REPORT BY THE INTERIM MANAGEMENT TEAM TO THE PORTFOLIO COMMITTEE: PUBLIC SERVICE AND ADMINISTRATION

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REPORT BY THE INTERIM MANAGEMENT TEAM TO THE
PORTFOLIO COMMITTEE PUBLIC SERVICE AND
ADMINISTRATION

• CAPE TOWN
• 14 AUGUST 2003

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Structure of the report
Turnaround Strategy
Lessons from the EC
Challenges and risks
Turn around strategy
Problem Analysis
Background and Introduction
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Mandate of the IMT

• Overall goal of the IMT is to ensure that any
  service delivery backlogs are addressed and to
  establish sound management and leadership in the
  Education, Health, Roads and Public Works and
  Social Development departments
• The IMT is specifically mandated to-
• establish turn around plans for the four target
  departments, including the elimination of service
  delivery backlogs
• address cross cutting issues such as disciplinary
  matters, procurement reform and human resource
  management
• establish appropriate management structures and
  back office support
• monitor the implementation of the turn around
  plans and other interventions as well as the use
  of conditional grants
• On the basis of its presentations to the
  Provincial EXCO and Cainet, the IMT received
  additional mandates related to specific challenges

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Structure of the IMT
Interim Management Team DGDPSA, DGOPSC,DGECape
and HoD of Provincial Treasury In partnership
with National Prosecuting Authority and other law
enforcement agencies
Joint Management Teams Specialists and
consultants from
Specialist Teams Issues based ad hoc teams, e.g.
Disciplinary cases
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IMT Roadmap
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Modus operandi of JMTs

• JMT co-leaders work collaboratively, and the HOD
  remains accounting officer
• The tasks of each JMT were to-
• develop plans and strategies to address service
  delivery backlogs
• Identify actions in the areas of Leadership and
  Management, Finance and Administration, Human
  Resource Management, Service Delivery and Ethics
  and Cultural issues
• to implement the turn around plan of the
  department
• The roles of the JMTs of each department are now
  being assessed to improve their effectivness

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Relationship with other stakeholders

• The IMT functions in close co-operation with, and
  receives support from various partners and
  stakeholders. These are-
• the Joint Anti-corruption Task Team (JACTT) led
  by the National Director of Public Prosecutions,
  that attends to criminal matters emanating from
  the IMTs work
• Intelligence and law enforcement agencies
• the Special Investigating Unit
• The Office of the Auditor-General
• a range of national and (other) provincial
  departments who provide portfolio specific or
  cross cutting support (eg. national Health
  department, SAMDI, provincial treasury of the
  Western Cape)
• the Center for Public Service Innovation and the
  State Information Technology Agency
• The IMTs operations are emerging as a model for
  integrated governance with a cross-departmental
  and cross-institutional sharing of skills and
  other resources

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Socio-economic profile

• Uneven development an extremely bi-modal
  economy composed of
• Two relatively developed port cities
• Impoverished rural periphery
• Peripheral to minerals-energy complex
• Home to migrant workers in the Bantustans
• Urban/seaports small import substituting
  manufacturing sector (mainly auto)
• Rural/hinterland Livestock economy

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BASIC CHARACTERISTICS(note that figures may have
changed)
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Poverty

• EC poorest province in SA GGP per capita is
  half national average
• 64 of population live in poverty (household
  income less than R800/month)
• 43 of households earn less than R500/month
• Poverty rate rises as high as 80 in former
  Transkei where households survive mainly on
  grants and remittances
• (need to reconfirm figures as these may have
  changed, though
• trends remain the same)

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PROVINCIAL GROWTH DEVELOPMENT STRATEGY FRAMEWORK
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Medium term expenditure framework

• Increase in equitable share for 2003/4 (6) and
  stabilizing through MTEFR26-R33b
• Conditional grants to double during MTEF period
• Gradual decline in own revenue over last three
  years but above budget expectations
• Effect of overspending has been negative on the
  ability of the province to maintain a healthy
  surplus
• Donor support projects in excess of R500m
• About R3.4 billion targeted for infrastructure
  projects in current financial year

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Spending capacity

• Improved spending levels in nominal terms
• Delays in payments of social grants arrears

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Problem analysis General observation
Current Stakeholder Perceptions
Positive
Negative

• Quality of leadership and management at
  departmental level?
• Quality of human resource management practices?
• Financial management and general administrative
  capacity?
• Ability to uphold ethics and reduce corruption?
• Reliability and dependability of public service
  to deliver on government priorities?
• Overall effectiveness and efficiency of public
  service ?

X
X
X
X
X
X
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Service delivery challenges - 1

• Service delivery issues
• The Eastern region has suffered from a history of
  neglect, therefore bearing the brunt of
  geographic disparities from a service delivery
  point of view
• There is an over-supply of planning activity not
  matched by implementation capacity
• Study of budgets do not indicate an immediate
  funding problem although a case can be made for
  historical backlogs

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Service delivery challenges - 2

• In the Eastern Cape, like other under-developed
  regions, there is a high dependency on Government
  for socio-economic development. Government
  cannot fail this need. In the absence of
  widely-available alternatives for socio-economic
  development, Government remains the major
  provider of-
• infrastructure development
• services
• social security, and
• opportunities that stimulate job creation

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Service delivery challenges - 3

• Job creation and increased social security are
  just not happening visibly fast enough
• There are plans and resources for fast-tracking
  service delivery in under-serviced areas (such as
  the Eastern region), however implementation of
  these plans remain frustratingly slow
• Inadequate focus on results and too much time
  spent on process

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Analysis of previous interventions aimed at
improving service delivery and capacity

• Number of projects/interventions interventions
  being implemented as at Dec 2002
• Education 28 different interventions
• Social Development 20 different interventions
• Public Works 13 different interventions
• Health 32 different interventions
• See annexure for detailed report

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Trends in Findings from previous interventions

• Shortage of professional/managerial staff
• Many managers in acting positions
• HR management is weak
• Financial management capacity is inadequate
• Poor communication
• Huge gaps between macro plans and operational
  plans
• Culture of shifting the blame

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Intervention areas mostly focused on

• Human resources (performance management, human
  resource records, training, recruitment, payment
  of backlogs, salary payments)
• Service delivery (various specific areas e.g.
  payment of grants)
• Financial resource management (payment of
  creditors, Clearing of suspense accounts, budget
  reviews)

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Analysis of interventions

• Similar type of activities being implemented by
  the different interventions but supported by
  different stakeholders e.g. different donors
  supporting similar type of activities
• Repetitive nature of implementing activities
  which were addressed by previous interventions of
  sustainability may be attributed to consultants
  contracts that are not performance based

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Our primary concerns - 1

• Our assessment is that a change in behavioral
  patterns is lacking and this change is critical
  for turn-around of the departments
• This assessment established that-
• Managers are, continuously, not taking
  responsibility and they are not displaying a
  strong sense of accountability - according to
  managers the problem always is out there and
  blame for inertia, under-servicing, poor
  leadership and management are deferred to
  systems, inadequacies, interference by unions and
  stakeholders and historic challenges
• In spite of the fact that departments
  continuously receive audit disclaimers, no action
  is taken against any manager and the problems are
  not rectified
• Personal responsibility is consistently fudged

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Our primary concerns - 2

• Unions continue to have undue influence over
  managers and their decisions, especially in
  Education, but we have to recognize that a fear
  factor is prevalent in some of these decisions,
  although evidence is limited to an incident in
  Health
• Very high levels of corruption are reported, but
  with limited follow through action
• The culture of ill-discipline and acceptance of
  the poor work ethic, manifests in such behavior
  as absenteeism and demanding overtime for work
  that should be done in office hours, accentuated
  by lack of vigorous management responses

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Our primary concerns - 3

• A culture of entitlement prevails as epitomized
  by claims to overtime, performance awards and
  backlog HR payments
• Managers have a significant reliance on outsiders
  for work that is normal businesses - donors and
  consultants are seen as only solutions
• The authority and power of the Tender Board far
  outweighs its level of accountability

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APPROACH

• Comprehensive, integrated
• Addresses both actual delivery and the conditions
  that make delivery possible
• Mixture of department specific and province wide
• There are transversal challenges that have to be
  addressed to make departmental delivery
  successful, for example financial management
  arrangements in the Province
• Mix of short and long term
• Some solutions are immediately implementable, but
  will only realise benefits in coming financial
  years
• Some solutions are immediately implementable and
  will realise immediate benefits

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CONCEPT
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Turnaround Strategy
Improve Internal controls and accountability
Improve HR Management
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Turnaround Strategy
Strengthen back office support

• Decentralize financial delegations back to
  departments as from May 1
• Delegate procurement powers up to R5m
• Source in back office support for two years based
  on output based contract
• In sourcing will focus on financial
  management,systems, closing of books and
  expenditure management
• Will include human resource management and
  cleaning of PERSAL database
• Separate process for document management

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BACK OFFICE SUPPORT PROGRESS
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BACK OFFICE SUPPORT PROGRESS
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Turnaround Strategy
Improve internal controls and accountability

• Decentralize Internal Audit function
• Departments to have own Audit Committees
• Internal Audit capacity will be outsourced for
  first year whilst capacity being developed
• Common audit plan and strategy for rolling out
  internal audit developed

Improve internal Controls
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INTERNAL CONTROLS PROGRESS
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Turnaround Strategy
Improve human resource management

• Implementation of resolution 7 proposals
• Filling of vacancies
• Strategy for attracting scarce skills
• Support services companies
• Incentives for professionals in rural areas
• Internships and strategy for training people in
  scarce skills

Improve Internal Controls
Improve HR Management
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IMPROVE HR MANAGEMENT PROGRESS
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Turnaround Strategy
Strengthen leadership and management

• Increase management to at least 1 of social
  departments
• Competency profiling of all senior managers
• Performance agreements for senior managers
• Initiate disciplinary processes for managers
  based on existing forensic and Auditor General
  reports
• Workplace based management development program

Improve Internal Controls
Strengthen leadership and management
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LEADERSHIP AND MANAGEMENT PROGRESS
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Turnaround Strategy
Ethics and anti-corruption strategy

• Advisory Panel for disciplinary cases
• Prosecutions for old and emerging cases
• Special Commercial Crimes Court
• Education and Awareness programs
• Hotline
• Forensic audits into problem areas

Improve Internal Controls
Ethics and anti- Corruption Strategy
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ETHICS AND ANTI-CORRUPTION PROGRESS
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Turnaround Strategy
Rapid and visible service delivery

• Service level agreement with Coega.
• Priority projects for six departments.
• Framework for monitoring projects.

Rapid and visible Service delivery
Improve Internal Controls
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RAPID SERVICE DELIVERY PROGRESS
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Turnaround Strategy
Departmental turn- around strategies
Departmental Turnaround Strategies
Improve Internal Controls
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TURN AROUND EDUCATION

• Based on 12 projects
• Human resourcing and personnel expenditure
• district development
• performance management
• management (their performance) and leadership
• financial services
• human resource services
• procurement and logistical services
• discipline
• physical facilities
• learning support material
• matriculation readiness
• school nutrition programme
• Was necessary to change the management structure
  by establishing a project management structure
  and the infusion of managers deployed from
  national departments, as well as the appointment
  of an interim head of department

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TURN AROUND HEALTH

• Three key focus areas
• Improve the management of health services
• Improve targeted front line health services in
  Eastern Region
• Improve back office support to health institutions

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TURN AROUND DRPW
Roads and Buildings Area wide buildings and
maintenance contracts
Property Strategic Asset Management
Partner
Human Resources Corporate Support
Procurement Ethics
CBWP
Strategy Priority projects (Roads
and Buildings)
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PROPOSED TURN AROUND SOCIAL DEVELOPMENT

• Review current leadership and management cadre
• Rid the Department of corrupt officials
• Implement initiatives to remove service delivery
  bottlenecks, particularly to speed up CGS
  registration and the disbursement of welfare
  grants.
• Celebrate short-term achievements with aggressive
  targeted communications

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PROPOSED TURN AROUND LONG TERM

• The long-term transformation will take place on
  three levels
• A reconfiguration of how the Department interacts
  with the public, which we call the front office.
  New partnership model with Home Affairs and
  Department of Labour to provide a one stop shop
  solutions
• Helping the Department to make the shift from a
  welfare to a developmental paradigm
• A redesign of the Departments back office. Key
  would be setting a processing center in the
  department and establishing a contract management
  center outside the department but managed by the
  department
•  

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PROGRESS AGAINST DEPARTMENTAL TURNAROUND PLANS

• Implementation has begun and progress in certain
  areas is being achieved.
• Issues of budget, however, are constraining
  progress and initiatives are underway to resolve
  this problem.
• Some concerns are also emerging with regard to
  the buy-in of certain departments in implementing
  the turnaround plans.

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CHALLENGES/RISKS

• Budget
• Required budgeted to implement is approximately R
  240 million.
• Departmental and transversal interventions will
  be funded from savings/underspending.
• Departments are busy finalising these
  allocations, but are experiencing difficulty to
  balance with ongoing work and commitments.
• Buy-in of departments
• Success requires ongoing support and buy in from
  those in leadership.
• Revised management structures
• Revised management structures are required for
  the successful implementation of turnaround
  plans.
• Challenges related to the concept
• Co-operative nature of the model requires
  effective lines of accountability, good
  communication and funding.

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EXIT OF THE IMT

• Concurrently developing critical structure
  through-
• - Monitoring and Evaluation mechanisms
• - Effective Management structures and
• - Dedicated function located in the OTP to drive
  and monitor after March 2004.

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EMERGING LESSONS/THEMES

• Turnaround is not a quick fix, some solutions
  only realise its full impact over time
• Getting basics right is essential for smooth
  functioning of higher level activities. A
  breakdown of basic administrative practices (such
  as recording leave) in many instances sabotage an
  output (such as paying out a pension, which
  cannot be done without a complete leave record)
• Setting a foundation for future delivery
• A lot of effort is being put into support systems
  that make actual delivery of services possible.
  Stable but flexible support systems can
  accommodate policy changes, but if the
  foundations are weak, departments battle to
  deliver and accommodate policy shifts.
• Exposing both national and provincial departments
  to various new ways of delivery (e.g.
  partnerships, alternative service delivery,
  benefits of using IT)
• The IMT is providing a rich experience in public
  administration and innovation, drawing on
  examples of other departments and provinces and
  tailoring solutions. These experiences can also
  enrich processes in other departments and
  provinces

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EMERGING LESSONS/THEMES

• To complete the delivery chain local government
  needs to be included in turn around strategies,
  but currently the legislative framework hampers
  this integration.
• The cooperative model currently applied in the
  Eastern Cape has limitations, and alternative
  models need to be available for similar
  interventions. This requires that the
  Constitutional-type interventions be made
  possible in flexible legislation.