings? Is there no possibility of monitoring that ?

41 It is done in December , Mr. Chairman , with

MR . VAN TONDER :

only three months left of the financial year . Then the second revised estimates come in and that is where the Departments must show exactly what And as I the position is in their Departments . say , as far as my experience goes in the Treasury , with the second revised estimates more money is actually asked for and it is motivated in such a way , and I think that everybody present here from Finance can support me there , that there is always quite an argument about money . Whenever we try to cut on a request , there But this is a worry is quite a problem about it . to Treasury , the big savings , because it throws the estimates and the budgeting for KwaZulu completely out . I mean , you never know where you are .

The one moment you budget for a shortage and

the next moment when the statements come in , you find that you have a surplus , and then you sit with it . And actually your hands are bound in Treasury , because you can only work on figures that are supplied to you by a Department . THE CHAIRMAN :

Mr. Liversage , we would be interested to hear your comment on this .

MR . LIVER SAGE :

Mr. Chairman , yes , I agree wholeheartedly with what the Treasury has said . They can only go by the motivations that are put in by the Departments for their estimates every year and if the money is available , they must grant it , if they consider that those projects are viable and they are necessary . So what happens is that once the money has been granted , it is entirely up to the Accounting Officer to spend it for the purpose that it was actually voted by the Legislative Assembly . As far as the Departments are concerned , they are supposed to keep commitment registers to indiSo cate to them how the money is being spent . that in their Department there should be a record

42 . showing them exactly how the money is being spent , so that the Accounting Officers are always aware of how the money is being spent . Also , from the Accounts Department we send statements to the Departments of acmonthly out tual amounts that have been paid , also indicating against the various main divisions and subdivisions how the expenditure is running during the course of the year . But apart from that , if a project is viable and it is put on the estimates and the money is requested and the money is available , there is not very much else that the Department of Finance can do to ensure ... We can only assume , once an Accounting Officer has asked for the money , that he is intending to spend it . THE CHAIRMAN :

In such an instance like this , Mr. Liversage , is there no way the Accounting Department is aware of the discrepancy , of the surplus savings ?

MR . LIVER SAGE :

Mr. Chairman , yes .

As far as it concerns the

actual expenditure , the amounts that we have actually paid , we can see from the statements we produce to the Departments that there are savings during the course of the year . But we do not know what has been committed within the Departments by orders or whatever , so that we cannot at any time say exactly how much saving is on a particular subdivision or main division . We can only assume and say , look , there is a saving on this one . We check that the commitment register is kept , but we do not monitor it as to the savings .

THE CHAIRMAN : MR . T.P. DUBE :

Thank you , Mr. Liversage . Mr. Ferreira , I would like to come back to the question of manufacturing , producing and trading operations , and request you to inform this Committee what will be done in this regard for 1984/85. For your guidance I quote from Treasury Instruction to you :

43 "You are requested to , in conjunction with Finance Section , work out a proper cost and accounting system for implementation on 1 April , MR . FERREIRA :

1981. "

Mr. Chairman , for 1984/85 , as I have said already , the Department has as far as possible collected expenditure and income figures , where they are collecting , and I was yesterday again informed by my officer responsible for reports to Audit that they will submit such a report to Audit for 1984/85 .

THE CHAIRMAN :

VOTE 9

Thank you , Mr. Ferreira .

FINANCE AND ECONOMIC AFFAIRS :

THE CHAIRMAN :

We welcome you , Mr. Van der Watt .

We want

to put a few questions to you . MR . T.P. DUBE :

Motor Accidents , paragraph 28 ( 1 ) ( c ) , page 16 : Mr. Van der Watt , I notice from the details published in connection with motor accidents in the Auditor - General's Report that in 1982/83 , 84 vehicles were withdrawn from service giving rise to a loss of R96 949 , while in the financial year now reported on where 180 vehicles were withdrawn from service with the resultant loss thereof being reflected as R72 636.

The value of the

loss for 1983/84 would appear to be relatively disproportionate when compared with the loss for 1982/83 , and I would be grateful if you could throw some light on these apparent unreliable comparative figures . MR . VAN DER WATT :

Mr. Chairman , in assessing the book value of these vehicles Treasury Circular No. 6 of 1982 is being applied . The true market value of the vehicle before and after the accident is taken in accordance with the Commercial Digest Manual and not just an

- 44 -

estimated value . So the explanation is that in assessing the book value we take cognizance of the figures reflected in the Commercial Digest Manual ; not solely , but also the latest information or the last information pertaining to the condition , the But we state of the vehicle before the accident . also have to bring it in relation or within the ratio of what this Commercial Digest Manual gives as a guide - line .

THE CHAIRMAN :

Is that the only criterion?

No , Sir .

MR . VAN DER WATT :

As I have just explained , that is

not the only criterion .

We have to take cogni-

zance of the actual condition , the appearance of the vehicle before the accident and then we are guided by this Commercial Digest Manual .

THE CHAIRMAN :

Mr. Van der Watt , it would be very strange How would you know the appearance of the vehicle before the accident ? How would you be able

...

to compare those two ?

I mean , is it not the model ,

the year and , of course , the condition of the vehicle at that stage after the accident ? MR . VAN DER WATT :

Well , this Commercial Digest Manual guides you in terms of the make and the year in which it was fabricated . That is the one criterion . And apart from that , the last known condition of the vehicle prior to the accident , that is the second criterion . If the record of the vehicle in regard to the servicing thereof is kept up - to - date , it gives you quite a reasonable guide as to the actual state of the vehicle before the accident .

THE CHAIRMAN : MR . T.P. DUBE :

Thank you , Mr. Van der Watt .

Let us proceed .

Mr. Chairman , I have a question because I am not satisfied with the explanation that the Committee has just been given by Mr. Van der Watt .

- 45 To me it would seem that in these two different periods either two different methods were used for assessing the value of these vehicles , or something is missing here , because you cannot have ... These numbers , half of 180 in fact is

90 , which is even more than 84 , and 84 was far greater in value than 180 in a subsequent period , which suggests that there was a difference in the manner of assessing in these two different cases . MR . VAN DER WATT :

Mr. Chairman , the only recognized manner in which you can assess the book value is by the Commercial Digest Manual , which gives you the market value of vehicles in relation to the age , and the other criterion is the history card or record of the vehicle which reflects and indicates the full history of all repairs done to that vehicle . These are the only criteria , there cannot be any other criteria , because you cannot solely go by the Commercial Digest Manual . That information relates to vehicles that are more or less in good condition . So you have to take into consideration the whole history of the vehicle ; apart from actually having seen the vehicle , you also have to take cognizance of the history record .

THE CHAIRMAN :

Mr. Van der Watt , I also compare this discrepancy . The difference is so great that one cannot associate it to be the same evaluation ; in preparing this it could not have been valuated in the same way , that is quite obvious . If it had been a write- off that is a different story .

MR . VAN DER WATT :

THE CHAIRMAN :

Yes , but these are write - offs . But what type of write - offs ?

Were they simi-

lar or were they worse? MR . VAN DER WATT :

Well , it depends upon the age of the vehicle , the year , the make and then the actual condition before the accident .

THE CHAIRMAN :

Even if there are less

cars

or more cars?

- 46 MR . VAN DER WATT :

Well , the later models would naturally be larger amounts , while older models would of necessity be smaller amounts . Mr. Chairman , in 1982/83 a new method of calculating the loss was approved , which boils down to this , that you take the market value in terms of the Commercial Manual Digest and the actual or the assessed value after the accident , and the difference is then the amount that is written off.

This may be a more realistic way of

doing the calculation . THE CHAIRMAN :

Let us proceed .

MR . T.P. DUBE :

Paragraph 28 ( 2 ) , page 16 :

Thefts and irre-

gularities . Mr. Van der Watt , could you please furnish the Committee with the modus operandi relating to the theft of the two motor vehicles as reported? MR . VAN DER WATT :

Vehicle ZG7643 · Ford Cortina sedan . The facts are : The vehicle was towed from Melmoth to Eshowe for quotations by the KwaZulu breakdown . The quotation for the amount of R701,60 was received from Messrs . East Service Station , Eshowe , and it was assumed that the vehicle was at their garage , awaiting the necessary repairs to be effected . After a few days it was discovered that the vehicle had disappeared from the garage . The officials in the Transport Branch of the Department and the police tried to discover the whereabouts of the vehicle , but it was all in vain . So it would appear that the supervision or the protection afforded by commercial garages in this particular instance was not satisfactory . The next motor vehicle was ZG8703 , an Isuzu The facts are : On 12 January , light delivery .

1980 , Mr.

Steyn took the above vehicle to Delta

Chevrolet for service .

On his way back he decided

47 to go where his wife was working to collect some college articles which he had left while the vehicle was being serviced .

He stopped at a cer-

tain shop to buy a time book and handbooks for stewards . The vehicle was parked outside the shop and it was locked and he spent 15 minutes in the shop . Mr. Steyn was surprised , when he came out , to find that the vehicle had disappeared . He reported the matter to the SAP Empangeni and their CR No. 1946/1/81 refers . The Logbook and order book were also in the vehicle . The police were unable to detect the offender and the vehicle was never found . THE CHAIRMAN : MR . VAN DER WATT :

THE CHAIRMAN :

Is that the end of the story? Unfortunately we had to approach Treasury for the write - off of the assessed value of the vehicles . Mr. Van der Watt , are these acceptable excuses , that nothing more is done about this , or to control or to ... .. ( INAUDIBLE )

MR . VAN DER WATT :

Well , the latter vehicle there , the Department and the police and any court will have to rely on the affidavit or the sworn statement or report furnished by the driver , that was Mr. Steyn . If the Transport Branch of the Department of Finance has no reason to doubt the bona fides of this report and statement and no negligence can be proved on the part of the driver , then there is only one way out and that is to submit the matter to Treasury for write - off . If there was any reason for doubt and there was evidence to that effect , then the matter could have been proceeded with further by police investigations .

But as nothing to the contrary can be

proved , there is no alternative but to dispose of

- 48-the matter in this fashion . The other vehicle · on the face of it , it does appear that there may have been a breach in communication between the garage where the vehicle was taken to and the relevant Department and/or the Transport Branch , but as there is no evidence to that effect , it is not possible to doubt the statement furnished by the driver of the breakdown . The garage , unfortunately , could not give an account of the vehicle's disappearance and it was fruitless to pursue the matter any further .

THE CHAIRMAN :

Well , Mr. Van der Watt , on these two cases I have my own comment to make , I do not know whether it will be worth anything to you people , that I find it very strange that even the towing of that car - an assessor could have been asked to come and assess the value and there would not have been a need to incur the expense to tow. What worries me , which I want to place on record , is that nothing is done when one goes to It is a shop and comes out and the car is gone . just too bad , it is gone . What measures are you bringing in in order to impress upon the officers that they must be stricter , be more responsible , so that they will know that such things do happen and that they should try and prevent it from happening again?

MR . VAN DER WATT :

Mr. Chairman , as far as the second vehicle is concerned , that was stolen in front of the shop , If you park there nobody can do anything about it . your car outside in the street , you are in front of a shop and you have locked it , you have taken the necessary precautions to lock it and you are away for 15 minutes and you come back and the vehicle has disappeared , there is nothing that you can do . There are no steps that you can take .

THE CHAIRMAN :

Fifteen minutes ?

MR . VAN DER WATT :

Fifteen minutes .

49 Mr. Chairman , I may mention THE CHAIRMAN :

MR . VAN DER WATT :

If it is a sworn statement I believe it , because it is a sworn statement ... It does not take some people , when they really want to steal a car , one minute .

A lady in one

instance stopped in front of the chemist and just popped in to enquire whether her prescription was ready , and when she came out her car was gone . So there is nothing one can really do to protect the car from theft , unless it is in covered parking and under lock and key of the garage . But in the open there is nothing you can do , if you have taken the necessary precautions to see that all the doors are locked , to prevent anybody who is inclined to steal cars , off .

from taking it and just driving

In the other case , as I have explained , there is absolutely no reason to doubt the bona fides of the break- down driver , who stated that he towed in the vehicle to the garage with the aim to have the damage assessed and to have the vehicle reSo But there his responsibility ended . paired . here we must also assume that he took the necessary precautions , to hand over the key to the garage . MR . T.P. DUBE :

Another question , Mr. Chairman . With regard to the 15 cases of theft from motor vehicles of small items , Mr. Van der Watt , I shall be glad if you could inform this Committee of the steps you have taken to introduce stricter control over these irregularities .

MR . VAN DER WATT :

Mr. Chairman , the Transport Branch of my Department has , apart from several circulars which were issued in the past and standing instructions in Transport Circular No.

3 of 1972 , conducted a

course for all departmental transport officers in which their duties , their functions and their responsibility in regard to transport in general was

50 explained in full . At this seminar it was stressed that whenever a vehicle has been requisitioned for , the departmental transport officer should take charge of such a vehicle which is now being allocated and that he must , in conjunction with the Transport Branch officer who hands him the vehicle , check and see that the spare wheel is there , that the elementary tools are there , and in turn , when he hands over that vehicle to the officer for whom this vehicle was requisitioned , he must likewise obtain a signature from that officer to the effect that the spare wheel is there and that all the tools that were issued with the car are also in place . These steps should be taken whenever there is a change of hands , a change of driver , a change from one officer to another . The same thing applies when a vehicle is taken to a garage for repairs . Then the driver should take care and ensure that the spare wheel and the tools are still intact , and on receipt of the vehicle he should do likewise and check on it . That is the only way , if these instructions and precautionary measures are adhered to . Then it is so much easier should ,

somebody tamper with

the vehicle , to be able to tell exactly when either the spare wheel or the tools are missing . Another point which was stressed was that when parking in open or unguarded areas , particularly when it is a lorry and you can see from behind whether the spare wheel is intact , that requirement should definitely not be overlooked . Apart from these precautionary measures , there is very little a person can do if you have parked the vehicle in an open or unguarded area and some unauthorized person comes and removes the spare wheel . There is very little one can do to prevent

51 that , but you can at least take precautionary measures on a regular if not day to day basis to at least be able to state beyond doubt that when you parked the vehicle there , the spare wheel was actually intact . THE CHAIRMAN :

Mr. Van der Watt , I do not know whether this is consistent with what you said earlier about the cars that have been taken , for example , the one that is parked in front of a shop and after 15 minutes it is gone , and now we are talking about spare wheels which are also prone to be taken and which are taken , but you say they can try and make sure I would have expected that even in the case of the parked car one would try and make sure that all the doors were locked , because you can lock the front door and perhaps you forget to lock the back door . You did not stress that one , but now with the spare wheels you seem to be emphasizing the taking care to ensure that it was actually there when you left it . me well .

MR . VAN DER WATT :

I do not know if you understand

No , this is apart from the normal precautions that you have to lock all the doors , that is , to protect any tools and the boot , that that is properly locked , that it is not just closed and not Those are the normal precautionary mealocked . sures .

But in addition to that one can , when you park your vehicle , particularly when it is a truck where you can see the spare wheel below , at least have the satisfaction that when you parked the vehicle the spare wheel was there . In those instances naturally it is not locked , it is just tied below or screwed below , but when the driver walks into a shop or into his office , there is nothing to prevent anybody from removing such spare wheel and consequently the driver cannot be held responsible .

52 Primarily he must take the necessary cautious and elementary steps to satisfy himself that all four doors were properly locked and the boot not only closed but properly locked , so that no negligence can be attributed to him. THE CHAIRMAN :

Thank you , Mr. Van der Watt . I think we should have a break now , because we have got to go to various places for lunch and the queue there takes time . We will be back at 13h45 .

Thank you very much .

BUSINESS SUSPENDED BUSINESS RESUMED

VOTE 9

FINANCE AND ECONOMIC AFFAIRS ( CONTINUED ) :

MR . T.P. DUBE :

Paragraph 28 ( 4 ) , page 16 , Outstanding Cheque Lists . Mr. Van der Watt , according to the AuditorGeneral's Report , as at November , 1984 , monthly lists of uncashed cheques had not been compiled for the period September ,

1980 ,

to March ,

1983 .

This unsatisfactory position is the same as discussed by this Committee in April , 1984 .

Can you please furnish this Committee with your reasons for non- adherence to the basic accounting principles relating to bank reconciliations which can only be effected when , inter alia , details of outstanding cheques are available? MR . VAN DER WATT :

Mr. Chairman , the position with regard to the outstanding cheques for the period October 18 to March , 1983 , is still the same .

Our computer

staff has not been in a position to do anything about this matter .

- 53 -

However , we have managed to reconcile all the cheques for the period April , 1983 , until March , 1984. The cheque list as at March , 1984 , has now been printed , over the week - end . After many problems we managed to overcome the initial problems and we have succeeded in producing the cheque lists as at the end of March , 1984 . In respect of the period prior to April , 1984 , I am of the opinion that it is purposeless The aim is , to spend any more time on this matter . once the reconciliations for the period April , 1984 , to March , 1985 , are done , during that period the balance of cheques outstanding as at 1 April , 1984 , should stabilize at some point in time ; whether it is the end of May or whether it is the end of June or August , but it should stabilize . Then the solution would be for the Department of Finance to make a submission to Treasury to get authority for non- production thereof and to have those cheques which are now stabilized , being accepted as the final position and that those cheques will be journalized . Treasury , of necessity , will refer the matter to the Auditor - General's office for comment .

In addition to this particular programme in the Computer Division , we have experienced many other problems in regard to several other programmes and I am convinced that it is meaningless and purposeless to flog a dead horse . We must concentrate on current work and I may give the assurance to this Committee today , Mr. Chairman , that with reorganization in the Computer Division and with the acquisition of a data processing manager on contract , in the person of Mr. Possick ( ? ) from Joubert Systems , who has managerial capabilities and qualities , we will be in a better position , when this Committee meets again next year , to definitely report progress .

54 But we cannot afford to concentrate on a backlog which has reached the stage where any further attention to that matter may retard current work and affect the normal functioning of the Department in an adverse manner . From May last year Barclays Bank introduced a take input from their side which we can use in our system and which should ease the future capturing of data in regard to cash cheques , and once we have overcome the initial stage , May to June , my Department is convinced that the rest of the months for 1984/85 should go much faster . That is all I can indicate to the Committee at this stage , Mr. Chairman . THE CHAIRMAN :

Mr. Van der Watt , I do not know whether you do it purposely or whether it was a slip of the tongue , but I find it very difficult to accept your evaluation of our work , trying to get things up- to-date . You referred to a dead horse , fruitless · when do you consider a thing to be fruitless?

When does it become fruitful and when does

it become fruitless?

Because I mean , we are here

to get things organized . Are you going to give us now the opinion as to when to decide that this is useless? MR . VAN DER WATT :

Mr. Chairman , fruitless expenditure starts where you continue performing an operation , knowing in advance ,

as in this particular situation , that

the chances of success within a reasonable period are very slim . It does not warrant the time and the expenditure to concentrate on those 2

years , while it

is in the interests and to the advantage of the Government that we should manage rather the day to day work and keep the current work up- to - date . THE CHAIRMAN :

Mr. Van der Watt , I think when you arrived here we were already , when you started with the

- 55 KwaZulu Government , working on these cheque lists I even appreciate what you and we got them ... have done up to now , but what I cannot accept is If your statement , saying that it is fruitless . it is as you say , we could have given this up last year and we would not even have achieved what we have now done . So , it is our responsibility to see that things are kept up- to - date and it is also helping your Department as well as anybody who may come after you , to find things in the position they are expected to be in . So I think you are over - stressing the point of it being a fruitless exercise , because we were promised here , this Committee was promised that things would be up- to - date , because there was a delay here and there with the computer and we expected that . Now you come with this fruitless thing , that we now have to give it up .

I am sure you are aware too that we thought you were organizing the work , that is why we condoned this , because you were organizing .... the computer was faulty and all that and so on . But it appears , therefore , that anything that may be a discrepancy has to be considered to be fruitless and then we carry on with the job . Is that so ? MR . VAN DER WATT :

No , Mr. Chairman , that is far from the truth . We have here to do with a factual position . The computer staff , as it was right from the beginning , were not in a position to cope with the situation . We at no time , until December , 1984 , had a real data processing manager who really knows all and the mathe ins and outs of computerization nagement of such a branch . We only had the services of a chief programmer , on contract , and a serviceman for a part of

- 56 that time , who had to manage the data capturing , the programming , the operation and the management . They could not do it . So it is not a case that the Department of Finance does not realize the It is a full consequences of this situation . situation beyond the ability of the Computer Division to cope with . THE CHAIRMAN :

Thank you very much .

I think that is the

finer point , where we are stressing now the real state of affairs , because I was going to ask you , how far are you , but now you tell me that it cannot cope beyond this stage . MR . VAN DER WATT :

Well , Mr. Chairman , as I have explained previously , with the present set - up in the Computer Division we have a qualified data processing manager , we still retain the services of a chief programmer and we have Mr. Barnes , who was previously a serviceman on our establishment , full - time , and in addition to him we have two servicemen . So the position has largely improved and with a qualified data processing manager , who is reporting back to finance management on a weekly basis , I feel convinced , apart from assurances that may have been given in the past , I feel quite positive that next year this time the Computer Division in regard to the bank reconciliations and the issue of outstanding cheque lists will definitely have improved largely . But we still remain with that backlog and I maintain beyond any doubt , I am convinced of it , that it is purposeless that we waste time on that . The Government does not really lose anything . It is just a book entry , that once the amount of cheques outstanding which were not cashed as at 31 March , 1984 , has stabilized , we approach Treasury for the necessary authority to journalize it . That is the only solution .

THE CHAIRMAN :

Thank you .

Mr. Dube?

-- 57 MR . T.P. DUBE :

Mr. Chairman , in the light of the explanation that has been given to this Committee of yours , I fail to reconcile the explanation with the requirements as expressed by the Committee through Resolution No. 1/1984 , to the effect that Treasury be advised of the seriousness with which this matter was viewed by this Committee . And I am sure Treasury did do something to the Department concerned , especially in regard to this matter . I would refer to the Accounting Officer before the Committee now and find out if there was anything issued to the Department by the Treasury , concerning this matter , and what the response of the Accounting Officer was thereto .

MR . VAN TONDER :

Mr. Chairman , yes , as I explained previously , we did send out from Treasury the circulars in connection with the Resolution taken by this Committee last year , and I did get a reply from the Department of Finance to those circulars and requests for comment on it . Unfortunately this was received only this year , at the end of January of this year , but as far as the outstanding cheque lists are concerned , the reply from the Department of Finance reads : " The computer cheque reconciliation programme was rewritten in a simpler and more meaningful format . The reconciliation computer cheque list is now, 25/1/85 , balanced for the period 1 March , 1983 , to February , 1984 , and March , 1984 is being processed by the Computer Section . The last month to be balanced prior to this was October , 1980 .

The balance which the computer will reflect as outstanding for the period prior to 1 March , 1983 , will be the full amount for the whole period 1 November , 1982 , to March , 1983 ,

58 .which in March , 1984 , will become stable .

Application will be made for this amount to be written back to Revenue and for the non- production of the computer cheque lists for the interim period to be condoned . " This is what the Department of Finance wrote to me at the end of January , 1985. I am still waiting for the Department of Finance to come back to Treasury with the final position of what is going on . But up to now there has been no further progress on this matter from the Department , to the present time , but I did not get this response from the Department . THE CHAIRMAN :

Thank you very much , Mr. Van Tonder .

I

thought we were going to get that level of discussions , not for the Department to tell us about it being fruitless and flogging a dead horse and so forth , because we need to come to a conclusion and to come out neat in this regard . We cannot just leave it hanging in the air . But in the first instance there were consultants that were hired . We learnt of that . We do not know the results of that , what happened there . Today we are getting a story that there is now the assurance , there is a man now who is in the service and who is competent and is going to get things up - to - date . But there is no mention of the request that was made to condone that backlog , so that we may know where we are and where we must begin . MR . VAN DER WATT :

Mr. Chairman , that action can unfortunately only be taken once the outstanding balance of uncashed cheques as at 1 April , 1984 , has stabilized , The moment that amount is stabilized , then only can my Department make a submission to the Treasury to

59 write back those cheques and credit Revenue and to ask for condonation of the furnishing of cheque lists for the said period . But I am convinced , Mr. Chairman , that by the next meeting of this Committee that action will have been taken . THE CHAIRMAN :

Just a last question on this point , Mr. Van der Watt . What is the present position now?

You say

that everything is under control ? MR . VAN DER WATT :

Mr. Chairman , the present position is that they are starting on April and that we will continue as fast as we can with the other months . There will be a little tricky period when the bank switches over to a new system in May and June , but once we have overcome those initial problems , I am convinced that everything will be running smoothly . I may mention that in the recent months , the data has been captured , the tape furnished by Barclays Bank has been run and paired off with our own information of cheques issued , and it would appear that there will not be any hitch from November onwards .

THE CHAIRMAN :

Thank you , Mr. Van der Watt . Mr. Dube?

MR . T.P. DUBE :

Paragraph 28 ( 5 ) , page 16 : master-General's Account .

Can we proceed ,

Overdraft on Pay-

Mr. Van der Watt , could you enlighten this Committee in regard to the overdraft on the Paymaster-General's Account at 31 March , 1984 , and is this considered to be sound accounting and financial practice? MR . VAN DER WATT :

Mr. Chairman , it is true that no Department should allow that the Paymaster -General's Account be overdrawn at any time . Here we had the situation - unfortunately this reverts back to the Additional Estimates in

- 60 terms of which the Treasury order was drawn 10% on the main appropriation in terms of the the We were then existing Withdrawal of Moneys Act . restricted to 10% of the original appropriation and had it not been that we were restricted to that , then in terms of an estimate of expenditure made during February and again during March , it But as appeared that there would be no problem . a result of this transposition of figures in the schedule to the Additional Appropriation Bill , whereby the saving which was actually effected on Vote 3 : Works was transposed and reflected against Vote 9 : Finance , that gave rise to the over- issue , but the bank was at no time overdrawn . Although the cash book was overdrawn , the bank itself was at no time overdrawn , and the KwaZulu Government in reality did not suffer any loss . MR . T.P. DUBE :

Mr. Chairman , as I understand it , and perhaps this is only an assumption , this occurred only because of the circumstances at the time . Do I take it that the Accounting Officer is giving a commitment to this Committee that this will not happen again?

MR . VAN DER WATT :

Mr. Chairman , to the best of our ability we will guard against a recurrence . I may mention that a precautionary measure which was subsequently taken during the 1984 Session of the Legislative Assembly , was that an amendment to the Withdrawal of Moneys Act was passed , allowing 20%, which gives us a little more room and which will act as a safeguard to ensure that the PaymasterGeneral's Account will not easily be placed in a position or a situation where it can be overdrawn .

THE CHAIRMAN :

Thank you , Mr. Van der Watt .

With that as-

surance can we proceed ?

MR . T.P. DUBE :

Statement 2 - Exchequer Issues , page 16 , Paragraph 28 ( 6 ) :

Over - issues from the Exchequer .

Mr. Van der Watt , I wish to enquire in regard to the over - issue of R3 579 580 from the Exchequer

- 61 in respect of service Finance and Economic Affairs as reflected in Statement 2 Exchequer Issues , together with the explanation at page 16 , paragraph 28 ( 6 ) of the Auditor - General's Report . Bearing in mind that Mr. Parker has also informed me that the over- issue arose as a result of a technical error in framing the Additional Estimates of Expenditure , I would be grateful if you could enlighten this Committee further in this connection and in particular how it was possible , with the processes to be followed in compiling estimates of expenditure and the internal control measures which should have been applied , a technical error to have taken place . MR . VAN DER WATT :

for such

Mr. Chairman , the request for Exchequer issues was made on the approval of the Second Revised Estimates for 1983/84 . At that point in time it was not realized or could it have been foreseen that the schedule to the Additional Appropriation Act would reflect This was only figures in a different fashion . realized on receipt of the Printed Estimates during April , 1984 , whereas the Exchequer issue had to be made before 31 March . It was too late then to do anything and it could not be rectified .

THE CHAIRMAN :

... ( INAUDIBLE ) ... of that discrepancy of the transfer of cars - this is all reflected in that?

MR . VAN DER WATT :

Correct , Mr. Chairman .

THE CHAIRMAN :

So , we realize the seriousness of this .

You

know, it focuses itself on all sorts of accounting and I trust we have learnt a lesson from this . MR . VAN DER WATT :

Mr. Chairman , it is on account of this unfortunate incident that Finance and also Treasury are reluctant to transfer any servant from one Department to another during the course of a financial year . And as far as Finance is concerned , we try and get the co - operation of the Commission

- 62 .that all financial adjustments , where functional divisions are transferred or have to be transferred from one Department to another , only take place at the beginning of a financial year .

THE CHAIRMAN :

Thank you very much , Mr. Van der Watt . was going to comment on that one . is a valid point .

I

I think this

Perhaps we could have avoided

this had things been transferred at the end of the financial year . Of course , that does not get you off the hook , but it would have been much easier to follow up the financial transaction .

Thank you . MR . T.P. DUBE :

Mr. Van Tonder , what are Treasury's views in regard to this over - issue and the circumstances giving rise thereto ? If you could just sum it up .

MR . VAN TONDER :

Mr. Chairman , yes , I think what you have just said is the crux of the whole matter . It was because a function was transferred from one Department to another Department during a financial year , with the funds applicable to that function going with the function . Now , this is something that should actually not happen and we have decided in Treasury also that we will not allow this in future , because this whole problem actually started there and it ended there , with the transfer of funds , and I think we have learnt our lesson . We will not fall in the same hole again in future , and this is all I can say , Mr. Chairman .

MR . T.P. DUBE :

Paragraph 28 ( 7 ) , page 16 :

Ex gratia payments .

Mr. Van der Watt , while I do not have a clear and concise definition of an ex gratia payment , to the best of my knowledge , and for our purposes , it could be described as a payment for which there is neither a legal nor a contractual obligation on the part of the Government to make , but there could well be a moral obligation therefor .

- 63Could you , in the light of my remarks , furnish this Committee with more details of the circumstances leading up to the ex gratia payments mentioned in the Auditor - General's Report? Kindly first deal with the payment under ( a ) and thereafter with the payments mentioned under (b ) . MR . VAN DER WATT :

There were three cases , Mr. Chairman .

The

one relates to an officer in the Department , Mr. Sitole , who was an accountant in the Department of Finance . His father was the Chief of the Sitole Tribe and after he passed away , the tribe insisted that this officer should take up his father's position . As Mr. Sitole did not then qualify for a monthly pension , a submission was made to the Cabinet in which the position was set out ,

and Cabinet

approval was obtained to pay an ex gratia amount to Mr. Sitole . Treasury was thereafter approached and Treasury approval obtained to effect this ex gratia payment of R3 086,43 . In recognition of the meritorious service Mr. Sitole rendered whilst in the employ of the KwaZulu Government Service , it was submitted to the Public Service Commission that an ex gratia payment in the amount of R3 086,43 be made to him in lieu of leave due to him during his career , which body recommended in the positive . Treasury Authority FT369 dated 8/6/83 was obtained after Cabinet approval . THE CHAIRMAN :

Mr. Van der Watt , how do you see this action that was taken in the light of what the regulations say as far as ex gratia payments are concerned and in the light of the discipline that has to I mean , we may be exercised in the service here . have many other instances that will follow . Will they also go the same way?

- 64 MR . VAN DER WATT :

Mr. Chairman , the position here is somewhat different . The Public Service Regulations do not make provision , where a person resigns , that you can pay out untaken leave , but in view of the circumstances in the case of Mr. Sitole , which were in the interests of the tribal authority whose chief he has now become , in view of that responsibility he was forced or felt duty bound to resign , and the Cabinet , on the recommendation of the Public Service Commission , approved that the leave due to him may be paid as an ex gratia payment . So the circumstances here are fully qualified .

THE CHAIRMAN :

Mr. Van der Watt , I am not against the action itself . I am only thinking of the basic principle here .

We see that this is a valid point and it was

definitely motivated , it could not have happened like that , but I am only worried about the future . So this should be followed very closely and I think a case on its merits should perhaps be the only criterion . MR . VAN DER WATT :

Mr. Chairman , that is the criterion that was followed . Any deviation from the regulations must be considered on merit and motivated to the Public Service Commission ; the Public Service Commission's recommendation obtained , which was done ; Cabinet approval obtained , which was done ; and Treasury authority obtained which was done .

So

every action taken in this particular case is within the scope of the regulations . THE CHAIRMAN :

Can we now take the second case?

MR . VAN DER WATT :

Accident - ZG8280 , driver :

Mr. Moses Mkhize .

The facts of the case are :

On 19 February ,

1982 , Mr. Hlabanyake Dlamuka , a trainee foreman , took this vehicle ZG8280 and he authorized Mr. Moses Mkhize to drive him to Botha's Hill , where he was staying . The trip was unauthorized . After Mr. Mkhize had left Mr. Dlamuka at

- 65 Botha's Hill , he proceeded to Hammarsdale where he On his way to Hammarsdale he states

was staying .

that a private vehicle , ND 141276 , approached ahead with bright lights on . He was blinded and as a result the collision occurred . The private vehicle was completely wrecked as a result of the accident , and the loss suffered by the owner of ND 141276 is calculated as follows : market value ; market value after the accident ; general sales tax ;

towage costs ;

total loss .

The matter was reported to the police , it was submitted to the State Attorney and the owner of this private car had to be compensated for damages . The matter was referred to the State Attorney and at the request of the State Attorney , Treasury was approached to make an ex gratia payment to the owner of the private car , to make good the loss of his car . The amount could not have been recovered from this driver , he could never pay it , and there was no alternative but to act in terms of the State Attorney's directive to obtain approval for an ex gratia payment to the owner of the private vehicle . Here too the normal and only recognized channel was followed . It was reported to the State Attorney , the State Attorney informed the Department what to do , they made a recommendation which the Department , on behalf of the KwaZulu Government , accepted and obtained the necessary authority to effect the ex gratia payment .

THE CHAIRMAN : one?

Thank you , Mr. Van der Watt . And the third I am sorry , Mr. Dube wants to put a question

to you concerning this one . MR . T.P. DUBE :

Mr. Chairman , we have just been told by Mr. Van der Watt that the fact of the matter was that the driver of the official vehicle was blinded by an oncoming car . If that is a fact , it means that the driver really has a case in court , he can put

- 66 his side of the matter . But as it appears now , the driver , before he even appears before the court , is taken by the Department of Finance as being in the wrong and the State Attorney does not decide to take the matter to court , because seemingly it is obvious So that the driver of the car was in the wrong . was it is not a fact that the driver of the car blinded .

MR . VAN DER WATT :

Mr. Chairman , this case should also be seen This trip was unauin a particular perspective . thorized . So here from the staff there was an irregular action on the driver's part , who is an employee of KwaZulu , so in a way KwaZulu is now held responsible by the owner of that car . The owner of the car demands compensation for the loss which he has suffered as a result of the write - off of his car as a result of this accident .

MR . T.P. DUBE : MR . VAN DER WATT :

What became of the driver? Mr. Chairman , here too we have to deal with the matter in terms of the driver's financial position , quite apart from his physical position . If he only earns ,

say , R100 or R120 a month , even

if we went to court and we obtained judgment against him , he can never repay R5 474,80 . Although disciplinary action is taken , such drivers are often instructed that they are now exonerated from the further driving of ZG vehicles . The moment you make them pay ,

even if it is a small

amount , they just disappear , and they cannot afford it in any case , and no court will give judgment in terms of which a person who does not have the financial ability , should make good a sum to this extent . THE CHAIRMAN :

Mr. Van der Watt , I think this is opening a way where we will not be able to close the door again , because here you admit that these people are not well paid and are unable to account for their

67 responsibility .

And again it is a story put to

the Auditor-General here , that the man was blinded and the case was not taken to court , and now we are wasting all this time discussing something that is irrelevant . Because , I mean , it was the fault of the Department because a member of its staff could drive the car unauthorized and cause the accident , and eventually they have to pay . But the story that has been put here to the Auditor- General , to me there is a hidden agenda , I mean , the facts are not as they should be . But for the sake of our administration here we must be careful how we handle the property of the Department . Perhaps we should rather have less but better qualified and well paid drivers , rather than to say that because a man is not well paid , therefore he gets away scot - free when he damages cars belonging to the KwaZulu Government . MR . VAN DER WATT :

Mr. Chairman , I do not think that is the point . The point is , this was an unauthorized trip by an unauthorized driver .

THE CHAIRMAN :

MR . VAN DER WATT :

Yes , Mr. Van der Watt , I agree , but why go to the extent of making a story about ... ( INAUDIBLE ) ... when the man was not going to be taken to court in any case? Mr. Chairman , all the facts we put to the State Attorney , all the facts , and we acted on the advice of the State Attorney .

THE CHAIRMAN :

Thank you , Mr. Van der Watt . The next case , Mr. Van der Watt ?

MR . VAN DER WATT :

This is an injury The next one is similar . to Sipiwe Dlamini - accident ZG 1813 . The plaintiff failed to issue summons timeously , that is , by 26 September , claim has now become prescribed .

1981 , and his This is what

the State Attorney writes to the Department of

- 68 · Co -operation and Development : " This was due to an arithmetical error by his attorney in the calculation of the 90 - day period of extension in terms of the Motor Vehicle Insurance Act . The plaintiff's attorney has now requested that consideration be given to the possibility of an ex gratia payment herein . This office ( that is the State Attorney's office , Durban ) is of the opinion that this request may receive favourable consideration ,

for the follow-

ing reasons .

The merits of the case are such that the KwaZulu Government would ... ( INAUDIBLE ) In terms of paragraphs 4 and 5 of the Department of Co - operation and Development's letter dated 12 August , 1981 , the opinion was expressed that the KwaZulu Government could not escape liability and this office was requested to negotiate a settlement . The abovementioned opinion was confirmed and this office's letter dated 2 September , 1981 , and steps were instituted to settle the quantum of the plaintiff's claim . The plaintiff suffered severe injuries in this collision through no fault of his own . Were it not for the fact that the claim was prescribed

upon a techni-

cality incorporated into the Motor Vehicle Insurance Act , the claim would be settled , and the decision whether to make an ex gratia payment herein rests with yourselves and we await your further instructions in this respect .

- 69 As regards the quantum of the claim , any payment made would be in an amount considered reasonable by yourselves and upon the full details being supplied by the plaintiff of his injuries . " The matter was again submitted to Treasury and Treasury approval obtained on the 3 June , 1983 , for the payment of an ex gratia amount of R1 500 to the claimant . THE CHAIRMAN :

Thank you , Mr. Van der Watt .

MR . T.P. DUBE :

Suspense Accounts . The following concerns both the representative of the Auditor - General and the Secretary for Finance . During the proceedings of the Sessional Committee on Public Accounts in April , 1983 , and in April , 1984 , the then Secretary for Finance informed this Committee in regard to its enquiries in connection with Suspense Accounts , inter alia , that : "During 1978 a concession was made to all National States by the Audit office in Pretoria that they could set off uncleared balances , debits and credits , the one against the other . Now, this National State has never made use of that concession by the Audit office . " ( See page 22 of the 1983 Verbatim Report of the Sessional Committee on Public Accounts ) . Mr. Parker , the Chairman requested you to obtain a copy of this concession for future reference for this Committee . Were you successful?

MR . PARKER :

Mr. Chairman , I regret to report I was not successful . As requested , I took the matter of the concession up with the Secretary for Finance and was informed in early October ,

1984 , that no

written concession per se could be traced in his

- 70 . records .

He stated that this was a verbal agree-

ment between the Office of the Auditor-General , Pretoria , and all National States . However ,

following discussions he had with

my predecessor , it was decided that use would only be made of this concession when the amounts outstanding had been stabilized and after every effort had been made to analyse these amounts .

He further indicated that as this was an open agreement to which his Department had been working , the reference to the concession at the Sessional Committee enquiries was not seen to be an unsupported statement . As I could find no written evidence in my local records , nor in the various reports of the KwaZulu Sessional Committees since 1978 , I requested the Secretary on 15 October ,

1984 , to furnish more

specific details in regard to the verbal concession on the following lines : (i )

The approximate date that the concession was granted ;

(ii)

the conditions under which set off could be effected ;

(iii )

the extent to which set off could be effected ;

(iv)

which , if any , of the various Suspense Accounts were excluded from the concession ;

(v)

any conditions which may have been imposed on him to qualify for the concessions ;

(vi )

the steps he had taken to meet with the conditions mentioned in ( v ) ;

(vii )

details of the progress he had made to analyse and clear the accounts involved ; and

(viii )

when he considered that the amounts in the accounts would be stabilized .

71 . I also drew his attention to the fact that according to his information the concession had been granted in approximately 1978 and six years had gone by since then . The information requested by me has still not been supplied . In February , 1985 , the Secretary for Finance advised me that it was decided either to approach Cabinet to have the remaining constant balance of R656 619,25 outstanding in the Suspense Accounts prior to 1982 written off by means of a Finance Act , or written off against Main Division E , Item 12 of Vote 9 - Department of Finance . Mr. Chairman , I would , with respect ,

suggest

that this matter now be referred to the Secretary for Finance . THE CHAIRMAN :

Mr. Van der Watt , the matter is referred to you by the Committee .

MR . VAN DER WATT :

Mr. Chairman , it is true that in regard to the amounts in Suspense prior to April , 1982 , we reached a position whereby a solution in the normal way appears to have come to a standstill . These amounts have been analysed .

They are basically

in regard to claims in respect of social pensions on the RSA Government in respect of which the vouchers are no longer in our possession . That Department claims that they have not received it . Likewise there were other similar amounts in regard to claims in respect of Education and Training , in regard to initial salary payments , KwaZulu The original Department of Education and Culture . vouchers have also gone astray in transit , there are a few subsistence claims .

and then

The position is now in regard to these amounts that as at April , 1982 , the balances have stabilized .

A draft is being prepared for submission to

Treasury for approval and with the request that these amounts be written off against the Votes of the then Departments of KwaZulu .

· 72 Once this action has been taken and Treasury approval obtained , these amounts will be written off against the 1984/85 financial year , and next year these amounts should not again appear in the financial statements . The other approximately 30 accounts have now been itemized and with amounts in suspense it varies , they never stabilize .

Regular follow- up

actions are being taken to clear these items , but here too the Department of Finance relies entirely on the feedback of relevant Departments in respect of which amounts were disallowed , but then there are also items of a general nature and of a recurring nature , such as disallowances for bursaries , arrear membership contribution to the pension fund , payments on behalf of Co - operation and Development , also Education and Training , payments on behalf of the Auditor - General , payments on behalf of labour , the South African Sugar Association - loans to farmers , and then there was also a little in respect of flood relief for 1983/84 . The amounts of these accounts vary from month to month , but I have been given the assurance that all these amounts are properly analysed ,

itemized

and that regular control is being exercised . I may mention , Mr. Chairman , that although it is no longer a requirement by the Auditor - General's office that 6-monthly statements of uncleared items in the Suspense Accounts need be submitted in future as a controlling instrument , we in Finance have decided that for management in our own Department we are going to reintroduce the submission by the relevant sections of these statements , which enables management in Finance to see at a glance whether there is movement to the good or whether some items have become stagnant . THE CHAIRMAN : MR . VAN DER WATT :

Are you through , Mr. Van der Watt ? Yes , Mr. Chairman .

I can give you the assu-

rance that these amounts are all analysed and are

· 73 continuously followed up to ensure that they are cleared .

THE CHAIRMAN :

Mr. Van der Watt , I thank you very much , because you seem to have helped me quite a lot . You have answered some of the questions I was going to put to you even before I could do so .

MR . VAN DER WATT :

Thank you , Mr. Chairman .

THE CHAIRMAN :

Mr. Van der Watt , can we then come to No. 2 .

MR . T.P. DUBE :

Mr. Van der Watt , mention has been made of the possibility of writing off of approximately RO , 65 million , while it is noted that according to Statement 3 , ( iii ) Suspense Accounts , page 26 , at 31 March , 1984 , there is a balance of about R7,7 million . I am sure to persons with long experience in and sound knowledge of state financial administration there is no cause for alarm for the difference of R7 million between RO , 65 million to be written off and R7,7 million in these accounts . However , could you give this Committee more information in regard to the two amounts?

MR . VAN DER WATT :

Mr. Chairman , I think I have partly replied to this question . The amount of R7,7 million is not a stagnant amount . This amount is made up of quite a few items , as I have explained before , and I give you a comparative figure in regard to some of these items , how they vary from 1982/83 to 1983/84 . Disallowances -

General :

In 1982/83 it was

R336 347,97 , in 1983/84 it was R324 421,20 ; ZG Vehicles Disallowances :

In 1982/83 it

was R188 013,83 , in 1983/84 it was R199 650,27 ; Advances on Subsistence and Transport :

In

1982/83 it was R419 883,01 and in 1983/84 ... THE CHAIRMAN :

I am sorry to interrupt , Mr. Van der Watt ,

- 74 -

but I do not know whether ... MR . VAN DER WATT :

Mr. Chairman , I will just give a few more examples where there are big amounts . Labour :

In 1982/83 it was R408 828,94 , and

in 1983/84 it was R732 283 .

Another big one - Social Benefits :

In 1982/83

it was R373 926,55 and in 1983/84 it was R348,33 .

Another big one

Maintenance Grants :

R284 519,47 in 1982/83 and in 1983/84 it was R 392 750 . THE CHAIRMAN :

I do not think we need all that . have already indicated those sums .

I think you

But thank you

for the explanation . So that was in reply to this No. 2 . Can we then proceed please , Mr. Dube? MR . T.P. DUBE :

Statement 4 , page 27 , Motor Transport .

Service : Subsidized

Mr. Parker , could you please furnish this Committee with the reasons for the qualification of the amount of R318 566 outstanding at 31 March , 1984 ,

MR . PARKER :

with endorsement of " Balances under query - subject to alteration" ? Mr. Chairman , yes . During the financial year

1982/83 a number of informal queries were raised by Audit in regard to apparent errors which would have had a direct bearing on the calculation of monthly In the main these discrepansubsidy repayments . cies related to journeys undertaken by officials which had been reflected as official but in Audit's opinion were regarded as private , and as such did not qualify for inclusion in the calculation of the subsidy repayments . In this manner the recoveries in 1982/83 had been overstated and accordingly the total was shown Unfortunateas being less than the actual figure . ly there are still approximately 11 informal queries issued in 1982/83 which have not been replied to .

75 Until satisfactory replies have been received , the Auditor -General is obliged to qualify his audit certificate . MR . T.P. DUBE :

Mr. Van der Watt , as the Department of Finance accounts for the item Service : Subsidized Motor Transport , I would be grateful for your comments in regard to the non- reply to the informal queries and how the problem can be overcome .

MR . VAN DER WATT :

Mr. Chairman , the arrangement is that all informal Audit queries originating from routine checking of expenditure vouchers and claims are channelled via the Chief Accountant's office to the relevant Departments . This is , from a practical point of view, the only way to exercise to an extent overhead control on the response by relevant Departments .

Depart-

ments are also periodically reminded of outstanding matters . As far as Audit queries relevant to subsidized transport are concerned , the matter is in no way easy and the position was further complicated when a dispute arose in regard to the question as to whether kilometres travelled between residence and place of work should , in respect of subsidized transport , be allowed as official or private . Treasury was of opinion that certain paragraphs in a Department of Works circular , No. 12/1982 , was an infringement of the Code : Subsidized Transport scheme and to an extent also an infringement of the functional activities of the Public Service Commission , the statutory body for the control of the administration and procedures and also personnel administration and service conditions . As the Commission also ruled that Works circular No.

12/1982 was considered to be a devia-

tion from the code subsidized transport in November , 1983 , Treasury on 28 March , 1984 , withdrew

- 76 the authority FT3/ 3 dated 10 September , 1982 , and in turn the Commission ruled that this circular was inconsistent with the Code :

Subsidized

Transport . Mr. Chairman , the withdrawal of this circular caused a real hornet's nest among the then Secretary for Finance and the relevant Secretaries involved , as a result of which a memorandum was submitted to Cabinet on 28 May , 1984 . Cabinet , by Resolution No. 151/84 of 5 June , 1984 , ruled : " Cabinet , after consideration of the memorandum as well as the submissions from the office of the Auditor - General and the Secretary to the Treasury , resolves as follows : Circular 12/1982 Works to be reinstated with retrospective effect from 1 October , 1983 , and all actions taken in terms of the circular are condoned , as such actions were taken in good faith and in the interests of good administration . The exemption to heads of Departments to travel between Melmoth and Ulundi and return to Melmoth on a daily basis , be reinstated with retrospective effect from 1 October , 1983. The memorandum to Cabinet , Cabinet's decision as well as circular No. 12/1982 and the representations by the Auditor - General and the Secretary to the Treasury , be submitted to the Public Service Commission for further consideration . "

Mr. Chairman , these documents were submitted to the Commission on 20 June , 1984 , and on 29 November , 1984 , the Commission informed the Department of Finance that -

- 77 -" ... has considered the matter and recommended the withdrawal of Works circular No.

12/1982 with effect from

a future date , e.g. 1 April , 1984. "

As seconded officers were primarily involved , all these documents were submitted to the Department of Cooperation and Development on 13 December , 1984 , for a directive . On 31 January , 1984 , the said Department replied : 'With reference to the annexures which accompanied your communication and also recent conversations between Messrs . Pelser and Van der Watt , it is confirmed that the use of subsidized transport between residence and place of work for the purpose of official kilometres , could only be allowed in the event of prior authority having been obtained for such trips from this office . This information was verbally conveyed to all heads of Departments at a Secretaries ' Meeting held on 4 March , 1985 , when it was ruled that circular No. 12/1982 is still applicable ' . " Mr. Chairman , as I am convinced that the subsidized transport scheme should primarily be in the interests of the KwaZulu Government and not so much to the sole benefit of the co - owner of the vehicle , the matter was referred back to the Commission , with the request to submit its recommendations to Cabinet in terms of Cabinet Resolution No. 151/84: " Against the background of the above

- 78 facts you will appreciate the problem ( INAUDIBLE ) and complications I still maintain that apart from the contents of circular No. 12/1982 , Accounting Officers are obliged to at least be courteous in their approach to an Audit query , to at least analyse the elements thereof , to test the actual claim in terms of reasonableness and to reply constructively . No Department should be allowed to ignore an Audit query just because the Accounting Officer regards the matter as irrelevant or dropped in terms of the Secretary's ruling , which can only be a recommendation and not binding to my mind . " The matter is now in the hands of the Commission who , in terms of the Cabinet's Resolution , item 3 , has to reconsider the matter and make a formal submission to Cabinet .

ries .

We have analysed the outstanding Audit queThey refer primarily to the Departments of

Health and Works , and just glancing through the contents of these queries , I do not think any Secretary would be playing the game by just saying that circular No. 12 still applies , and think that that is the end of it . Those Audit queries need to be analysed . The elements thereof must be tested against the provisions of the Code : Subsidized Transport , and secondly , circular No. 12/1982 , and irrespective of the fact that Cabinet requested the reinstatement of that circular retrospectively from October , 1983 , there are elements which are not covered by that concession and I have requested the Secretaries concerned to kindly give this matter their kind and immediate attention .

THE CHAIRMAN :

Thank you , Mr. Van der Watt .

· 79 I wonder if you could inform this Committee whether the 1982 circular was withdrawn or not? MR . VAN DER WATT :

It was reinstated by my predecessor and now we are awaiting a submission by the Commission to Cabinet with their proposals , and until such time as that submission is made and a directive obtained from Cabinet , I do not think that it is possible for Finance to withdraw it .

THE CHAIRMAN :

We welcome , Mr. Cele , and we would be grateful if you could help us out here and put us in the light , because to us all this is a jigsaw and we do not see our way clear to discuss this fully .

MR . T.P. DUBE :

Mr. Cele , you have heard the information furnished by the representative of the Auditor - General and the Secretary for Finance in connection with journeys undertaken by officials from their residences to their places of work being claimed as official journeys for subsidy purposes , but which should be regarded as private and thus not be utilized for repayment of subsidy .

As it is one of the functions , powers and duties of the Public Service Commission to make recommendations in regard to staff matters of KwaZulu Government officials , can you please inform this Committee what specific action the Commission is contemplating that this contentious matter can be resolved as soon as possible , in order that State funds are appropriately accounted for? MR . CELE :

Mr. Chairman and hon . members , the question I have to deal with here is by no means an easy question . The question posed to me now is : " What specific action the Commission is contemplating that this contentious matter can be resolved as soon as possible in order that State funds are appropriatcly accounted for ? "

- 80 .· I say this is a difficult question , in that in my view this is a question which should rightly be answered by the Commission itself . But the question having been put to me , as the Secretary of the Commission , I have had to consult the Chairman of the Public Service Commission to get his views on the matter , because what I am going to say here is actually the views of the Commission as put to me by the Chairman . Mr. Chairman and members , briefly , the Commission is of the opinion that right now there is no matter that is before the Commission for conThere is none sideration or to be contemplated .

at all . The Commission feels that certain matters were raised by the Department of Finance and those matters came to the Commission's office and they were duly put to the Commission , which considered those matters and then made a recommendation , which the Commission directed that we should forward to the Department of Finance and not direct to the Cabinet . Because , Mr. Chairman and hon . members , the procedure is that before matters go to the Cabinet , Secretaries of Departments approach the Commission for a recommendation and then that recommendation , once furnished by the Commission ,

is

conveyed back to the Department which has brought up the matter , and it is then the function of the head of that Department to take the matter up with his Minister or with the Cabinet . But in this particular case things did not go the normal way , because we understand that a submission was made directly to the Cabinet by the Department of Finance , and no reference was made to the Commission.

The first thing the Commis-

sion heard was that a decision has been taken by the Cabinet ,

and that decision of the Cabinet is

now referred to the Commission to reconsider .

- 81 -· So , when the Commission dealt with these matters as instructed by Cabinet , the Commission was of the opinion that when they make their recommendation , they should not forward it direct to the Cabinet , but to the Secretary for the Department of Finance , where the matter started . Mr. Chairman , if I may refer to the documents I have here and with your permission , Sir , may I read the letter containing the recommendation of the Commission which was forwarded to the Secretary for Finance . The Minute is dated 29 November ,

1984 , ad-

dressed to the Secretary for Finance :

" Subsidized Motor Transport . Your F2933 dated 20 June , 1984. The Cabinet per Resolution 15/1984 , decided that (a)

Works Circular No. 12/1982 be reinstated with retrospective effect from 1 October , 1983 , and all actions taken in terms of the circular be condoned ;

(b)

heads of Departments be granted exemption to travel between Melmoth and Ulundi , such trips being regarded as official with effect from 1 October , 1983 ; and

(c )

the memorandum to Cabinet , Cabinet's decision as well as circular No. 12/1982 , and the recommendations by the Auditor and Secretary to the Treasury , be submitted to the Commission for further consideration .

The Commission has considered the matter

82 and recommended the withdrawal of circular No. 12/1982 with effect from a future date ,

e.g.

1 April , 1985 .

It has come to the notice of the Commission that when officers have been allocated subsidized transport , they have less time in offices. For the Commission it is difficult to understand why the Government should pay for the transport of allocated officers as it happens where an officer's residence has been declared as his headquarters . Consequently the Commission requests that the circular being drawn and that there should be no deviations from the code . The Commission's recommendation above does not refer to the exemption of heads of Departments regarding the use of subsidized transport . Your Department ( that is the Department of Finance ) is kindly requested to re- submit the matter to the Cabinet with the necessary motivation and with a view to the amendment of the regulations and the relevant code . It will also be appreciated if the draft of the memorandum to the Cabinet could be made available to the Commission before it is submitted to the Cabinet , please . " Mr. Chairman , the Commission is of the opinion that once this recommendation has been conveyed to the Department of Finance , the ball is now in their court , and the Commission cannot do anything at this stage until this circular No. 12/1982 has been withdrawn , either by the Secretary for Finance or

· 83 by the Cabinet .

Thank you .

THE CHAIRMAN :

I think we come back to you , Mr. Van der Watt . MR . VAN DER WATT :

Mr. Chairman , these views expressed by the Public Service Commission were discussed with Mr. Johns at a Secretaries ' Meeting , and he is adamant that the Commission must now act or react and make their submission to Government . From the Department of Finance's point of view I do not think we have any option but to support the views expressed by the Commission , the statutory body responsible for codes affecting administrative procedure , service conditions and personnel administration , and with this in mind I think the Commission should now take the bull by the horns and make a submission to Cabinet .

THE CHAIRMAN :

Thank you , Mr. Van der Watt .

But I think I

have the view that the ball is in your court , according to the explanation given by the Commission as far as this matter is concerned . And even more motivated now that this has appeared before my Committee , I would plead that this matter be resolved between you and the Commission , and it can be endorsed by the Cabinet for that matter . But I think , as the Secretary of the Public Service Commission has indicated , they are waiting for your reply as far as this matter is concerned . Am I wrong or right , Mr. Cele ?

MR . CELE : THE CHAIRMAN :

That is the position , Mr. Chairman . Well gentlemen , we have heard the background to this whole affair and as we all seem to agree , this matter should be resolved or initiated now, from this point , by the Department of Finance , in order to achieve the end result . I think that is where my Committee stands and

- 84 --

I thank you very much . We will adjourn now until 09h30 tomorrow .

COMMITTEE ADJOURNED

- 85 WEDNESDAY , 17 APRIL , 1985

09h30 . PRAYERS .

VOTE 2 - DEPARTMENT OF THE INTERIOR : THE CHAIRMAN :

I ask my colleague to read the question to

you . MR . P.O. SIKAKANA :

Paragraph 2 ( 3) , page 1 , Audit Queries . Mr. Wiggill , in his report the AuditorGeneral stated that the failure to collect outstanding amounts was mainly attributed to the noncompliance with instructions regarding internal checking and control . Can you please elaborate on this in regard to your Department ?

MR . WIGGILL :

Mr. Chairman and members of the Committee , I would just like to state that township managers are all aware of their duties in regard to internal checking and control , and my Department makes every endeavour for all township officers to be inspected regularly , but this is not always possible because of staff problems . We do have two approved posts on our establishment of township inspectors , but unfortunately only one has been filled , and at the request of Dr. Madide my Department is also keen that a new section or division for housing be established in our Department . At the moment housing and townships are all in one section and with the development of housing we find that it is possible that township matters are not receiving the attention they should be receiving . We have approached the Efficiency Division for a full inspection to be undertaken of the Department of the Interior and we do hope that when

86 a section for housing as opposed to townships is established , the position will improve . But offices are visited regularly and the managers and staff are continually briefed and instructed as to what is expected of them regarding Audit matters and financial control and checking . Finally , Mr. Chairman , I would like to just say that we did have a Mr. Bronkhorst in our Department who was transferred 16 months ago , and we have made repeated requests to Pretoria for him to be replaced . But unfortunately , with the staff position in the Government Service as it is , it has not been possible as yet to get him replaced , but I have been assured as recently as last week by Mr. Dreyer of Pretoria , that this is the number one priority in KwaZulu , that the Department of the Interior post be filled , this post of Mr. Bronkhorst , and hopefully when that post is filled things will improve . THE CHAIRMAN :

In other words , Mr. Wiggill , you are quite aware of this discrepancy of lack of control ? That you are aware of it in your Department ?

MR . WIGGILL :

We are all aware of it , yes , Mr. Chairman , and we are doing our best to overcome it .

THE CHAIRMAN :

I wonder , Mr. Wiggill , could you more or less commit yourself to this? Because I mean ,

it

is easy to hope for a thing , but it is a different matter to say , well , you are going to put might into it , to see that it works . Because that is what we are trying to do , to get everything up to the mark .

MR . WIGGILL :

Mr. Chairman , the position is that myself and Mr. Evert , who is our Assistant Secretary : Townships , try to visit as many towns as often as possible . We are doing that and when we do go there , we discuss the problems with the township managers

- 87 -

and we implore them and their staff to observe financial regulations , and they assure us they We are all doing our are also doing their best . best to overcome it , but it is a problem , I think not only in our Department but it is a universal But we are doing our best to overcome problem. it . THE CHAIRMAN :

Some of us are quite aware of the tremendous task you have in the townships and if it could be put in a more orderly way , it should be helpful to everybody , both to us in the communities as well as to the Government itself .

MR . WIGGILL :

We are aware of that , Mr. Chairman .

THE CHAIRMAN :

Thank you .

MR . P.O. SIKAKANA :

Paragraph 21 ( 1 ) , Townships , page 9 .

Can we pass on , please?

Mr. Wiggill , could you please inform this Committee why you were not able to furnish full statistics in respect of Mondlo Township to the Auditor - General for inclusion in his Annual Re-

port ? MR . WIGGILL :

Mr. Chairman , following the death · and I put in brackets " murder" - of the former township manager of Mondlo , Mr. Mgobese on 24 March , 1983 , the office at Mondlo has been closed . Mr. Mgobese was killed , the case was investigated by the police , but nobody was ever brought to trial for that murder . But the docket has not been closed by the police , they will not close it , SO it is still pending . But Mondlo , as you are aware , is a problem , a serious problem for the Department of the Interior , from the Minister right down . Collections are taking place at the magistrate's office , Nqutu , by staff from our head office . This is to assist those residents of Mondlo who are willing and keen to pay their accounts . The vast majority of Mondlo residents have

88 . opposed the rent and service increases brought about with effect from 1 January , 1979 , and the position is , I am sorry to say , that at present nobody in the Department of the Interior is preThey tell you outright pared to work at Mondlo . they would rather resign than go to Mondlo , because they fear for their lives , and they say they are justified in saying that . This is common knowledge in my Department and carries the full knowledge and concern of Dr. Madide as well . That is why we could not give that information for Mondlo , because it is a problem for us . We just cannot get staff to go there and with your permission , under the next question , Mr. Chairman , there are other things I can tell you about Mondlo , which I would like to tell the Committee in camera , with this machines switched off , later on , if you would like to hear it , political and other implications of Mondlo . THE CHAIRMAN :

Let us finish up my task first before we come to politics , because ...

MR . WIGGILL :

Well , unfortunately Mondlo is a political problem , Mr. Chairman .

THE CHAIRMAN :

Well , most of the operations are partly linked with politics , but you will get a chance to let us know more about it . What I wanted to ask you is how you can then expect efficiency at Mondlo ,

if you are operating

in this way and you keep on coming with the fact that nobody wants to go there and so on? MR . WIGGILL :

THE CHAIRMAN :

MR . WIGGILL :

Is that question No. 2 , Mr. Chairman . You can answer it when we ask question No. 2 , but to me they are related ... Yes , they are actually interrelated and with your permission I will answer question No. 2 as

-· 89 well . THE CHAIRMAN : MR . P.0 . SIKAKANA :

Just put the question , please . What action have you taken to solve this problem?

MR . WIGGILL :

Mr. Chairman and members of the Committee , the position at Mondlo is constantly being monitored and the possibility of staffing the office on a daily basis is at present being considered . What we have in mind is to send staff to Mondlo who will work there .

They can either live at

Nqutu or even at Ulundi here and it would involve more travelling , but we would like to have a presence there to help those people who want to pay . So we are thinking of staff to go into Mondly and start at 09h00 in the morning and come out at 15h00 in the afternoon . But I must tell the Committee that there again we are running into problems . are not keen on that idea at all .

The staff We have a man ,

I will not mention his name , a principal clerk on our establishment , who used to go to Mondlo after the trouble and not the death of Mr. Mgobese , and he was stopped by another man , whose name I will also not mention , who was a suspect in the murder of Mr. Mgobese . He was stopped in Vryheid and he was told , oh , I see you are back at Mondlo ? You had better not come back there , because within one week you will go the same way as Mr. Mgobese went . This was outside the police station in Vryheid , in the main street , and that is a principal So clerk and he has now told the other clerks . even to go to Mondlo on a daily basis , the staff are not prepared to do it . I am constantly discussing the problem with Dr. Madide and he is also very concerned about it . THE CHAIRMAN :

Let us continue , please .

MR . P.O. SIKAKANA :

Paragraph 21 ( 1 ) · Townships .

- 90 It is noted that there is a considerable increase in outstanding amounts under the abovementioned items during the financial year 1983/84 . Taking into consideration the contents of paragraph 2 ( 3) :

Audit Queries , it appears that

there was no improvement in the collection of outstanding amounts during the year under report . In fact , the position has deteriorated and this Committee would be grateful for your comments in this regard . MR . WIGGILL :

Thank you , Mr. Chairman . I agree that there has been an increase in the amounts outstanding in respect of items ( b ) and ( i ) . The major contributing factor to this in my Department is the unemployment position . It is common knowledge that thousands of breadwinners have lost their employment and although every effort is made to collect outstanding moneys , it is anticipated that the problem will become worse in this financial year if the economic climate worsens . To compound the problem , there is major resistance to the paying of water tariffs in our largest township , that is , Umlazi , and as I said just now, because of the problems at Mondlo , virtually no moneys are being collected in Mondlo at the moment . But the biggest reason for it , as we see it , Thousands of people

is the unemployment position .

have lost their work and when a man has hardly any money , and he has to decide between feeding his family or paying rent , obviously he is going to feed the family . paid .

That is why rents are not being

However , we are making every effort where

we can to collect the money . THE CHAIRMAN :

Mr. Wiggill , I appreciate the fact that those people are out of work , but I mean , it is not only in Mondlo , also in Umlazi and all the

- 91 other townships , so if that was the reason , we would not be getting any income . MR . WIGGILL :

No , what I have said about Mondlo , Mr. Chairman , at Umlazi we have resistance to the payment And at Mondlo , of water , which is just incidental . just for your information , as I said just now , virtually no money at all is being collected at Mondlo , and that also helps to increase the figure of outstandings . But the biggest problem , as we see it , is the unemployment position . We are making all efforts to collect money where we can , and I will also say this , and I would ask here again if the machines could be switched off , because I would like to say something else which involves ... No , I will say it openly .

I mean , We are not keen on evicting people . if a man is blatantly in arrears or is creating a disturbance or things like that , then he will be evicted . But this is a directive from Dr. Madide and I fully support it , that where people are battling to pay and they have other commitments and they have possibly lost their jobs , or their overtime has been cut , we will not freely evict people from their homes . And that , unfortunately , is a two- edged sword , because if you are not going to evict , it means that your figure of outstandings But you cannot have it both is going to go up . ways .

You can evict and cause lots of ill - feeling

in the townships and cause problems there , or you can try and wait , that possibly when the financial position improves , more money will be forthcoming . But in no township are we not collecting money because of that . Every effort is being made , and as I say , some township managers are more zealous and keen than others . I have actually had to go to one township , I will not mention its name , on instruction of the Minister , to please cut down in the evictions because of this . This is in the Richard's Bay /Empangeni area .

can say .

And that is all I

- 92 THE CHAIRMAN :

But , Mr. Wiggill , I think the main thing is Mondlo . The background , the situation sort of overshadows quite a lot of other problems which are normal problems , but just because of the situation there it seems to be orchestrated by the situation .

MR . WIGGILL :

That is right . That is why I have just mentioned , Mr. Chairman , why the figures could even be higher than last year ,

for instance , because unfortunately it

is a fact of life that every year the collections from Mondlo , for example , are less . So therefore If this figure would help to increase the figure . Mondlo was operating as a normal township , the figure would be considerably reduced . MR . M.A. MKHWANAZI :

Mr. Chairman , may I please ask Mr. Wiggill if he is aware of the information that sometimes in the townships when money is collected by the township managers or their staff , this is not done very late in the afternoon .

Could that not

perhaps affect the collection of money , that after two o'clock they are not allowed to collect money because now they are closed ? MR . WIGGILL :

I mean , It is a bit difficult to answer that . These are the Treasury Instructions are not ... financial regulations that lay down the hours that moneys may be collected and I think it is from 08h30 to 13h00 ...

THE CHAIRMAN :

MR . WIGGILL :

Yes it is the office hours here , 08h30 to 13h00 . Yes , 08h30 to 13h00 .

All offices where mo-

ney is collected close at one o'clock . I personally have not been advised that this is a problem since I have been involved in Interior . It could be that people battle to get there in time . Are you referring to people who are working , Mr. Mkhwanazi ?

-- 93 -MR . M.A. MKHWANAZI :

Yes , people who are working .

MR . WIGGILL :

Working shifts and things like that ... ?

MR . M.A. MKHWANAZI :

Yes , where somebody gets off at one o'clock to go and pay his rent and he cannot pay the money because the office is closed . Could that perhaps contribute to some accumulation

MR . WIGGILL :

( INAUDIBLE )

It could be , but I would not like to give a definite answer . It could be a contributory factor .

MR . M.A. MKHWANAZI :

I ask , Mr. Chairman , that we also look into that , because it may be to our advantage .

THE CHAIRMAN :

Well , I do not think that is our problem . They have to sort this out . I mean , we are only more or less opening their eyes to some of the things we think could be the cause . But again , I think if there is a standard time it cannot be changed because of one situation . But if there is a need it should be reflected in all the other areas as well , because this has been an ongoing thing , the standard time , long time .

MR . WIGGILL :

for a

About 30 years at least .

THE CHAIRMAN :

I think you could perhaps make exceptions , to make it more ...

MR . WIGGILL :

We could , Mr. Chairman , there will be no problem at all . I mean , the object of the exercise is to collect money , not to turn a person away who comes there with money . Through you , Mr. Chairman , have you actually heard this at Umlazi or at KwaMashu , Mr. Mkhwanazi ?

MR . M.A. MKHWANAZI :

...

MR . WIGGILL :

I will discuss this with the manager next

( INAUDIBLE )

·- 94 -

week , just to find out , and he can do a bit of research and ask staff members of the unit if they have actually encountered this . We can easily I mean , there are more ways of kilovercome it . ling a cat and it is not as if we are not allowed to do it . THE CHAIRMAN :

Thank you .

MR . P.O. SIKAKANA :

Paragraph 21 ( 1) :

Townships .

Mr. Wiggill , kindly refer to item (g ) :

Total

amount outstanding for six months or longer in respect of instalments 1983/84 - R641 881 . Because the comparative figures for 1982/83 were disputed by your predecessor , despite the fact that he had personally certified them as correct when submitting them to the Auditor -General for inclusion in the 1982/83 Annual Report , I am going to use as a comparison figure the outstanding sum as published in 1981/82 , and my remarks to you are as follows . It is noted by this Committee that outstandings for six months or longer in respect of instalments have increased by 155% from RO , 25 million as at 31 March , 1982 , to almost RO , 65 million as at 31 March , 1984. Comparatively there has also been a more than 20% increase in the number of cases . Can you inform this Committee of the reasons for this deterioration , as it seems we have a problem of internal control here , and of the control measures you have introduced since it was reported to me by your predecessor that township managers are definitely not paying enough attention to this problem? MR . WIGGILL :

Thank you , Mr. Chairman . I would like to say , Mr. Chairman , that I do find it a little bit embarrassing to comment on a Unfortunately statement made by my predecessor .

- 95 I have gone through the files and I see that it is quite correct what is written here , that the figures furnished at the time were incorrect . I also see , by going through the files , that my predecessor was requested to write you personally a letter after the last Sessional Committee , which he did do on 15 June , pointing out certain irregularities in his initial reports . And reading through his letter and where he did a recheck , apparently those figures were out by R142 000 . He admitted , on checking up , that the figures given were incorrect , and that they were ... Have you got the exact figure , Mr. Parker? It is R142 000 , it here .

according to the letter , as I see

Unfortunately it is a fact , and I cannot dispute it , that there has been a phenomenal increase in outstanding arrear rentals , and as I said with the last question which I was asked , Mr. Chairman , I think this goes hand in hand , unfortunately , with what I said just now , that the biggest reason here is the unemployment position . If a person is not paying his current rent because he does not have the money to pay , obviously he is not paying his arrear rent either .

So the problem goes hand in hand with what I said in reply to the last question , that although every effort is being made to collect rentals , it is unfortunately so that arrear rentals are increasing phenomenally because of financial problems and the current economic climate . And , as I said with the last question , at the riks of repeating myself here , it also goes hand in hand with the reluctance on the part of our Defor very good reasons , to evict people

partment ,

where they have not paid , unless there is a real bad reason to evict them. We do not just summarily evict a person who is making an attempt to pay and keep his children at school and feed his

- 96 family . So the answer here , as I see it , goes hand in hand with the previous question .

Well , as you have said , it

THE CHAIRMAN :

is also embar-

rassing for this Committee to be condoning all this and just to carry on like that , because where will we end up? MR . WIGGILL :

Mr. Chairman ,

as I have said , every effort is

being made to collect current and arrear rentals , we are doing all in our power . I mean , we have not just left the matter because of the current economic climate , but our hands are a little bit tied . I see your problem and I understand your problem as well and obviously you must raise the question and express your concern . THE CHAIRMAN :

Of course , it would be advisable if you people could come with a solution and then perhaps the Cabinet can make a ruling of some kind . But I mean , we cannot be discussing year after year the same problem without any solution .

MR . WIGGILL :

Which is actually getting worse year after year , unfortunately .

THE CHAIRMAN :

Anyway , let us continue with the next question .

MR . P.0 . SIKAKANA :

Paragraph 21 ( 2 ) , page 9 . Mr. Wiggill , could you please give the Committee more details of the cases where officials were implicated?

MR . WIGGILL :

Yes , Mr. Chairman and members of the CommitThere were four cases involving the Department of the Interior where officials were implicatee .

ted . The first case involved a Mr. E. Maseko , who was a clerk at KwaMashu Township . He falsified receipts and he defrauded the Government in

97 an amount of R960 ,

and when he was convicted he

was given five years suspended on condition he paid back the money which he had stolen , plus inThat is why the figure is now R1 028 , terest . that is the interest on the amount that he had stolen .

He has been paying back the money regularly at the rate of R80,00 per month , but unfortunately he has recently resigned . He has paid back more than half of the money and we are now going to recover the balance of R300 odd from his pension benefits . He has more than enough in his pension benefits to cover what the Government lost , so there will be no loss of any revenue to the Government in this case . The second case concerned a Constable Mkhwanyana . He lost a fire - arm valued at R450 while he was stationed at KwaMashu . The matter was reported to the Inyanda Police but they could not bring a conviction against the man . A Board of Survey Report was completed and Treasury ruled that the full amount had to be recovered from Constable Mkhwanyana . Steps have been taken to recover the money from him . He had to pay it back at the rate of R37,50 a month with effect from 30 September , 1984 , so in other words he has already paid back more than half. It will take 12 months to pay and at the end of September the last instalment will be collected from him . So there again there will be no loss to the Government when he has paid the full amount back . The third one , Mr. Chairman , concerns a Mr. A.F. Mkhwanazi who was a clerk at Ezikhaweni . He lost a fire - arm valued at

R450 .

He was charged

by the police for using the fire- arm out of office hours .

The matter was reported but before we could

take any disciplinary action against him , the firearm was miraculously recovered or it suddenly came to light . I do not know whether Mr. Mkhwanazi did

- 98 -not realize that he would have to pay for it and when he was told that he had to pay , he then found the fire - arm . It has now been since we have recovered , after this report was compiled ,

so there has been

no loss of any money for the Government there .

The fourth one , Mr. Chairman , concerns a Mr. L.K. Mkunya .

He was a clerk relieving at Sundum-

bili and while he was relieving there he lost a fire - arm valued at R413 . While the matter was still being investigated , he was killed tragically in a motor- car accident on 26 October , before the amount could be recovered from him. . The matter has now been referred to Treasury for a write- off after a full investigation into his estate , which appears to be insolvent . I have actually made a submission to Treasury to say that I think it would be very unfair that his family and his dependants should now be held liable for his negligence . Whether Treasury will accept it , I do not know.

They might say that the

estate must pay it back , but I think it would be a bit unfair to his family to lose R413 through his negligence in his lifetime , and I have recommended that the amount be written off . But it has not proceeded so I cannot give a final report on this case at this stage . THE CHAIRMAN :

So fire - arms are very much in the picture

here? MR . WIGGILL :

Unfortunately , yes .

There again the police

have helped us to try and clamp down , to exercise stricter control , but unfortunately , as I say , it happens , they do disappear .

They seem to be a

temptation . There is one constable , Mr. Mkhwanyana actually took his and his statement read that he went to a shebeen and while he was at the shebeen after hours , with the revolver , he felt sleepy

- 99 and he fell asleep , and when he woke up the revolver was gone . These are the problems we have , Mr. Chair-

man . THE CHAIRMAN :

MR . WIGGILL :

Mr. Wiggill , you mentioned a Mr. Mkhwanazi . Is he a member of this Committee? ( LAUGHTER ) No , I checked on that , Mr. Chairman .

I did

not want to mention the name , but I see this is a Mr. A.F. Mkhwanazi . ( LAUGHTER ) I never asked the question . MR . P.0 . SIKAKANA :

Mr. Wiggill , thank you for the information furnished so far . Could you also kindly inform the Committee of the steps you have taken as Accounting Officer to tighten internal checking and control in order to endeavour to bring about a reduction of thefts and irregularities of cash and fire - arms in your Department ?

MR . WIGGILL :

Mr. Chairman , unfortunately here again I have to repeat myself . It goes hand in hand with the very first question I was asked . All township managers and staff are fully aware of what their responsibilities are in regard to checking and control . We have got the financial instructions which are pinned up in their offices . I and Mr. Evert try and visit these offices as often as we can and when we do go there , we discuss problems with them . We point out to all our staff when they come to Ulundi , which is very often , what is and what is not expected of them as people handling Government moneys . We do everything possible , by word of mouth , by circulars , by instructions , by telling them what they must and must not do and thereafter , unfortunately , it is over to them . I mean , we can tell a man what he must do , we can say , you are now issued with this fire - arm , if it disappears you are going to be held liable

- 100 · for it , but what more can we do? It is difficult , Mr. Chairman .

I mean , if

a man then takes the fire - arm, after being told not to take it out of the office , and he goes to a shebeen and he drinks and he falls asleep or he feels sleepy and his revolver gets lost , how do we prevent it? It is very difficult . I see the Committee's concern .

But we are

also concerned and we are doing all in our power to impress upon people the importance of safeguarding Government money , Government property , and we can just hope that thefts will decrease . Fortunately in these four cases on which we have reported back , there has been no loss to the Government , except in the last case where there could possibly be a write - off , where the man is unfortunately dead . THE CHAIRMAN :

Then my last request to you .

Could you fur-

nish the Audit people with all these inspection reports? Is that possible? It should be possible , yes .

MR . WIGGILL :

We have got them .

We have our inspectors who go out . THE CHAIRMAN :

In future , I mean .

MR . WIGGILL :

In future , yes .

Fair enough .

We will do

that , Mr. Chairman . THE CHAIRMAN :

Thank you very much .

MR . WIGGILL :

That is about all .

I was hoping you would say that , Mr. Chair-

man . THE CHAIRMAN : MR . WIGGILL :

Unless you want to put questions to me ?

No , Mr. Chairman , no . for outside this meeting .

I will reserve those

Thank you , Mr. Chairman and members .

101 -

VOTE 3 - DEPARTMENT OF WORKS : THE CHAIRMAN : vote . MR . T.P. DUBE :

Welcome , Mr. Isherwood , we are now on your My colleague will ask the questions . Paragraph 2 ( 3) , page 1 - Audit Queries .

Mr. Isherwood , in his report the AuditorGeneral stated that the failure to collect outstanding amounts was mainly attributed to the noncompliance with instructions regarding internal checking and control . Can you please elaborate on this in regard to your Department ? MR . ISHERWOOD :

Yes .

Mr. Chairman , the only outstanding

amounts that are shown in the Department of Works are in the Suspense Account , that I can actually substantiate there , and this presently stands at R55 000 , which is an accumulation over the years and not specifically for 1983 or 1984 . Of this amount 95% is due to over- payments of salaries and wages of employees in the districts , which to date we have not recovered . Every effort has been made in the past to get the regional directors to recover these overpayments , but as many of them originate from wages paid for casual labour , it has been difficult to trace these people to recover these moneys . I think we appreciate that this is a slow process . But we are trying to get hold of these people and throughout the year the Economy Committee has recommended certain amounts to be written off as and when the regional directors have written in with confirmation that they are unable to trace these people . That is the only area in which I can find outstanding amounts as such , Mr. Chairman . THE CHAIRMAN :

Mr. Isherwood , what do you propose , how are you going to proceed with this ?

102 MR . I SHERWOOD :

I have asked my Deputy Secretary to list out and get from the magistrates a full list of the se outstanding ones and during the course of ...9 I have not actually stipulated a time , but we will make a concerted effort to get the regional directors to give us a recommendation one way or the other or , should I say , to substantiate one way or the other whether they have pursued this and give them a time limit on this , and after that we will ask for a write - off through the Economy Committee .

THE CHAIRMAN :

Of course , I take it you have the necessary staff material to handle this? I do not think you are understaffed , are you?

MR . ISHERWOOD :

Well , I think we all complain about our being understaffed . I appreciate , Mr. Chairman , that these things linger on and they definitely need investigation . It has come through the Auditor - General , I do not deny that , one has put it out to the regions ,

some

have come back , but I will make a concerted effort with limitations on my regional directors , limiting them to time . MR . T.P. DUBE :

Mr. Isherwood , will you please inform this Committee as to how much of these over- payments has been written off , or do you not have that information ?

MR . ISHERWOOD :

Mr. Chairman , I do not in fact have the total of the amounts written off by the Economy Committee .

MR . T.P. DUBE :

I would assume that since these over - payments were for casual labour , these amounts are totally irrecoverable . What is your opinion?

MR . ISHERWOOD :

No.

I would say some of them are .

Where

they have been translated as TWs or temporary employees , TEs , they are on a more permanent staff .

· 103 It would appear that the regional directors have not been following these up with the enthusiasm with which they should pursue it and I have taken it upon myself to see that this will be done . MR . T.P. DUBE :

Mr. Isherwood , could you please then inform this Committee in regard to the internal checking and control in your stores at the various centres?

MR . I SHERWOOD :

The stores have been a problem over the years , Mr. Chairman .

I think , as you can see in 22 ( 2 ) ,

with our losses and deficiencies , we have in that period written off over R90 000 and we have had surpluses of R25 000. I think it was round about November when one came through for my signature for this year , I am just relating this year's one . I queried it at the time , having just joined the Department of Works , and what I ascertained out of that discussion with my Assistant Secretary was that a lot of these stores had never in fact been taken over correctly and this is where the surpluses and the deficiencies were coming in . I think where There is a regular inspection . we made the mistake was that we had a centralized stores inspection section and they were decentralized and put into the regions and I think with no , and when I say with no supervision there , it now fell under the regional director who had other things , and he was a junior storeman or , I would say , a storeman but who had no seniority and he was not controlled properly . I have now instructed our Chief Inspector , who is Mr. Samkyn , to pull in all inspectors and they will go out on a centralized basis to all the regions to do stores inspection . That was actually implemented about four months ago . THE CHAIRMAN :

Mr. Isherwood , just for the information of this Committee , have some of the checkings that have been conducted by the Audit Department

- 104 included your stores , as far as you are aware? MR . ISHERWOOD :

THE CHAIRMAN :

I could not answer that one offhand , Mr. Chairman . I did not look into that .

I am only referring to this because if it is a co - ordinated effort to keep everything under control , normally this should be the case .

MR . ISHERWOOD :

I agree with you , yes , it should be . Mr. Chairman , it is difficult at times . know, we do get the Audit queries , it , they come to me personally .

You

I do not deny

If I can just de-

viate for a moment , I also get a lot of personal queries from my Minister and it is a physical impossibility to handle all that oneself , I think one appreciates that , and I appreciate that as Accounting Officer it is my job to do it . I do not deny that at all . You do put certain things out and expect a reply . I have got a file myself where I am now following up myself. I just keep a file and whoever I have given it to , I want a fortnightly report back and I am hoping that in the course of this year this will come straight .

THE CHAIRMAN :

Mr. Isherwood , would you kindly in future submit copies of these to the Inspection Section in Audit? Could you do that in the future?

MR . ISHERWOOD :

Copies of my memorandums?

THE CHAIRMAN :

The reports , yes .

MR . ISHERWOOD :

You mean my memorandums to my officials?

THE CHAIRMAN :

Yes .

MR . I SHERWOOD :

I can do it , I just think we are ...

THE CHAIRMAN :

Would that be possible?

Of the report , I mean , the Audit report you are making .

MR . ISHERWOOD :

Oh yes .

105 THE CHAIRMAN :

Should I put the question again?

I was say-

ing , would you kindly in future submit these reports , your internal departmental reports to the Audit office ? MR . ISHERWOOD :

Right , Mr. Chairman .

When the inspectors go

out on inspection and return with the reports , I will submit copies thereof to the Auditor - General . THE CHAIRMAN : MR . T.P. DUBE :

Thank you .

Can we proceed now?

Mr. Isherwood , I am going to question you in connection with the explanations furnished by you in regard to Main Divisions B , G and L. The explanations were that the savings reflected were mainly due to the transfer of the air transport function , the provision for diesel fuel and the motor transport function to the Department of Finance . The total savings under these Main Divisions amount to R17,5 million .

Your net savings , that

is , the surplus to be surrendered , is reflected as R15 million .

It seems to me that if the functions involving approved expenditure of R17,5 million had not been transferred to Finance , you would have incurred unauthorized expenditure . Would you comment please? MR . ISHERWOOD :

Mr. Chairman , the savings in fact made by my Department to the Department of Finance , to undertake the transport function which had been transferred to them , were in fact - and I have the detail here of what was transferred . Main Division A Main Division B

R

361 000 2 054 800

Main Division C

27 000

Main Division E

206 900

Main Division L TOTAL

11 116 440 R13 766 140

- 106 This in fact is a saving of R1 , 305 million . I think there was not enough detail shown in our explanations there . One might now ask , what happened to the R4 , 12 million saving under Main Division G , which in fact we indicated here as a saving to Finance .

Looking into that , it was found that Finance in fact paid that money out of their own vote , but we were able to make direct savings ourselves on that amount , in that we did not have to buy the fuel . THE CHAIRMAN :

Could I ask Mr. Van Tonder to please comment on this?

MR . VAN TONDER :

Mr. Chairman , I unfortunately do not have the detail of this . All I know is that the savings as indicated by the Accounting Officer for Works were actually made on request from the Treasury and Finance Department , because this function was transferred from Works to Finance . I am not so sure about the amount that was paid on fuel .

I think that was the case , but if I

must give it as a fact , I would not like to go into that . But I know that there was a dispute about , well , not a dispute , but it was a problem at the time , the paying of the fuel , and I think what Mr. Isherwood has said is actually correct , that Finance actually paid for the fuel but the money was on the vote of the Department of Works . THE CHAIRMAN :

This all arises from that change of Depart-

ment? MR . VAN TONDER :

Yes , it is still the same problem as we had yesterday , the transfer of the transport function from the Department of Works to the Department of Finance . It is still the same problem .

THE CHAIRMAN :

Which needed very detailed accounting , in order to effect a proper change?

107 MR . VAN TONDER : MR . T.P. DUBE :

Quite so . In other words , Mr. Isherwood , it does mean , although it is not ... ( INAUDIBLE) ... you do ad-

mit that if the money had been transferred with the function , your Department would have incurred unauthorized expenditure ? MR . ISHERWOOD :

Yes , Mr. Chairman , but in fact it was not a total of R4 million . You know, we have our budget on a little computer , but unfortunately I was not able to split up the details of Vote G to find out , without going back to the formats , which was a huge pile , exactly how much under Main Division G had in fact been budgeted for fuel . But we looked into the previous year and that came to just over R1 million . I think it was R3 100 000 we had in fact budgeted for , we did have that on our commitment register , what we had in fact spent . So we could say that and that there was still R1 million which did not go to Finance , which we had to account for , but it still reflects then as a saving of RO , 305 .

THE CHAIRMAN :

Would you say that that is realistic , or is

it

MR . I SHERWOOD :

It is just good luck more than anything else , Mr. Chairman .

THE CHAIRMAN :

Anyway , I think we discussed this yesterday and we all felt that these change - overs should be done at the end of the financial year . But when it becomes apparent that it should be done during the course of the year , I think a detailed analysis has to be made ,

so that we do not get the same

discrepancies .

MR . ISHERWOOD :

In fact , that Mr. Chairman , we have got it . There is how I was able to come by these figure . was a committee between Works and Finance that sat down and detailed what could come out of each It was only the fuel that obviously created

vote .

a problem .

But that is how I came by these .

- 108 -

Well , not only the fuel , but the total amount

THE CHAIRMAN :

was still with the Department , it was not transferred with the cars . Anyway , we do not have to go into that , but I just mentioned it , because we did come to this finding yesterday when we discussed it . MR . ISHERWOOD :

Mr. Chairman , if I may just ask , we are about to do another little exercise again with the Survey Department that has to come over to Works . Are we in fact going to transfer the money this year? We have just got to show it as a savings , as we have done here .

I do not think we

can transfer it .

THE CHAIRMAN :

It appears you have an infection .

You being

in Survey now, you want to bring out problems again . MR . I SHERWOOD :

No , Mr. Chairman .

I in fact voted against

it , but I lost out .

THE CHAIRMAN :

Please ,

can we proceed .

This is the last

one .

You are actually very lucky , because I thought I was going to catch you on ... Perhaps next year . MR . ISHERWOOD :

Well , I must state that Mr. Wiggill did this lot . Maybe I am in greater problems next year , I hope not .

THE CHAIRMAN : MR . ISHERWOOD :

Thank you , Mr. Isherwood .

I have taken a note of all your findings , thank you , Mr. Chairman .

VOTE 4 - DEPARTMENT OF EDUCATION AND CULTURE : THE CHAIRMAN :

Welcome , Mr. Zimu .

MR . ZIMU :

Thank you , Mr. Chairman .

THE CHAIRMAN :

We are on Vote 4 .

· 109 MR . T.P. DUBE :

Paragraph 2 ( 3) , page 1 . Mr. Zimu , in his report the Auditor - General stated that the failure to collect outstanding amounts was mainly attributed to the non- compliance with instructions regarding internal checking and control . Can you please elaborate on this in regard to your Department ?

MR . ZIMU :

Yes , Mr. Chairman .

It is true that we have

instances of non - compliance with the instructions regarding internal checking and control , but I want to assure your Committee that the Department is doing all it can to strengthen this aspect of administration , that is , the internal checking and control of monetary affairs at the schools that we control , that is , the Government schools . Since I appeared before your Committee last year , the Department has not only send men out to speak to the heads of the institutions and to guide them and advise them with regard to audit control instructions in this matter , but we have also written three times , by way of counselling and guidance , to our superintendents of these institutions . In order to enhance the ability of the heads of institutions to manage the monetary aspect of their responsibilities , we have applied for financial handbooks , Mr. Chairman , so that we could furnish them with these in order that they can have them at hand to read . We were furnished with six , although we had originally applied for 30 to send to our schools . We appreciate the supply that we have been given . Mr. Chairman , we would like the Department to comply in every respect with Treasury instructions concerning the control of moneys that are collected by the principals and rectors of these institutions .

We have , as I have said already ,

spoken to them, we have written to them and we

- 110 feel now the time has come for us to take more stringent measures .

Perhaps , Mr. Chairman , we should have done that already , but so far we have been acting on Treasury Instruction 0817 , which says that every effort should be made to go to these people , to But now we consult with them , to persuade them . want to go a step further and we have begun to do this , Mr. Chairman . We have begun to implement Section 34 of the Exchequer and Audit Act , 1975 , which means that after we have exhausted all the channels of persuading a man , writing to a man , we should then hold the man responsible for the money that he is going to collect and we should ask for Treasury approval to have the money deducted from his salary .

That is what we are going to do now.

Otherwise you would be confronted with the situation where you have to ask me the same question year in and year out , unless you throw me out sooner . (LAUGHTER ) MR . T.P. DUBE :

Mr. Zimu , in your answer you mentioned that you asked for a supply of 30 financial handbooks and you only were supplied with six . Who is actually responsible for supplying this material ? Is it not actually the responsibility of the Department to see that it is supplied to the institutions?

MR . ZIMU :

Yes , Mr. Chairman .

We were trying to get

these handbooks , as I have indicated , of course , we get them from the Department that deals with finances , so that we could then relay them to the schools - once we have received them we could supply the schools with the books . THE CHAIRMAN :

Did I hear correctly?

Did you say that you

are getting them from the Department of Finance ? Which Department supplies you with the books?

- 111 MR . ZIMU :

Mr. Chairman , I may not be au fait with the exact source of the books , but I was under the impression that we get them from the Department of Finance . Mr. Chairman , I personally do not actually ask for the books from that Department , I am supplied with the books , and I have assumed that we are supplied by the Department that is responsible for the financial affairs of Departments .

THE CHAIRMAN :

Mr. Van Tonder , could you please help us with this problem?

MR . VAN TONDER :

Mr. Chairman , yes , it is actually the Treasury that supplies the Departments with these financial handbooks . But these books are actually bought through the Department of Co - operation and Development from the Central Treasury , because it is the Treasury Instructions issued in terms of the Exchequer and Audit Act . We tried to have them printed by KwaZulu , but it cost such a lot that we decided against that and we decided to buy them through the Department of Co - operation and Development at R48,00 per book .

What we did was , when a Department asked for 30 , like the Department of Education did , we requested that Department - because I can tell you that the chapter that deals with collections in So what we that book is only a couple of pages . asked Departments was that instead of issuing 30 or 40 or 50 to a Department , to take out that chapter that is applicable to a certain section or division in the Department , make photostat copies thereof , and issue that to those sections or divisions . I can tell you , the Department of Agriculture for instance , asked for 65 , and af-

and Forestry ,

ter it was explained to them what the cost of these things was and also how they should go about it ,

112 they were quite happy to make photostat copies of those chapters that are actually applicable to a division or a section . That is all I can say , Mr. Chairman . THE CHAIRMAN :

Well , I suppose this is an indication that Mr. Zimu could perhaps also try to apply the same formula , but the one thing that I wanted to stress is that irrespective of the circulars or forms that have been supplied to these institutions , I think control is the most vital thing . You can have the forms there , but if there is no control we would still be harping on the same subject year after year . So I am glad that you have indicated your intention now to move away from this paternalistic approach , to be more positive and really control this issue .

MR . ZIMU :

Thank you , Mr. Chairman .

THE CHAIRMAN :

The next question , please .

MR . T.P. DUBE :

Paragraph 23 ( 2) . Mr. Zimu , could you please give the Committee more details regarding this fraud case , as well as details of steps you have taken to improve internal checking and control ?

MR . ZIMU :

Thank you , Mr. Chairman .

Two clerks of my

Department forged the signature of our Chief Inspector who had been authorized to sign claim forms submitted by teachers at Adult Education Centres . They come in batches and he signs them and he then gives them to our Services Section , who processes them and then forwards them to Finance for payment . What happened , Mr. Chairman , was that one of the clerks , he was not actually dealing with this work , he was a clerk in stores , got an idea and he worked in collusion with a clerk in the

-- 113 .He forged the signature , as

Services Section .

a result of which a cheque was issued .

And this

clerk , with whom he was working in collusion , also at some later date forged the signature of the Chief Inspector on some other claim form . Both claim forms were therefore fictitious , as a result of which the Department incurred this loss of R1 400.

One cheque was for R800 and the

other was for R600 . Thanks to Finance and Audit this was discovered and when they discovered this , we immediately suspended these two clerks without pay and reported the matter to the police , and they were arrested , but they came out on bail . The case has been on and off for quite some time now, because this thing happened early last year . It has now been remanded again for 28 May . We intend ,

should they be found guilty , that we

should apply to the court for compensation to the Department in terms of section 300 of the Criminal Procedure Act . That is what we intend to do . I have consulted legal opinion , Mr. Chairman , because I realized that sometimes it happens that a person could be acquitted on a technical point , as to what to do with these clerks if they are acquitted .

Do we reinstate them immediately?

It does not do the image of my Department any good if we do and I have been advised that we could If they are acquitprosecute them departmentally . and deal a summons with them ted we could serve with them departmentally in collaboration with the Department of Justice . THE CHAIRMAN :

Mr. Zimu , just for my own information , do these departmental hearings also apply to the staff or is it teachers only that you can charge departmentally?

MR . ZIMU :

Well , Mr. Chairman , I think in this case it means the head of the Department of Education and

· 114 -· Culture must institute the proceedings which will , of course , be finalized by the relevant Department .

As a Department we do not deal with

Civil Servants as such .

THE CHAIRMAN : MR . LIVER SAGE :

Mr. Liversage , can you answer my question?

It actually includes all Yes , Mr. Chairman . all departmentally , them You can charge staff. officials .

THE CHAIRMAN :

It means if I have been acquitted or if I have paid my fine to the magistrate , you can still charge me?

MR . LIVER SAGE :

Yes , Mr. Chairman .

for instance ,

Normally if a person is

found guilty in a court of law, then his services are terminated , because Government Servants are not supposed to have criminal charges against them . But if he is found not guilty in a court of law , he can still be charged departmentally and a departmental enquiry can be conducted into the charges against him for misconduct . THE CHAIRMAN :

But if he is charged and he has paid in the court of law?

MR . LIVER SAGE :

Mr. Chairman , I am not quite sure that I understand your question . If he is charged in a court of law and he has paid his fine , then he has been found guilty and he still has a criminal charge against him .

THE CHAIRMAN :

So he does not come back?

MR . LIVER SAGE :

Therefore he should ,

strictly speaking , be

discharged , even though he has paid his fine and refunded the money . THE CHAIRMAN :

Anyway , the Department of Education and Culture then seems to be producing good ... · is it all Zulu culture , these things ? I think you are deviating from the culture now .

- 115 -

MR . ZIMU :

Mr. Chairman , I do not know.

I will reply

to the second part of the question , the measures that ... THE CHAIRMAN :

No , that is alright .

MR . T.P. DUBE :

Paragraph 23 ( 4) . Mr. Zimu , how was it possible , with the internal control measures which should be in force in your Department ,

for you to have incurred fruit-

less expenditure? MR . ZIMU :

Mr. Chairman , this matter is tragic in a sense , because the Department should , under normal circumstances , not have incurred the fruitless expenditure . Because of an unexpected , shall I say , confluence of circumstances , this expenditure happenThe Department had normally ed to be incurred . applied for Tender Board exemption to buy these beds and mattresses from a firm called Lilacs , and the Department had done this on 7 July , 1983 , in order to prepare for the students who would return to Umbumbulu College on 18 July . As it happened , there was a delay in the response from Tender Board and because of the delay , the Department went ahead and bought the mattresses , fearing that if the students returned and did not find anything to sleep on , we might be faced with a situation of revolt .

As you know , Mr. Chairman , the students of today are not like the students of yester- year , who were prepared to throw down their grass mats and throw themselves down and go to sleep . It occurred to the Department , seeing that the firm Lilacs was not a firm that was unknown to the Tender Board and in fact the Tender Board had given the Department of Education exemption to obtain orders from this firm from 1980 to 1983 on ten occasions , our Department had ordered ten

- 116 .times from Lilacs through Tender Board exemption , from 1980 to 1983 , and the last order had been placed in June of that very same year - it therefore occurred to the Accounting Officer that Tender Board would again give approval for purchase from this very firm . So when they went ahead , despite the fact that they had not receive any approval from Tender Board , it was thought that Tender Board would approve of this , but Tender Board did not . In fact , Tender Board approval came on 8 August , quite some time after the colleges had reopened and most unfortunately Lilacs was not the firm that Tender Board approved , it was some other firm , and there was a disparity between the price that Lilacs charged and what this other firm would charge . The difference was R1 173 , 15 , and that is the amount , Mr. Chairman , which is in question here , the fruitless expenditure that was incurred . The background to this matter , Mr. Chairman , is that we did all we could to discuss this matter with Audit . We even went on our knees , arguing , as we do now , to ask them to please not declare this as fruitless expenditure . We tried to argue that the firm which is on Government contract , if we had ordered from a firm which is on Government contract , we would have paid more than we paid to Lilacs , but most unfortunately the stark fact , of course , is that the Tender Board approval cost less than we paid to Lilacs and Audit dug their heels in and said no . We even went to see them and conferenced with them , trying to avoid a situation where we would have to try to explain away this fruitless expenditure . Mr. Chairman , the lesson is taken and we now undertake to abide by Tender Board Instructions in this matter . Thank you , Mr. Chairman .

- 117 -

THE CHAIRMAN :

Thank you for the explanation , Mr. Zimu . I think you have learnt the hard way . You referred to the children of yester - year and the children of today . We could do with whatever was given , but it would appear that you are also of today's people who do not want to take instructions , because there are instructions laid down which must be obeyed .

I cannot see you escaping that similari-

ty in your action . Anyway , I think you have learnt the hard way MR . ZIMU :

I appreciate that , Mr. Chairman .

THE CHAIRMAN :

I think that is all , thank you very much , Mr. Zimu .

MR . ZIMU :

Thank you , Mr. Chairman .

VOTE 6 - DEPARTMENT OF JUSTICE : THE CHAIRMAN :

Welcome , Mr. Oltmann .

We are now on your

vote . MR . T.P. DUBE :

Paragraph 2 ( 3 ) , page 1 :

Audit Queries .

Mr. Oltmann , in his report the Auditor - General stated that the failure to collect outstanding amounts was mainly attributed to the noncompliance with instructions regarding internal checking and control . Can you please elaborate on this in regard to your Department ? MR . OLTMANN :

Mr. Chairman , a surcharge register is maintained of outstanding amounts . Cases are followed up at intervals and our files bear evidence of steps taken to collect the outstanding amounts . The need for regular and thorough checking by all subreceivers ,

subaccountants , magistrates ,

in other words , is emphasized continuously . They

- 118 have the Financial Regulations , Treasury Instructions and Revenue Instructions to follow. Finance inspectors carry out inspections and their reports are followed up by the inspectorate in the Department of Justice . Departmental inspectors of the Department of Justice in turn also check on the Audit queries and finance inspection reports . As their strength was doubled last year , from two to four , matters should improve in the way of keeping track of progress reports and proper compliance with regulations and instructions . One unit in head office also assists in following up outstanding queries and in particular Audit queries . At two stations certain staff problems contributed to worsen matters and an inspector was sent out by me to attend specifically to the compiling of replies to long outstanding finance reports . This follow-up work should now progress satisfactorily and take its normal course . You will appreciate that there is a continuous circulation of staff in order to give effect to our in- service training programme and until all promotion posts are filled and we reach saturation point , mistakes in the course of training can be expected to occur . With progress and the building up of experience matters will improve .

THE CHAIRMAN :

Mr. Oltmann , I am not with you when you say that due to the continuous training and grading of Do you mean to people we have to live with this . say that we just have to accept this , because we balance it by training?

MR . OLTMANN :

Mr. Chairman , what I mean is that where you have a structure of principal clerk ,

senior clerk

and clerk Grade I and these posts are filled by clerks Grade II , you have to live with it , you do your best , and until those people are trained to

- 119 their proper grading with the proper experience , we have this state of not complete satisfactory control in administration .

THE CHAIRMAN :

I still would not accept that reply , Mr. Oltmann , because I mean , you have an official at the station who keeps a proper check and control there . This does not happen after a long break , I mean , this checking takes place from day to day , not so ?

MR . OLTMANN :

Yes , correct , that is done , but the number of mistakes that are made is the problem .

THE CHAIRMAN :

Just as a guide to this Committee , could you sketch how you operate the in - service training in your Department ?

MR . OLTMANN :

In every district office and in head office we have a plan , a visual plan as to who has had what experience and we circulate the staff . They do not stay in one post from one year to the other , they move along in order to widen their experience . They must get experience of the whole spectrum , otherwise they will eventually not be qualified to become heads of offices and heads of districts . I do not know whether that satisfies you .

THE CHAIRMAN :

Yes , it does satisfy me in a way , because I wanted to know more or less so that we have an idea how it is planned .

MR . OLTMANN :

You will follow that a person who started as clerk of the court and is then sent to the acSurely counts office , has to learn from scratch . there is a person who guides him , but in the first few months he is bound to make a few more mistakes , while being trained .

THE CHAIRMAN :

But if these are financial mistakes , they can be corrected at once , not so ?

- 120 MR . OLTMANN : MR . T.P. DUBE :

Yes , the checking officer does see to that . Mr. Oltmann , I just have a short question clarity for . Do you conduct any courses for the newcomers into the Department?

MR . OLTMANN :

Yes , all newcomers , as soon as they can attend the induction course , and then courses are run throughout the year . As you will also notice from the annual reports that are submitted by this Department , we have a pretty well organized training programme . We send them on courses . That is one aspect of our trainig system , that they must attend as many courses as they can and as many people as we can spare go on these courses .

THE CHAIRMAN : MR . T.P. DUBE :

Could we proceed then . Paragraph 25 ( 1 ) , page 13 :

Thefts and Irregula-

rities . Mr. Oltmann , could you please give the Committee more details of the two cases of theft/burglary specifically mentioned in the Auditor-General's Report , and also inform it of the control measures you have introduced from the hindsight experience you have gained? "

MR . OLTMANN :

Mr. Chairman , one of the two cases referred to is that of the magistrate , Simdlangent sha, who checked the clinic registers and receipts at Hartland Clinic and pocketed the money . An amount of R10 992 was involved and this has been recovered . He was criminally charged , convicted and removed . A finance inspector discovered this irregularity . Only regular inspections can counteract such dishonesty . The second case was at Emnambithi .

An amount

of R62 408 pensions cash had been drawn and was kept overnight in a safe inside a strongroom , with

- 121 Burglars using a night-watchman on the premises . electric grinders opened both the strongroom and the safe doors without the watchman noticing it . Suspects were arrested , charged , guilty and discharged .

found not

I can only say that I

think it was due to inadequate evidence . An amount of R11 672,50 , exhibits , were paid The to court and paid into the Revenue Fund . balance of R50 735,50 was written off under Treasury authority FT3 / 5 /6 , No. 128 of 1984/85 dated 10 July , 1984 . No degree of hindsight or organization can add anything to prevent that . man was not alerted . THE CHAIRMAN :

Even the night -watch-

Well , Mr. Oltmann , this does not say very much for Justice in this country , does it ? I mean , if you fail to arrest a culprit , what hope do we have as lay people?

MR . OLTMANN :

Mr. Chairman , the administration of justice depends upon the evidence available .

THE CHAIRMAN :

Even if you have taken a thing , there must be evidence , even if I know you have taken it ?

MR . OLTMANN :

The rule of law in this country is that you are innocent until you have been proved otherwise .

THE CHAIRMAN :

I do not blame the watchman .

Anyway , this is the third case . are you taking , Mr. Oltmann ,

What steps

as far as it concerns

these pension funds that have to stay overnight ? MR . OLTMANN :

Mr. Chairman , they do not normally draw pension money like that unless the circumstances require it . And if they have to do it , then they take all the precautions , which were taken in this case . In other words , inside a safe , in a strongroom , with a night - watchman . I do not see what more precautions one can take .

- 122 It is just an unfortunate occurrence here . I have never experienced such a case before in my life . THE CHAIRMAN :

Then we can pass on .

MR . T.P. DUBE :

Paragraph 25 ( 2 ) , page 13 :

Ex gratia payment .

Mr. Oltmann , could you please inform the Committee of the grounds on which this non- contractual / legal obligation payment was made? MR .

OLTMANN :

Mr. Chairman , the Senior Prince , Israel Mcwayizeni Zulu ,

and his son , Justice Mtutuzi Zulu ,

were assaulted in a restaurant in Nongoma Village , Their assailments were found guilty of assault and the matter was represented to Cabinet . Cabinet , per Resolution No. 8 March , 1983 , resolved :

58/1983 , dated

" That the Department of Justice should negotiate with Messrs . Chennell and Co. , Durban , to lodge a claim on behalf of the Senior Prince for pain and suffering and to legally represent the Senior Prince , the cost of such legal representation to be paid by the Department of Justice ;

Provided that this is not to be regarded as a precedent entitling members of the Royal Family to full legal representation ; and provided further that should costs be awarded to the Senior Prince , such costs should be returned to the Department of Justice . " The relevant Treasury Authority , FT 3/6/6 , No. 492 of 1983/84 , dated 29 December , 1983 , was obtained for the part payment of R2 000 already incurred by the attorneys at that stage .

123 --

On 6 March , 1985 , defendants agreed to a settlement award of R6 000 in favour of the Senior Prince and costs . His son was to receive R1 500 in addition . I called for a certified copy of the taxed bill of costs from the attorneys and any costs recovered should be sent to this Department . The Auditor - General's reference in this matter is ZAG8/2901 and he will be informed of the results and final payment in due course . THE CHAIRMAN :

So it still hangs on that lost note?

MR . OLTMANN :

Yes .

We only received a letter yesterday in

this regard in which we have been informed of the final costs that we have to pay to the attorneys for their services rendered , and even now , until the warrant of execution has been executed , we So it will take a few cannot finalize the matter . months yet , Mr. Chairman , to finalize it . THE CHAIRMAN :

MR . OLTMANN :

So even after this it still has to be finalized in court? No , a warrant of execution has been issued against these people , they live somewhere in the Witwatersrand , and this R6 000 plus R1 500 plus costs must be paid by them before the attorneys can pay it over to us .

THE CHAIRMAN :

Thank you very much , Mr. Oltmann .

VOTE 7 - DEPARTMENT OF HEALTH AND WELFARE : THE CHAIRMAN :

Welcome , Dr. Hackland .

DR . HACKLAND :

Thank you , Mr. Chairman .

THE CHAIRMAN :

We are now on Vote 7 .

MR . T.P. DUBE :

Paragraph 2 ( 3 ) , page 1 : Audit Queries . Dr. Hackland , in his report the

- 124 Auditor- General stated that the failure to collect outstanding amounts was mainly attributed to the non- compliance with instructions regarding internal checking and control .

Can you please elaborate on this in regard to your Department? DR . HACKLAND :

Mr. Chairman , with regard to the internal checking and control on these outstanding amounts , the Department has made every effort to make administrators , medical superintendents aware of these . We do receive a quarterly report of these amounts and these amounts are again referred back to the various institutions for checking . The problem is , when one goes to collect these outstanding amounts , that we have to look particularly in the rural areas at the problems of maintaining contact with the patients , those who have utilized the services . The instruction is that every amount that is owed to the Department is recorded and that an account is sent out to the individual if that person has not been able to pay that amount on admission or on first coming into contact with the health service . We as a Department feel that it is imperative that initially we treat the patient irrespective of the fact that he either has or has not money at that stage .

Following that , it would be

important to recover the money . The assessment of the amount owed is according to the tariff of fees and it is the Department's responsibility then to follow up and to seek every means to recover this amount of money . As we know , particularly in the rural areas , it is difficult to keep contact postal - wise if accounts are sent out ; in fact , even to make contact with individuals who may have given an erroneous address .

125 This was done on three occasions , in fact , and when the hospital administration is satisfied that they have made every attempt to recover this money ,

it is then reported to our Department .

I would like to give evidence to this Committee , to say that in the urban areas we have taken steps , it is much easier to recover money in those areas , and in one of our institutions in fact we have reached the target of receiving an amount of nearly RO , 5 million in fees , now that we have It is strengthened our control in this respect . a difficult situation . it . Furthermore ,

We are very conscious of

administrators are made aware

of this at regular meetings and at a bi - annual meeting of our medical superintendents these figures are presented to them , indicating to them our deep concern at the failure to recover these fees . THE CHAIRMAN :

Dr. Hackland , this is not the first time we have dealt with this query by the Auditor - General . I remember , I do not know which year it was , that I suggested that in the rural areas especially , which you have referred to , contact be made with the tribal authorities and with the regional authorities , to get them involved in this discrepancy , because they have more contact with the people , they know the people in the area . Perhaps that could be one way of overcoming some of these discrepancies .

DR . HACKLAND :

Thank you , Mr. Chairman .

We have in fact act-

ed on that , and furthermore , what we have done is to identify the areas where there are greater problems , and this is being followed up . THE CHAIRMAN :

Thank you .

MR . T.P. DUBE :

Paragraph 26 ( 3 ) , page 14 :

gularities .

Thefts and Irre-

- 126 Dr. Hackland , this Committee is perturbed to note that of the 12 cases of theft in your Department , reported by the Auditor - General , officials were involved in five instances .

Your comments , please . DR . HACKLAND :

Mr. Chairman , my Department is very conscious of the fact that officials handling money are in a particular situation of responsibility .

However ,

theft remains a moral issue , irrespective of the degree of control , and where money is handled by officials every attempt is made to have tight control measures . The officers should be made aware of these checking procedures and the hospitals and clinics are inspected . As this Committee is well aware , we have 26 hospitals and 165 clinics , and the situation is such that our own Department is able to inspect , on a formal basis , those institutions at the rate of once per year . But the Department is making an effort to do what we call spot checks and this , I think , is important , because when a spot check is done the officers become very well aware that they may not know what is being checked and when it will be checked .

These spot checks do not take a long

time , but in fact tone up the control in any of our institutions , and that is what is being done at the present moment . Obviously it is the responsibility of our Department to convict these officials and this is being done as well , and it is good to note in fact that we are aware that officials have been convicted of theft . THE CHAIRMAN :

I just want to be sure if I am well informed about the inspection periods . I wonder if Mr. Parker could tell me what the normal prescribed periods are .

127 MR . PARKER :

Mr. Chairman , I can only tell you as regards the Audit Department . What we do is , we draw up programmes of the areas we are going to inspect in advance , and with the staff available to us unfortunately we are only at the present moment able to inspect financial and other institutions , like stores , once every five years . We can do no better than that and the position will never improve as far as Audit is concerned , unless the staff itself improves . So , Mr. Chairman , Audit will once in five years come to one of the Accounting Officer's clinics or hospitals , on average . Thank you , Mr. Chairman . My question was :

THE CHAIRMAN :

What is the normal pres-

cribed time that is allowed for the checking ? MR . PARKER :

all .

Mr. Chairman , there is no prescribed time at It all depends on the availability of staff

and the area to be covered .

I am talking as far

as the Audit Department is concerned . The Accounting Officer as such can arrange inspections at any time with his own officials and there is no prescribed interval in which he must carry out an inspection .

Thank you , Mr. Chairman . THE CHAIRMAN :

MR . T.P. DUBE :

Could you pose the next question? Dr. Hackland , what steps have you taken ,

as

the Accounting Officer of your Department , to prevent theft by your staff? DR . HACKLAND :

Mr. Chairman , I have already mentioned one of the steps which have been taken , and that is to initiate these spot checks , which we have found to be valuable . The other is that any official from head office who visits the institution ,

comes back

- 128 with a report if there is any concern in any way , and that is followed up . For instance , if the procurement officer visits the institution , a reports comes back .

If the pharmacist visits the

hospitals or the clinics , a report comes back , and if there is any query whatsoever it is followed up , all in an effort to increase the control in this area . Then , of course , the important aspect of security procedures .

That is being followed up by

my own Department with regard to security officers being appointed and also frequent checks being made . Then one of the other important aspects we feel is the rotation of staff , so that the staff within the institution itself are checking on one another . It is difficult where staff is not available or where you have a skilled person to remain in one Department for a long period of time , but where one is able to rotate staff , in fact it becomes a self- inflicted check .

THE CHAIRMAN : MR . T.P. DUBE :

The next question . Dr. Hackland , according to the AuditorGeneral's Report compensation in the sum of R10 000 was made in respect of burns sustained by a person while a patient in a State hospital . We understand that a child was burnt by a heater . Also that the findings of your departmental investigation were that no officials of your Department could be held responsible for the burns and that responsibility therefor was due to your Department's inability to improve the health care facilities and staffing of health services because of lack of funds . It was also stated in the findings that these problems continue to exist at many of the State hospitals , thus reducing the Department's ability

129 to provide safe care for patients , exposing them to risks that lead to such claims .. Dr. Hackland , this Committee is very disturbed , in addition to the aforementioned , to learn that one of the findings of the investigating body was , and I quote : " The physical structure of the ward constitutes a medico - legal risk as the heaters are not protected and the lay- out prevents ease of distant observation . " Can you inform this Committee what has been done to remedy or eliminate these risks and why was it not possible to ensure that the heaters were protected ? The latter would seem to be an elementary and basic requirement in any State hospital , particularly where bedridden patients are attended to . DR . HACKLAND :

Mr. Chairman , thank you , and I share your disturbed response to this report . Indeed , it would seem to me to be a judgment that nothing has been done , because the steps that should have been done are deemed to be elementary and basic . The Department has responded , but I would like to draw to the attention of this Committee that the Department of Health inherited many buildings that do not follow the specification of health planning with regard to those buildings , and to bring those buildings up to the standard , to upgrade them , is a very costly affair . This is being attended to by our Department as we have funds available . This Committee is very well aware of the present financial situation , and may also be aware of what steps have been taken by our Department in an effort to upgrade these buildings .

The upgrading would take the form of alterations , which may be minor , it may be major , but

- 130 in every situation , where there is a medico - legal hazard , we have attempted to take those steps . I know this situation personally myself .

I

know how this building was built , I know where the money came from to build it and it had nothing to do with the Government . And in many of these situations that is our inheritance . It is true to say that it is difficult for staff in independent small roams like this to have their eye on every patient all the time . For that reason , obviously , one would have to have additional staff . But there again our hands have been tied , to a large extent , in bringing up to scratch the staffing of our hospitals . The norms in our hospitals are such that in the rural areas we are only 43% to standard norms of our nursing staff , and that is ,

( a ) financial ,

and ( b ) the training programme , and our Department is attending to these matters and they will be solved in time . What is being done by our Department in the immediate situation is obviously to protect our patients , and this is being done by the use of non-open bar heaters in all wards . They are banned from use in hospitals .

We have convection

heaters , the asbestos heaters , which are unlikely to cause a fire nor are they likely to cause a burn . Some of the heaters we have found in our hospitals were inherited as well , bar heaters , openbar heaters , and although they are banned , they are sometimes utilized by staff who bring them in , But we are very they may be private and so on . conscious of these activities of the staff and in all ways attempt to prevent this from happening . Wall heaters , where we can and where new buildings are built and where old ones are renovated , are in fact being installed .

131 -· THE CHAIRMAN :

Dr. Hackland , I do not know whether I am being sentimental about this because you have emphasized the inheritance , but I think even in that primitive inheritance that you have inherited there was concern about safety . I am thinking now of the mission hospitals as such in which we have also been partly involved . But what standard of heater do you have which is acceptable? Because it was mentioned that nothing could be done , this happened to be accidental . We want to know the type of heaters that are standardized by your Department .

DR . HACKLAND :

Mr. Chairman , in response to that , no open heater , bar heater is available to our Department . This is by Tender Regulation and the heaters that are available are the convection type asbestos They are free standing at the present heaters . moment , but where they are fixed to walls , in fact they are the asbestos heaters .

THE CHAIRMAN :

Are they now in operation in all these hospitals?

DR . HACKLAND :

Mr. Chairman , I would be dishonest if I were to say I am sure that they are in all hospitals . It is the process that is under way in our Department and it is being implemented where we can .

THE CHAIRMAN :

What is the position where you have the old type of heaters ? Are there any measures that are being taken to make them more safe as far as exposing people to this danger ? I am thinking of the old type of heaters , perhaps in remote parts , like in the rural areas , where there is no electricity and so on?

DR . HACKLAND :

Mr. Chairman , yes , and I appreciate that question . There is no way in which one can , where there is electricity available , make a bar heater safe .

We accept that . The other types of heaters that are utilized ,

for instance , gas heaters are utilized , paraffin

- 132 -burners are utilized and many of us , like yourself, have been brought up in that kind of situation . Safe equipment is attempted to be purchased and where gas is utilized , in fact over this past year my Department has been strict in implementing the safety precautions that are to be taken in every institution , including the clinics , in the utilization of gas .

THE CHAIRMAN : MR . T.P. DUBE :

Thank you . Dr. Hackland , kindly refer to your Department's Appropriation Account on page 14 of the Auditor -General's Report , in particular to the Main Division 0 : Pensions and ex gratia assistance to indigent persons , where a saving of nearly R12 million is reflected . In addition to the explanation as published : " Saving due to some pensioners failing to collect pensions" , could you please inform this Committee , in the light of the situation for the financial years 1981/82 and 1982/83 , where sums of nearly R1,6 million and R6 million had been overspent on this service , the reasons for such a large saving in 1983/84?

DR . HACKLAND :

Mr. Chairman , my answer to that question is the fact that during the 1981/82 and 1982/83 financial years the Department had no restriction on the approving of social pensions and also on the applications which were accumulating at the Reference Bureau in Pretoria . These were continually being received and immediately approved for payment . It was on this basis in fact that the Department was conscious of the total number of applicants that they had anticipated for the 1983/84 financial year and aware of the fact that this account had been overspent , and it did not wish this to happen again .

- 133 An amount was budgeted which the Department felt , in its wisdom , was appropriate to the needs of the pensioners . In May of the 1983/84 year a restriction was brought to bear on the number of pensioners to be processed , the 5% restriction . That restricted the growth rate of the pensioners and on the basis of that we have a ceiling , and that is one of the very important reasons why we reflect a saving . But another very important aspect is that at every pay period we have a number of suspended pensioners , and they may be suspended for a number of reasons , and if one looks at the records of these suspensions at every pay period , if we look at the September period ,

for instance , where we

had something like 187 000 benificiaries , there were approximately 11 500 suspended pensioners . Now , if you take that at the rate of R130 per pensioner , it amounts to something like R1,5 million per pay period , and those suspensions occur on every pay period . That is how money is accumulated and at the moment the Department is looking at ways in which it can accommodate this anomaly with regard to the suspensions . It is a very difficult problem but we are looking at it . We are being assisted by the Department of Finance in this respect . As you know , there is also this commission of enquiry into the payment of pensions and this is one of the aspects that will be dealt with as well .

Who sets the limit , Dr. Hackland ?

THE CHAIRMAN : DR . HACKLAND :

The limit in fact was set by Cabinet on the number of applicants that we had at the time and it was set at a 5% limit . And you say the matter is under investiga-

THE CHAIRMAN :

tion? DR . HACKLAND :

Mr. Chairman , I assure you that it is .

We

- 134 are very concerned about this and we know that this can be perpetuated if it is not dealt with . MR . T.P. DUBE :

Dr. Hackland , is the case of a deceased pensioner also taken as a suspension? Or is this different ?

DR . HACKLAND :

Mr. Dube , the case of a deceased person is different , in that the pension would not have been received and that then would come forward as a review , but it would be in effect a suspension .

MR . P.0 . SIKAKANA :

Dr. Hackland , what sort of cases are suspend-

ed? DR . HACKLAND :

What brings about suspension? If the pensioner is ill and does not come for

payment and that money is not received , that would be a suspension .

If a person has a procurator and there is some concern that that does not in fact fulfil the requirements of the Department , it may be suspended for some reason , the vouchers are returned unpaid to the Department , you have an automatic suspension .

In other words , these are controlled

measures brought about by the Department , so that we can be assured that when a pension is paid , it is paid to the right person and that that person is alive at the time . MR . T.P. DUBE :

The Committee would also like to be informed of the control you are exercising , not only over the availability of funds , but also that maintained over the cancelled , lapsed or deceased cases of social pensions .

ᎠᎡ . HACKLAND :

Mr. Chairman , my first response to that question is , as we are all aware we live in a computer age . To a large extent we seem to be governed by the computer , it is a facility available to us , and this computer is programmed in fact to stop any payment , all the processing of a pension after three lapsed pay periods . That is in fact one of the most important ways in which one can be

- 135 assured that a pension is not being paid . The other measure that is taken is in fact an indirect method , and that is that when a person is deceased , for instance ,

funeral expenses

are paid by the Department , that is , for an indigent person receiving a pension , and when that application comes forward and it is notified to the Department that funeral expenses have been paid , automatically that is processed into the administrative procedure and that pension is stopped . THE CHAIRMAN :

Dr. Hackland , you have mentioned the computer and it is very interesting , because I find it to be a very easy scape - goat . But somebody has to put information into the computer and we have had quite a lot of instances here where ,

since the com-

puter has taken over , we have more problems than we had before the computer . Can you account for this? DR . HACKLAND :

Mr. Chairman , I gave the very positive aspects of the computer , where it was in fact working to the advantage of the Department . I acknowledge your comments about the problems and that it is and does become an easy scape - goat , which I do not personally accept . As we know , what is fed into the computer is what one gets out of the computer . I think that one must also accept that there are administrative procedures which have to be followed and followed very carefully , and probably more carefully now that we have a machine to do our work .

Our Department is very aware of that

aspect of it . THE CHAIRMAN :

MR . T.P. DUBE :

Thank you . Dr. Hackland , it would be appreciated if you could inform this Committee of the reasons for a relatively large sum to be held in suspense at the end of the financial year , which may be chargeable to the vote at a future date .

- 136 DR . HACKLAND :

Mr. Chairman , the answer to this question in fact is that an amount of money is placed in a suspense account , because from time to time there are queries with regard especially to the payment of pensions , and where that is a query and on review of that particular situation by the Department of Finance further information is required regarding that query , this amount is placed in suspension . In fact , it is an account that is administered by the Department of Finance and not by our own Department , and that being the case , it is a departmental arrangement , in consultation

MANKAWLIONAIM

with the Department of Finance , for ease of handling of the cases which I mentioned . THE CHAIRMAN : MR . PARKER :

Mr. Parker , could you comment? Mr. Chairman , I would like to put something This is an straight for purposes of the record . amount in suspense by the Accounting Officer of the Department of Health , not by the Finance Department . It is his funds which are held in suspense and he is accountable for it .

He should

not refer to it as a Finance Department affair .

Thank you . THE CHAIRMAN :

Before you reply , I would like to ask Mr. Parker , what does this involve , when you talk of the suspense of this sum? Is this in figure terms

or in cash? MR . PARKER :

Mr. Chairman , that amount that is held in suspense is money which the Department of Health would or could have charged to its vote in that year . It is now being held over for the vote of the next year .

I think I would like , if I have your permission, to just read the relevant section of the Exchequer and Audit Act and that might clarify the matter . It is section 14 ( 3 ) ( d )

and I am just paging

- 137 over to it now .

Section 14 commences as follows :

" An Accounting Officer shall as soon as possible but not later than five months after the close of a financial year , prepare and transmit to the AuditorGeneral for examination an appropriation account in respect of such year in respect of each vote under his control and shall at the same time send a copy to the Treasury . " Now, section 14 ( 3 ) ( d ) reads :

"An indication of the aggregate of any balance in a suspense account which may be chargeable to the vote . " " To the vote " is his vote , not to the vote of the Department of Finance , Mr. Chairman .

THE CHAIRMAN :

Thank you , Mr. Parker . The ball is in your court , Dr. Hackland .

Do

you have any comment ? DR . HACKLAND :

Mr. Chairman , I hope that my reply did not indicate that I felt this was in the account or the Vote of the Department of Finance . I acknowledge full well that it is in our vote , but the procedure is such that the close liaison between the Department of Finance and the Department of Health with regard to the administering of these pensions , was seen to be aided by the availability of this suspense account . If there are other ways in which this can be administered and perhaps better procured for the Department , then obviously it is our responsibility to look at this . But at the present moment this is the way it is being done and in fact the whole procedure is eased and of benefit , both to the recipents of these amounts of money and also the Department .

- 138 .THE CHAIRMAN: MR . VAN TONDER :

Mr. Van Tonder , do you have any comment? Mr. Chairman , I think this is more a question for the Chief Accountant to answer , as this account , this Suspense Accounts is actually administered in the Accounts Branch of the Department of Finance and Treasury is not involved in the handling of that account . I know about the account , I know that it exists there , and all I can say is that the money is put in suspense until clarity is received , from whatever source , to clear the account . I think that is what it amounts to . It is just a question that if there are queries on a certain amount that we know is a pension , it is put in the suspense account and the moment we get clarity on it , we clear the account , or the Finance Branch will clear the account on instruction from the Department of Health .

THE CHAIRMAN :

Any comment , Mr. Liversage?

MR . LIVERSAGE :

Mr. Chairman , yes .

We have a centralized ac-

counting system , therefore we do the accounts of all the Departments , and this is part of our responsibility to the Department of Health . I would just like to say that all pensions , at every pension pay period , are paid from the suspense account and those vouchers that are returned paid , come back and are read into the computer and reconciliation takes place . So that every bi -monthly payment is in total paid from a suspense account . Those vouchers are then returned and then they are allocated to the various votes in the Department of Health , and this is part of that procedure . Each bi -monthly payment is approximately R10 to R11 million .

- 139 · THE CHAIRMAN :

Whilst you are with me , how does this then show in the final analysis , in the closing of the books ? Is this a tidy way of showing it in the books?

MR . LIVER SAGE :

Yes , Mr. Chairman , this is a tidy way , because all the suspense accounts are analysed and are followed up ,

should there be any queries on

any amounts that are not clear to the votes . THE CHAIRMAN :

Are there limited amounts which have to be recognized ?

MR . LIVERSAGE :

No.

It depends on a partic ular pay period , , h m q t It o a u w n e y ries here are . an could be unretu rned vouchers via the magistrates that are put into suspen se until such time as those vouche rs are returned and allocated to the votes of the Depart But those unretu ment of Health . rned vouche , o w t q r h h u a e ery is , are always foltever rs lowed up by the Depart ment of Finance .

Mr. Chairm

Thank you , Mr. Chairman . THE CHAIRMAN :

Thank you very much , Dr. Hackland . Mr. Van Tonder ,

could we then put the next

question to you for a reply? MR . T.P. DUBE :

Mr. Van Tonder , I wish , for your information , to repeat the question put to the Accounting Officers of the Departments of the Interior , Works , Education and Culture , Agriculture and Forestry , Justice and Health and Welfare . The question was :

In his report the Auditor - General stated that the failure to collect outstanding amounts was mainly attributed to the non- compliance with instructions regarding internal checking and control . MR . VAN TONDER :

Mr. Chairman , yes , this is a problem , the non- compliance with instructions , internal checking and control in a Department . But the problem , as far as I see it ,

is within the Departments . I

think from outside it is going to be very

- 140 difficult and I will tell you why .

I will make

myself clear on that point . There are the instructions from the Treasury , there are Revenue Instructions , also issued in terms of the Exchequer and Audit Act , there are departmental instructions , and there are instructions issued from time to time from either the Department of Finance , from the Treasury or from Departments . So the instructions are there . I can also tell you that whenever a Department holds a conference on matters in the Department , I know for a fact that there is always somebody from Finance invited to give a sort of a lecture on internal control , the checking to be done and what is to be done . So the Departments are actually aware of what The they should do and how they should do it . instructions are all there . Then , apart from the instructions , we have inspection teams from the Department of Finance . We have heard from Justice that they have an inspection team . I know that Agriculture and Forestry have an inspection team . We heard this morning that the Department of Works have an inspection team . The Department of Health have inspectors . The auditors themselves do inspections at all offices at all times , although maybe with very long intervals , but the inspections are done . As far as I am concerned , and I think as far as the Treasury is concerned , the instructions are there . If we in Treasury are made aware of the problem as far as the internal control of a Department is concerned , we take the necessary action to ensure , by way of instructions , by way of Treasury circulars to Departments . The only problem I see with the implementation of the instructions , is the staff problem as far as the inspection teams are concerned . We

· 141 heard this morning from Audit that they are so short-staffed they cannot do the inspections as they would like to do them . Finance , I know, have the same problem , that they would like to inspect an office once a year at least , but with the staff available I cannot see that it can be done , it is impossible . So , the way I see this is that this is a departmental problem , it should be sorted out within the Department , because the Accounting Officer is aware of all the problems . Whether we can solve this problem by inspection teams , I do not know. I cannot see that . We have books and books with instructions , the Financial Handbook with revenue instructions , and apart from this we also have the old Justice Code of Accounts . That is even more detailed .

But it is a problem , as far as I can see , of implementing all these instructions , to see that the Accounting Officers see that these instructions are implemented . When we get cases in Treasury for write - offs , we handle every case on its merits , we treat it on its merits , and we are getting more strict in Treasury , for instance , about the write - off of any amounts .

We feel that this might be a way of ma-

king Accounting Officers more aware of the problem in their Departments , by refusing to write off any shortages or irregularities or anything like that , to condone ,

for instance , non- compliance

with instructions in a Department . But this is a problem and how , except for the measures I have mentioned , this is going to be solved , I do not know .

At this stage I am at a

loss .

With all the instructions , with everything It that we have , there should not be a problem . is just a question that the Accounting Officers should see that they are implemented .

THE CHAIRMAN :

Well , there are certain questions related to

- 142

this one .

What you are really ... ( INAUDIBLE )

But I thought you may come with a suggestion , a method that could perhaps help us . I mean , you say everything is there , but what do we lack then? MR . VAN TONDER :

Mr. Chairman , as I say , the Accounting Officers must be made aware , although they know it , they should know it , it is there , they have got it It is even in writing in front of them every day . spelt out for an Accounting Officer what his duties are . I do not think it is necessary for anybody to make the Accounting Officer aware of his duIt is there , he has it , it is in a book , he ties . But it is a problem and I do must just read it . not think it is so easy to solve it , unless you can have inspection teams going out every month to an office , but that , of course , is practically impossible .

THE CHAIRMAN : MR . LIVERSAGE :

Mr. Liversage , do you have any comment ?

Yes , Mr. Chairman .

I would agree with the

Treasury that the instructions are there and in my experience , from my inspectors going out to institutions , we invariably find that where there are problems it is that internal control - I am talking now particularly about internal checking

is

not done as it should be done . Unfortunately I must also agree that we would like to do more inspections , but I think we have 44 posts on our establishment and only about eight are filled . So you can see the lack of inspectors we have .

We have about 36 posts vacant and the

problem to fill those posts is a particularly serious one , because you cannot just take anybody and put him on an inspection team. They must be hand - picked people to send out to institutions to do the inspections . They often work on their own and they must be reliable people that you know you can trust to work on their own

- 143 · without supervision .

And they must be completely au fait with all financial instructions , which is difficult , because you find that the Department of Health has certain instructions , the Department of Education has certain instructions , and each

Department has some peculiarities . So , to fill those posts is very difficult . But we try and do an inspection at an institution at least once every two years , in spite of the fact that we only have eight inspectors .

THE CHAIRMAN :

Well , I do not know , gentlemen .

I feel ,

from all that has been said now, that proper heed is not taken . They are not taking their responsibilities seriously .

I do not see any other way .

I may be wrong , but nobody seems to really feel he is complying with his responsibility as he should . MR . T.P. DUBE :

I also think so , Mr. Chairman . The thing is that in a situation where the success would be achieved by a joint effort , every person who has to make a contribution towards that success should really know in which direction he is working .

In this case , as Mr. Van Tonder has just explained , it seems the Accounting Officers have not succeeded in getting that spirit in their Departments , to get every official of every Department to make his contribution towards the main purI think that is pose of the whole establishment . what is still lacking at this stage . MR . VAN TONDER :

Mr. Chairman , just a last word from me , from Treasury's side .

The whole problem is that of the Accounting Officer . If he in his Department does not do his duty , it is going to be very difficult for anybody from outside , be he the financial inspector , the auditor , Treasury , no matter who , because if the Accounting Officer is not always on his toes in his Department , he will be on his toes while you

- 144 .are there , but the moment you leave the office the same thing happens again . So as far as Treasury is concerned , this is a problem within the Accounting Officer's sphere of work . He is the man , he is the person , he is the only man , as far as I am concerned , who can solve this problem . I can assure you , he is made aware at all times , through the Chief Accountant , through the Treasury , through Audit , of his responsibilities and I still maintain that he is the man who can solve the problem .

Thank you , Mr. Chairman . THE CHAIRMAN :

Mr. Parker?

MR . PARKER :

Mr. Chairman ,

if I can say a final word , I

wish it was , this laxity in internal control by Accounting Officers has a detrimental effect on Audit , that it hampers Audit in carrying out its functions . In actual fact , if an Accounting Officer applied strong internal control measures in his Department , the Audit task becomes lighter , that means fewer Audit officials are needed to carry out the Audit function , because the control is already existing and Audit merely tests then to see that the control is in existence , whereas at the moment Audit is required to go beyond the bounds of normal audit functions . It carries out a deeper check , because it knows that the internal control is lacking . Thank you , Mr. Chairman . THE CHAIRMAN : blem .

Well , that is as far we can go with this proI do not know , I would plead with the De-

partments here , the Accounting Department and the Finance Department , to find a forum of motivating . I see no other way and we need to motivate the responsible officers towards this responsibility . So I appeal to you gentlemen adhere , because we have no other people who can be called upon to

145

assist us .

Thank you .

VOTE 8

DEPARTMENT OF POLICE :

THE CHAIRMAN :

We welcome you , Colonel Mathe , we are now on your vote , and I call upon Mr. Dube to read the question to you .

MR . T.P. DUBE :

Paragraph 9 :

Stores and Equipment .

Colonel Mathe , in the 1981/82 Report of the Auditor-General it was stated that stocktaking was not carried out in your Department , for which In 1982/83 this Treasury exemption was obtained . happened again . Then for the financial year 1983/84 you failed to arrange for stocktaking to be carried out at the Quartermaster Stores and did not obtain Treasury exemption for this . This is a serious situation .

Annual stocktaking procedures are surely

laid down in the Financial Handbook . Can you elaborate on this? COLONEL MATHE :

Mr. Chairman , yes . Concerning the failure to take stock at the Quartermaster Stores in accordance with the laid down instructions , my Department regrets it . It must , however , be mentioned that stocks were checked during 1983/84 , but due to a misunderstanding as to the use of the Stock Control Register , which differs from the old SAP system to which members are accustomed , it could not be recognized as a proper stocktaking .

Steps have , however , been taken to avoid a recurrence of this nature and a Stock Control Register has been brought into use and stock was taken at the Quartermaster Stores during the 1984/85 financial year in accordance with the

146 -laid down instructions . THE CHAIRMAN :

Colonel Mathe , does it mean then that you were using an SAP control book or whatever ?

COLONEL MATHE :

The system , Mr. Chairman .

THE CHAIRMAN :

That had been used throughout the Department ?

COLONEL MATHE :

Throughout , yes , on a monthly basis .

THE CHAIRMAN :

And now you feel everything is under control ?

COLONEL MATHE :

Everything is under control .

We have in fact

turned over to the new system that is used . THE CHAIRMAN :

I am glad for that assurance that you have everything under control .

Could we then pass on? MR . T.P. DUBE :

Mr. Van Tonder , can you please let this Committee have your views on the failure by the Department of the Police ,

since its inception , to

comply with Treasury Instructions relating to stocktaking of stores and equipment at least once in every financial year , unless an application for exemption has been submitted to and approved by the Treasury before the close of the financial year? MR . VAN TONDER :

Mr. Chairman , I am not aware or I was not aware of the fact that stock was not taken in the Police Department . Treasury will only consider an application for exemption if it is put to the Treasury with very good motivation , and as far as I am aware this was not done during the financial year in question . So , Treasury will only consider any exemption if a case can be made out why it was not done , but I am not aware of any application that was made to Treasury about this .

147 -

THE CHAIRMAN :

Well , I suppose we have had an explanation Can we

from Colonel Mathe in this connection . pass on? MR . T.P. DUBE :

Paragraph 27 , page 15 :

Compensation payments

R6 000 .

Colonel Mathe , could you please inform the Committee of the circumstances which gave rise to these compensation payments? COLONEL MATHE :

Yes , Mr. Chairman .

In fact , these compensa-

tions are divided in two , the first one being an amount of R2 500 , I think I have to deal with that first , and the second one is R3 500 , making a total of R6 000 . The first one concerns one Mr. ?

Nene , that

after his unlawful detention , assault and release at the Mondlo Police Station on 26 October , 1982 , he was again arrested and detained by one Constable S.W. Xaba on 16 November , 1982 , on the same allegation of attempted rape and theft of a Bible . He was kept in custody until 14 January , 1983 . He appeared before court at Nqutu and was found not guilty and discharged , and in his letter the Secretary for Justice agreed with the Attorney - General that an amount of R2 500 in respect of this claim for unlawful arrest and detention be paid to the plaintiff .

The Department felt that the claim was fair and just and the Department was further convinced that should the matter be referred to court , the This is

court would have awarded a higher amount . now in respect of the first claim .

The other one of R3 500 , Mr. Chairman , this claim arose out of an assault case of one Miss Agnes Mchunu of Mondlo , who was arrested at Mondlo by Constable S.M. Myeni of the KwaZulu Police , who is stationed at Mondlo . Constable Myeni was in the company of Constable A.L. Sigcobo ( ? ) and Mr. M.A. Mpondweni , who is a casual labourer at Mondlo

- 148 · Police Station . Constable Myeni accused Miss Agnes Mchunu of having stolen his police revolver . During the course of her arrest at her home she was assaulted by the three members of the force with clenched fists and also kicked . As a result of the assault she sustained injuries . She was handcuffed and taken to the police station , where she was detained . She was later dropped in a drain of night soil and then ordered to undress and wash herself . She subsequently laid a charge of assault against the members concerned . After investigation the case was referred to the Attorney-General for his decision , who ordered that the members be prosecuted criminally . The case was held at Nqutu Magistrate's Court , where all three were found guilty of assault and each sentenced to R90,00 or 90 days ' imprisonment . An agreement was reached that the matter be settled in the amount of R3 500. was in an amount of R10 000.

The original claim In fact , also in the

case of the first one the original claim was R10 000 . In the opinion of the Department the amount of R3 500 was fair and the Department was also convinced that had the matter been taken to court , the court would have awarded a higher amount . Also , it was felt that if the matter was taken to court , the publicity would cause the Department further harm . THE CHAIRMAN :

Sorry for the interruption , Colonel Mathe , but I think the Chief Minister would like to see you .

Could we interrupt now?

COLONEL MATHE :

Straight away?

THE CHAIRMAN :

Yes , straight away .

- 149 ❤ UPON RESUMPTION : THE CHAIRMAN :

COLONEL MATHE :

Did you finish your explanation , Colonel Mathe , about those cases? Mr. Chairman , I wonder whether I would be allowed to finish up the last question .

THE CHAIRMAN :

MR . T.P. DUBE :

Let us put it to you first . question to you .

Let us put the

Colonel Mathe , could you inform this Committee whether any recoveries had been made in regard to these compensation payments and what steps have been taken by you in order to reduce any loss to the State?

COLONEL MATHE :

Mr. Chairman , I wish further just to say that following their conviction and sentence in a court of law , departmental boards of enquiry in terms of the Police Regulations were held against Constables Sigcobo ( ? ) and Nene as to their fitness to remain in the Police Force . The board found that both members were unsuitable to remain in the Police Force and they were consequently dismissed . Mr. Chairman , due to an administrative error and oversight , Constables Xaba , Myeni and Sigcobo ( ? ) were discharged from the Police Force before recovery of the loss could be made .

This error is regretted and strict control over claims and recovery thereof is now exercised , to avoid any further errors of a similar nature . MR . T.P. DUBE :

Colonel Mathe , could you please tell the Committee how long ago these events took place , if possible?

COLONEL MATHE :

Mr. Chairman , Constable Sigcobo ( ? ) was dismissed on 25 January , 1983 , Constable Myeni on 29 February , 1984 , and Constable Xaba - I do not have the precise date here .

MR . T.P. DUBE :

Mr. Chairman , I think that is sufficient , because I just wanted to find out if it was

- 150 possible , to get something from their pension contributions . But if it is so long ago , I am sure if they had anything , this might have been paid out to them .

I suppose the police do have pension facilities ? Yes , Mr. Chairman , there are .

COLONEL MATHE :

As I said ,

there was an oversight and before we could deduct anything they had already been dismissed and their pension moneys were also paid out to them .

THE CHAIRMAN :

Colonel Mathe , I am sure ,

from your replies ,

that you are aware of the discrepancies of oversight , which I hope you will watch in the future so that it does not occur again . Could I ask you to read the following question , Mr. Dube? MR . T.P. DUBE :

Appropriation Account , page 15 : Explanations of the causes of variation between expenditure and amounts voted . Colonel Mathe , in addition to the explanations furnished by the Acting Accounting Officer of the Department of Police in respect of the following Main Divisions B.

Over- expenditure R333 250 (94%) - excess due to unforeseen special police courses undertaken not provided for , and

F.

Under - expenditure R241 145 ( 37%) - saving due to over- estimation ,

could you furnish more details of the circumstances under which it was not possible to foresee special police courses and how you overestimated your financial requirements in respect of police functions? Surely with proper and sound financial planning and budgeting there should not have been such wide fluctuations in your estimates?

- 151 COLONEL MATHE :

Mr. Chairman , under Main Division B I must point out that it must be remembered that the Department is still in its infancy , needing to expand its manpower , increase its equipment and acquire and polish its policing skills . This Department frequently receives requests from various quarters for essential services and For growth , which necessitate training courses . example , a mobile unit , now better known as the Reaction Unit , which consists of 36 members , had to be established and be fully trained in all aspects of counter - insurgency and anti - riot proceThis has been due to renewed ANC threats dures . and sporadic attacks . The establishment of the Reaction Unit was in fact requested by the hon . Minister of this Department . The training of these men was done in two phases .

One course was conducted at Babanango ,

here in Natal , and the last phase at Thabazimbi in the Transvaal . This resulted in considerable expenditure in respect of subsistence and travelling allowances , as well as in respect of accommodation and supplying of meals to members . It is not possible for the SA Police to indicate to us exactly which courses can be presented to the KwaZulu Police during the following financial year . This is due to requests by the various National States and other Homeland Police Forces , accommodation facilities being the major problem . Mr. Chairman ,

it happened that as a result of

a dire need , training of commissioned officers for the Police Department had to be undertaken . The SAP indicated that they could not accommodate our requirements , but a couple of weeks later they notified us that they could accommodate us . The same applied to the training of students , where they initially indicated that they could only accommodate 36 students per semester , and then afterwards informed us that they could accom-

- 152 modate 72 and even 108 students . Mr. Chairman , should we not have made use of such offer , it would mean that we would have had a considerable number of untrained policemen who would at any rate receive salaries equal to salaries paid to qualified policemen . Overseas trips and rallies of the hon . the Chief Minister , which necessitated strict security measures , were undertaken and which could not been predicted . Provision has since been made on the estimates for training as a separate item . Then , Mr. Chairman , under Main Division F ,

the

over- estimation in respect of this item was mainly owing to budgeting for police stations which should have been erected by and taken over from the Department of Co - operation and Development , in which there was delay due to unknown reasons . Therefore less was spent on police equipment and uniform items . This under- expenditure was also used to partially compensate for the over - expenditure under Main Division E. It will be noted , Mr. Chairman , that the total budget in respect of 1983/84 was not in actual fact under spent . THE CHAIRMAN :

Colonel Mathe , thank you very much for the explanation . It gives us a picture . But I would like to know , concerning the training aspect , is this now a standing rule that they have to go up to the Transvaal for training or could facilities be provided here and the trainers come here? Which would be more economical ?

COLONEL MATHE :

Mr. Chairman , mostly we are at their mercy , because we are in need of their help . We tried to request them to come down but they were only willing to train our men for the first phase here

- 153 at Babanango and they emphasized that they cannot come here to train them further in the second phase , because of , for instance , the terrain and other equipment that was too heavy and too expensive to bring down here . So we had to take them up .

THE CHAIRMAN :

And as far as you are aware , are these categories fully - fledged now , or are you still building on?

COLONEL MATHE :

I am thinking of the whole establishment .

Mr. Chairman , we are still building on , because if one considers the area which we are poliIt is too cing , 36 is just a drop in the ocean . little and we are looking forward to having our Perhaps with such facilipolice college built . ties the experts from Pretoria will come down , or we can send our instructors up to be trained , for them to further train our men .

THE CHAIRMAN :

I am merely enquiring about this .

This means ,

in other words , that you will still be faced with the problem of budgeting , which you still will be very uncertain of from time to time ? Is that correct? COLONEL MATHE :

That is quite true , Mr. Chairman .

We cannot

predict most of the things that seem to come our way unexpectedly . We are still going to be faced with this for some considerable time to come . THE CHAIRMAN :

Just for the sake of interest I would like to know, Mr. Van Tonder , how you look at this whole thing .

MR . VAN TONDER :

Mr. Chairman , Colonel Mathe did come and see Treasury and he discussed this whole problem with the Treasury when the last Additional Estimates were drawn

up . I did explain to the Colonel at that stage that although there are difficulties

in budgeting and it is a problem to foresee expenditure like this , he must at all times approach Treasury before any expenditure like that is undertaken or any courses like that ,

and the Colonel

· 154 did at the stage , when we discussed this , give me the assurance that in future it will not happen again .

Before anything like this is undertaken ,

he will come and see Treasury first , and I was quite satisfied at the time that it will be done in future . THE CHAIRMAN :

MR . VAN TONDER :

But , Mr. Van Tonder , if he sees you , where can this money come from? Mr. Chairman , that is the whole problem .

If

the Treasury cannot provide the funds at the stage when a function like that is undertaken , then we will let the Department know that it cannot be undertaken at that stage and they will have to That wait with it until the funds are available . is the position . I mean , if you do not have the funds , it is no use asking to do anything , otherwise the Department will get themselves into trouble . So , if the funds are not there , it will just have to be explained to the institution or the Department that funds are not available at that stage , and when the annual estimates are drawn up we can have a look at the whole picture , to see where we can take some money and how we can fund a position like this . THE CHAIRMAN :

Well , I am more concerned about the future and I am thinking seriously to which way we can help in a situation like this . You do not see any provision that could be provided in the budgeting? There are no contingent funds that could be used? there is nothing that could be done?

MR . VAN TONDER :

No. It is just the normal budgeting procedures that will have to be followed , and like we always say when we do the budget , from a Finance point of view , the person or the Department who motivates best will get the money . So if the Police have a good case to make out , and if ,

for instance , there is a Cabinet resolution

· 155 about a new function or a new service in the Police then , of course , that will get preference . But the main thing is that Treasury must be approached at all times before a service like that Then there is always , or I would is undertaken . not say always , but then we can sit down and plan and see whether we cannot make a plan and provide the funds .

THE CHAIRMAN :

I still do not find any leeway here , Mr. Van Tonder , when you say that motivation plays a role in this , in which case then , if there is a surplus at the end - because I mean , you can motivate a thing and when there is a surplus , where do I go , whom am I going to ask?

MR . VAN TONDER :

A surplus on the budgeted funds ?

THE CHAIRMAN :

Yes .

I mean , he can motivate , to start with , with good motivations and good intentions , but in the end perhaps the transactions do not go the way that you ...

MR . VAN TONDER :

Mr. Chairman , this is exactly what we had If yesterday with the Department of Agriculture . you request the money , you must see that you will be able to spend that money . You must not take somebody else's money and sit with it in your bank That account while the other one sits without it . is why I say planning is the most important thing . If a Department requests funds , it must be able to spend those funds . If it cannot do so , it must not ask for it . But it must not spend first and then come back to Treasury , then they also have a problem .

So planning is the keyword here , at all times . Over - estimating is just as bad as under - estimating , I would say , and therefore planning is the keyword . THE CHAIRMAN :

Thank you , Mr. Van Tonder , but I was only referring to this Department that is creating , building up the Department , what facilities were

- 156 possible to channel , you know , because you cannot treat it normally , just like an ordinary Department that is fully- fledged and can plan and can estimate . MR . VAN TONDER :

But that is taken into consideration , Mr. Chairman , when the budget is drawn up , with all new Departments .

The fact that it is a new Department

and is still building itself up , is taken into consideration when the budget is drawn up . THE CHAIRMAN :

Thank you . I think we are through with Colonel Mathe , thank you very much . COMMITTEE ADJOURNED

- 157

THURSDAY , 18 APRIL , 1985

09h30 . PRAYERS .

VOTE 1 - DEPARTMENT OF THE CHIEF MINISTER : THE CHAIRMAN :

Welcome , Mr. Armstrong . I am quite aware , Mr. Armstrong , that you are sitting in a situation for which you perhaps may not be well prepared , but I hope you are going to do your best to satisfy this Committee . I just want to assure you of our concern about the illness of Mr. Johns and we are all thinking of him .

We are on Vote 1 :

the Chief Minister's De-

partment , and I will ask my colleague to put the question to you . MR . P.0 . SIKAKANA :

Mr. Armstrong , in the final paragraph of the Second Resolution of its Second Report on Public Accounts , 1984 , this Committee recommended : " The Committee recommends that the Public Service Commission should give urgent attention to assist Departments concerned with the necessary training of staff in the Inspectorate Divisions , in particular by means of job evaluation , productivity measures and work survey , to compile task analysis and job specifications for each type of post . " Could you please inform the Committee of the steps taken by you to implement the instructions contained in this Resolution ?

MR . ARMSTRONG :

Mr. Chairman , ... ( INAUDIBLE ) ... having

· 158 discussed the position with Mr. Johns at his home last night , we discovered that unfortunately he cannot remember yet where he placed the information which we should now be presenting to the Committee . The information was prepared , but I think his illness has disconcerted him to such an extent that he is not , at home , in a position to say exactly where this can now be found , with the result that we have been rushing around since 8 o'clock this morning , trying to get copies of the relevant information . But Mr. Cele , who is now with me , has been faced with a similar difficult situation , in that the man in his Department who prepared this information, has just left or is on the verge of leaving - he can confirm that in a minute , if you do not mind , Sir , - on a study tour overseas , with the result that he may be able to give a little bit of information on the questions , but I am not quite sure that today ,

at this very time , we

can actually satisfy your requirements . We may in fact have to ask for an adjournment possibly until tomorrow , Sir . May I ask if Mr. Cele could be allowed to try and answer as far as he is able to ? THE CHAIRMAN :

First of all , I think the main part of my enquiry was to find out if the Resolution did reach your Department .

MR . ARMSTRONG :

Yes , Sir .

THE CHAIRMAN :

And how far it was taken care of .

Now that

you say that the work you prepared that was supposed to be presented to us here , is not available , ...

I think we should break now for tea , perhaps that will give you time to look through your books , if you have books to look through .

- 159

Thank you , Sir .

BUSINESS SUSPENDED BUSINESS RESUMED

MR . ARMSTRONG :

Mr. Chairman , the question was received and was investigated through the Public Service Commission , and the following information , that I will then lead for your information , has been made available to us . Presently all financial courses are run by the staff of the Department of Finance , by Mr. Mncwabe , the Senior Accountant . The Efficiency Branch of the Public Service Commission is prepared to undertake the compilation of task analysis and job specifications for each type of post envisaged in the query . The request for this , however , must come from the Department of Finance . In addition to that , we would like to give quite a lot more information about the inspectorate itself . The posts that we are referring to , first of all it must be confirmed that they are administrative posts , the inspectorate posts that we are talking about , and they are not related to the inspectors of Works , stock inspectors , school inspectors and things like that . They are purely the administrative inspectorate posts . We would like to point out , Mr. Chairman , that all inspectorate divisions , other than those specifically related to Works and school inspectors , that all the other inspectorate divisions , that is , the administrative divisions , were created specifically for Departments , to enable the Departments ' management to carry out inspections in their own Departments , to ensure a more

160 efficient and satisfactory service .

The inspectorate is domestically orientated and once the PSC has created the organization and posts , it is for the Department itself to fill those posts out of their own ranks . In the case of the Department of Finance and the Pension Section of the Department of Health and Welfare , inspectorates were established in terms of legislation and it is imperative that these posts be filled with officials coming through the ranks of those Departments , so that it will be officials with the necessary experience to in fact be able to carry out inspections efficiently and to report on such inspections with the necessary expertise . The departmental inspector has a responsible task and should therefore be senior enough to be able to handle work with as little supervision as possible . It is therefore for the Department to identify those officials in the ranks for possible promotion or transfer to the inspectorate . In the Central Government all departmental inspectors are sent on Organization and Work Study Courses , to become better equipped for the task , particularly of job evaluation , productivity measures , work surveys , to compile task analysis and so on , which are referred to in your query . The departmental inspectors of the Department of Justice have all attended this short course and have been rewarded financially for the attendance and for passing those courses . Regular inspections of magistrates ' offices , that is , fault finding , are carried out , and management react timeously on findings and recommendations made . Arrangements can be made by the Manpower

- 161 Division of the Public Service Commission to

establish if such courses can be offered , that is , the Work Study Courses . The Director of Efficiency Services of the Department of Co - operation and Development is visiting Ulundi on 18 February and has an appointment with the Secretary on that day . The matter will be taken up with him officially and depending on the outcome of these discussions , the matter will be put before the Commission to determine if any financial benefits can be instituted for such incumbents , which could then serve as an incentive for staff to train in this direction . What it really amounts to then , Mr. Chairman , is that it is really incumbent upon the Departments themselves to nominate officials from their own side , because there simply are not trained and experienced officials available all over the place just to fill posts , and it would not really serve much purpose in appointing outsiders into Departments to try and carry out inspections on work which they know nothing about . THE CHAIRMAN :

Thank you , Mr. Armstrong .

Was that state-

ment which you have read out compiled by your Department ? It is in answer to the Resolution? MR . ARMSTRONG :

It was compiled by the Public Service Commission and the Work Study Officer of the Public It is a Service Commission , for our Department . division of our Department , us as a statement from us .

THE CHAIRMAN :

so it is prepared for

And this type of operation applies in all Departments , not necessarily only in Finance , I mean , in the Department of Works , the Department of Agriculture ?

MR . ARMSTRONG :

Which operation , Mr. Chairman?

THE CHAIRMAN :

The training , along similar lines that you have indicated , that the staff has to come from that Department for training?

162 Yes , Sir .

MR . ARMSTRONG : THE CHAIRMAN :

What happens , well , you may have a reply to this · what happens in a case where you find that you do not have a suitable man for that type of training to fit the specific task that is required at the time , when there are possibilities of getting other staff seconded to your Department who have been in the service and more or less know the rules of the game? an outsider?

MR . ARMSTRONG :

Is that also regarded as

If there are people with suitable experience outside of the Public Service , Mr. Chairman , it is not impossible , of course , to re - appoint them or , as you say , possibly to second them , depending on whether they are working for bodies that are competent to second to the KwaZulu Government . I cannot say that we know of such people , but if such people are known again to others or to other departmental heads , they would be quite free to bring to the attention of the Public Service Commission the fact that Mr. A is available , and try to arrange , through the Public Service Commission ,

for the use of his services .

People can be

obtained on contract , if necessary , to do specific jobs . This is done in a variety of ways . THE CHAIRMAN :

Mr. Armstrong , I am referring now to internal secondments or transfers , for instance , Accountancy Department .

from the

If they had qualified

people there who perhaps were not fully used but had the experience , could they not be used in such instances like this , if there is liaison?

MR . ARMSTRONG :

They could be used provided , of course , that the heads of Departments concerned are prepared to release those officers for work in other Departments .

The transfer of a person or even the se-

condment of a person from one Department to another does not rest with the Public Service Commission , of course . It can be recommended by the Public Service Commission , but the actual transfer of

163 officers rests with the Minister of the Department . So it would depend on them , whether they would be prepared to release such persons . THE CHAIRMAN :

I am mentioning this because I know that some of the Departments may have a surplus of people who are ready for advanced training in various fields , who have been long in the service but because of their grading there is a ceiling . I am wondering to what measure this is being applied . It is easy to talk about untrained people , ... ( INAUDIBLE ) ... trained people , but I do not think we will ever come to that if we do not make full use of the present facilities that we have .

MR . ARMSTRONG :

I think that most Departments feel , Mr. Chairman , that it is not always very useful to appoint outsiders in the inspectorate divisions , because for an inspector really to be effective , he must know what he is looking for , unless he has had sufficient background training in a particular Department or in a particular type of work , because obviously there are certain types of work So unless he which are done in all Departments . has sufficient background experience in the type of work or in a particular Department , then he is But where there are jobs , not really of much use . types of work done in all Departments , of course , then there is no objection whatever to people moving from one Department to another on promotion into inspectorates .

MR . T.P. DUBE :

Mr. Armstrong , in fact the Committee is perturbed because part of Resolution No. 2 reads , I quote : " This was evidenced in the instance of the Department of Finance where , of an approved establishment of 48 posts for each inspectorate division , only four have been filled . "

and

164 In fact , this situation existed at the time when this Resolution was drawn and it still exists . Now, as we learn from you , Mr. Armstrong , the matter still rests with the Departments concerned , but as we get the information , nothing is really changing , it is still the same thing .

Now , our worry is , is there a lack of training in the Departments themselves so that they could get suitable people to fill these posts and what can be done in order to solve this problem?

MR . ARMSTRONG :

Mr. Chairman , it is a little bit difficult for me to answer on behalf of the Department of Finance what they could do internally to speed up the training of officials , to move through their If you ranks into the inspectorate division . have 48 posts and a relatively small staff below , I would say that it it would take you many years . would be very near impossible to ever fill those posts out of young people coming through the ranks . One really would have to look elsewhere for suitable people to fill those posts . To fill 48 posts through the ranks , you would have to have a very large number of junior people being trained over quite a number of years . There I am afraid the Department of Finance itself would have to indicate if they would be prepared to accept people from outside of the Public Service who may have suitable training in banks , building societies , people with accounting If they were preor bookkeeping qualifications . pared to accept that sort of person into the inspectorate , to be given relatively short - term training , to equip them for the Public Service , then one may be able to make an impression on the 48 posts .

THE CHAIRMAN :

I wonder , Mr. Van Tonder , if you have any comment to make on what has been said here?

- 165 MR . VAN TONDER :

Mr. Chairman , I think this is more a question that actually should be put to Mr. Liversage , the Chief Accountant , because that is one of his It is not so big problems in the Accounts Branch . easy to say , I have 100 juniors and I can take 48 of those juniors and train them as inspectors , because as Mr. Armstrong has said , to be an inspector you must know everything . You must know what to look for and you must know why you are looking for it . To send out an inspector to a magistrate's office , for instance , he must know everything about finance and a little bit more . The second problem is that a financial inspector in our Department is normally a more senior man . You know, we started in 1976 without any people , we only had a couple when we started at Now we Ulundi , and that is only eight years ago . have a few senior people , thankful .

for which we are very

We do draw people from other Departments , especially from the Department of Justice , but they are not very eager to let us have their peoThe se ple , because we take their know-how away . trained people we take now and put them in Finance , and now they have to start training their staff right from the ground agein . It is a problem and given time , yes , we will be able to fill those 48 posts , but I cannot see that you can train even a fairly senior per son in the Finance Branch within , well , I would not say you can do it within a year , to be a good financial inspector , because he must know everything about finance .

An inspection team normally has a leader with other officials with him . Now , those officials under the leader - firstly , you have to have a leader who is a senior man , and just to get the But I think , with leader is already a problem .

- 166 what we had up to now and with the staff available , I think Finance has done quite a marvellous job there , as far as training of inspectors is concerned . The problem is to get people , the right people . You cannot send anybody out in the district . Whether he is a senior man or not , he must be trained properly , and I think that is the main problem , Mr. Chairman .

THE CHAIRMAN :

Mr. Armstrong , we know that the Public Service Commission had recommended the training of 48. Why was it recommended when there is no way of getting these people? How did they expect these people to be found?

MR . ARMSTRONG :

Mr. Chairman , I think I must simply say there that it would be a formality for the Public Service Commission to say that they are prepared to train people , provided , of course , that the DeThe propartments can find the people to train . blem lies in the area that Mr. Van Tonder has been explaining here , that the KwaZulu Public Service itself is so young that it is very difficult to find people senior enough to train . This , of course ,

stems largely from what I

call the lack of foresight on the part of the Republican Government , in not admitting sufficient Blacks into the White Public Service long ago , in order to give them sufficient background training so that they could man jobs of their own .

It has been left to a very late stage .

When

a local government or some kind at different levels are formed , then only are those people given the opportunity to come into the Public Service . But that is then at a very late stage and to expect them from their own ranks then to be able to find sufficient people with the right experience to put into senior posts , is really expecting the impossible .

- 167 I would just like to add , Mr. Chairman , that Mr. Cele has just informed me that we have had a number of enquiries from ex Public Servants who left the Public Service because of the salary conditions , particularly some people in Barclays Bank , but this just means that there could be in other banking or financial areas as well who are now interested in coming back to the Public Service since the improvement in the Public Service salaries .

So that is an area that we could , of course , follow up , and we could deliberately try to encourage people from such areas to come back to us on the grounds now of our improved salaries . THE CHAIRMAN :

Thank you very much , Mr. Armstrong .

I am

glad that this has come from you , right from the horse's mouth , because I know of a friend of mine who secured somebody , a very highly trained person , a B.Comm . chap , and recommended this man to a particular Department here , but it is just lying there . So , if an earnest endeavour is made I am sure there are ever so many opportunities . I mean , this is not an exceptional case of the Finance Department .

This is not a holy place that we need exceptionally talented people . In all spheres of life we have departments where we like to have qualified people for various reasons , but I am saying that if we really are earnest about trying to get

people , the people are available , as you have just mentioned . I am only disclosing this now after you have admitted yourself that it is possible to do it .

I wonder , Mr. Cele , if you have any comments to make in this regard . MR . CELE :

Very little , Mr. Chairman .

I think Mr. Arm-

strong has covered more or less everything . It is quite true that when we started here

168 at Ulundi in 1976 , we had quite a number of our Civil Servants in the Department of Finance who left the Department and joined Barclays Bank , and that was because of the low salaries which were paid at that time .

But we have found that

lately a number of people from Barclays Bank have applied and have actually been appointed or reappointed in the Government Service , and it seems that this trend is continuing . I think just about a month ago our office , that is , the Public Service Commission's office , managed to get the services of two chaps from Barclays Bank . THE CHAIRMAN :

That is good news .

I suppose we can then

hope that these 48 posts will be filled , that next year perhaps there will be a certain percentage that have been filled . Do you have something to say in this connection , Mr. Liversage? MR . LIVER SAGE :

Mr. Chairman , I might just say that there have been additions to the four posts that were previously reported . There are now eight posts in the inspectorate division and some of those people we did draw from the Department of Justice .

THE CHAIRMAN : MR . LIVER SAGE :

I do not know , because

Have you finished?

Mr. Chairman , I was just going to further clarify the position , that we have our own training officer in the Department of Finance , as Mr. Armstrong said , Mr. Mncwabe . He is a Senior Accountant , he has gone through all the training courses for a training officer , in fact , he has been overseas as well . So he is quite capable of training people within our Department for these posts .

But

the position , as I said yesterday , is that an inspector must have special attributes and we have to hand- pick particular people in our own division to make them inspectors .

169 I would also like to say that when we came here in 1976 , in the Department of Finance we had 18 people . We have now got an establishment of more than 300 people . You can see that not only in the inspectorate division but right through the whole Department of Finance there is a great demand for staff . Thank you , Mr. Chairman . THE CHAIRMAN :

I was just going to remark about the discussion that we are having about the training , because at one time it was mentioned here that the Public Service does not prescribe , it is the Department that sends the people for training , a particular Department , and Mr. Cele just remarked now that the people from Barclays Bank which they have ... From which Department were they appointed?

MR . CELE :

Mr. Chairman , most of these people who left the service in 1976 and 1977 were in the Department of Finance , it was then called the Department of the Chief Minister and Finance , and quite a few of them have come back to the same Department , now the Department of Finance . I also know a few in the Auditor-General's office and also in the Public Service Commission office .

THE CHAIRMAN :

Thank you . I think , Mr. Van Tonder , you are holding onto quite a big crowd of people who can be seconded to other Departments , to the inspectorate divisions .

MR . VAN TONDER :

Mr. Chairman , I would like to comment on that , because as you have just heard , we have 48 posts for inspectors in our own Department , and we only have 8 of those 48 posts filled . So we actually need a lot of people from other Departments to be trained as inspectors . But I would just like to emphasize that we must realize that an inspector is a special type

· 170 I know the Auditor has the same proof person. blem - he is looking at me and he is smiling all the time . (LAUGHTER )

But it is a problem to get a financial inspector and he must be a special sort of person . You cannot send You cannot put anybody there . anybody out to a district to inspect an office , There are senior especially magistrates ' offices . people in there and it must be a person that other people look up to , and that is a big problem . THE CHAIRMAN :

I agree , as we were told that these people must be acceptable and respected for that job , but I mean , who creates this type of people? (LAUGHTER ) Mr. Sikakana we can go on to the other question .

MR . P.O. SIKAKANA :

Paragraph 20 ( 1 ) , page 8 :

Bursaries .

Mr. Armstrong, in the Auditor - General's Report it is stated that R35 000 was owing by exbursary holders who did not comply with the terms of their agreements . Kindly inform the Committee of the following : 1.

How many bursary holders have not complied with the terms of their agreement up to 31 March , 1984?

MR . ARMSTRONG :

2.

What steps have been taken to recover these amounts? and

3.

Indicate the degree of success achieved as a direct result of these steps .

Mr. Chairman , I am afraid I do not have complete information in reply to that question , but I will offer you what I have at the moment . As far as we could establish from our own records and also from the records of the Department of Finance , there are no suspense account

· 171 .· items outstanding from the previous financial year as at this time . All of the outstanding bursary loans that were regarded as irrecoverable have in fact been written off with the consent of Treasury before the end of December , 1983 . Unfortunately I am not in a position to state how many there were and exactly what those amounts are . If that is required , I am afraid I would have to obtain it for the Committee at a later stage . THE CHAIRMAN :

You say there is no chance of recovering some that you know of now?

MR . ARMSTRONG :

Mr. Chairman , I can confirm that attempts are made immediately when people resign . The first step that is taken , of course , is to withhold any further payments to the officer concerned . Any last salary that may be due to him is withheld , the refund of pension contributions is withheld , and that is , of course , then written off against whatever amount is still outstanding . But frequently there are amounts left over , there are balances left over of the bursary obligations , and having seen a few of the individual files myself , I have seen the letters which have been written through magistrates and through relatives , trying to find these people , but most of them simply disappear without trace . Where it is possible to trace them , then in fact they are taken to court for recovery of the amounts . The greatest problem lies in fact in tracing the addresses of people who have disappeared , because obviously they deliberately try to cover their tracks and keep out of touch with us , and we find that even sending letters to the homes of relatives , the letters are simply sent back , marked unknown .

So that it becomes very difficult for

anybody in fact to trace these people .

- 172 THE CHAIRMAN :

I wonder then , Mr. Armstrong , ... ( INAUDIBLE ) how long are you going to incur all these write - offs , because I mean , it is a big sum here ?

What attempts are being improvised to overcome this? MR . ARMSTRONG :

Mr. Chairman , when one is giving people money which virtually amounts to money in advance , as we are doing in these cases where you send people away for training with some sort of agreement that they will work for you two or three years after that it is in fact giving them large sums of money in advance - then one is always exposed to the risk that you are not going to get your money back . Possibly a much stricter selection of the candidates themselves may contribute to reducing the losses . I am not quite certain what sort of selection processes are used by Departments when they select people for training . It may be an idea in fact to send the candidates to the training institutions for selection . But , of course , what happens there is that we may then find that candidates selected by us are in fact rejected by the training institutions , because their selection standards frequently differ from ours , and one would then find , of course , that we may have fewer people going for training than we are able to send now .

But that would be the only way really to try to pin them down , because we are sending them now without any security whatever , and if one gives somebody an unsecured loan , well , that is also ... THE CHAIRMAN :

Mr. Armstrong , I am aware of all the snags , but I was thinking that we should make an attempt to close the loopholes in the whole agreement . I mean , if it is just left like this , it will be an endless task .

I do not think we only have this problem in

173 this particular case , I think in many cases where bursaries are granted people are faced with the same problem, but then they learn from year to year how to safeguard any discrepancy that may perhaps have been overlooked .

As you say now, some of the commitments that these people are making themselves in writing and in the forms I am sure they must fill in some forms , I do not think it is just a blanket ... MR . ARMSTRONG :

No , Mr. Chairman , they fill in forms and they do sign a proper legal agreement with the Department before they are permitted to go on a course . The problem lies with the application of the agreement or the enforcement of the agreement after the man has gone , because you cannot enforce the agreement unless you can find him . You can only take him to court to enforce the agreement if you can in fact find the man to take him to court , and this is where the problem lies , that one is unable to trace them . What private commercial firms do is that they employ tracing agents , but , of course , that costs money .

The police will not attempt to trace miss-

ing persons for us .

They simply say that they are

overburdened with preventive crime work and they are not there to look for people for commercial debts . So that we are left to our own devices when it comes to trying to trace somebody and the only means that we have of tracing them then is in fact by letter. We do not have any sort of inspectors that we can send out physically to look for people at old addresses . We can only resort to the post , and this is virtually futile . MR . T.P. DUBE :

Mr. Armstrong , there is just one point that I want to clarify in my mind . In the Audit Report it says there :

- 174 "An amount of R35 274 was owing at 31 March , 1984 , by ex-bursary holders who did not comply with the terms of their agreements . " Now, in your reply I think I heard you say that as far as you are aware , by the end of the period under review there was nothing on balance in the suspense account , and I got the impression that you might perhaps be querying this figure . MR . ARMSTRONG :

No , Sir , I would not like to query the figure there . I would prefer to query my own letter .

That says there was an amount outstanding

at the end of March , 1984?

THE CHAIRMAN :

I wonder , Mr. Parker , can you comment on this?

MR . PARKER :

Thank you , Mr. Chairman . I would like to remind you and the members of your Committee that the information published in the Auditor -General's Report which is now being discussed , is information which is furnished by and personally signed by the Accounting Officer as being correct . So it would be rather unwise to question the information published now , at this stage . The questioning or the querying should have taken place when the report was being compiled .

MR . ARMSTRONG :

I certainly did not query the information given in the Report there , Mr. Chairman . I can only query the information given in the letter which I have here . If you could just spare me one minute to have a look at it . Mr. Chairman , I regret I must apologize for the information given in this letter here . It would seem to me that they are referring to the previous financial year , that amounts owing at the end of March , 1983 , were in fact dealt with during the period and were written off before the end of

- 175 December , 1983 , and this letter is in fact not referring to the query posed now. So unfortunately I do not have a reply to the query posed now.

THE CHAIRMAN :

I quite understand , Mr. Armstrong , and I would then request you to make arrangements , when Mr. Johns is up and about , to submit a written reply to this question with a copy to the Audit office , the letter , of course , being addressed to me , so that we may have everything under control .

MR . P.O. SIKAKANA :

Appropriation Account :

Explanations of the

causes of variation between expenditure and amount voted , page 8 , explanation E. Mr. Armstrong , I wish to put a question to you in regard to your explanation furnished under Main Division E : Miscellaneous , for the more than voted sum of R1 020 157,05 .

Your explana-

tion was that the excess was due to increase in pension fund contributions as a result of establishment expansion and improved wage structure . On the other hand you informed me on 24 April , 1984 , and I quote from the final sentence on page 15 to the end of the first paragraph on page 16 of this Committee's Report of 1984 , that you thought the over - expenditure on pension fund contributions would not occur this year . "Mr. Johns :

Yes , Mr. Chairman .

I

think , if it will set the Committee's mind at rest , as far as the 1983/84 financial year is concerned we have also asked for an increase of R1,6 million for the same thing and we got it in time , so I do not think this will crop up again next year . #t In view of what I have quoted , and your assurance to this Committee , could you please elucidate in regard to this excess expenditure of R1 million on the pension fund contributions and what steps you have taken to avoid inaccurate estimation

176 in future? MR . ARMSTRONG :

Mr. Chairman , the question of salary increments for Public Servants , not just annual increments but the revision of Public Servants ' salaries , is an ongoing process , it is something that never really stops , and because of that , the amount estimated at the beginning of any particular year for pension contributions can never be certain in the circumstances in which we work here . I would just like to give a little explanation , as far as my knowledge extends , of how the system works elsewhere , to compare it with the problem that we are faced with here at the moment . In the Republic of South Africa the Public Service Commission ,

together with the Treasury ,

decide on the amount of money to be committed during any financial year for revision of salaries . That is done on a global basis for the Public Service , and when that figure is known , it is then a relatively simple matter for the Public Service Commission there then to determine the effect of that increased amount , what effect it will have on the contributions to the pension fund . In the circumstances that the Public Service Commission functions in this Government , the Public Service Commission here is not in control of the revision of Public Servants '

salaries .

Those

Public Service salary changes are regulated again by Pretoria and we are not informed a year in advance that revisions are going to be made or what the probable amounts of the revisions would be , with the result that when estimates are made by this Department , we can only base our estimates on known information . One is given an opportunity later in the year to make a second revised estimate and then , of course , the information which has become known between the commencement of your year and the time you make the second revision , is used . But in the

- 177 last couple of years , particularly with the socalled new dispensation for Public Servants , the timing of salary changes has not been as it has been in the past .

In the past Public Service salary changes normally took place on one fixed date for the whole Public Service , at one time . So if they picked the date of 1 April or 1 July , everybody got an increase on that particular date . The way the dispensation itself has been implemented , has been on a staggered basis , with the result that increases have been cropping up at any time , in any month , sometimes backdated , sometimes you get the information before the increments are due .

But one can never be quite cer-

tain , with the result that the question then of estimating 18 months in advance for the amount that you require , becomes virtually impossible . And this ,

together , I must say , with a little bit

of lack of co - ordination perhaps of the estimates of other Departments with our information , has led to this position where one finds at the end of practically every year that there is a difference in what we ask for and what we actually need . The same thing has happened again this year , because there were very large increases for certain categories of staff in the 1984/85 financial year and there the amount under - estimated , the Treasury can correct me but I think it was somewhere in the region of about R4 million , which is a substantial amount , which could simply not be foreseen by this Department because , as I said right at the beginning , we are not in control of the amounts or the timing of the increments that are given during the year .

We are hoping in the future that with the assistance of the Department of Finance , which does control through the central computer the salaries of all the Public Servants of KwaZulu ,

- 178 that with the information which they will now be able to provide for us , really on an ongoing basis throughout the year , we should be able to update our own requirements on the same basis . That if they could provide us even every three months with an expenditure figure and an estimated expenditure figure for the following three months , we would in fact be able to estimate relatively accurately , more accurately than we have been able to in the past .

THE CHAIRMAN :

I understand , Mr. Armstrong , and our question is based on the assurance that was given by your colleague , who was emphatic that this was going to work and , of course , there is a big discrepancy here , which has alarmed us , to find that he was way out .

MR . ARMSTRONG :

Mr. Chairman , I think we would all like to give an assurance that something will not happen again . But , of course , the only way we could really ensure that , would be , at the beginning of the year , to over - estimate . Unfortunately there we are fairly strictly bound by the Treasury itself , with their instruction that one can only estimate for your actual known circumstances and known costs and that one cannot make provision for unknowns , with the result that we are not really permitted to make large provisions for unknown increases which may come during the year .

THE CHAIRMAN :

Thank you very much .

I am very grateful for

the background you gave and the comparison with operations of this nature in the Republican Government . I do not think , with all these stresses that we are attempting to make and the pains that we are labouring under in trying to cut the cloth according to size , that this will deter from our stand of not accepting independence . If this is the way we are going to be forced into independence , I do not think this will be possible .

- 179 Anyway , thank you very much indeed , Mr. Armstrong .

Just a last question .

Mr. Van Tonder , what

is Treasury's comment on this matter? MR . VAN TONDER :

Mr. Chairman , I must say , I agree with what Mr. Armstrong has said about the problems of estimating the contributions to the pension fund , but I think there is one factor that we have overlooked here . If you will look at the Appropriation Account , you will see that there was a big saving on salaries under Main Division A. Now, it is possible that the Treasury might have ruled that that saving there must be used to cover the over- expenditure on E.

I am not saying that is the case , but that

is what Treasury normally would do . Otherwise it would mean we will have the same case as we had yesterday , that the Treasury will give more money , but it was not actually really necessary , because the money was in the Department . It was not going to be used in the Department and then the Treasury might have said , use your saving on A to cover the over- expenditure on E. That is what normally happens in a case like this . But I agree with Mr. Armstrong , it is a problem to estimate for contributions to the pension fund , because there could be general increases in salaries in the middle of the financial year . Now you have got to put that right with your revised estimates at the end of the financial year . Then But normally you will get a thing like this . what Treasury will do then , if there are savings on other Main Divisions , Treasury will say , use that money to cover the over - expenditure there . THE CHAIRMAN : MR . VAN TONDER :

Can Treasury do that ?

Is that allowed?

It is allowed , Mr. Chairman , it is called virement . It is recommended by Treasury and approved by the Minister of Finance .

- 180 THE CHAIRMAN :

By the Minister ?

MR . VAN TONDER :

Yes .

THE CHAIRMAN :

So we have been getting unnecessary problems here , if this was possible . I mean , we have had similar instances .

MR . VAN TONDER : THE CHAIRMAN :

Yes , that is right . Well , I think we have come to the end of your task . I do not know if you want some homeThank you work . You have some homework to do . very much .

THE CHAIRMAN :

I have some questions on which I would like members here to put me straight . Last night I got a request from the reporter about our ... ( INAUDIBLE ) Now my question is , is this in camera , this sitting?

MR . PARKER :

Mr. Chairman , to answer your question , this Committee is an extension of the Legislative Assembly and it has a directive from the Legislative Assembly to investigate the Report of the AuditorGeneral , and until such time as this Committee Tables its report in the House , it is in camera , it is completely confidential . No one outside an Accounting Officer or people you appoint as officials , may attend your meetings . Thank you , Mr. Chairman .

THE CHAIRMAN :

Well , I am glad for that explanation , because I have not committed myself to anything in that regard because it has not been debated here . But I wanted to know whether this was in camera and how far reporters are allowed to get news or ask to disclosing news of this meeting , but from the explanation you have now given I am clear .

- 181 Thank you very much . THE COMMITTEE ADJOURNED

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