Communications Strategic Review 2005

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The Department of Home Affairs
PRESENTATION TO PORTFOLIO COMMITTEE ANNUAL
REPORT 2007/08
2
Structure of the presentation

• Overview
• Presentation
• Context of the Report 2007/8
• Selected highlights from performance information
• Financial information

3
Introduction 1/2

• The Department received a disclaimer of opinion
  on its annual report for the 2007-08 financial
  year.
• As explicitly stated in the Auditor-General (AG)
  and Audit Committee reports, the finding comes in
  spite of good progress made by the DHA in
  addressing a number of serious problems uncovered
  in previous audits.
• Actions taken before the shortcomings could be
  addressed, included
• An eight week analysis of the status quo in DHA
  and solution design utilizing
• Report prepared by Support Intervention team
  (SIT)
• Work dome by Fever Tree consultants
• Detailed study of previous AG reports
• Suspension of officials and hiring of temporary
  or short term replacements
• Consultations with National Treasury
• Some of the improvements realised
• Improved contract management resulting in
  substantial savings
• Creation of Immigration Account Financial
  statements to resolve legacy problems that went
  back decades
• Allocation of significant resourced time and
  levels to address revenue management, asset
  management, risk management, etc

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Introduction 2/2

• Although progress was made, the benefits of these
  initiatives could not be realised fully in the
  2007 - 2008 financial year because of the
  deep-rooted and pervasive nature of the problems.
• In the longer term, substantial investments in
  the development of human resources, systems and
  infrastructure will be required to achieve the
  desired standards of efficiency and service
  delivery.
• Prognosis we anticipate a continuation of
  qualified audits unless support is received from
  National Treasury and Department of Foreign
  Affairs in respect of
• Foreign component of revenue management
• Immigration account

5
The context of the Annual Report 2007/08
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What is the Department reporting against? 1/2

• The Annual Report for April 2007 March 2008
  reports against
• A 3-year Strategic Plan that is organised under
  6 high level integrated strategic objectives in
  support of government priorities
• The Annual Performance Plan (APP) for the
  Department, which was amended to take account of
  the new projects and deliverables from the
  turnaround.

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What is the Department reporting against? 2/2

• The Annual Report also reports against the
  audited financial statements of the DHA and GPW,
  including
• The Accounting Officers Report DHA
• The Accounting Officers Report GPW
• The Appropriation Account and related notes

8
2007 2008 The Departmental context 1/3

• The primary strategic goal is to transform the
  Department into a modern, efficient,
  cost-effective service organisation, that is
  responsive to the needs of South African
  citizens, residents and visitors.
• The Minister and her cabinet colleagues mobilised
  a Support Intervention Team that in March 2007
  produced a report that detailed the need for
  transformation.
• The Minister launched a comprehensive and
  well-resourced Turnaround of the DHA in June
  2007, with the support of National Treasury and a
  service provider (FeverTree/ AT Kearney).
• Phase 1 was a six-month phase from June to
  December 2007. The aim was to identify and
  understand the problems and to design responses
  and solutions.
• A major focus during Phase 1 was to also develop
  a new Vision and Design for the Department that
  was service and customer-focused.

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2007 2008 The Departmental context 2/3

• A number of quick win areas were identified in
  Phase 1. These areas were earmarked for immediate
  action and significant success was achieved in
  all these areas. Examples are improving the ID
  process and establishing a Large Account project.
• Whilst Phase 1 was about understanding the
  problems, Phase 2 of the turnaround is about
  broad-based implementation of change. Phase 2
  will run from Jan 2008 to December 2009.
• A third phase, to embed and complete the
  implementation of the turnaround, will follow
  during 2010 and 2011. The entire DHA turnaround
  has a five-year planning horizon.
• The Turnaround is intended to transform the
  Department with respect to four key areas
  Service Delivery and Facilities, People and
  Organisational Structure, Corruption, Security
  and Risk and Information Technology (IT).

10
2007 2008 The Departmental context 3/3

• The Strategic Plan for 2007/08 to 2009/10 was
  tabled in May 2007, prior to the commencement of
  the turnaround.
• The projects from phase 1 (June to Dec 2007) and
  Phase 2 (Jan to Mar 2008) were later integrated
  into the planning of the DHA and resulted in the
  production of the revised APP.
• The revised APP portrays a true reflection of
  what the DHA achieved and how funding was
  utilised.
• The Portfolio Committee was informed of this in
  November 2007 and provided with a table of
  deliverables per project .

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PROGRAMME PERFORMANCE
Selected Achievements per Strategic Objective
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Performance against Strategic Objectives

• Strategic Objective 1 To provide secure,
  efficient and accessible civic and related
  services and products to citizens and legitimate
  residents within specified timeframes
• Improved ID turnaround time from 127 days to
  approximately 60 days through the transformation
  of ID processes and the roll-out of online
  verification.
• An electronic tracking system for ID
  applications, Track and Trace, was rolled out in
  more than 250 offices. ID track and trace
  functionality caters for the recording of
  progress of ID applications from end to end. SMS
  verification was introduced to inform clients of
  where their ID applications were at each stage,
  including when and where to collect the
  documents.
• Productivity in key ID process bottleneck area
  was improved by approximately 300 through
  implementation of operations management
  principles.
• A backlog of more than 236 000 records in
  Fingerprint verification section was eliminated.

12
13
Performance against Strategic Objectives

• Strategic Objective 1 To provide secure,
  efficient and accessible civic and related
  services and products to citizens and legitimate
  residents within specified timeframes
• Backlog in Fingerprint Capturing brought down
  from 495 000 to 97 000.
• The implementation of the new Coat of Arms in
  South African passports and travel documents.
• Implementation of a new contact centre solution
  that led to the general improvement in the
  handling of customer calls to the toll free
  number. 80 of calls are being answered within 20
  seconds.

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14
Performance against Strategic Objectives

• Strategic Objective 1 To provide secure,
  efficient and accessible civic and related
  services and products to citizens and legitimate
  residents within specified timeframes
• ID Process Transformation
• Four fingerprint scanning machines were added to
  increase throughput.
• 400 front office staff members were trained on
  how to use a QA checklist to improve quality of
  applications.
• A single courier service was put in place to pick
  up and drop off ID applications and completed ID
  books.
• Four pilot projects, with redesigned front-end ID
  process using online fingerprint verification
  capabilities, were rolled out.
• A new end-to-end ID process with 15 steps
  instead of more than 80.
• 22 million birth, marriage and death records
  sorted and indexed at end of 2007/08.

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15
Performance against Strategic Objectives

• Strategic Objective 2 To manage migration
  effectively by enabling the movement of skilled
  workers into the country and efficiently and
  securely facilitating the entry, stay and exit of
  visitors.
• Completion of the 2010 FIFA World Cup user
  requirements to enable process re- engineering.
• Establishment of a Large Account Unit to fast
  track various work permits. 4 Pilot Large
  Accounts were successfully serviced and 1801
  permits were issued. (Anglo American 469,
  Arcelor Mittal 611, Lafarge 403 and Gautrain
  (Bombela) 318
• 1 133 quota work permits were issued to
  foreigners with scarce and critical skills in
  2007/08. This is a marked improvement on the 194
  issued in the previous year.

15
16
Performance against Strategic Objectives

• Strategic Objective 3 To determine the status of
  asylum seekers and manage refugee affairs in
  accordance with international treaties and the
  bill of rights as enshrined in the constitution
• Refugee Affairs capacity strengthened by
  appointment of four directors and two deputy
  directors to head Reception Centres and the
  appointment of 191 officials.
• A new Refugee and Deportation System (biometric
  system) developed and pilot testing done.
• Marabastad - infrastructure, equipment and
  systems were vastly improved.
• Counter Xenophobia unit was part of task team
  that dealt with attacks in Atteridgeville and
  distributed Stop Xenophobia pamphlets in a
  door-to-door awareness campaigns.

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17
Performance against Strategic Objectives

• Strategic Objective 4 To foster domestic,
  regional and international co-operation towards
  improved economic growth and development,
  including events with strategic importance to the
  country.
• MOU on visa waiver for diplomatic and official
  passport holders signed with India, Tanzania and
  Sudan.
• Training provided for immigration officials from
  Rwanda and DRC.
• Visa agreements were concluded with Korea,
  Tanzania and Vietnam with respect to diplomatic
  and official passport holders and with Belarus
  for ordinary passports.
• Facilitation of Movement Agreement with Lesotho
  signed.
• One Stop Border Post Agreement with Mozambique
  signed.
• Repatriation of Records Agreement concluded with
  Namibia (NPR records).

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Performance against Strategic Objectives

• Strategic Objective 5 To deliver the
  departments mandate effectively by implementing
  a new organisational model that is characterised
  by caring officials who serve with
  professionalism and by effective governance and
  operational control
• The implementation of a new operating model for
  the Department as well as the new organizational
  structure, including footprint recommendations
  and staff numbers.
• A nationwide survey of clients was conducted that
  informed organisational design.
• A high level plan to transform the Department in
  line with the new operating model was developed
  and agreed.
• A new governance structure was recommended and
  implementation began with a revised Executive
  Committee and establishing an Operations
  Committee.
• A draft policy and legislative conceptual
  framework was developed.

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Performance against Strategic Objectives

• Strategic Objective 6 To create an enabling
  environment by putting in place support services
  that are effective, efficient, integrated and
  that prevent corruption.
• Finance and Risk
• All six previous audit reports were categorized
  and key risks and issues prioritized.
• A strategy was developed to deal with risks at
  Rosslyn Document Archive Depot.
• Cash handling machines were piloted in four
  offices, with revenue collection.
• An Asset Register was compiled.
• New tender and contract management process
  finalised
• New and improved SLAs were negotiated with a
  number of key suppliers.
• Cost savings of R68m on the remainder of the
  Lindela (Deportation Centre) contract.
• Further potential cost savings of up to R40m
  with other key suppliers was identified.

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Performance against Strategic Objectives

• Strategic Objective 6 To create an enabling
  environment by putting in place support services
  that are effective, efficient, integrated and
  that prevent corruption
• Information Services
• IT projects and the architecture to support new
  operating model requirements were agreed to.
• Upgrade of HANIS (Home Affairs National
  Identification System) to new technology (HANIS
  Tech Refresh).
• Master Information Systems Plan and Enterprise
  Architecture updated.
• Development of Refugee and Deportation System.

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Performance against Strategic Objectives

• Strategic Objective 6 To create an enabling
  environment by putting in place support services
  that are effective, efficient, integrated and
  that prevent corruption
• Corporate Services
• Performance agreements improved and aligned
  with the revised APP.
• 70 functionality of PERSAL achieved to ensure
  improvement on turnaround time in processing
  certain HR transactions.
• Meetings with union leadership were held and a
  joint statement of shared intent as well as a
  turnaround accord was put on the table.

22
Performance against Strategic Objectives

• Strategic Objective 6 To create an enabling
  environment by putting in place support services
  that are effective, efficient, integrated and
  that prevent corruption
• Internal Audit
• Audit charter approved.
• Comprehensive Internal Audit procedure manual
  adopted.
• Co-sourcing agreement in place to increase audit
  scope and coverage.
• Enterprise-wide risk management facilitated.
• Preliminary risk assessment conducted as part of
  turnaround.
• Top ten risks prioritised and management
  strategies developed.

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Performance against Strategic Objectives

• Strategic Objective 6 To create an enabling
  environment by putting in place support services
  that are effective, efficient, integrated and
  that prevent corruption
• Counter Corruption and Security Services
• High risk offices identified and 36 offices
  evaluated.
• Prevention workshops conducted in all provinces.
• 53 Workshops on security policy conducted
  nationally.
• Pre-employment screening of 490 prospective
  employees conducted.
• Security evaluation conducted on 84 existing
  accommodation.

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FINANCIAL INFORMATION
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Financial Overview

• The financial year turnaround began in earnest in
  November 2007
• Weekly operational meetings were held with the
  auditors and the turnaround team
• Monthly executive meetings were held with the
  Auditor General executive
• The Information Systems budget was re-prioritized
  in the year under review.

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Financial Overview

• The department began an Asset take exercise in
  February 2008
• Completed backlog of Senior Management Service
  members performance reviews from as far back as
  2003/04
• Negotiated R68million savings on the Deportation
  Holding Facility Contract.
• So in 5 months what have we resolved?

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Previous Areas of Concern Raised by the AG

• Reporting of Fraud Error in the financial
  statements
• Completeness of Accruals
• Completeness of Commitments
• Clearing of Inter-responsibility suspense
  accounts
• Balancing of voted funds to the National Revenue
  Fund
• Disclosure of Irregular expenditure
• Incurring of Fruitless wasteful expenditure
• No Fixed Asset Register
• Accuracy of Cashflow Statement
• No Immigration Account Financial Statements

RESOLVED
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SUMMARY OF EXPENDITURE FOR 2007/08 PER PROGRAMME
Rand thousand FINAL APPRO-PRIATION EXPENDI-TURE AS AT 31 MARCH 2008 UNDER/ (OVER-SPENDING) OF BUDGET SPENT
1. ADMINISTRATION 1 177 423 1 090 502 86 921 92,6
2. CIVIC AND IMMIGRATION SERVICES 1 728 807 1 536 557 192 250 88,9
3. TRANSFERS TO AGENCIES 614 668 614 668 100,0
TOTAL 3 520 898 3 241 727 279 171 92,1
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SUMMARY OF EXPENDITURE FOR 2007/08 PER ECONOMIC
CLASSIFICATION
Rand thousand FINAL APPRO-PRIATION EXPENDI-TURE AS AT 31 MARCH 2008 UNDER/ (OVER-SPENDING) OF BUDGET SPENT
COMPENSATION OF EMPLOYEES 1 120 191 1 086 974 33 217 97,0
GOODS AND SERVICES 1 420 682 1 281957 138 725 90,2
FINANCIAL TRANSACTIONS IN ASSETS AND LIABILITIES 26 708 (26 708)
TRANSFERS AND SUBSIDIES 626 117 625 797 320 99,9
PAYMENT OF CAPITAL ASSETS 353 908 220 291 133 617 62,2
TOTAL 3 520 898 3 241 727 279 171 92,1
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Detail of Over/Underspending
Rand thousand UNDER/ (OVER-SPENDING)
COMPENSATION OF EMPLOYEES 33 217 Underspending can mainly be attributed to the slow filling of vacant posts due to finalisation of the organisational structure and outstanding claims regarding foreign missions
GOODS AND SERVICES 138 725 Underspending is mainly due to the Smart ID Card which did not materialise, as well as the Passport System for which only preparations for implementation has been done.
FINANCIAL TRANSACTIONS IN ASSETS AND LIABILITIES (26 708) Includes mainly thefts and losses, relating to amounts that should have been written off as far back as 2002.
TRANSFERS AND SUBSIDIES 320 Underspending is mainly due to earmarked funds for payment of employees initiated severance packages
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Detail of Over/Underspending
Rand thousand UNDER/ (OVER-SPENDING)
PAYMENT OF CAPITAL ASSETS 133 617 Underspending due to construction of new buildings which did not materialise as well as re-classification of expenditure to current for maintenance and repair on lease buildings by the Department of Public Works. Departmental vehicles purchased were not delivered before year end and hence could not be paid for.
TOTAL 279 171
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The 2007/08 Audit Opinion

• The following 6 challenges still remain with the
  department.
• Completeness of Revenue
• Auditability of the Fixed Asset Register
• Completeness of the Lease Register
• Supporting documentation for Government Garage
  Expenditure
• Supporting documentation for the Immigration
  Account classification of such expenses
• Clearing of Receipt Deposit accounts

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Responding to Audit Opinion

• Revenue accounting and collections
• In addressing the completeness of Revenue,
  foreign revenue processes need to be separated
  from local revenue processes
• Local revenue being addressed by Standard
  Operating Procedures (SOPs), uniform front
  office receipting registers, automated cash
  handling devices and interface into BAS.
• BAS to be rolled out to all front offices as well
  as SCOA Ver3
• Project commenced with IMS to register and
  reconcile all Passenger carrier fines in the
  Penalty Case System
• For Foreign revenue agreement must be reached
  with Dept of Foreign Affairs based on National
  Treasury guidance.
• The department is not present at all Missions
  hence supervision is weak and not within the
  departments control
• Our plan is to put the receipting solution at all
  foreign missions
• Local revenue - 18 months more, Foreign revenue -
  36 months

34
Responding to Audit Opinion

• Assets and the accounting thereof
• A number of the points raised by the auditors in
  their report have already received attention, and
  exceptional progress is being made.
• The R 392 million worth of assets which
  could not be verified have subsequently been
  analysed and corrected as follows
• R 125 million of Work-in-Progress has been
  correctly classified
• R 11.8 million Internet charges incorrectly
  allocated to Fixed Assets will be corrected in
  the 2008/9 financial year
• R 53 million CPI adjustments, foreign exchange
  adjustments and retention fees on original
  invoices, which have subsequently been
  allocated to the original physical asset to
  which they relate
• R 85 million of IT related invoices have
  been matched with the physical assets
• The vehicles on the Departments asset register
  have all subsequently been confirmed as belonging
  to the Department.

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Responding to Audit Opinion

• Assets and the accounting thereof..
• Complete the matching of Invoices to IT assets in
  the asset register
• Update the asset management policy
• Maintain the Asset register going forward
• Train asset management staff in Standard
  Operating Procedures over assets
• Perform interim final annual asset count
• Dispose of all assets that do not have economical
  use and value

36
Responding to Audit Opinion

• Maintenance of a Lease register
• The historical lease register in the department
  reflected only certain leased property
• An exercise has begun to update the lease
  register with all leases in the department,
  inclusive of IT, vehicles and other leased items
• Our plan is to have this register completed by
  December 2008

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Responding to Audit Opinion

• Government Garage
• Still remains a challenge within the department
• Department failed to produce 44 pieces of
  supporting documentation, mostly petrol slips
• After year end we have confirmed additional
  transportation officers to strengthen the process
• We are working in conjunction with Government
  Garage Auditor General to secure all supporting
  documentation acceptable evidence respectively.

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Responding to Audit Opinion

• Payables and classification errors
• Working with the Department of Foreign Affairs on
  availing supporting documents to clear the
  payables account.
• May require National Treasury intervention to
  assist if the Department of Foreign Affairs
  confirms no supporting documentation available
• The most likely difference in the foreign
  allowance account is R14million, we are scanning
  general ledger accounts to correct mis-posted
  journals.
• Approving of journals is being reviewed by senior
  management.

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Responding to Audit Opinion

• Cash Cash Equivalents
• The department has 38 suspense accounts of these
  6 relating to receipting deposits have not been
  cleared by year end.
• Weekly trial balance meeting have been instituted
  to check and confirm status of all control
  accounts.

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• Siyabonga
• Dankie
• Thank You
• Realeboga