South Africa

South Africa

Would Parliament’s accounting and financial management stand up to scrutiny?

Would Parliament’s accounting and financial management stand up to scrutiny?

Secretary to Parliament Gengezi Mgidlana, who earns R2.8-million a year, has not signed the statutorily required performance agreement for the 2016/17 financial year. “The performance agreement was prepared and is ready, but has not yet been signed,” he acknowledged at a meeting of the joint standing committee on the financial management of Parliament. As parliamentarians expressed concern over inadequate information in the national legislature’s financial and performance statements, questions also emerge on other fronts, such as the apparent massaging of the institution’s vacancy rate. By MARIANNE MERTEN.

At R2,815,412, Secretary to Parliament Gengezi Mgidlana earns just about R59,500 less than President Jacob Zuma for the 2016/17 financial year ending March 31, and more than the presiding officers the Secretary to Parliament reports to.

Or Chief Justice Mogoeng Mogoeng.

Or Deputy President Cyril Ramaphosa.

National Assembly Speaker Baleka Mbete and her National Council of Provinces (NCOP) counterpart Thandi Modise, like the chief justice and deputy president, earn R2,716,789 over the same period. That’s because the salary freeze at that level for the 2016/17 financial year, as recommended by the Independent Commission on the Remuneration of Public Office-Bearers, was officially signed off by Zuma in early December.

However, Mgidlana received a just over R200,000 salary boost from the R2,599-million he was paid in the 2015/16 financial year, plus a performance bonus, according to Parliament’s annual report for that year.

Co-incidentally, Parliament’s 2015/16 annual report lists two employees at the top management F2 level, who received a total performance bonus of R130,614, or R65,307 “average cost per employee”. It is not clear who the second employee might be, given Mgidlana was employed as Parliament’s top administrator from December 2014. According to a parliamentary document seen by Daily Maverick, Mgidlana is the only employee contracted at this F2 level that comes with the R2.8-million salary package.

For that 2015/16 financial year Mgidlana had signed a performance agreement, it emerged in Friday’s joint standing committee meeting.

Not so for the current financial year that started on April 1, 2016.

Failure to sign a performance contract contravenes the Financial Management of Parliament and Provincial Legislatures Act, which in Clause 8(1)(a) stipulates that such an agreement must be completed between the Secretary to Parliament and presiding officers, who ultimately are responsible for all things parliamentary, “within one week after the start of each financial year”. That’s within the first week of April, every year.

The joint standing committee on Friday agreed its co-chairpersons would “urgently” intervene with Mbete and Modise in this matter. It’s not the only matter in which the committee wants the presiding officers to intervene. The committee wants more transparent financial and performance statements, in the same format as applied to other accounting officers, also reflecting line item spending, according to a draft committee report, seen by Daily Maverick. That report also expressed concern about Parliament’s non-compliance with prescripts and regulation on the payment of suppliers within 30 days and the awarding of tenders within 90 days.

Mgidlana did not give the committee specific reasons why the legally required performance agreement had not been signed 46 weeks into the current financial year, but said there were still engagements with the presiding officers. As his human resources manager had prepared the necessary performance agreements, the next financial year 2017/18 would start on a clean slate on April 1, 2017, Mgidlana said: “When we start this year, we start on a very good footing.”

But human resources are clearly tricky. Parliament in a statement last Wednesday said its “accelerated recruitment drive to address high vacancy rates at its senior management level has delivered” with the filling of the last senior management post – and publicly claimed success for slashing the overall vacancy rate to 4.3%. “Parliament has also reduced its overall vacancy rate from 18% in 2014/15 financial year, to 4.3% in 2017, with women constituting 54.1% (717) of its 1,326 staff complement,” it said.

Problem is that the actual official staff complement of Parliament is just over 1,700 posts. By using the number of actually filled posts, rather than the overall approved staff complement, the numbers can be made to look more rosy. But this picking and choosing of the baseline changes the numbers significantly.

The National Education, Health and Allied Workers’ Union (Nehawu) has maintained Parliament’s vacancy rate actually is 19.1%. Their calculations are based on an official staff complement of 1,714, of which 328 vacant posts have been frozen.

The 4.3% vacancy rate was a “management lie”, according to Nehawu parliamentary branch chairperson Sthembiso Tembe:

With such a high vacancy rate it would be naïve for any reasonable person to expect the already overstretched employees to meet all the unrealistic and unachievable performance targets,” he said. “People are bragging for having filled senior vacancies, but that will remain a futile exercise and wasteful expenditure if the positions of the junior employees, who perform all functions, are not filled.”

Most vacancies are in professional white-collar jobs such as researchers, content advisers and support staff to committees, which Parliament routinely describes as its “engine room”.

At Friday’s committee meeting Mgidlana acknowledged that “more than 300 posts … were frozen”. This decision was taken, he explained, because these jobs had been vacant for between one to three years. Hence the institution now had asked staff to make do: “People have to do more with less,” Mgidlana told the committee.

Also at risk of unravelling is the Secretary to Parliament’s rosy view of labour relations of all sides “working hard” following terse relations since the strike in late 2015. Several issues have yet to be resolved, including the non-payment of staff performance bonuses. This matter has been escalated to Nehawu national level and, Daily Maverick understands, a meeting between the union’s Deputy Secretary-General Zola Sapetha and Mgidlana is scheduled for this week.

Or, as Mgidlana told the committee: “The Secretary did not receive any performance bonus, nor has any staff member, in the year in question.”

He did not answer questions as to why the staff compensation budget had been decreased, even as the Parliamentary Budget Office document states that, given the current expenditure trends, the institution would not spend 10% of its R2.189-billion budget by the end of the current financial year:

What are the reasons for decreasing the compensation (of staff) budget since negotiations on performance bonuses have not been finalised and the expenditure rate is 71.5% as at end December?” states the briefing document, seen by Daily Maverick.

On Sunday City Press reported that Mgidlana received a bursary worth over R30,000 to pursue studies at Unisa without applying for it – a situation Parliament said was part of his terms and conditions of employment. Only 50 of the 156 applications were approved for funding in 2017 from Parliament’s R1.5-million bursary budget.

This comes as Mgidlana’s travel, including R1.8-million spent on two overseas benchmarking trips in late 2015, luxury hotel accommodation and chauffeur-driven transport, has repeatedly come to the fore. To date Parliament maintains all this was in line with the institution’s prescripts and policies.

Amid Friday’s questions by the joint standing committee, it emerged that R6.5-million is being spent on two studies on Parliament’s relocation up north. This was raised in the 2016 State of the Nation Address by Zuma as a means to cut costs of transporting, and accommodating, the Pretoria-based officials and members of the executive to Cape Town for legislative and parliamentary business.

Mgidlana confirmed that one study to update the rands and cents implications of an earlier 2004 study was completed, and now under way was a socio-economic study set to take between three to six months. He provided no details on the company conducting this socio-economic assessment or when exactly the tender was awarded.

This comes against the background of speculation in parliamentary corridors that this tender, alongside at least two others, was awarded by the special bid adjudication committee, which is chaired by Mgidlana.

On November 14, 2016 Mgidlana approved a written request by his supply chain management secretariat for a special adjudication bid committee chaired by himself to deal with specific bids on an as-and-when-required basis [sic]”, according to a memo seen by Daily Maverick.

As far back as 2006 National Treasury’s code of conduct for bid adjudication committees says these should be chaired by chief financial officers. The 1999 Public Finance Management Act in clauses 44 and 56 states that an accounting officer delegates the powers to adjudicate bids to others. The reason? To avoid potential conflicts of interests as departmental and institutional accounting officers sign off on awards.

Parliament may wish to invoke its unqualified audits to dismiss any criticisms. But the reality of the audit process is that as long as there is an acceptable paper trail, the auditor-general will be satisfied.

But a number of red flags have been raised by the joint standing committee on the financial management of Parliament. Whether it extends scrutiny to other issues remains to be seen. DM

Photo: Secretary to Parliament Gengezi Mgidlana. (Photo by The Food and Agriculture Organization of the United Nations (FAO) via Flickr)


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